Dandelion: A Bitcoin Protocol to Hide a Transaction’s Origin

 

 

A bit of a confusing image above? I had to do a lot of reading myself to make sense of it, and I like to think of myself as a relatively technically inclined person.

Anyway, this is a graph of the potential Bitcoin protocol “Dandelion”. First brought to my attention by Coindesk, Dandelion is a protocol that attempts to hide origin of the node who submitted a Bitcoin transaction (don’t worry, I’ll explain that in a moment). I encourage you to go read the details on GitHub (or at least the abstract).

You see every time a node (a node being a computer running traditional Bitcoin software) makes a Bitcoin transaction it “announces” it to other nodes. While it’s necessary for nodes to do so (how else would the spread they word), it also means that another node could make note of who spread the word of the transaction and then use that information in whatever way they see fit.

This is where Dandelion comes in. To oversimplify everything, it basically shuffles the transactions between nodes, making it very hard to find out what node really submitted that transaction (now does the image make sense? It’s a bunch of transactions being shuffled between nodes). This is by no means anonymity, but it does strengthen your pseudonymity a bit; creating a hurdle for dragnet style surveillance. Best of all, this would not require a hard fork to implement, so implementation is foreseeable.

 

Final Thoughts:
Although Dandelion would not have a noticeable difference for most users, it would passively provide them a bit more privacy and create a fairly large barrier for somebody to perform mass surveillance.

Therefore I do hope that the development is successful and that we see Dandelion implemented at some point in the future.

A follow up to my previous prediction

A few weeks ago I made a prediction that Bitcoin would hit a pump that would end with it sitting around $10,000 to $15,000 in the following weeks. I just figured I would follow up on that today.

Well, I was sort of right. The pump did occur in the coming weeks; however I over estimated it’s strength a bit, with Bitcoin hitting a high of $9932.53. It was pretty close to the minimum I predicted 3 weeks prior, although still not as high as I expected.

Ripple: A temporary rebound on the way? My quick prediction.

 

Ripple, Ready to Rebound?
Ripple’s Price. Source: Coinmarketcap.com

Remember Ripple’s pump at the very beginning of 2018? It went from about 20 cents all the way up to $3.65, right before crashing to about 48 cents and then beginning on a slow climb again. Well, I think that it is going to rise quickly and then have another crash.

As you can see to the right, Ripple went crazy high and then dropped like a stone. A classic bubble example, although I think that the next rise and crash is already beginning to start. Here is my cut and dry prediction of what Ripple’s market will do.

 

What is Ripple?

Ripple is a pretty generic cryptocurrency. It has goals similar to Bitcoin (being a decentralized payment system), but that’s about it. You can read about it at ripple.com if you want to know more about it, of course in the world of crypto investments hype and bubbles always control the market; and I’d bet half the investors in Ripple don’t even know what it is (this is not what I would recommend, but it’s the unfortunate truth).

 

My Prediction

I predict a simple rise and fall in the coming months. It probably will not exceed $3 very much because that will be a physiological “glass ceiling” since that was the high right before the crash.

Of course I can’t be sure (and this is not financial advice), just speculation of a volatile market.

An OP-ED about an OP-ED: A conspiracy against Bitcoin? And do you really have control of your own money?

Ask yourself: “Do you control your money?”

I was browsing Coindesk when I came across the below OP-ED:

Bank of America Is Closing My Three-Year-Old’s Account Over Crypto

Go ahead and read it, this article is the basis of mine. Long story short the author claims that Bank of America closed his account, his wife’s account, and the account he was using to hold his daughter’s college funds in because he started a firm that traded cryptocurrencies.

 

 

It just gets better…

A little extreme, don’t you think? And this is not a one-off event, as: PayPal banned bitcoin related transactions, Mastercard baned EU Bitcoin Debit Cards, Visa shut down some Bitcoin Debit Cards, some banks baned the purchase of Bitcoin with their debit cards, and so forth.

 

This sounds like a conspiracy against Bitcoin.

Based the responses of many financial institutions towards Bitcoin in the last year or so you would think that they are afraid of Bitcoin and/or there is a conspiracy against Bitcoin.

 

But aren’t a bunch of banks researching the blockchain?

You probably keep hearing that “x institution is researching how to use the blockchain”. Keep in mind that “Bitcoin” <> “Blockchain” are not synonymous: Bitcoin is a decentralized P2P currency, where a blockchain is simply a ledger. So a bank could adopt a blockchain style ledger but still remain hostile to Bitcoin.

 

So, what do I think?

Bitcoin is yet to even develop much of a niche, so I do not see Bitcoin “killing fiat” (or similar chatter you’ll find on Reddit) any time soon (and probably not ever). Because of this I wonder why so many banks have taken a hard line stance as if it were cutting into their business.

Still though, if you read the articles that I have linked to it will really sound like there is a conspiracy against Bitcoin (or cryptocurrencies in general).

However, to be honest, I have absolutely no idea if there is one or not. Reading about events like these is creating the same questions in my mind that they probably created for you, and one could make a logic argument both for and against a conspiracy against Bitcoin.

 

Closing Thoughts:

What I can say though, is that it’s is very important we keep a close eye on events like these. I think that they are a good example of our ever decreasing financial freedom if a large bank can tell use we can or can’t buy something with our own money.

You’re probably going to be able to pay state taxes with Bitcoin in Arizona

Pay Your Taxes With Bitcoin

 

First reported by CoinDesk, you can read the details of the bill at Legiscan and the bill’s changes to the tax code on the Arizona state legislator’s site.

 

What is this bill?
In short, this Arizona state bill (SB1091) will allow you to pay your state taxes in Bitcoin (and potentially other cryptocurrencies as well). Supposedly other states are also considering this, but Arizona is the only one to have made any progress towards it.

 

What’s the news?
If you have followed Bitcoin related news you would know that this is not the first time this story has broke, in fact it’s been in the news on and off for nearly 4 months. Just like the previous times, however, it’s in the news because of the progress it is making.

According to Legiscan, after passing the Arizona State Senate it is now going to be voted on in the Arizona House of Representatives; meaning that it is getting close to either being signed by or vetoed by Arizona’s governor Doug Ducey (assuming it passes the house).

 

What does this mean for Bitcoin?
If this bill passes, it will be a great source of publicity for Bitcoin; as well as a much needed source of adoption that will help give Bitcoin a better sense of “legitimacy”. Still though, it shouldn’t be to overblown, as this is kind of news will probably be shrugged off after some time by most everyone (as with most news it seems – everything has a flashy title and politically charged content that is forgotten by the time the next story breaks).

 

Do I think it will pass?
Judging by the rate of success it has had getting to the point that it has gotten, as well as the fact that most politicians are probably looking to get their names in the headlines (for a good reason of course); makes me pretty sure that this will pass. Of course I’m no political analyst, so take my predictions with a grain of salt.

 

Final Thoughts:
Like I said above, I think this is a badly needed source of legitimacy and good publicity for Bitcoin. I’m expecting this bill to pass, although to be honest I think it’s more for show and publicity; and that it really will not remain in the news for all that long (or become all that utilized).

Is Bitcoin going to have another bull run? Based on past bull runs I think so.

 

Bull - CC0, From Pixabay.com

Bitcoin’s price sure has been a wild ride since the beginning of 2018. Tons of good and bad publicity, the futures market, and of course the crazy volatility with Bitcoin’s price hitting highs of nearly $20,000 and lows of nearly $6,000. However, I am beginning to think that the crazy volatility is coming to an end and we are about to enter another period of stability and rising prices.

I know, you are probably skeptical of that. But let me explain my logic and the similarities to past market patterns. See the chart below? You can see the sudden rise, followed by the return to pre-rise levels, then a bunch of volatility.

Now, take a look at this chart. This chart covers May 1st 2017 through August 31st 2017.

Although the changes are less dramatic, it’s easy to see that Bitcoin went from $1,300 to $2,600 quickly, followed by some high volatility, a short session of stability, and then a steady rise. Now, comparing this chart and the last, you can easily come to the conclusion that they line up pretty well; except the first chart (being the present price) stops in the middle of the stability period. This is where my prediction of a rise comes in to play.

 

My Thoughts Summarized:

While nobody can be right 100% of the time (and trust me, I’m no exception to that rule), I am pretty sure that we will be seeing a bull run withing the coming week or two, probably ending up somewhere between $10,000 and $15,000.

The Bitcoin “Flippening”: Why it won’t happen

The Bitcoin "Flippening": Image Unavailable
The Bitcoin “Flippening”

 

 

There has been a lot of chat about about the “flippening” on the internet, and while some people are convinced it will happen, I disagree.

 

What is the “Flippening”?

Never heard of the “flippening?” That’s alright, I had not also up until a couple of months ago. The “flippening” is a speculated event where another altcoin surpasses Bitcoin’s market cap and takes the title of the #1 cryptocurrency.

Of course you can never be sure, but I am pretty well certain that this will not happen; at least not in the remotely near future anyway. Below I have 4 reasons why I believe this to be true:

 

1 Transaction Prices

Probably the biggest reason why people speculated the flippening is because of the high transaction prices of Bitcoin compared to other cryptocurrencies. While it sounds like a legitimate reason for the community to migrate to another crypto, it’s flawed logic. You see, if everybody migrates to another crypto then that crypto becomes bogged down and just as congested as Bitcoin is now.

 

2 We would all have to agree on a “better” crypto

Even with transaction prices out of the way, you might be thinking “what if another crypto comes along with better features?” Problem is, every feature has it’s pros/cons, and since the community can never agree on anything (think SegWit, that took 6 months and had virtually no drawbacks); how do you think the community would agree on changing to a different cryptocurrency altogether. Besides, if a feature is agreed on by most everybody it will be implemented into Bitcoin.

 

3 Adoption

Bitcoin has it’s uses, but at the moment most transactions are speculation based. The numbers I have heard have ranged from 70%-80% being speculation, while the other 20%-30% is actually part of a normal purchase. While 20%-30% is low, most altcoins (with a few exceptions) are probably 99.9%+ speculation. This creates high volatility and even if it appears to rise it could very well fall just as fast. That is not a good storage of value.

 

4 Mutually Assured Destruction

If Bitcoin was replaced it would create chaos in the market and everything would suffer immensely. Most people would probably cash out, and outside investors coming in would be nearly non-existent. This is a good deterrent for anybody trying to organize a mass migration to a different cryptocurrency, as it would probably result in everything being worthless (or at least worth a lot less).

 

Closing Thoughts:

Again, while nobody can be right 100% of the time (and trust me, I’m no exception to that rule); I highly doubt we’ll see the flippening any time soon, mainly for the reasons stated above.