Quick Brew? BitFury’s Coffee Machine Accepts Bitcoin Via Lightning Network

Blockchain firm Bitfury has come up with a novel product aimed to make it easier to pay for products with bitcoin.

To that end, a specialized engineering team within the company has developed a coffee vending machine capable of connecting to the Lightning Network, a second-layer transaction protocol designed to make bitcoin more scalable by processing transactions off the main bitcoin blockchain.

As a result, the vending machine can accept bitcoin payments without charging high fees or requiring long transaction times, according to a press release. LightningPeach, the team behind the new vending machine, added a device capable of joining the network to a coffee machine that already sported some built-in smart components, according to the release.

The device is composed of a small Raspberry Pi computer and a unique circuit board designed by the team to process transactions.

Vasyl Grygorovych, LightningPeach’s head of community, told CoinDesk that the team’s strategic goal is to develop a real-world infrastructure for faster bitcoin payments.

“With a small computer and a chip, which is assembled by us or is easy to reproduce … it is much easier to pay with cryptocurrencies than with credit cards, because you don’t need your credit cards at all, you just need your mobile device,” he said.

The team’s head, Pavel Prikhodko, explained that the chip can be installed on other types of devices as well.

He continued:

“In a way, as we connect this machine, we can connect lots of other stuff, both offline and online. It relies on the infrastructure we built, so we really want for this to open the road to other businesses who want to try crypto. We want to [build] a way to do this easily.”

Users can scan a QR code on the machine using their phones, which connects to a bitcoin wallet, the release explains. Users would be charged $2 for a cup of coffee, which the system would then convert into roughly 15,800 satoshis (smallest subdivision of a bitcoin).

Grygorovych said the team modified a commercially available coffee maker, which already had the ability to connect to the internet, making accessing the Lightning Network relatively easy.

“We just need to put this hardware inside,” Prikhodko said.

Moreover, Prikhodko explained, “Cheaper [chips] can be installed into a majority of vending machines, so you can use them whenever you want … like universities or malls. And people [who] have bitcoin wallets with Lightning support can just pay with no issues.”

While the first coffee machine LightningPeach has modified remains operational inside Bitfury’s office, there are no plans to distribute a mass-production version at this time. Rather, the device was built to determine whether Lightning-compatible vending machines were feasible at all.

“We’re still thinking if we should scale this or just keep this … but overall we work with lots of companies around the world in understanding use cases and understanding what needs to be created, how real businesses … [might] use Lightning. That’s just one example,” Grygorovych said.

Author: Nikhilesh De
Image CreditRachel Pipan/Bitfury

Crypto Hedge Fund vs. Litecoin and its Creator

In a new research report, written by Tushar Jain, managing partner of Multicoin Capital, the crypto hedge fund reveals that it has taken a bet that Litecoin will decline in price by shorting the coin widely considered to be “the silver to bitcoin’s gold.” The fund argues that “Litecoin is a relic of the pre-smart contract platform crypto ecosystem.” Litecoin creator Charlie Lee dismissed “concerted effort to suppress Litecoin price” as FUD “by groups that see Litecoin as a threat.”

Proponents of Litecoin often argue that it serves important functions in the crypto ecosystem by functioning as a testnet for bitcoin and being fast and cheap medium of exchange for everyday payments.

Multicoin, however, does not share the view that Litecoin is a viable medium of exchange (MoE), writing that “Litecoin is not uniquely positioned to become a MoE and there is no substantial evidence of its adoption.” The report further pointed out that the Litecoin Foundation’s specific payment processor, Litepay, “ceased operation” in March of this year, which further lowered the usefulness of Litecoin as a medium of exchange.
Also, Multicoin writes that the Litecoin Foundation is also close to running out of capital necessary to continue development of the protocol. Currently, the foundation owns assets worth only about USD 322,000, of which 82% is held in LTC. The report further notes that although Litecoin has “not been completely abandoned by developers, […] no new material developments that can be attributed to Litecoin.”

The fund expects these “multiple strong negative catalysts over the coming months”:
Growth in Coinbase listings rapidly diminishing Litecoin’s position as the comfortable entry point into crypto for naive investors who don’t understand that you can purchase fractional coins
* Increased usability and higher capacity of Bitcoin resulting from Segwit and Lightning * * * Network adoption
* Viability of Lightning Network as a payment rail
* No differentiated roadmap for LTC
* Persistent selling pressure due to mining
* Bitmain reportedly owns over 1M LTC and is likely to sell the LTC to continue their support for BCH

However, the Litecoin creator took to Twitter to defend the cryptocurrency in a series of 11 tweets.
According to Lee, Litecoin “has one of the most secure networks of all altcoins”, “has a ton of liquidity”, and is supported by 9+ payment processors which makes it “extremely easy for merchants to accept LTC”.
Also, he stressed that Litecoin processes USD 200 million worth of transactions each day and “the network has worked flawlessly for 7 years.” Moreover, Lee claims that “Litecoin will always be the cheapest and fastest on ramp to Lightning Network.”

Also, not everyone shares the same view as Multicoin. Back in August, Mati Greenspan, senior market analyst at the social trading platform eToro, wrote in a report that he believed Litecoin was trading at a “massive discount,” while recommending investors to buy the coin.
The analyst argued then that Litecoin is one of the most liquid cryptocurrencies in existence, has a large market cap, and acts as an important gateway from fiat currencies and into the world of crypto, while adding that retailers are increasingly accepting Litecoin as payment.

Litecoin’s market capitalization currently sits at around USD 3 billion. With a price per coin of about USD 54, Litecoin is now down 87% from its peak of USD 420 on December 12 last year after an extreme run-up in prices during that month.

Author: Fredrik Vold
Image Credit

49% of the Bitcoin Lightning Network is occupied by one node

According to 1ml, Andreas Brekken, the CEO of Shitcoin.com occupies 49% of the Bitcoin [BTC] Lightning Network. Shitcoin has over 35 BTC on the Lightning Network and the portal has announced that this is for an upcoming review on the Lightning Network.

Andreas Brekken was the former Advisor at Kraken and Bitcoin.com. He has been a part of the Bitcoin community since 2011 and his website shitcoin.com is solely for criticizing crypto-projects. It also includes reviews of tokens such as Tron [TRX], EOS [EOS], IOTA [MIOTA].

The Bitcoin Lightning Network is a second layer payment protocol on top of the Bitcoin blockchain. It is a solution for the Bitcoin scalability issues. It allows 2 nodes to make an unlimited amount of transactions off the Bitcoin blockchain. The transactions are recorded on the blockchain only when the node channel is closed. The key features of the Lightning Network include instant payments, scalability, low cost and cross-chain atomic swaps.
An increase in the number of nodes on the Lightning Network results in an increase of the network’s capacity, as seen by the capacity doubling since 1st July 2018.

The current statistics of the Lightning Network are:
Number of Nodes: 2755
Number of Channels: 9159
Network Capacity: 72.29 BTC
Nodes with active channels: 2024
Out of the total network capacity, Shitcoin’s node holds 35 BTC leading it to occupy more than 48% of the total capacity of Lightning Network. The other node holds approximately 1% of the total capacity. This results in the nodes occupying 49% of the total capacity making it the largest amount of Bitcoin on the Lightning Network.

Moreover, Andreas has been continuously showing his interest in the Bitcoin Lightning Network. When questioned on his Lightning Network node on Twitter, he responded by saying that he was surprised no one noticed the nodes’ color choice.

Cyborgene, a Redditor says:
“I don’t think it’s one guy. Probably a company or a few miners together trying to grow their lightning channels capacity and become a medium. By the way, I am also setting up my Lighting Node”

Uvas, another Redditor says:
“Yes, I am very curious about what he has planned. My guess is that he is just going to shut them all down at once and see what happens.”
Some Redditors even argue that it could be a 51% attack but it does not apply here as the Lightning Network has no mining power.

Owlholic, a Redditor says:
“Well. True and not. It’s not the mining 51% attack but likely there is some downside of one player owning over half. Otherwise they wouldn’t do it!”

Since 49% of the Lightning Network is occupied by Brekken, only 51% of the Lightning Network is left for the other users. Unless there are more nodes added to the network, it might hamper the overall usability of the network.

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Author: Priya
Image Credit: Unsplash

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A New Twist On Lightning Tech Could Be Coming Soon to Bitcoin

Bitcoin’s lightning network may be just starting to send transactions over the blockchain, but already its developers are looking to rearchitect the technology.

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That’s because, while touted as a way to significantly boost bitcoin’s capacity, the network itself does require users to store a significant amount of data, which makes it difficult to download and run. As such, several lightning developers – Lightning Labs co-founder ‘Laolu’ Osuntokun and Blockstream’s Christian Decker and Rusty Russell – have published a new proposal which imagines an alternative, “simplified” way of making off-chain transactions called eltoo.

But the new proposal isn’t only about condensing the amount of data users need to store, it’s also about keeping users’ cryptocurrency safe.
For instance, all this data poses another problem in that if users accidentally broadcast older data, they might lose money. As such, this data has been coined “toxic information.”

Eltoo, on the other hand, only stores the most recent off-chain transaction data, solving the well-known “information asymmetry” problem – that is if something happens to the device you’re running your lightning app on – say your smartphone – you might lose access to the whole history of data.
“With eltoo, we reduce the risk of funds being swept away. We remove this toxic information,” said Decker, who noted that the proposal’s name is a joke of sorts – the phonetic spelling of “L2,” which stands for layer-two, what many people call technology like lightning that pushes transactions off-chain.

And this is something Decker is very interested in since he’s experienced the problem personally.
“This actually happened to me,” he said, adding:
“I had an old lightning node on my laptop. I restored it. I didn’t know I didn’t have the newest state. The guy closed the connection because they knew it was an old state! Because he could steal it. Which he did, by the way.”

Developers have long been trying to come up with a way for users to make a bunch of transactions using bitcoin, without bloating the blockchain with unnecessary data.
That’s really what most of the scaling debates are all about.

But the first attempt to do this was way at the beginning of bitcoin’s history when off-chain transaction capabilities were experimented with using so-called “sequence numbers” to keep track of which off-chain transaction is the most recent.

The idea was simple – if Alice has $10 and sends a $1 transaction to Bob, obviously her balance dwindles to $9.00. This then gets a sequence number “1.” If later, she sends Bob $4, her balance is now $5, and this most recent transaction gets a sequence number “2.”
But according to Decker, the mechanism “didn’t work out,” because miners didn’t have any reason to enforce the rules and replace old transactions with the more recent ones.
Miners could just broadcast the one transaction where Alice’s balance drops to $9 (even though she had made another transaction that dropped her balance to $5). While it’s unclear why a miner might want or decide to not revoke a transaction for another one, they could decide to do so since there was no enforceability.
In this way, revoking old transactions in crucial otherwise Bob might not get the second transaction and Alice could run away with the money.

This “lack of enforceability” is a problem that wasn’t solved until 2015.
And the lightning network is the best-known solution to this problem so far. Today, revoking old state is accomplished with the “L2-penalty” model – whereby a lightning wallet or node stores all of these intermediary states, then, if someone tries to broadcast an earlier, now-invalid state, this is detected and the cheating user is punished by losing money.

But, three years on, the researchers are, in fact, going back to the idea of using sequence numbers to revoke old transactions.

Unlike bitcoin’s old code, which didn’t have an enforcement mechanism for these sequences, eltoo adds a procedure that makes every state update prescribed. Every state update – Alice sending Bob money, for instance – is composed of two transactions, each of which both parties store and which totally replace the prior update transaction.
“Only the last settlement transaction can ever be confirmed on the blockchain,” the introductory blog post explains.

The tangential advantage of this system is that it increases lightning’s scalability. With eltoo, each lightning node doesn’t need to store all the intermediary states, rather, it stores only the most recent version and some information about the transaction itself, such as it’s corresponding settlement transaction and potentially the HTLCs that spend from that settlement, the post notes.

What’s perhaps the most beneficial part of the proposal, though, is that it isn’t built on a “winner takes all” model.
Instead, eltoo and older L2 penalty schemes can be used side-by-side.

“Eltoo has quite different tradeoffs. I’m not implying it’s better in all senses,” Decker told CoinDesk, pointing to some arguments on the bitcoin developer mailing list about the technology increasing waiting times for transactions to be settled.
Still, overall, he’s pretty excited about eltoo and the simplicity it brings, adding:
“We don’t know which one is nicer, but I would like eltoo as the better option. I think eltoo is easier to explain and to extend later on.”

Not only are developers still discussing the proposal’s merits, but there’s another thing standing in the technology’s way – “sighash_noinput.”

This long-anticipated code option needs to be added to the bitcoin codebase for the cryptocurrency to be able to support eltoo (at least in an efficient form).

To understand why, it’s important to know what the basic sighash function does. It works as a flag of sorts that specifies what part of the transaction data needs to be signed when it’s transferred over to someone else. Users can choose from a range of options – for instance, the default flag, sighash_all, indicates that all parts of the transaction need to be signed, meaning that none of these parts can be changed throughout the process.
The proposed “sighash_noinput” function could flag that the “input” data going into a transaction doesn’t need to be signed. And in turn, that the input data can change over time, from when the transaction was created to when it’s written to the blockchain.
And this is exactly what eltoo needs, since the concept is that all the state in between the beginning and final transaction will be deleted, meaning the input will be different from the start and the end.

When asked whether he thinks the sighash_noinput proposal will get merged into the bitcoin codebase, Decker laughed and said, “Ever since SegWit, I stopped making these predictions.”

He’s pointing to the fact that Segregated Witness (SegWit) had broad support from the bulk of bitcoin’s most active developers, but ended up stirring up a years-long battle within the community. The code change was only added to bitcoin last August, even though it was proposed more than two years prior.

Still, even though it’s early, the sighash_noinput function is a relatively easy change to make to bitcoin’s codebase, Decker said.

Plus, it’s been theorized for some time that the change would have many positive implications for developers, he continued. Because of these potential benefits, a handful of Twitter users have begun adding the code change to their profiles to express their support, much like Twitter users did during the scaling debate (with #No2X becoming popular among those who were opposed to the Segwit2x initiative).

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Author: Alyssa Hertig
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MIT Is Testing A Smart Contract-Powered Bitcoin Lightning Network

An MIT test is providing a rare glimpse of how bitcoin might truly work at scale.

Revealed last week, the prestigious U.S. university has been quietly demoing an experimental use case for bitcoin’s lightning network, one that showcases how it might be combined with smart contracts to not only handle millions of transactions, but do so with a greater degree of complexity.

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Modeled within the school’s Digital Currency Initiative, started in 2015 as a way to further R&D on cryptocurrencies, the test envisions a system wherein transactions would take place automatically in the case of defined external events, based on say today’s weather or the current price of U.S. dollars.

This is possible due to MIT’s creative use of so-called “oracles,” trusted entities meant to broadcast data to smart contracts. For this demo, researchers Tadge Dryja and Alin S. Dragos built a test oracle to broadcast the recent price of U.S. dollars in satoshis, the smallest unit of bitcoins, which anyone can grab and use for their smart contracts.

It’s a notable step forward for the idea, one first proposed by lightning inventor Dryja last summer. However, this is the first time it’s been implemented as a prototype with working code.

Dragos told CoinDesk:

“We built this as a standalone feature of our lightning network software. We chose data what we thought would be cool, U.S. dollars, but it could be any data you want, whether weather or a stock.”

Dragos stressed that the demo is “experimental” and “shouldn’t be used for real money.” That said, he and other MIT researchers are convinced that with the help of the lightning network, bitcoin might one day scale to capacities originally envisioned by its early users.

As part of that work, MIT researchers have already created an implementation for the lightning network called lit, and this oracle code is an add-on of that work.

“We at DCI, we really believe in the lightning network,” Dragos said. “Bitcoin doesn’t scale very well. I decided there has to be something better. Turns out what’s better is lightning. It’s the way to scale.”

Bitcoin smart contracts

But while lightning provides scale, smart contracts add other new functionality to bitcoin. For example, should the tech in MIT’s test be implemented, you could make some sort of a bet based on what’s happening in the world.

Or, in this case, a futures contract. Alice promises to pay Bob whatever the price of dollars is in satoshis on a certain day, say Friday. If a dollar is worth 12,150 satoshis by the end of the week, then she will end up paying that.

It’s a kind of advanced smart contract use case that is usually not associated with bitcoin.

“When folks think smart contracts, they think ethereum. Their scripting language is much richer,” Dragos admitted.

But, he argues that with some workarounds, bitcoin can do the same thing.

“It’s not as developer friendly because bitcoin didn’t go in that direction, but you can use it. You have to be a little creative,” Dragos said.

In short, it uses Dryja’s “discreet log contracts” scheme to broadcast data to the smart contracts. One of the most important advantages of this scheme is scalability, because most of the data doesn’t need to be stored on the bitcoin blockchain.

The other is privacy, since oracles don’t have any way of knowing who’s using the data they’re broadcasting.

“We’re introducing a model where oracles are not aware of who’s using the data they’re using,” Dragos said.

Some ‘quandaries’

But while this simple demo is now complete, Dragos and Dryja think there are many outstanding questions and “quandaries,” as Dragos put it. “From the individual oracle’s perspective, they’re going to want to make some money. We’re going to have to understand that,” Dragos said.

Another is that the oracle at this point is trusted. But there might be a way to minimize this trust by allowing a user to use many oracles at once.

But there’s a certain point where MIT DCI hopes to stop working on the technology and pass it off to someone else.

“We’re working with companies that might implement this,” Dragos said. And though he couldn’t name names, he mentioned they are “big company” partners of the DCI.

The hope is these bigger companies will be better at understanding what normal users want from the software. So, while MIT DCI built a prototype demonstrating how the underlying technology really works, they haven’t produced an app as mindlessly easy to use as say, Venmo or Facebook.

“UX is not our core expertise,” Dragos said.

Now it’s open for people to use for whatever oracle data they want. So, it’s up to the community to decide if it’s worthwhile to use or not.

“It’s a hard guess. It could be a significant deal if people use it. But we don’t know what people are going to be using it for,” he added.

Dragos stated:

“New technologies are available all the time, that doesn’t mean they end up making it though.”

Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Author: Alyssa Hertig
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