Ripple CTO David Schwartz says a realization about Bitcoin’s “secret sauce” led to the creation of XRP. At SXSW in Austin, Texas, Schwartz expanded on what brought him to the world of blockchain and cryptocurrency in the first place.
“When I first saw Bitcoin it was one of those things where you could almost call it love at first sight. I saw the technology and I thought wow, there’s really something here. And I wanted to learn everything I possibly could about it, and I found the communities, looked at the source code.
And I happened to be a little bit lucky that there was a problem at the time. This was just around the rise of mining pools and the software was never designed to handle mining pools. So a lot of people were complaining about performance issues in the software, and one of the things I specialized in was improving the performance of software. And I saw these bounties. Mining pools were like, ‘I’ll pay 10 Bitcoins if someone can fix this problem. I’ll kick in 15 Bitcoins if someone can solve that problem.’ And they were worth about $15 a piece, so that was real money…
So I explored for the direction of solving that problem that mining pools have. So I solved the problem, and they paid the bounties. And it’s kind of funny – when I went to buy a house in Oakland, I used the bounties as the deposit. And it was the first time Wells Fargo ever had to do the provenance of funds. It actually went to the posts on the Bitcoin forums, where people had offered the bounties and I claimed it.”
According to Schwartz, the epiphany that led to the creation of the XRP Ledger centered on the notion that the public ledger is the core innovation that makes Bitcoin revolutionary.
“When we looked at Bitcoin, I think a lot of people in the community thought that proof-of-work was the secret sauce, or the magic element of Bitcoin. And what I and a few other people – Jed McCaleb realized this first – and that was the key insight of his that led to the formation of the XRP Ledger and ultimately Ripple – was his insight that proof-of-work was not the secret sauce.
The secret sauce of Bitcoin is that all of the state information is public. The ledger is completely public. You can see every transaction, every balance. Everything is public. And what that means is you don’t have to take anybody else’s word for anything. If someone submits a transaction, you can check if it’s valid. You can figure out what it does all by yourself.
And that was the sort of decentralization magic, and that proof-of-work was just the way that it solved the double spend problem, the idea that if I have one Bitcoin, what if I try to send it to two different people? And that kind of led to this idea that there might be other ways to solve the double spend problem that might have different characteristics from Bitcoin.”
“Use case fit? We have that in payments. Make no mistake, these things work for particularly international or cross-border payments because domestic payments in most parts of the world work pretty well.
Although there are exceptions. I’m sure most of you have heard of PayPal or Venmo. They’re owned by the same company – they don’t interoperate. Clearly, that’s an example of domestic payments that don’t work. But I think the cases where they don’t work are the exception. International payments are where we really have product market fit right now.”
As for additional uses for blockchain and crypto, Schwartz says it may take a minute before companies wake up to the true benefits of the technology.
“Centralized databases are expensive. I was talking to some pharmaceutical companies who are looking for a database application that involves tracking the movement of their goods. And they were quoted many millions of dollars by companies whose job is to provide centralized databases. Well, you can stand up a private Ethereum node if you want. A couple of them. It’s much cheaper and the reliability is higher.
And I think also the security difference – people will say there are applications where security isn’t super critical. But what I think they miss is the fact that certain types of attacks are fundamentally impossible on blockchains. Any attack that involves injecting fake data is absolutely impossible on a blockchain, where it’s possible on a database.”
Bitcoin Hash Rate alcanza 102 quintillones en el hito histórico de la red
Bitcoin’s (BTC) network hash rate has passed a record 102 quintillion hashes for the first time in history in a historic milestone for the cryptocurrency.
Bitcoin adds another zero to hash rate
As data from monitoring resource Blockchain confirmed on Sept. 18, hash rate, ultimately a function of how secure the Bitcoin network is, has reached a high of 102.8 quintillion hashes.
Bitcoin network hash rate. Source: Blockchain
The achievement follows a string of records for the metric this year, Cointelegraph reporting on various stages of its expansion over the past few months.
Hash rate refers to the amount of computing power involved in processing Bitcoin transactions. The higher the number of hashes, the more implied competition there is among miners to obtain the block reward.
Since December 2018, the hash rate has progressed from its recent low of 31 quintillion hashes per second, equating to the progress of 230%.
Bitcoin proponents eye price implications
Current growth has excited commentators, despite coming in tandem with a moderate decline in Bitcoin price.
As many noted, new upward action for hash rate tends may hint at future price growth. Hash rate began growing in January after several months of decline, with price then following in April.
Commenting on the current rate of growth, Lightning Torch organizer Hodlonaut said the figures spoke to underlying confidence among miners.
“Last readjustment period (2016 blocks, or around 2 weeks) increased 10.38%. We are about half way through the current readjustment period, and on track for another 11.85% increase,” he forecast.
Others have already given more bullish predictions. Max Keiser, a firm believer in Bitcoin’s prowess over altcoins, has frequently doubled down on his depiction of giant surges in both hash rate and price in the near future.
Bitcoin needs to be ‘better regulated’ before it is traded on major exchanges
Speaking at a conference today hosted by CNBC and Institutional Investor, Securities and Exchange Commission Chairman Jay Clayton said that bitcoin would need better regulation before being listed for trading on major traditional exchanges like NYSE or Nasdaq.
“If [investors] think there’s the same rigor around that price discovery as there is on the Nasdaq or New York Stock Exchange … they are sorely mistaken,” said Clayton. “We have to get to a place where we can be confident that trading is better regulated.”
Clayton’s comments come a few days after VanEck and SolidX’s decision to withdraw their bitcoin ETF proposal. Earlier this month, Clayton also said that while “progress is being made” on the bitcoin ETF, bitcoin businesses still need to address some of the SEC’s lingering concerns, citing crypto custody and the threat of price manipulation on unregulated exchanges.
Bitcoin (BTC) Crashes Below $10,000 Days Ahead Of Bakkt Futures Launch
Bitcoin (BTC) has declined well below $10,000 just before the most anticipated Bakkt futures launch. This has unnerved a lot of the bulls that were hoping for a rally to the moon by Monday. However, when everyone starts thinking the same way, it is best to think the opposite. Remember, Bakkt is “scheduled” to be launched on Sep 23, 2019.
It was “scheduled” to be launched on December 12, 2018 as well and if you had been hoping in November 2018 that $6,000 was going to hold just because Bakkt was going to be launched then you would have made quite a loss as the price nosedived to $3,130 from there in a matter of weeks. So, what does this recent crash mean in light of what has happened in the past?
The market makers were waiting for investors to enter margined longs. They gave them plenty of time to do that as the price consolidating and doing nothing much. So, they kind of forced traders into making the decision now instead of waiting to enter a trade after the breakout because these past few days traders have been made to be comfortable buying into sideways action in anticipation of a pump as we saw in the case of Ethereum (ETH) and other altcoins. Most of them entered leveraged longs on BTC/USD in the hopes of profiting off a potential Bakkt rally. Those that had their stops just below the symmetrical triangle were shaken out but there are a lot more stops to be run just yet. The market makers might want to give investors another chance to long these dips so they can trap them again.
Bullish or bearish doesn’t matter from the market makers’ perspective. They are in the business of shaking out the traders hoping for easy money in this market. As I have said before this is not legal and if someone were to do this in the stock market they would find the SEC knocking on their door. However, anything is possible in this market in the absence of regulation. If we look at the 1H chart for Bitcoin Dominance (BTC.D), we can see that it broke out of a falling wedge and is now primed for further upside.
Bitcoin dominance (BTC.D) rises when either Bitcoin (BTC) is planning on outpacing the market at a certain point or we are primed for further downside and Bitcoin (BTC) is expected to hold its ground better than other coins. In both cases, this rising dominance in Bitcoin (BTC) does not bode well for the altcoin market which has yet to experience serious pain. There are a lot of useless projects in the altcoin market and it is only a matter of time before we see a strong downtrend that shakes out most of such projects. The fact that Bitcoin dominance (BTC.D) just broke out of a falling wedge and has now begun an uptrend is a testament to the fact that recent hopes of an altcoin season were just orchestrated attempts by the big players to lure retail investors into buying their altcoin bags before the next crash.