• Bitcoin mining is becoming increasingly centralized with two pools controlling over 50% of the hash rate.
• Mining pools allow miners to combine their computing power and increase their chances of winning the proof-of-work competition more frequently.
• The rewards are then redistributed to all members in proportion to the computing power they have provided.
Centralization Of Bitcoin Mining
Bitcoin mining is becoming increasingly centralized, with two major pools Foundry USA and Antpool controlling over 52% of the global computational power. This centralization could have serious implications for Bitcoin’s security and censorship resistance, as well as its decentralization goals.
What Is Pool Mining?
Pool mining is a method that allows miners to unite their computing resources in order to increase their chances of winning the proof-of-work competition more frequently. By combining forces, they can probabilistically write more blocks and receive more rewards than an individual miner could on his own.
The Benefits Of Pool Mining
By pooling together, miners can increase the frequency at which they receive rewards, allowing them to pay for electricity or other expenses associated with running a mining farm more easily. Additionally, pool mining also ensures that rewards are fairly distributed among members according to their respective contributions in terms of computing power.
The Risks Of Centralized Mining
With two large pools controlling such a significant portion of the hash rate, there is an increased risk for 51% attacks or other forms of censorship or manipulation on the network by these entities. This poses a threat not only to Bitcoin’s security but also its decentralization goals.
Pool mining provides numerous benefits for miners such as increased frequency in receiving rewards and fair distribution according to contributed computing power; however, it should not be taken lightly as it does come with certain risks such as potential centralization by large entities leading to potential security threats on the network and censorship issues
Risks of Storing Bitcoin
• Online threats like malware, hacks and phishing attacks can lead to losing funds with no way to recover them.
• People have lost money due to dramatic accidents like leaving bitcoin in centralized exchanges that gone bankrupt or vanished.
• DIY wallets are available for extra security, allowing users to build their own device that leaves no trace and securely generates private keys.
What is a Multisig Wallet?
Multisig wallets have existed in the Bitcoin ecosystem since 2012 and represent a great security aid in a self-custody practice. They are two types of multisig wallets: collaborative custody wallets (whereby you use a third party to manage one of your private keys) and self-custody wallets (whereby you alone manage the distribution of all private keys).
Best Collaborative Multisig Wallets
Collaborative multisig wallet offer 2-out-of-3 key management, whereby you will have control over one private key while the third party holds the other two – one online and another offline in cold storage. The advantage of such solutions is convenience as customer service can assist with managing the private keys if needed, but also come at the expense of privacy as companies may require KYC procedures. Furthermore, they may not be available everywhere globally. One popular example is Casa, which offers multisig wallet services free of charge.
Self Custody Wallets
Self-custody wallets allow users to keep full control over their funds without relying on any third parties for assistance or holding any information about their transaction history or balances. Popular examples include hardware wallet Trezor Model T, software wallet Electrum and open source project Wasabi Wallet for enhanced privacy features. These solutions may be more secure than collaborative ones as there is no single point of failure but require an extra effort from users when it comes to managing multiple private keys correctly.
Choosing between collaborative custody and self-custody depends on many factors including user’s risk awareness level, geographical location and technical skillset. Both solutions come with risks so understanding them before deciding on one is recommended in order avoid potential losses associated with digital assets storage mistakes.
• P2P and DEX exchanges are a growing method of trading Bitcoin without the need of a middleman.
• An escrow service is used to safeguard the transaction, ensuring that both buyer’s and seller’s assets are safe.
• P2P exchanges offer privacy, censorship resistance, and security that centralized services can not provide.
What is a P2P Exchange?
Peer-to-peer (P2P) or decentralized exchanges are a growing method of trading Bitcoin without the need for a middleman to facilitate the transaction. An escrow service usually safeguards the transaction, ensuring that neither the buyer’s nor the seller’s assets are at risk. An escrow is a service agreement that holds the assets or money of two parties in blockchains. It releases money once predetermined conditions have been met.
Features Of A P2P Exchange
P2P networks exist long before Bitcoin was introduced as they involve exchanging or sharing information, money, or assets over the internet between two or more parties without involving any central authority. They tend to be more relaxed when it comes to verification processes and users can choose from different payment methods with lower fees compared to traditional ones. Moreover, users establish trust among participants through rating methods which shows their reliability for transactions.
Benefits Of Using A P2P Exchange
These networks never cease to function as long as two parties continue communicating and using them since there is no single point of failure like centralized entities but instead there is an entire network of peers with similar interests in maintaining its existence and protecting user privacy. In addition, Bitcoin offers one of the most secure networks with on-ramps and off-ramps not being able to boast such assurance making it difficult for anyone to shut down these types of exchange platforms even if they try doing so from private or state attackers alike.
Disadvantages Of Using A P2P Exchange?
Although these platforms offer great advantages compared to others, they still might have several drawbacks including scams by other malicious users who might take advantage of those looking for investments opportunities resulting in financial losses due this lack of regulation involved in these types of transactions since all funds are transferred directly into user wallets right after concluding them so buyers must be extra careful when selecting their counterparties for each exchange platform visit regardless if it’s done online or offline which could lead some users into feeling uncomfortable enough not wanting use them at all times either because they don’t feel secure enough about trusting someone else’s reputation ratings or simply do not wish taking risks with their funds especially when investing large amounts leading them towards finding centralized alternatives instead .
Overall, relying on peer-to-peer exchanges along with cold storage means embracing completely into the Bitcoin ecosystem while enjoying maximum levels freedom within its limits providing nonstop access along more reliable options than any other existing alternative available today proving that this type cryptocurrency infrastructure continues gaining traction worldwide despite all challenges that come up during its path offering even greater potential than most people think possible in many aspects during upcoming years ahead now that its usage has become even more widespread than ever before thanks advancements like these ones seen recently during recent months around world throughout different countries too
• Nigeria recently launched a Central Bank Digital Currency (CBDC), the eNaira, as part of its financial system.
• The government has put restrictions on cash withdrawal, limiting it to about $225 per week and $45 per day.
• These regulations have been met with skepticism from Nigerians who view them as an attempt by the government to gain more control over citizens’ finances.
This is an opinion editorial by Heritage Falodun, a Bitcoin consultant and computer scientist based in Nigeria. It focuses on the launch of the eNaira, Nigeria’s Central Bank Digital Currency (CBDC) and how it has sparked new sets of financial policies, regulations and restrictions from the Nigerian government.
In an effort to drive consumers toward alternative options like its CBDC, the Nigerian government has now put restrictions on cash withdrawals from banks limiting it to about $225 per week or 100,000 naira and a daily limit of about $45. This has caused some concern among Nigerians who perceive these regulations as an attempt by the government to gain more control over citizens’ finances.
Viewpoint of CBDC Launch
The governor of the Central Bank of Nigeria, Godwin Emefiele views that launching a CBDC is “to ensure that more people in this country are financially included” due to advancements in money technology moving from commodity to metallic, then paper and plastic; now digital. He believes that this should be seen as a solution for their economic predicaments such as inflation, monetary censorship and rigid access to foreign exchange amongst others however so far this does not appear to be what is happening on ground level within Nigeria since January 2021 when they launched their CBDC.
Reaction From Nigerians
On February 2nd 2023 just two days after the initial deadline set by the Central Bank for all Nigerians to return old naira denominations a Nigerian named Oluwasegun Kosemani tweeted expressing his view that “the Nigerian government is intentionally forcing its citizens into a cashless Keynesian economy while they position their surveillance CBDC – eNaria as final destination”. This example shows how well-informed younger generations understand what these regulations mean for them in terms of financial control which appears mostly directed at pushing towards a cashless policy where the government holds complete control over all citizens’ finances.
In conclusion it appears that despite being introduced with good intentions such as increasing financial inclusion with alternative options like CBDCs it appears that so far Nigerians are not leaps and bounds closer towards achieving this goal but rather further away due to increased governmental control via restrictive policies over their finances through limiting withdrawals etcetera which creates distrust among citizens towards both their governments intentions but also their own ability to manage their own money in ways they see fit without interference or restriction
• Multisignature security (“multisig”) offers a different set of security guarantees than single-signature (singlesig) solutions.
• Multisig wallets are more secure, as multiple entities are involved and there is less trust in any one entity.
• Setting up and using multisig can be operationally more time consuming, so it should only be used for long-term HODLing.
What Is Multisig?
Multisignature security, or “multisig,” is a wallet that can talk to multiple signing devices and coordinate between them for signing transactions (generally using the PSBT format). In comparison, a singlesig wallet talks to one signer only. The singlesig wallet is also often the signer, meaning the keys are hot.
Advantages of Multisig
The advantages of having multiple signers are to reduce single points of failure and increase redundancy in your setup. By having multiple entities involved, users can minimize trust in any one entity as well as increase their overall security posture.
Considerations For Bitcoin Custody
Setting up and using multisig can be operationally more time consuming and include more pitfalls if not done correctly. Therefore, it is recommended that users only consider multisig for long-term HODLing where regular transactions are not anticipated. A robust multi-vendor multisig setup requires hardware from at least two vendors; thus incurring costs associated with hardware procurement and maintenance which should also be considered before opting for multisig custody solutions.
Common Examples Of Attacks On Multisigs
Common examples of attacks on multsigs include social engineering attacks such as phishing scams or other malicious attacks targeting specific individuals who have access to part of the wallet’s private keys. These types of attacks may lead to stolen funds if they are successful in acquiring access to an individual’s private key or device containing it. Additionally, compromised hardware devices used in a multi-device setup could also lead to stolen funds if attackers gain control over it without being detected by the other signers participating in the system.
In conclusion, while singlesigs provide basic bitcoin custody options when managing small amounts, I believe that anyone holding a non-trivial amount of bitcoin for the long term should evaluate a multisig option due its added security features such as reduced single points of failure and increased redundancy within its setup process. However, it is important to keep in mind all considerations associated with setting up a robust multi-vendor solution such as costs associated with hardware procurement and maintenance before opting for a multi signature custodian solution.
Overview of Madeira
• A small Portuguese island 600 miles off the coast of Portugal
• Popular tourist destination with warm and temperate climate and a rich cultural heritage
• Economy driven by tourism, remittance, trade in ports, and exports such as bananas, passion fruit, tea, and wine
Bitcoiners Visit Madeira
A band of high-profile Bitcoiners visited Madeira this summer to document their experience. Pleb Music created a documentary featuring drone shots, storytelling sleight of hand and the agile camerawork of @Cinemuck_. The documentary showcases life on the island during the Northern Hemisphere winter.
Economy of Madeira
Madeira is like other small island developing states where its development is restricted due to its size. The local economy depends on tourism as well as remittance sent from Madeirans living abroad. Additionally, they export bananas, passion fruit, tea and wine. In order to diversify the economy during low season months they have begun to encourage digital nomads to work from the island.
Food & Culture
The cuisine on Madeira consists of espetada (posh kebab), steak and scrumptious fish which appeals to Bitcoiners visiting the island. There is also a rich cultural heritage that makes it an appealing travel destination for tourists looking for Instagram-worthy landscape views.
In conclusion, this summer’s visit from Bitcoiners highlighted why Madeira should be on any traveling Bitcoiner’s bucket list: stunning views, delicious food options and a unique culture that makes it stand out from other destinations. With regular direct flights to New York and budget airlines travelling to European capitals cities this small Portuguese island offers something for everyone.
Black Americans and Bitcoin
• Black Americans have been drawn to Bitcoin due to its potential, technology, and price movement.
• Millions of people invested in Bitcoin with their COVID-19 stimulus checks.
• However, the crypto market crash has hurt Black investors disproportionately.
The Crypto Bubble
In the late 2010s, a significant number of black Americans began researching Bitcoin with enthusiasm. They saw the promise of its blockchain technology, a distributed ledger that provides an immutable record of transactions, as well as watched the price movement of bitcoin hitting record highs. With the distribution of COVID-19 stimulus checks in 2020, millions of people who had never had much to invest or save suddenly had cash on hand and many chose to put them into bitcoin.
Unfortunately, over the last year following this period where many black investors found bitcoin, the overall crypto market has started to shrink; cryptocurrency holdings have disappeared after these digital currencies entered into a winter market resulting in more than $2 trillion being lost in value with bitcoin plunging from highs of $69,000 reached in November 2021 to around $20,000 per coin now.
Addressing Financial Inclusion
Bitcoin naturally holds practical appeal for small-dollar investors from historically marginalized communities who distrust traditional finance. For instance, Black Americans can purchase BTC on digital platforms without a credit check which may hold them back from financial inclusion in other assets. This is why many Black investors have invested funds into bitcoin because they believe it will give them financial autonomy despite the risks associated with it.
Although investing in cryptocurrency may be risky and expensive for some people due to losses related to crypto bubbles or crashes such as we are seeing now; there are important lessons that can be learned from black investors about becoming an intelligent investor regardless if purchasing Bitcoin or not: doing your research before investing and understanding exactly how digital assets work can go a long way when it comes to making smart investments decisions no matter what asset you choose.
Despite recent downturns in cryptocurrency markets black Americans continue to show interest in digital assets due both its potential profit but also its promise of financial independence which makes it attractive for those who distrust traditional finance systems due lack of access and opportunity provided by them. With their enthusiasm for this new technology there is much that other investors can learn about proper research methods and understanding how digital assets work before committing funds towards them regardless if they are interested on buying Bitcoin or not.
• Cameron Winklevoss, co-founder of Gemini, has released an extensive letter accusing Digital Currency Group (DCG), Genesis, and its key personnel of fraud.
• The letter alleges that the $2.8 billion crypto lending arm of Genesis Trading, Genesis Global Capital LLC, realized losses of at least $1.2 billion and instead of taking steps to restructure and protect users, the fund fraudulently marked a 10-year promissory note down as a current asset.
• The letter also claims that Barry Silbert is unfit to run DCG as he is apparently responsible for passing on the risk to the users of Gemini Earn, with greed being the driving factor behind this decision.
Cameron Winklevoss, the co-founder of Gemini, has recently released an extensive letter alleging fraud committed by Digital Currency Group (DCG), Genesis, and its key personnel, including Barry Silbert. The letter claims that after Genesis Global Capital LLC, the $2.8 billion crypto lending arm of Genesis Trading, realized losses of at least $1.2 billion in the wake of cryptocurrency hedge fund Three Arrows Capital’s collapse, instead of taking action to restructure and protect users, the fund attempted to defraud others into believing that $1.2 billion of working capital had been injected into the company. To achieve this, the firm allegedly marked a 10-year promissory note down as a current asset, which Winklevoss noted should not have been done as “A promissory note with a principal repayment due in 10 years falls outside the definition of a ‘current asset’ by a country mile.”
The letter also claims that Barry Silbert and other key personnel of DCG and Genesis were responsible for passing on the risk to the users of Gemini Earn. Winklevoss alleges that this decision was driven by greed, as the crypto hedge fund was reportedly redirecting investment into Grayscale Investments’s GBTC, which limited the growing discount of the Trust.
Finally, the letter concludes with a statement that claims that Barry Silbert is unfit to run DCG, as he has proven himself “unwilling and unable to fulfill his fiduciary duty to protect the interests of DCG and its stakeholders.” This letter has certainly raised eyebrows in the cryptocurrency and investing community, and only time will tell how this story will unfold.
• BlockFi and Celsius were two of the most popular crypto lending companies of the past year. However, both companies have now gone bankrupt due to their investments in bitcoin mining.
• BlockFi announced its new mining operations in May 2021 in the form of a partnership with Blockstream and its long-standing mining unit, while Celsius invested $500 million into its mining efforts.
• The failure of both companies showcases the importance of careful investment decisions and the interconnectedness of the crypto industry.
The crypto industry is a volatile and ever-changing landscape, with fortunes made and lost in the blink of an eye. This was made clear in the past year, when two of the most popular crypto lending companies, BlockFi and Celsius, both went bankrupt due to their investments in bitcoin mining.
The failure of both companies serves as a stark reminder of the interconnectedness of the crypto industry, as well as the importance of careful investment decisions. BlockFi announced its new mining operations in May 2021 in the form of a partnership with Blockstream and its long-standing mining unit, although the exact amount of hash rate managed through Blockstream remains unclear. Celsius also invested heavily in bitcoin mining, with $500 million spent on its mining efforts as of November 2021.
The combination of crypto lending and crypto mining, while seemingly attractive, can be a risky endeavor. Both of these companies failed catastrophically, leaving their investors in a lurch and providing valuable lessons for future entrepreneurs. Not only did these companies suffer from the volatility of the crypto market, but their investments in bitcoin mining likely did not pay off in the end.
In the wake of the disaster, investors are left wondering what could have been done differently. The failures of BlockFi and Celsius demonstrate how difficult it can be to navigate the ever-changing crypto industry. As investors look to the future, it is important to remember that missteps can be costly, and that the industry is highly interconnected. A careful approach is the best way to ensure that investors are not left with a sour taste in their mouths.
• In 1914, a British ship, the Alert, set sail from Dover with the mission of sabotaging German undersea cables and cutting off their communication with the world.
• The British set up a system of censors across the empire, from Hong Kong to Malta to Singapore, to intercept strategic intelligence between the enemy and their agents.
• By leveraging the system of censors, the British were able to monitor and censor up to 50,000 messages per day.
At the outbreak of the First World War in 1914, Great Britain had the world’s most sophisticated undersea telegraph cable system, which encircled the entire globe. With the declaration of war on Germany, the British had to act quickly to cut off their enemy’s communication with the world. A solution was found when a British ship, the Alert, set sail from the port of Dover with a mission to sabotage German undersea cables and disconnect them from the world.
In order to ensure that the enemy’s communication was completely severed, the British employed a system of censors across the empire, from Hong Kong to Malta to Singapore. These censors were not just tasked with preventing the communication of strategic intelligence between the enemy and their agents, but with gathering intelligence as well. The system of censors was able to monitor and censor up to 50,000 messages per day, providing an almost impenetrable barrier between the enemy and their allies.
The British censorship system was a great success and played a major role in the Allied victory. By intercepting and censoring enemy communication, the British were able to gain a strategic advantage over the Axis powers and end the war. The success of the British censorship system during the First World War showed the importance of communication in warfare and the power of censorship in achieving victory.