In this file:
· Wyoming's New Blockchain Laws Are Receiving World Wide Attention
· The Blockchain divide: why large corporates are delinking it from the crypto world?
· Once hailed as unhackable, blockchains are now getting hacked
Wyoming's New Blockchain Laws Are Receiving World Wide Attention
By Bob Beck, Wyoming Public Media
Mar 8, 2019
While the Wyoming legislature was busy fighting about private schools, the budget and a few tax issues, it also passed legislation that continues to make the state the place to be for Blockchain technology.
Blockchain is a digital ledger that can be accessed instantly. It's most commonly used in the financial world where digital money can be transferred back and forth without delay. But Blockchain can be used for other things as well.
This session the legislature passed a law making Wyoming the first state to recognize cryptocurrencies, virtual securities and other digital assets and also allowed financial depositaries, which are like banks to come to the state and store the digital assets.
Caitlin Long is a Wyoming native with a long history on Wall Street and is the co-chair of Wyoming Blockchain coalition.
"This is one where being first really does matter, because we could grab a first mover advantage and it's clearly starting to play out that way.
Long added that it's hard to overstate the interest in what Wyoming is doing.
"I've had thousands of inquires personally on social media just in the past two weeks. When I published a piece on Forbes.com two days ago that summarizes the importance of the legislation, within 24 hours it had 22-thousand views," Long said.
That's not a surprise to Laramie Senator Chris Rothfuss, who said the worldwide interest has been high ever since Wyoming embarked on this effort.
"Of all the years I've been in the legislature, this is the first time I've been in committee where people fly from all over the world to participate. Where we have billionaires in the back of the room to provide testimony on what it is we are working on, where we get unsolicited advice from law firms in the east coast that work in securities," Rothfuss said.
Recognizing digital assets was huge for Wyoming, but he said the so-called digital banks part of the legislation was equally big. That's because specialized banks are needed to store digital assets.
"That allows these innovative and kind of advanced startups to be able to bank and pay their paychecks," Rothfuss said.
Already several of these repositories are looking to set up shop in Wyoming. Sheridan Representative Cyrus Western said the need is great and will benefit the state.
"Goldman Sachs issued a whitepaper back last summer saying there's about $110 trillion worth of securities floating around on the global market and in the next five years, ten percent of that will migrate to Blockchain. So we are talking about $10 trillion that needs to be stored somewhere," Western said.
He said the goal is to bring some of that money to Wyoming. He added that others are paying attention, such as the main exchange in the digital currency world.
"The founder and CEO of Kraken, which is one of the big Bitcoin exchanges, I think they have six or seven million users? You know they were here because they are strongly considering moving their operations to Wyoming. I think this is a company with like 700 employees. When you have people like that knocking on your door, something's going right," Western said.
Sundance Representative Tyler Lindholm said helping legislators understand the importance of this has taken some time and education. But he noted that businesses get it...
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The Blockchain divide: why large corporates are delinking it from the crypto world?
Amazon and IBM are championing Blockchain, but are desisting from crypto ledger-linked reward mechanisms. Doesn’t this defeat the very purpose of a decentralised approach to verifying transactions?
Vishal Krishna, YourStory.com
11th Mar 2019
Blockchain is the way ahead, but true Blockchain is decentralised and intrinsically linked to a rewards mechanism. The idea was to create blocks of information in a transaction cycle and allow third parties – crypto miners - to verify any changes to the transaction or contract process, and offer a rewards mechanism.
But with Blockchain being linked to the speculation behind cryptocurrency, corporates are more than happy to delink the technology from cryptocurrency. By doing so, they are defeating the very purpose of a decentralised approach to verifying transactions and enforcing contracts with utmost transparency.
The death knell was sounded by AWS, the $28 billion public cloud giant. It launched a couple of Blockchain-based services at AWS Re:Invent 2018 based on a centralised smart contract system with AWS acting as the verifying layer but with no link to the crypto rewards mechanism.
Amazon-managed Blockchain is a fully managed service that makes it easy to create and manage scalable Blockchain networks using the popular open source frameworks Hyperledger Fabric and Ethereum (to be launched next year).
Tough to manage?
According to AWS, Blockchain makes it possible to build applications where multiple parties can execute transactions without the need for a trusted, central authority. But the verifying mechanism will be AWS, not crypto miners. AWS has a reason for not going the decentralised route; it says building a scalable Blockchain network with existing technologies is complex to set up and hard to manage.
To create a Blockchain network, each network member needs to manually provision hardware, install software, create and manage certificates for access control, and configure networking components.
Once the Blockchain network is running, you need to continuously monitor the infrastructure and adapt to changes, such as an increase in transaction requests, or new members joining/leaving the network.
Amazon’s “Managed Blockchain” eliminates overheads required to create the network, and automatically scales to meet the demands of thousands of applications running millions of transactions.
“Once your network is up and running, managed Blockchain makes it easy to manage and maintain your Blockchain network,” says Andy Jassy, CEO of AWS. Amazon’s MB manages your certificates, lets you easily invite new members to join the network, and tracks operational metrics such as usage of compute, memory, and storage resources.
In addition, MB can replicate an immutable copy of the Blockchain network activity into Amazon Quantum Ledger Database (QLDB), a fully managed ledger database. “This allows you to easily analyse network activity outside the network and gain insights into trends,” he adds.
AWS is the centralised authority and has everything to do with its quantum ledger database, which is different from relational databases. Ledgers are typically used to record history of economic and financial activity in an organisation.
With Amazon QLDB, an organisation’s data’s change history is immutable – it cannot be altered or deleted – and using cryptography, the organisation can easily verify that there has been no unintended modification to the application’s data.
QLDB uses an immutable transactional log, known as a journal, which tracks each application data change and maintains a complete and verifiable history of changes over time. It is also server-less, and so automatically scales to support the demands of an organisation’s application. There are no servers to manage; no read/write limits to configure. With QLDB, you only pay for what you use.
Let’s consider a retail transaction to simplify this process...
Once hailed as unhackable, blockchains are now getting hacked
More and more security holes are appearing in cryptocurrency and smart contract platforms, and some are fundamental to the way they were built.
by Mike Orcutt, MIT Technology Review
February 19, 2019
Early last month, the security team at Coinbase noticed something strange going on in Ethereum Classic, one of the cryptocurrencies people can buy and sell using Coinbase’s popular exchange platform. Its blockchain, the history of all its transactions, was under attack.
An attacker had somehow gained control of more than half of the network’s computing power and was using it to rewrite the transaction history. That made it possible to spend the same cryptocurrency more than once—known as “double spends.” The attacker was spotted pulling this off to the tune of $1.1 million. Coinbase claims that no currency was actually stolen from any of its accounts. But a second popular exchange, Gate.io, has admitted it wasn’t so lucky, losing around $200,000 to the attacker (who, strangely, returned half of it days later).
Just a year ago, this nightmare scenario was mostly theoretical. But the so-called 51% attack against Ethereum Classic was just the latest in a series of recent attacks on blockchains that have heightened the stakes for the nascent industry.
In total, hackers have stolen nearly $2 billion worth of cryptocurrency since the beginning of 2017, mostly from exchanges, and that’s just what has been revealed publicly. These are not just opportunistic lone attackers, either. Sophisticated cybercrime organizations are now doing it too: analytics firm Chainalysis recently said that just two groups, both of which are apparently still active, may have stolen a combined $1 billion from exchanges.
We shouldn’t be surprised. Blockchains are particularly attractive to thieves because fraudulent transactions can’t be reversed as they often can be in the traditional financial system. Besides that, we’ve long known that just as blockchains have unique security features, they have unique vulnerabilities. Marketing slogans and headlines that called the technology “unhackable” were dead wrong.
That’s been understood, at least in theory, since Bitcoin emerged a decade ago. But in the past year, amidst a Cambrian explosion of new cryptocurrency projects, we’ve started to see what this means in practice—and what these inherent weaknesses could mean for the future of blockchains and digital assets.
How do you hack a blockchain? ...
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