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cryptosuite94-blog · 6 years ago

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The Future of Blockchain

If you have actually attempted to dive into this mystical thing called blockchain, you 'd be forgiven for recoiling in scary at the large opaqueness of the technical jargon that is typically utilized to frame it. So before we get into what a crytpocurrency is and how blockchain technology may alter the world, let's discuss what blockchain actually is.

In the most basic terms, a blockchain is a digital journal of deals, not unlike the journals we have actually been utilizing for hundreds of years to tape-record sales and purchases . The function https://en.search.wordpress.com/?src=organic&q=block chain of this digital journal is, in truth, practically similar to a conventional journal because it tape-records debits and credits in between individuals. That is the core principle behind blockchain; the distinction is who holds the ledger and who verifies the deals.

With conventional transactions, a payment from a single person to another includes some sort of intermediary to facilitate the deal. Let's say Rob wishes to move ₤ 20 to Melanie. He can either offer her money in the form of a ₤ 20 note, or he can use some sort of banking app to transfer the cash directly to her bank account. In both cases, a bank is the intermediary verifying the transaction: Rob's funds are validated when he takes the money out of a atm, or they are verified by the app when he makes the digital transfer. The bank decides if the transaction must go ahead. The bank also holds the record of all transactions made by Rob, and is entirely responsible for updating it whenever Rob pays somebody or gets money into his account. Simply put, the bank holds and controls the journal , and whatever flows through the bank.

That's a lot of responsibility, so it is necessary that Rob feels he can trust his bank otherwise he would not risk his money with them. He needs to feel positive that the bank will not defraud him, will not lose his money, will not be robbed, and will not disappear overnight. This requirement for trust has actually underpinned quite much every major behaviour and element of the monolithic financing industry, to the level that even when it was found that banks were being careless with our money throughout the monetary crisis of 2008, the government (another intermediary) chose to bail them out rather than risk ruining the final pieces of trust by letting them collapse.

Blockchains run differently in one key regard: they are completely decentralised. There is no main clearing house like a bank, and there is no main ledger held by one entity.

When a new transaction is gotten in into a blockchain, it is first secured utilizing advanced cryptographic technology. When encrypted, the transaction is transformed to something called a block, which is generally the term used for an encrypted group of brand-new transactions. That block is then sent out (or broadcast) into the network of computer nodes, where it is confirmed by the nodes and, when validated, passed on through the network so that the block can be added to completion of the journal on everyone's computer system, under the list of all previous blocks. This is called the chain, hence the tech is described as a blockchain.

As soon as approved and tape-recorded into the journal, the deal can be finished. This is how cryptocurrencies like Bitcoin work.

Responsibility and the removal of trust

What are the benefits of this system over a banking or main cleaning system? Why would Rob use Bitcoin instead of regular currency?

As pointed out before, with the banking system it is critical that Rob trusts his bank to safeguard his money and manage it properly. To ensure this happens, huge regulative systems exist to verify the actions of the banks and ensure they are fit for function. The trust relationship in between people and banks is precarious and awkward : we do not really trust them however we don't feel there is much option.

Blockchain systems, on the other hand, do not need you to trust them at all. All deals (or blocks) in a blockchain are validated by the nodes in the network prior to being contributed to the journal, which means there is no single point of failure and no single approval channel. If a hacker desired to effectively tamper with the ledger on a blockchain, they would need to concurrently hack millions of computer systems, which is practically difficult. A hacker would likewise be basically not able to bring a blockchain network down, as, again, they would require to be able to close down each and every single computer in a network of computers distributed worldwide.

The encryption process itself is also a crucial aspect. Blockchains like the Bitcoin one use intentionally hard processes for their verification procedure. In the case of Bitcoin, blocks are validated by nodes performing a intentionally processor- and time-intensive series of computations, frequently in the kind of puzzles or complicated mathematical issues, which imply that verification is neither immediate nor available . Nodes that do devote the resource to verification of blocks are rewarded with a transaction charge and a bounty of newly-minted Bitcoins. This has the function of both incentivising people to end up being nodes ( due to the fact that processing blocks like this requires quite effective computers and a lot of electrical energy), whilst likewise dealing with the procedure of generating - or minting - systems of the currency. This is referred to as mining, because it includes Crypto Exchange Focus a significant quantity of effort (by a computer system, in this case) to produce a brand-new commodity. It also means that transactions are validated by the most independent way possible, more independent than a government-regulated organisation like the FSA.

This decentralised, highly protected and democratic nature of blockchains suggests that they can function without the need for regulation (they are self-regulating), government or other nontransparent intermediary. They work due to the fact that people do not rely on each other, rather than in spite of.

Let the significance of that sink in for a while and the enjoyment around blockchain begins to make sense.

Smart contracts

Where things get actually intriguing is the applications of blockchain beyond cryptocurrencies like Bitcoin. Considered that one of the underlying concepts of the blockchain system is the protected, independent verification of a deal, it's easy to imagine other methods in which this kind of procedure can be valuable. Unsurprisingly, lots of such applications are already in use or development. Some of the very best ones are:

Smart contracts (Ethereum): most likely the most exciting blockchain development after Bitcoin, wise agreements are obstructs that consist of code that needs to be performed in order for the contract to be satisfied. The code can be anything, as long as a computer can execute it, but in simple terms it means that you can utilize blockchain innovation (with its independent verification, trustless architecture and security) to produce a type of escrow system for any kind of transaction. As an example, if you're a web designer you might produce a agreement that validates if a brand-new customer's site is released or not, and after that automatically release the funds to you once it is. No more chasing or invoicing. Smart contracts are likewise being used to prove ownership of an possession such as property or art. The potential for minimizing scams with this technique is enormous.

Many cloud-based systems are run on servers stored in single-location server farms, owned by a single entity (Amazon, Rackspace, Google etc). Dispersing information on a blockchain removes the trust problem totally and also assures to increase reliability as it is so much harder to take a blockchain network down.

With huge centralised services such as Facebook holding so much data about us, and efforts by numerous developed-world federal governments to keep digital details about their citizens in a central database, the potential for abuse of our individual data is frightening. Blockchain technology uses a potential solution to this by wrapping your essential data up into an encrypted block that can be verified by the blockchain network whenever you need to prove your identity.

Digital ballot: highly topical in the wake of the investigation into Russia's influence on the current U.S. election, digital ballot has actually long been believed of being both unreliable and highly susceptible to tampering. Blockchain technology provides a method of validating that a voter's vote was effectively sent while keeping their anonymity. It promises not only to decrease scams in elections however also to increase general voter turnout as people will have the ability to vote on their smart phones.

Blockchain innovation is still quite in its infancy and the majority of the applications are a long method from basic use. Even Bitcoin, the most established blockchain platform, goes through substantial volatility indicative of its relative beginner status. The capacity for blockchain to fix some of the significant issues we face today makes it an extraordinarily exciting and sexy innovation to follow. I will certainly be watching out.

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smartoptionsio · 6 years ago

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User Report: How I got robbed with an OTC (Over The Counter) Trade

Recently we saw someone in a chatroom telling about a sad story. The guy got robbed in an Over-the-counter deal in a Telegram group for such kind of transactions. Obviously, he is still angry about what happened and searched for a way to spread a warning to the community, trying to effectively reduce the number of scams and learn from his expensive lesson, so he can pull something positive for others out of his pitiful situation. We want to help him and make sure our readers won’t fall for the same scam. Thank you, Samo for compiling your story into an interesting read. And now read and scare while reading this cryptocurrency thriller. The following content has been contributed by Telegram user @samurai007 – Please contact him if you have further ideas, hints, information for his hunt.

On average there are about 9 million dollars a day stolen in the cryptocurrency market. Who knows what would be the number if all small thefts, scams, and hacks that nobody knows about would be considered. If you get robbed on the street you call the police but what can you do if you get robbed in cyberspace. Well, this article is one of the things I will do about it.

I made a mistake, done things to quickly and lost quite some money which was stolen by a scammer on Telegram chatroom group called OTC Trade NEP5, ERC20, ICO. There were a lot of interesting offers with slightly better prices than in one other well-known group. This should have been the first warning. Those compelling prices, which were set a little below the OTC market prices, the purpose is to attract as many traders as possible. One other thing that acted as a positive impression was a large number of members which gave me some sense of security. Those numbers were fake in my opinion. The group had more than 5k members. I am not so sure if the trade offers were real at all. The group had just one administrator Dmittri W with a username @Dmittri1986. This should have been another warning for me. I should have stepped away but I didn’t. Albert Einstein said that anyone who has never made a mistake has never tried anything new.

So why even try such trading if you have trusted regular exchanges where you can make a trade not worrying that you might lose your money while doing the trade? I have heard about the OTC trading and started to read about this hidden market to learn some basics. Soon I have found out that the OTC market is way bigger than regular cryptocurrency market and probably all major transactions happen there.

I believe most people didn’t hear about the OTC trading or know just a little about it, which is why I will make a quick abstract from the articles I have read. It is also important for me to inform you about this way of trading despite the fact that my main goal is to warn people about the scams and scammers that come with it.

OTC (Over the Counter) trading is basically a trade that is done by one buyer and one seller behind the scene and bypassing the exchanges. That kind of trading is done for a long time in various markets. It is preferred by wealthy investors or hedge funds who make large transactions. Recently OTC is done by brokers and some platforms developed by cryptocurrency exchanges. It is also done through chat rooms.

It is necessary to explain why someone would choose the OTC trading over regular exchanges.

PRICE …you can get a better price which you negotiate with the seller.

LIQUIDITY …there is a lack of liquidity on some exchanges, trading pairs, tokens/coins. That is especially problematic when you want to fill a large order.

SLIPPAGE …slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. Slippage often occurs during periods of higher volatility when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of the trade.

LIMITATIONS …cryptocurrency exchanges often set trading limits as KYC (Knowing Your Customer), day trading and withdrawing amounts. Completing larger trades and exchange KYC verification processes are time-consuming.

Those are the obvious problems regarding regular exchanges trading in the cryptocurrency market. Selling hundreds of millions of dollars of bitcoin on a public exchange in a short period of time could crash the market due to lack of liquidity. So with the OTC trading, you can make large transactions with which you don’t disturb the market prices and you don’t become bait for crooks. You can discuss and set the price and complete a trade instantly. One research company has concluded that the OTC market of bitcoin is at least two to three times larger than the exchange market, so 1 to 1.5 million BTC is traded the OTC daily. Not all transactions show up on public blockchains as many venues omnibus accounts so only net changes to their positions will be written to the public blockchain. That is why the movement of the cryptocurrency exchange market is unpredictable and the market often demonstrates an extreme rate of volatility. If the bitcoin exchange market only accounts for 25 percent of the actual volume of the dominant cryptocurrency, it is that much more difficult to find the cause of the movements of BTC and other cryptocurrencies which also follow the movement of bitcoin. OTC trading has a major role in the cryptocurrency market and many traders are aware of that fact. More and more traders use the OTC every day, there are also those who are restricted or limited to trade due to national regulations of cryptocurrency trading. Not just the big players, but also regular traders, who see the OTC trading as a good opportunity to purchase a coin/token for a slightly better-fixed price, try it. Which means there are smaller sums involved in separate trades, less experienced traders and limited regulations. So this becomes as an El Dorado found again for all the scammer, thieves, and opportunists.

There are many paths you can take to make an OTC trade but there are also many wrong turnings. You can do the OTC trade on ATM machine, you can find a broker (which can be quite expensive), cryptocurrency exchange OTC platforms or chat rooms. Many regular traders use chat rooms to discuss different projects, prices, trading techniques and other stuff regarding cryptocurrency market and trading. Telegram and Discord are two of the most popular chat rooms in a crypto scene. They are used by traders and different projects who can join or create specific groups. Such groups are also created and used for the OTC trading. Chatrooms OTC groups have almost no regulations and legal criterions. They are managed by administrators who usually offer escrow service in exchange for a fee as well. The reputation of the OTC group and administrators are probably the best indicators if one should choose to make a trade and trust the escrow provided. Some groups also offer whitelisting and KYC from both parties and escrow to make sure that you know with whom you will make a deal.

Trading via chatroom has a history and is used even more today. First major Bitcoin OTC trade was done on an IRC chatroom channel #bitcoin-otc. The trade itself is quite simple. Basically, you can post your offer that includes information of the trade you wish to complete, where you specify the type of a trade, the coin/token pair and amount you want to trade and finally your price proposal. You must then wait for the counterpart contact. You can also just respond to an existing offer. Both sides negotiate the conditions and specifics and make a deal by themselves or with the agreed escrow. This way of trading can be used for all cryptocurrencies or some tokens that are not officially available on the market. People even sell the ICO (Initial Coin Offering) allocations that are hard to get.

You can get stuff on the OTC that you can’t nowhere else. This aspect has another appeal for regular traders as they can buy some potentially worthy coins/tokens for a good price before they hit a market. Another opportunity for scammers to seize and another warning for traders to stay away as those kinds of trades are often accompanied by greed and lust for money. Chasing good prices and quick profits is where people lose their mind and forget about safety. One must always remember that in the cryptocurrency market it is always better to err on the side of caution.

I wanted to buy a token that I couldn’t get an ICO allocation for because of the difficult entry conditions that were set by this project’s team. I have missed the allocation at the end of this long procedure to be whitelisted for a crowdsale. FOMO (fear of missing out) stayed with me. I decided to give the OTC trade a go. I found this one Telegram group that had a good reputation, many members and administrators who were whitelisted and posted an offer after completing whitelisting myself. Everything was ok. At first, I posted a very low price to see how others will react to it and after nothing happened I raised my offer’s price. I was curious about the OTC market prices of the token I was interested so I looked for another OTC group. I found, already mentioned one, OTC Trade NEP5, ERC20, ICO with this one administrator Dmittri W with a username @Dmittri1986. I checked the prices which were slightly better than those in the other group and posted an offer. I didn’t pay much attention to this group’s reputation and security as this was meant just as a comparison. It was already late at night when I received two offers, one after another. This was probably a pure coincidence. I discussed both offers and chose to go with the better one. I totally forgot about the second post I made in another group I knew nothing about. I was quite tired, it was late and I was carried by a seemingly good offer and made a huge mistake.

I made a deal with a seller named “Utkarsh Surse” with username @utkarsh156O13. We contacted an escrow and administrator “Dmittri W.” We agreed that I send my money to the escrow and when he confirms the transaction the seller does the same and he sends me the money. Another coincidence was that there were problems with the blockchain involved in this trade so my transaction didn’t go through. As if someone was trying to prevent me to make a mistake. But I didn’t listen to my guardian angel and somehow forced this transaction which got stuck anyways. So we agreed to wait and go to sleep and finish the deal in the morning. Before I went to bed I checked one more time and the transaction went through but no one responded as they were probably already sleeping. I went to bed with a very bad feeling and I just hoped everything will turn out ok. At this time my intuition already tried to tell me that I did something wrong. No one responded in the morning. And soon I just heard three message alarms one after another. Even before I have looked at my phone I already knew what has happened. The buyer and the seller left the conversation and the chatroom was gone. So was my money. And there was nothing I could do about it as I realized I made a deal with some guys from this OTC group I knew nothing about. Another thing I realized was that I was tricked and robbed by one person as only one person could delete those conversations in a second. The worst part was that I could check the scammer’s wallet and I could see my money but could not touch it. This was a torment for my stupid deed.

I want to post the NEO wallet addresses of a seller and an escrow. That might help you not to get robbed by this scammer(s).

“Escrow” Dmittri W … @Dmittri1986 NEO address … AHBWHizMAi43vfDGeZDbdcqDoCFUmY3YjM

Seller Utkarsh Surse … @utkarsh156O13 NEO address … AMCXsBcQHn7vQ8GoS8fHAbALFBkEJfYBAp

I have found one other article dealing with the same name and address but I don’t have the permission to include that information yet. I followed the transactions from this addresses and the money goes through one particular big exchange and there are very large assets on that wallet. I also believe that this scammer steals the identities of other people and uses them to betray people. Please be aware that those people mentioned in this article, if they are real, are probably not involved and don’t even know about this scam.

All that I wrote above influenced on my decision to make a trade in which I got scammed. There was this wish to go into the unknown field of cryptocurrency market, to learn to trade via OTC but mainly there were those bad factors that drove my decision. Opportunism, lust, and greed. Now, that I know. I was tired and careless and acted stupidly. I am writing this in a detail because I believe that such scenarios are very common. Maybe not all the factors involved or the same type of trade but some segments for sure. You should always check things so many times as necessary that you are sure what you are doing. Don’t get greedy and don’t chase opportunities that are long gone.

I am in the crypto market for more than a year, I am not dealing with large assets, I find blockchain technology something that will co-shape the future and I take trading as an interesting experience from which I can get much more than just money at the end. I will miss the money that was stolen from me and that I’ll probably never see again. This is one mistake I will never forget and one opportunity to make a change for myself and for everybody else.

Please be careful and enjoy yourself while trading!

p.s. You can contact me via Telegram…my username is @samurai007

References 1. https://www.finder.com/otc-cryptocurrency-trading 2. https://www.ccn.com/otc-is-much-larger-than-bitcoin-exchange-volume-where-real-whales-trade/ 3. https://www.investopedia.com 4. https://www.coindesk.com/bitcoin-brokers-trade-millions-without-exchange/ 5. https://news.bitcoin.com/9-million-day-lost-cryptocurrency-scams/ 6. https://hackernoon.com/the-6-costliest-mistakes-people-make-when-trading-bitcoin-otc-d975d4acda25

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