Ethereum Staking vs Bitcoin Halving Model

1. Is Ethereum Staking Inflationary Long Term?

Post-Merge, Ethereum operates under a Proof-of-Stake model.
New ETH is issued to validators who stake capital to secure the network.

A. New ETH Issuance

• Issued to validators as staking rewards
• Issuance rate adjusts based on total ETH staked
• Current gross issuance: ~0.5%–0.7% annually

B. Fee Burning (EIP-1559)

• Base transaction fees are permanently burned
• Higher network activity → more ETH burned

Net Supply Outcome

Ethereum’s long-term supply is activity-dependent.

2. Comparison to Bitcoin’s Halving Model

Bitcoin Monetary Structure

• Fixed maximum supply: 21 million
• Block rewards halve approximately every 4 years
• Issuance is time-based and deterministic
• Eventually reaches zero new issuance

Ethereum Monetary Structure

• No fixed supply cap
• Issuance varies based on staking participation
• Transaction fees are burned
• Net supply depends on network demand

Core Differences

Summary

Bitcoin: Digital gold model

• Absolute scarcity
• Predictable issuance
• Monetary rigidity

Ethereum: Productive digital asset model

• Capital-secured network
• Supply reacts to economic usage
• Monetary flexibility

Conclusion

Bitcoin provides predictable, capped scarcity.
Ethereum provides adaptive, activity-based monetary dynamics.

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Transactions that modify state cost money (gas).

These need to be transmitted (broadcast) to the entire network.

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A public network is a network that ANYONE can join. No permission is needed (permissionless public network). An example is the ethereum main network.

Permissioned Public Networks

Permissions (for a blockchain network) could be in the form of an access control list, or simply a requirement placed on users to enable them to join a network.

An example of a public, permissioned blockchain, could take the form of a public proof of stake network, in which STAKING is required in exchange for permission to participate in the network (as a validator). The bitcoin network does not require staking to act as a validator (though the lightning network does).

The need for Privacy on Public Networks (for B2B or B2C transactions)

In addition to any business-to-business (B2B) interactions between the companies themselves, it’s possible the network would involve some form of business-to-customer (B2C) interaction , which require privacy.

How can Sensitive Data be protected?

The contents of a transaction, as well as the code and data associated with a smart contract, are publicly viewable.

Though a smart contract’s code is compiled to bytecode, bytecode can be decompile fairly easily. As such, sensitive information should neither be hardcoded into a contract nor sent to it as part of a transaction.

What can be done, however, is to encrypt any sensitive data off-chain before sending it to the network. Using public-key cryptography:

1. The sensitive data is encrypted with the recipient’s public key  (which could be published either on- or off-chain)
2. The encrypted data is sent either to a smart contract (which has a way to receive it), or in the data field of a normal transaction
3. The received data is decrypted using the recipient’s private key

Using PKI, one can thus encrypt sensitive data on a public, permissionless chain.

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Ranking of assets by total capitalization

The post Top World Assets – Gold, Bitcoin, Apple, Microsoft…Ranked appeared first on Anuj Varma, Hands-On Technology Architect, Clean Air Activist.

Coinbase PRO will charge you ZERO percent commission. Simply set up your bank details within Coinbase PRO and when you are ready – follow the steps below:

1. Set up a LIMIT order to sell your BTC (look at the last trading price on the top – and put that into the USD price for the limit)
2. It will sell (within a couple of minutes) without any commission. You will now have a USD balance.
3. Now, you can WITHDRAW (you should see a withdraw button below your USD balance) to your configured bank account. This withdrawal is FREE….no charge (unlike Coinbase.com)

Summary

Use Coinbase PRO for all your USD to BTC transfers as well as deposits and withdrawals (from your bank)..

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This post discusses different ways you can write your own program to interact with the live bitcoin blockchain (known as main net).  (Also read Bitcoin Wallet Basics).

You can program against the current mainnet (bitcoin’s main blockchain) using a couple of different options::

1. Option 1 – Run your own Bitcoin client in Server Mode (  more on this in a separate post)
2. Option 2 – Run a thin API client and hook into Blockchain.com’s API – that is in turn hooked into the mainnet.

Option 2 – Hook into Blockchain.com’s API. Blockchain.com provides developer APIs for payment processing and for a bitcoin wallet.

Steps 1 and 2 – Request an API Key, Create a bitcoin wallet on blockchain.com

Request an API Key from blockchain.com

Create a wallet, and validate your email address. Login using your newly created wallet address and your password. Associate your wallet with your API (Account Settings –> IP Restrictions –> allow API Access)

Step 3 – Create a VM, Install node, npm and blockchain wallet service

Setup a VM ( either a VPS from digital ocean or a google compute engine instance ).

sudo-apt-get update

sudo apt-get intall nodejs

sudo apt-get install npm

npm install -d blockchain-wallet-service

Step 4 – Launch your wallet service

cd /usr/local/bin 

node blockchain-wallet-service start -port 3030

Step 5 – Check that our API key works

http://127.0.0.1:3030/merchant/MY-GUID/login?password=MY-PWD&api_code=MYAPIKEY

Although this request will fail, check your email. Blockchain.com would have sent you an email containing your IP address and your API key.  In the email, will be a link to ‘authorize your IP’. Once you do, you can re-request the URL above and you should see a success.

Step 6 – Start Using Your Wallet

Try creating a new bitcoin address:

http://127.0.0.1:3030/merchant/MY-GUID/new_address?password=MY-PWD&api_code=MYAPIKEY

Summary

This is a quick, getting started guide to using the bitcoin wallet API. While this is a perfectly valid approach to building wallet apps, this relies on an already running node elsewhere. You may want to also run your own full bitcoin node, which will the topic of a future post.

The post Bitcoin Wallet API Programming appeared first on Anuj Varma, Hands-On Technology Architect, Clean Air Activist.

Difference between Wallet and Wallet Address

A wallet contains both your private and public key  (saved together as a “pair”).

The private key is used for spending your bitcoin (i.e. SENDING btc). The public key is used for receiving payments. The private key is randomly generated and the public key is derived from the private key.  A total of 2 ^ 160 public keys are possible.

The wallet address is just a hash of the public key.  This is something you would share with the world – to receive your bitcoin in.

What does a wallet address look like?

There are three things that make up this address:

1. The encoded id of the network (testnet, mainnet…)
2. A hash of the bitcoin owner’s public key
3. A checksum for checking the validity of data.

Where are the addresses stored on the bitcoin network?

When you create an address, it is stored in your wallet, and that’s it. It is not recorded on the underlying bitcoin blockchain until a transaction, involving that address, is sent out.

The post Bitcoin wallet basics appeared first on Anuj Varma, Hands-On Technology Architect, Clean Air Activist.

The transaction issue has divided the Bitcoin community into two groups. One group claims that Bitcoin was never designed to be a “cup of coffee” payment solution, the other says that it has to scale. As neither group was ready to give up, in August 2017 Bitcoin was basically split using a process called “Hard Fork”, which created a new version of Bitcoin called Bitcoin Cash. Bitcoin Cash uses the same codebase, but with a Blocksize limit of 8Mb. This increased limit makes possible a performance of around two million transactions processed per day.

Mining Pools

Larger Blocksize limit (8MB). As a result – more transactions are able to be processed for a cheaper fee.

–   Bitcoin has lots of mining pools, so no one is strong enough and a situation where a single miner has a majority of 51% to rule them all is quite impossible.

Bitcoin Cash, on contrary, is highly centralised. Right now we already have 3 mining pools that make more than 51% together. This can be a dangerous situation because the future of the currency becomes too reliant on these three.

Technical differences

Bitcoin Cash is aware of its weaknesses and added protection adjustments to close these gaps and make the new currency safer for all to use.  

Replay and Wipeout Protection

Bitcoin Cash uses a different hash algorithm to the one Bitcoin uses. So, the replay between the two chains is no longer possible.

On-chain scalability

Bitcoin Cash’s technology allows for an increase in the number of blocks. Right now it is 8MB and further increases are possible.

New transaction signatures

Bitcoin Cash has a different transaction signature to verify its distinction from Bitcoin.

Emergency Difficulty Adjustment (EDA)

A new algorithm which ensures normal chain performance in the face of dramatic changes of the number of miners. This provides additional stability to the currency as a whole.

BCH and BTC Basics – Transactions Making it to the Ledger

For transactions to make it to a ledger, a miner has to do three things:

a) Validate that the transaction is legit (enough balance)

b) Create / Find a new key that will be used to tie the PREVIOUS transaction on the chain with the current one being validated.

c) Wait for other miners to CONFIRM his discovery of the key and the finalization of the block.

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Running a node is just listening for other nodes to pass you data, checking that its valid, and passing it in further.

  So a peer will tell you “block 12345573 has parent x, is at height y, has transactions a,b,and c, its nonce is 73626 and its hash is a6h54fwj”. When you run a node, your job is to just check that those details are valid and that the hash lines up and to pass that data onto anyone else that might not know it yet.

Mining

  When you’re mining, you’re listening for new transactions, so some random peer will tell you “x wants to send y btc to z, here’s his signature “. And as a miner your job is to collect a few if these, add in the other data above (parent block), and randomly append millions of possible nonces until the resulting hash follows the rules of the bitcoin network. Once you have that hash, you transmit that block back to regular nodes to further distribute around the network.

The post Running a full node (BookKeeping) versus Mining appeared first on Anuj Varma, Hands-On Technology Architect, Clean Air Activist.

In fact, I DID wire the funds – and it still took that long. Here is what happened (and why I believe Crypto will eventually kill traditional banks)

Day 1 (Friday, the 12th) – Initiate Wire Transfer

Day 2 and 3 (Saturday, Sunday, 13th and 14th) – Wires are not processed. Wait till Monday

Day 4 (Monday, MLK Day) – Bank Holiday, no wire processing

Day 5 (Tuesday) – It SNOWED in my hometown – with ice on the roads; All banks were closed (I could not go in to figure out why my wire was stuck)

Day 6 (Wednesday) – I finally get to a branch only to find out that my wire was stuck because I was trying to wire to a crypto exchange (and some banks treated that with ‘suspicion’). Never mind that I had been a customer of the bank for over 15 years –and never mind that crypto exchanges based in the U.S. are fully legit, SEC backed and approved!!

Day 6 (Wednesday) – Withdraw the money from the bank where the wire was stuck – transfer to another bank, where I had no trouble wiring in the past. Took ANOTHER day for my bank-to-bank transfer!

Day 7 (Thursday) – With funds in my alternate bank account, I was finally able to send out a wire, which reached the same night.

All this while, I am closely watching the markets for signs of recovery (and some of the coins I was after, did recover somewhat).

My point is, it shouldn’t take a week to transfer funds from a U.S account to a U.S exchange, when a Bitcoin would have gone through in minutes (30 minutes on average).

• It has nothing to do with your customer history at the bank or your account history – but everything to do with slow processes.
• It would be understandable if these funds were being transferred internationally – there are regulations etc. around that. Even then, a week would have been considered long.

The Crypto Advantage

Banks, in my humble opinion, are doomed, as are loans and mortgages and other ‘unsmart contracts’ that take days and weeks to go through.

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