Bye-bye, Bitcoin. It’s all about bananacoins.

Cast yer digital votes.
Cast yer digital votes.
Image: Getty Images

A new pilot program in West Virginia aims to take voting into the technological future. In doing so, the state has cast its eye toward one of the most popular tech buzzwords of 2018.

West Virginia has contracted the Boston company Voatz to enable voting via smartphone for troops overseas in the 2018 midterm elections, according to CNN. Members of the military will be able to cast their ballots using an app, with voting data recorded on a blockchain. 

Troops will still be able to cast paper ballots if they prefer. 

To use the app, voters will have to submit a photo of their government issued ID, as well as, um, a selfie video. Voatz’ facial recognition technology will ensure that the person voting in the selfie video matches the ID. 

But the use of smartphone-, app-, and blockchain-based voting prompts concerns, because these technologies may not be consistent with the recommended way to secure an election. Joseph Lorenzo Hall, the chief technologist at the Center for Democracy and Technology, even told CNN that it was a “horrific idea” because of the security vulnerabilities it opens up.

The industry standard for election security is to use devices that produce a paper trail. That way, there is a non-digital, and non-vulnerable back-up, should anything go awry. Facilitating voting via a (hackable) smartphone, and aggregating that data digitally sans paper trail — whether on much-evangelized blockchain technology or not —  opens up too many avenues for attack, Lorenzo Hall said.

And attack is nowhere near out of the realm of possibilities for the 2018 midterms. U.S intelligence agencies concluded that in the 2016 election, Russian hackers attempted to hack the voting systems in 21 states, and were successful at accessing voter data in at least one, Illinois (however, there’s so far been no evidence the data was altered or votes were changed).

Federal officials warn Russia is now attempting to interfere with the 2018 midterms. And while they do not see hacking election machines as the main vulnerability, they’re keeping an eye on it.

But the U.S. may not be doing enough to bolster the digital integrity of election infrastructure. Last week, the Senate voted down a bill that would provide $250 million to states to modernize and secure the voting process, because they said it was not clear how states had used the $380 million already allocated. Still, experts say the initial funds are nowhere near enough to fully secure America’s elections. 

It might just be too soon to rest our faith in American democracy on the blockchain.

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Bitcoin could change the world by making governments change money

Image: Bob Al Green/Mashable

Russia is working on a government-run cryptocurrency. And they’re not alone. 

Governments around the world — including the U.S., China, Japan, Canada, Venezuela, Estonia, Sweden, and Uruguay — are either actively working on some form of digital currency or exploring the topic. 

But don’t expect a bunch of bitcoin clones. Governments have very different priorities, and decentralization — a main feature of most cryptocurrenices including bitcoin — doesn’t tend to be one of them. In fact, government digital currencies could herald a new era of centralization, posing serious questions about privacy and the viability of true cryptocurrencies like bitcoin. 

There’s important differences between true cryptocurrencies and what are generally called “centralized digital currencies” (CDCs). One of the main qualities — if not the central feature — of cryptocurrencies is that they’re decentralized. This means no single person, government, company, or group can control them. CDCs, on the other hand, are on the opposite end of the spectrum. They are as centralized as can be.

That centralization could provide governments with some world-changing capabilities — some good, some rather scary. There’s the upside of giving people a secure and cheap way to buy thing. There’s also serious privacy concerns, especially when talking about authoritarian countries. 

Russia has, in particular, floated some interesting ideas around why it would want to introduce some form of government-led cryptocurrency. Details are scant, and it’s not clear if the “cryptoruble” would be a true cryptocurrency using decentralized ledger technology or if it could be mined. What is clear, however, is that Russia is interested in some sort of digital currency to get around international sanctions and possibly even allow the government to tax its sizable black markets.

“There have been two reactions from central governments. One is to try to figure out how to regulate the darn things, and the other is, do we figure out how to make our own?” said Paul Triolo, head of geotechnology at the Eurasia Group. “2017 was sort of a watershed year in that 2017 saw the regulatory response globally really pick up.”

Why now?

The technology behind digital cash isn’t new in concept of execution. Long before Venmo had become a verb, companies were working toward entirely digital transactions. 

Adoption wasn’t terribly quick or widespread. Nor were the systems that emerged to service digital transactions terribly efficient or cheap. Governments and banks weren’t in any hurry to adopt this tech since nobody else was either.

Then bitcoin happened. The explosion of BTC and other cryptocurrencies have forced governments to take a look at just what these technologies mean for the future of commerce, finance, and centralized authority over the creation and movement of money.

Jacob Eliosoff, founder of cryptocurrency investment fund Calibrated Markets, said governments are now seeing the benefits of this technology but are also going to need time to understand it.

“In principle there could be various benefits: the simple efficiency of instant global electronic transactions, preventing counterfeiting, better record-keeping and monitoring of transactions, no printing press, etc,” Eliosoff wrote in an email. “But also right now some governments, like some companies, are probably just dazzled by the hype and making stuff up so as not to get left behind.”

There’s also some larger conceptual issues at play here. Bitcoin has proven that it’s possible to create money outside of government-based financial systems. Ole Bjerg, an associate professor in at Copenhagen Business School, said this is forcing governments and central banks to ask tough questions about their role in the economies of the future.

“What bitcoin has done is it’s sort of made a lot of people aware that you can actually create money in new ways,” Bjerg said.

By many definitions, digital currencies backed, issued, and tracked by a government or central bank would not be a cryptocurrency. 

“To many of us Bitcoiners, the essence of ‘crypto’ is decentralization: a currency that no person or institution owns or controls, so no one can take it from you or prevent you from sending it, or print it at will,” Eliosoff wrote. “Countries like Denmark have been moving towards cashless societies since before Bitcoin existed, but of course those are still centrally managed currencies. You don’t have to be against fiat per se (I’m not) to see it as fundamentally different from cryptocurrencies.”

To some, the question of what is and isn’t a cryptocurrency is besides the point. The mechanism is just a detail. 

“The main point is you can have digital money which is a liability with a central bank rather than a private bank. Whether you do that with a blockchain or you do it with a database doesn’t make much of a difference,” Bjerg said.

Why should I care?

There’s a very simple reason a government digital currency could be good for you. 

It’ll save you money.

Andrew Levin, a professor of economics at Dartmouth College, said digital currencies could cut out middlemen and banks, meaning fewer people taking a cut out of transactions.

“One important reason for trying to move ahead with a central bank digital currency is to create a payment system that is essentially free for consumers and businesses,” Levin said.

If you have a debit card, there’s a good chance it says some combination of MasterCard, Visa, Bank of America, Wells Fargo, or any variety of other companies. They’re not providing that service out of the goodness of their hearts. They make money when you use that card.

Under the new system, you’d pay with money directly held by the government (or really a country’s central bank) through what some call a “Centralized Digital Currency,” or CDC.

With a CDC, you’d have a card but it wouldn’t say any of those companies. It would say probably say “U.S. Federal Reserve” — the U.S. central bank. It wouldn’t take any cut, and the U.S. government is much less likely than a bank to go under and take your cash with it.

A CDC, then, is the functional equivalent to using cash, with one big caveat that we’ll get to shortly.

Even the economists are getting excited

There’s a good reason that economists have been getting excited about CDCs. 

Governments control the economy through central banks. In the U.S., that’s the Federal Reserve a.k.a the Fed. The Fed controls the economy through a relatively arcane system in which it tweaks interest rates to control the money supply. It’s a multi-step process that attempts to influence spending and saving behavior by consumers and businesses. But since financial resources are held by private institutions, the ultimate effects of the Fed’s decisions are filtered through these other organizations. 

The major upside of a CDC is that central banks would be able to directly change the interest rates on the currency, meaning it’s incentives for saving and spending would pack a much bigger punch. And not just that, it could easily turn the interest rate negative — something central banks can’t really do now — when it really needed to stimulate growth. 

After the financial crisis and the ensuing global economic slowdown, these measures did not prove terribly effective at stimulating growth. Central banks did what they could, lowering interest rates about as much as they could in order to try to goose their economies. 

Giving central banks the ability to aggressively push the economy through control of a digital currency would make a major difference in peoples’ lives, Levin said.

“This has been a very long slow painful recovery that’s been very painful for lots of normal households. Normal American families have really suffered for the last ten years and part of the reason for that is that the Federal Reserve was constrained,” he said. 

Imagine that the financial crisis was just a speed bump instead of a giant crater that the U.S. (and really the world) is just barely climbing out of. That’s the kind of promise that some economists think CDCs could deliver on.

OK, so what are the downsides?

There’s two main drawbacks here.

The first is that the promise of decentralization isn’t just negated by a central digital currency; a CDC is even more centralized than the existing system. For people who believe that decentralization is a good thing that will free people from dependence on governments and big companies, 

The other main drawback is privacy. Cash is anonymous, giving people a certain amount of freedom to spend money without having to worry about explaining their actions.

A CDC would conceivably remove any and all privacy from your spending (at least as far as hiding it from the government). 

“This sounds glib, but many of us would argue that untraceable transactions are actually an important civil liberty which cryptocurrency enables, but digital fiat impairs,” Eliosoff wrote.

Russia’s nefarious goals for its cryptocurrencies point to how governments around the world could start embracing digital currencies for their own ends both good and bad. Meanwhile, countries like Russia and China — two of the countries most aggressively pursuing their own digital currencies — are the ones cracking down hardest on bitcoin and other distributed currencies.

Cache money

In the near future, not much will change. Governments don’t tend to move quickly. There will be any number of tests to see how this could work, as some countries have done with ideas like a minimum basic income

They could, however, be forced to adapt if cryptocurrencies begin to offer a real, viable alternative to the existing financial system. There’s plenty of blockchain enthusiasts who believe that’s just a matter of time, though it could be a while.

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Bitcoin price crashes, loses $2,000 in a few hours

It's about time you learned how Bitcoin works.
Image: pixabay

Bitcoin’s bubble just burst, at least a little bit.

The high-flying cryptocurrency declined more than $2,000 dollars in the span of a few hours on Wednesday. It’s one of the sharpest drops in recent memory and a stark reminder of the volatility of the cryptopcurrency that is suddenly on everyone’s mind.

Bitcoin’s recent rise happened almost as quickly as its Wednesday decline. Bitcoin enthusiasts cheered on Tuesday as 1 BTC surpassed $10,000 for the first time, only to see it hit $11,000 the next day

Wednesday’s crash pushed Bitcoin’s value below briefly below $9,000 on at least one exchange, though it appeared to have recovered some value shortly thereafter. As of 3:17 P.M. EST, Coindesk had Bitcoin trading at $9,852.54.

It continued to recover throughout the day, trading around $10,100 around 5 P.M.

The graph below, from, shows the sudden drop off on Wednesday afternoon.

Even with the decline, one Bitcoin is worth more than it was a week ago, when it was trading around $8,000, and far more than one year ago, as the graphs below show.

Thought Bitcoin is still far more valuable now that it was even just a little while ago, Wednesday’s sudden decline shows just how volatile Bitcoin can be, even as it gains wider acceptance as a viable store of value. 

The decline also provides more fuel for Bitcoin skeptics who have been sounding the alarm over what they see as dangerous speculation. It also triggered plenty of schadenfreude on Twitter.

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Bitcoin’s current price swings indicate even bigger volatility in the future

Image: Christopher Mineses/Mashable

If you’ve been following the rate of Bitcoin, you’re accustomed to volatility. Considering that the start of 2017, the rate has actually quadrupled, however a couple of sharp drops implied that financiers might’ve quickly lost cash.

But the current cost drop– from an all-time high of around $4,500 to $3,500, and after that back to $4,200 once again– is various.

This volatility comes soon after the intro of Bitcoin’s just recently created bro, Bitcoin Cash. This other cryptocoin was developed on August 1 by a group that wasn’t delighted with the instructions Bitcoin was heading.

It’s presently the 3rd biggest cryptocurrency, with a market cap of more than $11 billion, and its rate has actually just recently tripled– from around $300 to $900– prior to falling back to around $660. This cost increase of Bitcoin Cash has accompanied the cost drop of Bitcoin, so exactly what’s occurring?

All you have to understand remains in this chart, which reveal the wild swing of how successful it is to mine Bitcoin and Bitcoin Cash.

At one point it ended up being a lot more rewarding to mine Bitcoin Cash than Bitcoin.


Both Bitcoin (BTC) and Bitcoin Cash (BCH) procedures use something called trouble modification, that makes sure that miners (individuals who utilize their computing power to produce brand-new bitcoins and power the Bitcoin network while doing so) constantly my own an optimum variety of bitcoins in a particular quantity of time. When there’s excessive mining power, trouble increases to make sure brand-new bitcoins do not flood the marketplace too quickly.

But when the mining power is doing not have, trouble decreases, and it decreased greatly for Bitcoin Cash. All of a sudden, a computer system that might mine one BCH (Bitcoin Cash) daily might mine numerous times as numerous, making a lot more earnings. And because Bitcoin and Bitcoin Cash are extremely comparable, it’s simple for miners to leap ship– and a great deal of them did.

The chart above demonstrate how rewarding it is for miners to mine BTC rather than BCH. On August 18, it ended up being more rewarding to mine BCH, and considering that miners almost constantly follow success, they merely changed to mining BCH rather of BTC. On August 22, it ended up being more successful to mine BTC once again, so miners are returning (see chart listed below).

The mining power is going back to Bitcoin.


There was likewise a negative effects to this: As mining power (likewise called hash power or hashrate) went away from BTC to BCH, Bitcoin deals ended up being slower and more pricey; now that it’s returning, the reverse is taking place.

All of this is the most likely reason the rate of Bitcoin is presently recuperating while the cost of Bitcoin Cash is falling (though undoubtedly not extremely quick). This brief turnaround reveals how delicate Bitcoin truly is.

The politics of Bitcoin is untidy and ready to get messier

That little chart above will end up being extremely important once again in November, when Bitcoin will when again fork (split into 2) to embrace a proposition triggered SegWit2x .

This proposition was turned down by Bitcoin’s core advancement group, as well as though most of Bitcoin exchanges and miners have actually vowed to update, it may trigger a great deal of problem for Bitcoin. Preferably (a minimum of for SegWit2x supporters) after the fork, practically everybody must change to the brand-new variation of Bitcoin, leaving the old one to pass away. There’s constantly a possibility that some group will choose to update the tradition chain in a various method and push that variation as the “real” Bitcoin. If such a strategy acquires traction, miners will have 3 various “Bitcoins” to select from, which might trigger turmoil.

All of these forks are mainly focusing on one concern: The block size in Bitcoin’s blockchain. One block would be one page in the note pad if you believe of a blockchain as a huge note pad with records of all deals on the Bitcoin network. Presently, at 1MB, that obstruct is too little, and Bitcoin can just process a low variety of deals each day. Bitcoin Cash, SegWit, SegWit2x– all these are various propositions to resolve this issue.

Why exists a lot squabbling over exactly what appears to be an easy upgrade of the Bitcoin’s software application? It’s not that basic. Bitcoin has actually ended up being a big network, as well as the smallest modification in code can have baseless repercussions. Second, a great deal of individuals have a great deal of cash in Bitcoin, and they’re wanting to safeguard their interests. Third, Bitcoin Core– a group of designers that have actually directed Bitcoin’s advancement given that its creator, Satoshi Nakamoto, had actually vanished in 2010– has actually been incredibly unwilling to accept third-party propositions. As an outcome, they’re losing their impact over the network, and given that miners can pick which proposition to support, if the bulk begins to mine, state, Bitcoin Cash, the initial Bitcoin may end up being deserted.

On one hand, this is democracy at work. It’s excellent, in a manner, that Bitcoin can not be quickly changed; if it could, then it would not really be decentralized. Simply like in political democracy, the masses might be controlled to vote the incorrect method. Go to any Bitcoin-related online forum and you’ll see an enormous quantity of deceptiveness, half-truths, and great old muddying of the water, making it extremely hard to make a notified choice of any kind.

With Bitcoin’s rate and cryptocurrency buzz being near their all-time highs, things do not precisely look frightening for the future of crypto. Scratch a little bit underneath the surface area, and you’ll see that the power battle within Bitcoin, potentially the most significant in its history, is about to reach a climax quickly.

The author of this text want to thank Luka Zubovi for his corrections and ideas.

Disclosure: The author of this text owns, or has actually just recently owned, a variety of cryptocurrencies, consisting of BTC and ETH.

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