Category Archives: Cryptography

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Keybase to “Space Drop” Users $115 Million in XLM

The Stellar Development Foundation has partnered with Keybase and is airdropping 2 billion Stellar Lumens (XLM) worth approximately USD 115 million over the next 20 months. It is being called the Space Drop. The first phase of the airdrop has already taken place, with 100 million XLM worth $5 million distributed to around 280,000 Keybase users, translating to $20 for each user.

In order to qualify, users had to join Keybase before September 9, which was before the airdrop was announced, or connect their Keybase to a GitHub or Hackernews account that was created before September 9. The airdrop instantly goes into a Stellar wallet integrated with the Keybase client around the middle of each month.

There is a dual purpose to this airdrop. First off, the Stellar Development Foundation has a mandate to deliver XLM to the world. Keybase users are generally cryptography-oriented individuals, which is the perfect audience to target for cryptocurrency adoption. Keybase is a platform where users can cryptographically verify their identity and associated Twitter, GitHub, HackerNews, and Bitcointalk accounts, as well as accounts on numerous other websites. This is done via the Keybase sigchain, which is essentially a blockchain that immutably stores all identification information for each user. This is important nowadays, since cryptocurrency influencers and businesses are subject to copycat scammers, and people can use Keybase to verify the real accounts that an influencer or company is running.

Thus, the Stellar Space Drop on Keybase is incentivizing users to have a cryptographically proven identity and to use the XLM cryptocurrency.

 

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Large Bitcoin Collider (LBC) Aims To Brute Force Private Keys, Unintentionally Proves Bitcoin’s Cryptography Impregnable

LBC, Large Bitcoin Collider Aims To Brute Force Private Keys, But Has Only Proved That Bitcoin's Cryptography Is Impregnable

The Large Bitcoin Collider (LBC), perhaps nicknamed after the Large Hadron Collider (LHC) which is the most powerful particle accelerator in the world, is a project which aims to brute force Bitcoin private keys. It all started when Bitcointalk user Rico666 became fixated with building the most optimal program to generate Bitcoin private keys in July 2016. At first, the program was able to generate 2 million keys per second and simultaneously compare them to all of the Bitcoin addresses which contained funds at the time, and if a match occurred the program would display a found message.

By August, Rico666 decided that this technique of attempting to brute force Bitcoin private keys via rapid generation would be far more efficient if users pooled their resources, and this was when the LBC was truly born. This concept is similar to a mining pool, where users aggregate their mining power in order to have a better chance at striking a block reward.

Users not only aggregated their computing processing power for the LBC, but they also combined their brainpower to make the LBC program as efficient as possible. Now the LBC is consistently generating 300-500 million private keys per second, although a Twitter post from 2017 shows that the LBC once reached a speed of 2,656 million keys per second.

TIL Large Bitcoin Collider-distributed effort to find collision of private keys by creating addresses checked against known address with funds. In event of collision funds become accessible. Speed 2.6Gkeys/s https://t.co/5FobzoD5nYhttps://t.co/j4SCEEj05Vhttps://t.co/IwJN2lewye pic.twitter.com/Ux3PGNvWku

— Bitcoin Art Gallery (@btcArtGallery) November 7, 2017

After almost 3 years of generating keys 24/7, the LBC has cumulatively generated 37.646 quadrillion private keys, or in long-form 37,646,390,000,000 private keys.

This is indeed a tremendous amount of Bitcoin private keys, but this number is only an iota of the total possible Bitcoin private keys. There are a total of 2^256 possible Bitcoin private keys, many orders of magnitude more than the 2^77.4 total number of stars in the universe, although less than 10^78 to 10^82 — the total number of atoms in the universe. If the total number of atoms in the universe is towards the bottom of that range, that means there is 1 Bitcoin address for every 10 atoms in the universe, which is mind-boggling considering that a cluster of 10 atoms can only be seen with the most powerful microscopes. Now imagine that there are enough Bitcoin private keys to fill each microscopic piece of the entire universe.

Simultaneously, since generating a Bitcoin address involves the combustion of far more than 10 atoms of fuel, this means it is physically impossible to generate all of the possible Bitcoin private keys. That being said, the LBC’s primary goal is to generate a single Bitcoin address that has funds in it, not to generate all possible Bitcoin private keys.

Specifically, the LBC is aiming to find a hash collision. Hash collisions are possible because there are 2^160 possible Bitcoin public addresses, but 2^256 Bitcoin private keys. This means for every Bitcoin public address there are 2^96 possible private keys. If a Bitcoin user creates a public address with a certain private key, and then the LBC generates a different private key that has access to the same public address, it would be considered a hash collision.

The LBC is designed to search the first 2^160 Bitcoin private keys, which would yield all possible Bitcoin addresses assuming that the 2^96 possible private keys for each address are evenly distributed throughout the 2^256 total possible private keys.

So far the LBC has covered the first 2^55.06 out of the 2^160 total search space. It becomes exponentially harder to search each consecutive bit of the search space. At a rate of 300 million keys per second, it would take approximately 1.545 * 10^32 years to generate the 2^160 keys.

Once again, the goal of the LBC is to find a single hash collision, not all of the possible Bitcoin addresses, and it is estimated it would require the generation of 2^134.58 keys for a single collision to be found. However, that would still take roughly 3.44*10^24 years, far beyond the point that the sun becomes a red giant and engulfs the Earth, and perhaps even approaching the heat death of the universe.

One final note is that there are only 26.69 million Bitcoin addresses with a balance greater than zero, as compared to the 2^160 total possible Bitcoin addresses. This fact alone reveals the strong cryptographic security of Bitcoin, and why trying to brute force a Bitcoin address by randomly generating keys is probably a waste of time.

The Large Bitcoin Collider Is Generating Trillions of Keys https://t.co/8VBNE5F2UA

— Josh Olszewicz (@CarpeNoctom) April 14, 2017

That being said, the LBC does have all the excitement of a never-ending lottery where hundreds of millions of tickets are scratched off every second. This is especially true considering that a ‘puzzle transaction‘ totaling 32.9 bitcoins worth USD 321,000 was dispersed across each bit of the LBC’s search space, and the prize increases consecutively by 0.01 bitcoin for each consecutive bit of search space. This puzzle transaction is perhaps intended to motivate Bitcoiners to create the fastest brute force program possible, and indeed blockchain data seems to indicate that other programs are competing with the LBC to capture the puzzle transactions.

Ultimately, it appears the LBC project has definitively proven that Bitcoin’s cryptographic security is impregnable. Even a group of hackers who spent months developing the most efficient program to brute force Bitcoin private keys, and then have pooled their computing resources together for years, appear to have literally zero chance of ever achieving their goal of finding a legitimate non-puzzle transaction Bitcoin address containing a single satoshi.

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A Cypherpunk’s Manifesto Calls for an Anonymous Transaction System 16 Years Before the Launch of Bitcoin

The Cypherpunk movement, founded by Eric Hughes, Timothy C. May, and John Gilmore in 1992, ended up playing a crucial role in the origin and development of Bitcoin. A Cypherpunk’s Manifesto written by Eric Hughes in 1993, 16 years before the launch of Bitcoin, calls for an anonymous transaction system.

Specifically, within the manifesto, it says: “Since we desire privacy, we must ensure that each party to a transaction have knowledge only of that which is directly necessary for that transaction. Since any information can be spoken of, we must ensure that we reveal as little as possible.

Privacy in an open society requires anonymous transaction systems. Until now, cash has been such primary system. An anonymous transaction system is not a secret transaction system. An anonymous system empowers individuals to reveal their identity when desired and only when desired; this is the essence of privacy. Privacy in an open society also requires cryptography. If I say something, I want it heard only by those for whom I intend it. If the content of my speech is available to the world, I have no privacy. To encrypt is to indicate the desire for privacy, and to encrypt with weak cryptography is to indicate not too much desire for privacy. Furthermore, to reveal one’s identity with assurance when the default is anonymity requires the cryptographic signature.

We must defend our own privacy if we expect to have any. We must come together and create systems which allow anonymous transactions to take place. People have been defending their own privacy for centuries with whispers, darkness, envelopes, closed doors, secret handshakes, and couriers. The technologies of the past did not allow for strong privacy, but electronic technologies do”.

These are the principles upon which Bitcoin is built. Bitcoin is designed so that only a cryptographic address is necessary to send a transaction, with no unnecessary identifying information. Further, Bitcoin uses strong cryptography, indicating that the creator of Bitcoin, Satoshi Nakamoto, had a strong desire for privacy. Indeed, Satoshi was an active member of the Cypherpunk mailing list and collaborated with various Cypherpunks to develop Bitcoin. Satoshi built on top of the ideas behind several electronic cash systems developed by Cypherpunks including Hashcash, Bit Gold, and b-money.

A Cypherpunk’s Manifesto then defines the principles of Cypherpunks and what defines a Cypherpunk, saying “We the Cypherpunks are dedicated to building anonymous systems. We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money.

Cypherpunks write code. We know that someone has to write software to defend privacy, and since we can’t get privacy unless we all do, we’re going to write it. We publish our code so that our fellow Cypherpunks may practice and play with it. Our code is free for all to use, worldwide. We don’t much care if you don’t approve of the software we write. We know that software can’t be destroyed and that a widely dispersed system can’t be shut down.

Cypherpunks deplore regulations on cryptography, for encryption is fundamentally a private act. The act of encryption, in fact, removes information from the public realm. Even laws against cryptography reach only so far as a nation’s border and the arm of its violence. Cryptography will ineluctably spread over the whole globe, and with it the anonymous transactions systems that it makes possible”.

Clearly, Satoshi was a true Cypherpunk, and Bitcoin likely would not exist without the research conducted by Cypherpunks on cryptography and electronic money for the 16 years between the time A Cypherpunk’s Manifesto was written and the launch of Bitcoin. Further, Cypherpunks such as Hal Finney were the original users of Bitcoin and played an essential role in keeping Bitcoin alive during the weeks and months after the genesis block.

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Crypto Pioneer David Chaum Builds Super Fast Blockchain Platform

Crypto guru and pioneer David Chaum is launching his own platform which he is promising will be able to process thousands of transactions a second.

The new platform named Elixxir will not only outpace Bitcoin, said Chaum at the Consensus conference in Singapore last week, but will allow digital cash to be traded at a similar speed to physical cash as well as cut down on the energy required.

Chaum is an American computer scientist and cryptographer famous for developing ecash, an electronic cash application that aims to preserve a user’s anonymity. He has also invented many cryptographic protocols and founded DigiCash, an electronic money corporation.

One of the reasons for cryptocurrency’s popularity is its speed of delivery to the user, with the Bitcoin network able to process around seven transactions a second. Chaum had been working on speeding up the processing time of electronic funds since the launch of DigiCash and then Bitcoin ten years later.

“These breakthroughs I’ve made change the whole game,” Chaum said in an interview. “We can actually meet the requirements to go to consumer scale…Truth be told, when I invented [DigiCash] there was no chance of using it… People didn’t even know about the internet.”

On the current Bitcoin network, transactions are processed in blocks. When connected, they create the blockchain which the stores the transaction on a ledger replicated on every computer. Miners compete to be the first to verify and process the transaction in a valid block, thus adding to the blockchain and collecting newly-created Bitcoin generated as a reward for finding new blocks.

Chaum’s Elixxir system limits these types of transactions, making the system less decentralized. These blocks won’t carry the transactions and won’t be linked to wallets, requiring less processing power due to less stored information. The key, he claims, is that producers will be given equal status, unlike the current system, thus eliminating the energy-intensive status quo.

Chaum has said that he will open up Elixxir as an open-sourced project to encourage improvement from developers in the future.

 

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Shortage of Blockchain Developers Causes Industry Issues

At the start of the year, Coincheck Inc suffered from a major hack, losing USD 550 million in tokens. The Tokyo-based exchange put one of the single biggest cryptocurrency thefts in history down to a lack of expertise among staff.

With the industry revolving around currency and holding data, it has attracted the attention of hackers. And with exchanges frequently found wanting in cybersecurity measures, there will only be so much that regulatory powers will tolerate. If this shortage of development expertise continues it could have detrimental effects on many businesses.

Demand for blockchain developers inflates salaries

With demand for developers at all-time highs, salaries are seeing a 20 to 30% rise from previous years. With experts in the industry often being aligned with the values of blockchain, there is no haste to assist some of the larger corporations which decentralization sets out to disrupt.

Japan doesn’t seem to be the only country struggling, even if the likes of the UK and US have engineers who can easily transition into this new field. Japan, on the other hand, seems to be stuck in a rut with employees often bound to lifelong careers with companies.

Current methods of dealing with the shortage

Large organizations are looking to invest in the future of their workforce by setting up in-house training centers to quickly bring their employees up to speed on the concepts behind blockchain. At the moment, most have only a basic understanding. Migrating entire systems over to blockchain requires employees to be more astute in the technology to produce more intuitive designs during development.

As they don’t currently possess the necessary skills, many companies have no choice but to outsource work. However, contracting work to blockchain freelancers is an expensive option and will only inhibit the abilities of smaller startups to off the ground. But ideas that can’t hire or afford to hire will be going nowhere.

With competition high and large organizations researching blockchain, the rush is on. Employers who can’t afford to wait for new graduates are now willing to take on employees without degrees. Since online courses and open resources are enough to bring some junior developers up to speed, they are able to complete basic roles within the industry.

Shortage of development expertise

Leading towards the end of Q4 2017, blockchain jobs had doubled from six months prior. From 2016 to 2017, a growth in startups had seen available positions triple, with a general lack of expertise in the industry.

With new startups on the rise and large organizations looking to explore the technology, it is hoped that millennials can rise to the challenge. Cryptocurrencies have already captured their attention, with younger generations often owning some. After being born into a digital age, they have the potential to bring innovation to the industry.

Have you got what it takes to become a blockchain developer?

 

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