Crypto-Currencies are not “crypto”

The name “crypto-currency” has been attached to Bitcoin and a host of online, blockchain based exchange units … but where’s the “crypto” aspect? 

The realm of information security must "reclaim" the word crypto from people who trade in Bitcoins and other digital currencies, according to industry veteran Bruce Schneier.
"I have long been annoyed that the word 'crypto' has been co-opted by the blockchain people, and no longer refers to 'cryptography'," blogged Schneier in a brief post: https://www.schneier.com/blog/archives/2021/11/crypto-means-cryptography-not-cryptocurrency.html
Look up the word “crypto” in many dictionaries to learn it refers to cryptography, which in turn is defined as “the computerized encoding and decoding of information”. Search “crypto” on Google, however, and you’ll see a host of top results pointing to cryptocurrencies like bitcoin and ethereum.

This lexical shift has weighed heavily on cryptographers, who, over the past few years, have repeated the rallying cry “Crypto means cryptography” on social media. 

Read more over at the Guardian https://www.theguardian.com/technology/2021/nov/18/crypto-cryptocurrency-cryptographers

Addressing Anonymity with Electronic Currencies

With the surge in online shopping and the need for less contact, electronic payments have increased significantly during this pandemic. We do know that both the Ethereum and Bitcoin blockchains are open and -- while they are theoretically anonymous -- as soon as any crypto account touches a bank account tied to your identity, you are in direct contact with the pool, which could be recording your IP address and associating it to your cryptocurrency account. 

Many might recall that the cryptocurrency industry was initially portrayed as "anonymous digital cash." While experts were quick to point out that this was not exactly the case, Bitcoin (BTC) found initial popularity in darknet markets such as Silk Road, where merchants sold illegal goods ranging from light drugs to, allegedly, hitman services. Founded in 2011, Silk Road thrived for the next two years until the Federal Bureau of Investigation shut it down in 2013. Authorities later revealed that completely free blockchain explorers aided their investigative efforts.

Some cryptocurrencies (such as Zcash and Monero) are explicitly designed to address traceability concerns, incorporating several security mechanisms, including:

Ring Signatures, which allow signed messages to be attributable to “a set of possible signers without revealing which member actually produced the signature” ...

Stealth Addresses, which refer to methods for key management in which public keys are derived separately from private keys for the purpose of obscuring the public keys, and

Confidential Transactions, which use Pedersen commitment schemes to restrict disclosing the amounts transacted to anyone other than the transacting parties.

Some are thinking up ways to successfully implemented privacy-enabling cryptocurrency, so that metadata associated with transactions would be hidden. Online, data flows or the ledger would not reveal relationships among transactions or any information about the transacting parties.

As more central banks consider how to embrace the digital economy, new ideas will flourish. Unlike traditional money, cryptocurrencies aren’t issued by countries or central banks. On the contrary, one of the hallmarks of these products is the lack of regulation and oversight by a central authority. Most US banks have been slow to introduce software that allow peer-to-peer payments for things like splitting the bill on a meal. In some scenarios, central banks could directly issue digital currencies into users’ online wallets without involving banks and other middlemen. Americans could also potentially hold accounts at the Federal Reserve for making transactions using a digital dollar, simplifying the process and lowering the cost of exchanging payments.

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Non-Repudiation in Supply Chain Management - Use Case for Blockchain

Supply chains are under strain at the moment -- the fragility of current systems is laid bare during this pandemic crisis. Blockchain, simplified, is a data structure that maintains transactional records and while ensuring security. This decentralized approach ensures — a chain of records which are controlled by no single authority. This enables digital information to be distributed, but not copied, so each individual piece of data can only have one owner. Blockchain is the underlying technology of digital currencies. But it has a multiplicity of uses.

Many call blockchain a “digital ledger” stored in a distributed network. Here is one way to think about how Blockchain works:

“Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet…”

This information is constantly reconciled into a database, which is stored in multiple locations and updated instantly. That means the records are public and verifiable. Since there’s no central location, it harder to disrupt as the data exists simultaneously in millions of places.

In the service of supply chain management, manifests could be secured with this approach. Modern supply chains are complex. A business’ supply chain consists of all the links to creating and distributing it products. Depending on the goods, a supply chain can be extraordinarily complex, spanning numerous stages with multiple geographical (often global) locations. The documentation can consist of a multitude of invoices, statements, payments, bills of lading, etc., and have several individuals and entities involved. The timeframe, even with just-in-time production, can require months for the process to go from raw materials, component construction and assembly, through packaging and distribution.

The idea of using blockchain to streamline workflows for all parties, no matter the size of the business network, is not new. In government procurement, for example, shared infrastructure provides auditors with greater visibility into participants’ activities along the value chain.

The challenges in many supply chains include lack of transparency because data consolidation clouds repudiation. There's a lack of real-time issue resolution resulting in ineffective supply chain risk management. Shocks (as we have seen) result in sudden demand changes -- a "bullwhip" effect that reverberates throughout the vendor ecosystem.

A use case might look like this: instead of having a central intermediary, use blockchain in an Enterprise Resource Planning (ERP) solution to synchronize data and transactions across the network. Each participant verifies the work and calculations of others. This relives the enormous amount of redundancy and crosschecking found in many current systems.

With the right implementation strategy, blockchain has the potential to drive efficiencies, lower costs, and to enhance consumer experience through transparency and traceability.

Digital Crypto Currency from... the US Central Bank?!

Over at SlashDot, we read:

America's lawmakers and Federal Reserve officials "are so concerned about Facebook's plans to launch a new digital currency," reports Politico's financial services reporter, "that they're contemplating a novel response -- having the central bank create a competitor."
Momentum is building for an idea that was once considered outlandish -- a U.S. government-run virtual currency that would replace physical cash, a dramatic move that could discourage major companies like Facebook from creating their own digital coins. Facebook's proposed currency, Libra, has forced the Fed to consider the issue because of a fear that private companies could establish their own currencies and take control over the global payments system. Some Fed officials share the concern about a new balkanized currency system outside government control that Facebook has threatened to unleash. "Libra bust this way out into the open," said Karen Petrou, a managing partner at Federal Financial Analytics who advises executives on coming policy shifts. 

But it's not just Facebook. The matter is also taking on urgency as other countries consider creating their own digital currencies -- another potential challenge to the primacy of the U.S. dollar. The head of the Bank of England has floated the idea that central banks could create a network of digital currencies to replace the dollar as the world's reserve currency... The Bank for International Settlements, which represents the world's central banks, said early this year that most were conducting research into central bank digital currencies and many were progressing from conceptual work into experimentation and proofs-of-concept...

The details of a possible [U.S.] Fed-developed digital currency are still vague. But advocates and experts say such an instrument could give consumers a new way to make payments without having to rely on banks and without incurring fees when they transfer money. The digital currency would likely take some inspiration from the technology that underpins other cryptocurrencies such as Bitcoin. The discussions are informal at this point. Members of Congress from both sides of the aisle have written to the central bank asking officials to consider how they might approach a digital currency, and some Fed officials have begun to acknowledge the government might someday play a role. "It is inevitable," Federal Reserve Bank of Philadelphia President Patrick Harker said at a recent conference, according to Reuters. "I think it is better for us to start getting our hands around it."

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Blockchain is More Signifcant than Bitcoin

Tha math bitcoin solved a paradoxical problem: a currency with no regulator, that nonetheless can’t be counterfeited. Now a similar mix of math and code promises to pull off another seemingly magical feat by allowing anyone to share their data with the cloud and nonetheless keep it entirely private. At MIT, “homomorphic” encryption is a way to encrypt data such that it can be shared with a third party and used in computations without it ever being decrypted. That mathematical trick—which would allow untrusted computers to accurately run computations on sensitive data without putting the data at risk of hacker breaches or surveillance—has only become more urgent in an age when millions of users constantly share their secrets with cloud services ranging from Amazon and Dropbox to Google and Facebook. Now, with bitcoin's tricks in their arsenal, Enigma's creators say they can now pull off computations on encrypted data more efficiently than ever.

Bitcoin itself Is the vanguard of a predecessor technology to the real, lasting innovation: the blockchain — the peer-to-peer ledger system that records cryptocurrency transactions and allows them to operate without a central authority. A German nonprofit, the IOTA Foundation announced that it was teaming up with several major technology firms to develop a “decentralized data marketplace” utilizing its own cryptocurrency, which works without blockchain technology. Though IOTA tokens can be used like any other cryptocurrency, the protocol was designed specifically for use on connected devices.

Crypto Currency Funds... Deleted. $300 million gone

A developer trigger a bug that locked up multi user wallets, then, deleted the contents...

Effectively, a user accidentally stole hundreds of wallets simultaneously, and then set them on fire in a panic while trying to give them back.

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