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Venezuela: A Collapsing Economy’s Tryst With Crypto
Venezuela, a federal republic on the northern coast of South America is all in crypto news from a last couple of months just after launching its oil-backed cryptocurrency — Petro (PTR). The country is hoping that the new crypto coin will help it evade U.S. budgetary sanctions and save Venezuela from crisis restore the doomed economy.

The Venezuela Crisis
Venezuela holds the world’s biggest supply of unrefined petroleum. It was a powerhouse of South America in the 1990s. It was a going fine until a little exclusive class started controlling everything and there was nothing for impoverished masses.
The nation moved in the direction of communism in 1999 and chose Hugo Chavez as president. He championed populism, cut ties with the United States and cozied up to China and Russia, both of which credited Venezuela billions. Chavez ruled until his demise in 2013, is still considered today to be a godman for poor people.
Chavez utilized oil money to fund many of his infrastructure and housing projects, which saw vast improvements in the quality of life for some of the poorest Venezuelans, according to Gregory Wilpert, a sociologist and author of “Changing Venezuela by Taking Power: The History and Policies of the Chávez Government.”
It helped Venezuela in significantly declining inequality and poverty. The problem was that this relied precisely on the oil wealth and at the time, it was assumed that the price of oil would continue going up. That was a wrong assumption.

Before he passed on, Chavez picked Nicolas Maduro to succeed him, and Maduro kept up the administration’s practices. According to Wilpert — The new govt made mistakes in terms of economic management, mainly by subsidizing food products so massively, which was a legacy of the Chavez government.
The subsidies kept getting bigger and bigger. So it became much more profitable to smuggle these products out of the country. That’s one of the reasons it created so much scarcity. So the actual policy of supporting and redistributing wealth is actually working against many of the people it is supposed to benefit.
His administration also stopped publishing any reliable statistics, including on economic growth and inflation. It accepted millions in bribes for construction projects and racked up debts that it is still struggling to pay.
The Current State Of Venezuela
The local Venezuela currency Bolivars getting depreciated rapidly because of a black market. One American dollar was worth about eight Bolivars in 2010 which is around 69,900 Bolivars today.
The International Monetary Fund estimates that inflation will reach 2,068.5 percent by 2018.

The black market still has a powerful influence on food prices causing severe food shortages. This reflects in the long queue of people inside and outside supermarkets and the attempts to cross the border with Colombia to buy basic goods.
The financial emergency is hitting Venezuela’s general healthcare sector the hardest. In the public hospitals, medication is generally not available.
Around 75 percent of Venezuelans are suffering from weight loss and unemployment.
Crime and violence are also widespread. According to the independent group, the Venezuelan Violence Observatory 27,479 people were killed in 2016.
Govt cash is decreasing day by day.

Venezuela running out of cash because of crisis
Here Comes Petro — The Savior
In the mid of February 2018, the govt of Venezuela has launched its first state-backed cryptocurrency (ERC-20 token) — Petro (PTR). President Maduro said that the govt has received $735 million in the first day of a pre-sale of the cryptocurrency.
Petro will be a sovereign crypto asset and each Petro token will be backed by one barrel of Venezuelan oil and will be sold at the same price. Total about 100 million Petro tokens would be issues of worth around $6 billion, said the govt.

Petro will have three major use cases:
MEANS OF EXCHANGE: It may be used to purchase goods or services and will be redeemable for fiat money and other crypto assets or cryptocurrencies through digital exchange houses
DIGITAL PLATFORM: It can perform the functions of the digital representation of goods and/or raw materials (e-commodity) and the creation of other digital instruments for national and international trade
SAVINGS AND INVESTMENT FACILITY: Petro will be available for free exchange in electronic exchange houses (exchanges) around the world and will have the necessary characteristics to carry out direct exchanges (Atomic Swaps) in a safe manner and in accordance with the Venezuelan legal framework.
Venezuela as a country is in a state which is doing anything to save its economy. Launching the Petro token is the idea from the same like. They want to make Petro as an instrument for Venezuela’s economic stability and financial independence. At the initial level, it has received a lot of criticism from the economist because of trust and transparency issues with Venezuela in the past. It will interesting to see how it continues.
About CoinSwitch: is the world’s largest cryptocurrency exchange aggregator. It provides exchange service of 300+ coins and over 45,000+ pairs from leading exchanges like KuCoin, Bittrex, Cryptopia, ShapeShift, Changelly, and Changer. It provides an easy way for users to trade coins across multiple exchanges based on price and reliability.
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Mount Gox Saga And Its Effect On Bitcoin Price In 2018
Mount Gox, established in 2010 and was one of the best Bitcoin exchange is currently influencing the Bitcoin prices from time to time.

The Mount Gox Exchange

Mount Gox (Mt. Gox) was one of the worlds first Bitcoin exchange based in Tokyo, Japan. The exchange operated between 2010 to 2014. It was handling over 70 to 80% of the online Bitcoin(BTC) transactions worldwide. Handling of such a significant number of transactions gave Mt. Gox an outsized part in deciding the fate of Bitcoin. In 2013, for instance, it suspended trading for a few days just to cool down the market.
Mt. Gox Hack Explained
In February 2014 customer complaints about long delays in withdrawals were increasing and there were more than 3,300 posts in a thread about the topic on the Bitcoin Talk online forum. Immediately after that Mt. Gox stopped all Bitcoin withdrawals in the wake of claiming to have found suspicious movement in its digital wallets. The hack was supposedly possible due to company’s negligence and inexperience towards security measures.
The news of the suspension brought about the cost of Bitcoin diving by 20%. The organisation found that it had “lost” in excess of 850,000 bitcoins, which, at the time, spoke to more than 7% of all the bitcoins available for use.
While it later they found 200,000 Bitcoins, but still the missing 650,000 Bitcoins had a potential to destabilise whole Bitcoin market. The estimation of the Bitcoins was evaluated at over $450 million, with the loss pushing Mt. Gox into bankruptcy. It petitioned for chapter 11 in the Tokyo District Court and was ordered to liquidate in April 2014.
A Japan-based attorney, Nobuaki Kobayashi was appointed as the trustee for the case and given the control of all Mt. Gox BTC wallets. Kobayashi has been tasked with liquidating the coins on behalf of Mt. Gox creditors. Most of whom have not recovered their funds after the exchange closed its trading operations in 2014.
Mt. Gox Trustee Nobuaki Kobayashi (Image source:
Mt. Gox Trustee Mr. Kobayashi is legally allowed to sell-off the 200,000 Mt. Gox Bitcoins to cover the claims of creditors but his action of liquidating in large quantities of Bitcoin on public exchanges gets criticism.
Several times it has impacted the Bitcoin price due to the increase in liquidity in the market.

Kobayashi revealed in March that he had sold about $400 million of MtGox Bitcoin and Bitcoin Cash in September of 2017.
Notably, a transfer of funds on February 5, 2018, which can be concluded with a 50 percent decline in market value from January’s all-time high market cap of $830 billion.
Image source:
On 15th May 2018, the transactions from Mt.Gox cold wallet occurred in the early hours of the morning in Europe and 11 PM EST in the US. The transaction from Mt. Gox Wallet can be seen here on Blockchain Info. The amount of this transaction is calculated to be 8,214.97084 BTC, which is worth around $76.7 Million at the time of the transaction. The BTC market is concluded to have reacted towards this move and has reached to 8200$.
The market has reacted most of the time on the sell of Mt. Gox Bitcoins and it has fallen down because of panic sell. Being vigilant and wait for the market to recover is the key during the storm of sudden sell-off.
Cryptocurrencies As Digital Cash: A New Era Of Payment System

As the word portrays, this is electronic cash, currency or money which can be stored on a smart card or in a mobile wallet. Digital cash is a system where one can make payment electronically involving the bank/financial institution directly for the transaction to take place. It is clear that this is a century where technology has become the pillar of advancement in all activities conducted. Many people have drowned into this technology which is much preferred nowadays since it is much quicker and safe. One can also define digital cash as a system used to purchase cash credits and then storing them into the computer where one can use it to do e-purchasing through the internet.
How Digital Cash Works
Just like any other currency, this is a legal currency which is backed by banks and the government. Not many people have an idea of how it works. This has been the trend of making payment after a purchase especially if it is a transaction that involves different countries, for example, online shopping or online payment for a service.
A simple illustration will help you understand how digital cash can be used. For example, “A” is the user who obtains this digital cash from his bank and wants to make a payment using the digital cash to complete a transaction to user “B” who is a merchant. “B” will receive the electronic cash and makes sure that it has been verified by the financial institution.

The existing digital cash system (cs[dot] bham[dot] ac[dot]uk)
What Benefits Does Digital Cash Have?
#1 The system is secure
This is a secure system that uses serial numbers to avoid any duplications. There is always a central system which verifies each and every transaction happening through it.
#2 Simple to use
This digital cash is simple to use when it comes to both receiving and spending perspective. Due to its simplicity, users have increased in number and everyone is running into this technology. You do not have to hold a degree in cryptography for you to be a user. Simplicity is the key to creating acceptability for the public.
#3 Offers two-ways services
With digital cash, it is possible for the peer to peer transaction to happen without either of the party requiring a registration merchant status. It has made it possible for a transaction between parties to be easy and fast.
#4 Has facilitated payments
A person from a different country can be able to purchase goods or service and make the payment within a few minutes using digital cash. Are you in the restaurant and as a group have planned to share to cost? This is an easy task, one can make the whole payment using the digital cash and the rest send their share to this one person who has paid the whole bill.
Cryptocurrencies As Digital Cash
As the white paper of very first cryptocurrency Bitcoin says- It is a purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution. Even though the existing digital transactions are secure, but it relies on financial institutions to serve as a trusted third party for processing. The system works well for most transactions but it still depends on the trust based model. Completely non-reversible transactions are not really possible with this model.
So here comes the cryptocurrencies where the payment is based on cryptographic proof instead of trust, allowing any two parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally non-reversible in this case.
So digital cash is a general, inclusive term for all types of immaterial monies, while cryptocurrencies are a particular sort of digital cash which has special features for decentralization and trustlessness.

Following are some of the examples that can be considered as digital cash in crypto-world. These cryptocurrencies can easily replace existing digital cash:
These are just a few cryptos which are mostly popular, there are others but as for now the above are the one with a larger share in the market. Bitcoin and Ethereum are the strongest cryptocurrencies that face up and downs but still emerge to be the best in the market.
Bitcoin (BTC) is the first cryptocurrency ever created and got a widespread adoption over the years. Bitcoin is generally traded against FIAT, as the years progressed Bitcoin is also used as a transaction of value. The total supply of Bitcoins is set to 21 million units that can be cryptographically mined over a period of time.
Ethereum (ETH) is the second most popular crypto-asset after Bitcoin. While Bitcoin is created to be a store of value, Ethereum was created to be the ‘World Computer’. Ethereum provides a platform run by something called ‘smart contracts’ which allows others to build protocols and applications on the Ethereum platform. These protocols and apps can provide different functionalities based on the services they provide, opening to a wide range of different sets of crypto assets.

Ripple (XRP) is the most controversial of all the crypto-assets. Let’s break down ripple into two categories: Ripple Protocol and XRP (Ripple Crypto currency). Ripple raised in popularity when its protocol challenged the way the entire banking system works. The current system, SWIFT, which the banks use is time consuming and a very inefficient way of information transfer between two banks. Ripple’s protocol can be used to provide lightning fast transactions between different banks in two different continents. One of the reason why Ripple is most controversial is because of the centralization over its network. While most of the crypto assets are decentralized, over 70% of XRP’s reserves are held by its founders and they dictate how to develop and use Ripple. Also XRP is not strictly required to be used in Ripple’s protocol creating more negativity around its value over time.
Litecoin is another peer-to-peer cryptocurrency that is similar to Bitcoin. As more and more people started embracing Bitcoin, there came a time where people thought Bitcoin won’t be scalable in long term due to its mean block time of 10 minutes. As more and more transactions happen in BTC, the more time it takes to confirm the transaction resulting in higher transaction fees and a blockade of unverified transactions in memepool. Hence Litecoin was born hard-forking the Bitcoin network making some slighter modifications to its protocol in order to accommodate for less mean mining time resulting in more transactions without clogging the network. The mean block time for Lite coin is 2.5 minutes and the total supply is capped to 81 million.
Apart from these top cryptos there a few more cryptocurrencies which can be used a digital cash for payment: Dash, Monero, DigiByte, ReddCoin, Bitcoin Cash, Bitcoin Gold, Vertcoin etc.
Major Differences Between Digital Cash And Cryptocurrencies
The verification of Bitcoin or other cryptocurrencies transaction uses a private key to make payment where each and every person who possesses ownership has a private key; this is how the Bitcoin is decrypted. On the other side, digital cash uses a public key to decrypt the note provided by the bank.
Cryptocurrencies use blockchain where verified transactions are stored; in this case, the financial institutions are not involved in verifying the transaction. Current digital cash is verified through the note that contains a unique serial number that the financial institution provides the user with each note used in any transaction contains a new serial number that helps the bank in the verification process.
As discussed above it shows that digital cash has a big difference when it comes to the techniques used in its operation compared to cryptocurrencies. Theft or fraud in cryptocurrencies is very rare since the process is secure and very safe for the transaction. But the cryptocurrencies have a basic problem for scalability. Bitcoin blockchain can process only almost 5 to 7 transactions per second while current digital payment system like VISA cards can process up to 2000 transactions in a second. Many developments are going on to solve the scalability issues for the Cryptocurrencies. If this happens then cryptocurrencies have a great future ahead as a payment medium.
In the next article of this series, we will discuss about Privacy Coins. is the world’s largest cryptocurrency exchange aggregator. It provides exchange service of 300+ coins and over 45,000+ pairs from leading exchanges like KuCoin, Bittrex, Cryptopia, ShapeShift, Changelly, and Changer. It provides an easy way for users to trade coins across multiple exchanges based on price and reliability.
Please do write us to if you have any queries.
Join our telegram group to stay updated on new coin additions and other updates
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The Verge, Bitcoin Gold And MonaCoin Hacks: All You Need To Know
Verge (XVG), Bitcoin Gold (BTG) and MonaCoin (MONA) suffered the 51% attack during the same timespan. Coins worth millions of dollars were stolen as a result of these Proof Of Work (POW) coin hacks.
Verge (XVG) Hack, 2nd time last 2 months
Verge has suffered the attack, 2nd time in last 2 months. The attacker has generated around 35 million XVG coins worth 1.7 million USD.
The theft occurred when hackers exploited a specific glitch in Verge’s technology by mining multiple blocks virtually one second apartusing the same algorithm. This was the same tactic used in a hack just last month that saw over 250,000 XVGs stolen, forcing Verge to prepare a subsequent hard fork.
The same was accepted ay the Verge team on twitter on 22nd May:

Reddit user ocminer was the first to notice both attacks. The user commented that Verge’s system had not been properly repaired since April, and that “since nothing really was done about the previous attacks (only a band-aid), the attackers now simply use two [algorithms] to fork the chain for their own use and are gaining millions.”

The Verge Price graph
The attack happened just a few days after the China ranked Verge at #13 with Bitcoin in the list of top cryptocurrencies.
Bitcoin Gold (BTG) Attack
The 26th-largest cryptocurrency Bitcoin Gold was attacked by the malicious miners and he was able to double spend the millions worth of coins.
To execute the attack, the miner acquired at least 51 percent of the network’s total hashpower, which provided them with temporary control of the blockchain. Obtaining this much hashpower is incredibly expensive — even on a smaller network like bitcoin gold — but it can be monetized by using it in tandem with a double spend attack.

After gaining control of the network, the attacker began depositing BTG at cryptocurrency exchanges while also attempting to send those same coins to a wallet under their control. Ordinarily, the blockchain would resolve this by including only the first transaction in the block, but the attacker was able to reverse transactions since they had majority control of the network.
Consequently, they were able to deposit funds on exchanges and quickly withdraw them again, after which they reversed the initial transaction so that they could send the coins they had originally deposited to another wallet.

Bitcoin Gold’s developers advised exchanges to raise the block confirmation requirements to 50 blocks t avoid such attacks.
A bitcoin gold address implicated in the attack has received more than 388,200 BTG since May 16 (mostly from transactions it sent to itself). Assuming all of those transactions were associated with the double spend exploit, the attacker could have stolen as much as $18.6 million worth of funds from exchanges.

BTG price graph
MonaCoin (MONA) Attack
The Japanese cryptocurrency MonaCoin suffered from a network attack that caused roughly around $90,000 in damages during last week.
The attack appears to have been a selfish mining attack, where one miner successfully mines a block on the blockchain but does not broadcast the new block to other miners. If the secret miner can then find a second block before the rest of the miners find any new blocks, then the secret miner has now effectively created a branch in the chain that is longer than the chain everyone else is working on.
As is standard in most blockchain protocols, the chain with more blocks is considered by the mining network to be the correct chain, as it has the most “proof of work.” So, when the secret miner makes their longer chain public, it invalidates any and all of the blocks discovered by other miners during the time the secret chain was hidden.
Most exchanges have halted all deposits while they work on fixes to prevent possible future similar attacks. Monacoin balances held in wallets are considered safe.

Mona Coin price graph
So XVG, BTG, and MONA all three are proof of work coins and the 51% attacks has taken place on all 3 coins differently. Do you think its high time to move on from POW to another more efficient algorithm?
About CoinSwitch: is the world’s largest cryptocurrency exchange aggregator. It provides exchange service of 300+ coins and over 45,000+ pairs from leading exchanges like KuCoin, Bittrex, Cryptopia, ShapeShift, Changelly, and Changer. It provides an easy way for users to trade coins across multiple exchanges based on price and reliability.
Please do write us to if you have any queries.
Join our telegram group to stay updated on new coin additions and other updates.
Happy Switching :)

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