I have been noticing on many online bitcoin districts that various users are unable to understand the concept of Segregated Witness. This post will clear up any doubts, uncertainties, and myths regarding SegWit.
So, what happens in SegWit?
SegWit is short for Segregated Witness and it’s a proposal presented by the developers of Bitcoin Core. Originally it was aimed to solve the transaction malleability, which is a well-known weak spot in the Bitcoin system. The idea behind SegWit is that the signatures in a transaction, also known as the “witness data” are skipped when calculating the transaction id.
Basically, SegWit will update the 1MB size block limit to 4-million unit block weight limit. This counts serialized
witness data and one unit and core block data as four units. This is an entirely new transaction format, meaning the block size is increased. SegWit counts each byte in a witness as 0.25 bytes towards the 1MB block limit, thus the maximum size of a block becomes just under 4MB.
It’s not that the data gets smaller, it’s just counted in a way that allows for the block limit to be increased.
The short/easy version
In simple words, signature related data is removed from bitcoin transactions, causing them to appear smaller in size. Also, making the block size smaller, further, allowing more transactions to take place.
Clearing up myths and rumors
Myth: SegWit as a soft fork is much more dangerous than a hard fork
A soft fork ensures that the backward and forward compatibility is under control. Also, when a soft fork is set up, old versions of Bitcoin software will be able to function without any faults. On the other hand, a hard fork requires every Bitcoin user to update to the new software to support the consensus rules. Any user that fails to upgrade to the new software might be under the risk of getting thrown off the Bitcoin network.
Myth: SegWit is more complicated than a super simple hard fork
Similar to a hard fork, SegWit proposes the same idea of increasing the block size limit. No doubt, it is pretty complex and introduces several changes, but it is a relatively simple conceptual change. Basically, SegWit ignores the signatures when calculating the transactions, but as a soft fork, some additional changes must be made to make SegWit transactions compatible with non-segwit nodes. These changes then have side effects which can be beneficial to Bitcoin. It also contains more functionality than a hard fork increasing the block size limit. The hard fork to increase the block size limit also appears simple, but additional changes need to be made to support the deployment and to solve the quadratic hashing issue with transactions.
Myth: Miners who don’t upgrade to segwit will be forcefully told to quit the bitcoin network
This is false since SegWit will be deployed using the BIP9 versionbits which uses a 95% threshold. A miner would not run into any trouble, as long as he follows certain rules. However, if he fails to follow these rules, he could end up with transactions including witnesses but he wouldn’t be having the witnesses nor the witness root hash in the Coinbase. This would be an invalid block that would be in the orphan pool.
What are the benefits of SegWit?
Besides the obvious benefit of having to increase the capacity, there are several other benefits that come with the introduction of SegWit. Some of those benefits are:
- Node performance is tested based on how weighting data
- Signature covers value
- Linear scaling of sighash operations
- MultiSig gets more security
- Script versioning
- Increased security to almost-full-nodes
Why hasn’t SegWit been activated yet?
If there is not enough support shown, it might result in a contentious fork. That means a part of the network switches to the new client while some remain to use the older version. This leads to two sets of cryptocurrencies with different rules, co-existing and competing for users and legitimacy.
In order to avoid such a situation, the developers of SegWit have programmed a specific rule in the software proclaiming that it will only activate once it reaches the 95% mark.
Currently, the support is hovering around 32-33%.
Coinsquare is a Canadian crypto exchange which has launched its very first television commercial, as it’s looking forward to extend its customer base before divulging to public by the end of this year.
The exchange, Coinsquare is sometimes called “Canada’s Coinbase” and has launched an ad on Monday that will start running on television later this week. According to the advertisement, Coinsquare is the most secure platform of Canada for trading cryptocurrencies, and also, the advertisement attempts to initiate the reputation of exchange as a reliable and trustworthy option to the scams and other warning tales that fill the space.
Also, the timing of the ad campaign is eminent, since the interest of consumers in cryptocurrencies has declined in the past few months. But, it relates with the ambitious plans of Coinsquare to continue its development, internationally and as an IPO (initial public offering).
At the beginning of this year, the exchange, Coinsquare unveiled that it intends to go public in the month of September by listing on the Toronto Stock Exchange. The company expects that it will raise almost $120 million (C$150 million) and after that, it will use those funds to finance expansion into the United Kingdom and United States.
Cole Diamond, the Chief Executive Office of Coinsquare told bloomberg, back in January that:
“The United States and the UK market are next… We believe that we will be a strong competitor to Coinbase and other exchanges in the US by the end of the year.”
While Coinsquare considers itself as a strong competitor to Coinbase in the future, at this time, it processes quite less trading volume than its correlative south of the border. According to CoinMarketCap, at this time, Coinsquare is ranked as the 95th-largest exchange of the world, with daily volume of almost $1.7 million. Amid exchanges that provide CAD trading pairs, it is ranked on the third position, behind QuadrigaCX and LakeBTC .
Although it isn’t the first cryptocurrency company that’s going public, however, Coinsquare is going to be one of the first to do so via conventional means, which offers an extensive regulatory analysis process. Many have done the same through RTOs (reverse takeovers), where a firm joins a company that is already listed on an exchange and after that, it modernizes its ticker symbol as well as its name.
An ether wallet had received hundreds of thousands of dollars around two weeks ago. Unfortunately, those funds were later hacked form different wallets due to the negligence on the user’s end. If only a few security measures had been taken, some of those funds could actually be protected from the hacker.
How it happened
Maximum of funds were stolen from a user holding 973 ethers. What caused this hack was the fact that the user had a rooted android phone. Rooted Android phones are similar to jailbroken iPhones, which means that new applications can be installed but they have no security assurance that the apps are not malicious. That being said, such an app must have been installed on to the device providing the hacker access to your phone. On gaining access to the device, the hacker used an exploit to retrieve the backup phrase to Jaxx wallets. This exploit has not been fixed since Jaxx is a hot wallet, which means that coins are kept here for frequent use and not storage.
Ways to increase the security of your funds
Crypto security experts have provided a few tips on how you can maintain the security of your wallets and funds.
- Do not use public Wi-Fi even after using VPN.
- Be sure to turn on 2-FA for all your user accounts, with google authenticator.
- Do not store your private key unencrypted.
- Never access your funds from a rooted device.
- Do not install applications on your device that are not trustworthy.
- Keep a look out for phishing scams. Your private key should only be known by you.
- Bookmark your sites. Some fake sites are known to have URLs similar to the actual portals and could steal your personal info.
- If you possess a large sum of funds, split it amongst separate wallets to ensure that not all your money could be lost due to some blunder.
- Cold wallets are to be preferred over hot wallets and exchange wallets for storage.
Story Credits: coinidol.com
Image Credits: coinjournal.com
An escrow service provides safer transactions especially since bitcoin transactions are irreversible. It holds the buyer’s coins in escrow and releases them after the satisfaction of both the parties. Escrow protects sellers from fraudulent buyers and likewise, buyers are protected if the seller turns out to be a scammer and doesn’t deliver the goods.
Multisig aka Multi-signature is a technology that takes care of bitcoin wallet address. The basic principle is very simple: more than one person must sign the transaction in order for it to be valid. Bitcoin has a built-in feature that lets you choose as many signatures as you like, and then choose how many signatures in total must be provided for a valid transaction.
How to Use Multisig to Escrow Bitcoin?
The most common use of Multisig would have to be bitcoin multi-sig escrow. Multi-sig escrow provides consumer protection without the need of a central escrow provider to hold the coins on your behalf. Instead, an address is created which requires ‘2 of 3’ signatures from the buyer, seller and a third person who provides arbitration in case there is any disagreement. This address holds the payment until the product or service is delivered, and then can be used to pay the seller or refund the buyer.
Multisig can strongly benefit both individuals and organizations in improving security, establishing access controls, and enabling the delegation of partial trust. The additional signature proves that the transaction process is complete when both parties are aware that the terms of the transaction have met.
Bitcoin Escrow- Specialized Services
There are some specific platforms present for providing bitcoin escrow service to bitcoin users. When you use one of these services, you are able to choose a third-party arbitrator from a list. If this list isn’t available in the event of a disagreement, they will act as a mediator.
- Bitrated – Costumers choose from a list of independent arbitrators registered on a platform. After confirmation, the buyer secures bitcoins into a multi-signature address and the payment is secure until two of the participants agree to release them.
- Escrow My Bits – This Bitcoin escrow service charges 1% escrow fees which provides possible dispute resolution. Storing your funds in a secure 2 of 3 multi-signature transactions where they hold one key.
- StrongCoin- It’s an online wallet with built-in escrow with 1% fee on bitcoin cryptography. Use this service to buy items as they are able to offer escrow where no single party holds bitcoins. They hold one vote and to release the coins, you require two votes.
While in escrow, coins cannot be stolen unless two of the users also sign the transaction. This is much more secure and is highly recommended for anyone dealing with a large number of bitcoins.
There are more than 500 cryptocurrencies in the world, but Bitcoin has dominant worth. In fact, some countries become the hub of this peer-to-peer digital currency. Here, this article is about the story of some countries, which country uses Bitcoin and who accept the Bitcoin and use it in payment transactions.
Countries that say yes to bitcoins
If a country going to introduce Bitcoin technology to its financial sector. Then, it clearly means that country is going toward the revolutionary situation. It would leave a strong impact on its all sectors and also on related countries.
Bitcoin accepted countries:
Canada becomes a bitcoin-friendly country, which ensures that Bitcoin cryptocurrency is not used for money laundering. Canadian authority makes it sure that transactions of Bitcoin are taken place under complete supervision. Canada revenue agency takes Bitcoin transactions as barter transaction. In addition, income generated from these transactions named business income.
Australia allows The Australian taxation office considers Bitcoin transaction as barter arrangement. Which means, Bitcoin transaction legally completes its process under specific rules and regulation.
A small nation, accept the Bitcoin digital currency. It has no history of jumping to new technology. whereas, its financial sector show interest to implement on Bitcoin technology. They are going to use blockchain technology for healthcare, banking services and much more.
Denmark is one of the developed countries in the world with living standard and with financial stand as well. Bitcoin will be used in all aspects. Whether in means of exchange or to the alternative to central banking monopoly. Danish bank declares that “Denmark is home to a number of Bitcoin startups and exchanges such as CCEDK, which has been a prolific innovator in the crypto-space with recent releases of Bitcoin “3.0” technology and decentralized exchange.”
Countries with strict rules
In the same way, countries which opposed Bitcoin first. Now, those countries have a dominant part in Bitcoin transactions. They utilize its advantages in their investment. The main reason behind the opposition was the anonymous conduction of transactions between two account holders. it may use in illegal dealings like buying drugs or weapons…
Whereas, in presence of all securities, countries accept the Bitcoin with strict rules. Here are some countries with strict rules.
As the USA is considered as Bitcoin friendly country. Whereas, the government is trying to control Bitcoin transaction process. Same as with its traditional money. Incidentally, Bitcoin is peer-to-peer digital currency and never controlled by anyone or any authority. In that case, USA government generate some rules regarding Bitcoin.
In the same way, Japanese Financial service agency place regulations to Bitcoin exchanges. According to Motokazu Endo, Attorney of FSA,
“Cryptocurrencies’ prices fluctuate sharply, and they’re highly speculative. Many exchanges have the weak financial basis, and should they go bankrupt, it would be tough to protect creditors’ assets.”
At this point, if Japanese people want to buy bitcoin. Then, they have to pay 8% consumption tax. And this all transaction will be through Yens. Because bitcoins considered as imported goods.
In July 2016, China introduces a law named “civil right object” to the public. Chinese can buy and sell goods through Bitcoin under this law.