Refresher-What is Cryptocurrency?

Bitcoins

Cryptocurrency is a digital based medium of exchange that uses cryptographic functions to conduct financial transactions. Through blockchain technology, it achieves decentralization, transparency, and immutability. Simplified, cryptocurrency can be compared to casino chips or arcade tokens. It’s a form of payment, like the U.S. dollar and can be used to buy goods and services. But, unlike fiat money, it’s digital and uses encryption techniques to control the creation of monetary units and to verify funds that are transferred. Unique to cryptocurrency are the following:  

  • It is decentralized which means that supply is not determined by a central bank.  
  • It has no physical form like a dollar bill or coin, and only exists in the network. 
  • It has no essential value, meaning it can’t be traded and it is not redeemable for another commodity such as gold. 
  • It is nearly impossible to counterfeit or double spend.  

The term cryptocurrency is derived from the encryption techniques used to secure the network. They function using blockchain, a decentralized technology spread across many computers that manages and records transactions with immense security. Without blockchain, cryptocurrency would cease to exist.  In simplified terms, the “block” is the digital information, and the “chain” is the public database in which it is stored. They are like a spreadsheet containing information regarding a transaction. Every transaction generates a hash, which is a unique string of letters and numbers created by special algorithms to distinguish one block from another. The computers (also known as nodes) in the network will inspect the transaction and either confirm or reject it. If most of the computers approve the transaction, it is written into a block that joins the chain. Once the new block is added to the blockchain, it becomes public information for anyone to view.   

Several popular blockchain-based cryptocurrencies include: Ethereum, Litecoin, and NEO. But the first and most recognized digital currency is Bitcoin. An anonymous entity named Satoshi Nakamoto developed Bitcoin in 2008. According to Coinmarketcap.com, there are now thousands of different ones being traded publicly, but Bitcoin remains the single most well-known cryptocurrency to date. So, what is it exactly? Simplified, Bitcoin is like a computer file that is stored in a ‘digital wallet’ app on either a smartphone or computer. You can transfer Bitcoins to your wallet or to other people like you can with real money. However, unlike money you send through your bank or a digital payment service, the transfer goes to a network of computers which confirm your transaction (as explained above). Moreover, cryptocurrencies like Bitcoin are created through a process called mining. This is not the same as mining for gold. This process involves powerful computers solving complicated problems.   

Miners
Miners

Miners are a crucial tool for cryptocurrencies. Without them, transactions would not be verified, and users would not be able to make payments. Miners like Canaan Avalon 1066 and 1047 are remarkable, sophisticated machines designed to mine blocks. Their roles are to secure the network and process every Bitcoin transaction.  

For some, the paper dollar is outdated. Cryptocurrency has emerged as the more progressive and secure medium of exchange, though many people have yet to fully convert to the digital eco-system. Nonetheless, since its inception, the debate to shift to cryptocurrency has advanced. Some of the arguments for the digital dollar and against traditional government-based money include:  

  • Overturn corruption: through traditional government-based money, we are giving all our power to one centralized entity to control how it is used and moved. It aims to resolve the issue of absolute power by dispensing power among many people rather than one.  
  • Eliminate extreme money printing. 
  • Return absolute power: All assets are transferred to the government when you die without having a legal will in place or having owned a business. With cryptocurrencies, you and only you have access to your funds.  
  • Eliminate the middleman: Whenever you make a payment or transfer, the middleman (your bank or digital payment service) will take a cut. With cryptocurrencies, all the network members in the blockchain are the middleman.  
  • Serve the unbanked:  A large sector of the world has no access to payment systems like banks. With cryptocurrency, the spread of digital commerce around the globe will enable anyone with a mobile phone to begin making payments.  

Globally, the economy continues to move toward a digital eco-system. Everything from money transfers to investments, the world is going paperless. Cryptocurrency has become the most promising addition to the digital payment sector. Blokforge is proud to be a part of the economic progression by providing state-of-the-art miners for mining Bitcoin cryptocurrencies. Additionally, Blokforge is currently working to develop nodes. These are computers in the network that communicate with each other to transmit information. 

US Excludes Iran’s Central Bank from the Global FinancialSystem

US Excludes Iran’s Central Bank from the Global Financial System

Economy & Regulation

The Central Bank of Iran has been cut off from the global monetary system, after the Swift banking network bowed to U.S. pressure. The move leaves Iran’s 81 million citizens financially excluded and facing serious economic consequences, amidst renewed U.S. sanctions. America’s coercion of Swift attests to the stranglehold the nation exerts on the world economy, and the power it possesses to punish dissenters.

Also read: Minecraft-Like Platform Craft.cash Brings a 3D World to Bitcoin Cash

Swift Severs Ties With Iran

The Society for Worldwide Interbank Financial Telecommunication, commonly known as Swift, is a network relied on by banks to funnel money all around the world. Headquartered in Belgium, it is meant to serve as an international cooperative society, and thus is not meant beholden to any single nation. The reality is quite different however. The U.S., as is its wont, has forced Swift to accede to its wishes and sever ties with Iran’s central bank, as its sanction-led battle with the Islamic nation heats up. U.S. Treasury Secretary Steven Mnuchin revealed the move on Nov. 8, tweeting:

Had Swift failed to follow the orders of its U.S puppet master, it could have succumbed to the same fate as Iran itself. “Swift could be subject to sanctions,” Mnuchin proclaimed last week. “Swift is no different than any other entity.” His comments reinforce the belief that no international organization is beyond the reach of American forces. The Swift money transfer system is open to all nations until the U.S. decides otherwise. In a statement made earlier this week, Swift explained:

In keeping with our mission of supporting the resilience and integrity of the global financial system as a global and neutral service provider, Swift is suspending certain Iranian banks’ access to the messaging system. This step, while regrettable, has been taken in the interest of the stability and integrity of the wider global financial system. Our mission remains to be a global neutral messaging provider.

Permissioned on Pain of Punishment

US Excludes Iran's Central Bank from the Global Financial System“Swift is an enforcement arm of the U.S. government,” tweeted bitcoiner Nic Carter in response to the news. “The current financial system is an extension of U.S. hegemony,” he continued. “It is a system that works for many, but not all.”

There are arguments that can be made for and against America’s decision to exert a financial blockade on Iran for funding militant groups in the Middle East. What is inescapable, however, is that the biggest victims of the Swift banking ban will be ordinary Iranians who are blameless, yet find their business and personal lives crippled by U.S. hegemony.

“Swift is the lifeblood of international payments,” said Thilo Brodtmann, executive director at Germany’s VDMA, an engineering association. “Any restriction, however small, on the neutrality of this system is unacceptable. Today Iran, tomorrow Russia and then China?”

America’s decision to impose harsh sanctions on Iran is a controversial one that even its closest allies are seeking to circumvent. The U.K., Germany and France are among five countries to have established a special purpose vehicle (SPV), an alternative system that will enable companies to continue trading with Iran. Iranians struggling to send and receive funds from family overseas have no such luxury however. Swift and SPVs are of little use to the ordinary man or woman on the streets of Tehran, to whom censorship-resistant money, such as decentralized cryptocurrency, can be literally a lifeline.

US Excludes Iran’s Central Bank from the Global Financial System

What are your thoughts on Swift’s Iranian banking ban? Let us know in the comments section below.

Images courtesy of Shutterstock.

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Cloudflare Launches Decentralized Web Gateway at Its First’Crypto Week’

Internet security provider Cloudflare is introducing a new product to help users more easily access the InterPlanetary File System (IPFS), the decentralized storage protocol developed by Protocol Labs.

In a blog post Monday, Cloudflare announced it was launching a “Crypto Week,” where it will announce “support for a new technology that uses cryptography to make the internet better” every day. The first of these technologies is a portal to more easily access IPFS, as well as build websites on top of the technology.

In a second post, the company explains that the peer-to-peer nature of IPFS provides a number of redundancies for users trying to access a specific website or piece of data. The first is that content can be accessible even if a node goes down, whereas a single server failure might bring down a website on the existing internet.

The second feature revolves around the fact that users can request data using hash values, rather than IP addresses, which acts as a method of ensuring the data received is what was requested, according to the post.

To ensure users can access data stored through IPFS, Cloudflare is offering a gateway which delivers content using Hyper Text Transfer Protocol Secure (HTTPS), the dominant protocol used to transfer data.

The post explained:

“At the most basic level, you can access any of the billions of files stored on IPFS from your browser. But that’s not the only cool thing you can do. Using Cloudflare’s gateway, you can also build a website that’s hosted entirely on IPFS, but still available to your users at a custom domain name. Plus, we’ll issue any website connected to our gateway a free SSL certificate, ensuring that each website connected to Cloudflare’s gateway is secure from snooping and manipulation.”

While Cloudflare’s product is allowing access to a decentralized protocol, the company noted that users can still report abusive or harmful content, indicating that it may be able to revoke its portal to any websites providing such content.

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