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VPN Protocol Wars in the Blockchain World

Placeholder VC partner Joel Monegro, in his formative article on value captured by protocols, explained that shared data layers in decentralized networks and limited supply cryptographic access tokens (i.e., cryptocurrencies) make blockchain protocols valuable and accessible for all. The proliferation of blockchains has led to an influx of these “fat” protocols, which are capturing more […]

VPN Protocol Wars in the Blockchain World was originally found on Blokt – Privacy, Tech, Bitcoin, Blockchain & Cryptocurrency.

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Placeholder VC partner Joel Monegro, in his formative article on value captured by protocols, explained that shared data layers in decentralized networks and limited supply cryptographic access tokens (i.e., cryptocurrencies) make blockchain protocols valuable and accessible for all.

The proliferation of blockchains has led to an influx of these “fat” protocols, which are capturing more value than the leaner application layers on top vis-à-vis thin ones in traditional internet stacks such as TCP/IP. As a result, decentralized protocol solutions looking to solve various problems have come to the fore.

Some of these problems being the disadvantages in traditional internet communication, centralized control over web accessibility, and mass surveillance. Blockchain-based VPNs (Virtual Private Networks) are a solution to this problem. Two major companies that are working on products in this space are Orchid and Tachyon Protocol. With their VPN services going live this month, let’s compare how the two match up.

Web vs. Web 3.0 (source)

An Introduction to Orchid and Tachyon

Orchid is building an open-source internet protocol on top of the internet stack to allow anonymous web access in order to circumvent surveillance states.

It does so by incentivizing users to share bandwidth with others in a marketplace setting. This breaks up traffic and directs it over Orchid’s network of distributed nodes. Kind of a decentralized alternative to TOR (The Onion Router). Launched back in 2017, Orchid has so far raised USD 48M from marquee investors such as Sequoia, DFJ, Andreessen Horowitz, Polychain Capital, Box Group, Blockchain Capital, etc.

Tachyon Protocol is building an alternate stack to disrupt traditional communication protocols over the internet in order to eliminate drawbacks in TCP/IP. It is a collaboration between X-VPN and V Systems. X-VPN is a renowned VPN service provider used by 50 million + people worldwide. V Systems is a blockchain database cloud project that uses a unique Supernode-Proof-of-Stake consensus mechanism for security. Tachyon brings to fruition years of experience and research by Sunny King (inventor of Proof-of-Stake consensus mechanism), Peerchemist (Peercoin Project Leader, and President of the Peercoin Foundation) and FinTech investor Alex Yang. More on the collaborators and team members later.

With a focus on VPN, both platforms are built on public blockchains (Ethereum and V Systems). Nodes on each network need to stake tokens for verification before they can offer traffic to users. In return, they receive crypto payments (in the respective tokens) through smart contracts. However, there are major differences between the two projects that set them apart.

Orchid vs. Tachyon Protocol

Orchid Protocol works on top of traditional internet protocols and creates a privacy layer using blockchain. This is done by using the open-source WebRTC for transmission to perform preliminary data obfuscation and multi-hop to reduce the chances of data theft. Data obfuscation makes Orchid traffic look like normal internet traffic with no identifier to detect that Orchid is being used.

However, this also leads to the possibility of deterioration in the transmission quality of data being moved. In normal practice, data obfuscation has been seen to have adverse impacts on network security and firewall identification. Similarly, multi-hop, while hiding original nodes, does not mask individual node activity in a P2P network. As a result, source nodes can be tracked using traffic analysis. For storage and routing, Orchid uses IPFS and Ethereum’s DHT, respectively.

The Orchid Protocol acts as a layer on top of the normal Internet stack

In comparison, Tachyon Protocol’s approach has been to disrupt the core transmission protocols themselves, thereby providing a more comprehensive solution. It is reconstructing the TCP/IP model using its own iterations of proven P2P technologies – DHT, blockchain, UDP, and encryption.

As opposed to WebRTC, it uses its own Booster UDP to improve network connection success rates and transmission quality. The Tachyon Security Protocol is designed for end-to-end encryption and protocol imitation. With respect to multi-hop, the Tachyon Anti-analysis helps multi-relay forwarding to reduce the risk of information exposure after a single node is attacked. Tachyon also uses its own DHT for routing.

Tachyon Protocol replaces traditional Internet Protocols with distributed technologies

Orchid is built on Ethereum, which is a mature ecosystem with thousands of dApps and platforms built over it. However, in its current state, the Ethereum chain is limited in terms of TPS (transactions per second) and hence leads to performance bottlenecks during times of high traffic.

Orchid Protocol’s whitepaper mentions that if it were to rely on Ethereum solely, the network would allow up to 7 million users only. Comparatively, V Systems, the blockchain on which Tachyon is based, has much higher TPS and hence can theoretically support a billion users. However, it is a smaller ecosystem compared to Ethereum and is relatively newer.

For verification, Orchid Protocol uses a stake weighting plan for nodes with staking time as the adjustable parameter. The initial staking period is set at 30 days, which is good for network security but increases the barrier to entry for user participation since they need to bear more opportunity costs from higher risks of price fluctuations. To solve this issue, Orchid lets nodes with higher/longer stakes to get more traffic.

This, however, runs the risk of Matthew effect: “rich get richer, poor get poorer.” In Tachyon Protocol, staking amounts and staking periods are both adjustable parameters, thereby allowing more parameters to be tweaked in the event of an early-stage attack. The initial staking time is set to 7 days in Tachyon. In order to make up for the opportunity costs of users, the system provides fixed staking rewards to participants.

Key team members of Orchid Protocol are:

  • CEO Dr. Steven “Seven” Waterhouse who co-founded RPX Corp and was a project lead at Fortress, Pantera Capital and Sun Microsystems. Steven has extensive experience in the blockchain industry, with key connections in the VC investment space.
  • Co-Founder Brian J. Fox who was the first employee of the Free Software Foundation and is the author of the GNU Bash shell. Brian has a rich experience in open source community development.
  • Co-Founder Jay Freeman who developed the popular Cydia software.
  • Co-Founder Gustav Simonsson, who helped launch Ethereum and is an authority figure in blockchain security.

Key Tachyon people include:

  • Founding Member Sunny King who invented the Proof of Stake consensus mechanism and is the founder of V Systems blockchain project. Sunny is a cult hero figure in the cryptocurrency space making rare appearances in public to maintain his anonymity.
  • Founding Member Peerchemist who is a project leader at Peercoin. As an OG crypto developer, he is highly regarded in the developer community and maintains a global developer network influence.
  • Founding Member Alex Yang who is a FinTech investor and entrepreneur with over 14 years of experience in banking and finance including Nomura as an Executive Director and UBS as a VP. He is also a Co-Founder of Beam Capital.
Sunny King’s first “public appearance” at The Capital event by CoinMarketCap (source)

For making settlements, Orchid uses nano payments, which is also one of its major points of focus. Nano payments allow for a large number of small transactions at low transaction costs. However, nano payments aren’t completely untraceable, and as mentioned earlier, individual node traffic can be tracked to identify source nodes.

In comparison, Tachyon has a unique mainchain payment channel. In addition to allowing for a large number of small transactions, the transaction fees in the sidechain are nil. Payments using this sidechain method are anonymous since they use payment pools. But the implementation complexity is high.

Having analyzed both projects at length, there are certainly pros and cons to both platforms. However, one major advantage that Tachyon has over Orchid is that it is backed by established brands like X-VPN and V Systems, which have been battle-tested by millions of users. As the war of the VPN protocols heats up, it will be interesting to see how these two platforms grow and influence the segment and each other over time.

VPN Protocol Wars in the Blockchain World was originally found on Blokt – Privacy, Tech, Bitcoin, Blockchain & Cryptocurrency.

Source: https://blokt.com/blockchain-blog/vpn-protocol-wars-in-the-blockchain-world

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$500K Bitcoin Donation Funneled to Groups Involved in US Capitol Riot: Analysis

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Blockchain intelligence firm Chainalysis has tracked simultaneous Bitcoin (BTC) donations to wallets associated with right-wing extremist groups in the U.S., which might have helped fund the recent riot at the U.S. Capitol. The news marks yet another pivot towards pseudonymous money transfer means by alt-right groups in the U.S.

Alt-Right Agitators Received $500K in Bitcoin Prior to US Capitol Riot

Publishing its findings on Thursday (Jan. 14, 2021), Chainalysis revealed that several notable alt-right personalities who were present at the Jan. 6 riot in the U.S. Capitol received substantial Bitcoin donations.

According to Chainalysis, a single donor funneled 18.15 BTC to addresses belonging to entities with right-leaning affiliations on Dec. 8, 2020. At the time, this figure was worth over $500,000.

In its report, Chainalysis also revealed that popular far-right political commentator Nick Fuentes received 13.5 BTC. There are a few photographic pieces of evidence placing Fuentes at the riot with a megaphone in hand though Fuentes has denied entering the building itself.

Apart from him, alt-right podcaster Ethan Ralph and VDARE — an anti-immigration organization — also received BTC sums from the donor. While Chainalysis did not reveal the identity of the person responsible for funneling the Bitcoin, the crypto forensics outfit did mention that there strong evidence that the donor is a French computer programmer.

An examination into the donor’s wallet shows that the person is likely an early Bitcoin adopter. Further investigation into the donor shows a history of donations to extremist causes with an alleged suicide note referencing known alt-right talking points.

Based on these findings, U.S. law enforcement officials are reportedly investigating possible links between the donations and the assault on the Capitol. Prosecutors also say that they are approaching the investigations from a counterterrorism and counterintelligence standpoint.

Financial Censorship Triggering Crypto Adoption

Alt-right groups receiving donations in Bitcoin is only the latest example of political and social groups with dissident ideologies embracing cryptocurrencies. Indeed, Bitcoin’s early history is somewhat intertwined with WikiLeaks especially after the establishment was cut off from mainstream funding sources.

Even countries facing economic sanctions are also adopting cryptocurrencies. Venezuela is a popular example, with the Maduro administration even creating its own oil-backed Petro “coin.”

Nations like Iran are actively supporting Bitcoin mining with tax breaks for BTC miners. As previously reported by CryptoPotato, the output from three power plants has been offered to miners in the country.

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Source: https://cryptopotato.com/500k-bitcoin-donation-funneled-to-groups-involved-in-us-capitol-riot-analysis/

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Bitcoin Faced First Major Correction In Current Bull Run: The Crypto Weekly Market Update

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This week was very intensive in the cryptocurrency market. It’s perhaps safe to say that it was among the most tumultuous ones we’ve had in the last few months.

Everything started calmly, and during the weekend, the price hit an all-time high value of $42,000. The excitement was short-lived, as immediately after that, bitcoin went in the opposite direction and started to decline. It wasn’t until Monday, however, when things took a turn for the worst.

Bitcoin’s price lost around $12,000 in what seems to be the first major correction in the ongoing bull run. The decline of around 27% came in a few brutal four-hour red candles and led to the liquidations of $2.87 billion worth of both long and short positions, indicating once again how over-leveraged the market is.

From there, the price took uphill and even reached $40,000 again on Thursday. Bears, however, weren’t done as what followed was another handful of red candles that brought the price to its current trading level of about $35,000.

With this said, the entire cryptocurrency market took a hit as the capitalization has dropped below $1 trillion. Meanwhile, Bitcoin’s dominance is also suffering, as it’s down to 67.7% during this week from its high of around 70.3%. This shows that despite the blood on the streets, altcoins have managed to take the upper hand and claim a larger portion of the market.

Meanwhile, two other projects made headlines over the past few days, mainly thanks to their incredible price performance. Despite this brutal correction, Polkadot’s DOT token is up 40% over the last seven days, while LINK is up 22%. The latter even charted a new all-time high today.

In any case, the week was particularly exciting, and even though this time it was the bears who had the upper hand, it’s very interesting to see how the next few days will shape up. Is this the beginning of a larger correction, or is it just a step back in preparation for an even bigger rally? We have yet to see.

Market Data

Market Cap: $964B | 24H Vol: 144B | BTC Dominance: 67.7%

BTC: $35,442 (-14.6%) | ETH: $1,141 (-7.5%) | XRP: $0.276 (-12.9%)

Tether (USDT) January 15th Deadline on iFinex Case: Everything You Need to Know. Today is an important date for the entire cryptocurrency industry as it marks a serious deadline on the iFinex v. NYAG case. Here is everything you need to know about it and what to expect.

FinCEN Extends Comment Window on Proposed Crypto Regulations. After receiving thousands of responses and serious criticism from industry participants, the Financial Crimes Enforcement Network (FinCEN) has decided to extend the comment window on the proposed cryptocurrency regulations.

Following Coinbase And Bakkt: Winklevoss’ Gemini Reportedly Considers Going Public. Cameron and Tyler Winklevoss are reportedly exploring the option of taking their cryptocurrency exchange, Gemini, public. This means that they could follow in the footsteps of other cryptocurrency-related companies with similar intentions – namely, Coinbase and Bakkt.

Greenlight: Anchorage Secures Crypto Banking Charter from the OCC. The United States Office of the Comptroller of the Currency (OCC) has granted a cryptocurrency custodial service company a national trust charter. This puts the firm in the position to claim the mantle of a US-based national crypto bank.

4 Possible Reasons for Bitcoin’s $12K Correction After Reaching $42,000 All-Time High. Bitcoin went through its first major correction this week, sliding by more than 27% in just a few four-hour red candles. Here are some of the potential reasons for which this happened.

Crypto Market Cap Reclaims $1 Trillion as Bitcoin Sets Sights on $40K. The cryptocurrency market sees no boring days. Just a couple of days back, it was on its way back up, recovering from a major correction, and even claimed $1 trillion in market cap again. Unfortunately, today things took a turn for the worst again.

Charts

This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Polkadot, and Cardano – click here for the full price analysis.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/bitcoin-faced-first-major-correction-in-current-bull-run-the-crypto-weekly-market-update/

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Report: Mt Gox Creditors Could Claim 90% Of The Owned Bitcoins After A CoinLab Deal

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Nearly $5 billion in bitcoin could make their way back to Mt. Gox users following a deal between creditors and CoinLab. Nevertheless, the agreement is still reportedly subject to creditor acceptance.

  • Bloomberg reporter Matt Leising offered a brief explanation of the story earlier today, noting that CoinLab has reached a deal with Mt. Gox creditors for 90% of the bitcoins they are owned.
  • Should the deal indeed proceed, the creditors would receive over 135,000 bitcoins out of 150,000. With today’s prices, this sizeable amount has a value of $4.8 billion. 
  • As those users have been waiting for over six years to receive their coins, whose value has appreciated significantly, the community speculated that they might dispose of the bitcoins, which could harm the market.
  • Founded in 2011, CoinLab partnered with Mt. Gox in late 2012 to handle transactions for the exchange in the North American region. However, the collaboration ended rather shortly as CoinLab took Mt. Gox to court, alleging that the trading platform had broken its contractual agreement. 
  • The Japan-based crypto exchange was the largest trading platform years ago, responsible for over 70% of the BTC transactions during its peak. However, it all crumbled after one of the largest hacks in the cryptocurrency field in which the attackers took 850,000 bitcoins – worth over $30 billion today.
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Source: https://cryptopotato.com/report-mt-gox-creditors-could-claim-90-of-the-owned-bitcoins-after-a-coinlab-deal/

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