The miners are incentivised to follow the most widely adopted chain to maximise their profit so there needs to be a very strong reason to move away from the the original Bitcoin supported by the Core team. The miners and scale of Bitcoin is what gives it security and its wide adoption in many areas just makes it safer and easier to stick with it. It may not always be that way but there would have to be a very compelling reason to switch.

I guess you'd do it the same as the State pegs value to a piece of paper.

At an abstract level you'd create a currency where you promise to exchange $1 for one token then you'd hold the same amount of money in dollars as tokens sold.

So lets say you're writing this in something like Ethereum, Olympus or Rootstock, you'd write an off-chain service where someone can send you dollars with their wallet address and in exchange you'd send them tokens. Let's say they send you $1000 and with their wallet address, your service would create 1,000 new tokens and send them to that address and you'd add that $1,000 to your fund. Then when someone wants to cash in their tokens they'd call a smart contract sending their 1,000 tokens and account number to send the cash to. You'd have a service that detects the transaction and destroys the tokens and sends the dollars to their account.

That's one way but I'm sure you can think of other ways to do it. Since you're promising to buy the tokens for $1 then the value should never drop below $1. Of course it might rise above $1 if someone decides the token has more utility than the dollars they're mapped to.

Plutous does something similar but pegs another token to Bitcoin and there are other systems that peg to gold and dollars. For gold they create a serial number for the gold held in storage and attach it to the token so like with the above system there's a promise in principle to exchange 1 token for 1 gold unit so they're pegged together.

There are pro's and con's.

If you consider that the objective is to provide access to funding for startup's and to enable savers to invest in those startup's for profit and to support startup's then the following are some of the advantages and disadvantages.

Pro's
> Any serious startup can create a pitch, present it and hopefully generate funding.
> Startups don't have to work through templates from crowd funding companies or meet their individual requirements around history and capital and reporting and pitch materials like videos etc.
> Anyone with spare money can invest in any startup they choose. Pre-crowd funding investments were more for the elite in society, crowd funding made investments in startups accessible to everyone, ICO's are the next level making it possible for anyone to conduct their own due-diligence and invest.
> The money raised goes straight to the business raising the money, there's no one sat in the middle gving it a haircut
> It's global so anyone can invest from anywhere which is why ICO's raise such large amounts compared to country level crowd funding projects.

Con's
> Because investors have to conduct their own due-diligence it attracts a lot of scammy ICO's.
> ICO's are often run on a no-promise donation basis by which I mean they ask for money but don't promise to deliver anything.
> Scammy ICO's never mention regulation even though ICO's are becoming increasingly regulated.
> ICO's are often for research projects with no clear commercial aim so where's the profit really coming from? I'm all for supporting research but as an investor it's important that there's a commercial aim such as a profit generating product being developed to run on top of the new blockchain
> ICO's are often for a hand-full of smart contracts to run on Ethereum or a tweaked branch of Bitcoin. Ask yourself, is a few weeks work tweaking a Bitcoin branch or writing a few smart contract really worth tens of millions of dollars? Perhaps, if there's a strong commercial case for the results.


ICO's are a great way to invest and raise investment but I'd suggest always consider people who are involved in the ICO and the commercial aims of the project. If this is someone's 5th ICO then how serious are they about this ICO? I prefer new ICO's by companies with a commercial story to tell, some background history leading up the ICO project and a commercial aim.

For full disclosure I am involved in an ICO which we're putting so much effort into with regulators and legal advice to protect both investors and the business, something that so many ICO's totally ignore.

Paper wallet I'd say, print a couple of copies off, keep one in your safe and the other at a secure location, it'll be as safe as your money at the bank, more so in fact since they can't just help themselves to it as easily as cash.

Bitcoin's a dirty word in banking circles. They love blockchain but they tend to avoid Bitcoin like it'll give them the plague. I don't agree with it, they're missing a real opportunity but don't expect any support from them.

There are very good reasons for not increasing the size of blocks. Sure it's OK to scale up a little but larer blocks move Bitcoin ever closer towards centralisation which is the real incentive for mining companies.

If Bitcoin was to be truly successful and become as widely used as the Visa network then you would need to move up to 400TB of data between nodes whih would require 38 Gbps connections, hardly something for consumers. The only way to achieve that would be to centralise into a closed banking network. So either Bitcoin stays small and on the fringe of payment systems or it goes through the changes needed to allow it to scale.

Bitcoin is now pretty mature, its proven itself as a robust immutable data store or persistance layer. Technology does get layered, it always has done, that's how this stuff works. SQL is a great query language but you wouldn't want to write your website with it. Bitcoin is a very powerful and robust persistance layer for simple transactions but if you try to write everything to it and just keep putting the block sized up it does collapse under its own weight. Fortunately there are people running the numbers and with the foresight to see these major problems coming along and so far the best option that's come up is the Lightning Network. If Bitcoin can't scale to hold every transaction then move most transactions off-chain and go peer to peer with Bitcoin just storing the balances as needed. On paper its a great solution and it has been tested to death on test networks so it is the better option compared to just pumping th blocks up until they explode. It's fine to increase block sizes for a while but the argument is that it just allows the problem to be put off until the network is so big and so critical that no one will dare to do anything and just concede that it's safer to let it centralise into the hands of a couple of mining giants.

Well you just need an address, can't you just install a wallet like Jaxx, generate addresses in multiple currencies and list them in your product listings?
That would work if you didn't sell many items so you could easy tell which payment was for which sale. The problem is if you're selling lots of $10 items and you're receiving lots of $10 payments to your wallet you wouldn't necessarily know which payment was for which sale.

What about Shopify or one of these plugins?
https://bitpay.com/bitcoin-for-ecommerce

I don't know anything about them so I don't know if they're reliable.

You could but it's usually not the most effient place to store large amounts of data. Blockchains strength is its immutable nature which makes it ideal as a ledger but considering the cost and bandwidth for mirroring large chunks of data to ever node it isn't ideal.

You need to understand many areas to be able to develop a safe web wallet.

> Infrastructure including setting up WAF's, hardened servers and placing sensitive components on servers behind multiple layers of security from Network Security Groups that restrict access to DMZ's. You can't just stick keys and services on a server near to the Internet, there has to be layers of security providing defence in depth. Assume your server will be attacked by the best hackers out there and then add even more security.

> For the front end itself you can use any technology you like as long as its used well. Javascript, .NET web applications, whatever takes your fancy.

> Again, don't do anything crypto on the web server, be very paranoid and consider those encryption to be the most precious object in the world.

> Then when you're 100% sure that you're security is tight, pen test it to pieces and run plenty of vulnerability scans.


But to answer your question, use whatever web technology you are most comfy with because it's more about understanding the risks and strengths of the technology. I'd rather an experienced php developer write an app in php than to try to write one in .NET just because .NET has a better reputation in terms of security.

This whole idea that Bitcoin is some kind of currency exclusive to criminals is just ridiculous. Most crime is still funded in dollars or failing that, Euro's or pounds. If you're smuggling people or funding other major nefarious activities you are far more likely to be using a more abundant, widely accepted and easy to hide currency. When HSBC got into trouble for turning a blind eye to money laundering it was for more money than the entire Bitcoin economy and that was just one single instance of serious crime.

The vast majority of use of Bitcoin is for perfectly legal and everyday activities, even Amazon has plans to accept it. Just because someone doesn't want to broadcast to the world what they're buying doesn't make it shady. If it was then everyone would have public bank accounts so we could all inspect their bank statements. Privacy is more popular these days because there's been so many abuses of people's private information whether its State or corporate or criminal hacking or whether its just trading of legal or ill-gotten data for marketing purposes. Identify theft is a massive problem and financial records are a powerful aspect of good identity theft.

I was at a presentation recently by a central bank and they talked about how privacy is vital for banking because there are many genuine reasons for banks and businesses and people to want to move money anonymously, its a major use case for any currency and doesn't indicate that a currency is somehow dirty as a result.

Depends on what your interest is, whether you're interested in the trading side or technical side or general economics.
I'd suggest picking up a good book and reading it. I really enjoyed "Mastering Bitcoin" although its more of a technical book than a trading or economics book. It's still worth reading if you're reasonably technical so you develop a good grounding in what Bitcoin actually is in terms of technology.

Beyond that there are some good Podcasts and website that cover the trading side.

I'd split your money between Crypto and other investments, perhaps shares on IG or something. Incidentally IG supports Bitcoin trading now as well.

With the crypto investment I generally hold a percentage but trade more than 50% but I trade in one or two altcoins that I've traded for a long time and have a good feel for. I find that's less risky. My wife recently showed some interest in trading so I said "pick a coin from the list on Poloniex" and she chose the most random collapsing altcoin there was but as a teaching aid I showed her how to place a small amount, $50 or so on it. Damned thing shot up like a rocket which I didn't expect at all and she made more than I did that day with my larger trades.

Hard to predict but I still still to the coins I know best.

It's not about the block size but about the broader direction of Bitcoin I believe. Putting up the block size now is a very short term fix that puts off developing a real solution to a major problem.
How big is the problem? Well the Visa network has peaked at 47,000 transactions per second and so if Blockchain was to replace Visa as a transaction network then it would need to transfer 400 TB of data per day requiring a connection speed of 38Gbps (38,000 Mbps). The only way that's possible would be to stop moving data across the Internet but instead move mining into a centralised banking network and we're back to a centralised banking network.

So if we accept that something has to change to deal with this looming problem then why would miners be so against it? The suggestion is that the best solution is the Lightning Network which moves most transactions off-chain meaning there's less for miners to mine and charge for. The Lightning Network in its present form is dependent on Segwit so miners are incentivised to block the Segwit change to head off Lightning Network. AsicBoost is another aspect to all of this since it allows some mining hardware to have an unfair advantage in terms of efficiency so those miners have a double incentive to block Segwit. So the argument is made that rather than change anything big then we should just keep making the blocks bigger which allows miners profits to grow and the network to become ever more centralised.

The Lightning network is vital for Bitcoin IMHO. The idea that every micro-transaction has to be verified by the entire network makes no sense, it's like saying if I want to buy a sweet from my local market I need the worlds banking network to verify and approve it.

Lightning Network finally makes Bitcoin scalable in terms of transactions per second. It also makes it possible to obfuscate transactions off-chain particularly when combined with Sphinx and Hornet.


The simplest way to think about Lightning Network is to think of how you make transactions in daily life.
If you want to pay me $100,000 then you want some evidence that you've paid me and so you would want to record that transaction to the Blockchain. The transaction is broadcast, recorded and becomes immutable and proveable from that point forward. There is a cost associated to that however which you cover with fees.
If you want to pay me $1 then you would likely be happy to just hand me $1 and forego the fees. The Lightning Network creates a payment channel between you and me so your wallet makes a note that its given me $1 and my wallet makes a note that you've paid me $1. You and I perhaps make regular payments between us so I pay you $2 for something then I pay you $3 for something else and you pay me $2.50 for something. The balance is I owe you $1.50. You or I decide we want to persist that to the blockchain so we instruct the wallet to write a transaction for $1.50 to the blockchain.

Several important benefits just occurred.

1. We just skipped all those micro-transaction fees and just had one final fee so we saved money.
2. An observer of the blockchain can't see what micro-transactions happened so there's some obfuscation of transactions there.

Now you can extract that by considering a scenario where I want to pay someone called George who I don't know and so I don't have a payment channel to. But I do know and trust you with our payment channel and you know and trust someone called Jane with a payment channel and Jane knows and trusts George with a payment channel so if I give you $1 and you give that to Jane and she gives it to George then the net result is that George has been paid by me but there's still no fees and the transaction is still obfuscated. Each channel may be written out at different times so from an observer it becomes difficult to unpick payments moving about. Not impossible and if I'm a node in that channel I can see where the money is coming from and going to.

So this is where protocols like Sphinx and Hornet come in by creating encrypted shells similar to how TOR works to hide the flow off money as it happens off-chain.

So Lightning is just moving transactions off-chain and into a peer to peer network.

I think he meant that there's already a lot of work going into developing quantum resistant algorithms, even NIST has work to identify and recommend the best algorithms for this since it isn't a challenge unique to blockchain. There are algorithms that should be resistant to quantum computing attacks so presumably Bitcoin would need to switch to one of these algorithms. That is an over-simplification though because what happens with all those coins sat in storage that were generated with the old algorithm. It may be that the only solution is to start a whole new blockchain and there are altcoins out there that are built to tackle this exact problem.

What about Brian Armstrong and Fred Ehrsam, the founders of CoinBase? I don't know how much they made or how much has been made by traders moving money each day.

Bitcoin should be fine, the tokens will have inherent value which will generate new wealth from fluctuating exchange rates and there will be fees for the miners.

I don't think there's any right or wrong answer, they all carry the same risks keeping large amounts of crypto online.

I've had no problems with Poloniex but they could be hacked any time the same as any other exchange. I don't expect them to be hacked but its the risk they all share.

You can trade on Coinbase even, in and out of Bitcoin or trade privately....buy 1 BTC, add some markup and offer to sell it in bits privately throgh local bitcoins.

Fee's are a problem but hopefully the Lightning network will improve matters since most smaller transactions will go peer to peer off-chain without fees.

It depends on the use case.

Sometimes its perfectly acceptable or even desirable to have public visibility of transactions. A charity with a public account is not a bad thing and throw away accounts just for one off transactions is also often acceptable. Generating new addresses for each transaction can also be sufficient.

But often privacy is vital, would you want your bank account and its transactions visible to the world even if they didn't know for sure who owned the account? That's where technologies like the Lightning Network with Sphinx or Hornet comes in to keep all those smaller transactions off chain and just using the blockchain for intermittent persistance of transactions.

The reality is that blockchain is one layer but not the only layer. TCP is awesome but it isn't enough for a functional corporate network. A more realistic long term solution layers technologies so there's nothing inherently wrong with combining blockchain with cloud with desktop with mobile with SQL databases, just make sure that each layer is used appropriately for its strengths.

Bitcoin remains my favourite blockchain since its the most practical and well used. Its far from perfect and doesn't cater for all scenarios but thats why we have altcoins. I don't like the idea that its Bitcoin or nothing, that's like someone inventing the car and announcing there's no need for other car makers, we have a car thank you very much.