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Author Topic: The Silk Road seized and the downfall of Mt.Gox  (Read 868 times)
theyoungmillionaire
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May 02, 2018, 07:20:05 PM
Last edit: June 06, 2018, 10:00:23 AM by theyoungmillionaire
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 #1

The Silk Road seized and the downfall of Mt.Gox

Silk Road is the first modern darknet market. Derived from a historical network of trade routes, which started during the Han Dynasty (206 BC – 220 AD) between Europe, India, China, and countries on the Afro-Eurasian landmass. Started in February 2011, a booming online marketplace, and founded by Ross Ulbricht, a darknet market operator, known alias “Dread Pirate Roberts”. Ross as some article say American former drug trafficker, some people say he is a visionary who wants anonymity, maximize political freedom and independence, emphasizing freedom of choice, voluntary association, and individual judgment; they believe in every individual rights. He also has some business failures before Silk Road.

It produced millions of dollars in revenue, secret was simple: ensuring the anonymity of its buyers and sellers. You can access it through Tor, software that renders anonymous on the internet and as a tool for uncensored communication to Internet users. Primarily, buyers could register free, but there were a limited number of new seller accounts available; new sellers had to purchase an account thru an auction. Later, a fixed fee for each new seller account to mitigate the possibility of malicious individuals distributing tainted goods, the site had 10,000 products for sale by vendors[read].

Bitcoin is the primary mode of payment, fiat to bitcoin then btc to Silk Road account, if there is a transaction the buyer’s btc will be escrow; when the buyer confirmed the legitimacy of the purchased, seller’s account will be credited. Despite its highly anonymous features, in October 2013 the U.S. Government shut it down. Intersection between the Bitcoin housed on the site, valued at tens of millions of U.S. dollars, and a key crime-fighting tool: the federal asset forfeiture program. As soon as the United States seized Silk Road, it also, by virtue of technological fiat (and, apparently, some clumsiness on the part of Ulbricht), seized the bitcoins housed therein. This included Ulbricht’s staggering personal bitcoin supply (about 150,000 BTC), accumulated through the healthy commission Silk Road took from all sales, as well as all of the bitcoins held by its many users or housed in the aforementioned escrow accounts (about 30,000 BTC). This meant that if a drug-seeking Silk Road user tried accessing the site after the shutdown, he would, to his likely dismay, be redirected to an FBI-generated shutdown notice. In addition, all of the bitcoins he may have stored on Silk Road would also be gone, seized by the government as part of efforts to forfeit all of the bitcoins held in Silk Road accounts. Short discussion by the federal asset forfeiture program[read].

Silk Road Seize lessons: Ross was just clumsy: agreed to be interviewed by Forbes, under the show of the Dread Pirate Roberts, in the summer of 2013, revealing enough of himself to law enforcement to pierce Silk Road’s veil. As Michael Neilsen suggests, the claim that Bitcoin can be used anonymously—the claim that drove the very formation of Silk Road and other marketplaces that specialize in illegal goods—is a myth. “The block chain is public,” Neilsen argues, and “although Bitcoin addresses aren’t immediately associated with real-world identities, computer scientists have made a great deal of progress figuring out how to de-anonymize ‘anonymous’ social networks.

If FBI agents can trace the flow of the Silk Road bitcoins—or, simpler still, exploit civil forfeiture to make such tracing unnecessary—proponents of Bitcoin (particularly those who seek to use Bitcoin to facilitate criminal activity) will be forced to adjust accordingly. By virtue of the blockchain, the backbone of the Bitcoin ecosystem, Bitcoin may never be as anonymous or untraceable as it purports to be. Ironically, as Neilsen aptly suggests, Bitcoin is “perhaps the most open and transparent financial instrument the world has ever seen.” The Silk Road episode stands as evidence that existing legal structures such as asset forfeiture currently have the power to contain Bitcoin. U.S. Marshalls auction off the bitcoins from the Silk Road forfeiture, we are left to question whether this newfangled crypto-currency is any different, from a legal perspective, from an old fashioned pile of cash.

MtGox downfall.  MtGox was a bitcoin exchange based in Shibuya, Tokyo, Japan, as the largest bitcoin intermediary and the world's leading bitcoin exchange. MTGox stands for "Magic: The Gathering Online eXchange” founded by Jed McCaleb, now the most controversial figure in cryptocurrency and hated due to its issue with XRP. The exchange handled millions of dollars’ worth of transactions a day, just like a traditional “forex” trading platform. When BTC is sent from one public key address to another (sender used private key), funds cannot be retrieved unless the receiver physically sends the funds back (using own private key). This feature of Bitcoin is the core of its almost-totally protected transaction system, while MtGox’s exchange system avoided this security feature for the sake of accessibility and speed. This arrangement, called a web wallet, is the similar as Silk Road, meaning the private keys is with MTGox, and the only thing keeping MtGox from stealing the funds was, ironically, the prevention of legal action on the basis of contract law or criminal law. It is considered “the worst of both worlds” since it joint the irreversibility of BTC transactions (once you sent your BTC to MtGox, only MtGox could ever send it back to you) with none of the highly developed regulatory protections of the traditional financial services system. Even though users “owned” the BTC they had sent to their MtGox wallets, their claim to ownership was secured only by a simple contract—the user agreement.

In early 2014 it dramatic collapse. In February 2014, Mt. Gox suspended trading, closed its website and exchange service, and filed for bankruptcy protection from creditors. In April 2014, the company began liquidation proceedings. The disappearance of more than $400 million worth of bitcoin from MtGox, and its subsequent collapse, many Bitcoin users left with no option other than to trust the traditional legal system for relief. Whether the collapse triggered by hacking or mismanagement, its effect on customers is the same: they are unable to retrieve their funds.  Mizuho had been trying to shut down MtGox’s account for months before the collapse, and now that it is theoretically liable for the exchange’s errors, other banks who deal with Bitcoin businesses are proceeding cautiously. Bitcoin’s largest exchange and its customers have become involved in legal actions is clear evidence that the traditional legal system will continue to dominate dispute resolution for Bitcoin users.

Like Silk Road case, it proves that current legal tools like asset forfeiture can be adapted to Bitcoin’s supposedly cutting-edge usage, and MtGox case displays that bankruptcy and class actions can be applied to Bitcoin denominated business disputes.  Some developers are moving forward with systems based on Ricardian contracts (“smart contracts”) and multi-signature cryptography, application of these technologies would be a peer-to-peer exchange.

Bitcoin, in order to continue its challenge to our old financial system, it must cope up with and react to our traditional legal structures; either that or it must progress beyond them. As Bitcoin grows in popularity, so does the law’s interest in being able to reach it just like Silk Road and MT.Gox.  

Your thoughts? If you have more knowledge about these historical events, kindly reply. Let us learn together.  

Sources:
Silk Road, Ross, Libertarianism, Cyber-takings, Lessons, MTGox, Jed, FCK/YOU Money, Meet the Dread Pirate Roberts, Academic Exercise, multi-billion dollar system

This topic is a challenged by TMAN:
All good dude. For more merits, tell me more about Silk Road and MTGox, give me a proper rundown on both including what MYGox stands for and who Ross is
Challenge accepted
It is a summary of what I have learned about Silk Road and Mt.Gox.
I do not own most of it.  

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May 02, 2018, 07:28:16 PM
 #2


Nice effort bud, you taught yourself something, you adhered to the rules by citing sources.. I am impressed bud.

Edit - you got more merits than activity right now.. is this a new nullius? someone else found their niche?

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May 02, 2018, 08:06:25 PM
 #3

I like this "coaching" by TMAN. I haven't seen anyone giving out merits through challenges. Maybe Jet Cash is doing something similar, but that's still a rare thing around here, even more rare than seeing a jr. member with so many merit points.
P.S. This is just one view on the DPR situation. There are other, including the mainstream, that sums up numerous stupid mistakes made by him along the way. For instance he had authorities at his door months before he was arrested because they intercepted a package with fake IDs from Canada that had his address. They only questioned him about it and did not arrest, because they thought it to be a minor thing. He could disappear, had plenty of time, but chose not to.
I don't think he revealed enough to Forbes, his biggest mistake was posting SR code on a public forum, using his real name.
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May 02, 2018, 08:28:24 PM
 #4

I like this "coaching" by TMAN. I haven't seen anyone giving out merits through challenges. Maybe Jet Cash is doing something similar, but that's still a rare thing around here, even more rare than seeing a jr. member with so many merit points.
P.S. This is just one view on the DPR situation. There are other, including the mainstream, that sums up numerous stupid mistakes made by him along the way. For instance he had authorities at his door months before he was arrested because they intercepted a package with fake IDs from Canada that had his address. They only questioned him about it and did not arrest, because they thought it to be a minor thing. He could disappear, had plenty of time, but chose not to.
I don't think he revealed enough to Forbes, his biggest mistake was posting SR code on a public forum, using his real name.

Thanks bud, What is the saying? Give a man a fish & he can eat for a day, teach a man to fish and he can eat for a lifetime?

as for DPR, it was a Gmail or hotmail that linked off a forum name if I remember correctly, though I could be wrong.

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May 03, 2018, 02:56:23 AM
Last edit: June 25, 2018, 10:43:26 AM by Daboy_Lyle
Merited by TMAN (2), intoy_victor (2), theyoungmillionaire (1), Strufmbae (1), vhiancs (1), azvn (1)
 #5

This topic is a challenged by TMAN:
All good dude. For more merits, tell me more about Silk Road and MTGox, give me a proper rundown on both including what MYGox stands for and who Ross is
Challenge accepted

I was wondering if TMAN give me a challenge like this, so that my knowledge will improve. Seeing posts by theyoungmillionaire and nullius aspire me to do so.  theyoungmillionaire and I are on the same country, I thought that if he can do this why not me? Keep up the good work theyoungmillionaire. You inspires me to become like this.
TMAN I am challenging you to give me a challenge like this. I want you to be my coach TMAN.
Give another challenge to educate my self more.


More about The Silk Road seized, and the downfall of Mt.Gox
ConclusionThere is little doubt that Bitcoin and the multitude of progeny crypto-currency platforms it spawned have the potential to fundamentally change our conception of money. All signs point to it becoming increasingly accessible and popular—brick and mortar retailers have started allowing the use of Bitcoin at their stores, allowing consumers to transact with Bitcoin in the “real” world in addition to online. In order to continue its challenge to our traditional system of financial transactions, however, it must contend with and react to our traditional legal structures. Either that, or it must evolve beyond them. The Silk Road and MtGox episodes are early suggestions that crypto-currency technology will not be able to circumvent the traditional legal system entirely. As Bitcoin grows in prevalence, so does the law’s interest in being able to reach it.
More Than $140,000,000 Bitcoin Moved From Mt. Gox Wallets
More than $140,000,000 worth of Bitcoin and Bitcoin Cash saw themselves being moved from Mt. Gox’s cold wallets this past Thursday. A very big move that can be a cause for concern for the valuation of Bitcoin.

The world of cryptocurrencies has seen a lot of good times and plenty of bad. During the time that regulatory bodies just shrugged their shoulders when they heard of Bitcoin and other cryptocurrencies but they did manage to bat an eye brow or two, the trading of cryptocurrencies globally was rampant. From the very short time of half a decade between 2009 and 2014, Bitcoin saw a sharp rise in popularity and it became a multimillion dollar ecosystem.

The cryptocurrency exchanges operating at the time were very few in number and one of them Mt. Gox based in Japan was the most popular cryptocurrency exchange on the planet. In fact, the trade volume that Mt. Gox accounted for at its peak was 80 percent of the total trade volumes of the planet. This made Mt. Gox the cryptocurrency exchange which held most of the cryptocurrency funds in the world at the time until the debacle of 2014 happened.
Silk Road was an online black market and the first modern darknet market, best known as a platform for selling illegal drugs. As part of the dark web, it was operated as a Tor hidden service, such that online users were able to browse it anonymously and securely without potential traffic monitoring. The website was launched in February 2011; development had begun six months prior. Initially there were a limited number of new seller accounts available; new sellers had to purchase an account in an auction. Later, a fixed fee was charged for each new seller account.

The Mt. Gox Scandal
Mt. Gox enjoyed its position as the world’s leading cryptocurrency exchange until 2014 when the funds started to get siphoned off of the exchange’s wallet and stolen. This also saw the company’s CEO cease operations of the cryptocurrency exchange and declare that the cryptocurrency exchange has gone bankrupt.  At the time, this created widespread panic in the Bitcoin ecosystem and caused a significant crash in the prices but the world of cryptocurrencies soon recovered.

This was regarded as the biggest cryptocurrency theft at the time it happened and is still considered to be one of the most significant events to have taken place. The allegations against the CEO Mark Karpeles of embezzlements and fraud soon followed. The CEO is currently amidst facing the class action lawsuits and embezzlement charges filed against him while the people affected by the scandal are being compensated right now.

For those who didn't know what is Mt. Gox and The Silk Road.

Mt. Gox
Mt. Gox is a Tokyo-based cryptocurrency exchange that operated between 2010 and 2014. Mt. Gox, or Mtgox, was responsible for more than 70% of bitcoin transactions at its peak.

Silk Road
'Silk Road' A digital platform that was popular for hosting money laundering activities and illegal drug transactions using Bitcoin. Silk Road, coined as the first modern darknet market, was launched in 2011 and eventually shut down by the FBI in 2013.

Source: https://jolt.law.harvard.edu/digest/the-silk-road-and-mtgox-lessons-in-law-for-bitcoin , https://cryptodaily.co.uk/2018/04/140000000-bitcoin-moved-mt-gox-wallets/ and Investopedia

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May 03, 2018, 06:39:10 AM
 #6

Nice work both of you..

So the next challenge to you both.. RSK, what is it, what makes it so great - what other alts will it damage.
@Daboy_Lyle @theyoungmillionaire

impress me lads, you both have an opportunity to earn some merits here.

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May 03, 2018, 09:39:53 AM
 #7


What is Rootstock? (RSK)
Rootstock (RSK) is a smart contract platform that is connected to the Bitcoin blockchain through sidechain technology. Although the smart contracts aren't actually deployed on the Bitcoin blockchain itself, RSK allows users to send Bitcoin directly onto the Rootstock chain through a 2-way peg, which are then converted into smart Bitcoins on the Rootstock blockchain. These RSK coins can be used to deploy or to interact with smart contracts and dApps on the RSK blockchain.

It relies on a merge-mining scheme to secure its blockchain. Merge mining allows Bitcoin miners to work on both the BTC and the RSK without any impact on Bitcoin mining, meaning that miners get a BTC and RSK reward for the same computational work they would do on Bitcoin alone. This system is being tested and is supported by some of the major Bitcoin pools. More about RSK. Just watch this video

The RSK MainNet was launched in January 2nd, 2018, only a week after the announced date to commemorate Bitcoin's birthday on January 3rd.
HISTORY
Rootstock was announced in LaBitconf 2015 held in Mexico city on December 2015. Soon, the company RSK Labs was founded in order to implement the proposed platform. In March 2016, $1 million was raised by the company. Also sometime in March, the project was renamed RSK. In November 2016, RSK Labs launched the 'Turmetic' Testnet. In May 2017, RSK Raised $3.5 Million from private investors and launched an improved RSK Testnet. The RSK MainNet was launched in January 2nd, 2018.

Source: RSK and RootStock

noo,.. I need more than that - I want you to do what theyoungmillionaire did, He took hours on his post, he read, asked a few questions then processed the information.. if you are going to just copy, paste and cite sources in a rush job I wont be helping you out level up.. this isnt a video game that needs quick action. This is a learning exercise fella

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May 03, 2018, 02:09:37 PM
Last edit: May 03, 2018, 03:17:53 PM by Kim Ji Won
 #8

Asking TMAN's permission to have me also join this challenge. Anyways, if I am not eligible for this challenge, I will still research your question and if you could tell me if what I've understood through my research is correct or not, that would be also much appreciated.


I've summarized all that I've read so far so this will be short. I hope I discussed the main points of the question.
What is RSK?

Bitcoin blockchain does not have the ability to enable smart contracts like Ethereum does but through RSK, which provides the missing technical needs in its blockchain to enable smart-contracts capabilities and with its goal to enhance the network, like faster transactions, better scalability that will promote more use case scenarios with the use of bitcoin. These features can only be used in the RSK's blockchain so if developers will use it, they will transfer their BTC to that blockchain which will be then converted to SBTC (Smart Bitcoin).SBTC's value is equivalent to Bitcoin's but they reside in the RSK blockchain.

What makes it so great This is based on my own opinion through what I've understood in RSK.

What makes it great is that it can act almost the same way with the bitcoin blockchain but with a lot of new enhancements that bitcoin could not attain (at the moment in the very least). With faster transaction and better scalability, it will solve the problem that bitcoin could pose in the future if ever its block size is not increased through the hard-fork in the next halving. That will also result in an increase in bitcoin transaction fees through some cases and will cause a turmoil between miners and users. As RSK blocks can hold many more transactions compared to bitcoin blocks, it will offer lower transaction fees.

Souce:
RSK, RSK2
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May 03, 2018, 03:43:58 PM
Last edit: May 11, 2018, 10:45:55 AM by theyoungmillionaire
Merited by Spidersbox (50), TMAN (5), copoyes (1)
 #9

Nice work both of you..

So the next challenge to you both.. RSK, what is it, what makes it so great - what other alts will it damage.
@Daboy_Lyle @theyoungmillionaire

impress me lads, you both have an opportunity to earn some merits here.

RSK is smart contract technology that can be used to bitcoin blockchain. Smart contract is a procedure that implements the terms of a contract; this is not unique to ETH alone, as BTC allows using smart contracts in building services to add suitable on bitcoin transactions. Even though these facilities use bitcoin, it is naturally centralize since their smart contracts should be present on a centralized server. RSK arises from “rootstock”, it is like a flat, underground stem that frequently sends off roots and shoots from its nodes”. It is the first open-source smart contract platform with “a 2 way peg to bitcoin”.
Bitcoin miners can also earn rewards thru merge mining, which allows miner to join in the Smart Contract revolution. RSK enables the execution of a smart contract[read Smart Contracts]. Developers are attractive to these because they offer extra scripting opportunities thru the use of smart contracts. Bitcoin’s scripting system is limited on purpose (security).
The best thing about RSK, it can run smart contracts in a platform capable of scaling up to 2000 transactions per second on chain and 20,000 transactions per second off chain.
As the RSK.co official website explains, that’s how RSK is “providing the scalability needed for global financial solutions.”
Another edge is that it does not force users to choose between ETH and BTC when they want to take benefit of smart contracts, allows developers to implement smart contract solutions onto the bitcoin blockchain; it is BTC Friendly, does not compete with Bitcoin, security, scalability, instant payments. In non-technical language, means developers could issue an app into ETH and RSK similar to the way developers release an app into iOS or android, platforms are different, but work in a similar overall. It will greatly affect ETH and ETH enthusiast. See some of their comments:

Quote
killerstorm
RSK is essentially an Ethereum clone which uses federated consensus model (blocks are built by pre-defined authorities, not by miners) and uses Bitcoin as a currency. It really has very little to do with Bitcoin itself.

They can have "almost instant transactions" and "better scalability" because blocks are built by business nodes and they don't care about users being able to run nodes.

Quote
DiachronicShear
In addition to what's been said, one exists, the other doesn't. That matters when someone like MasterCard wants to use a blockchain in their business. They can either wait an undetermind amount of time for a politically tumultuous system to hack on a quick fix for smart contracts OR they can start now with a system that actually works and has leadership.

Ethereum is also not static. The longer Rootstock takes, the further behind it'll be. If it takes 2 years (as you postulate), it'll be competing with PoS and Sharding, not to mention Plasma chains.

Oh, also, IF BITCOIN HARD-FORKS, ROOTSTOCK STOPS WORKING. So any upgrade to the Bitcoin network will break RSK.
Read more:RSK vs ETH

Is it going to change Bitcoin forever? Or there will be something that will emerge from inside the Bitcoin ecosystem? Your thoughts.

Sources:
RSK White Paper, Review, RSK, Smart Contracts, RSK Mines, Guide, Smart Contracts effect, What differs between BTC upcoming RSK, What on Earth is a Smart Contract

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May 03, 2018, 04:13:28 PM
 #10

snip

This is pretty shit, you haven't shown any understanding, or gone out of your way to work on this - Ill let anyone join in here but I need effort.

snip

This is better, so tell me - what is your personal opinion of rootstock?

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May 03, 2018, 04:42:41 PM
Last edit: May 04, 2018, 05:28:30 PM by theyoungmillionaire
Merited by TMAN (2)
 #11

This is better, so tell me - what is your personal opinion of rootstock?

In my opinion, rootstock will soon help shape the future of bitcoin blockchain. The connection to Bitcoin is the most significant feature of this technology. We all know that bitcoin is the most widely used cryptocurrency in the world, with its popularity & security these will be the edge of RSK compared to other smart contracts. Another thing is that, it does not need extra power in terms of mining; I know it will not affect me (I am not a miner), but it is good for our nature (which is we live in). What about you?

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May 03, 2018, 04:59:43 PM
Last edit: May 03, 2018, 05:14:33 PM by Daboy_Lyle
Merited by TMAN (2)
 #12

In addition to what's been said, one exists, the other doesn't. That matters when someone like MasterCard wants to use a blockchain in their business. They can either wait an undetermind amount of time for a politically tumultuous system to hack on a quick fix for smart contracts OR they can start now with a system that actually works and has leadership.
Ethereum is also not static. The longer Rootstock takes, the further behind it'll be. If it takes 2 years (as you postulate), it'll be competing with PoS and Sharding, not to mention Plasma chains.

This is better, so tell me - what is your personal opinion of rootstock?
Let's say I am arguing that rootstock will bring the technology of ethereum along with the publicity of bitcoin. Combined I think the rootstock and bitcoin publicity will outweight the benefits and marketcap of the Ethereum. I really like ethereum, and I've made a lot of money from it, but if I disregard emotion I feel like RSK will take all of the positives of ether and also all the investment that is in bitcoin. The RSK will help the future of bitcoin. Many bitcoin miners will be affected due to the power needs of this platform.  I could do much better by not even promising to merge the system into bitcoin and by embrace the centralized nature of the system. The system for example could offer to hold more than just BTC in their multisig.


Multisignature is a form of technology used to add additional security for cryptocurrency transactions. Multisignature addresses require another user or users sign a transaction before it can be broadcast onto the block chain.
Source:  MULTISIG,
https://www.reddit.com/r/ethereum/comments/78leax/what_differs_between_bitcoin_upcoming_rsk/
Goodbye ETHEREUM, RSK is here.

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May 03, 2018, 05:18:48 PM
 #13

What about you?

"If" they pull it off quickly, then I really believe it could be a massive blow to Etherum, BTC has the network effect 30,000,000TH/s.. That is a phenomenal base to build smart contracts on, who knows though, it isn't always the best projects that become the market leader. RSK is something that I keep an eye on monthly now (thanks Lauda)

snip -

good work dude..

What do you two know about the lightning network?

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May 03, 2018, 07:44:32 PM
Merited by TMAN (1)
 #14

Regarding Ross and the Silk Road, where was the corpus delicti?

What is a corpus delicti? Corpus delicti is Latin for "body of the crime." It is the material substance upon which a crime has been committed. In other words, there has to be someone who was harmed, had damage to his property, or with whom a contract was borken. Who did Ross hurt in one of these ways?

Further, even if there was someone that Ross hurt, was there proof that it was Ross who did it?

Further, at any trial, the plaintiff has to appear. This means that the one who was accusing Ross had to take the oath and get on the stand and testify. Who was the plaintiff? THE UNITED STATES OF AMERICA. Let's see the USA take the oath, get on the stand and testify. Not its attorneys. The USA itself. Can't happen.

The failure of Ross's attorneys was the problem.

No corpus delicti = no trial.
No evidence that Ross did a non-existent crime = no trial.
No plaintiff appearance = no trial.

There is only one reason why Ross is in jail. He agreed to it.

Cool

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May 04, 2018, 02:27:34 AM
Last edit: May 04, 2018, 04:50:41 AM by Daboy_Lyle
 #15

What do you two know about the lightning network?

This is my summary of what I read.
Lightning Network
Seeks to solve this by allowing participants to transfer money to each other without having to make all their transactions public on the blockchain. This one will make transactions "Lightning Fast".Transactions sent over the Lightning Network are much faster then SegWit. It reducescongestion on the bitcoin network. It also allows users to not require direct channels between each other as long as they have an open path via other users. Move less important transactions off the main blockchain in a secure way .
Lightning Network and SegWit is related to each other but LN has a big advantage when it comes to transaction.

Is Lightning a token or ICO?
No,  it uses real bitcoins and smart contracts to allow
participants to aggregate many transactions into one, final,
settlement transaction.

Difference between Segwit and Lightning Network.
Segwit has nothing to do with lightning directly, but two of the very useful things it does is fix malleability and put values under the signature.

Lightning doesn't require segwit at all, but value-under-signature makes the protocol much more efficient, and fixing malleability enables the desirable modes of operation where you outsource channel watching. But you could do lightning without segwit, it is not a strict requirement.

In addition to this.
SegWit (Segregated Witness) is is the name used for an implemented soft fork change in the transaction format of the cryptocurrency bitcoin, which has also been implemented on currencies such as Litecoin, DigiByte, Vertcoin and Feathercoin.

What is an off-chain transaction?
An off-chain transaction is any bitcoin transaction which does not use
the Bitcoin Network, and thus pays no Bitcoin transaction fees to
miners. Buying and selling on exchanges, for example, occurs off
chain. However, withdrawing from on exchange to a bitcoin address
occurs “on-chain.”

Source: LN, LightningNetwok, SegWitvLN

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May 04, 2018, 12:23:03 PM
 #16

What do you two know about the lightning network?

This is my summary of what I read.
Lightning Network
Seeks to solve this by allowing participants to transfer money to each other without having to make all their transactions public on the blockchain. This one will make transactions "Lightning Fast".Transactions sent over the Lightning Network are much faster then SegWit. It reducescongestion on the bitcoin network. It also allows users to not require direct channels between each other as long as they have an open path via other users. Move less important transactions off the main blockchain in a secure way .
Lightning Network and SegWit is related to each other but LN has a big advantage when it comes to transaction.

Is Lightning a token or ICO?
No,  it uses real bitcoins and smart contracts to allow
participants to aggregate many transactions into one, final,
settlement transaction.

Difference between Segwit and Lightning Network.
Segwit has nothing to do with lightning directly, but two of the very useful things it does is fix malleability and put values under the signature.

Lightning doesn't require segwit at all, but value-under-signature makes the protocol much more efficient, and fixing malleability enables the desirable modes of operation where you outsource channel watching. But you could do lightning without segwit, it is not a strict requirement.

In addition to this.
SegWit (Segregated Witness) is is the name used for an implemented soft fork change in the transaction format of the cryptocurrency bitcoin, which has also been implemented on currencies such as Litecoin, DigiByte, Vertcoin and Feathercoin.

What is an off-chain transaction?
An off-chain transaction is any bitcoin transaction which does not use
the Bitcoin Network, and thus pays no Bitcoin transaction fees to
miners. Buying and selling on exchanges, for example, occurs off
chain. However, withdrawing from on exchange to a bitcoin address
occurs “on-chain.”

Source: LN, LightningNetwok, SegWitvLN

you just copy and pasted here.. write something in your own words that shows you understand LN ..

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May 04, 2018, 12:46:26 PM
Last edit: May 04, 2018, 01:21:30 PM by Daboy_Lyle
Merited by TMAN (1), Ararbermas (1)
 #17

Snip
This is only for what I've learn.
write something in your own words that shows you understand LN ..
LN is the new payment protocol that is better than segwit. Segregated Witness  is only for soft fork like Alternative coins. Segwit was the first implemented first payment protocol. The segwit2x is for hard fork. Lightning Network will make every transactions private. LN has a big advantage on a faster transaction than the first paymen protocol.
Lightning Network is not a token or ICO but it uses real BITCOINS. Lightning Network is one of the leading solutions that has been presented to scale Bitcoin.
The Lightning Network will bring to Bitcoin off-chain transactions that can be sent at rapid speeds because they aren’t recorded on the blockchain. It is off-chain.

Lightning Network will make the transactions better.
Lightning Network on 2 word term is LIGHTNING TRANSACTION


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May 04, 2018, 05:25:02 PM
Merited by TMAN (3)
 #18

What do you two know about the lightning network?

Since we are the future of financial system, there are some issues with bitcoin scalability, why? Because, blockchains are slow & expensive. If you have notice, when you send some bitcoins to exchange, they would receive it like 10mins. or more & you have paid a high transaction fee just to speed it up. If you apply it in a real world, it will not work. I will just use my visa to buy then.  That is the problem of our bitcoin, and lighting network is the idea that can solve scalability of the blockchains. Its idea is not all of your transactions are recorded on the blockchain.
If you would visualized, we can bypass the recording process on the blockchain and help it by carrying them off the chain. In layman’s term, we will open a payment channel between us and record its opening on the blockchain. Imagine a SDB (safety deposit box) wherein two people deposited amounts of money “and” each put a lock (sounds like a “bank”, right? SDB plus joint account). After the account opening, we can transact anytime thru our payment channel, it will stay for decades, unless we will end our contract or close our channel (that’s the time we will touch again the blockchain).
By then we can write our final rights of transactions that happened thru our channel on the blockchain, we are bound with promise of ownership. So, we only go to the blockchain upon account opening & closing of our payment channel.

Simple example:
theyoungmillionaire bought a phone worth 1.7 BTC from Daboy_Lyle and payment will be done via BTC, since:
theyoungmillionaire & TMAN have a payment channel, and TMAN & Daboy_Lyle also with a payment channel. theyoungmillionaire can pay Daboy_Lyle thru TMAN.
TMAN will send 1.7 BTC to Daboy_Lyle and theyoungmillionaire will refund TMAN with 1.7 BTC.

By these, we can offload transactions on the blockchain, thus, we can release up the chain’s bandwidth. Transactions is going to happen at lightning speed (That is why it is called lightning network), By means of a network of payment channels, millions of transactions occurred, and that too without a heavy transaction fee (NO FEE FTW).  

Sources:
LN, LN explained, BTC lightning, LN video, illustration, highly anticipated LN, Lightning papers

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May 04, 2018, 06:38:49 PM
 #19

Nice effort lads, I do hope this has encouraged you to learn more. I would love it if you both took a break from posting and spent the time reading.

Hit me up next Thursday and I'll post so other stuff

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The Next Evolution In Transaction Technology


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May 10, 2018, 04:59:57 PM
 #20



This is better, so tell me - what is your personal opinion of rootstock?


Good definition of RSK or Rootstock information by the "theyoungmillionaire"

Here are my thoughts on RSK.

CLAIM)  RSK is a drive chain/side chain/federations way of approving or finding consensus for BTC payments almost instantly.

This may improve the transaction speeds slightly on the BTC network, but it's not going to fix the bottleneck of the protocol.

Current speeds for BTC Network are (7) transactions per second [1]. Even if by side chaining or other processes, you still need to find consensus for the "locked" BTC and update the public ledger. Enter the bottleneck on BTC and you've only temporarily side stepped a problem.

Think of it like this: If you patch a bottleneck ... you still have a bottleneck   OR   if you put lipstick on a PIG it's still a PIG.

Bitcoin is a great store of value, but not effective as a means of Point-of-Sale payments for good and services.

When I see RSK's claim of "almost" instant payments, I find it very dubious.  What happens when a large data set of requests come on the network?  More than likely (bc of the BTC bottlenecks), RSK may be able to process funds on their side, but the BTC side would end up in a queue jam (think traffic jam ... in LA) and there would be nothing almost instant about the process. It would be similar to Decemeber 2017 and transactions would take minutes or longer.

Edward Snowden agrees with my understanding of really the "block chain" bottlenecks as a whole [2] . Transaction speeds and the public ledger are massive design flaws.

Unless some of these "side chain" projects can defy the laws of physics.  None of them can fix this problem.  I'm not impressed by RSK or the Lightning Network as explained above.

The best way to achieve the goal of every day transactions would be to convert BTC to another crypto that can provide high speeds.  Unfortunately, none exist yet  (or do they)?

Here is an interesting article on current progress of the Lightning Network:  https://www.coindesk.com/bitcoin-lightning-payments-slowly-becoming-less-reckless/


Let me know your thoughts on the post everyone?  Hope you found this interesting and informative.


REFERENCES

[1] https://howmuch.net/articles/crypto-transaction-speeds-compared

[2] https://www.coindesk.com/edward-snowden-public-ledger-is-bitcoins-big-flaw/

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