Former President and Republican Presidential Candidate Donald Trump reportedly inquired about solving the U.S. national debt problem using bitcoin. Audio recorded by the Bitcoin.com News team confirmed that on an X space held on Sunday night, Bitcoin Magazine CEO David Bailey revealed that Trump asked if bitcoin could solve the trillion U.S. national debt […]
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Jordan Peterson Sparks Debate On How Bitcoin Can Solve Major Banking Problem
The flagship cryptocurrency, Bitcoin, was created with the goal of disrupting the traditional financial system. In support of this, Best-selling Author and Clinical Psychologist Jordan Peterson has suggested that customers should abandon the banking system and probably adopt Bitcoin.
Jordan Peterson Says Bitcoin Over Banks
Peterson was making this suggestion in response to a news report that Macquarie Bank, Australia’s fifth largest bank, was planning to transition to a digital-only banking system by November 2024. In line with this, the bank will begin phasing out cash, cheque, and phone payment services as part of its offerings.
The psychologist quoted the report and stated, “Maybe it’s time to scrap Banks,” and further quizzed, “Could Bitcoin fix this?”
Maybe it’s time to scrap
BanksCould
Bitcoin fix this? https://t.co/j6wldXMv7P— Dr Jordan B Peterson (@jordanbpeterson) September 14, 2023
For one, Macquarie Bank’s decision has been widely criticized as it potentially excludes certain customer groups. Furthermore, this move also highlights one of the problems that cryptocurrencies like Bitcoin aim to solve by giving customers more control over their money.
It is believed that these financial institutions shouldn’t be able to have so much control over people’s finances and decide how they spend their money as these banks could easily implement policies that do not favor or cause difficulties to certain customer groups.
Additionally, Macquarie, in a statement, described digital transactions as being a “safer, quicker, and more convenient way to bank.” However, crypto advocates beg to differ as, in response to Peterson’s tweet, some responded that networks like the Bitcoin Lightning Network, XRP Ledger, and Bitcoin Cash are a better alternative than the banks’ digital systems.
Lightning Network To The Rescue
Many, including Republican presidential candidate Aaron Day, seem to be against the idea of Bitcoin replacing banks. In response to Peterson’s tweet, Day stated that the traditional banking system could do between 50,000 and 100,000 transactions per second (TPS), unlike Bitcoin, which has a TPS of seven. He also elaborated that the CBDC pilot in the US can do 1.7 million TPS.
No, it couldn’t. The traditional banking system can do 50k-100k transactions per second. The CBDC pilot in the US can do 1.7 million TPS. BTC can do 7 TPS.
You need to do some research before you spout BTC. You might think you are in the in crowd but you’ve actually taken a…
— Aaron Day 2024: Truth and Transformation (@AaronRDay) September 14, 2023
Following this, crypto supporters quickly responded that the Bitcoin Lightning Network helps to solve this problem as it boasts a TPS of up to 1 million, making it faster than the traditional banking system, which Day argues for.
The network is able to provide a quicker alternative while enjoying the security that the Bitcoin blockchain provides. Blockchain technology (which cryptocurrencies run on) is said to be more secure and transparent than the traditional banking system.
Meanwhile, many in the Bitcoin community seemed to be happy about the idea of Jordan Peterson mentioning the foremost cryptocurrency on his platform, as that could suggest that Bitcoin is about to gain a major proponent. The Canadian psychologist boasts a huge follower base with 4.6 million followers on his X (formerly Twitter) platform.
Paysenger Launches IDO as the Platform Looks to Solve the Challenges of AI-Generated Art
PRESS RELEASE. The rise of AI-generated art has created ethical concerns and challenges within the art community, as many artists perceive these tools as undermining their skills and exploiting their work for profit. Paysenger, a groundbreaking blockchain-based collaboration platform for content creators, fans, and brands, is poised to tackle these issues with its native token, EGO, and AI integration.
Paysenger introduces a personalized AI model that allows artists to create unique, AI-generated art in their distinctive style. This exclusive, artist-specific AI model uses the artist’s social account for validation and access. By combining personalized AI models, blockchain technology, and NFTs, Passenger aims to revolutionize the art world and foster new opportunities for artists and brands alike.
Paysenger’s cutting-edge technology and proprietary AI have been developed in collaboration with Dr. Tamay Aykut, formerly a visiting assistant professor at Stanford. The company also collaborates with Polygon and ConsenSys, a prominent blockchain software company, further solidifying its position in the industry.
Despite the skepticism surrounding AI projects and the hype they generate, Paysenger stands out as a project backed by substantial investments and focused on addressing real-world challenges. Projects with such foundations are expected to yield impressive results, capturing a significant market share in the long run.
The platform’s native token, EGO, not only serves as a medium for users to interact with their favorite creators and support their work but also provides an incentive for users to perform targeted actions like content publication, paid communication, and purchasing content from creators. As Paysenger continues to develop its ecosystem, the EGO token is poised to become an essential component of the Paysenger platform.
In addition to addressing the ethical concerns surrounding AI-generated art, Paysenger offers a wide range of features for content creators, including AI-generated chat, photo generation, and content requests. These features, combined with the platform’s commitment to fostering a thriving creative community, make Paysenger an appealing choice for those interested in blockchain-based projects with real-world impact.
Paysenger’s success in bridging the gap between Web2 and Web3 technologies and its potential for mass adoption of blockchain technologies present a strong case for the value of its native token, EGO. As the platform continues to grow and expand its offerings, EGO is set to become an integral part of this innovative ecosystem.
On May 25th, Paysenger is scheduled to launch its Initial DEX Offering (IDO), marking a significant milestone for the company.
This is a press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.
Edogawa Ward in Tokyo to Use Metaverse Tech to Solve ‘Hikikomori’ Problem
Edogawa Ward in Tokyo plans to use metaverse tech to help social recluses, also known as “hikikomori,” begin to integrate with society again. The ward will organize a series of hybrid (virtual and in-person) meetings this year with the objective of reuniting people with social reclusion problems and helping them in their reintegration process.
Edogawa Ward to Leverage the Metaverse in Hikikomori Reintegration Processes
Edogawa Ward, located in Tokyo, announced that it will offer a series of metaverse meetings as part of the reintegration process for social recluses in the area. The meetings will be held in hybrid form, with social recluses having the opportunity of attending in person or online, allowing a safe haven for meeting and talking about their common problems.
There will be six of these events in 2023, organized by the Kazoku Hikikomori Japan nonprofit, with a capacity for up to 80 participants, 50 in the metaverse platform, and 30 in the designated venue. The meetings will be held in a metaverse space designed by Kazoku Hikikomori, with remote users being able to shield their identities using avatars if desired.
About this initiative, a ward officer explained:
We want to offer a place where they would think ‘I want to be there with the others.’
The Hikikomori Issue
The social exclusion (or hikikomori) problem in Japan is a condition that affects some individuals, who seclude themselves from society and decline to have any interaction with others. This condition is estimated to affect more than 1 million Japanese, with experts considering the number to be higher, closer to the 2 million mark.
This condition can cause problems in the families of these individuals, who must provide for them, causing economic strain. The inclusion of metaverse-based techniques in dealing with this phenomenon could ostensibly help some of these individuals to at least interact virtually with their peers.
According to a 2021 survey, 9,096 residents were hikikomori in Edogawa. On the reach of this action and its significance, Edogawa Ward Mayor Takeshi Saito stated:
We don’t think everything will be solved just because we offer a metaverse. It’ll probably be helpful for some people. We’re targeting those who can’t leave their rooms and haven’t been interacting with other people. We want to help them take a step forward.
Another initiative of this kind, targeting school absenteeism in Toda City, was announced in October, also using metaverse tech to allow students to roam virtual campuses while preparing to attend regular classes eventually.
What do you think about the use of metaverse tech to aid in solving the social reclusion problem? Tell us in the comments section below.
As Crypto Storage is Still a Major Problem, Can NFT integration Solve the Issue?
Now a trillion-dollar market, the crypto ecosystem has withered some of the toughest conditions within its period of existence. However, like any other technological innovation, it is not short of native challenges. This ‘lucrative’ market faces a myriad of shortcomings, including criticisms from regulators and long-standing financial institutions. But the most significant hurdles are currently attributed to the underlying infrastructures.
In a recent interview during the Paris Blockchain Week, Binance CEO Changpeng Zhao identified crypto custody as one of the hardest challenges that remains unsolved. According to CZ, the inaccessible and complex nature of crypto wallets is undoubtedly hindering mass adoption in the digital asset space. He was also keen to highlight that this one of problems he would prioritize given an opportunity,
“If I had no financial pressure, I would want to solve the most difficult problem that is blocking adoption. That would be the problem I would try to solve.”
The Loophole in Crypto Custody
Anyone who has interacted with crypto long enough understands there is a thin line when it comes to storing the newly found wealth. Stakeholders have in the past lost huge sums of money as result of wallet breaches or forgetting one’s seed phrase. As it stands, 20% of the BTC in supply cannot be accessed due to lost private keys.
Is this efficient for an ecosystem touted as the future of finance? While Rome wasn’t built in a day, the issue of crypto wallets needs to be addressed sooner than later. Some crypto diehards would argue that non-custodial wallets are a long term solution. However, the complexities involved in securing one’s seed phrase paint a different picture.
“But today, most people cannot store their private keys securely. The wallets require them to be technical. Your computer cannot get a virus. If your computer gets a virus, there’s all kinds of problems that will happen. You will lose your money.” added CZ Binance.
Even worse, the current infrastructure of most non-custodial wallets does not feature a solution for passing heritage to future generations. It is quite unfair to invest in an industry where there is no guarantee that one’s offspring will benefit in the event of their death. After all, this is standard practice in the traditional finance scope.
Unfortunately, custodial wallets offered by crypto exchanges are not any better; while they might feature a heritage structure, users are not in control of their private keys. In the event of a breach such as the infamous Mt Gox hack, chances are high that any investor holding funds with the affected exchange will have to incur significant losses.
So, what is the ultimate solution to a secure crypto storage ecosystem? The perfect answer would be it’s neither white nor black, but the emergence of Non-fungible tokens (NFTs) seems to be paving way for tamper-proof and heritage-designed Web 3.0 wallets.
NFTs; The Future of Crypto Wallet Infrastructures
The NFT hype has taken the crypto industry by a storm, with digital creatives such as Beeple cashing big on their work. Though a relatively new area of innovation, the indistinguishable (unique) nature of NFTs could be a game-changer in the development of non-custodial crypto wallets.
Emerging DApps such as Serenity Shield are implementing NFT technology to introduce a strongbox solution that addresses seed recovery and heritage issues. Launched in 2021, this Web 3.0 project features a fully encrypted solution for storing digital assets. Ideally, Serenity shield allows crypto natives to create an account where they can securely store their seed recovery phrases.
Serenity’s strongbox then partitions the sensitive information into three unique NFT keys. The first NFT is allocated to the account owner, the second to a prospective heir while the final key is stored in the Serenity Shield smart contract. To unlock the information in the strongbox, one requires at least two of the NFT keys, making it possible for a user to recover sensitive information or transfer ownership to an heir.
Going by the trends in NFT integrations, the value stretches beyond play-to-earn and the metaverse economies. There is a wide range of crypto applications that could benefit from scaling through NFT infrastructure. Most notably, this upcoming crypto niche provides a building base for secure DApps, ultimately solving pertinent issues such as seed recovery and digital asset heritage.
Conclusion
Cryptocurrencies might have come of age but there is a lot to be done to ensure that investors sleep comfortably knowing their assets are safe. As highlighted in the introduction, it is still a murky world for crypto wallets, whether custodial or non-custodial. This is not to say that existing issues cannot be solved; newer technologies like NFTs present an opportunity to tackle a majority of the underlying problems.
Hashstack Finance Launches Open Protocol On The Testnet To Solve One of DeFi Lending’s Key Issues
The decentralized finance industry needs a severe shakeup where its current borrowing requirements are concerned. Forcing users to put up more collateral than they seek to borrow is not feasible in the long term. Hashstack solves this issue by bringing undercollateralized loans to decentralized finance.
Unlocking The Full Potential of DeFi Lending
The concept of decentralized lending and borrowing provides a necessary alternative financial approach. Millions of people have little or no access to traditional financial products and services. The underbanked and unbanked population will be the primary beneficiaries of decentralized finance, but only if the requirements are manageable.
In the current lending and borrowing landscape, those requirements make little sense. More specifically, users looking to borrow funds need to put up 150% of the borrowed amount – or more – as collateral. That seems strange, as one traditionally puts up a maximum of 50% of what they want to borrow as collateral when dealing with banks. Moreover, the requirement to have more money than you want to borrow does not appeal to unbanked or underbanked individuals.
S&P Global put out a study in 2021 depicting how DeFi lending can disrupt traditional systems. However, they also identified certain constraints that have to be addressed. One of the main concerns is the collateral requirements, which hold back the potentially massive growth of lending volumes. Additionally, most current DeFi borrowing involves acquiring more crypto assets rather than solving real-world problems.
Changing that narrative is crucial for decentralized finance to gain mainstream adoption. Unfortunately, very few protocols provide solutions to these problems. Hashstack and its undercollateralized loans offer a new take on decentralized lending and borrowing.
Hashstack’s Open Protocol Arrives On The Testnet
Making decentralized loans more accessible requires lowering the collateralization requirements. Hashstack Finance acknowledges things need to change on that front and aims to facilitate the transition through its Open Protocol. The new DeFi lending protocol offers non-custodial and secure undercollateralized loans with up to a 1:3 collateral-to-loan ratio. It is a welcome change from the average 1.5:1 collateral-to-loan ratio found in today’s DeFi industry.
More importantly, users can withdraw up to 70% of their collateral after acquiring a loan. The remainder of the collateral and acquired loan are in-platform trading capital, giving users more flexibility over their funds. Being able to borrow ,000 with roughly 3 in collateral paves the way for broader mainstream adoption of decentralized finance. Accelerating the growth of DeFi lending is crucial, especially where mainstream users are concerned.
Another crucial benefit of Hashstack is how it integrates with existing DeFi solutions. For example, users can access all of PancakeSwap’s market swaps and improve their loan utilization. In addition, borrowers can swap borrowed tokens into any other currency supported by this decentralized trading platform. For example, open Protocol supports BTC, USDT, USDC, BNB, and HASH on Binance Smart Chain, Ethereum, and the Avalanche C-chain.
Conclusion
The advent of undercollateralized loans changes the public perception of decentralized finance. Removing the hurdles to adoption paves the way for the global adoption of these innovative protocols. Moreover, it helps the industry achieve its goal of being a viable alternative to traditional finance, especially for borrowing and lending.
The approach by Hashstack Finance shows collateral requirements for DeFi loans do not need to be as high as they are today. Moreover, its integration with DEXes like Pancakeswap creates many exciting opportunities. Modularity is a crucial aspect of decentralized finance, and integrating various protocols’ technology into one user interface makes for an appealing option.
What Fintech Can’t Solve in Traditional Finance
In a world where money is power, power is centralized in the hands of those who control money. Dependent on them, the people of the world suffer, slowly watching their financial opportunities vanish. If individuals are to determine their own financial futures – and thus their lives – power must be decentralized and returned to them.
Failures of Fintech and Traditional Finance
In a panic to uphold their economies, world governments printed tens of trillions of dollars during the COVID-19 pandemic, consequently diluting the buying power of citizens globally. Now, inflation is on the rise – 6.8% in the United States, 4.48% in India, and 3.8% in the UK. World governments have made it very clear that they can print as much money as they like, regardless of the cost. People are tired of their fates being dependent on the state’s policies – money printing, bank bailouts, trade wars, and business subsidies – policies that rob them of financial opportunities.
Fintech does as much to reduce access to financial services as it does to increase it. Inhumane automated systems determine insurance rates, big players on Wall Street manipulate the markets, financial institutions harvest people for their data, and governments take a piece of every dollar that citizens earn before they’re even paid.
But that’s only for those lucky enough to have access to financial services in the first place. While bank accounts and loans are common in Western countries, many people have no financial access at all. To the unbanked, college loans, homeownership, insurance coverage, investing opportunities, and stable pay are all unfamiliar privileges.
A New Financial System
DeFi stands for Decentralized Finance, a new type of financial system in which individuals use cryptocurrency technologies to provide financial services to each other, without the need for centralized authorities or middlemen (like banks and escrow services).
DeFi is powered by blockchains, decentralized records of transactions; smart contracts, bits of software that run on decentralized computers and enforce agreements in cyberspace. Together, blockchains and smart contracts enable trustless financial cooperation, in which all financial agreements are automatically enforced. This eliminated the need for banks, credit agencies, loan officers, and escrow accounts. Blockchain and smart contracts replace them all, removing middlemen, making finance more efficient, and lowering barriers to entry.
Because DeFi is decentralized, nobody can prevent others from joining. Anybody can visit a DeFi platform in their browser and instantly gain access to cryptocurrency trading, Peer-to-Peer loans, and high-yield saving programs. Here are some additional benefits of DeFi:
- The unbanked can use DeFi to bank themselves.
- DeFi allows individuals to earn passive income by providing services to others.
- There are no credit scores, meaning that all people have equal access.
- Growing DeFi ecosystems themselves act as major investment opportunities.
So then, why hasn’t DeFi caught on? The truth is that DeFi is new, and some of the kinks are yet to be worked out. While the engineering behind DeFi platforms is safe and secure, most are difficult to understand and use. This is where DeFiChain, a people-oriented DeFi platform, can help.
DeFiChain believes in empowering individuals and understands the needs of users. This pushes them to create fast, intelligent and transparent decentralized financial services that are accessible to everyone. Let’s look at a few things they’re working on that make DeFi easy:
- A secure platform built on Bitcoins principles
- A thorough learning platform with easy-to-understand DeFi guides and educational videos.
- A fully-fledged mobile app that can be used to exchange tokens and liquidity mine for up to 200%+ APR rewards.
- An innovative platform for users to mint stock-based tokens, providing users with exposure to securities.
Little Victories of DeFi
While it hasn’t hit mass adoption quite yet, DeFi is making waves and generating buzz. Brands like Adidas, Coca-Cola, and several others entered the DeFi NFT space. Bitcoin ETFs have seen a few successful launches around the world. Homes are selling through the blockchain. Sports teams score sponsorships from cryptocurrency projects. And El Salvador adopted Blockchain as legal tender. DeFi victories pop up everywhere, and the world slowly becomes a freer place.
How TG Ecosystem Uses Cooperation to Solve Major Crypto-Market Problems
Several models for the development of nations for the next three to five years were presented by the World Economic Forum, where cooperation was emphasized as the foundation for successful and speedy economic and social recovery. Speaking at the WEF, Børge Brende, a Norwegian politician and member of the Conservative Party, said that “the direction in which we need to head is towards greater dialogue, coordination and collective action”. Even today in the world of global business, we’re seeing hundreds of examples of cooperation gone right, such as the UN Global Compact, C40 Cities, Sustainable Trade Initiative (IDH), World Resources Institute, and many others. How are things in the crypto-world?
The problems that cooperation can solve
Cooperation has been popular around the world for many centuries as a form of getting people to work together to achieve certain goals. Nowadays, cooperative societies are designed to solve modern economic problems, namely:
- eliminating intermediaries, thereby lowering the cost of goods and services;
- speeding up the process of producing goods or certain commodities;
- exchanging experience and information in order to make adequate decisions in politics, education, healthcare, and any other economic sectors;
- accumulating resources (money, time, labor) for effectively implementing projects and achieving goals.
Only up until a few years ago, cooperation was predominantly characteristic of industrial and manufacturing enterprises and companies as well as businesses from the non-financial sector. Today, however, we’re seeing more and more examples of cooperation in online environments and among IT projects. Here are just a few of them.
Blockchain Investors Consortium. The Blockchain Investors Consortium has more than 120 members with more than billion in digital assets under management in the group. The funds raised are used to support global projects aimed at the development and popularization of blockchain technology.
IBM Food Trust. This is an association of several blockchain technology companies at once. The IBM Food Trust consortium includes producers of agricultural products, carriers, as well as consumers such as Walmart and Nestle. Furthermore, businesses can track food products from their suppliers to consumers using their platform.
Today, cooperation can not only accelerate the launch of crypto and blockchain startups but also significantly influence the popularization of blockchain technology in the world.
The true power lies in a number
“Let’s remember what happened on the stock market with Gamestop. Hundreds of thousands of retail investors rushed to buy up the securities of a little-known company, succumbing to the influence of FOMO, which was skillfully created by crowd manipulators. Crowds, after all, are easy to manipulate. As a result, investors lost money after all the excitement had died down. A well-thought-out participant self-organization system turns a crowd into a group, and a decision-making system makes it possible to solve this issue in a centralized way,” says Eugene Melnik, the CEO of TG Ecosystem.
The self-organization of groups and, later on, the cooperation between them will be the solution to spontaneous investments lacking a clear strategy for recovering funds. The TG DAO 3.0 Launchpad, part of the TG Ecosystem, presented an effective solution to reduce the risks associated with investing in cryptocurrency, based on self-organization and cooperation.
“We analyzed the main reasons for the failure of the ICO boom in 2018 and developed our own solution for the startup launch market. It lies in the cooperation of experts, users, and the projects themselves. We achieve our goals much faster when we act together rather than separately,” said Eugene Melnik.
The TG DAO 3.0 Launchpad includes several instruments for effective crowdfunding. These include an accelerator and a platform for IDO, as well as other services that will be launched in 2022. The Launchpad team is also ready to collaborate with not only blockchain startups, but also with venture capital projects that offer innovative solutions for various areas of business.
“Even today, we’re receiving a large number of applications to participate in the accelerator program and conduct IDO. Four projects have been approved by our expert council and will soon be eligible for discussion by community launchpad members. By the end of the year, we plan to review another ten projects and choose the most deserving of them,” Eugene Melnik comments.
Cooperation is crucial when choosing startups to invest in, so the Launchpad team has arranged a voting system where users will decide which startups are allowed to conduct a token sale. This way, investors avoid the problem of recklessly investing their money into sketchy projects.
Cooperation introduces several advantages that can be successfully used in projects.
“First of all, it’s the ability to bring groups of people together and create the appropriate targeted programs for the purpose of investing or conducting joint activities. Secondly, the simplicity of participating within a cooperative, since a participant only needs to submit an application and pay the minimum entrance and share fees. Funds or other proprietary contributions to startups are allocated as early as when the cooperators create the program in question.
Thirdly, the cooperative has the possibility to distribute its income among project participants in proportion to their participation in the cooperative’s business activities. In this case, it is the cooperative members themselves who decide on how the income is to be distributed,” says Natalia Khitruk, lawyer at TG Ecosystem.
In the very near future, TG DAO 3.0 will conduct a Funding Round and a Public Sale of TGDAO tokens. More information about the project can be found on the website.
TeraBlock To Use Binance Cloud to Solve Liquidity Issues and Bolster Security of its platform
TeraBlock, an automated crypto exchange, has partnered with Binance Cloud to make crypto trading hassle-free on its platform.
Commenting on their partnership with Binance Cloud, Shivam Tandon, the CEO of TeraBlock, said: “After announcing the successful completion of our recently conducted IDO on BSCPAD, our users will benefit directly from the Binance Cloud partnership. The upcoming TeraBlock exchange, powered by Binance Cloud, enables our users to experience better trading depth, security, and transaction speed.” He also hoped “to bring a renewed interest and experience like never before to the crypto space.”
The Game-Changing Partnership
It is a game-changing partnership as it will save TeraBlock from falling into what we can call a new crypto exchange conundrum. You see, it is common for new exchanges to lose users because of a lack of liquidity and gaps in security infrastructure. Considering that 34% of crypto traders consider liquidity a crucial factor while making a decision, it can prove to be a death knell for many new cryptocurrency exchanges.
You must be wondering how a partnership with Binance Cloud changes the equation here? Well, that is because Binance Cloud essentially mimics all the advantages of Binance. It combines the technology, security, and liquidity of one of the most popular cryptocurrency exchanges in the world. Thus, TeraBlock users do not have to worry about the lack of liquidity on the platform or any security gaps in TeraBlock’s infrastructure.
The Role of TeraBlock & Binance Cloud in the Partnership
After the partnership between TeraBlock and Binance Cloud, TeraBlock will only have to handle the business development and operations aspect of their platform. Binance Cloud will manage the rest of the activities like the development and maintenance of their exchange technology, user registration, security, and liquidity. Also, the benefit isn’t limited to liquidity alone as Binance Cloud will also prop up the security infrastructure of TeraBlock.
Scientists in UK Solve Privacy on Ethereum Using Only Smart Contracts
Privacy is a top concern for decentralised finance (“DeFi”) and general cryptocurrency users. The commonly held belief of anonymity formerly drove many to use currencies like Bitcoin and Ethereum, but this is quickly fading as more surveillance comes to light. A group of scientists have been working on solving this problem through a project known as the Railgun Project.
This is hardly a new concern. For instance, Tim Copeland wrote an article in early 2020 highlighting the trivial nature of “doxing”, or disclosing sensitive personal information about Ethereum wallet owners, just by using their publicly known wallet details.
For this reason, earlier this year The Right to Privacy Foundation sponsored a new DeFi project called Railgun, led by a group of scientists in Europe, Australia and Canada. RAILGUN, a privacy system built directly on Ethereum, from which you can interact directly with DEXs, or Distributed EXchanges and other DeFi applications, allows users to engage in cryptocurrency and DeFi based activities, ensuring financial freedom, without the fear of being spied on, by anyone.
Privacy using ZK-SNARKS on Ethereum base was once considered impossible, but new breakthroughs in cryptographic technology has made it possible for the first time, using only smart contracts with Railgun.
What is RAILGUN?
RAILGUN is a collection of smart contracts (computer code that enforces rules and performs a function to fulfill transaction obligations in DeFi applications) that utilizes zero-knowledge proofs (which are ways of proving certain things about entities without disclosing what they are or sensitive details about them). These working together, makes it possible for RAILGUN users to exchange currencies and use apps in the DeFi space without linking their original address or other activity. Their finances will remain private.
According to the project lead researcher, Mr. Emmanuel Goldstein, the system will be fully live on the Ethereum network in July. Users will be able to deposit ETH, USDC, renBTC, renZEC, and other tokens into the RAILGUN system and become anonymous, allowing them to take action with the tokens they deposited, in private.
Unlike earlier attempts to create privacy on ethereum, no new nodes will be needed, and there will be no need for a “Layer 2”, or an additional infrastructure that operates on top of Ethereum.
“RAILGUN uses only zk-SNARKS in smart contracts, so it’s all on-chain, with full Ethereum security, and no trade-off” says Mr. Goldstein.
The project team has also announced a private DEX to be included in the private system, and the ability for third-party wallet apps to automatically include Railgun privacy as a feature for free. By creating an ecosystem where privacy, anonymity, transfers, trades, and other activity all happen in one place, all participants benefit from an increasingly large and noisy anonymity pool. All users of the system are able to piggyback off the activity of others.
How is RAILGUN different?
Previous iterations of privacy protocols have failed to accomplish the flexibility, security and privacy guaranteed by RAILGUN. Incumbent solutions like mixers are woefully lacking in functionality and convenience. For example, they don’t allow for internal shielded transfers, can’t interact with smart contracts, and users have to operate in fixed denominations meaning users can’t effectively transact using their protocol, with any kind of ease or efficiency.
The technology behind RAILGUN
The core component that brings privacy and anonymity in RAILGUN is the utilization of Zero-Knowledge Proofs. Similar to how Zcash works, RAILGUN utilizes zk-SNARKs to prove that shielded transactions are valid without revealing any information about the sender, the recipient or the transaction amount.
Once the proof is verified by the smart contract, then it updates the Merkle tree which accumulates all generated notes (i.e. encrypted balance owned by a public-key controlled by the recipient), and nullifies the consumed notes (i.e. owned by the sender). This prevents users from double-spending or creating money out of thin air. To put it simply, zksnarks is a proving system, and “zero-knowledge” means the verifier gains no knowledge about the transaction’s sender, recipient or amounts, giving users complete privacy and anonymity.
Railgun comes with what users have come to expect in terms of a modern user experience. If they’ve used MetaMask or any other popular wallet it will be transparently familiar. They won’t have to worry about how the zk-SNARK proofs are generated or verified or how the RAILGUN smart contracts protect their privacy. All the complex tasks are handled by the wallet itself, with no additional complexity to the users. Furthermore, it’s open-source so anyone can audit it at their own will.
What can users do with RAILGUN?
RAILGUN will be for those who believe privacy is a fundamental right as a human being. Users will be able to:
- Perform darkpool style trading where nobody can copy your farming strategies
- Make confidential payments to your attorney when seeking legal advice on personal disputes.
- Entering into new coin investments without alerting those who follow your wallet
- Build a shielded balance without outsiders knowing the specifics of your diamond handbags
- Receive donations without outsiders being able to view donation history
- Prevent spying and data collection about their transaction habits
- Be free from being targeted by advertisers or fraudsters based on your DeFi habits
- Stop any dates looking into your DeFi habits before having dinner with you
Where can users learn more?
Twitter: https://twitter.com/railgun_project
Telegram: https://t.me/Railgunproject