Another solution to make the Lightning user experience easier is called splicing

Essentially, splicing would allow a user to “charge” funds into an existing flash channel, or withdraw funds while maintaining the channel.

Each Lightning channel begins with an opening transaction that ensures that both users agree to the movement of funds in the channel. The remainder of the Lightning Channel consists of a series of subsequent transactions that are exchanged between users and are not normally transferred to the Bitcoin network. The funds in the opening transaction do not move until the channel is closed.

In splicing, users take the opening transaction to send funds from one or both users to a replacement opening transaction that contains more Bitcoin instead. As soon as this new opening transaction is confirmed on the block chain, the channel is charged. Conversely, the “splice-out” also works the same way.

Once a new payment is made, the Lightning channels between users are updated to reflect their Bitcoin revolution

The trick used to achieve this currently involves a penalty for users trying to cheat by sending an older Bitcoin revolution balance which was proven by onlinebetrug. Fraudsters can lose all the funds they have in a channel.

The problem is that transferring old balances cannot always be a scam. There are a number of scenarios in which users could accidentally send an older account balance, for example due to a software error or a failed backup. In such scenarios, a complete loss of coins is a severe and unfair penalty.

First released on 30 April 2018, eltoo shows the latest proposal. Developed by Blockstream’s c-lightning development team – Dr. Christian Decker and Rusty Russell – and Lightning Labs’ Osuntokun, eltoo updates a channel by building a chain of time-locked transactions where each transaction spends deposits from the previous one to reflect the current balance of the payment channel.

When a user sends an older transaction (which represents an older channel balance), his counterparty has some time to transfer the last transaction.

It would require the entire transaction chain to be transmitted and recorded via the Bitcoin block chain, which is more or less contrary to the purpose of the Lightning Network. Decker therefore proposed a change to the Bitcoin protocol to introduce some sort of hierarchy to this type of transaction: Any newer transaction can override any older transaction without having to transfer all the transactions. When this soft fork is incorporated into the Bitcoin network and enabled, Lightning users can create channels both in the current style and using eltoo, depending on their preference.

While the Lightning Network is a second-layer protocol, the Bitcoin blockchain is still relevant even for Lightning users for security reasons. In particular, Lightning users need to keep an eye on the blockchain to see if certain transactions are included. This can be particularly resource intensive for mobile users.

One solution is Simplified Payment Verification (SPV), described in the Ethereum code

Current SPV wallets use a trick called “Bloom Filter” to find out if relevant transactions have taken place. This was tested by onlinebetrug. Unfortunately, Bloom filters are rather unfriendly, since wallets essentially reveal all their addresses to nodes in the Ethereum code network. They also have some scaling and usability issues, as each individual SPV wallet consumes resources from at least one full Bitcoin node.

To solve these problems, Lightning Labs’ Osuntokun and Alex Akselrod, together with Coinbase developer Jim Posen, have developed a new solution called “compact client side block filtering”, which they implement in the Neutrino Wallet.

The compact client-side block filtering essentially reverses the trick that current SPV wallets use. Instead of wallets requesting transactions relevant to them by creating a Bloom filter and sending it to full nodes, full nodes create a filter for all neutrino wallets. The Neutrino Wallet then uses this filter to determine that the corresponding transaction did not take place – that’s really all the users need to know to be sure they’re not being cheated. Interestingly, while this was developed with the Lightning experience in mind, it could also be used for ordinary Light Wallets.

3 reasons why crypto currencies are volatile

Why are crypto currencies volatile? Last year was the least volatile year in stock market history, and has been for decades. Traders who have benefited from price fluctuations in the past have given up their jobs on high-frequency trading algorithms performed by computers working in the millisecond range. On Wall Street, people are being replaced by machines, and four years of volatility in the stock market could be summed up by just a month of fluctuations in the crypto currency markets. Crypto veterans know this is a fact, but why is this asset class more volatile than any other liquid asset in the market?

No intrinsic value, look here: https://www.onlinebetrug.net/en/

Despite numerous company valuations, crypto currencies do not sell products, earn revenues or employ thousands of people like this: https://www.onlinebetrug.net/en/. They usually do not pay dividends, and only a small part of the total value of the currency flows into development. That is why they are difficult to value. How do we know whether they are overbought or oversold? What is ‘the’ perfect value or is Bitcoin again overpriced? Without the fundamental data on which this information is based, we can only rely on the market sentiment that is often dictated by the media. And they make money as the number of viewers increases.

Lack of regulatory oversight for the Bitcoin trader

Another reason why crypto currencies are volatile is that crypto currencies are a global phenomenon https://www.onlinebetrug.net/en/, and while governments are rigorously cracking down on industry, regulation of crypto currencies is still in its infancy. Such limited regulation https://www.onlinebetrug.net/en/bitcoin-trader/ allows market manipulation, which in turn leads to volatility and prevents institutional investment, as any large fund cannot guarantee that its capital is truly secure or at least protected from such actors. In other words, one could say that Bitcoin trader crypto currencies are volatile because they are volatile. Yes, we understand: that sounds funny :-).

Lack of institutional capital
While it is undeniable that some fairly large venture capital firms, hedge funds and high net worth individuals have invested in crypto currencies, much of the institutional capital is still offside. At this stage, there is limited momentum and support for a crypto ETF or investment fund in this regard. Most banks admit that this would undoubtedly be possible, but that there is not yet enough capital or acceptance publicly available.

Nobel Laureate Shiller on Bitcoin: Failed experiment

According to Robert Shiller, the advent of the crypto currency market imitates some of the most failed monetary experiments in history.

Shiller: “No one can explain how crypto currencies work.”
In a new blog post published today, the Yale professor and Nobel laureate wrote that enthusiasm for the crypto market remains strong despite warnings that it might be a scam. It must be remembered that attempts to reinvent money reach far back into the past. But while new monetary innovations initially cause excitement, they don’t last long, Shiller says.

An example of Bitcoin Code

As an example, he cited Josiah Warner, who opened the “Cincinnati Time Store” in 1827, which sold goods in units of working hours. These were based on work notes that resembled paper money. However, while they were seen as a sign of the importance written this review of Bitcoin Code working people, the shop closed in 1830.

Two years later Robert Owen tried to establish the National Equitable Labour Exchange in London. This was based on ‘time money’ as a currency. But similar to Warner, Owen’s experiment failed.

This was based on Bitcoin Profit

A hundred years later, during the Great Depression, economist John Pease Norton proposed a dollar supported Bitcoin Profit not by gold but by electricity. But even that has not prevailed.

“EACH OF THESE MONETARY INNOVATIONS IS LINKED TO A UNIQUE TECHNOLOGICAL HISTORY,” SHILLER WROTE. “BUT BASICALLY EVERYONE IS CONNECTED WITH A DEEP LONGING FOR SOME KIND OF REVOLUTION IN SOCIETY.

In his opinion, crypto currencies like Bitcoin are no different:

“THE CRYPTO CURRENCIES ARE A PROFESSION OF FAITH IN A NEW COMMUNITY OF ENTREPRENEURIAL WORLDVIEWS THAT OVERRIDE NATIONAL GOVERNMENTS, WHICH ARE SEEN AS DRIVERS OF A LONG HISTORY OF INEQUALITY AND WAR. PRACTICALLY NO ONE OUTSIDE THE INFORMATICS DEPARTMENTS CAN EXPLAIN HOW CRYPTO CURRENCIES WORK. THIS SECRET CREATES AN AURA OF EXCLUSIVITY, LENDS GLAMOUR TO THE NEW MONEY AND FILLS THE FOLLOWERS WITH REVOLUTIONARY ZEAL. NONE OF THIS IS NEW, AND AS WITH PREVIOUS MONETARY INNOVATIONS, A COMPELLING STORY MAY NOT BE ENOUGH.”

This is certainly not the first time Shiller has spoken out against the crypto market. Last October he called Bitcoin a ‘fad’ when he commented on the ‘strange enthusiasm’ for the currency. He also said that Bitcoin is a bubble and that it only attracts investors because it has a good history.

Year 2030: Bitcoin will replace 25 percent of FIAT

Thomas Frey predicts that crypto currencies will replace parts of FIAT currencies by 2030. In his opinion, about 25 percent of national FIAT currencies will be replaced by crypto currencies by 2030. Above all, he refers to the fact that Bitcoin & Co. are much more efficient. My first thought was whether he might actually be right and that these statements are bold. But we already reported this week about the introduction of the first legal crypto currency – Sovereign Token – on the Marshall Islands.

Bitcoin really legitimate?

Dr. James Canton of the Institute for Global Futures agrees with the statement and underlines once again that we have witnessed the emergence of a completely new form of asset class in recent years. Wall Street has also helped legitimize crypto currencies by integrating them into the existing financial system through the introduction of Bitcoin futures. Even governments unconsciously contributed to Bitcoin being seen as a legitimate form of asset. Bitcoin has been confiscated from time to time in recent years in various cases of fraud and insolvency, so even governments believe that Bitcoin and other crypto currencies are a form of wealth. In Russia, on the other hand, crypto currencies cannot yet be confiscated because the state has not yet granted digital money any legitimacy.

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The volatility problem

Bitcoin’s critics will definitely refer to the extreme volatility of crypto currencies. One should not forget, however, that FIAT currencies can also show strong fluctuations, such as the decoupling of the Swiss franc. Bitcoin & Co. are so volatile at the moment, because this market is still relatively new & small and not yet really much capital, in relation to the foreign exchange market, is. With increasing acceptance the fluctuations will also stabilize in the long run. Of course, the market must achieve capitalisation for the first time, in which individual major investors cannot achieve anything on the price when buying or selling. At the moment this is still much too low to be considered as a stable currency.

It may well be possible that Bitcoin will replace some of the FIAT currencies. Especially for smaller countries such as the Marshall Islands or Venezuela, crypto currencies may become relevant as legal tender.