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From ‘Attack’ to ‘Optimization’ — Slush Pool Reveals ASIC Boost Compatibility


The Controversial ASIC Boost Was Once Called an ‘Attack’ to the Bitcoin Network and an ‘Exploit’

Last year there was a roaring debate about the use of a technology called ASIC Boost an improvement that provides mining chips with roughly 20-30 percent more efficiency. Developers Timo Hanke and Sergio Lerner invented ASIC Boost, but Bitmain was accused of using the technology covertly last spring, and bitcoin core supporters called it an “attack or exploit.”

From 'Attack' to 'Optimization' — Slush Pool Reveals ASIC Boost Compatibility
Back in the spring of 2017, ASIC Boost was considered an “attack or exploit” against the BTC network. Now, this March the operation Slush Pool has announced compatibility with the technology.

Greg Maxwell was the first to kick off the heated argument and said miners covertly using the technology could outcompete other mining pools, and easily profit by $100 million USD per year or more. After Maxwell’s ‘revelation’ most people looked to blame Bitmain Technologies and its founder Jihan Wu, even though Wu and his company denied the allegations. Bitmain does hold patents in China for the ASIC Boost technology, but it has never been proven that the company used it covertly.

Many vocal supporters of the core software got upset with Jihan Wu and Bitmain over social media and forums across the net. When the news spread like wildfire that April, the founder of Slush Pool, Marek Palatinus, talked about ASIC Boost being an “attack” and called it “free hashrate” in a very long and telling Twitter conversation.

“Now it is clear how they can get that ‘free’ hashrate to attack bitcoin with empty blocks after Bitcoin Unlimited forks — ASIC Boost,” Palatinus states back in April.

From 'Attack' to 'Optimization' — Slush Pool Reveals ASIC Boost Compatibility
Slush Pool’s Marek Palatinus talking about ASIC Boost back in April of 2017. At the time, Palatinus didn’t like Bitmain’s official response to the accusations of covert use. To this day it has never been officially proven that Bitmain has used ASIC Boost. 

After Being Very Controversial, the Technology Is Now Acceptable Because of Patent Law

However, a firm called Little Dragon Technology LLC has released the patent publicly to any company that abides by the BDPL structure of defensive patents. Because of this Palatinus and his operation Slush Pool has decided to utilize ASIC Boost and even refers to the protocol as an “optimization.” Slush Pool also details the organization’s motivation:

After reviewing the new Blockchain Defensive Patent License (BPDL), we would see beneficial for the community to have a central place with stratum protocol specification. At the same time, we have have been working on a proposal for stratum protocol extensions.

From 'Attack' to 'Optimization' — Slush Pool Reveals ASIC Boost Compatibility
Slush Pool’s ASIC Boost stratum announcement.

Last spring many individuals thought the debate about ASIC Boost was “overblown” and used as a divisive tactic against Bitmain and Jihan Wu. Professor Emin Gün Sirer out of Cornell University called the technology and “optimization” and said calling it an “exploit” was a bit far-fetched. Ryan X Charles the creator social media platform the Yours Network told that he believed the controversy was overblown as well calling ASIC Boost an “attack.” The well-known bitcoin developer Gavin Andresen explained his opinion that month stating:

It’s not ok for ethereum to change their rules to undo a theft, but it is ok for bitcoin to change the rules to prevent an optimization?

The lead developer of Bitcoin ABC is very vocal about the announcement from Slush Pool.

According to reports, Slush Pool is now fully compatible with ASIC Boost. Although there are no mining devices that support the ASIC Boost protocol unless the accusations of covert use are valid. Slush Pool used to command a lot more hashpower back in 2012-2016, but the operation’s hashrate has dropped significantly to under 10 percent of the BTC network hashrate. The company may believe the action of utilizing ASIC Boost can help increase Slush Pool’s hashrate, among all the other competing mining pools looking to improve efficiency. In addition to the announcement made by Slush, the company ‘Halong Mining,’ a controversial firm due to the uncertainty the mining devices truly exist, announced it’s ‘mining rigs’ would embed ASIC Boost into its Dragonmint mining machines.

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Compliant ICOs? Bitcoin OGs Launch Regulated Token Sale Service


Mason Borda has been into initial coin offerings (ICOs) since the beginning.

Yet, the former BitGo software engineer, who helped set up Augur’s wallet for its token sale in 2015, was hesitant to enter the market himself until last summer. That’s when Borda, and security veteran James Poole, started building TokenSoft, a platform for helping projects manage their initial coin offerings (ICOs).

Revealed exclusively to CoinDesk, the project is officially launching today, and with the news, Borda is detailing for the first time a number of the platform’s features that are aimed to combat what he sees as prevailing industry issues and pain points.

For one, the white-label software solution is all about compliance, treating every token sold as a security per guidelines laid out by various SEC regulations (such as Reg D, Reg A, etc.).

This will likely attract many clients amid rumors the SEC has undertaken a sweep of the ICO industry, sending out subpoenas and requests for information to all kinds of stakeholders.

“People are starting to err on the side of compliance, rather than trying to figure out how to make their token sale a utility token sale,” Borda said. “We’ve always known here, at least, that you can’t really do a full utility token sale.”

And while TokenSoft is entering a hot market with a fair share of competition, Borda believes his past while help him differentiate the platform and make sure it’s prepared for anything the token industry throws at it.

He told CoinDesk:

“Regulations are really important to me and if you see what happened with the previous blockchain companies, the ones that survived are the ones that embraced regulations.”

Automating compliance

With the focus on compliance, Borda told CoinDesk the platform can handle just about any token offering, including those that want to target U.S. customers – they just have to follow the rules.

The U.S. regulatory environment is notoriously cumbersome, and with the SEC yet to issue any formal guidance on the industry, some token issuers have decided to cut off investors in the country rather than deal with any possible regulatory repercussions.

TokenSoft, though, is for issuers that don’t want to circumvent rules and regulations, but be proactive about building their tokens with existing regulations as guidelines.

And that’s not just in the U.S., but throughout the world, where quirky legalities also exist.

For instance, Borda mentioned fund-of-funds client Apex Token Fund, which had a requirement that their investors needed to adhere to the disparate securities laws of the countries they were in. As such, TokenSoft built their platform to take that into account, automating the addition of compliance mechanisms, such as know your customer (KYC) and anti-money laundering (AML), that vary by country.

“If in other countries there are different requirements, we can help do that,” Borda said, although he didn’t disclose how exactly TokenSoft does this.

It’s currently serving 50 countries for Apex Token Fund.

Looking forward, the company sees opportunities in further automation.

“There’s a lot of new technology that allows the enforcement of these rules we keep talking about, but by pushing that down to the blockchain itself,” said Poole, an alum of prominent security companies like RSA and Symantec.

For example, say a security token needs to be traded only with other regulated investors, a smart contract could white list all the wallets that could possibly trade that token and block trades that sent tokens anywhere else.

Borda said this could create a global mesh of compliant channels, which could increase liquidity for these assets while eliminating the friction of abiding by the law.

Engineering good experience

But there’s more than just compliance.

Another area TokenSoft looks to improve is the user experience for investors. Poole believes TokenSoft’s white-label software, in which all the issuer’s branding and precise legal language can be easily adapted, will help there.

“All the investors know that they go directly to our client to be the face of the sale,” Poole said.

But because TokenSoft handles the infrastructure that supports that page, the instances of those websites crashing due to significant traffic is limited. The benefits of this were displayed when Overstock’s tZero switched platform providers in the midst of their $250 million token sale, dropping SaftLaunch because of its time-consuming and complicated compliance.

TokenSoft has also added mechanisms for making purchasing cleaner.

For instance, when a typical sale goes live that accepts ether, bitcoin or another cryptocurrency, the same public address is usually given to all investors, leading to higher transaction fees.

But Borda believes that’s a waste of money. So, on the TokenSoft platform, investors are queued up using a unique ID as they come into the sale. In this way, their place in line is already set, eliminating this practice.

Shifting perspective

Still, given the somewhat murky nature of ICO regulations, it’s natural to ask, what exactly convinced Borda and his team the timing was right?

First, Borda said he began seeing entrepreneurs who already had successful companies move to launch token sales, putting their reputations on the line. And second, Borda saw a spate of high-profile law firms starting to take on ICO clients.

TokenSoft only works with companies with counsel from one of four law firms, for now: Perkins Coie, Cooley, DLA Piper and WSGR.

And for Poole? Seeing crypto tokens start to find uses beyond just raising money, such as decentralized governance, was the turning point for him.

“This actually is something that could change a lot of the finance industry,” he said.

TokenSoft’s first two sales – and Swarm Fund – ran on Sep. 9. Since then, the company has worked with six more clients and currently has five sales active.

“There’s a lot of new companies entering the space that haven’t necessarily been in production,” Borda said, adding:

“We’ve been in the space for a while. We’re doing interesting things like helping people adhere to global securities regulations.”

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Japan’s FSA Suspends Two Crypto Exchanges


Finance regulators in Japan have ordered month-long suspensions for two domestic cryptocurrency exchanges.

The Financial Services Agency (FSA) said on Thursday that it has issued business suspension orders to two exchanges – FSHO and Bit Station – effective for one month starting from today.

The FSA mandated that seven trading platforms in total must improve their system security measures and submit a written improvement plan by March 22. Those four exchanges are Tech Bureau, GMO Coin, Mister Exchange, Bicrements as well as Coincheck, the exchange at the center of a recent $500 million heist that sparked the ongoing probe by the agency.

As reported by CoinDesk, the FSA had already stepped in soon after Coincheck reported that $500 million worth of the NEM token had been stolen in January. According to statements at the time, the FSA discovered Coincheck’s internal systems were lacking, including inadequate anti-money laundering measures.

Following its on-site inspection on Coincheck, the financial regulator also expanded its probe to other domestic crypto trading platforms that are yet to be approved by the FSA for inadequate security measures which included the two that are suspended today.

Elsewhere in the announcement, the FSA also established a cryptocurrency exchange industry study group which aims to examine institutional issues regarding cryptocurrency.

According to the agency, members of the study group will come from academic institutions, cryptocurrency exchanges as well as government agencies as observers. The FSA itself will serve as the secretariat, according to statements.

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SWIFT Claims ‘Huge’ Progress on DLT Bank Pilot


Interbank messaging platform SWIFT has published the results of a long-running distributed ledger proof-of-concept project.

Based on Hyperledger Fabric, the SWIFT trial focused on the use of nostro accounts, or bank accounts held by banks inside other banks. The proof-of-concept envisioned these “many-to-many” bank transfers, specifically examining how the system could meet requirements around governance, security and data privacy as they relate to the nostro reconcilitation process.

According to Damien Vanderveken, SWIFT’s head of research and development, the test provided a window into the strengths – and limits – of migrating such a system to distributed technology.

He said in a statement:

“The DLT sandbox enabled us to control access, to define and enforce user privileges, to physically segregate confidential data and store it only with the relevant parties while supporting a strong identity framework by linking all participants to their BIC, and having all keys signed by a SWIFT certification authority.”

“Lots of things we couldn’t do before, we can do now,” he later told CoinDesk. “Somethings we couldn’t’ do, but it’s just a matter of time before they get fixed and we are entirely happy.”

According to Vanderveken, from a technology perspective, “the progress compared to a year ago was huge and fantastic.”

However, SWIFT’s report also details the limitations of the transaction capacities current blockchain solutions can support, considering that, at a commercial-scale level, the system in question would need to be able to handle many more channels than the proof-of-concept demonstrated.

“If you have so many channels, then it becomes more complicated to do a number of things,” Vanderveken explained.

That said, the test showed that banks could conduct real-time transactions using a distributed ledger, while staying in compliance with reporting requirements.

“It enabled real-time … transaction status updates, full audit trails, visibility of expected and available balances, real-time simplified account entries confirmation, the identification of pending entries and potential related issues, and generated the data required to support regulatory reporting,” Swift said.

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