Boxmining v2

Author: Angela Wang

  • Private Keys: What are they and why are they important?

    Private Keys: What are they and why are they important?

    Private keys are made of numbers and letters, they are used to uniquely identify users which will allow them to perform secure transactions.

    A cryptocurrency private key uniquely identifies, authenticates, and grants you access to your account, enabling you to spend or send the cryptocurrencies in your wallet. This means that you will lose your assets if you lose your private key. Fortunately, there are methods to help store your private keys as will be seen later.

    Private Key vs Public Key- What’s the difference?

    Private keys are NOT public keys. A public key or address allows other users to identify you and your account during a transaction.

    By way of analogy, a public key is like a bank account number which others can know and they require it to transact with you. On the other hand, the private key is your PIN code which you need to access your bank account at the ATM. Only you should know that secret PIN code as anyone who knows it can withdraw funds from your account.

    To learn more about how this technology came about, check out my interview with one of the pioneers of public-key cryptography-Whitfield Diffie.

    Father of cryptography: Whitfield Diffie

    How are private keys generated? 

    The platform first generates a private key using random mathematical sequences. From there, the public key is generated.

    How do you access your cryptocurrency using a private key? 

    There are 2 ways to access your cryptocurrency once you have a cryptocurrency account and a private key:

    1. Vsit a reliable Digital Ledger Technology (DLT) website using your internet browser and log onto your account using your private key. The site will confirm that the account matches the private key and allow you to view and perform transactions online. However this method of directly logging in through a browser is inconvenient as you must input all the alphanumeric characters of your private key every time you wish to transact; or
    2. Use a cryptocurrency wallet. With this wallet, all your private keys will be stored and accessed with a simpler to master authentication phrase. The wallet will provide the private key when you make a transaction. There are several kinds of wallets which store your private and public keys, e.g. 

    •    Desktop wallet e.g. Exodus wallet

    •    Mobile wallets e.g. Enjin wallet

    •    Hardware wallet e.g. Ledger Nano X, Trezor Model T

    •    Software wallet e.g. Electrum wallet

    Cryptocurrency hardware wallets
    Cryptocurrency hardware wallets

    Speaking of wallets, you’ll also hear people mentioning “hot wallets” and “cold wallets”. It may sound confusing at first, but it simply refers to whether they are connected to the internet or not. Hot wallets are connected to the internet, whilst cold wallets are not.

    Click here to learn more about hot and cold wallets, and their pros and cons.

    What is a seed phrase / recovery phrase? What does it have to do with your private key?

    In our wallet setup tutorial videos you there will be a step where you need to write down and keep in safe custody a string of words. This is known as your seed phrase. The seed phrase is generally 12 or more English words which is used to encrypt your private key into an easier to understand format (i.e. instead of a string of letters and numbers). Therefore, anyone who has access to your seed phrase has access to your private key.

    How can I keep my seed phrase safe?

    Your seed phrase (or recovery phrase) is essentially your private key, but encrypted in an easier to understand format. Therefore it is crucial to keep it safe from hackers and thieves. Here’s some tips and tricks which you could consider to keep them safe.

    Recording your seed phrase:

    • Write down your private keys using pens with permanent ink and paper that would not smudge or cause ink to fade over time (e.g. paper which receipts are usually printed on).
    • Laminating the paper which your seed phrase is recorded on to avoid water damage.
    • Avoid the cards provided to you by the wallet manufacturers to write down your seed phrase i.e. do not use the recovery cards provided by say Ledger to record your Ledger seed phrase. This is to try and make it that much more difficult for thieves to piece the puzzle together.
    • There may be debate on this, but some have suggested to have more than 1 copy of the seed phrase in case it gets lost.
    • For those who are worried about using pen and paper. Some companies such as Cryptosteel which sells devices with metal tiles for you to record your recovery seed on.
    • Some have even come up with the idea of memorising the entire phrase themselves, or having their trusted friends and family to memorise several words each.

    Confirming your seed phrase: As a best practice, once you’ve copied down your seed phrase you should confirm the phrase with the following steps. Firstly to send a small amount of cryptocurrency to the public key that is generated, then to delete the account from your device. Finally to import your account to your device again. If you see the same amount of cryptocurrency in your device, then the seed phrase correctly corresponds to your account.

    Storing your seed phrase: if you have several copies of your seed phrase, you can store it in several discrete locations which are ideally safe from the elements and not obvious to find. Another best practice is also to keep your seed phrase in a separate location from your hardware wallet.

    What happens if you lose your private key? 

    If you lose your private key, you will not be able to access any funds in your account. Because of the secure nature and random mathematical sequences used to generate the private key, nobody will be able to recover your private key and consequently the cryptocurrencies.

    It is therefore advisable that you keep your private key very safely.  

    Using a cryptocurrency hardware wallet can prevent loss of your private key.

    When setting up the wallet and syncing with the accounts, users must set an 18 to 24-word recovery phrase. This recovery phrase is then used to restore your device and consequently your private key.  

    Cryptocurrency private keys and cybersecurity 

    Anyone that has access to your private key can access your funds. This is the same for the recovery phrase.

    Therefore, be careful not to reveal your private key to anyone. You should also be careful not to inadvertently give thieves access to your funds by saving your recovery phrase online or taking photos of it.

    To prevent theft, one option that some people use is to save the private key offline on a paper wallet. 

    Conclusion

    A cryptocurrency private key is a unique identifier that distinguishes your cryptocurrency account from others. It generates the public key that your trading partners will use to transact with you, and allows you to log in and transact with them.

    Therefore you should ensure your seed phrase/ recovery phrase and thus your private keys remain safe.

    Updated 30th March 2020: Added 2 new sections “What is a seed phrase / recovery phrase? What does it have to do with your private key?” and “How can I keep my seed phrase safe?”

  • Bitfinex News: What’s Happening at Bitfinex? (Updated 19 May 2019)

    Bitfinex News: What’s Happening at Bitfinex? (Updated 19 May 2019)

    Bitfinex

    Bitfinex Legal Troubles

    Bitfinex has been in some trouble since 24 April 2019 when the New York Attorney General (NYAG) obtained a Court Order against iFinex, Bitfinex’s parent firm to stop violating New York law and defrauding New York residents. In the Order, iFinex was accused of covering its $850 million losses by borrowing from Tether’s reserve. The NYAG also obtained a preliminary injunction against Bitfinex or Tether from accessing its reserves.

    This also caused a stir within the cryptocurrency community as it was essentially revealed that Tether is not fully backed by cash. Rather, it is only 75% backed by cash with the remaining through loans or other securities.

    To learn more about Tether (USDT) check out my video below:

    https://youtu.be/2XHYkaSemqc
    Tether (USDT) Explained-is Tether a scam?

    What is the Bitfinex Initial Exchange Offering (IEO)?

    Amid a gaping $850 million hole on Bitfinex’s financial books, Bitfinex has released its official white paper indicating its plan to issue an initial exchange offering (IEO).

    The white paper can be viewed here.

    Bitfinex IEO whitepaper

    The white paper states that 1 billion tokens dubbed LEO will be sold to investors. Notably, LEO tokens will be purchased using USDT, a stable coin issued by Tether Ltd which is also owned by iFinex.

    To appease investors, the LEO tokens will enable them to enjoy discounts when trading on Bitfinex and EOSfinex. Additionally, the same benefits will be available on other platforms operated or owned by iFinex.

    To evade regulations, the tokens will not be available to investors in the United States or any U.S. persons.

    Will the Bitfinex IEO save the exchange?

    Notably, the exchange is conducting the initial exchange offering to stitch the $850 million hole in its balance sheet.

    Whether the amount will be enough to save the troubled exchange is debatable. Firstly, the chance of success is very high since this is not the first time the exchange is raising tokens to cover up for losses. In 2016, Bitfinex pulled a similar stunt to cover losses incurred after a security breach on its platform. As it did then, the exchange is replicating the same scheme; selling ‘temporary tokens’ which it later buys back.

    From the outlook, iFinex has a complex but well thought out plan. Since LEO will be purchased with USDT, raising $1 billion will be enough to reinstate the USDTs 1:1 tether to the U.S dollar, plus some change. iFinex can deposit the change into Bitfinex’s account without going against the court order issued by the New York Attorney General. It will then help settle the loan that Tether gave Bitfinex to cover for the loss.

    The only reason that Bitfinex will be able to get away with this plan is that virtual currency exchanges do not fall under the same regulatory framework as traditional financial institutions.

    Bitfinex CTO confirms rumours that it has raised $1 billion

    Tweet from Bitfinex CTO Paolo Ardoino

    Bitfinex’s CTO Paolo Ardoino has confirmed via social media on 13 May 2019 that the Company was able to raise $1 billion USDT by private sales in 10 days.

    What happens next? Update: new developments in Court case

    The legal proceedings against iFinex by the NYAG are ongoing.

    New Court documents were filed on 13 May 2019 where NYAG and Bitfinex are disagreeing on the terms of the injunction.

    On the one hand, the NYAG wants to prevent Bitfinex or any of its affiliated entities from accessing Tether’s fund reserves and a 90-day injunction.

    On the other hand, iFinex is proposing that its affiliated entities should be able to access the funds, and a shorter period of 45-days for the injunction. However they make this proposal without waiving their previous motion to vacate the NYAG’s previous Court Order entirely.

    As both sides cannot come to an agreement on the terms of the injunction, or at all, it is likely that Judge Joel M. Cohen, who oversees this case would want to schedule a hearing. This is so both parties would have a chance to present their arguments and for the Court to come to a determination on these opposing views.

    However as CoinDesk reports and as seen from the Court documents filed, it is unclear when this hearing will be.

    Court gives Bitfinex room to conduct its business. Bitfinex praises Judge’s decision.

    On 16th May 2019, Judge Joel M. Cohen Ordered that the terms of the preliminary injunction should be tailored so that the legitimate business activities of Bitfinex and Tether would not be interfered with.

    Specifically the Court ordered that:

    • Tether can now loan assets to Bitfinex or other parties in its normal course of business;
    • Tether can only distribute funds from its reserves for payroll, and paying contracts, consultants or vendors;
    • Bitfinex or Tether must provide the documents asked for in the NYAG’s original subpoena; and
    • The injunction will expire in 90 days. BUT the NYAG can request for the period to be extended.

    Bitfinex considers this a victory. In its statement, Bitfinex repeated that the NYAG’s order was made in bad faith, and says the Court’s decision leaves “no doubt” that Tether and Bitfinex are entitled to continue running their business as normal.

    Update: LEO token will list on Exchange starting 20 May 2019

    Bitfinex announced on 17 May 2019 that its LEO token will commence trading on 20 May 2019 at 8:00a.m. UTC on Bitfinex.

    It is considered that LEO token is a utility token similar to Binance’s BNB token.

    The token will be tradable against BTC, USD, USDt, EOS, and ETH.

  • VeChain ToolChain: Blockchain secured anti-counterfeit for everyone

    VeChain ToolChain: Blockchain secured anti-counterfeit for everyone

    VeChain ToolChain could bring blockchain technology to the masses. Toolchain allows anyone to use the power of blockchain without complicated programming or engineering. We always hear a lot about blockchain projects including VeChain partnering with big names. Examples being DNVGL, BMW, PwC and others (Click here to find out more about Vechain and its partnerships).

    According to statistics from the United Nations, over 90% of firms worldwide are Micro-, Small and Medium-sized Enterprises (MSMEs).

    VeChain’s ToolChain seems to recognise their importance and is bringing its blockchain technology to them.

    What is VeChain?

    VeChain is a blockchain platform which supports the creation of smart-contracts. These are self executing contacts that have a guaranteed outcome without third party trust. This allows for the creation of decentralized applications which is intended to solve enterprise problems such as anti-counterfeiting and cold-chain logistics. To learn more, check out our article VeChain Explained or our VeChain in a Nutshell video below.

    https://youtu.be/wH2G_44x4vw
    VeChain in a nutshell

    For more nutshell videos, why not check out our Cryptocurrency in a Nutshell playlist to learn more about other projects?

    What is ToolChain?

    ToolChain is VeChain’s latest product. It was announced at the VeChain Summit 2019 (Click here for a recap).

    ToolChain hardware kit displayed at VeChain Summit 2019

    ToolChain is a kit containing all the necessary hardware, software and service protocols to onboard a business onto the VeChainThor blockchain.

    There are 3 Versions of the ToolChain kit: Standard, Developer and Channel Partner. This is so that businesses with any levels of technical capability can use VeChain’s technology.

    Standard Version

    The Standard Version provides standarized application modules, tools and Internet of Things (IoT) devices. It was designed for MSMEs without the capability to develop their own blockchain-based lifecycle management solution. Businesses can be onboarded onto the VeChainThor blockchain within 30 minutes.

    Developer Version

    The Developer Version is designed for enterprise customers with stronger technical capabilities. It will allow enterprises to develop various applications based on the VeChainThor blockchain tailored to their needs.

    Channel Partner Version

    Channel Partners will be able to have independent deployment and multi-dimensional customisation of ToolChain.

    VeChain ToolChain at a glance

    The ToolChain hardware kit contains:

    • QR code printer and application software to print QR codes.
    • NFC writer and software to create digital labels on NFC tags.
    • IoT devices, RFID chips and sensor devices
    • Handheld terminal devices which will enable ToolChain apps to bond and activate NFC chips, and transfer the data on them.

    In terms of software:

    • ToolChain Admin Center: this app is a command centre. One of its features is that business owners can use this software to configure NFC and/or RFID chips. The Company can ship these NFC and/or RFID chips directly to businesses.
    • VeChain Work App: this app allows business owners or third party manufacturers to “bind” the physical product to the NFC/RFID chip. To learn more about this app, check out Bsc44’s article here.
    • VeChain Pro app: this app is already available to download. It will be pre-loaded onto the NFC scanner. It allows anyone to view the entire story of the product including proof of authenticity and origin.
    Description of the ToolChain kit components

    Examples of VeChain ToolChain in use

    One of ToolChain’s notable users is SBTG Surplus & Co., a custom sneaker artist. SBTG uses NFC chips embedded into its limited edition sneakers. Customers can verify the sneakers’ authenticity, origin and other information by scanning them with the VeChain Pro app.

    SBTG have recently partnered with Adidas and HBO Asia to produce limited edition Game of Thrones sneakers. These sneakers are powered with VeChain Technology.

    SBTG x Game of Thrones sneakers with VeChain RFID chips

    Problems with authenticity and quality assurance

    MSMEs generally lack technical or financial resources. Hence they have difficulty in ensuring their products’ authenticity and quality. They are also vulnerable towards counterfeiters and bad actors in the supply chain. This in turn could seriously damage their reputation.

    Even for products from larger corporations, product authenticity and quality assurance is not transparent. We as consumers do not have easy access to information on the supply chain of our products.

    Consumers still rely on outdated authentication methods. This is true even for expensive luxury items. As an example, for luxury watches we would compare an items’ appearance or check its serial number. Meanwhile there are official databases of serial numbers. The numbers are only etched onto the watch and counterfeiters can easily copy this.

    Thus, authenticating a luxury watch requires significant expertise and experience. Whilst counterfeiters are always trying to make their watches look more authentic.

    Can VeChain ToolChain bring mass adoption through MSMEs?

    ToolChain can be a simple and cost effective supply chain management solution for MSMEs. ToolChain could finally give MSMEs the same ability as large corporations to ensure product quality.

    As mentioned above, most of the world’s businesses are MSMEs. ToolChain could finally bring blockchain to a substantial but overlooked group

    Moreover, customers will be able to scan the NFC/RFID chip embedded into the product and see information pertaining to their exact item.

    If you want to learn more about VeChain, check out our guide, VeChain explained.

    Want to find out more interesting happenings at the VeChain Summit? Check out these videos below!

    https://www.youtube.com/watch?v=ZRBuQ96ikPc
    Check out our livestream with VeChain’s with Sunny Lu (CEO) and Kevin (COO), and Patrick from Plair
    And don’t forget to check out our post VeChain Summit recap video!

    Mass adoption is starting through…milk?

    On 18th May 2019, VeChain announced that its enterprise partner, Bright Food (Group) Co., Ltd (“Bright Food”) has put its “Cupids Farm” milk on their BrightCode Commodity Confidence Index Platform (“BrightCode Platform”).

    Cupids Farm milk

    The BrightCode Platform is a blockchain-based commercial ecosystem built upon the Partner Version of VeChain ToolChain. To learn more about the Platform, check out Oliver’s article here.

    Bright Food was founded in 2006 and mainly produces milk products, sugar, wine, snacks and canned goods. Bright Food’s products can be found in over 4000 online shops in China. The Company was listed as one of the ten Chinese companies to watch in the international arena by Forbes Magazine in 2015.

    When customers can scan the QR code on bottles of “Cupids Farm” milk, they will be directed to the BrightCode Platform. There, key information on the bottle of milk’s lifecycle will be available. For example information on where it was produced, videos of the diary farm, production techniques etc.

    VeChain’s other partner, DNVGL will be responsible for verifying the source data and tamper proof technology. So customers can be assured that the information presented is authentic.

    Information shown to customers when they scan the QR code

    FREE trial now available!

    You can now register for a FREE ToolChain trial account by signing up with them! Link Here!

    Tweet from Kevin Feng, COO of VeChain