Originally published at http://www.kkurokawa.com. June 12, 2015, Information may be out of date.

Decentralized exchanges have been raved about for a while now in the Bitcoin space and has been crowned as the future saviour of our financial exchange infrastructure (even Mark Karpeles of Mt. Gox fame is talking about it ) . But unfortunately, this is a very hard problem and the current batch of decentralized exchanges have one system breaking issue that makes them entirely unusable. I’m specifically talking about decentralized exchanges where the actual process of matching orders happens on the blockchain. This includes the likes of Nxt, BitShares, Counterparty, and Augur which has a built in limit order book, or some approximation of the limit order book, on the protocol consensus level (Augur is not branded as a decentralized exchange, but you can think of them as an exchange for a specific asset class which is prediction of future events). All of these platforms allow you to issue assets and trade them on the blockchain. …


Frances Coppola, a long time critic of Bitcoin, declared that “Bitcoin is a Cult”, which predictably stirred a lot of shit posting and ruffled feathers. Many Bitcoin’ers were offended by this declaration, resulting in name calling and ad hominem attacks, which ironically proved Coppola’s points. Bitcoin is a cult, and no cultists likes to be pointed out as a cultist. She is not the first to point out this fact, others have said the same thing.

The cult label can be seen as a pejorative but I will attempt to explain here how it is a perfectly reasonable and necessary description of Bitcoin. A cult is just a religion with limited membership status and social acceptance. Musician Frank Zappa cleverly stated that “the only difference between a religion and a cult is the amount of real estate they own”. …


Goodbye 2018, Goodbye Bitconnect

I think 2018 will forever be etched into my memory as the year of Bitconnect. Nothing embodies the meteoric rise and fall of the crypto markets better than Carlos Matos’s iconic performance as chief shill of the now defunct ponzi scheme. Matos blew up into main stream culture, and everyone from Pewdiepie to John Oliver was talking about him. This EDM Remix of Matos will forever be on my playlist.

Despite the total craziness of 2018, Bitcoin’ers grinded away to develop great things like Lightening, and also seek the truth. This is my arbitrary list of the most informative truth seekers in Bitcoin in 2018 and the content they produced. I gained a lot of inspiration and knowledge from them and hope that others will too. …


Craig “Faketoshi” Wright and Bitcoin SV is running a variant of the Nigerian scam. Nigerian scams work because “by sending an email that repels all but the most gullible, the scammer gets the most promising marks to self-select, and tilts the true to false positive ratio in his favor.” [Cormac Herley, “Why do Nigerian Scammers Say They are From Nigeria”]. In other words, Nigerian scams work because it is a hyper efficient idiot finder. Only an idiot would engage with such a preposterous claim regarding a Nigerian prince. Most people will just ignore it, and this is good for the scammer because the scammer does not have to waste time engaging people with brains. Imagine if you were a scammer and you sent out a million emails. …


Bitcoin cash is facing a schism. Developers on Bitcoin ABC seems to be completely oblivious to this threat, hence they are proposing to hardfork over non critical matters on Nov 15th. It is not clear what the other BCH implementations like Bitcoin Unlimited and the new Craig Wright project Bitcoin SV intends to do on Nov 15th. What is clear is that there is a good deal of hostility (devs being banned from communication channels, Faketoshi posturing), and a high likelihood of Bitcoin Cash splitting into multiple chains. …


The Hydra is a multi headed serpent from Greek mythology that can regrow any head that was cut off

Vitalik Buterin recently made a massive series of tweets where he described his line of thinking regarding Proof of Stake (POS). It was quite technical and filled with a bunch of jargon, and I doubt that the average person interested in cryptocurrencies can decipher a fifth of what he was talking about. The goal of this post is to explain in simple term where his logic falls apart and why POS doesn’t work.

As Hugo Nguyen correctly pointed out, there are only three tweets (9–11) in Vitalik’s tweet storm that is relevant to the POS discussion. I will summarize here for clarity purposes: Vitalik believes that by imposing 2 additional requirement to Ethereum clients, he can make POS work. The requirements are that “clients log on at least once every four month”, and that new clients download the blockchain “from some trusted source when you sync for the first time”. The 2 requirements are needed to prevent “long range attacks”. In this attack, an alternate blockchain which appears completely legitimate to a POS node is created in order to mislead the user. For those that want a better understanding of this attack, I’d suggest reading Ethereum’s POS FAQ sections on the nothing at stake problem and weak subjectivity. …


Symmetric Cost Principle

Offense and defense in a POW blockchain is symmetrical. The action required to keep a POW blockchain secure, is the same action required to attack it. That action is mining. Further more, any adversarial activity will be met with resistance. Using current hashrates to estimate the cost of a 51% attack (such as this site) ignores the important fact that additional hashrate could be brought online to resist a 51% attack.

By recognizing 51% attacks as a game fought between two opposing forces, we can make a general rule that applies to all POW blockchains regardless of the hash rate called the Symmetric Cost Principle. The Symmetric Cost Principle states that: The cost that a 51% attacker must incur to succeed has to be more than the cost that the defender will bare in order to prevent it.


This research has been sponsored by LBRY, a free, open, and community-run digital marketplace.

Designing ASIC resistant proof-of-work blockchains, and particularly hard-forking to achieve such ASIC-resistance is a contentious new issue in the cryptocurrency space. ASIC chips are custom manufactured computing devices designed specifically for a particular blockchain or hashing algorithm. As such, they are far more efficient at mining than commodity hardware such as CPUs or GPUs.

Forking to prevent such resistance, referred to as an AAHF (Anti-ASIC Hard Fork) for the rest of this article, changes the mining algorithm on a blockchain so that ASICs tailored to the old algorithm can no longer mine effectively. AAHF aren’t just theory. Recently Monero executed one and Zcash is pondering whether to do the same. …


I’ve been thinking a lot about left and right-wing politics, due to the extremely polarized nature of the current American/Western political landscape. Naturally, I started thinking about left and right-wing ideologies in the cryptocurrency space, and how increasingly relevant these ideologies have become in this space. In the early days of Bitcoin, arguments revolved purely around the technology and efficient solutions to tractable engineering problems. If there was any ideological arguments, they were mostly between Hodlers (people that believe in, or can at least see some value in cryptocurrencies) and Nocoiners (people who think that Bitcoin is stupid).

But these days, major conflicts in the crypto space can be described as intractable ideological conflicts. The block size debate is an example of this. The numerous skirmishes between altcoins vs Bitcoin, or altcoins vs altcoins is another example. In this article, I will describe how we can look at these ideological conflicts the same way we look at mainstream political conflicts. More specifically, I will describe how the concept of left-right political spectrum applies to people in the cryptocurrency space, which I will call “hodlers” for a lack of a better term. …


A visual metaphor for the IOTA Tangle. A big mess held up by fenced walls.

IOTA is cryptocurrency that uses a Tangle instead of a “blockchain”. From https://learn.iota.org/faqs, “The Tangle as implemented in IOTA is the first public distributed ledger to achieve scalability, no fee transactions, as well as quantum-computing protection”. In this article, I will try to investigate how they achieve this claim and see how correct their claim is.

I’m going to skip the “quantum-computing protection” part here because I’m not well versed in the topic, but let’s cover the two important topics. IOTA is proposing that the Tangle is a ledger that has “no fee transactions” and “achieves scalability”. These are two very contradictory statements because if there is no fee, there is nothing that prevents someone from spamming the network, and thus you have a ledger that grows out of control. Some shills have used “infinite scaling” ( https://www.iotasupport.org

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Kay Kurokawa

crypto memes R&D

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