Tag Archives: Daniel Palmer

Crypto Token Sales: At Long Last, Lawsuits

Over the past few years there has been an upwelling of various blockchain based, “decentralized” token sales.  Blockchains are very flexible, loosely regulated, and the transactions happen in milliseconds.  So there are a lot of variations on the theme.  But mostly, these activities are digital versions of age-old operations to borrow and lend, buy and sell—abstracted, virtualized, and blazing fast.

This has been controversial from the beginning, since many of these shows look a lot like conventional securities, yet are operating outside financial regulation.  In fact, regulators have regularly (a) refused to approve them, (b) ruled that these are securities and therefore are subject to the rules, and (c) shut down dubious scammy activities.

But these are so simple to do that there are new ones every day, many of them coming from “offshore”, and a lot of companies are making money serving them up.  And, I assume, no end of sheep begging to be shorn.

I think this isn’t so much “cryptocurrency is censorship proof”, it’s more of a script-kiddie, “any idiot can do it” thing.

Daniel Palmer reports this month (possibly timed to meet a statute of limitations), lawsuits have started to rain down [1].  The lawsuits were filed in New York, but the activities occurred all over the world in various crypto friendly havens.

The basic complaint is that these tokens walk like a duck, quack like a duck, and in fact, are unregistered securities under US law.  Since these “tokens” were sold without the legally required framework, they would potentially be a form of fraud, and certainly investors did not have full information about them.

Part of the case appears to be specifically about tokens that were presented as decentralized tokens (which is sort of legal), but were really created and controlled by a single entity—which makes them securities.  This would be a form of fraud.

This will be an interesting and hard fought suit.  Both sides are well funded, and there are going to be obscure technical arguments, deep philosophical claims, and the discovery will bring out some really interesting data.

The CryptoTulip of the Year judges (me) will be watching this lawsuit very closely.


  1. Daniel Palmer (2020) Major Crypto Firms Including Binance, Civic, Tron Targeted in Flood of Lawsuits. Coindesk, https://www.coindesk.com/top-crypto-firms-including-binance-civic-tron-targeted-in-flood-of-lawsuits

 

Cryptocurrency Thursday

Nakamoto’s Worst Nightmare

Pretty much the entire concept of Nakamotoan cryptocurrencies depends on the consensus protocol, now known as “Proof of Work”.  All the participating nodes “vote” to determine the consensus order of records on the ledger.  This works because it is “[i]f a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains.” ([2], p. 3)

This security claim assumes that there are a great many nodes, computing power is distributed evenly among them, and that each node operates independently.  If there are too few nodes, some have vastly more computing power, or a majority conspire together, the security can be broken.  These breaches are termed “51% attacks”, and they can result in theft or other mischief.  These are the kryptonite for Emperor Nakamoto’s Fancy New Clothes, to mix metaphors.

Can this disaster actually occur?

Well, Bitcoin itself has yet to be hacked this way, but other Nakamotoan cryptocurrencies certainly have.

This month David Palmer reports on one such attack, on “Bitcoin Gold” (nothing to do with the original Bitcoin), “Bad Actors Rent Hashing Power to Hit Bitcoin Gold With New 51% Attacks”.  [3]   That’s right, this particular cryptocurrency has a small enough network that it is possible to borrow enough CPU power to suddenly have a majority vote.   It’s not certain how much the thieves gained in the attack, but an earlier attack netted $18 million to the thieves.

I’ll note that this attack happens because the nodes know nothing about each other.  The results are “trusted” because of the computations, not because of the identity of the nodes.   I.e., this is an inevitable result of Nakamoto’s notion of “trustless” agreement.  If you trust everyone equally, you are obviously vulnerable to theives.

Palmer’s article refers to a blog by James Lovejoy [1].  The cool thing is that this blog is mainly a collection of reports of 51% attacks on different cryptocurrencies!

This attack is not only possible, it happens all the time!

To be sure, most of the cases are small, fly-by-night cryptocurrencies.  But beware, because even the larger cryptocurrencies have highly concentrated computing power.  In addition, some variations that look like Nakamotoan cryptocurrency use different protocols, which sometimes are, well, not well thought through or tested.

This is not the world Emperaor Nakamoto promised us!


  1. James Lovejoy, Bitcoin Gold (BTG) was 51% attacked, in Githup Gist – James Lovejoy, January 25, https://gist.github.com/metalicjames/71321570a105940529e709651d0a9765
  2. Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System. 2009. http://bitcoin.org/bitcoin.pdf
  3. Daniel Palmer (2020) Bad Actors Rent Hashing Power to Hit Bitcoin Gold With New 51% Attacks. Coindesk, https://www.coindesk.com/attackers-rent-hashing-power-to-hit-bitcoin-gold-with-new-51-attacks

 

Cryptocurrency Thursday

More Ethereum Software Engineering

Perennial favorite CryptoTulip of the year  Ethereum continues to stand out in this year’s competition.

Even as Bitcoin and other cryptocurrencies are whipsawed by insane volatility (strong dollar kind of means weak Bitcoin, no?), fraud and crime are rampant, and Craig (“I am Satoshi”) Wright’s Theater of the Absurd is in its summer run (with some competition from the addled fugitive John McAfee).

Meanwhile, in Ethereumland, they continue to explore how to do engineering with no one in charge to make decisions.

Core Development Experimenting with Planning

“They” (it’s kind of hazy just who is in charge) have an upgrade (“fork”) scheduled for October, but they are still trying to figure out what will be in it [1].

Programmers always have the attitude, “You can tell me when or you can tell me what, but you can’t tell me both.”   Ethereum is experimenting with the “tell me when” approach:  set a deadline, and then see what can be done by that time.  Will this work?  We’ll see.

The deadline for proposals has passed but–surprise!–they need to sift through them to figure out what can and should be included in the update.  Christine Kim reports that—surprise, again!—this is not an easy process.  Only one proposal is a “definite go”.  As her headline says, “The Real Discussion About Ethereum’s Next Hard Fork Is About to Begin”.

If and when “they” decide what will be in this October release, the candidate code is supposed to be integrated into test systems by about mid-July.   We’ll see.

All this looks like real software engineering.

There is even a checklist of “readiness” or lack thereof.   However, as Kim points out, that  “the envisioned timeline for Istanbul is a rather new creation that has never replicated by previous ethereum hard forks”.  I.e., they’ve never actually tried this approach before.

(I have.  So have thousands of other professional software developers.)

In my decades of professional software engineering, I rarely met a deadline.  It is always a challenge to get everything done on time.  Usually, there has to be triage: what must be done, what would be good to have if possible, and what can be left out if necessary.

In my own experience, there is often need for somebody, a manager or executive, to “make the call” on this triage.  We’ll see how it works by “consensus”.

End-User Software

No normal humans should ever see the “core” software discussed above.  Out in the world, users deal with clients, services, and apps. All this other software needs to be kept up, too. The “core” developers can’t make that happen, it’s up to others, including the users.  How is that working out?

Daniel Palmer reports that this is potentially disastrous, because “Unpatched Ethereum Clients Pose 51% Attack Risk [2].

Ethereum and most cryptocurrency is used via user devices, often via mobile apps.  This client software is loaded on zillions of devices, under the control of users, AKA, normal people.  Security flaws can enable these clients to be monkeyed with, and, as Palmer notes, potentially hijacked in ways that threaten the core protocols.

Palmer is referring to a report from Security Research Labs, which shows that large numbers of clients have yet to install security patches issued earlier this year [3].  The unfixed bugs open the system to the infamous 51% attack:  bad nodes manipulating the consensus process to fiddle the ledger.

The SRL report indicates that part of the problem is that these software products are not easy to update, which is kind of a damning finding.  I mean, the point of cryptocurrency is security, so you’d think that the software should at least be well engineered.  (Not that safe and reliable auto updates are easy to implement—far from it.)

(We may also pause to contemplate the fact that there are three clients that account for the vast majority of user connections.  This is scarcely “decentralized”, regardless of how the “core” software works.)

You begin to see why Apple and Google police their app stores so annoyingly.  They impose standards to try to make sure that third parties don’t wreck the whole system.

Success Means Maintenance

This year Ethereum is experiencing all the real software engineering challenges that come with success.  The more you succeed, the more maintenance you have to do, and the more careful you have to be about your upgrades—thousands of users and millions of dollars are at stake, so you need things to be as smooth as possible.

The core code is attempting to get into a professional-grade development process, with accountability and predictable disruptions, but without benefit of any final authority to call the hard choices.

At the same time, the end-to-end system is slow to pick up crucial patches, potentially threatening the whole shebang.

We’ll see how this works out?  Will they make the October deadline?  Will client bugs cause a disaster?  Stay tuned.


  1. Christine Kim (2019) The Real Discussion About Ethereum’s Next Hard Fork Is About to Begin. Coindesk, https://www.coindesk.com/the-real-discussion-about-ethereums-next-hard-fork-is-about-to-begin
  2. Daniel Palmer (2019) Unpatched Ethereum Clients Pose 51% Attack Risk, Says Report. Coindesk, https://www.coindesk.com/unpatched-ethereum-clients-pose-51-attack-risk-says-report
  3. Security Research Labs, The blockchain ecosystem has a patch problem in Security Research Labs – Bites. 2019. https://srlabs.de/bites/blockchain_patch_gap/

 

 

Cryptocurrency Thursday

Cryptocurrency is Perfect for Ransomware

For all the happy talk about reinventing money and society, Nakamotoan cryptocurrencies are “reinventing” crime. The equivalent of a “bag of twenties” in the alley, cryptocurrencies are, in fact, designed to undermine nation states and the rule of law.

So, it isn’t terribly surprising that Bitcoin and other cryptocurrencies have become a regular part of not only gray and black marketeering, human trafficing, (and probably terrorism and espionage). but also  twenty-first century extortion.  You could say that Bitcoin has “reinvented” and “disrupted” the ancient extortion racket.  Yay!

This spring, Coreware updated their tracking of ransomware attacks, to report that crypto ransoms increased 90% in the first quarter of 2019 [1].  That’s right, doubling every quarter.

A success story for cryptocurrency!

Actually, the statistic refers to the average ransom paid.  I’m not sure what the number and frequency of attacks, but they probably increased, too.

The good news, if you can call it that, is that paying the ransom generally does result in the data restored, over 90% of the time according to this report.  At least so far, the extortionists have been “honest”.

The horrifying news is that the attack vectors are not just phishing and exploits, but the number one entry point is Remote Desktop Protocol (RDP).  This is Microsoft’s version of remote login, and apparently is widely used and poorly secured.  We had remote desktops way back when Microsoft hadn’t heard of networks yet, and they were gawdawful security holes back then.  But these days with remote work, edge computing, clouds, and all that, apparently people are still using this shaky concept, with entirely predictable side effects.  Sigh.

Anyway, however they get in, and however “honest” the extortion, cryptocurrency makes it work so much better, even pseudo-anonymous systems such as Bitcoin.  The payment can be automatically whisked away, off into the Internet, split ups, mixed in, and converted to other tokens, and later to “fiat” currency.

This is ingenious technology, all the more so because anyone can do it.  It doesn’t take a genius to buy and set up a ransomware operation, it just takes money.


Given this background, it’s easy to see why regulators are tightening the screws on cryptocurrency exchanges.  These sites are where a lot of the “whisking” happens, and more and more they are being subjected to the same laws as everybody else, including anti money laundering (AML) rules.

For instance, a firm called Bittrex has been trying to get a license to operate in New York state for a while.  It’s not going well.  The application was rejected, apparently due to their disinterest in following the rules—rules that everybody else has to follow [2].  Bittrex maintains that this is “regulatory overreach”, and that other jurisdictions haven’t been so strenuous, and so on.  Good luck with that approach.

I have to say that I totally sympathize with the regulator in this case.  It seems abundantly clear that Bittrex is not, and cannot, enforce customer identification, suspicious transaction monitoring, and other AML requirements.  Without them, this will be yet another haven for tax evasion, irregular commerce, and extortion.


  1. Coreware Consulting, Ransom amounts rise 90% in Q1 as Ryuk increases. Coreware Inc, , Westport, 2019. https://www.coveware.com/blog/2019/4/15/ransom-amounts-rise-90-in-q1-as-ryuk-ransomware-increases
  2. Shirin Emami (2019) NYDFS: Why We Rejected Bittrex’s Application for a BitLicense. Coindesk, https://www.coindesk.com/nydfs-why-we-rejected-bittrexs-application-for-a-bitlicense
  3. Daniel Palmer (2019) Malware Crypto Ransoms Rose By Almost 90% in Q1: Report. Coindesk, https://www.coindesk.com/malware-crypto-ransoms-rose-by-almost-90-in-q1-report

 

Cryptocurrency Thursday

 

 

CryptoTulips For the Home: “Blockchain-powered” refrigerator

The cool thing (no pun intended) about refrigerators is how simple they are.  Plug it in, put food in, take food out.  Maybe adjust the temperature setting so frozen stuff stays frozen and the milk does not freeze.  Every once in a while, maybe a light bulb needs to be replaced.  There you go.

This spring Wien Energie and Bosch are demoing a “blockchain-powered” refrigerator (quoting Coindesk [1]).  Obviously, blockchain doesn’t “power” the appliance or anything else–in fact, blockchain sucks power big time.  As in many IoT concepts, a blockchain is actually used to log the consumption and source of the electricity used, and ultimately, to use “smart contracts” to control where and how much power is purchased.  Wein Energie is, of course, a power company, so they are on the other end of the transaction.

The idea apparently is to be able to know how much your refrigerator is using, and also to be able to specify that you want power from local renewable sources, for instance, and to use the blockchain records to prove your Carbon footprint.

The fridge also has the usual IoT widgets.  A mobile device controls the settings and tracks usage.  It also raises alerts, though the only example given is if you leave the door open.  (As I said, fridges are pretty fool-proof to start with, so it’s hard to add digital whistles and bells.)

The press release says* that this makes the customers active participants in the energy market, at the level of a every device [2].  Wein is, of course, in the energy market business.  Consumers, of course, are not.  And most of us really aren’t interested.

So, despite the Coindesk headline, this is really just another iteration of the blockchain IoT microtransaction theme (e.g., this, this, this, this) The refrigerator is implementing a general purpose electricity buying protocol that can be used for any electric device.

The Coindesk report talks about controlling the refrigerator power stand alone, i.e., with a contract for where the refrigerator gets its electricity [1].  I suspect this is misleading, because it will be completely unwieldy to have to “actively participate” device by device.  Also, it seems unlikely that you’ll want to do different things for each appliance, vehicle, screen, etc.  You’ll probably want to buy power from one source, and distribute it to all your devices.

So, wouldn’t it be better to have an account that buys electricity for all your devices?

Your refrigerator doesn’t need to make a separate bargain with the supplier, and the power company doesn’t need to know how much power your refrigerator is using, I think what you really want is an (opaque) outer “shell” that gets electricity for your whole ensemble, and a separate, private system to manage what you hook up and how you allocate within your bubble.

What I’m describing is much more complicated that the Wein concept described in the demo. I’s actually a glorified “smart meter”, that acts the same way as a firewall. The blockchain might be a good fit for the house to power company market, but the within the house management should have its own private data.   The network inside home is not particularly simpatico with an open-to-the-whole-world blockchain, it is likely that a conventional database would make more sense than a blockchain for managing your own devices in your own home.

I’m not a gigantic fan of the whole idea of “smart devices” in general, and very much not a fan of having every device talking to the open internet.  So, I’m really not a fan of this kind of “transparent” appliance connected to the grid model, blockchain or no.

In my own view, I think that using a blockchain solves the problems of the power company, but seems to be a poor match to the actual needs or desires of customers. In fact, it seems to create a lot of new problems for home owners:  now you  have to do a bunch of administrative IT work to run your refrigerator and everything else.

Ick!  How is that an improvement?


Perhaps blockchain “powered” appliances will be a candidate for the Crypto Tulip of the Year this year.  We’ll see.


* I’m relying on the Coindesk translation—I’m not fluent in German.


  1. Daniel Palmer (2019) Bosch and Wien Energie Demo Blockchain-Powered Refrigerator. Coindesk, https://www.coindesk.com/bosch-and-wien-energie-demo-blockchain-powered-refrigerator
  2. Wien Energie, Sonnenstrom kühlt Bio-Joghurt, in Wien Energie – News. 2019. https://www.wienenergie.at/eportal3/ep/contentView.do/pageTypeId/67831/programId/74495/contentTypeId/1001/channelId/-53365/contentId/4203192

 

Cryptocurrency Thursday

IOTA’s Cart Is Way, Way Before the Horse

Earlier I commented on SatoshiPay microcrasactions switching from Bitcoin to IOTA. Contrary to early hopes, Bitcoin has not been successful as a medium for microtrasactions because transaction fees are too high and latency may be too long.

IOTA is designed for Internet of Things, so it uses a different design than Nakamoto, that is said to be capable of much lower latency and fees. SatoshiPay and other companies are looking at adopting IOTA for payment systems.

The big story is that IOTA is reinventing Bitcoin from the ground up, with its own home grown software and protocols. I described it (IOTA) as “funky” in my earlier post.

It is now clear that this funkiness extended to the implementation, including the cryptographic hashes used [1,2]. This is not a good idea, because you generally want to use really well tested crypto algorithms.

So when we noticed that the IOTA developers had written their own hash function, it was a huge red flag.

Unsurprisingly, Neh Haruda reports that their home grown hash function is vulnerable to a very basic attack, with potentially very serious consequences.

The specific problems have been patched, but the fact remains that IOTA seems to be a home made mess of a system.

Narula also notes other funkiness.  For some reason they use super-funky trinary code which, last time I checked, isn’t used by very many computers. Everything has to be interpreted by their custom software which is slow and bulky. More important, this means that their code is completely incompatible with any other system, precluding the use of standard libraries and tools. Such as well tried crypto libraries and software analysis tools.

I have no idea why you would do this, especially in a system that you want to be secure and trusted.

The amazing thing is not the funkiness of the software. There is plenty of funky software out there. The amazing thing is that lots of supposedly competent companies have invested money and adopted the software. As Narula says, “It should probably have been a huge red flag for anyone involved with IOTA.

How could they get so much funding, yet only now people are noticing these really basic questions?

It is possible that these critiques are finally having some effect. Daniel Palmer reports that the exchange rate of IOTA’s tokens (naturally, they have their on cryptocurrency, too) has been dropping like a woozy pigeon [3].  Perhaps some of their partners have finally noticed the red flags.

The part I find really hard to understand is how people could toss millions of dollars at this technology without noticing that it has so many problems. Aren’t there any grown ups supervising this playground?

I assume IOTA have a heck of a sales pitch.

Judging from what I’ve seen, they are selling IOTA as “the same thing as Bitcoin, only better”. IOTA certainly isn’t the same design as Bitcoin, and it also does not use the same well-tested code.  I note that a key selling point is “free” transactions, which sounds suspiciously like a free lunch. Which there ain’t no.

IOTA’s claims are so amazingly good, I fear that they are too good to be true.

Which is the biggest red flag of all.


  1. Neha Narula, Cryptographic vulnerabilities in IOTA, in Medium. 2017. https://medium.com/@neha/cryptographic-vulnerabilities-in-iota-9a6a9ddc4367
  2. Neha Narula, IOTA Vulnerability Report: Cryptanalysis of the Curl Hash Function Enabling Practical Signature Forgery Attacks on the IOTA Cryptocurrency. 2017. https://github.com/mit-dci/tangled-curl/blob/master/vuln-iota.md
  3. Daniel Palmer, Broken Hash Crash? IOTA’s Price Keeps Dropping on Tech Critique Coindesk.September 8 2017, https://www.coindesk.com/broken-hash-function-iota-price-drops-on-tech-critique/
  4. Dominik Schiener, A Primer on IOTA (with Presentation), in IOTA Blog. 2017. https://blog.iota.org/a-primer-on-iota-with-presentation-e0a6eb2cc621

 

Cryptocurrency Thursday

“Distributed Apps” Using A Blockchain

Daniel Palmer writes at Coindesk about “decentralized apps”, AKA “dapps”, which he considers “one of the more novel ideas to emerge from the blockchain community”. Using the ubiquitous blockchain as a shared memory, and various versions of machine executable contracts (misnamed “smart contracts”), designers are creating services that have no “centralized authority”.

It’s early days, so it remains to be seen what might be done with this concept. Palmer reviews seven “dapps” under development using Ethereum, which has one of the more developed platforms, as well as its own cryptocurrency, “Ether”.

So what is being built?

  1. Vevue project

“Make video, earn bitcoin.”

They aim to “bring Google Street View to life”, by “enabling users to take 30-second video clips of restaurants, hotels, places, events and more to share with other around the world.” Revenue also comes in from responses to requests for live video in specific locations, paid in cryptocurrency.

As far as I can tell, the blockchain is mainly used to manage the flow of cryptocurrency, as people request and post videos. The overall system is organized as a DAO, but what does the organization do? I’m not sure.

As far as I can tell, most of the service is built on conventional resources, including Google Maps, YouTube, etc. These services are notably not run as DAOs. So Vevue is a “dapp” overlaid on conventional non-d technology.

  1. Etheria

A virtual world that looks like Minecraft, except “the entire state of the world is held in and all player actions are made through the decentralized, trustless Ethereum blockchain.”

The game mechanics appear to center on real estate—buying and selling ‘tiles’, and ‘farming’ income from tiles.

The supposed advantages of using the blockchain are:

“1.  Ξtheria cannot be taken down. Not by the government, not by its owner-players, not even by the developer (me). Ξtheria will exist as long as Ethereum does.

2. Likewise, Ξtheria cannot be censored or altered against the wishes of its owner-players.”

OK, I get that. But why?

This sounds like a solution to a non-problem.

  1. KYC-Chain

“KYC” stands for “Know Your Customer”, which is the standard bureaucratic process that legitimate financial institutions follow to deter money laundering and illicit commerce.

The “dapp” uses the Ethereum blockchain to make it easy to post and retrieve DYC certifications.   The certifications must come from conventional sources, i.e., “authorities”. The dapp uses Ethereum’s “trusted gatekeepers” to certify these IDs, which are cryptographically signed.

Essentially, the blockchain is making it easier and more efficient to perform conventional KYC.

This is actually a good idea, though it is nothing more than a digital notary system at base, so not that new.

One thing KYC-chain is not, though, is “trustless”. That is why it actually makes sense, of course, since the whole point is to establish trust.

  1. 4G Capital

This company aims to offer micro lending to small businesses in Africa.

We offer 100% unsecured debt funding to self-employed informal market traders”. The platform is deployed via mobile devices, which are ubiquitous.

From what I have read there is surely a problem to address, here. I don’t think that using a blockchain is necessarily better than conventional approaches, but the point is that conventional services are not reaching “the little guy”.

I have to worry a bit about this service. Microlending has received a lot of headwinds recently, for bad reasons and good ones. (“Microlending” is indistinguishable from and competes with loan sharking.) Also, there have been regulatory problems with cryptocurrency systems in Kenya and possibly elsewhere. (Crypto based systems compete with bank run payment systems.)

Myself, I tend to worry about “unsecured” loans, which tend to be usurious, exploitative, and often borderline illegal.

  1.  Eth-Tweet

Twitter like messages, stored on the blockchain. The messages therefore cannot be censored. Also, pseudonymous tipping is supported.

I’m not a big fan of spamming a blockchain with public messages, because I don’t especially want to expend my own computing power on such things (i.e., when I process and validate the blockchain).

If successful, the combination of concealed identity and inability to censor means that the channel will be filled with spam, flames, porn, and will quickly descend into useless chaos.

Also, I consider Twitter to be pointless, so why would you want to (poorly) replicate it.

  1. Ampliative Art

Ampletive Art is “a new, empowering art procedure” that “proposes to develop a reciprocity-based web platform”. The goal is for “art actors” to “contribute to the art community and be rewarded through alternative means”. (Alternative to the capitalist market, I assume.)

Users are invited to create their own galleries of digital art (for free), and to contribute to the on-line community through comments and tipping with cryptocurrency.   Any profits are disbursed accorting to “reputation” within this digital community.

I note that there are already other blockchain based certification systems for digital art. This one is a bit more “social” minded.

The web age notes that the peer to peer blockchain means “No speculative intermediaries”, which I’m willing to postulate is a real problem for artists.

It is less clear to me whether other parts of the solution make sense :

“Incentives for everyone: an alternative way to remunerate, make known and recognize your contributions to the art community.

“Income by merit: through the donations collected by your contributions and the distributed revenues received by your community reputation.”

  1. WeiFund

Let’s Decentralize Crowdfunding”, they proclaim.

Considering the already decentralized crowdfunding platforms as not decentralized enough, WeiFund is building a Kickstarter-like service using Ethereum. “Kickstarter in a box”.

All funding is in cryptocurrency and uses “smart contracts”.

A key feature is that no one can “censor” your crowdfunding activity.

Is this even legal? I would think that securities and financial regulators might take a dim view of some of this activity.

Discussion

Most of these “dapps” look to me like non-solutions, or solutions to non-problems.  It’s not clear that using blockchain technology or a DAO is actually useful.  But we shall see.

One interesting thing about this roster of “dapps” is that many of them are hybrid systems, using the “trustless” peer-to-peer architecture, blockchain, cryptocurrency, and smart contracts in tandem with conventional systems.

In fact, many of them use only some of the features of the Ethereum “ecosystem”, eschewing others. Some use the blockchain for ubiquitous write-once storage, others use smart contracts, and others use cryptographic signatures. One even uses the “trusted gatekeepers” instead of “trustless” decentralization.

In fact, when you think about it, it is interesting to speculate that pretty much the only application that would use all the features of a cryptocurrency, “trustless”, ubiquitous storage, cryptocurrency, and smart contracts would be electronic cash, a la Bitcoin. Almost any other application will probably eschew with one or more of these features of blockchain technology.

 

Cryptocurrency Thursday