Review of the top blockchain and cryptocurrency stories from March 21st, 2018. Facebook controversy, DragonMint Bitcoin mining release, IBM's Tamper-Proof Digital-Footprints, Bank of Thailand's digital currency, storing & linking data on the blockchain, and Consensus Algorithms.

1. Daily Bit #67: Facebook
Facing Investor Lawsuits

2. Table of Contents
I. Tweet of the Day
II. It’s Unwise to Keep Data Centralized
III. Digging into Bitcoin Mining
IV. Tamper-Proof Digital-Footprints
V. Additional Reading
VI. Bull: Bank of Thailand
VII.Bear: Storing, Linking Data on the Blockchain
VIII.Consensus Algorithms

3. I: Tweet of the Day
Crypto is an unknown territory.
It’s better to admit that you don’t know how it’ll play out than
to fool yourself that you can predict the crypto future.
- @muneeb

4. II: It’s Unwise to Keep Data Centralized
Facebook Hack
- Private info on 50 million users obtained by Cambridge Analytica in 2015
- Eventually worked with Trump during 2016 campaign
- Class action lawsuit filed
Damages could be in the billions, if not trillions
- David Vladeck, Georgetown Law
- FTC to determine if consent decree was breached
- Estimated damages of $40,000 per exposed user

5. II: It’s Unwise to Keep Data Centralized (cont.)

6. II: It’s Unwise to Keep Data Centralized (cont.)
More Problems
- Little data protection
- Sandy Parakilas: Data “could not be monitored by facebook”, “there was no
insight into what was going on”
- Executives turned blind eye to risk

7. II: It’s Unwise to Keep Data Centralized (cont.)

8. II: It’s Unwise to Keep Data Centralized (cont.)
Blockchain Solution
- Facebook exposed to increasing risk as platform scaled
- Decentralized systems vastly reduce cybersecurity risks
Examples
- Civic: Secure identity platform
- Valid: Monetize personal data (Civic competitor)
- Steem: Blockchain-based rewards for publishers to monetize content

9. III: Digging Into Bitcoin Mining
Changing Landscape
- New facilities
- New equipment
- Changing geography
Hashrate distribution
- Definition: Electricity consumed by network
- Major Players: BTC.com; AntPool

10. III: Digging Into Bitcoin Mining (cont.)
New Pool on the Blockchain
- Halong’s DragonMint Bitcoin miners
- BTC.com: 21.5% (16% weekly decline)
- Antpool: 14.6% (15.6% weekly decline)
Rationale
- ASICBoost algorithmic optimization, increases mining rate ~20%
- Blockchain Defensive Patent License
- “No incentives to create smaller blocks, nor does it interfere with upgrades to the Bitcoin
Protocol.”

11. III: Digging Into Bitcoin Mining (cont.)

12. IV: Tamper-Proof Digital-Footprints
Cryptographic anchors: authenticate a product’s origin and contents
- Edible ink
- Code revealed by water
- “World’s Smallest Computer”
- Smaller than a grain of salt
- <10 cents to produce
- Several hundred thousand transistors
- Mobile sensor
- Detect counterfeit goods, optical features of certain objects, presence of DNA sequences

13. IV: Tamper-Proof Digital-Footprints (cont.)
Taking Counterfeit Goods Off The Counter
- Nobody likes knockoffs (Video)
- Not as forward as “I Can’t Believe It’s Not Butter!”
- Global fraud estimated at $600 billion/year
- 70% of life-saving pharmaceuticals fake in some regions
- Frequent hand changing for long distance products
Resolution
- Infuse trust, efficiency and transparency

14. IV: Tamper-Proof Digital-Footprints (cont.)
Timeline
- First models: 18 months
- Full release: 5 years
They’re edible!

15. V: Additional Reading
● Stellar aims to launch the Lightning Network on their mainnet by December 1st.
● Here’s how a hostile takeover might play out in the token economy.
● Snapchat swung the #BanHammer, announcing a prohibition of ICO ads.
● French Finance Minister Bruno Le Maire of France declared the country “will not miss the
blockchain revolution”, as reported by Numerama.
● Tether printed $300 million in USDT tokens yesterday - it’s the first outflow in months.
● Maryland’s House Bill 163 and Senate Bill 1068 consider the study and regulation of
blockchain.

16. VI: Bull: Bank of Thailand
Banks: 14 (Thailand Blockchain Community Initiative aka TBCI)
Large corporations: 4
State enterprises: 3
Wholesale bank currency to facilitate transactions among them all: 1
Proof of concept: Inthanon
- Improve management of interbank fiat settlements
- Remain up to speed with Rest of World

17. VI: Bull: Bank of Thailand
Goals of TBCI
- Bank of Thailand governor Veerathai Santiprabhob: “Interoperability enhances
efficiency, reduces costs in our financial sector and addresses the needs of the
consumer and the business sector.”
- Expected launch 3Q2018
Potential Partner?
- OmiseGO

18. VII: Bear: Storing, Linking Data on the Blockchain
The Guardian:
- “German researchers have discovered unknown persons are using bitcoin’s
blockchain to store and link child abuse imagery”
Researchers:
- “It could become illegal (or even already is today) to possess the blockchain”
- “Legal texts from countries such as the USA [47], England [3], Ireland [32] deem
all data illegal that can be converted into a visual representation of illegal
content.”

19. VII: Bear: Storing, Linking Data on the Blockchain
Nothing New
- Genesis Block: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Panel
- Luke Dash Jr, Bitcoin Core Developer:
- “Bitcoin’s blockchain does not store images. While perhaps you could write software to
encode/decode image data as transactions, those transactions are not images.”
- “In fact, I would argue that the decoding software (that transforms innocuous data into p*rn) is
the real p*rn, and therefore is illegal to possess.”
- Brianna Wu, Software Engineer:
- “I think the facts are, it introduces a non-zero amount of legal risk to mining and hosting. And
that will be used as a weapon by hostile institutions.”

20. VII: Consensus Algorithms
Hugely important aspect of a decentralized cryptocurrency
Double Spending
- Wikipedia: A potential flaw in a digital cash scheme in which the same digital
token can be spent more than once.
Case Study: Snacks
- Dollar on a line of tape vs. vending machine
- Need to determine “one version of the truth” across network of machines
- Phil Glazer: Consensus algorithms are “designed to achieve reliability in a
network involving multiple unreliable nodes.”

21. That’s All For Today!
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