What is a 51% Attack? 1 208

With the constant talk about the blockchain being immutable, one could be forgiven for thinking that it is, in fact, impossible to alter a transaction made on the blockchain. There are, however, certain circumstances in which this is not entirely true. And one of them is called a 51% attack.

51% Attack Explained

Bitcoin and other cryptocurrencies are produced by miners who contribute their computing power and technical expertise to the network. Since the blockchain is run by consensus, in which there is no centralized owner, a 51% attack is when an individual miner (or group of miners) manages to control more than 50% of a network’s computing power.

This would allow the miner (often referred to as a bad actor) to disrupt the network and rewrite history if they so desired, making the blockchain, in fact, mutable.

So, The Blockchain is Insecure Then?

Most cybersecurity experts agree that the blockchain is to all intents and purposes the most secure technology the world has ever seen. Thanks to its decentralization, there is no single point of failure, in which one database could be hacked. There is also no way of tampering with records without rewriting the whole network, unlike our current system, in which transactions can be modified an unlimited amount of times.

But, there is the potential for a 51% attack.

Why aren’t people more concerned about such a threat? Mainly, because if we’re referring to a massive network like Bitcoin, because it’s night impossible to pull off.

To gain the majority of such a gigantic network, the perpetrator would need vast sums of money, mining hardware, and electricity to do it. As more and more miners join the Bitcoin network, they bring their computational power with them. And 51% of the computational power of the Bitcoin network is rather a lot, to say the least.

And in actual fact, all they would achieve in doing so is devaluing the currency, which would leave them with less money than the fiat currency they had invested in the attack. So, the financial incentive to carry out such an attack is simply not there. The benefit of carrying out a 51% attack then, is significantly outweighed by the cost and logistical hassle.

Other Cryptocurrencies and a 51% Attack

Altcoins are more susceptible to a 51% attack, as they are not as mature nor have as much computational power as bitcoin. But there are responses to a 51% attack that a cryptocurrency under attack can apply. The most common is known as a “hard fork.” Forking is essentially another way in which the blockchain can be changed and history rewritten, but it is done with the consensus of the majority.

For example, Ethereum decided to hard fork its entire chain to recover after the DAO ‘hack’ in 2016. The majority of Ethereum miners created a fork to keep the blockchain’s history intact, but erase the hack and make it look as if the DAO attack never happened.

This led to a split among those who were not in agreement, and the emergence of Ethereum Classic, which trades at a fraction of Ethereum as we all know it. While purists are against the notion of forking to right a wrong (believing that the “code is law”), forking is starting to become common practice. Had it not been for forking, after all, Ethereum would surely have collapsed.

Similarly, a recent possible 51% attack on the Verge network produced uncertainty and concern about this privacy-oriented cryptocurrency. Close to $1 million of the currency was stolen as one single miner was able to trick the system into thinking it had the consensus. While the Verge team claim to have the “bug” under control, it’s more than likely they will have to carry out a hard fork to prevent attacks like this from happening in the future.

So, just when you thought you were getting your head around the blockchain and getting to know its undisputed qualities, you found out there’s more to this beast than meets the eye. The blockchain is not, in fact immutable. However, the chances of a 51% attack on a major network are smaller than an ant moving a mountain.

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Christina is a technology and business communicator who has worked with high profile ICOs and blockchain influencers to break industry news.

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Real Estate Doesn’t Need to Be So Complicated 1 383

Because blockchain is basically data management, one industry it stands to improve a great deal is real estate. The process of buying and selling real estate is first and foremost a data transfer. There were $463.9 billion in large cap commercial real estate investments nationwide in 2017. All that money moves paper. Since land cannot actually be owned, the idea of land ownership must be exhaustively documented, organized, purchased and sold. The myriad processes that make up one transaction, namely title transfers, putting funds through escrow, and navigating an outdated MLS system, all stand to benefit from a technology upgrade.

Blockchain could quicken and simplify these processes by virtue of its transparent, untamperable and near instantaneous handling of data. “What if you could irrefutably determine who previously owned a property, record with absolute certainty who the new owner is after it sells and reference the blockchain at any time to verify all previous owners?” asks Mark Rutzen, Co-founder and CEO of Eondo Inc.  “Even the combination or splitting of parcels would be easy to record with blockchain technology,” he adds.

Moving into the future of real estate, particularly commercial real estate and investment, will soon mean embracing the block. Here are some of the ways blockchain is changing real estate.

Financing Developers and Investors

For anyone in real estate investment or development, the most glaring obstacle is getting the upfront capital when you find a good opportunity.

“Real estate investors and developers are turning to new technologies like blockchain smart contracts to find more liquidity at lower costs,” says Joseph Snyder, CEO at Lannister Holdings, an Arizona-based technology company working to create more blockchain lending and crowdfunding tools through their Lannister Development subsidiary.

Lannister is publicly traded and regulated by the SEC, which is uncommon for a blockchain company. But Snyder sees it as an inevitability in the long term. He anticipates a future where blockchain real estate regulation is the norm, and blockchain development like Lannister’s is part of mainstream business development and commerce.

“We wanted to be heavily regulated up front,” he says. “We believe regulation and financial compliance are coming down the pipe.” And, according to their website, they “see a future of security, transparency, and growth beyond the stale oligarchy of traditionalists.”

Systems like this give access to capital to smaller investors and developers who don’t have a lot of capital to work with up front. In theory, this could level the playing field.

Real Estate Professionals Worldwide Are Developing a Blockchain Future

Others are envisioning a near future where you could buy a house with a click on a shopping cart icon. If blockchain can clean up the real estate process enough, it could do more than just disrupt the industry. It could give it a total overhaul.

The P2P nature of blockchain enables faster sales and a higher volume of deals closed with fewer legal headaches and administrative fees. It also means a trustless economy and immediate processing of property values and other technical details, like zoning regulations or utility expenses.

Organizations like the International Blockchain Real Estate Association, or IBREA, are dedicated to incubating the many possibilities produced by the intersection of real estate and blockchain. Local chapters of IBREA hold meetups in 23 cities for its 5,000 members to come together as professionals and co-educators, with the goal of moving the real estate world into the blockchain age.

According to Ragnar Lifthrasir, founder of IBREA, “real estate technology is going more peer to peer.”

“I think what people are missing with blockchain and real estate is the data problem,” he adds. “We have so much data in real estate. So to really do blockchain real estate well you also have to have a good data system, which is distributed file storage, or IPFS.”

Real Estate Without Headaches

With some real world testing to work out the bugs, blockchain real estate could take us into a future where we can buy and sell property as easily as we do a cup of coffee. With data properly arranged and the transactions secure and transparent, there will be no need for the systems currently governing the industry—nor the room for error, delays and complications they open up at every step.

For anyone with aspirations in real estate development or investment, blockchain promises to open a lot of doors.

There’s an Inflatable ‘Bitcoin Rat’ Staring Down the Fed 1 126

Someone has put a giant inflatable rat outside the Federal Reserve Bank in New York.

It’s covered in Bitcoin code, printed in rainbow colors, and is apparently a piece of installation art aimed at subverting the federal institution that controls the US dollar. Or is it pale, puffed-up pariah a commentary on Bitcoin bros themselves? Or does it have something to do with Warren Buffett, who earlier this year called Bitcoin “rat poison squared”? According to CoinDesk, who first reported on the inflatable rat, the meaning is intentionally ambiguous.

The artist behind the puzzling prank is Nelson Saiers. He describes his own work as “mystifying” and “singularly original”, notwithstanding the long history of rats being inflated as protests or used as economic and political icons in art and entertainment around the world.

“It’s art, so I hope they’re entertained by it,” he said, apparently implying that art is entertainment. “It’s informative, I hope people will learn [and] I’m hoping it’ll at least help people understand bitcoin better and be kind of faithful to what Satoshi would have wanted,” he added, citing the mysterious pseudonym of Bitcoin’s founder with a touch of reverence.

A $50 Million Artist

Saiers, a phD in theoretical mathematics, was a hedge fund manager who did that thing where you give up all the money to chase your dream of being an artist.

His financial experience includes a stint as managing director at Deutsche Bank’s prop trading desk, before becoming CIO of Saiers Capital, the hedge fund that bears his name. His creative career gives credence to the theory that working as an artist is more and more a privilege of the very wealthy.

CNBC estimated Saiers’s wealth to be around $50 million at the time of he departed from the financial industry to pick up his paintbrushes.

The Rat Joins a Tradition of Sculpture-as-Commentary in FiDi

The Bitcoin rat, which stands on Maiden Lane, isn’t the first pop up sculpture to grace Manhattan’s financial district. Last year, Kristen Visbal’s 50 inch bronze ‘Fearless Girl’ statue made waves by staring down the famous ‘Charging Bull’, to the outrage of ‘Charging Bull’ sculptor Arturo Di Modica. The 3.5 ton ‘Charging Bull’ itself was left on Wall Street in the middle of the night when Di Modica originally created it, obstructing traffic and drawing the curiosity of passers by.

When Saiers placed the Bitcoin rat, he initially set it up on private property and was promptly ushered off by security guards, who he says were good natured about the situation. He expects the sculpture to be more temporary than the aforementioned Wall Street bronzes, and will probably only be around for a few days.

A Critique of the 2008 Bailouts

The placement of the rat on Maiden Lane seems to be no accident, but rather a reference to the Maiden Lane Transactions, more commonly known as that time when the Fed bailed out the big banks after they all caused the 2008 market crash. The Bitcoin crowd’s antipathy towards the Fed and the big banks is palpable in Sairs’s rat sculpture, and while a more specific meaning eludes, perhaps the success of the piece depends upon its ability to start conversations about the state of finance.

We’ll leave it to the viewers to decide who’s the rat—the Federal Reserve, or Bitcoin itself—and what that means for the future of currencies.

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