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Trio Solutions for Instant Bitcoin Confirmations

Three Solutions for Instant Bitcoin Confirmations

Merchants and customers don’t want to wait around for Bitcoin confirmations.

One of the so-called “problems” with Bitcoin in the eyes of fresh users is the lack of instant confirmations. Transactions are usually viewed as generally secure after a few confirmations on the blockchain, but this can create a problem in situations where you want to buy something from a store and then leave without having to wait around for the next block. The time inbetween fresh blocks has led to the creation of a number of different altcoins that boast confirmation times in the one minute range, but creating an entirely fresh cryptocurrency is not necessary wen you’re just attempting to speed up transaction times. There are also people who believe that unconfirmed Bitcoin transactions are relatively secure, but the fact remains that only confirmed transactions should be trusted. Let’s take a look at three different solutions for making instant Bitcoin confirmations both possible and generally safe.

The Centralized Solution

The most common way that people are dealing with instant confirmations right now is through centralized services such as Coinbase. With this solution, the Bitcoin wallet provider is storing the private keys for customers and merchants, which means there is no risk of a double-spend inbetween two of their users. As long as the transaction is inbetween two Coinbase addresses, the transaction will actually take place off the blockchain. This means that Coinbase simply switches their internal account ledger rather than updating the censorship-resistant Bitcoin blockchain. These “off-chain” transactions also have the advantage of carrying no fees, which makes microtransactions a more realistic possibility. While this is the most widely used solution right now, it is also the most problematic. Bitcoin is supposed to be a entirely decentralized currency and payment system, so creating a fresh version of PayPal on top of the blockchain defeats the purpose of using a cryptocurrency in the very first place.

Trusted Addresses with Multi-sig

Multi-signature Bitcoin addresses are powerful contraptions that can be used to find a fresh balance of power inbetween a company storing bitcoins and that company’s customers. When using a wallet such as GreenAddress.it, there are actually two signatures that are required to finish a Bitcoin transaction. The user must very first initiate the sending of funds with their private key, and GreenAddress will then also sign off on the transaction after checking for any kind of suspicious activity. Not only is this an enhancement in the security department, but it also permits merchants to trust zero-confirmation transactions, as long as they also trust GreenAddress as a company.

Due to the fact that GreenAddress has to sign off on every transaction, any user who dreamed to accomplish a double-spend would also need to have GreenAddress as an accomplice in the fraud. A time sensitive lock is also added to the user’s wallet permits them to use their funds without a signature from GreenAddress after a certain period of time, which means the wallet provider could never prevent a user from using their own bitcoins.

Open Transactions and Federated Servers

One last solution when it comes to enhancing the security of instant Bitcoin transactions is Open Transactions. With this option, bitcoins are stored on federated servers. This means that, much like Coinbase, transactions can be made off-blockchain without having to wait for anything to confirm every ten minutes. The main advantages of the Open Transactions model over Coinbase are that the servers storing the funds can’t forge receipts and there is not one central point of failure. Voting pools also suggest an improvement over the more traditional option of having one entity store your coins. While a system of federated servers should not be considered as secure as a blockchain, it could be the flawless balance of security and convenience that many Bitcoin-related companies have been searching for over the past few years.

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QBitcoin: A Way of Making Bitcoin Quantum-Computer Proof? IEEE Spectrum

qBitcoin: A Way of Making Bitcoin Quantum-Computer Proof?

A fresh quantum cryptography-based Bitcoin standard has been proposed that could harden the popular cryptocurrency against the advent of full-fledged quantum computers. Bitcoin as it now exists involves traditional public key cryptography and thus could conceivably be hacked by a future quantum computer strong enough to break it. However, quantum cryptography, which is based not on difficult math problems but the fundamental laws of physics, is expected to be strong enough to withstand even quantum computer-powered attacks.

The proposal, dubbed “qBitcoin,” posits transmission of quantum cryptographic keys inbetween a remitter and a receiver of the eponomous named cryptocurrency, qBitcoin. The system would use p rovably secure protocols such as the BB84 quantum key distribution scheme .

To exchange qBitcoin, then, requires that there be a transmission network in place that can send and receive bits of quantum information, qubits. And that is no mean feat, considering it typically involves preserving the polarization states of individual photons across thousands of kilometers. To date, there are five known quantum key distribution networks in the United States, Switzerland, Austria, and Japan. China is working on their own massive 2000-km link, as well. And a number of satellite-to-satellite and satellite-to-ground quantum key distribution networks are also being developed and prototyped.

The thing that menaces Bitcoin may in fact also be the thing that comes to its rescue: The qubit

Which is to say that qBitcoin or something like it could not be scaled up today. But if the quantum computer singularity is approaching, in which a powerful enough machine could menace existing cryptography standards, quantum cryptography would be an essential ingredient of the post-“Y2Q” age. So existing quantum key distribution networks might at least serve as outposts in a burgeoning global quantum network, like Western Union stations in the early days of the telegraph.

Some things about qBitcoin might emerge the same to any Bitcoin user today. “Bitcoin is a peer to peer system, and qBitcoin is also peer to peer,” says Kazuki Ikeda, qBitcoin’s creator and PhD student in physics at Osaka University in Japan. He says compared to Bitcoin, qBitcoin would suggest comparable or perhaps enhanced levels of privacy, anonymity, and security. (That said, his paper that makes this claim is still under peer review.)

However, the lucrative profession of Bitcoin mining, under Ikeda’s protocol, would be very different than what it is today. Transactions would still need to be verified and secured. But instead of today’s system of a cryptographic puzzles, qBitcoin’s security would rely on a two thousand one proposal for creating a quantum digital signature. Such a signature would rely on the laws of quantum physics to secure the qBitcoin ledger from tampering or hacking.

Ikeda’s proposal is certainly not the very first to suggest a quantum-cryptographic improvement on classical-cryptography-based digital currencies. Other proposals in 2010, two thousand sixteen ,and even earlier this year have also suggested up variations on the theme. All work to mitigate against the danger large-scale quantum computers would represent to Bitcoin.

Of course, not every solution to the quantum singularity is as promising as every other. A person going by the treat “amluto” criticized Ikeda’s qBitcoin proposal on a prominent message board last week. (amluto claimed to be author of one of a previous quantum currency proposals from 2010—presumably the two thousand ten proposal’s co-author Andrew Lutomirski, albeit IEEE Spectrum was incapable to confirm this supposition at press time.)

“This is nonsense… It’s like telling that you can transmit a file by mailing a USB stick, which absolutely ensures that you, the sender, no longer have the original file. That’s wrong—all that mailing a USB stick ensures is that you don’t have the USB stick any more, not that you didn’t keep a copy of the contents. Similarly, quantum teleportation gobbles the input state but says nothing about any other copies of the input state that may exist.”

Ikeda says he disagrees with the analogy. The point, he says, is that there are no other copies of the “input state” as it’s called above—in other words of the quantum keys that secure qBitcoin. So, Ikeda says, qBitcoin is safe just like Bitcoin is safe today.

But one day, thanks to quantum computers, Bitcoin, will no longer be safe. Someone will need to save it. And, no matter who devises the winning protocol, the thing that menaces Bitcoin may in fact also be the thing that comes to its rescue: The cagey qubit.

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