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Circling back to blockchain’s originally intended purpose: Timestamping

Timestamping is an open-source way to prove integrity on the internet, increase transparency around creation and ownership, and make the internet a safer place through more accountability and blockchain — all without needing any one person to validate content.



What was blockchain technology originally intended for? It’s generally presumed that it was created in 2008 by Satoshi Nakamoto as part of his white paper, creating Bitcoin (BTC). Since Bitcoin would be built on decentralized ledger technology, a blockchain needed to be established as the foundation for the cryptocurrency.

Since 2008, blockchain technology has expanded well beyond cryptocurrency usage and is now being applied in a variety of use cases from healthcare to finance to green tech and more.

But blockchain tech didn’t start with Satoshi’s white paper. It was actually invented in 1991 as a way to verify and protect content through a concept called timestamping.

A blockchain history lesson

In Satoshi’s famous Bitcoin white paper, he cites another paper: “How to Time-Stamp a Digital Document,” published by Stuart Haber and W. Scott Stornetta in 1991. The two researchers knew that, in an all-digital world, the issue of certifying documents — when they were created and when they were changed — would become an issue.

They explained that in the past, you could simply flip through the pages of a notebook to see dated entries. They cite other means of certification, such as mailing oneself a letter or having something notarized, but in those cases, tampering of documents would be discovered immediately. But not so in a digital world, where documents can be altered with no evidence left behind.

“The problem is to time-stamp the data, not the medium,” they wrote. The first solution they proposed was to simply send a document to a timestamping service. The TSS would then retain a copy for safe-keeping, which could be brought out for comparison when needed.

What is the problem with this solution? It relied on a third party that might mishandle it.

Instead of a third-party verifier, they would use a cryptographically secure hash function, which would serve as the unique identifier for a piece of content. Instead of sending the whole document to the TSS, the creator would send the unique identifier instead. Upon receipt, the TSS would make a confirmation with a digital signature. By checking the signature, the client would be assured that the TSS actually did process the request, that the hash was correctly received, and that the correct time was included.

But what happens if the TSS puts a false timestamp on the hash? Haber and Stornetta proposed two solutions: (1) Use bits of previous requests to create new ones, which forces a chronological record; and (2) Make the whole system decentralized, transparent and checkable.

For anyone familiar with how blockchain technology works, this is it. Blocks are created by drawing from the hash of the last block and solving the hash of the new block. Once a block is added, it’s verified by nodes on the blockchain in a decentralized system and locked into the public ledger, unable to be altered.

Original use cases

Haber and Stornetta outlined use cases for this kind of time-stamping, citing inventions or ideas where authorship would need to be proven. Because the documents are recorded as hash functions, it timestamps intellectual property and patents without revealing the contents. They also cite examples where, if a company has documents that were tampered with, they can prove the originals through the timestamp. They envisioned timestamping to encompass not only text documents but original audio recordings, photos, videos and more.

While Haber and Stornetta eventually went on to create their own company called Surety, which acted as that TSS (and, interestingly, published their hashes in the New York Times classifieds every week starting in 1995), but the idea never fully caught on. It wasn’t until Bitcoin was created in 2008 that blockchain technology was finally fully created — four years after Haber and Stornetta’s patent on it ran out.

Why do we need timestamping today?

The need for authenticating documents wasn’t just a 1990s concern. In a world where there’s so much digital content being produced and when distrust in content on the internet seems to be growing, timestamping might just be the way to achieve the transparency and accountability that’s needed.

The idea is simple. A unique hash is generated from a piece of content’s text, title or date, and is added to the blockchain. This not only locks in the time at which a piece of content was created to a public distributed ledger but if any part of that content is altered, the hash alters too — showing that it was tampered with or that a new version was created.

This allows content creators to be able to prove at any time that they created the piece by calling it up on the blockchain. Timestamping can also put an end to plagiarism and copyright disputes since original work can be found linked to its hash in an immutable blockchain.

Timestamping also increases trust for readers. With added identity tiers, they can know exactly who wrote the content and when and can view an authentication certificate. The more sites that adopt timestamping, the more readers will get used to associating timestamping with transparency, accountability and authenticity — and will reject any unverifiable content that not timestamped. Timestamping has a use case in e-commerce as well, where buyers can see original terms and agreements and not be cheated by a suddenly updated version that nulls a warranty.

With a simple implementation, the internet could become a safe, trusted place where authors can feel confident their content will remain secure, and where readers know that what they’re reading is verifiable. It’s been a long time since the original paper in 1991, but those ideas are needed today.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Sebastiaan van der Lans is the chairman of The Trusted Web Foundation as well as founder and CEO of WordProof. He’s the winner of the European Commission’s Blockchains for Social Good Contest. He’s on a mission to bring trust back to the internet.




Polkadot-centric derivatives exchange raises $6.4M in seed funding

The successful private investment round highlights growing conviction in the Polkadot ecosystem.



DTrade is planning to build the first derivatives exchange on Polkadot following a highly successful private investment round.

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Polkadot-centric derivatives exchange raises $6.4M in seed funding

Decentralized exchange dTrade is bringing derivatives trading to the Polkadot ecosystem after concluding a $6.4-million seed investment round, setting the stage for wider decentralized finance use cases on the developer network.

The private investment round was led by some of the biggest names in the blockchain venture capital world, including Three Arrows Capital and DeFiance. Polychain Capital, ParaFi Capital, Huobi, Mechanism Capital, Bixin Ventures, IOSG Ventures, Hypersphere Ventures and Fenbushi Capital also participated.

Several companies have also stepped up to support liquidity on dTrade, including Alameda Research, CMS Holdings, MGNR, Kronos and Wintermute.

Alameda Research has invested heavily in Defi this year, allocating $20 million toward Reef Finance and $4 million toward Coin98 Finance.

As a decentralized exchange, dTrade allows for the trading of perpetual swaps and options with on-chain settlement. In theory, the platform can accommodate unlimited derivatives markets without custodial and counterparty risks. The trading platform is not available to United States-based traders.

“Derivatives are on track to become the largest market in decentralized finance, similar to how they are the largest asset class in traditional finance,” said Nikodem Grzesiak, co-founder of dTrade. “Derivatives are an exciting use case of blockchain. Entirely new perpetual swaps for blockchain-based assets within Polkadot’s multi-chain architecture can be added through a simple governance proposal.”

The popularity of crypto derivatives has exploded over the past year as participants seek additional exposure to the rapidly growing market. CoinMarketCap’s 2020 annual report found that crypto derivatives accounted for 55% of the total cryptocurrency market last year.

Polkadot’s developer network has also grown rapidly, with 435 projects having launched on the platform at the time of publication.



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Dfinity’s ICP token sees violent first day of trade on major exchanges

Following five years of development, Dfinity’s Internet Computer token is trading on major exchanges.



Dfinity’s “Internet Computer” tokens are finally tradable after five years in the making.

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Dfinity's ICP token sees violent first day of trade on major exchanges

The launch of the Internet Computer utility token has seen a wild first day of trading after its long-awaited debut on exchanges.

The ICP token from Dfinity was listed on Coinbase Pro and several leading exchanges including Binance, Huobi Global, and OKEx on May 11.

Over four hours, prices for the newly launched token have swung from an early intraday high of $700 down to $250, before recovering 70% over 10 hours to trade for $425 at the time of writing. Coingecko estimates $1.8 billion worth of ICP tokens have traded just 14 hours since trade commenced.

ICP/USD chart, 24 hours: Coingecko

The Internet Computer is a decentralized blockchain project by the Dfinity Foundation. Dfinity describes the protocol’s mission as expanding the functionality of the public internet from a network that connects billions of people through standard protocols to a publicly accessible global supercomputer based on its own ICP protocol.

It has the lofty ambition of replacing the trillion-dollar legacy internet and IT industry by allowing developers to install their code directly on the public internet — dispensing with hosting companies, servers, commercial cloud services, and tech monopolies.

Like Ethereum, the platform would allow developers to run computing applications on decentralized infrastructure. However, Dfinity claims superior scalability over Ethereum’s Layer 1 mainnet.

While Dfinity has been focused on building this Internet Computer since 2016, much of the project’s inner workings have been shrouded in mystery due to its policy of closed-source development. The platform’s Mercury genesis launch event took place on May 7, marking the public launch of the platform after its completed mainnet initialization in December 2020.

ICP tokens can be staked into its governance system to earn “voting rewards” or be converted into “cycles” that can be used to power smart contract computation. The Internet Computer platform runs on a Network Nervous System (NNS), which is an open algorithmic governance system that oversees the network and the token economics.

The system is broken down into several subsections which include the ICP tokens in addition to “neurons” and “canisters” which govern the network autonomously and are explained in much more detail on the Dfinity blog.

The project started fundraising before the 2017 ICO boom under the DFN ticker but has since rebranded to ICP.



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Binance CEO says volatility ‘is not unique to crypto’: Data shows it’s Bitcoin’s jet fuel

Binance CEO Changpeng Zhao said Bitcoin’s volatility is “probably less volatile” in comparison to some stocks, but data shows Bitcoin is the incontestable winner when adjusting the metric based on returns.



During an interview with Bloomberg TV on May 3, Binance CEO Changpeng Zhao suggested that Bitcoin (BTC) “is probably less volatile” than the stock prices of Apple (AAPL) and Tesla (TSLA).

Zhao argued that crypto’s volatility was not unlike the stock market, adding: that “volatility is everywhere” and that “it is not unique to crypto.”

However, those involved in cryptocurrency trading probably know that cryptocurrency prices fluctuate a lot more than listed trillion-dollar companies. This begs one to question whether or not Zhao is detecting a trend that some may have missed?

60-day historical volatility, BTC vs. stocks. Source: Cointelegraph

The first obvious reading from the chart above is that both Bitcoin and Tesla share different volatility levels when compared to trillion-dollar stocks like Apple and Amazon.

Moreover, stocks seem to have experienced a 60-day volatility peak in November 2020, while Bitcoin was relatively calm.

Tesla is an exception rather than the norm

Another thing to consider is that Tesla’s market capitalization is $633 billion, and it has yet to post a quarterly net income above $500 million. Meanwhile, every single top-20 global company is incredibly profitable. These include Microsoft (MSFT), Google (GOOG), Facebook (FB), Saudi Aramco (ARAMCO.AB), Alibaba (BABA), and TSM Semiconductor (TSM).

The 12 most volatile $200 billion market cap stocks. Source:

The list above shows the top-12 and bottom-12 most volatile stocks to show how Tesla’s (TSLA) price swings are far off the average of other $200 billion market cap companies. The volatility seen in cryptocurrencies has been the norm, given that there is a lack of earnings, a very early adoption-stage cycle, and a lack of an established valuation model.

One doesn’t need to be an expert in statistics to ascertain that the S&P 500 index performance has been pretty much stable over the past year, apart from a couple of weeks back in September and October 2020.

12-month S&P 500 performance, 5-day chart. Source: TradingView

Zhao may be the founder of the leading crypto exchange, but he doesn’t personally trade. On the contrary, he actually recommends holding (HODL) instead of trading in every instance possible.

Lol, I don’t do leverage or loans. I don’t even trade. I just hodl #bnb.

— CZ Binance (@cz_binance) January 12, 2021

If you feel stressed out during every dip, you probably should not trade much, or at least change your trading strategy. Maybe just #HODL?

Not the best advice for our business (trading fees), but probably good advice for many new “traders”.

Not financial advice.

— CZ Binance (@cz_binance) April 22, 2021Volatility does not measure returns

Exclusively analyzing volatility presents another big problem. The indicator leaves out the most important metric for investors, the return. Whether an asset is more or less volatile doesn’t matter if, on average, one asset consistently posts higher gains than others.

MicroStrategy has listed almost every currency, stock index, and S&P 500 index component, and curious analysts can compare returns and the sharpe ratio side-by-side with Bitcoin’s.

As explained in the footnotes:

“The Sharpe ratio is a measure of risk-adjusted (really volatility-adjusted) returns. It is a way to measure how much return an investment generated for the risk (volatility) endured over some time horizon.”Bitcoin return and sharpe ratio vs. major assets and indexes. Source: Microstrategy

As the data clearly states, Bitcoin is the winner on risk-return metrics against every major asset and index over the past 12 months. A similar outcome also takes place when using a 5-year timeframe.

Therefore, Zhao may have simply incorrectly stated that Bitcoin’s volatility is similar to the stock of trillion-dollar companies. However, when adjusting the metric based on returns, it is the incontestable winner.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

The first obvious reading from the chart above is that both Bitcoin and Tesla share different volatility levels when compared to trillion-dollar stocks like Apple and Amazon.



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