TransitNet https://transitnet.io/ Bringing Title To Cryptocurrency Thu, 20 Oct 2022 06:30:25 +0000 en-US hourly 1 https://wordpress.org/?v=5.8.9 https://transitnet.io/wp-content/uploads/favicon-32x32-1.png TransitNet https://transitnet.io/ 32 32 What Is the Purpose of Crypto Hashing? https://transitnet.io/blog/what-is-the-purpose-of-crypto-hashing/ https://transitnet.io/blog/what-is-the-purpose-of-crypto-hashing/#respond Mon, 24 Oct 2022 08:00:32 +0000 https://transitnet.io/?p=1387 Data security has emerged as perhaps the most paramount concern in the digital world. At the time of this writing, there are over 10,000 different cryptocurrencies with a total market capitalization hovering at 900 billion USD. With so much money at stake, secure, tamper-proof transactions are critical. Blockchain or crypto hashing is the key to […]

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Data security has emerged as perhaps the most paramount concern in the digital world. At the time of this writing, there are over 10,000 different cryptocurrencies with a total market capitalization hovering at 900 billion USD. With so much money at stake, secure, tamper-proof transactions are critical. Blockchain or crypto hashing is the key to achieving this. Let’s explore what hashing is, how it works, and the importance of hash functions for transaction security.

Crypto Hashing Past and Present

The word hash originates from the 14th-century French verb, hasher, meaning to chop up. The etymology is particularly relevant to hashing algorithms where a  digital piece of data is “chopped” up into a small, fixed-size output.

Jump ahead six centuries to 1979 when the concept of a hash function was first formalized by cryptographer Ralph Merkle. Merkle, who is also credited with developing public-key cryptography, wanted to create a way to verify the authenticity and integrity of data stored electronically. The idea was simple: take some digital data, run it through a mathematical algorithm, and out pops a checksum. The algorithm is designed such that it is very difficult to generate the same checksum for two different pieces of data. This property is known as collision resistance.

How Does Crypto Hashing Work?

Hash data provides the benefit of one-way data binding. That is, it is computationally very difficult to derive the original data from the hashed value. A hash function is any algorithm that takes some arbitrary input data of any size and maps it to a string of fixed length. This string is typically referred to as a “hash value,” “message digest,” or simply a “digest”. Hash functions are a fundamental part of modern cryptography. They are used in digital signatures, message authentication codes and many other security applications.

For example, the Secure Hashing Algorithm 256 (SHA-256) hash function will always output a 256-bit (32 byte) hash value regardless of the input data size. Hash values are typically expressed in hexadecimal notation. SHA-256 will always produce the following 256-bit hash of the word cryptocurrency:

a81246023e3f6c6167a08ba224409026f88bb8e98ed1431cd53cb63a328c6e84

As you can see, the value is 64 bytes=32 bytes=256 bits in length.

However, changing the spelling of cryptocurrency to criptocurrency yields the following result:

2ebc729b61043f1e74653366f8c82a6cd93737e8382a06d29c78f9d82194cc57

Here, the length of the string is identical but the value is completely different, proving the avalanche effect: that a small change in input outputs a completely distinct string.

The most important properties of a good hash function are:

  • Deterministic: The same input always produces the same output
  • Unpredictable: Very difficult to predict the output for a given input
  • Non-invertible (one-way): Computationally infeasible to determine the input given the output
  • Collision-resistant: Extremely difficult to find two different inputs that produce the same output
  • Avalanche effect: A small change in the input should produce a significant change in the output

The Importance of Hash Functions for Crypto Transaction Security

Cryptocurrencies use a distributed ledger system, which means that transactions are recorded on a public blockchain. This offers many advantages in terms of transparency and security, but it also poses some challenges. One of the biggest challenges is ensuring that transactions cannot be tampered with once they have been recorded on the blockchain.

This is where hash functions come in. Every transaction that is recorded on the blockchain is first hashed using a cryptographic hash function. This generates a unique fingerprint that can be used to verify the authenticity of the transaction.

If someone tries to tamper with the transaction, even just a small change will result in a completely different hash value. This means that it is immediately obvious if a transaction has been tampered with.

Hash Functions and Blockchain Data Structure

Hash functions are an essential part of blockchain transaction security. They help to ensure the integrity of data and prevent tampering. They also make it possible to generate digital signatures, which provide authentication and non-repudiation. Hash functions are an essential part of blockchain technology and are what makes it so secure.

The main elements of a block in a blockchain are:

  • The data is stored or transmitted
  • A cryptographic hash of the previous block in the blockchain
  • A timestamp
  • A nonce value

The data stored or transmitted is typically referred to as the “message.” The cryptographic hash of the previous block is called the “parent hash.” The timestamp is used to track when the block was created. The nonce value is a number that is used to help prevent “replay attacks”. A replay attack is where an attacker tries to reuse a cryptographic hash in order to tamper with the data in a blockchain.

The cryptographic hash function is used to generate a digest of the message. This digest is then combined with the parent hash, timestamp, and nonce value to create the block header. The block header is then hashed again to produce the final block hash. This final hash is what is used to validate the authenticity of the block.

The data structure is composed of blocks that hold individual transactions. Each block contains a cryptographic hash of the previous block, a timestamp and transaction data. The first block in the chain is known as the genesis block. A genesis block differs from other blocks in that it does not have a previous block to reference. The genesis block is typically hardcoded into the software used to create the blockchain.

The use of cryptographic hash functions provides a way to verify the authenticity of data stored in the blockchain and prevent any tampering with the data. By using a chain of blocks, it is possible to create a secure, tamper-proof ledger of all transactions that have taken place.

How Does Hashing Work in Cryptocurrency?

In cryptocurrency, hashing is used for two main purposes: to generate a unique identifier for each transaction and to secure the network through Proof of Work. Let’s take a closer look at both applications.

Transaction ID

Each transaction in a cryptocurrency network is identified by a unique alphanumeric string, known as a transaction hash or transaction ID (TXID). This hash is generated by running the transaction data through a hashing algorithm. Importantly, each transaction hash is unique and cannot be predicted in advance. As such, it can be used to verify the authenticity of a transaction.

In addition to serving as a transaction identifier, the TXID is also used to generate a checksum for each block of transactions. This checksum, known as a Merkle root, is stored in the block header and is used to verify the integrity of the entire block. To generate the Merkle root, the transaction hashes are first arranged in a binary tree. The hash of each leaf node (transaction) is then combined with the hash of its sibling to generate a new hash, which becomes the parent node. This process is repeated until there is only one node remaining, known as the Merkle root. Any change to even one transaction in the block will cause the entire Merkle root to change, making it easy to detect tampering.

Proof of Work

The Proof of Work model is the most common form of consensus mechanism used in blockchain networks. It is a process by which nodes in the network validate transactions and add them to the blockchain. The key characteristic of proof of work is that it makes it computationally difficult for bad actors to manipulate the transaction history, as they would need to redo the entire proof of work process. Miners compete to be the first to solve a cryptographic puzzle, known as a hashcash. The winning miner is rewarded with newly minted bitcoins and fees from transactions included in the block.

Solving the puzzle requires a miner to find a nonce value that produces a valid hash. The difficulty is adjusted by changing the number of zeros that must be included in the hash. The target difficulty is such that it takes an average of 10 minutes to find a solution.

For example, if the current difficulty is set to include four zeros, then a valid hash would look something like this: 00009f2d7b5dc1cefdf29fc05a74ab86. If the number of zeroes is increased to five, then a valid hash would look like this: 000006dca70f31a9625eaaf4e36dd63c.

Proof of Stake

Ethereum uses a Proof of Stake process, but rewards miners with ether, the native cryptocurrency of the Ethereum network. In addition to transaction fees, miners are also paid a block reward, which is currently set at 3 ether.

Proof of stake is an alternative to proof of work in which node operators are chosen to validate transactions based on the number of coins they hold. The more coins a node has, the greater its chances of being chosen to validate a block of transactions. Importantly, proof of stake does not require expensive mining hardware, making it more environmentally friendly than proof of work.

Understanding Hashing Is the Key to Blockchain Fundamentals

The properties of the hashing function are fundamental to blockchain technology. Hashing algorithms generate unique IDs, guarantee data integrity and are integral to establishing consensus through Proof of Work. Our team at TransitNet is taking ownership verification to a new level with innovative tools for cryptographic assets. Contact us now to become part of our new product launch.

Sources:

Ethereum – Proof of Stake

Bitcoin Wiki – Hashcash

Investopedia – Proof of Work

Sectigo Store – SHA 256 Algorithm Explained by a Cyber Security Consultant

Etymonline – Hash

Yahoo Finance – Crypto market cap teeters above $900B as bitcoin falls

Statista – Number of cryptocurrencies worldwide from 2013 to February 2022

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Investing in TransitNet’s Community Funding Round https://transitnet.io/blog/investing-in-transitnets-community-funding-round/ https://transitnet.io/blog/investing-in-transitnets-community-funding-round/#respond Thu, 20 Oct 2022 06:16:04 +0000 https://transitnet.io/?p=1390 A community funding round is when a company lets their customers, users, family, and friends invest alongside VCs and angel investors to own a part of the company. How Does It Work? A decade ago, no one could have ever conceptualized community funding. But now with the advent of social media, entrepreneurs networks are larger […]

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A community funding round is when a company lets their customers, users, family, and friends invest alongside VCs and angel investors to own a part of the company.

How Does It Work?

A decade ago, no one could have ever conceptualized community funding. But now with the advent of social media, entrepreneurs networks are larger than ever. They can reach people interested in investing in their business via LinkedIn, Twitter and more.

Community funding rounds enable founders to raise much-needed capital from both their professional and private networks, and in a much shorter time span than the traditional dance done with VCs. The campaign can easily and quickly be shared digitally whether it be via a post, email or text message. What’s more, crowdfunding allows everyday, individual investors to invest on the same terms as professional VC’s or angel investors.

These rounds were made legal by the SEC (Regulation Crowdfunding), and recently, many community fundraising platforms have been launched to accelerate this form of crowdfunding. According to SEC rules, founders can raise up to $5 million per year worldwide from both accredited or unaccredited investors.

Join our community funding round

This year, we decided to raise a community funding round. It’s been amazing to see all the support from the community for TransitNet and to give everyone a chance to get involved in building the future of crypto. 

We chose to work with Wefunder because they make investing simple, transparent and easy. On our campaign page, you can find everything in one place. You can ask us questions there, hear more from our lead investor, review our deck and financials, ask questions and join us for exclusive investor-only events. Follow our campaign page for updates. Investing takes less than 10 minutes.

Learn more about investing and consider becoming part of TransitNet’s investor community.

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How Artificial Intelligence is Shaking Up Crypto https://transitnet.io/blog/ai-crypto-what-you-need-to-know/ https://transitnet.io/blog/ai-crypto-what-you-need-to-know/#respond Sun, 16 Oct 2022 20:17:39 +0000 https://transitnet.io/?p=1383 Crypto AI may be a game-changer for crypto trading. Discover the impact of artificial intelligence on cryptocurrency.

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Artificial Intelligence (AI) is a field of computer science that deals with the creation of intelligent agents, which are systems that can reason, learn and act autonomously. The potential of AI is vast, and it is being developed and applied in a variety of industries including healthcare, finance, manufacturing and retail. But where do AI and the blockchain intersect? Discover how AI crypto may change the face of the cryptocurrency market.

How Does AI Work?

Artificial intelligence is based on the principle that it is possible to create machines that can learn and work on their own, just like humans. This is done by feeding the machine data, which it then uses to learn and improve itself. The more data the machine has, the better it can become at its task. AI models are based on algorithms, which are a set of rules that dictate how the machine will learn and act. 

Examples of AI models include decision trees, support vector machines and artificial neural networks. Natural language processing is used in AI to enable the machine to understand human language and respond accordingly. Deep learning is a type of machine learning that is based on artificial neural networks. It is used to automatically improve the performance of a machine at a task by making use of experience.

There are numerous AI cryptocurrencies on the market. Prominent examples include:

  • Fetch AI: Building a decentralized infrastructure for artificial intelligence that will enable developers to create, train and monetize AI models. This allows businesses to access AI services in a more efficient and cost-effective way.
  • SingularityNET: Decentralized marketplace for AI algorithms. Designed to allow businesses and individuals to buy and sell AI services in a more efficient way. The platform includes a number of features that make it easy to find, compare and purchase AI services.
  • Velas: Uses AI to power its consensus mechanism. Designed to be more scalable and energy-efficient than other blockchains. The platform also includes a number of features that make it easier for developers to create and deploy applications.
  • Numeraire: Goal is to provide equity trading on the Ethereum blockchain.
  • Cortex: Powers AI-enabled smart contracts. Provides developers with a toolkit that allows them to create and deploy AI-powered smart contracts. The platform also includes a decentralized exchange where users can trade AI models.
  • Ocean Protocol: Allows businesses and individuals to share data in a more secure and efficient way. The platform includes a number of features that make it easy to find, access and monetize data.
  • dKargo: Improves the efficiency of logistics. Easily track, manage and pay for shipments.

How the Blockchain Works

Blockchains are the basis for cryptocurrencies, which are digital currencies that use cryptography to secure their transactions. Cryptocurrencies are traded on decentralized exchanges, which are platforms that allow for the peer-to-peer exchange of cryptocurrencies. The blockchain is a distributed database that contains a record of all the transactions that have ever been made. The blockchain is used to secure and verify these transactions. Each transaction is represented by a block, which contains a timestamp, the sender’s address, the receiver’s address  and the amount of cryptocurrency being traded. The blocks are then chained together, with each block containing a hash of the previous block. The blockchain is thus a chain of blocks, each of which contains a record of all the transactions that have been made.

The Confluence of AI and Cryptocurrency

It seems only natural that the emergence of AI would be followed by its entry into the new world of cryptocurrency. After all, AI algorithms have been used for trading (Algo-trading) in traditional markets for decades,  originating in the 1930s and gaining prominence in the 1980s. According to a 2020 survey, algo-trading can reduce risk by determining the impact of trades on the market, providing lightning-fast trades with bots and most importantly, removing the impact of human sentiment or emotions from the equation. Unlike established markets that have a history of millions of data points available for analysis, cryptocurrency trading is still in its infancy. This presents both opportunities and challenges for those looking to use AI in this new space.

AI for Crypto Trading

Like traditional markets, cryptocurrency is highly volatile, which makes it difficult to predict. This presents a challenge for crypto AI models, as they need large amounts of historical data to be accurate. Perhaps the most significant difference between the use of AI in traditional markets and crypto is the user base. Institutional investors spend heavily on proprietary algorithms, so few of these are available to retail investors. By comparison, the use of AI in trading cryptocurrencies is accessible to retail investors with many exchanges providing trading bots. Each of these bots has its own set of rules or algorithms that it uses to make trading decisions. Examples include: 

Benefits of AI Crypto

There are a number of benefits to using AI in the cryptocurrency market. These include:

  • Increased accuracy: AI-based trading bots can make decisions with greater accuracy than humans. This is because they are not subject to emotions or other psychological biases.
  • Faster trades: Trading bots can make decisions much faster than humans. This is important in the cryptocurrency market where prices can change rapidly.
  • 24/7 trading: AI-based trading bots can trade 24 hours a day, 7 days a week. This allows traders to take advantage of opportunities that they may otherwise miss.
  • Wallet Security: Crypto wallets are using AI to secure their users’ funds. With the increasing number of hacks, AI is being used to secure wallets by identifying and flagging unusual or suspicious activity. 
  • Regulatory Compliance: AI is being used to help cryptocurrency exchanges comply with regulations. By monitoring transactions, AI can help exchanges to identify and flag suspicious activity.

Risks of Artificial Intelligence Crypto

There are also a number of risks associated with the use of AI in the cryptocurrency market. These include:

  • Black box risk: It can be difficult to understand how an AI-based trading bot makes decisions. This “black box” risk is a major concern for many investors.
  • Security risks: Cryptocurrencies are a target for hackers. If an AI-based trading bot is compromised, it could result in the loss of funds. Furthermore, AI models can be used to help identify and prevent fraud and money laundering.
  • Dependence on data: AI-based trading bots are only as good as the data that they are given. If the data is inaccurate, the bot may make bad decisions.

AI Will Power the Future of Crypto

The AI crypto ecosystem is developing rapidly with the combination of ai models with blockchain technology. This evolution promises greater efficiency, security and accuracy for investment decisions in a volatile marketplace. At TransitNet we’re building the world’s first crypto proof of ownership registry to let people establish ownership for their crypto wallets. Join us now to be first in line when we launch.

Sources:

Cryptoslate – All AI Cryptos

Medium – The History of AI Finance

The Trade – Algorithmic Trading Survey: Hedge Fund 2020

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10 Crypto Trends on the Rise https://transitnet.io/blog/10-emerging-crypto-trends/ https://transitnet.io/blog/10-emerging-crypto-trends/#respond Tue, 04 Oct 2022 13:18:43 +0000 https://transitnet.io/?p=1380 What’s in store for crypto? Find out where the smart investors are heading and what’s set to shine next with our 10 crypto trends to track.

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It might be risky to predict the future of any currency, not least during the depths of a crypto winter, but the overall patterns don’t lie. That’s why we’re following these 10 crypto trends with keen interest. If you’re looking for a hint of where crypto, DeFi and the regulatory landscape are headed in the near future, keep an eye on these shifts, themes and features. 

1. DeFi Gains Momentum

The crypto markets have shrunk by 70% since 2021, yet decentralized finance (DeFi) applications are seeing historic growth. Why? It’s partly because investors are snapping up the opportunity to earn yields on digital assets using smart contracts. Moving traditional transactions to the blockchain eliminates the intermediary (and their fees). With monthly trading volumes steadily rising across Decentralized Exchanges (DEXs), the Total Locked Value (TLV) of assets could well go beyond the current figure of $229 billion. Now that Bitcoin offers sidechains that support smart contracts on top of the Bitcoin blockchain, DeFi is no longer confined to Ethereum. 

2. Bitcoin Put to the Test

It may have endured a turbulent 2022, but Bitcoin is still perceived as the most secure blockchain currency. With inflation hitting 9.1% in the US in June 2022 and forecast to rise as high as 18% in the UK in 2023, investors are ready to put Bitcoin to the test as a hedge against inflation. That might be a lot to ask, however. While Bitcoin is attractive during periods of inflation due to monetary expansion, its impact is limited when (as of now) inflation is due to rising commodity and utility prices. 

3. Interoperability Solutions

One of the recurring bugbears for investors is the need to maintain a range of wallets and exchanges to trade each cryptocurrency, with little support for moving assets between currencies or layers. Each platform uses its own standards and codebases and transaction fees are high. Enough is enough. New ventures such as Polkadot (from the founder or Ethereum) and ICON are intent on connecting blockchains through a centralized relay chain. In short, they’re allowing blockchains to talk to each other. For all the talk of an arms race in blockchain interoperability solutions, the bottom line is that improved interoperability benefits the community. Less friction allows more users to enter the arena. 

4. Institutional Crypto Adoption

Not only are more companies adding crypto assets to their balance sheet, but asset managers too are looking at crypto with a fresh perspective. Skepticism is giving way to pragmatism for two reasons — the comparative fragility of conventional financial markets, and the ease of buying and selling assets through DeFi. Securities such as the Grayscale Bitcoin Trust, one of the first to focus solely on Bitcoin, already manage assets worth more than $13 billion. It’s still early days, though. Institutional investment in crypto is still a fraction of investment in conventional markets and the serious business won’t begin until the pension, hedge and sovereign wealth funds come calling in earnest. 

5. Regulatory Landscape

Are the “Wild West” days of crypto coming to an end? The Securities and Exchange Commission (SEC) may still be debating whether crypto is a security or commodity, but regulatory clarity is coming. Certainly, the IRS is set to take a greater interest in crypto assets held by Americans, while the European Union is intent on establishing regulated Markets in Crypto Assets (MiCa) to protect consumers. Ultimately, greater regulation benefits investors and consumers alike and facilitates the launch of exchange-traded funds (ETF) like BITO Bitcoin — the first to debut on the New York Stock Exchange. 

6. Across the Metaverse

You don’t have to embrace the vision of the metaverse to experience its effects. Virtual spaces and communities are poised to become very real indeed, and with that the rise of:

  • Tokenization, not least non-fungible tokens (NFTs), whose market value is set to rise by 24% from 2022 to 2028 (hitting an estimated value of $70+ billion). Expect NFTs to consolidate their value as sources of decentralized funding for creators and artists, especially when it comes to building virtual properties and hosting virtual events in the metaverse. 
  • Decentralized Apps (DApps) that run on peer-to-peer networks will allow metaverse users to trade property without prohibitive transaction fees. 
  • Gaming and Finance (GameFi). The monetization of gaming could reach new heights with more opportunities to earn and trade assets between stores. 

7. Expanding Markets

Is the tipping point approaching? PayPal and Venmo now allow Bitcoin trading on their platforms, while 

Disney, Microsoft, Google and Apple are all exploring their own blockchain technology projects. Even national governments and treasuries are taking the leap of faith. El Salvador became the first of the nation states to make Bitcoin legal tender in 2021, and other Latin and Central American countries are looking to join them. 

8. Central Bank Digital Currencies (CBDCs)

Central banks around the world are also investigating options for issuing their own digital currencies. So far, 105 countries are exploring digital currencies, 11 have launched (including Jamaica and Nigeria) and 14 are undergoing pilot projects. That includes China, which is pressing on with plans for a digital Yuan wallet despite banning cryptocurrencies. Should CBDCs gain traction, crypto interoperability will gain further momentum as countries seek to standardize transactions. 

9. Going Green

Bitcoin mining accounts for 0.5% of global electricity consumption and the serious environmental impact is not likely to go unnoticed any longer. Even if 0.5% doesn’t sound like a lot, it’s more than the consumption of Sweden, which also happens to be one of the countries pioneering net-zero, renewable options for establishing Proof of Work. We’re a long way from eco-friendly crypto, but the footprint is now part of the debate. News that the world’s second most valuable cryptocurrency, Ethereum, has switched to a Proof of Stake mechanism instead of Proof of Work (cutting energy consumption by 99.95%) shows how much pressure the major currencies are to get a grip on their carbon footprint.

10. Cybersecurity Threats

The safest prediction one can make about cryptocurrency is that the danger from hackers will increase steadily. Cybercriminals stole $1.9 billion in 2022 and they’re unlikely to lose enthusiasm. There were 97 million cryptojacking attacks in 2021, targeting exchanges and wallets. It’s a reminder why any investor needs to carefully evaluate the merits of a hot/cold wallet or crypto vault for their assets. 

Secure the Future of Crypto With TransitNet

By its very nature, the future is uncertain. That calls for confidence and peace of mind today. Secure your assets with the industry’s first offchain title registry from TransitNet and prove ownership, should the worst happen. 

Sources

Imaginovation – 10 Promising Cryptocurrency Trends to Watch for in 2022

World Economic Forum – What’s next for bitcoin and crypto? The trends to watch in 2022

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TransitNet’s Beta Product is Here! https://transitnet.io/blog/transitnets-beta-product-is-here/ https://transitnet.io/blog/transitnets-beta-product-is-here/#respond Thu, 29 Sep 2022 06:19:25 +0000 https://transitnet.io/?p=1401 The big day has finally arrived — today is the day we release our beta! 🎉 Thanks to alpha user feedback, we’ve already rolled out a number of enhancements. Now our beta version allows the documentation of ownership of crypto wallet addresses, making it safer to transact with crypto and hold it in self-hosted wallets. […]

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The big day has finally arrived — today is the day we release our beta! 🎉

Thanks to alpha user feedback, we’ve already rolled out a number of enhancements. Now our beta version allows the documentation of ownership of crypto wallet addresses, making it safer to transact with crypto and hold it in self-hosted wallets.

With TransitNet’s first-of-its-kind software, not only can users document ownership of crypto wallet addresses, but they can also securely share that information with other parties.

Here are some examples of how TransitNet’s title records can benefit users:

  • Prevent scams and losses from wrong transactions by verifying the identities of the parties involved before sending or receiving crypto;
  • Mitigate the risk of lost crypto with proof of ownership records that can be provided to authorities in case of theft or disputed payments;
  • Monitor wallet addresses 24/7 to detect any movements of crypto in or out of a user’s verified wallet;
  • Allow crypto to serve as collateral or proof of reserve without being locked up, facilitating crypto’s use in a greater range of financial activities; and
  • Demonstrate seamlessly all the accounts and wallets that are owned by an individual or business, a valuable development for industries such as auditing and insurance.

Our product is chain-agnostic, allowing users to establish titles to a variety of addresses on different blockchains and pull those records together in one place. We’re at the forefront of changing the crypto landscape by building the keystones crypto needs for Web3. 🤩

Access to our beta is currently available on an invitation-only basis.

Want to get on the invite list? ✉ Go to our homepage and drop your email in the “Join Now” box.

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What Is the Metaverse Crypto? https://transitnet.io/blog/what-is-the-metaverse-crypto/ https://transitnet.io/blog/what-is-the-metaverse-crypto/#respond Thu, 15 Sep 2022 09:00:03 +0000 https://transitnet.io/?p=1337 The term crypto metaverse is a buzzword that gets tossed around a lot these days. Numerous explanations are floating around the web of what it actually means. Let’s take a deep dive to get some clarity.

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We’re all familiar with the word universe to describe the totality of everything that exists, including all matter and energy, the physical laws and constants that govern them, and all space and time. In other words, the universe is the sum of all things. But what’s the metaverse? Let’s break it down. The prefix meta (Greek origin) in modern language means “beyond” or “higher.” Metaverse simply loses the “uni” in universe and replaces it with meta. 

What Is the Metaverse Crypto?

Defining the metaverse is difficult but it has now evolved to mean virtual, interactive worlds linked to our physical world. The metaverse is a collective noun that encompasses all virtual worlds, or metaverses, that offer interactivity. However, there’s a difference between interacting with a virtual world in a game like World of Warcraft and experiencing a metaverse. Game development veteran and CEO of Playable Games, Raph Koster, defines metaverse as a virtual world that blends with the real world. For example, a student’s avatar could attend a virtual classroom that mirrors their actual classroom, while simultaneously sitting beside a student who is physically present in the real classroom. In another case, an employee could sit at a virtual desk and get paid a real salary.

Genesis of the Metaverse

In his science fiction novel, Snow Crash (1992), author Neal Stephenson coined the term metaverse, referring to a virtual reality simulation where people can interact with each other, as well as digital representations of real-world entities. The Wachowskis’ Matrix franchise further popularized the metaverse, where the titular matrix is a simulated reality where intelligent machines create a simulated world to keep humans docile. These fictional narratives provided inspiration for the virtually limitless potential of the metaverse using current and emerging technology including augmented reality and virtual reality.

The Purpose of the Metaverse

The metaverse is in its infancy. The future will determine its purpose. Right now, the metaverse offers virtual worlds where people can socialize, create, buy, sell, learn and play with a connection to the real physical world. Technologies beyond the horizon will realize the potential and direction of the metaverse.

From Metaverse to the Crypto Metaverse

The crypto community repurposed the term “metaverse” to refer to decentralized virtual worlds incorporating the blockchain, where users can own their assets, and transactions are recorded on a public ledger. These metaverses are sometimes called crypto metaverses, metaverse crypto, or virtual blockchain worlds (VBWs). Games are the most dominant applications harnessing crypto.

Crypto Metaverse Games

Game developers are the dominant players integrating crypto-based tokens for buying and selling game assets, as well as in-game microtransactions. Four of the best non-fungible token (NFT) games include Axie Infinity, The Sandbox, Gods Unchained and  DeFi Kingdom. Gameplay may give players the opportunity to earn NFT game assets like avatar armor, music, art or practically anything you can think of. NFTs can be sold in a marketplace, then converted to fiat currency on an exchange. The first and most well-known crypto metaverse is Decentraland, a decentralized virtual world built on the Ethereum blockchain.

In Decentraland, users can purchase land parcels that they can use to build whatever they want, from simple 3D scenes to complex games and applications. Decentraland is powered by the Ethereum-based MANA token. Blockchain games can also offer Decentralized Autonomous Organization (DAO) meaning that the game is not controlled by a single entity. Instead, it’s governed by all the players who have an economic stake in the game powered by crypto.

Crypto Metaverse — Moving Beyond Games

Beyond games, the crypto metaverse has gained a foothold with big brands. Adidas sold $22 million worth of NFT shoes in less than 10 minutes. Top Shot, an NBA highlight reel platform minted on the blockchain, had $230 million in sales in 2020. Approximately 7 million people representing 224 countries visited Nikeland, Nike’s virtual store on Roblox. And Sotheby’s metaverse reinvented its staid auction house image when it sold an NFT of digital art for $69 million, the third-highest price ever paid for a piece of digital art. Companies see the potential of building brand experiences through virtual worlds and customer interaction. The metaverse offers that opportunity and crypto becomes a means to purchase in a virtual world and redeem in the physical one.

The Crypto Metaverse Is Just Beginning

Crypto already plays a fundamental role in gameplay and brand experience. With Facebook rebranding as Meta and internet giants like Google and Nvidia heavily investing in the metaverse, crypto would seem to be the logical eCommerce currency in virtual worlds as new applications are imagined and developed. Bloomberg estimates that by 2024, revenue from the metaverse market may approach $800 billion. Exponential growth means a robust crypto infrastructure is essential. Our mission at TransitNet is to tighten the security of cryptocurrency assets with the first offchain title registry of record for digital wallets. Protect yourself —  reach out to us to keep abreast of our latest technology. 

 

Sources

Adidas – Into the metaverse

Bloomberg – Metaverse may be $800 billion market, next tech platform

Forbes Advisor – Top NFT Marketplaces Of 2022

Gods Unchained – Gods Unchained 

Next Advisor – Want to Buy Crypto? Here’s What to Look for In a Crypto Exchange

Nikeland – Nikeland

Online Etymology Dictionary –  meta

Sotheby’s Metaverse – Sotheby’s metaverse

Venture Beat – Raph Koster’s real talk about a real metaverse

Wired – What Is the metaverse, exactly?

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What Is a Crypto Seed and How Can You Store It? https://transitnet.io/blog/what-is-a-crypto-seed/ https://transitnet.io/blog/what-is-a-crypto-seed/#respond Fri, 09 Sep 2022 17:48:45 +0000 https://transitnet.io/?p=1333 A crypto seed is the combination of 12 or 24 words used as a backup when users set up a bitcoin hardware wallet. Here’s a deeper look into how they’re used and stored.

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Buyers of crypto are most likely aware of the private key associated with their currencies, NFTs, and other assets, but what other security measures exist to ensure rightful ownership? Crypto seeds and seed phrases offer crypto owners a viable backup that they can use in their hardware wallets or offline storage vehicles.

What Is a Crypto Seed?

A crypto seed phrase, otherwise known as a seed backup, recovery phrase, seed words, mnemonic phrase, or secret words, is the combination of 12 or 24 words used as a backup when users set up a Bitcoin or cryptocurrency hardware wallet. More specifically, a seed phrase is an easily remembered representation of a seed, which is really just a long string of random digits. The crypto industry recognized that it would be easier for users to memorize and/or store crypto seed phrases than the actual crypto seeds.

Different wallets and wallet types have different backup processes, and it is quite possible that software wallets or “hot” wallets do not prompt account holders to physically back up a seed phrase. For the most security, users should back up their crypto in hardware or “cold” wallets or in some type of offline, physical location. Most hardware wallets make it very difficult to initialize the wallet without physically backing up a seed phrase. 

Seed phrases generated by wallets that follow the latest cryptocurrency standards pulled from a list of 2,048 unique words established as part of Bitcoin Improvement Proposal 39, or BIP39, explains Unchained Capital. Each word represents a range of bits in that long, random number that is your seed.

How Do Crypto Seeds Work?

Seed phrases are generated by the wallet at the time of account setup. Users should then secure this seed phrase for safekeeping in case they ever need to recover their wallet, at which point they would use these words for that purpose.

The 24 words of the crypto seed phrase represent the random digits of the underlying crypto seed, from which all the keys in the wallet are derived. The seed is used to generate the user’s master private key, which generates the rest of the user’s private keys. The private keys are then used to generate corresponding public keys. 

Therein lies the risk of losing access to one’s crypto seed phrase: malicious actors with access to the seed phrase can quickly gain access to the user’s private keys and thereby their crypto assets. 

How To Store Your Crypto Seeds Safely

There exist several strategies to keep your crypto seed phrases safe. Let’s have a look at a few of these.

Seed Phrase Splitting

​​Seed splitting involves separating seed phrases into two or more lists and storing each section securely. This can be carried out both virtually and physically, though physical storage tends to be safer. 

Physical Storage in a Steel Plate or Capsule

While security keys can serve as a physical location on which to store crypto seed phrases, they can still be lost, stolen, or compromised. 

A better solution is the use of steel plates and capsules that allow users to physically store their seed phrases, or split seed phrases, easily and securely. A steel capsule works by separating each word of the user’s seed phrase using both character plates and separator plates, according to MakeUseOf.com. It then securely locks them in using a deep thread that holds the capsule’s shell and core together.

Additional Security for Crypto Assets

As noted above, once a crypto seed phrase is lost or stolen, it is quite possible that a criminal may gain unlawful access to the user’s private keys. Once someone obtains the crypto’s private keys, it may be hard for the real owner to have recourse or even prove their ownership.

Cold hardware wallets certainly add heightened security for crypto owners, but extra protection is needed. As the industry evolves, third-party services have emerged to help investors protect their crypto wherever that crypto is stored, including wallets, platforms and exchanges. TransitNet is creating the industry’s first third-party title registry that demonstrates proof of ownership of crypto assets that is currency-agnostic and that can be used for a wide range of digital currencies and other crypto assets.  Join the forefront of the new crypto infrastructure.  Request an exclusive registration for TransitNet’s offchain title registry when it launches today.

Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, he covers such topics as security, mobility, e-commerce and the Internet of Things.

Sources

Unchained Capital – What is a bitcoin seed phrase and how does it work?

Unchained Capital – The ultimate guide to storing your bitcoin seed phrase backups

MakeUseOf.com – 4 Ways to Store Your Crypto Seed Phrases Securely

Ledger – How to Protect Your Seed Phrase?

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What’s the Difference Between Offchain vs. Onchain Crypto Transactions? https://transitnet.io/blog/offchain-vs-onchain-transactions/ https://transitnet.io/blog/offchain-vs-onchain-transactions/#respond Wed, 24 Aug 2022 20:42:29 +0000 https://transitnet.io/?p=1302 Should you choose offchain or onchain transactions for your crypto? Discover the key differences and advantages of each.

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By Nick Marshall

Every 2.58 seconds, on average, a new Bitcoin transaction is ready to be recorded on the blockchain digital ledger. That might be a fraction of the volumes that the major payment providers handle, but a Bitcoin transaction is a complex process. It doesn’t have to be, however. Just as crypto traders can choose to store their coins in either a hot wallet or cold wallet, they can choose between offchain or onchain for transactions. Find out why there could be some attractive advantages to choosing the former.

What’s the Difference Between Offchain vs. Onchain Transactions?

In theory, crypto transactions happen in real-time, but in practice, each one must go through a verification stage that imposes a delay. With an onchain transaction, that service is provided by crypto mining. It’s a lucrative business that requires considerable processing power. Crypto miners solve the algorithms that allow new data to be added to the blockchain. The entire transaction takes place within the blockchain, from linking the sale or purchase to a Bitcoin address to generating the private key which keeps the transaction secure. Miners receive fees for every transaction they “solve”, which vary according to the size and volume of network traffic. 

Offchain transactions, on the other hand, take place outside the blockchain. The transaction is mutually agreed upon between buyer and seller and is both validated and guaranteed by a third party. The funds themselves need never leave a private wallet, but their value is transferred between parties. The simplest methods of completing an offchain transaction are:

  • Swapping the private keys to a wallet directly between two parties. This transfers access to the assets from one owner to another, but not the coins themselves. 
  • Using a third party to guarantee and validate the transaction (similar to the way PayPal transfers funds). Transactions from one Coinbase wallet to another, for example, occur offchain, with the exchange acting as a third party.  
  • Converting the cryptocurrency value into a redeemable coupon that is then exchanged between parties.

The key difference between offchain and onchain is that an offchain transaction requires no changes to the blockchain. Consequently, transactions are genuinely instantaneous and incur no additional fees, since there is no mining involved. 

The Advantages and Disadvantages of Each

Unlike the hot and cold wallet debate, security isn’t the deciding factor when it comes to the choice between onchain and offchain transactions. For a start, the onchain registry is historically secure and while the exchanges themselves might be vulnerable to hacking, the Blockchain has a built-in resilience. Moreover, the onchain registry has enjoyed almost 99% uptime since its inception. 

The problem with onchain transactions is the speed and cost. Transactions are only valid once the public ledger is updated, and that can take time when volumes are high. The corresponding fees rise to levels that some traders may find prohibitive. A further drawback is that transactions cannot be changed once they have been validated. They’re publicly available too, so there’s the prospect of linking back a sale to a wallet or identity, even if the process is convoluted. 

Offchain transactions, by contrast, are fast and free. The transactions will eventually have to be recorded on the Blockchain, but it’s possible to make an instant trade at no extra cost without delay. Since these trades are not publicly viewable, there’s also a greater degree of anonymity. 

What TransitNet’s Offchain Title Registry Means for your Transactions

Since TransitNet offers the first offchain title registry, transferring legal ownership of cryptocurrency is seamless and secure. That’s a particularly alluring proposition for high-value or volume transactions where anonymity is required. For example, title can be transferred for loan collateral or valuation without having to hand over the assets themselves.

Without a secure offchain title registry, this trust would be difficult to emulate because the only way to establish asset ownership would be through the private key. If that key is lost, the assets follow. Ultimately, offchain transactions lend a degree of fluidity to crypto trading that complements the security of onchain transactions. In other words, offchain preserves the most appealing feature of Blockchain — the absence of overall control — but accelerates the process for validating transactions without an all-seeing institution in charge. 

Sources

Investopedia – On Chain Transactions (Cryptocurrency)

Investopedia – Off-Chain Transactions (Cryptocurrency) Definition.

Forbes – On-chain vs off-chain

Outlook – Stellar Tops Crypto Transactions By Volumes; Bitcoin Fourth, Ethereum Third: Report

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TransitNet Named to VentureBeat’s Top 10 “Blockchain Startups to Watch” https://transitnet.io/blog/transitnet-named-to-venturebeats-top-10-blockchain-startups-to-watch/ https://transitnet.io/blog/transitnet-named-to-venturebeats-top-10-blockchain-startups-to-watch/#respond Tue, 23 Aug 2022 06:02:48 +0000 https://transitnet.io/?p=1394 VentureBeat recently featured TransitNet as one of the “10 blockchain startups to watch.” VentureBeat is a premier tech news outlet with 12 million monthly page views and a leader in covering transformative tech. The article spotlighted 10 blockchain startups who are “well-positioned to make a statement in the blockchain space over the next few years.”  […]

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VentureBeat recently featured TransitNet as one of the “10 blockchain startups to watch.” VentureBeat is a premier tech news outlet with 12 million monthly page views and a leader in covering transformative tech. The article spotlighted 10 blockchain startups who are “well-positioned to make a statement in the blockchain space over the next few years.” 

Analyzing TransitNet’s service offerings, innovation and market capabilities, VentureBeat credited TransitNet as “a security-enhancing service” that facilitates “the flow of information to enable safe transactions and unlock new use cases for crypto.” 

Are you interested in being part of what we’re doing? If so, consider investing in TransitNet and become part of our mission to make crypto safer for everyone!

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What Does a Fork in Crypto Mean? https://transitnet.io/blog/what-is-a-crypto-fork/ https://transitnet.io/blog/what-is-a-crypto-fork/#respond Wed, 17 Aug 2022 08:00:09 +0000 https://transitnet.io/?p=1299 A crypto fork occurs whenever a community member or group wishes to make a change to the blockchain’s protocol.

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by Jake Wengroff

Cryptocurrencies are powered by the blockchain. As open-source software, the blockchain, and by extension, cryptocurrencies, rely on communities of developers to maintain and expand the underlying code. A crypto fork occurs whenever a community member or group wishes to make a change to the blockchain’s protocol, or basic set of rules. However, to do this, the original protocol is not completely rewritten. Instead, the chain is replicated and split from the original, creating a secondary chain that shares all of its history with the original. However, this new fork is “headed off in a new direction,” explains Coinbase.

The term “fork” is common to any software developer, as a fork is simply a copy of a codebase or repository intended to be refactored or reworked. Forks allow developers to experiment freely with code without affecting the original, underlying source code. This is especially helpful with open-source projects, which attract a community of developers eager to add features or remove bugs from public code repositories.

The Need for Crypto Forks

Most digital currencies have independent development teams responsible for changes and improvements to the network. As such, a crypto fork occurs so that a team or community member can experiment with adding more features or upgrading the currency’s security. 

Further, the developers of a new cryptocurrency can use a fork to create entirely new coins and ecosystems. By forking the chain, a developer can work on new features as a project, that when tested and validated by others in the community, can be incorporated back into the original chain.

Soft Fork vs. Hard Fork

There are two different types of forks: hard forks and soft forks. Both hard forks and soft forks are identical in the sense that when a cryptocurrency platform’s existing code is requested to be changed, the existing version remains on the network while the new version is created.

With a soft fork, however, only one blockchain will remain valid as users adopt the update. With a hard fork, both the old and new blockchains exist side by side, which means that the software must be updated to work by the new rules. Simply put, both forks create a split, but a hard fork creates two blockchains and a soft fork is meant to result in only one. Many people view a soft fork as nothing more than a software upgrade. 

Considering the differences in security between hard and soft forks, almost all users and developers call for a hard fork, even when a soft fork seems like it could do the job. Overhauling the blocks in a blockchain requires a tremendous amount of computing power, but the privacy gained from a hard fork makes more sense than using a soft fork. In cases of hard forks, two different coins and blockchains will run simultaneously after the fork. A hard fork generally ends in one of two ways:

  1. One blockchain becomes dominant, resulting in the other blockchain having low community adoption and value; or
  2. Both blockchains are adopted, co-existing and operating independently of each other with roughly equal community adoption and value. 

The first outcome is the most common, as happened with Ethereum and Ethereum Classic, with Ethereum vastly outperforming Ethereum Classic. The second is rarer, but it does happen, explains Commodity.com. Bitcoin Cash and Bitcoin ended up broadly coexisting once the SegWit2x update failed to materialize.

Keeping Your Crypto Safe 

Though the blockchain cannot be hacked, and crypto forks often mean that the blockchain is getting upgraded with new features, including those related to security, risks abound. Wallets, platforms and exchanges that store and transact crypto can be subject to attack. Once malicious actors obtain a crypto’s private key, it may be hard for the true owner to have recourse or even prove their ownership.

The industry needs market-driven solutions that can keep up with the ever-complex marketplace of crypto assets. TransitNet is creating the industry’s first third-party title registry that demonstrates proof of ownership of crypto assets, to add a layer of protection for investors in digital currencies and other crypto assets.

Join the forefront of the new crypto infrastructure. Request an exclusive registration for TransitNet’s offchain title registry when it launches today.

Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, he covers such topics as security, mobility, e-commerce and the Internet of Things.

Sources

Coinbase – What is a fork?

Investopedia – Hard Fork (Blockchain)

Commodity.com – What Are Forks and How Do They Impact the Price of Cryptocurrency?

CoinTelegraph – Soft Fork vs. Hard Fork: Differences Explained

GitHub – Fork a repo

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