We are excited to announce Coconut, a system and application solution that provides users with real name registration for the platform while enhancing the privacy. As privacy and regulation become increasingly important within the digital asset sector, Bitmain has developed a centralized identity authentication process that meets both regulatory requirements while fully protecting user privacy by separating the real-name authentication responsibility from business partner/platform.
On the other hand, we also understand that a fundamental value of blockchain is used to keep a user’s identity and their transaction history private and separated. While we strongly believe in this value, new regulations are requiring practitioners to identify business participants. Bitmain is launching Coconut to satisfy these new regulations and allow organizations to conduct business legally and compliantly.
Although there are numerous identity authentication schemes in the industry, most of these schemes focus on the use of blockchain to store and verify users’ identity information, or they attempt to carry out authentication in an absolute decentralized manner, which, considering today’s reality, seems to be part of a cryptopian future. The failure of the existing schemes to address the issues today has prevented them from being adopted widely. Coconut aims to use technical means to solve the problems in the service layer instead of the network layer.
Once users are identified by organizations, they are given an Intel® Enhanced Privacy ID (EPID) private signing key which cryptographically proves they are a valid member of a group without revealing their “real name” identity. The real-name authentication organization (“KYC service provider”) can use the Intel EPID public group key to verify a user’s identity without revealing personally identifiable information (PII data). In other words, with Coconut, users’ identities are kept private and their Intel EPID credentials allow various organizations to easily, quickly and conveniently verify a user’s authenticity. As an added protection, when the user’s Intel EPID private key is lost or copied, the valid signatures corresponding to the Intel EPID certificate can be revoked and added to the blacklist. It effectively reduces the risk of fraudulent identity.
In a conversation with Lorie Wigle, Intel VP Software and Services Group-General Manager, Platform Security Product Management, she expressed that “AI, analytics, and blockchain technologies are delivering new insights and business models from user data. However, GDPR and other privacy initiatives are placing controls on the use of personal data that could limit the impact of these breakthrough technologies. Intel EPID was created as an open technology and ISO standard to solve the intersection of managing identity at scale while offering anonymity for users and devices. Bitmain’s implementation of Intel EPID unleashes the true potential of blockchain technologies by improving privacy as a barrier to adoption.”
Being the interactive hub of user activity, aKYC service provider and business platform performs the role of an issuer of Intel EPID identities. Coconut plays crucial roles, and there are multiple business models it fits in. Coconut can be an identity authentication app that provides an Intel EPID identity service to external business platforms. Or for big corporate groups it can be used as an authentication system for risk management. After one-time real name authentication in the system, the user can participate in all businesses under the group. For institutions with high social credit, such as banks, in addition to internal use, their Coconut systems can be used externally as well.
We believe this advanced solution will enable both individuals and organizations to freely participate in blockchain and cryptocurrency technologies, despite new regulations surfacing within the industry. We believe that Coconut is the best scheme to balance anonymity and regulation. Besides, it can be implemented easily with consistent technical standards and it can be used extensively because of a strong feasibility.
We’re very pleased to share that last night our developers released the firmware for the Antminer S9 to enable what is popularly called the “overt AsicBoost” functionality. We will also release in one week the firmware to activate this functionality in other BM1387-based models namely the Antminer R4, S9i, S9j, T9 and T9+. This step will increase future effectiveness of several Antminer models and provides the framework for a strong long-term network.
Initially, we decided against activating this mathematical function in mining hardware produced by us, largely because of the legal uncertainty surrounding the use of AsicBoost. As an organization, we didn’t want to violate patent laws or act in any way that was untoward. Instead, we continued to focus our efforts on R&D and building the industry’s most efficient mining chips. It’s worth noting, as outlined in a April 2017 blog post, our ASIC chip BM1387 has the capability built into the chip technology.
In March 2018, we noticed new manufacturers of hardware advertising the use of “AsicBoost” and soon after that we noticed blocks being mined on the blockchain using AsicBoost. To give users of our mining pools the option to mine using AsicBoost we added support for it on both BTC.COM and Antpool.
Now we are pleased to give Antminer users whose miners have the capability to support this function a choice to avail this advantage without any negative impact on the Bitcoin protocol. This variant of the “overt AsicBoost” simply uses version bits different from those that other manufacturers have been using. It is equally transparent because it can be seen in the blockheader of boosted blocks.
With regard to patent rights, we continue to respect third parties’ IP right and take actions accordingly. Based on legal opinions from various jurisdictions, we believe that there isn’t and may never be a patent right over AsicBoost. Thus, all miners should be entitled to make their own choice on whether to use AsicBoost technology without anybody having an exclusive right over it.
Bitmain is committed to creating the industry standard for the most efficient and effective miners on the market. After testing AsicBoost on the Bitmain testnet, we found that the functionality does improve mining efficiency.
One of Bitmain’s top priorities and guiding principles is to provide our customers with the best mining technology in the industry and after extensive internal conversations, we have decided to activate this functionality to achieve two main objectives
Future Effectiveness: We recognize that cryptocurrency mining technology is rapidly evolving, innovating, and improving, and hardware depreciates rapidly. By activating AsicBoost, our customers’ hardware will increase in effectiveness while the future hardware we make continues to be the industry gold standard.
Stronger Network: We have been very transparent that we have activated AsicBoost in the miners on our testnet and have found that it improves efficiency in mining operations. Utilizing this technology will be very beneficial for the mining. AsicBoost has the potential to reduce the J/TH cost and increase the total hashrate of the network. By activating this upgrade widely, we are making the Bitcoin network stronger than ever before.
To put it plainly, we believe that communities served by Bitmain and its products should be supported and served as transparently as possible. Recent measures have included restricting order quantities, ensuring a first-paid-first-ship order of fulfillment, blocking IPs that we suspect to be hoarding, and publishing detailed shipping updates openly.
Based on the encouraging results from these early efforts, as well as our continued dialogue with the broader cryptocurrency community, Bitmain is redoubling its commitment to business transparency. Here’s how you can expect this effort to continue:
Disclosure policy on self-mining
Every 30 days we will publish data to advise community members which algorithms Bitmain is currently mining for itself and the total hashrate of Bitmain-owned hardware on each of these algorithms. The report will be available by this link: https://blog.bitmain.com/en/hashrate-disclosure/
Zero tolerance policy against ‘secret mining’
‘Secret mining’ is a practice whereby an ASIC manufacturer may mine with newly developed equipment prior to selling or distributing such equipment to customers. This has been criticized as conferring an unfair market advantage to ASIC manufacturers over individual community member miners. Bitmain itself has been unfairly accused of this practice. In the end, Bitmain values transparency and fair competition. We therefore remain opposed to this practice and maintain our long-held zero-tolerance policy regarding same.
We will never seek to mine ‘empty blocks’
While often described as the result of sinister intent, empty blocks often occur because of issues in block propagation at the protocol level rather than active decision-making by mining pool operators. We are actively working towards mitigating these issues. However, should there occur any unusual or excessive rate of empty block mining by a mining pool owned by Bitmain, we will seek out the cause and disclose the reasons why.
We will provide shipping and volume information of new miners to the public
We will publish the shipping and volume information for the first model of all new miners, tweeting the quantity and payment timestamps via the official Antminer Twitter account. We will do this for all rounds of shipments within the first batches of those models, because 1) these have the maximum impact on the network difficulty of a blockchain, and 2) these are the first miners that use our latest ASIC designs.
We present these efforts as our contribution to assuring both new and veteran participants of our commitment to a fair and transparent cryptocurrency ecosystem. Our intent is to both reflect and reinforce the philosophies that brought all of us here in the first place. We look forward to continuing the dialogue.
For buyers of the first batch of the Antminer Z9 mini, we will continue to post Z9 mini’s shipping updates from the new Antminer account.
For all corporate communications from Bitmain, please continue to follow our original Twitter account twitter.com/BITMAINtech (which is temporarily suspended because of confusion over Bitmain’s age) and our blog.
(This is a post on Circle’s blog to announce Bitmain’s partnership with Circle)
Today we announced the pending availability of tokenized US dollar coins supported by developments in the CENTRE open source framework and by a new partnership with Bitmain, which is also leading a $110M Series E equity investment in Circle.
USD Coin and CENTRE
The invention of cryptographic assets and blockchain-based computing have ushered in the next major era of the open internet. But a price-stable medium of exchange and store of value is missing, and badly needed in order for global financial interoperability to function reliably and consistently. Transacting in currencies which fluctuate with extreme volatility creates complexity and fragile settlement contracts, especially when compared to transacting in “tokenized fiat money” or fiat-pegged crypto assets.
A price-stable currency, such as a token pegged to the US dollar, is critical for enabling mainstream adoption of blockchain technology for payments as well as for supporting maturation in financial contracts built on smart contract platforms, such as tokenized securities, loans, and property. There are several interesting approaches to solving this need, spanning algorithmic reimaginations of money supply to crypto-backed tokens to fiat asset-backed tokens.
Circle USDC (USD Coin) is a solution that enables customers to purchase and use USDC fiat tokens for payments and trading in the crypto ecosystem. USDC provides a full reserve US dollar-backed stablecoin, and is based on the open source fiat stablecoin framework developed and governed by CENTRE, which will provide independent oversight of Circle’s offering.
Existing fiat-backed approaches have lacked financial and operational transparency, have operated in unregulated jurisdictions with unknown banking and audit partners, and have been built as closed-loop ecosystems and closed proprietary technologies.
Circle USDC addresses these problems by providing detailed financial and operational transparency, operating within the regulated framework of US money transmission laws, and reinforced by established banking partners and auditors. It is built on an open source framework with an open membership scheme that eligible Financial Institutions (FI) can participate in (CENTRE). USDC will be ERC-20 tokens minted, issued, and redeemed based on network rules defined by CENTRE.
Circle will only be the first issuing member of the CENTRE network, and further tokenized fiat stablecoins may be issued by other audited, licensed, participating network members. More about CENTRE is available here: https://centre.io
Bitmain is becoming a key supporter of CENTRE and USDC, and in conjunction with this new partnership, Bitmain is leading a $110M strategic investment in Circle. Also participating in this financing round are existing investors IDG Capital, Breyer Capital, General Catalyst, Accel, Digital Currency Group, and Pantera, along with new investors Blockchain Capital and Tusk Ventures.
Bitmain is one of the most important and forward-thinking companies in crypto, and has become a critical infrastructure provider for the entire crypto economy. Bitmain Co-founder and CEO Jihan Wu is well known for espousing a vision similar to ours regarding the creation and adoption of a new global economy powered by cryptographic assets, distributed contracts, and open source blockchain technology. We are excited to be working directly with Bitmain on realizing our shared vision.
Bitmain will also join CENTRE’s efforts to introduce multiple fiat-backed stablecoins and provide financial interoperability around the world. This partnership will help drive global interoperability that benefits consumers, business ventures, institutions, and marketplaces everywhere. Specifically, Bitmain will help CENTRE introduce multiple fiat stablecoins in a variety of geo-currency zones.
These strategic partners believe in Circle’s goal of creating an open, global model for finance for consumers and businesses everywhere. We’re humbled and excited to work with them.
Circle has grown to encompass multiple products: Circle Invest, Circle Trade, Circle Pay, and Poloniex. The refreshed look of our website circle.com, which is now updated and newly released, reflects this breadth. The pending introduction of USDC and other future stablecoins will impact and improve all of these products.
We wholeheartedly believe that an open internet of value exchange can transform and integrate the world more deeply, eventually eliminating artificial economic borders and enabling a more efficient and inclusive global marketplace that connects every person on the planet. We see the future of the global economy as open, shared, inclusive, distributed, and powerful — not only for a few chosen gatekeepers, but for all who will connect.
The development of USDC, the evolution of CENTRE, and this new strategic financing further grow our strength as we push toward our lofty goals. Yet in many ways, despite Circle celebrating a fifth anniversary this fall, we feel we are still just getting started. We’re thrilled for what’s to come.
Sean and Jeremy, Circle Cofounders
(The above is Circle’s blog post to announce the partnership with Bitmain)
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