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How SHA256 And Mining Protect The Bitcoin Network
Published
2 years agoon
By
CG_Arman [ad_1]
How mining works is fascinating. When I explain it to people, I enjoy seeing their face the moment their mind is blown. I’ll explain it here, but just know, I’m imagining all your faces as your minds blow!
I have to start with hash functions. Without hash functions, Bitcoin would not be possible. Let me explain what they are first, not only so you can sound cool at parties, but also because it’s fundamental to understanding how Bitcoin works — particularly mining but also transactions — under the hood.
You don’t need to understand how Bitcoin works in order to benefit from it, just like how you don’t need to understand how TCP/IP works to use the internet. But do go on, because it’s quite interesting and I’ll make it easy to understand, I promise.
Hash Functions
Let’s start with a schematic which I’ll explain below…
(Graphic/@jirols_btc)
On the left is the input, the center is the function, and on the right is the output. The input can be any data, as long as it’s digital. It can be of any size, provided your computer can handle it. The data is passed to the SHA256 function. The function takes the data and calculates a random-looking number, but with special properties (discussed later).
The first Secure Hash Algorithm (SHA) was originally developed by the NSA and there are many different versions now (Bitcoin uses SHA256). It’s a set of instructions for how to jumble up the data in a very complicated but specified way. The instructions are not a secret and it’s even possible to do it by hand, but it is very tedious.
For SHA256, the output is a 256-bit number (not a coincidence).
A 256-bit number means a binary number 256 digits long. Binary means the value is represented with two symbols, either 0 or 1. Binary numbers can be converted to any other format, for example decimal numbers, which are what we are familiar with.
Although the function returns a 256-digit binary number, the value is usually expressed in hexadecimal format, 64 digits long.
Hexadecimal means that instead of 10 possible symbols like we are used to with decimal (0 to 9), we have 16 symbols (The ten we are used to, 0-9, plus the letters a, b, c, d, e, and f; which have the values 11 to 15). As an example, to represent the value of decimal 15 in hexadecimal, we just write “f” and it’s the same value. There’s plenty of information available online with a quick Google search if you need more elaboration.
To demonstrate SHA256 in action, I can take the number 1 and run it through an online hash calculator, and got this output (in hexadecimal):
The top box is the input, the bottom box is the resulting output.
Note that all computers in the world will produce the same output, provided the input is the same and the SHA256 function is used.
The hexadecimal number output, if converted to decimal, is (notice it takes more digits to write):
48,635,463,943,209,834,798,109,814,161,294,753,926,839,975,257,569,795,305,637,098,542,720,658,922,315
And converted to binary it is:
11010111000011010110010011100111111111100110100111111001110000110011101011010111000000001001110111111110101101000111111010101110100011110101101101001001110101010100010001011110001110101001001110000000001111001010010110111011011011110000111010110110100101111010111001101011100110101110011010111001101011100110101110011010111001101011100111
Just out of interest, here is the same value in base 64.
1w1k5/5p+cM61wCd/rR+ro9bSdVEXjqTgDylu28OtpY=
Note that the smallest possible value SHA256 could return is zero, but the LENGTH is still 256 bits. This is how zero is represented:
0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000
And the largest possible value is:
1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111
In decimal, that’s:
115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,935
In hexadecimal, it is:
FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF
Note there are exactly 64 F’s.
Zero in hexadecimal can simply be written as one single zero, but for hash output, it’s 64 of them to keep to the requirement of a fixed size output:
0000000000000000000000000000000000000000000000000000000000000000
Here is a summary of some facts about the hash function that are vital to appreciate:
- The input cannot be determined from the output
- The input can be any length
- The output is always the same length
- The output will always be reproduced identically if you provide the same input.
- Any change to the input, no matter how small, will cause an unpredictable and wildly different output
- The output is seemingly random, but is actually deterministic (meaning it is calculated and reproducible)
- The output cannot be predicted. It can only be calculated and this takes a measurable amount of work by a computer (and hours with pencil and paper! Don’t do it.)
Now that you understand the basic concept of what a hash is, you can understand the explanation of how Bitcoin mining works.
But before you move on, I recommend you go to an online hash calculator and play with it a little and test for yourself what I’ve said about hash functions. I like this one.
Mining
I will start by demonstrating a concept of work, which is where “proof-of-work” in Bitcoin comes from.
Go to the online hash calculator and type “I am creating 50 bitcoins and paying myself this amount.”
Type it exactly, case sensitive, including the full stop. You should get this output:
Now, let’s create a rule that says for this payment message to be valid, we need the hash to start with one zero. To do that, we have to change the input somehow. But, as you’ve learned, it’s not predictable what the output would be for a given input. What modification can we make to ensure a hash starting with zero?
We have to add data using trial-and-error. But we also don’t want to change the meaning of the input message. So, let’s create a field (an allocated section) called a “nonce” which will hold a nonsense value.
The word “Nonce” is supposed to be derived from “number only used once,” but I don’t see it.
Notice below how just adding “Nonce:” as an extra field heading changes the hash output.
The output still doesn’t start with a “0”, so let’s add some nonsense (I added a meaningless “x”):
It still doesn’t start with a zero. I tried some more characters until the hash started with a zero:
There we go. Now, according to the arbitrary rules I set for this pretend version of Bitcoin, the text in the input window is a valid block with a single transaction paying me 50 bitcoin.
Note that Bitcoin blocks are essentially pages of a ledger. Each block is numbered and creates new bitcoin, along with listing the transactions between users. This record is where bitcoin lives.
Now a new rule. For the next block, the hash of the previous block must be included. I’ll add a little complexity and add a few more fields to approach what a real Bitcoin block has.
The hash starts with an “f” not “0”, so I’ll have to try some values in the nonce field:
This time I was luckier and found a suitable nonce after only four tries. Recall that for the first block it took 22 tries. There is some randomness here, but generally it’s not too difficult to find a valid hash if all we’re trying to get is one zero. There are 16 possible values for the first hash digit so I have a 1 in 16 chance that any modification I make to the input field will result in the first hash digit being “0.”
Note that Bitcoin’s fields are like this, but there’s more detail that I haven’t added. This is just to illustrate a point, not necessarily to detail exactly what a Bitcoin block looks like.
I will add a time field to the next block as I need that to explain the “difficulty adjustment” next:
Above is block number three. It includes the previous block’s hash and now I’ve also started to include the time. The nonce I found successfully made the hash start with a zero (I just kept typing a “1” until the hash target was met).
There’s enough here now that I can start explaining a few interesting concepts about the Bitcoin blockchain and mining.
Winning A Block
The mining process is competitive. Whoever produces a valid block first gets to pay themselves a set block reward. A miner that produces the same block number a bit later gets nothing — that block is rejected. Explaining why that is will cause too much of a diversion now, so I’ll explain it in the appendix.
After block three is found and broadcasted to everybody (all the Bitcoin nodes), all the miners stop working on what would have been their version of block three. They begin to build on top of that successful block three (by pulling its block hash forward into a new block) and start working on finding a suitable nonce for block four. The winner publishes the result and then everyone starts working on block five, etc.
With each block, new bitcoin are being created and collectively make up the total supply so far. If there are many miners, then statistically we should expect that blocks will be produced faster, and therefore bitcoin will be created faster. Problem, right?
Seeking a limited supply of bitcoin with a predictable issuance over time, Satoshi Nakamoto thought of this problem and introduced a negative feedback loop to keep block production at 10-minute intervals on average. How? See if you can think of a way. Pause for a moment and ponder — see if you can come up with the same genius solution and read on when you give up.
NODES: I mention “valid” blocks. So what? Who’s checking? The Bitcoin nodes are. A Bitcoin node keeps a copy of the blockchain so far and follows a set of rules to check that new blocks are within the rules and reject those that aren’t. Where are the rules? In the code. A computer that downloads the Bitcoin code is a node.
The Difficulty Adjustment
The average time to create new Bitcoin blocks is calculated by every node every 2016 blocks (this is why the time field is needed). This is part of the protocol and rules that the nodes follow. A formula is applied to adjust the number of zeros each block hash must start with in order to be valid.
Strictly, it’s not the number of zeros that is adjusted but a target value the hash has to be below, but thinking of leading zeros is simpler to explain.
If blocks are being produced too fast, then the hash target is adjusted according to pre-defined rules that all nodes follow identically (it’s in their code).
Keeping it simple for my example, let’s say other people are competing with me, blocks are happening too quickly, and now the fourth block needs two zeros instead of one, according to an imaginary calculation.
It’s going to take me a bit longer to get two zeros, but we’re imagining that there are many other people competing with me so the total time taken for anyone to find a block is kept to a target.
Here is the next block:
Notice the time. More than 10 minutes passed since the previous block (I just made the time up to demonstrate). The 10-minute target is probabilistic; it is never known exactly when the next block will be found.
I messed around on the keyboard for a minute until two zeros showed up. This was exponentially harder than finding a single zero. The chance of finding two zeros in a row is 1 in 162, or a 1 in 256 chance.
If more people were to join in the mining and competition for new bitcoin, then eventually three zeros will be required.
I just looked up the last real Bitcoin block, which contains the hash of the previous block. The hash was:
000000000000000000084d31772619ee08e21b232f755a506bc5d09f3f1a43a1
That’s 19 zeros! There’s a 1 in 1619 chance of finding such a block with each attempt. Bitcoin miners do many, many attempts per second, collectively all over the world.
The number of attempts per second is known as the “hash rate.” Currently, the estimated world hash rate is just under 200 million terahashes per second ( one terahash is a trillion hashes). With that many attempts per second, a block with a hash starting with 19 zeros is found around every 10 minutes.
In the future, as more miners join in, the hash rate will go up, blocks will be found faster, and Bitcoin’s difficulty will adjust to require 20 zeros, which will push block production back down to around 10 minutes.
The Halving
When Bitcoin first started, 50 bitcoin were produced with every block. The rules of the Bitcoin blockchain specify that after every 210,000 blocks the reward will be cut in half. This moment is known as “the halving,” and happens roughly every four years. The halving, combined with the difficulty adjustment keeping blocks at 10-minute intervals, means that around the year 2140, the block reward will be 0.00000001, or 1 satoshi, the smallest unit of a bitcoin, and can’t be halved anymore. Mining won’t stop, but the block reward will be zero. From that moment, no new bitcoin will be created going forward and the number of bitcoin is mathematically calculable and close enough to 21 million coins. This is how the total supply is known — it is programmatically set.
Even with the block reward at zero, the miners will still be incentivized to keep working in order to earn transaction fees.
How exactly is the block reward cut in half? It’s in the code held by the nodes. They know to reject any new block after 210,000 where a miner pays himself over 25 bitcoin. And then to reject any blocks after 420,000 where a miner pays himself over 12.5 bitcoin, and so on.
Transaction Fees
So far I’ve only shown imaginary blocks with a single transaction — the transaction where the miner gets paid a reward. This is called the “coinbase transaction.”
It’s not named after the company, Conbase, I mean Coinbase. The company named itself after the coinbase transaction, not the other way around. Don’t get confused.
In addition to the coinbase transaction, there are transactions of people paying each other. Here’s an imagined example:
I didn’t bother finding a real hash this time (It’s actually the real hash reported in block 200,001). The nonce I just made up for fun, but notice a message can be embedded there.
Satoshis famously included the words, “Chancellor on Brink of Second Bailout for Banks” in the first Bitcoin block (The Genesis Block), after the newspaper headline for the day.
The point here is that there are 132 transactions included (not all shown). Look at transaction #132 – 2.3 bitcoin from an address is paying 2.1 bitcoin to another address and also to a second address the amount 0.1 bitcoin (I’ve used dots to shorten the length of the address).
So a source of 2.3 bitcoin pays a total of 2.2 bitcoin (2.2 + 0.1 = 2.2). Is there 0.1 bitcoin missing? No, the difference is claimed by the miner, as I’ll explain.
The miner is allowed to pay himself 25 bitcoin as the block reward (because 210,000 blocks have passed so the reward has been halved from 50 to 25). But if you look, the coinbase transaction is 27.33880022. The extra 2.33880022 bitcoin comes from the other 132 transactions in the block – the inputs will all be slightly greater than the total of the outputs. So the miner gets to claim this “abandoned” bitcoin as payment to himself. These are considered transaction fees paid to the miner.
The block space is limited. When Bitcoin was new, users could send transactions with no fee and the miners would include the transaction in the block. But now there are more users and since getting on the next block is competitive, users include a fee in the transaction to entice the miner to choose their transaction over others’.
So when the block reward steadily goes down, halving every four years and eventually to zero, miners still get paid in this way.
Some have suggested that one day the reward to miners will not be enough and will cause Bitcoin to fail. This concern has been thoroughly debunked and I won’t repeat it here.
Can A Block Be Re-written?
This is extremely unlikely and it’s worth understanding why. You’ll then appreciate why Bitcoin transactions are immutable (unchangeable).
I explained earlier that the hash of the previous block is included in the current block. That means any editing of transactions in an old block changes the hash of that edited block. But that hash is recorded down in the next block, so that means that the next block needs to be updated, too. But if you change the hash recorded in that next block, then its hash needs to change, and so on.
Note that any time a hash is changed, you lose all these lovely zeros and will just be left with a random-looking hash — and have to do all the work again to get the zeros back. If you do that for the block you tried to edit, you then have to redo the work for the next block, and the next all the way to the most recent block. You can’t simply stop at the old block, because the rules of Bitcoin are such that the longest chain of blocks is the real Bitcoin record. If you go back and edit a block 10 blocks ago, you no longer have the longest chain. You have to add 10 more blocks and then a bit more because as you were creating those 10 blocks, the real chain probably became a bit longer. You have to race to overtake the real chain. If successful, then the new version becomes the real version.
Repeating the entire world’s collective hashing effort from the edited block to the latest block is the barrier to editing Bitcoin. The energy was expended to create those hashes with all those improbable zeros and that energy expenditure must be repeated to edit Bitcoin. This is why energy used to mine Bitcoin is not “wasted”; it is there to defend Bitcoin from edits, to make the ledger immutable without needing to trust a central authority.
What happens if two miners find a block at the same time?
This actually happens every now and then, and it always sorts itself out as follows:
Every node will receive either one of the new nearly-simultaneous blocks first and will accept that one and reject the one arriving just moments later. This results in a split of the network, but it’s temporary.
To illustrate, let’s call one of the blocks blue and the other red (they have no color, just bear with me).
Miners then work on the next block, but there will be a split as to which block they extend the chain from.
Let’s say the winning miner found a block using the blue chain. They will send the new block to all the nodes and the longest chain will be apparent. The nodes that had accepted the red chain will then drop it and adopt the blue chain.
All miners that were working on the red chain will stop and will now work on the longer chain, which is the blue chain. The red chain is dead.
Appendix
Why A Runner Up Miner’s Block Is Invalid
Suppose block 700,000 just got mined by MINER-A. Thirty seconds later, MINER-B also created a different version of block 700,000. When MINER-B broadcasts this alternative, every node is going to reject it because they have already seen and accepted the block by MINER-A. What’s more, in that 30 seconds, let’s say that MINER-C found block 700,001. Given that MINER-B’s competing 700,000th block does not extend the current chain (which is up to 700,001), it is also rejected for that reason.
Even more interesting is that if MINER-B had been working on block 700,001 instead of a competing version of 700,000, they would have had just as much chance of mining a valid block 700,001 as they would have to finally find an alternate block 700,000. So as soon as any miner sees a new block, they should set their effort on the next block.
If, however, Miner-B found block 700,000 one second after MINER-A did, then it’s possible that some nodes see MINER-A’s block first while others see MINER-B’s block first, depending on geographic locations and internet speeds. In that case, there is a temporary fork, and some miners will be working to extend one version while other miners will be working to extend the other. As explained earlier using the “blue chain” and “red chain” descriptors, eventually one of the versions will extend further before the other and become the valid version unanimously.
This is a guest post by Arman The Parman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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dYdX Founder Advises Crypto Industry to Abandon US Customers, Deeming Market Effort Unrewarding
Published
3 months agoon
August 28, 2023By
Team CG
The founder of the decentralized exchange, dYdX, asserts that individuals involved in cryptocurrency development should direct their efforts toward international markets beyond the United States for the upcoming five to ten years.
Antonio Juliano conveys to his audience of 49,400 on the social media platform X that the prevailing regulatory uncertainty within the United States does not merit the associated challenges or concessions.
Juliano contends that it would be more prudent for cryptocurrency developers to establish their products in alternative countries and subsequently re-enter the United States from a position of strength.
“Cryptocurrency developers would be well-advised to temporarily discontinue catering to the US market and instead seek re-entry in a span of 5-10 years. The complications and compromises involved do not warrant the endeavor. Moreover, a substantial portion of the market exists overseas. It is recommended to innovate in those regions, ascertain product-market fit, and then return with greater bargaining power…
The paramount objective shared among all stakeholders is to secure a significantly more potent product-market fit for cryptocurrency. The pursuit of a robust product-market fit does not necessitate flawless distribution. A multitude of substantial overseas markets present avenues for experimentation.”
Juliano articulates that advocating for more amiable cryptocurrency regulations demands time, although the process could be expedited if developers manage to introduce products that elicit consumer demand.
“However, this perspective does not undermine the importance of efforts to influence US cryptocurrency policy. On the contrary, such endeavors are absolutely vital. Given the protracted timeframe required (in anticipation of re-entry), and considering that much of the world takes cues from the United States, it becomes evident that our progress in shaping policies hinges upon achieving global-scale product usage.”
The dYdX founder proceeds to emphasize that, with time, American citizens will come to realize that cryptocurrency is inherently aligned with US values and principles.
“The tenets of cryptocurrency closely align with American values. What concept could be more quintessentially American and reflective of capitalist ideals than a financial system conceived for the people, driven by the people, and answerable to the people? This, indeed, constitutes the very essence of our endeavor.”
Read Also: Bloomberg Analyst Mike McGlone Predicts Bitcoin Vulnerability in Economic Downturn
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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Bloomberg Analyst Mike McGlone Predicts Bitcoin Vulnerability in Economic Downturn
Published
3 months agoon
August 27, 2023By
Team CG
Bloomberg Intelligence’s senior macro strategist, Mike McGlone, is conveying a pessimistic outlook for Bitcoin (BTC) in the immediate future.
During a recent interview on Kitco News, McGlone underscored that Bitcoin is currently displaying bearish signals even amidst the ascent of other high-risk assets.
“In the event of a downturn, adhering to a rule prevalent in bear markets, resources across the board could witness a reduction in value, and Bitcoin will not be an exception.
A crucial observation is the necessity for Bitcoin to exhibit divergent strength at a certain juncture, akin to the behavior of treasury bonds and gold in a deflationary economic environment. Regrettably, this pattern has not materialized.
After attaining its peak towards the conclusion of Q1, reaching approximately $31,000, driven by optimism and the influence of exchange-traded funds (ETFs), Bitcoin subsequently retraced to $25,000 or approximately $26,000. Presently, it is manifesting divergent weakness in contrast to the concurrent upsurge in the stock market.”
According to McGlone’s analysis, the ongoing “economic reset” implies a continuation of Bitcoin’s recent downward trend, although he anticipates that the premier cryptocurrency will ultimately attain a six-figure valuation.
“While I believe that Bitcoin will eventually achieve a valuation of $100,000, the onset of a global economic reset, as I anticipate, characterized by a standard deflationary recession leading to a decline in the housing and stock markets, analogous to the conditions of 2008—though arguably exacerbated due to the ongoing removal of liquidity from the system—Bitcoin’s role as an influential precursor comes to the forefront.
This underscores my point that Bitcoin has recently been taking on the role of a harbinger of trends. Its value ascended briefly to around $31,000, only to subsequently trend downwards. From my perspective, it serves as a leading indicator for a majority of high-risk assets.”
As of the time of writing, Bitcoin is trading at $26,079.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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Lead Developer Announces Imminent Public Reopening of Shibarium
Published
4 months agoon
August 24, 2023By
Team CG
Shiba Inu’s (SHIB) Latest Layer-2 Scaling Solution Nears Public Relaunch Following Recent Technical Challenges
Shytoshi Kusama, the enigmatic lead developer behind the SHIB project, has shared in a recent blog post that significant progress has been made in addressing the technical setbacks that temporarily halted the operation of Shibarium, SHIB’s new layer-2 scaling solution. The initial release of Shibarium encountered network issues that prompted its temporary closure. However, Kusama assured the community that diligent testing and parameter adjustments have led to notable improvements.
Kusama elaborated, stating, “After extensive testing and parameter refinements aimed at achieving a ‘ready’ status, Shibarium has undergone enhancements and optimization. While still undergoing testing, it is now successfully producing blocks.” Additionally, to prevent a recurrence of the past network overload, Kusama revealed the implementation of a new monitoring system and supplementary fail-safe measures. These include rate limiting at the RPC (remote procedure call) level and an automated server reset mechanism in the event of another surge in traffic.
With these advancements in place, the team is on the verge of reopening Shibarium to the public. As part of this progression, more network validators will be integrated into the ecosystem on August 23rd. Kusama emphasized the significance of this step, remarking, “Tomorrow, additional validators will become operational, expanding the options available for staking BONE. This will allow for a distribution of rewards earned through their roles within our community. As testing concludes, we will once again prepare for public utilization.”
Shibarium’s previous technical difficulties were attributed to an overwhelming influx of users and transactions during its initial launch. As of the current writing, SHIB is trading at $0.00000798, marking a 0.4% increase over the past 24 hours.
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Sam Bankman-Fried, Co-Founder of FTX, Files for Temporary Release from Incarceration
Published
4 months agoon
August 20, 2023By
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FTX’s co-founder, Sam Bankman-Fried, is currently seeking a temporary release from incarceration. The purpose behind this endeavor is to engage in collaborative strategizing with his legal representatives within the confines of the federal courthouse situated in Manhattan.
In a formal letter dispatched to US District Judge Lewis Kaplan on a Friday, Bankman-Fried’s legal team expounded that their client’s capacity to effectively scrutinize the extensive legal documents pertaining to his case has been significantly curtailed during his time spent incarcerated at the Metropolitan Detention Center (MDC) in Brooklyn.
Christian Everdell, the attorney representing Bankman-Fried, divulged that the government recently disseminated a voluminous three-quarters of a million pages of Slack communications. These were originally due several months prior. Expressing the urgency of the situation, Everdell articulated, “Only last week did the government furnish an aggregate of approximately seven hundred and fifty thousand pages of Slack communications that were originally stipulated for release months ago. Given the current timeline, it is a futile endeavor for Mr. Bankman-Fried to endeavor to review these materials.”
He underlined the pivotal necessity for Bankman-Fried to collaborate meticulously with his legal team, emphasizing his dire need to avail himself of an internet-enabled laptop within the courthouse premises. Such a resource would undoubtedly expedite the process of comprehensive document review, an imperative undertaking in light of his impending fraud trial scheduled for the forthcoming October.
In riposte to Bankman-Fried’s plea for reprieve, the prosecuting body voiced apprehensions regarding his adherence to the prerequisites concerning his planned defense strategy. Notably, they underscored that Bankman-Fried is yet to furnish the complete gamut of essential information regarding the counsel upon which he predicated his actions.
The prosecutors proffered caution that unless Bankman-Fried promptly discloses the minutiae regarding the counsel he received and the provenance thereof, any attempt to interject such a defense during the trial should be summarily proscribed.
Although the prosecutors extended an offer to facilitate the transfer of documents onto hard drives for Bankman-Fried’s perusal within the MDC premises, a viable laptop-based solution was deemed unattainable. Initially, the notion of relocating Bankman-Fried to a more compact, upstate correctional facility where he could access an internet-enabled laptop was contemplated by the prosecutors. However, this proposal was met with resistance from prison officials.
Regarded for its starkly onerous conditions, the Metropolitan Detention Center has cultivated a notorious reputation among its inmate population.
Bankman-Fried’s Incarceration Stemming from Unsanctioned Internet Utilization
As documented, Judge Kaplan sanctioned the re-imprisonment of the beleaguered cryptocurrency luminary, citing alleged instances of witness tampering.
In that juncture, Judge Kaplan pronounced that a strong prima facie case existed indicating that the accused had endeavored to tamper with witnesses on no fewer than two separate occasions.
The decision was additionally influenced by Bankman-Fried’s unsanctioned use of the Internet while released on bail under the guardianship of his parents at their abode located in California.
Judge Kaplan discerned that Bankman-Fried had indulged in excessive communication with various individuals via electronic correspondence, even resorting to the utilization of a virtual private network.
Concurrently, the disgraced progenitor of FTX is simultaneously grappling with novel allegations brought forth by the Department of Justice (DOJ). These allegations encompass the misappropriation of customer deposits, including the purported embezzlement of said funds.
An indictment filed on the most recent Monday delineates that Bankman-Fried stands accused of diverting and embezzling customer deposits from the FTX platform. The illicitly obtained funds were purportedly channeled towards political campaign contributions, collectively amassing a substantial sum exceeding one hundred million dollars, in advance of the 2022 US midterm elections.
The indictment further posits that despite Bankman-Fried’s intimate knowledge of FTX’s fiscal insufficiencies, he continued to channel the purloined funds into personal investments, acquisitions, and political campaign contributions.
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U.S. Securities and Exchange Commission Nearing Appeal in Ripple Lawsuit’s XRP Decision
Published
4 months agoon
August 19, 2023By
Team CG
The U.S. Securities and Exchange Commission (SEC) is taking significant steps towards pursuing an appeal in their recent legal battle against Ripple, indicating a potential shift in the course of the lawsuit.
James K. Filan, an experienced defense attorney specializing in crypto-related legal matters, has shed light on the latest developments. District Judge Analisa Torres has initiated a structured process for considering the SEC’s request to present an interlocutory appeal—a move that would allow the SEC to contest certain aspects of the ongoing case.
It’s important to note that this preliminary step does not guarantee the authorization of an interlocutory appeal; rather, it signifies that the SEC has been given the opportunity to formally request such an appeal.
Judge Torres has outlined the timeline for this process in her official order. The SEC is expected to file their motion for the appeal by August 18th. Subsequently, Ripple is given until September 1st to submit their opposition papers. If the SEC deems it necessary, they have until September 8th to file a reply.
The news of these developments had an immediate impact on the cryptocurrency market. Following the announcement of the judge’s order, the value of XRP experienced a sharp decline. The price, which had been trading at approximately $0.571, dropped to around $0.499 at the time of writing. This decrease of over 12% aligns with the broader trends observed across the cryptocurrency landscape.
The legal clash between the SEC and Ripple began when the regulatory agency filed a lawsuit against the San Francisco-based payments company in late 2020. The SEC alleged that Ripple had engaged in the sale of XRP without registering it as a security.
In a significant turn of events last month, Judge Torres issued a ruling that had mixed implications for both parties. She determined that Ripple’s automated programmatic sales of XRP, which occurred on the open market, could not be classified as securities offerings—a pivotal point of disagreement between the SEC and Ripple.
However, the judge did uphold a key aspect of the SEC’s argument. She agreed with the agency’s assertion that Ripple’s direct sales of XRP to institutional buyers indeed amounted to a securities offering, reinforcing the complexity of the case.
As the legal battle continues to unfold, the spotlight remains on the actions and responses of the SEC and Ripple, and how their ongoing dispute could shape the future regulatory landscape for cryptocurrencies and digital assets.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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