Kaspersky Lab and Parity Technologies Launch Blockchain-Based Voting System

Kaspersky Lab and Parity Technologies Launch Blockchain-Based Voting System

Cybersecurity company Kaspersky Lab unveiled Polys, a secure online voting system based on blockchain technology and backed with transparent crypto algorithms, at the company’s annual Cybersecurity Weekend event in Dublin.

“[Online] voting imposes extremely stringent requirements on the security of every aspect of voting,” notes the Polys website. “We believe that the blockchain technology is the missing link in the architecture of a viable online voting system.”

“In our Kaspersky Lab Business Incubator we’re supporting both internal and external teams in developing bright ideas and technologies, which can be implemented in various areas where safety and security are important,” said Vartan Minasyan, Head of Investment and Innovation at Kaspersky Lab.

“One such area is online voting and, when exploring the possible implementations of blockchain in particular, our team realized that this technology combined with the company’s cybersecurity expertise could solve key problems related to the privacy, transparency and security of online voting. We’re excited that we have been able to create a suitable environment for this internal innovation.”

Kaspersky Lab released a beta version of Polys, intended to get early feedback and iteratively develop an operational voting system that, according to the company, “will change the way people vote.”

At the moment, Polys offers a free web-based dashboard to create an online vote with two options: majority vote, in which the option that gets the majority of votes wins, and cumulative vote, in which the voter has multiple votes that can be given to a single option or divided among several options. Cumulative voting is often used, for example, for committee elections where voters can support more than one candidate.

Once a vote has been created on the Polys dashboard, the administrators can choose how to accept votes. Currently supported options are email, unique codes, and public voting. In email voting, Polys sends an email to each voter with a secure voting link. In public voting, the voting link is open to everyone who can view it. A combination of online and offline voting can be implemented with secure codes, generated by Polys and sent to users in electronic or printed format, which enable users to vote using either personal devices or public computers in voting kiosks.

Polys will support a desktop app to create a vote and a mobile app to actually vote. Besides the free dashboard, Polys offers a paid version that supports white-labeling, re-branding and integration options.

According to Kaspersky Lab, a robust voting system should ensure voter anonymity, provide protection against trash votes, vote trafficking and voter coercion, and enable voters to check that their votes have been recorded in the blockchain. It’s also important to encrypt the voting results recorded in the blockchain, otherwise intermediate results could become available before voting ends, which is often against the law.

For now, votes can’t be changed by Polys or by the voters, but a Polys white paper suggests countering the threats of vote trafficking and coerced voting by enabling voters to change their votes without limitation.

The source code of Polys, based on Ethereum smart contracts, will be made available on GitHub. Cybersecurity company Kaspersky Lab is leading Polys’s security development;  Parity Technologies, a company specialized in blockchain and peer-to-peer software for the decentralized web, will support the project’s blockchain development.

“Parity Technologies is excited to be involved with Polys as their platform of choice for such an innovative project,” said Jutta Steiner, co-founder of Parity Technologies. “Blockchain [technology] is increasingly being implemented by a vast number of industries, and we believe that decentralizing the voting procedure will ensure a fair process and create a high level of trust in the system.”

Kaspersky Lab proposes two typical use cases for Polys: early-adopting environments such as universities, where students and faculty will be able to informally vote for classes and student councils, and tech-oriented “future cities” that need new solutions for conducting formal elections with speed, reliability and trust.

It seems likely that blockchain-based online voting systems, including but not limited to Polys, will first find operational applications for informal, non-binding consultative voting in academia and similar environments. It’s worth noting that Decentralized Autonomous Organizations (DAOs), which can often be considered as demonstrators of future governance methods, have built-in voting systems based on blockchain technology, often implemented with Ethereum smart contracts.

Therefore, it seems plausible that blockchain-based voting could move to the “real” world of cities and governments. Once blockchain-based voting systems are able to demonstrate watertight security, they could address the challenge of counting errors and fraud in elections. It’s also worth noting that, while blockchain voting has its delays and costs, it could be much faster and cheaper than traditional voting systems. Blockchain voting could enable governments to implement direct democracy with frequent consultations on a wide range of political and social issues.

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MadHive’s Mission to Restore Transparency and Fairness to Advertising


Digital technology should make the advertising business more efficient. But it has not — at least not from the perspective of companies that place ads or the content publishers who sell ad space to them. Laden with middlemen and clouded by convoluted, proprietary ad placement platforms, the modern digital advertising industry faces serious challenges.

New York–based MadHive is on a mission to solve them. Using blockchain technology and smart contracts, MadHive is constructing an ad tech platform, called the MAD Network, that reduces the power of the  middlemen in ad tech and brings buyers and sellers closer together.

At the same time, the MAD Network is designed to restore transparency to the ad tech industry. By recording information on the blockchain, encrypting it and making it available to advertisers with the requisite permissions, the MAD Network prevents fraud and ensures that advertisers can trace exactly how their money is being spent. Publishers can also sell data over the blockchain to help advertisers understand consumer behavior and plan ad campaigns more effectively.

The Problems With Advertising Today

Software tools can automate most of the work required to match an advertiser looking to place an ad with a publisher who has ad space to sell. However, the platforms that currently connect advertisers to publishers operate as “walled gardens,” in which only the platform owners — as opposed to advertisers and publishers — can understand how dollars are spent and information is exchanged.

This isn’t a problem that affects only small-time advertisers and publishers. It impacts organizations as large as The Guardian, a major British newspaper that is suing an ad tech company over allegations that the company’s proprietary ad placement service imposed “secret commissions” on the publisher and obscured information that would have helped the newspaper secure a fairer share of profits from advertisers.

Put simply, advertising dollars “disappear” as they flow down the supply chain from advertisers to publishers. Middlemen soak up a majority of the revenue.

How Mad Network Fixes Ad Tech

A better approach to ad tech is possible. MadHive is leading the way by building the MAD Network, a blockchain-based ad tech solution. The MAD Network is a complete ad tech platform that consists of several components, each of which solves an important challenge for advertisers, publishers or both.

MADnet Books

MADnet Books is a blockchain-based payment system. MADnet Books does more than simply enable transactions, however. Because it is built on the blockchain, it facilitates decentralized, transparent revenue streams. Ad tech dollars can’t disappear when they are recorded on the blockchain — nor can advertisers and publishers be misled about the way money is being spent. The transparency that MADnet Books provides is just as important as the core payment functionality.

MADnet Books is powered by MADtoken, the protocol’s native token. The token economy is an important tool in the MADNetwork, which aims to flip the market dynamics for the middle layer. By doing so, MADNetwork will make it more profitable to be in business and serve the interest of buyers and sellers, which is not always the case in today’s supply chain. For the buyer this results in greater reach for the cost, while publishers actually lower the margin compression that currently plagues the digital advertising ecosystem.

MADnet Data

A significant amount of value within the ad tech industry lies in the data that digital ad platforms create. Traditionally, this data has remained in the hands of the middlemen who control the platforms. They don’t typically share it with advertisers; instead, they may sell it to advertisers’ competitors to generate additional revenue.

On the MAD Network, however, data will be shared thanks to MADnet Data, a decentralized data management platform. MADnet Data will enable advertisers and publishers to share data about ad performance and engagement directly with each other, in a secure, peer-to-peer fashion regulated by permissions and access control. Such data sharing can help to generate additional revenue streams for publishers while providing advertisers with deeper insight into the effectiveness of their ad campaigns. Here, again, it all boils down to transparency.

MADnet Core

MADnet Core is the server that matches advertisers to publishers for the purpose of placing ads. This is not just another ad server, however. Like the other parts of the MAD Network, MADnet Core operates in a decentralized fashion, with the network performing the work of finding out which publishers are a good match for which ads.
Because of this decentralized approach, no single party can control or manipulate the way ads are served. The core functionality of ad tech — matching advertisers with publishers — will remain open and transparent.

Token Sale

The MAD Network remains under very active development. MADnet Books is slated to be the first platform component to be completed, followed by MADnet Core and, later, MADnet Data.

To help support development of the MAD Network and offer the blockchain community an opportunity to invest in a platform that is poised to disrupt the ad tech industry from top to bottom, the MAD Network plans to host a token launch on November 30, 2017.

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Bitcoin Gold Launches Tomorrow

Bitcoin Gold Launches Tomorrow

After weeks of preparation, Bitcoin Gold (Bgold; BTG) is finally launching tomorrow,  November 12, 2017.

Bitcoin Gold is the second project to fork away from the Bitcoin blockchain to create a new coin this year; on August 1, Bitcoin Cash (Bcash) was the first. Where Bcash attempted to offer an on-chain scaling solution by increasing Bitcoin’s block size limit (while removing the Segregated Witness code), Bgold is an attempt to counter Bitcoin’s mining centralization.

The most important difference between Bitcoin and Bitcoin Gold is a new proof-of-work mining algorithm. Instead of SHA256, the new coin uses the memory-hard Equihash proof-of-work function that’s also used in the privacy-focused altcoin Zcash. This means that specialized ASIC hardware that has come to dominate Bitcoin’s mining ecosystem will not be able to mine Bgold.

Although Bgold is launching this weekend, the fork “officially” occurred on October 25. Anyone who held bitcoin (BTC) on that day (specifically, when Bitcoin block 491406 was mined) will have an equivalent amount of BTG attributed to their private keys. These private keys can be imported into a dedicated Bgold wallet, which, starting tomorrow, will allow users to spend the coins. (But note that this does not come without risks and tradeoffs: If you’re not sure what you’re doing, it’s best not to ignore BTG until you do. For more information als see this article.)

Block 491407 on the Bgold blockchain wil be the first block to deviate from the Bitcoin protocol. In other words, this will be the first block where Bgold splits off to become its own currency. However, somewhat controversially, the first 8000 blocks will be privately mined by the Bgold team. Only after these 8000 blocks will Bgold’s mining difficulty ramp up to normal levels, and will anyone be allowed to mine the coin. The resulting 100,000 BTG worth of block rewards will pay for project development and more. (For more details, see the Bitcoin Gold roadmap.)

Other changes implemented by Bitcoin Gold are mostly to ensure a smooth split away from Bitcoin. This includes a new difficulty re-adjustment algorithm named “DigiShield” that adjusts the mining difficulty each time a block is found — instead of once every two weeks. Bgold also includes strong replay protection, ensuring that no users spend BTC when they mean to spend BTG, and vice versa. Additionally, BGold implemented a new address scheme, preventing users from spending BTC to BTG addresses and vice versa.

Bitcoin Gold will be supported by a relatively large number of exchanges, including major players like Bitfinex, OKex and HitBTC. Several of these exchanges are effectively supporting BTC/BTG trading already through futures markets. Ignoring an initially inflated price, these futures have traded at around 0.02 BTC in recent weeks, with a notable surge to about 0.042 BTC over the past few days. If this holds up, 1 BTG would be worth almost $250, and Bgold would immediately become a top-5 altcoin on websites like coinmarketcap.com.

For more information on Bitcoin Gold, see Bitcoin Magazine’s earlier article on this project.

Disclaimer: The author of this article holds BTC and will therefore also own BTG at launch.

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De-briefing Ethereum’s Parity Predicament: What’s Next?

De-briefing Ethereum’s Parity Predicament: What’s Next?

After an unidentified actor “accidentally” triggered a series of bugs that destroyed approximately $150 million worth of digital currency, the world waits for a substantive answer — is this vulnerability an anomaly? An “I told you so”? Or a humbling opportunity to secure the Ethereum network?

What Happened?

On November 6, “Devops199,” an alleged amateur programmer, set off a chain of bugs on Parity, a popular digital wallet for Ethereum. These bugs affected multisignature, or “multisig,” accounts — “wallets” that require multiple users to enter their keys before funds can be transferred. The place these wallets connect to is known as a “library” contract.

  1. According to Parity, an attempt to fix a vulnerability that allowed hackers to steal $32 million from multisignature wallets in July of 2017 inadvertently created a second vulnerability in the library contract. This allowed Devops199 to gain control of every multisignature wallet as a sole owner.

  2. After Devops199 realized what had happened, he “killed” (deleted) the code. Unfortunately, this locked all funds into multisignature wallets permanently, with no way to access them.

  3. Because of the functionality of the current blockchain, $150 million worth of ether (ETH), the tradable currency that fuels the Ethereum platform, is now effectively destroyed and inaccessible to anyone.

Among the victims of this bug are several recently successful ICOs that chose to store their funds in a Parity wallet because of its multisig option and compatibility with various hardware wallets.

Parity’s Response (So Far)

On November 7, tweets on Parity’s official Twitter account acknowledged the vulnerability and confirmed that the funds affected are frozen and can’t be moved anywhere.

A day later, on November 8, Parity de-briefed the bug, explaining that it was indeed possible to turn the Parity Wallet Library contract into a regular multisig wallet and become the owner of it, which is exactly what Devops199 did. Parity now has a tool to check if a user/wallet has been affected by the vulnerability.

Parity’s History of Hacks

This isn’t the first time Parity has fallen victim to a security exploit. Parity’s multisignature contracts were previously the target of three thefts totalling 150,000 ether in July of 2017 (the second-largest hack after the DAO fiasco). And losses could have been exponentially higher. However, the “White Hat Group,” a collection of hackers and activists, was able to intervene and drain the majority of other wallets before they could be compromised as well.

“Future multi-sig wallets created in all versions of Parity Wallet have no known exploits.”

Official Parity website post following the July 19 hack

Jeff Coleman, an expert in blockchain technologies and currently a researcher and advisor with L4 Ventures, described Parity’s response to the July 19, 2017, attack as “worrying, to say the least.”

Coleman told Bitcoin Magazine that his primary concerns centered around Parity’s immediate response and its tendency to downplay the significance of the compromise, choosing instead to blame a large number of external causes:

“They blamed observers for not finding the bug before it was exploited; they blamed lack of incentivization for observers; and they blamed the Solidity language for not blocking access by default to the functions the [Parity team] failed to protect.”

He further noted that Parity seemed to be blaming the complexity of the well-audited wallet (which they still believed to be secure) from which they had originally modified their code. And also that Parity didn’t take responsibility for their own inadequate quality control and audit procedures.


Developers in the community are desperately trying to find a fix to the Parity predicament. Coleman believes that “from a technological perspective, there is nothing short of a hard fork [a non-backward-compatible change to the Ethereum protocol] to restore the destroyed funds.”

After the DAO hack in 2016, the Ethereum Foundation had already accepted a hard fork to restore lost funds, with the common understanding that this was a sort of “mulligan” — a one-time fix for a young, developing blockchain. This scenario, nevertheless, divided the Ethereum blockchain into two parts and created Ethereum Classic, the original Ethereum blockchain, backed by a community that vehemently opposes editing transaction history to restore lost funds.

Using hard forks as interventions to “correct” worst-case scenarios like this is highly controversial, especially since blockchains are meant to be immutable. So, it’s difficult to convince the Ethereum community to use a hard fork to rescue one team from a mistake. While many acknowledge sympathy for smaller accounts storing personal ETH, sentiment is not as sympathetic for the 300,000 ETH that belonged to the Polkadot Project, a Parity initiative.

Arseny Reutov, an application security researcher for blockchain security firm positive.com, affirmed this community sentiment, while acknowledging that hard forks can be solutions. However, he agrees that Ethereum cannot simply hard fork any time there is a problem on the network. He believes blockchains should expect “more and more high profile thefts and incidents,” and that the problem lies in the infant Ethereum platform itself — specifically, in the native Solidity programming language.

If a Hard Fork Isn’t the Answer, Then What Is?

Both Coleman and Reutov believe that the key to gaining the community support necessary to restore funds is to combine the Parity situation with similar situations in which funds have been lost due to various kinds of mistakes. Coleman referenced those detailed in EIP 156: “Reclaiming of ether in common classes of stuck accounts,” for example.

Coleman also pointed out that in any of these instances, it must be “completely unambiguous who the original owners of the assets were.” The necessary changes could then be made and packaged together in an “already planned hard fork, such as the upcoming Constantinople fork.”

Even so, restoring funds is problematic. Ethereum core developers must discern which mistake-affected funds will be returned to users. Will all funds be returned or only a select few — or will this be a ~500,000 ETH learning experience?

The post De-briefing Ethereum’s Parity Predicament: What’s Next? appeared first on Bitcoin Magazine.

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Bitcoin Price Analysis: Market Correction Could See Lows of $5,800

Bitcoin Price Analysis

In our last discussion of the bitcoin market, an emphasis was placed on the $7,000 support level because it represented a historic point of interest and it showed strong signs of support — a break of which would ultimately prove to have a strong downward move following afterward.

Bitcoin has since broken the $7,000 support level. It then took an immediate $500–$600 move downward and has, thus far, shown little interest in bouncing upward. Taking the whole move into view, we can see quite clearly that we completed a Wyckoff Distribution phase on the 30-minute candle; we are now heading downward as the supply is overwhelming the market:

Figure_1 (19).JPGFigure 1: BTC-USD, 30-Minute Candles, Wyckoff Distribution

Figure 1 shows a breakdown of the $7,000 support level, ultimately timed with the Last Point of Supply (LPSY) for this distribution phase. The LPSY represents the final, overwhelming abundance of supply in the market. As the price pushes lower, the supply outweighs the demand in the market and, as we are seeing in the current market, there is very little desire to buy at these prices.

Figure_2 (16).JPGFigure 2: BTC-USD, 1-Day Candles, Macro Parabolic Trend

Figure 2 shows the rejection of the linear ascending resistance line (shown in pink). This trendline has historically proven to be a point of reversal and, at the time of the article, is rejecting the trendline for the fourth time. If we follow the correction trend, we can expect an ultimate test of the lower parabolic curve that has proven to be support over the course of the last two years.

Figure_3 (15).JPGFigure 3: BTC-USD, 2-Hour Candles, Fibonacci Retracement Set

As predicted in the previous bitcoin analysis, we are currently finding support along the 23% Fibonacci Retracement values in the lower $6,500s. Historically, these values haven’t proven to be a significant market value, so I would not at all be surprised to see a test of the 38% values sometime soon. Figure 3 shows a lot of market activity and a well-established baseline of support in the 38% values. If the 23% values break and don’t hold support, we can definitely expect strong support in the 38% values that will require multiple tests if it tries to break the 38% support.


  1. Bitcoin broke below the $7,000 support level and ultimately completed a Wyckoff Distribution phase.

  2. Prior to the breakdown in price, the market rejected the historic resistance line, which has signaled a strong reversal point throughout the market’s history.

  3. We are currently finding support on the 23% retracement values, but ultimately the stronger support will be found on the 38% values in the $5,800s.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Guest Post: Understanding the Limits and Potential of Blockchain Technology

Guest Post: Understanding the Limits and Potential of Blockchain Technology

The promise of blockchain technology is coming to the forefront and capturing the imaginations of investors, entrepreneurs and innovators alike. But what many people do not know is how perilous the blockchain journey ahead still is. We live in a world of smoke and mirrors; enterprise investors must do their due diligence in navigating these choppy waters — making the right investments in the right blockchain technologies to unlock that promised potential.

To make the correct investments, we need to adopt a framework to evaluate them. Having a framework also means having the necessary inputs. What follows in this article are some of these key inputs.

If you are considering making technology investments, think about the end state: your vision. How will this technology fit within your existing technology infrastructure? You need to put on your far- and short-sighted glasses: First, what will the near future (1–2 years) of the blockchain ecosystem look like? Second, how will this blockchain technology integrate with your existing infrastructure? Does it complement your technology investments thus far? Does it mitigate or add to any burdens in your existing technological landscape? All of these questions should inform your purchasing decision.

As an integration consultant and a blockchain architect, my role is to help clients determine what is in the realm of possibility for them and what is not. Questions surrounding scalability, integration points, data interoperability and security are not easy questions to answer, but they must be considered. Some potential investors will be blinded by the sheer potential (or hype) of the technology and will completely ignore these realities. As appealing as blockchain technology is, it’s not for everyone. Some enterprise investors are not at the maturity stage to adopt it yet, and this is not an easy pill to swallow.

Blockchain is a nascent technology and much work is still being done in the areas of interoperability (e.g., ISO/TC 307, Ripple ILP, Hyperledger Quilt, etc.). These are challenges to consider. It is important to understand that, in order to realize the full potential of blockchain technology, some elements of integration with your legacy system are probably still going to be necessary. Consider also how your private blockchain can be integrated with public blockchains — we live in a less-than-perfect world where there are multiple blockchains. Will the blockchain be on cloud or on-premise? These are questions you’ll need to answer; in fact, these very questions will also serve as inputs to your technology adoption framework.

Bigger Picture

As blockchain technology speeds toward standardization (via International Standard Organization, etc.) and interoperability (Interledger Protocols, Hyperledger Quilt, etc.), we also need to ask ourselves if having too many standards will stifle innovation and whether integration and interoperability are antithetical to the core tenet of blockchain technology, which is decentralization, for which I have yet to find an answer.

Finally, the benefits of interoperable and integrated blockchains are many: improved governance, interoperability, process automation, further cost savings and perhaps even cross-chain atomicity (a dream for now, at least). But we must not allow the benefits to blind us to the reality.

I wish to end this article on a hopeful note. Despite the many challenges when it comes to adopting blockchain technology, these challenges are not unique to the blockchain. Every new piece of technology goes through phases of uncertainty and exploration: this one, too, shall pass.

This is a guest post by Nathan Aw. Views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

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NO2X: Next Week’s Hard Fork Has Been “Suspended” Due to a Lack of Consensus


There will almost certainly be no Bitcoin hard fork next week: the main organizers behind the SegWit2x project have “suspended” their efforts.

In an email to the SegWit2x mailing list, one of the main organizers behind the project, BitGo CEO Mike Belshe, explained that the proposed hard fork has not been able to gain sufficient consensus to proceed:

“Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time.”

The New York Agreement was originally forged between a group of Bitcoin companies in May of this year. An initiative by Digital Currency Group CEO Barry Silbert, the project — later dubbed “SegWit2x” — was to combine activation of the Segregated Witness soft fork with a hard fork to double Bitcoin’s block weight limit. With Segregated Witness activated on the Bitcoin network this past summer, arguably helped by the SegWit2x project, the hard fork was scheduled to take place next week.

However, the hard fork part of the New York Agreement was always controversial for a number of reasons. As a result, a growing number of signatories dropped out of the agreement over the past weeks and months, while developers, user communities, public polls, future markets and more all indicated limited support for the effort. And as the hard fork date drew closer, it become increasingly clear that SegWit2x would in fact spawn a new currency rather than constitute an upgrade of the Bitcoin protocol.

And this was never the plan, Belshe wrote:

“Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.”

Belshe’s email was also signed on behalf of Xapo CEO Wences Casares, Bitmain CEO Jihan Wu, Bloq CEO Jeff Garzik, Blockchain CEO Peter Smith and ShapeShift CEO Erik Voorhees. In a separate blog post published just before Belshe’s email, BitPay CEO Stephen Pair also called for cancelation of the hard fork.

While the New York Agreement was signed by even more companies (and some individuals), and anyone can still deploy the hard fork, it is unlikely that anyone will proceed with the hard fork in any meaningful way.

Belshe does, however, note that a hard fork to increase Bitcoin’s block weight limit might be needed in the future, writing:

“As fees rise on the blockchain, we believe it will eventually become obvious that on-chain capacity increases are necessary. When that happens, we hope the community will come together and find a solution, possibly with a blocksize increase.”

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