Connect with us

Bitcoin

Bitcoin’s Lightning Network: Users can lose all their money through no fault of their own, says Peter R Rizun

Priya

Published

on

Bitcoin's Lightning Network: Users can lose all their money through no fault of their own, says Peter R Rizun
Source: Unsplash

Peter R Rizun, the Chief Scientist of Bitcoin Unlimited, was previously in the headlines following his comments about the Lightning Network, the second-layer protocol proposed to solve Bitcoin’s scalability problem. The Chief Scientist is in the news again after he claimed that a Lightning Network user can lose all his money, without doing anything wrong.

Lighting Network, the second-layer solution, allows users to make off-chain payments, thereby ensuring faster and cheaper Bitcoin transactions. The Lightning Network is dependent on the underlying technology i.e. the Bitcoin blockchain, and was mainly created to serve the needs of small transactions. It enables users to make payments without having to record them on the blockchain, until it is settled. Moreover, the Lighting Network can act as multi-currency routing network in the future.

Peter R Rizun had this to say about the LN on Twitter,

“A Lightning user can lose all of their money through no fault of their own, in an environment with high and volatile L1 fees. BTC’s block size limit ensures high and volatile fees whenever demand for block space spikes.”

To this, Emin Gur Sirer, a Professor at Cornell University, said,



“Satoshi did not design for blocks that are mostly full, and the devs who came afterwards have not been able to design a fee mechanism that leads to stable and predictable fees.”

Further, Jungans, a Redditor, questioned whether this was not the same for on-chain funds scattered across several UTXOs. Peter Rizun clarified that the two were different cases. He said,

Source: Reddit

Source: Reddit

The Lightning Network was in the crypto-space’s limelight recently after it crossed around $5 million per channel capacity, with the reason speculated to be the Bitcoin bull run. Further, the Lightning Network gained support from one of the leading cryptocurrency exchanges Zebpay, after it announced Lightning payments in around 131 countries.





Subscribe to AMBCrypto’s Newsletter




Follow us on Telegram | Twitter | Facebook



Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Bitcoin

Huobi, Bitfinex, and other exchanges allegedly linked to laundering/mixing of Bitcoins

Avatar

Published

on

Huobi, Bitfinex, and other exchanges are allegedly linked in laundering/mixing of Bitcoins
Source: Unsplash

On 19 May, 2019, @Whale_Alert tweeted a transaction of 2000 BTCs between Bitfinex and an unknown wallet, which after in-depth research by a Twitter user, confirmed that it was linked with wash-trading, mixing and laundering of funds. The funds circulated over various exchanges like Bitfinex, Binance, Huobi, Coinbase, and others, raise serious questions regarding AML laws and more.

The flagged transaction was sent from 1HL5rZWw5rGzFAB1mThEMxwazEBtWigs7B to two distinct addresses.

The Twitter user, @Proofofresearch, flagged this transaction and revealed the exchanges involved [directly or indirectly]. The user tweeted,

The user flagged a few addresses in the clusters which sent a significant amount of funds, shown in the image attached below.

Source: Twitter | CryptoMedication

The entity 145631092, as seen in the above chart, the funds sent by Huobi from this cluster ended on July 21, 2017. Another wallet “17hf5H8D6Yc4B7zHEg3orAtKn7Jhme7Adx”, linked to having transactions with Huobi has one particular transaction that stands out as it has an op_code named “People! help!”, which was transferred on March 30, 2019.

Source: Smartbit

The wallet address “19V5joogtZCCj3YWcP9pNT8eKLSZybc1Kq” has only four transactions in total. Upon checking the previous transaction for this address, the transaction with hash “bee4795db198230d6baad2e9dbba42b597c635b2471101641cce99e1ff0e91e4” stands out, since it is linked to darknet market places, the user tweeted.

Source: Twitter | CryptoMedication

Further, the address “3M1QVCjXn38AUdUxbLCH4WUZc1ai72ZKgr” that sent funds to the above-mentioned wallet, has a strong connection to darknet market places like the Hydra Market place.

Source: Twitter | Cryptomedication

The source of these funds was directly linked again with Hydra Market place, with the user tweeting,

The Twitter user further alleged that the addresses linked to these clusters were attached to fraud and some user[s] was “selling accounts at Coinbase/Huobi/Bittrex/Binance.” The Twitter user also urged the compliance team of the respective exchanges to close these flagged accounts ASAP.

The user added that all the funds linked to darknet market places were later deposited in Huobi exchange, which according to the user, gets mixed by Huobi.



Additionally, the user added,

“There are zero customers involved in any of these transactions at this point. That much is obvious. These addresses are not functioning as customer deposit addresses. That’s a guarantee. Funds go to Binance/OKex/Poloniex/BTCBox.com… By FAR, Okex is the most frequent recipient of funds from these Huobi-controlled addresses. Please keep in mind that these are not deposit addresses. These are addresses where Huobi is literally mixing the funds and sending them to other exchanges for some reason.”

One particular address connected to Bitfinex in this fiasco, “1LSgEKji3ZoGdvzBgkcJMej74iBd38fySb,” has received 1 million Bitcoins, according to the user. The user added,

“As stated before, Binance/Coinbase/Bitfinex/Huobi/Bittrex/Coinbase/”Bitbank”/Bithumb/OKex are all pals in this laundering scheme together. They mix and mash funds and operate in a symbiotic fashion – replenishing stores when necessary… In this case, Huobi’s hands are dripping if there’s such a thing as catching someone ‘red-handed’.”





Subscribe to AMBCrypto’s Newsletter


Continue Reading

Trending