10

A sidechain has its own blockchain which is coupled to the Bitcoin blockchain via a two-way peg. This allows tokens on the Bitcoin blockchain to be frozen in order to make new tokens available on the sidechain. In turn tokens on the sidechain can be either destroyed or frozen to move money back to the Bitcoin blockchain. Lightning Network is not a sidechain....


7

There are two types of EWallets, hosted (shared) EWallets and hybrid EWallets. With hosted EWallets, all the coins are shared (all customers funds are combined) in the host's EWallet. Examples of this are Paytunia.com, Instawallet.org, EasyWallet.org, WalletBit.com, as well as the online wallets with the exchanges, such as MtGox.com, Bitfloor, etc. ...


6

Craig Wright's statement is fundamentally incorrect. Craig Wright is often wrong; he spews nonsense and technobabble and doesn't seem to actually understand anything. First of all, the Lightning Network is not a sidechain. It is a network of off-chain payment channels. Since each channel is directly funded with Bitcoin and the transactions made in the ...


5

Several exchanges have published reports (OKCoim, Kraken) but Bitfinex is the only one I am aware of to offer real time proof of reserves with individual BitGo wallets. "The era of commingling customer Bitcoin and all of the associated security exposures is over" http://www.businesswire.com/news/home/20150603005462/en/Bitfinex-BitGo-Partner-Create-World%E2%...


3

While the other answers have done a good job of explaining why the statement is misleading, I want to point out that it is technically true. Again, what he said was: This occurs because schemes such as segregated witness allow for the introduction of fractional reserve systems into bitcoin. And that's true. You could, if you wanted to, build a fractional ...


3

For currency in the form of Ripple IOUs, yes. Anyone can tell at any time the total outstanding value of all IOUs in a given currency for a given issuer. So a gateway could, if it wished to, provide provable reserves relative to its outstanding IOUs. However, gateways typically also hold fiat that's not in the form of IOUs. Gateways currently use a two-step ...


2

It is pretty simple. Persons A, B, and C store 10 BTC each with you, so you have 30BTC. You figure on any day you need 10BTC handy for all of the transactions of ABC. That leaves you with 20BTC to spend, and assuming they all don't come asking for it at the same time, you are fine. When doing this, you need them to send you the BTC, and you keep a record of ...


2

As Chris mentioned, this is the default behavior of bitcoind which the eWallet uses - disassociating addresses from accounts. Users expect the funds to be immediately available. If everyone has their own address, it means all the deposited funds must be in a hot wallet, which is dangerous since it can be hacked and stolen. A prudent eWallet will keep most of ...


2

David is right that Bitcoin in itself does not prevent the practice of fractional reserve banking. But the difference with Bitcoin is that unlike gold, you now have a digital, easily transferable, easily storable, easily secured currency. Banks would need to fight much harder for deposits now because there is alot less reason to trust a bank with your ...


2

Verifying that an eWallet doesn't do fractional reserve requires collaboration on its part (and its users), and I hope in the future most will collaborate this way. Every user will choose a unique identifier (which can be unrelated to any other identifying detail if they wish, or not if they want their ownership to be known publicly), and the eWallet will ...


1

The concept of a money multiplier is meaningless in an unregulated environment. The money multiplier is, by definition, a legal limit imposed on the reserves banks must have.


1

Only their XRP holdings, bitcoin holdings, devcoin holdings, namecoin holdings, barbequecoin holdings, ixcoin holdings etcetera etcetera etcetera come equipped naturally with public ledgers, so until the fiats come up with believable reliable public ledgers of their own full transparency seems likely to initially tend to be limited to XRP and the various ...


1

The wallet services are probably just running a single bitcoind server. bitcoind currently only supports a single wallet, and so by far the easiest way to arrange things is to keep all the user funds together in a single large wallet (regularly taking the majority off to an offline wallet for security purposes). Anything else would require custom code to ...


1

One attribute of a shared wallet is that it lessens traceability. In order to track bitcoin spending, records from the EWallet provider would be required. Some exchanges and EWallet providers have stated that they would only provide this information to authorities if required to do so after being subpoenaed. Others don't even retain logs (or at least, not ...


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