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Cartesi As A Leading Layer-2 Platform For The Development Of Smart Contracts

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Cartesi is taking smart contracts to the next level. It is a chain-agnostic layer-2 infrastructure, solving the pressing problem of scalability on the most important blockchains. Most notably, Cartesi implements a unique Linux-supporting VM, rollups and side-chains to revolutionize the way developers create blockchain applications, allowing them to use mainstream software components.

Using Cartesi, blockchain applications can be developed with the vast domain of mainstream software stacks available today. With this, applications can run off-chain by utilising the high security guarantee of the blockchain, with the advantage of being free from computation limits and high costs.

Being an off-chain decentralized computation platform, Cartesi is unique in the sense that it allows decentralized applications to be run on Linux in a way that is verifiable by the blockchain. Complex processes can be executed off-chain free from blockchains’ computational limits and corresponding fees as mentioned earlier. This serves both as an advantage and strength for the development of dApps.

By offering a Linux runtime environment, Cartesi is the only software-based verifiable off-chain computing system that gives developers access to a vast array of software that evolved in the last 30 years and that enable the applications we use on the internet today.

The biggest innovation of Cartesi is the ability to have typical real-world computations running off-chain on a Linux environment, in a way that is verifiable by the blockchain. Through this, dApps users can achieve consensus off-chain. In case of attempts to perpetrate fraudulent computation, Cartesi uses the blockchain as a supreme court to identify and punish dishonest users.

About Smart Contracts

Smart contracts are lines of codes, stored on a blockchain which automatically execute transactions when predetermined terms and conditions are met. They are computerized transaction protocols that execute the terms of agreement of a contract.

Smart contracts are needed in order to reduce heavy dependence on trusted intermediaries, arbitrations and enforcement costs, fraud and losses, as well as to reduce malicious and accidental exceptions.

First proposed in the early 1990s by Nick Szabo, a smart contract executed contracts between the buyer and the seller with the terms of agreement which has been directly written into the lines of codes prior to the time of execution. The code controls the execution and transactions are trackable but irreversible. This allows trusted transactions and agreements to be executed among disparate, anonymous parties without the need for a central authority or escrow.

In blockchain, developers are using smart contracts to automatically execute transactions when conditions are met using basic lines of codes stored on the blockchain. Smart contracts enable dApps (decentralized Applications) developers to program their applications to execute transactions between two or more parties based on pre-agreed terms. With the use of smart contracts, dApps developers are able to grant users autonomy, trust, security and efficiency. Through smart contracts powered applications, users can exchange money, properties and other valuables in a transparent, conflict-free way without the use of intermediaries or middlemen. This transparency and effectiveness are implemented by rollups.

A rollup is an off-chain aggregation of transactions inside an Ethereum smart contract, which reduces fees and congestion by increasing the throughput of the blockchain from its current 15 tps to over 1,000 tps. Optimistic rollups on the other hand are one type of layer 2 constructions that do not run on Ethereum’s base layer but on top of it. This enables running smart contracts at scale while still being secured by Ethereum.

According to Vitalik Buterin, co-founder of Ethereum and publisher of Bitcoin magazine, blockchain can benefit a wide range of sectors, and not just smart contracts. This shows that Smart contracts use-case with blockchain is not just timely, but also the future. Vitalik further explained that instead of calling them smart contracts, he should have called them something like “persistent scripts”. This is because smart contracts in public blockchain offer a much stronger value proposition than those running on enterprise blockchains. Public blockchain smart contracts enable parties to transact with any other party whether that party is known or anonymous.

 

Cartesi as a Leading Layer-2 Platform

Layer 2 solutions contain several types of solutions: some to scale payment, some are used for scaling smart contracts, and some to do computation off chain. However, one feature they all have in common is moving most of the work off chain and using a permissionless blockchain as anchors to ensure security. Layer-2 systems can become the basic systems used by all dApps.

When compared with traditional computer programs, dApps face two major challenges:

1. Scalability: dApps are crippled by slow transaction rates, light storage space, stringent limits on computation and high fees. These issues are widely recognized among the stumbling blocks impeding the full adoption of blockchain technology.

2. Primitive software infrastructure: Most dApps require a specialized operating system (O.S). O.S have been the basis upon which software development is built. Cut off from all these previous works, dApps developers struggle to accomplish tasks that are trivial for conventional developers.

Cartesi solves these problems by:

1) Offering developers the software and tools supported by a full Linux OS;

2) Moving all the heavy computation off-chain over large amounts of data, that blockchains cannot do;

3) Offering services and a token economy that allows users to securely rely on the network and remain free from inconveniences of blockchain tech (e.g. slow confirmation times, requirement to remain online to resolve disputes, and others)

Through these, Cartesi has given access to dApps developers who need smart contracts to be able to execute their activities on the system. By reducing the confirmation times for contract deals, more time can be spent on developing other valuable aspects of the deals.

Now, it is important to note that no software application can be built in isolation. Mainstream mobile/desktop/web applications today depend on multiple software dependencies that took decades to mature on operating systems like Linux. Without platforms like Cartesi, it could be very difficult for blockchain applications to use mainstream software, libraries and services, unless they sacrifice decentralization in some way.

Also, Cartesi is pursuing an inevitable future where a new generation of dApps would be developed that is today as inconceivable as the modern internet was about 50 years ago. To this end, Cartesi specified and implemented a decentralized Linux infrastructure for scalable blockchain applications. With Cartesi, dApps developers can have dApps’ logic actually running on Linux, preserving decentralization and the security guarantees of the blockchain.

Conclusion

Accordingly, owing to all the above-mentioned merits of the Cartesi system, the leadership position the system maintains among its peers when it comes to executing smart contracts development is apparent. Also, its ability to serve as a conflict resolution centre, most importantly, makes it the best Layer-2 platform on which to carry out the development of smart contracts. Hence, dApps developers, especially in African countries with fast-rising adoption of blockchain technology such as Nigeria, should utilise the Cartesi platform to develop their dApps.

For more information about the Cartesi project, you can check out the links below:

Website: https://cartesi.io 

Whitepaper: https://cartesi.io/cartesi_whitepaper.pdf

Twitter: https://twitter.com/cartesiproject

Explorer: https://explorer.cartesi.io

Blog: https://medium.com/cartesi

Telegram Community: https://t.me/CartesiProject

Telegram Announcements: https://t.me/cartesiannouncements

Discord (Development Community): https://discordapp.com/invite/Pt2NrnS

GitHub: https://github.com/cartesi

Reddit: https://www.reddit.com/r/cartesi/

Article Written by Helen IMAH – Cartesi Nigeria Ambassador





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US Treasury Sanctions Hit Russian Arms Dealer’s Crypto Wallets

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The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed full blocking sanctions on 22 individuals and entities across several countries, including Russia and Cyprus, as part of its sanctions evasion network that supports Russia’s military-industrial complex.

The sanctions were imposed under Executive Order 14024 and are part of the U.S.’s strategy to target sanctions evasion globally, close key channels, and limit Russia’s access to revenue for its war in Ukraine.

US Treasury Goes After Russian Arms Dealer’s Cryptos

The U.S. Treasury’s sanctions were imposed by the Russian Elites, Proxies, and Oligarchs (REPO) Task Force, a multilateral effort to identify, freeze, and seize assets of sanctioned Russians worldwide. This task force leverages information from international REPO partners and key data from Treasury’s Financial Crimes Enforcement Network (FinCEN) to share information, track Russian assets, and sever Russian proxies from the international financial system.

The REPO Task Force aims to maximize the impact of multilateral sanctions while preventing opportunities for Russia to evade or circumvent U.S. and partner sanctions.

The primary target of the sanctions is a Russian sanctions evasion network led by Russia and Cyprus-based arms dealer Igor Zimenkov and his son Jonatan Zimenkov. The Zimenkov network has been involved in projects related to Russia’s defense capabilities, including supplying a Russian company with high-tech devices after Russia’s full-scale invasion of Ukraine. They have also supported sanctioned state-owned Russian defense entities, Rosoboroneksport OAO and State Corporation Rostec, which are critical components of Russia’s military-industrial complex.

Igor and Jonatan Zimenkov have worked closely together to enable Russian defense sales to third-party governments and have engaged directly with Rosoboroneksport’s potential clients to facilitate sales of Russian defense material. Igor Zimenkov has also supported the Belarusian military-industrial complex by enabling the sales efforts of State Owned Foreign Trade Unitary Enterprise Belspetsvneshtechnika in Latin America.

Today, Igor Zimenkov was designated for operating in the defense and related materiel sector of the Russian Federation economy, while Jonatan Zimenkov was designated for having materially assisted, sponsored, or provided financial, material, or technological support for Igor Zimenkov, Rosoboroneksport, and other sanctioned entities.

The Zimenkov network used front companies to funnel money and maintain a lawful appearance. Singapore-based Zimenkov network shell company Asia Trading & Construction PTE Limited and its director, Serena Bee Lin Ng, have sold helicopters to clients in Africa on behalf of the Zimenkov network. Additionally, Cyprus-based Zimenkov network shell company Lobster Management Limited and its director, Mikhail Petrov, have facilitated sanctions evasion by providing support to sanctioned entities.

The Treasury’s OFAC continues to work with its international partners to coordinate information sharing and enforcement and to travel the world in pursuit of sanctions evasion. The sanctions imposed today are a clear signal to Russia and its military-industrial complex that the U.S. and its partners are committed to tightening sanctions enforcement and preventing the evasion of international sanctions.

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BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.



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Digital Wallet Growth Will Enable More Closed-Loop Transactions

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Crypto and fintech investment firm Ark Invest has made bold predictions about digital wallets, estimating that more than half the world will soon be using at least one.

In its Jan. 31 ‘Big Ideas 2023’ research report, Ark Invest revealed that digital wallet global population penetration is currently 40%. This equates to around 3.2 billion users, the firm added.

However, the research suggests that the number of online wallet users will increase at an annual rate of 8%. The firm predicted that this will result in a global population penetration of 65% by 2030:

“Having onboarded billions of consumers and millions of merchants, digital wallets could transform the economics associated with traditional payment transactions, saving them nearly $50 billion in costs.”

It also noted that digital wallets were gaining market share in online and offline transactions. Cash is definitely in decline, accelerated by government initiatives to go digital, as recently seen in Nigeria.


Payment method trends - Ark Invest
Payment method trends – Ark Invest

Digital Wallet Growth to Continue

Ark reported that digital wallets were scaling faster than accounts at traditional financial institutions. Furthermore, U.S. digital wallet adoption rebounded in 2022, surpassing previous highs following a COVID-induced dip.

The firm estimates that U.S. digital wallet users will increase by 7% annually during the next eight years. This will be a growth of around 160 million in 2022 to more than 260 million by the end of the decade.

Digital wallet user growth - Ark Invest
Digital wallet user growth – Ark Invest

Furthermore, online wallets are enabling “closed-loop” ecosystems. This is where consumers and merchants can transact directly, cutting out the middleman. 

“Digital wallets are onboarding millions of merchants to platforms that enable direct consumer-merchant transactions that disintermediate traditional financial institutions,” it noted.

In this closed-loop environment, wallet providers capture more value per transaction, enabling savings to be shared with merchants and consumers.

Open and Closed Lopp transactions - Ark Invest
Open and Closed Lopp transactions – Ark Invest

Additionally, Ark noted that closed-loop transactions could boost the margin structure of wallet providers.

It used Block Inc. (formerly Square) as an example, stating that it paid around 60% of customer transaction fees to third parties in 2022. The fees were paid for interchange, assessment, processing, and bank settlement fees. Block’s net take rate could more than double if customers transacted directly with merchants.

Block Inc. fee structure - Ark Invest
Block Inc. fee structure – Ark Invest

Closed Loop Transactions Could Top 50%

Finally, Ark predicted that these closed-loop transactions could account for over 50% of digital payments by 2030.

It used China as an example where wallets and merchants are largely internal or domestic only.

Closed loop cost savings - Ark Invest
Closed loop cost savings – Ark Invest

In conclusion, digital wallet growth is set to continue. Cutting out the intermediary which they facilitate is beneficial to both the consumer and merchant.

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BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.



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Strike Launches Lightning Remittances in the Philippines

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Bitcoin fintech giant Strike rolled out its Lightning Network money transfer service Send Globally in the Philippines, a $35 billion remittance market.

Send Globally launched in the Southeast Asian country on Jan. 31, 2023, enabling businesses and tourists to receive international money transfers in the Philippine peso. The country receives $35 billion in remittances globally.

How Strike’s Send Globally Service Works

“Remittances are a broken system and Strike delivers an incredibly empowering experience for people to send money around the world in nearly an instant,” Strike CEO Jack Mallers said.

According to a press release, Strike’s remittance service converts a sender’s fiat into Bitcoin and sends the Bitcoin to a Strike partner in the destination country using the Lightning Network, which in the case of the Philippines, is Pouch.ph. Pouch.ph then converts the Bitcoin to the recipient’s fiat currency and credits their bank or mobile money account, with Strike shielding both parties from the tax implications of handling Bitcoin directly.

Bitcoin’s Lightning Network is a layer-two solution on the Bitcoin blockchain that allows micropayments between nodes over a payment channel. Unlike traditional payment networks, Lightning’s low fees enable almost zero-cost remittances.

Recently, Mallers announced a trial to bring Bitcoin Lightning Network payments to retailers through a partnership with Fiserv’s point-of-sale solution Clover Commerce. The trial allows any application with Lightning capability to pay Bitcoin for goods and services at Clover merchants.

Philippine Smartphone and Internet Adoption Auger Well for Strike

Send Globally rolled out to Strike users in Ghana, Nigeria, and Kenya on Dec. 6, 2022, where it has reportedly gained rapid traction.

However, mainstream adoption in the Philippines will depend heavily on network effects, driven by smartphone and internet penetration.

According to Statista, the number of smartphone users will increase from 85 million in 2022 to 87 million by 2023. Additionally, forecasts suggest smartphone users will increase to 91.5 million in 2025, representing roughly 83% of the island nation’s population.

Smartphone Adoption in the Philippines
Smartphone Adoption in the Philippines | Source: Statista

Additionally, Statista predicts that about three-quarters of the population will have internet access by the end of 2023. Growing internet access increases the chance of Strike’s success, since it helped drive adoption of crypto game Axie Infinity.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

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BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.



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