Welcome to Hard Fork Basics, a collection of tips, tricks, guides, and advice to keep you up to date in the cryptocurrency and blockchain world.

If you’ve been in the Bitcoin and cryptocurrency game for any longer than a month, you’ve probably come across someone who has described themselves as a “Bitcoin maximalist.”

But what exactly does that mean? In this article, Hard Fork takes a look at what Bitcoin maximalism is, and what it means for cryptocurrencies.

One coin to rule them all

Being a Bitcoin maximalist is pretty easy, all you have to do is believe, with complete unwavering conviction, that Bitcoin is the only cryptocurrency worth caring about. To the Bitcoin maximalist, all other cryptocurrencies are just “shitcoins.”

While there is of course an ideological component to believing Bitcoin is the one true cryptocurrency, Bitcoin maximalists also base their beliefs on something called “ Metcalfe’s law ,” it’s more casually known as the network effect.

The more connections the better

Metcalfe’s law claims that the effectiveness of a network – such as telecommunications internet, or even social networking – is proportionally related to the square of the number of users connected to that network.

The law expresses the number of unique possible connections in a network. Mathematically speaking, if ‘n’ is the number of nodes in a network, it can be written as n(n – 1)/2.

Despite being primarily theoretical, research has gone some way to validating the concept with real world data.

Still following?

Imagine an internet with only two computers, that network can only make one valuable connection between the two computers. But a network with five nodes can make 10 unique connections, and a network with 10 nodes can make 45 connections. See where this is going?

Simply put, means that the more unique individuals or devices that join a given network, the more valuable each of those devices becomes. More devices means more connections, and therefore more value to the network.

With that in mind, you might start to understand why Bitcoin maximalists detest all other coins. After all, those hoards of altcoins are just serving to take valuable nodes users away from the Bitcoin network.

When the security and integrity of the network increases as more people join, it makes sense that Bitcoin maximalists would want more to join.

But, isn’t competition good for innovation?

In some cases, it is. In others, competition doesn’t really bring anything to the table.

Harvard academics found that firms which compete at a similar technological level invest more in research and development (and thus innovate to overcome the competition) than firms that don’t have direct competition.

However, for smaller and less competitive firms that are lagging behind the market leaders, it actually encourages less investment in R&D and is not as nurturing of innovation.

The outcome is that smaller firms tend to become more specialized and focus on their niche. When a market is highly competitive it tends to encourage diversification, thus reducing the instances where firms compete on equally level terms. In the world of cryptocurrencies, this means that we end up having a market saturated with coins that all claim to do things a little differently. Sound familiar?

With that in mind, Bitcoin maximalists might have a point – to a certain degree. There are hundreds upon thousands of altcoins on the market at the moment, and most of them are probably worth ignoring. But for the overall cryptocurrency market, it’s good for Bitcoin to have viable competition from a handful of combatants to ensure that the coins keep progressing.

It is a free market after all. Give the people a choice, and let them decide.

So, there you have it. Next time someone starts talking with an unwavering belief about how Bitcoin is the one true cryptocurrency, they’re probably a maximalist. And if they also rattle on about how the more people use the cryptocurrency, the better and safer it becomes? Well, then you know for sure they’re a maximalist.

Cryptocurrency scammers target schools, hospitals, government offices with bomb threats

A dangerous email scam appears to be targeting businesses, schools, hospitals, and government buildings across the US in an attempt to extort bitcoin (BTC) with a bomb threat.

A spokesperson for the FBI provided TNW with the following statement:

What you need to know:

It appears the threat is being sent via email as a cryptocurrency extortion scam. One Twitter user took a screenshot of a suspicious email they believe to be related to the ongoing investigations:

TNW has yet to confirm the veracity of this user’s claim, but local news sources across the country are reporting seeing similar emails.

Luckily it appears as though the demands are a hoax. We weren’t able to connect the cryptocurrency wallet address in the above email to any transactions, and law enforcement agents searching buildings where threats have been reported have so far found no explosives.

However, as the FBI warns, it’s still important to take any bomb threat seriously and to report suspicious activity or emails to the authorities immediately.

In related news , an unknown person called in a bomb threat to Columbine High School earlier today in Colorado. Authorities are unsure if this threat was related to ongoing extortion scams, but the threat was later declared false.

NBC News reports authorities continue to investigate bomb threats in Illinois, Ohio, Maryland, Virginia, and California. And a quick Google search for “ bomb threat ” shows an ever-increasing list of cities spanning the nation reporting more of the same.

In the meantime, we again urge anyone receiving a threat to consider it credible until a law enforcement agent specifically gives them directions otherwise. It’s worth keeping in mind that dozens of investigations across the country remain ongoing. It doesn’t matter how many are false threats if one of them isn’t. Stay vigilant and be safe.

We’ve requested more information from the FBI and will update this story as necessary.

Blockchains should have ‘privacy by design’ for GDPR compliance

General data protection regulation (GDPR) and blockchain is one of the industry’s most contentious debates at the moment.

Some believe that public permissionless blockchains cannot be GDPR compliant, and that private blockchains might be the answer to blockchain’s regulatory woes. Even so, private blockchains bring into question the very meaning of what a blockchain is. There is no simple answer.

Dutch blockchain startup, LTO Network, hosted speakers from Barclay’s bank, Cambridge Computer Lab, and Queen Mary University to take on some of these challenging questions at Hard Fork Decentralized last night.

The overarching sentiment from the evening? That we should probably be trying harder to get our heads around making blockchain a legally compliant technology that can be used in a broad range of public service settings.

Blockchain design from the ground up

According to Barclay’s Intrapreneur, Julian Wilson, we need to “reconfigure our approach and way of thinking” when building blockchains. We should not be using blockchain‘s as bolt-ons or additions to current business models, but entirely re-imaging our business models built around a suitable blockchain – assuming that a blockchain is the best solution, that is.

In some cases building a blockchain purely for the sake of it is the worst thing a company can do. For a bank that has over 300 years of history, like Barclay’s, it is not as simple as just moving current banking process over to the blockchain. Hundreds of years of evolution can’t simply be unpicked and put onto an off the shelf solution, blockchains need to be bespoke.

Particularly when there are know-your-customer (KYC) policies required by law, not all blockchains would satisfy these laws, thus specialist blockchains need to be created. Indeed, to make a blockchain legally compliant, it should be built with the law in mind, and not the other way around.

Blockchain as a crypto-legal puzzle

Researchers from Queen Mary University believe that solving the blockchain GDPR crypto-legal puzzle is actually quite simple.

Fundamentally, it can be solved by balancing blockchains design with legal requirement from the ground up. “To solve these design puzzles we must use creative solutions that support regulations by design,” said Dave Michels from Queen Mary University.

Michels described one solution to the GDPR crypto-legal puzzle, the right to be forgotten. In this case Michels believes that transaction data could be encrypted with a private key to generate a cipher text which can be stored on the blockchain in an immutable fashion. If one wants to be forgotten, deleting and removing the key makes the transaction data stored in the cipher text unreadable, but does not break the chain of records stored on the blockchain.

The issue however, is this creates a new challenge of where and how to store these private keys, in some cases it can lead to a point of centralization. If this is the case, it challenges the notion of whether decentralization is the best choice for the given application of the blockchain – taking us back square one.

Of course, these solutions are only applicable for GDPR, other nations will have different takes on regulation, so tackling blockchain compliance on a global level is even more difficult.

Indeed, there is not going to be an easy answer to the crypto-legal puzzle that blockchains present. But with legal researchers, bankers, and deveopers – like those at LTO Network’s talk last night – working to solve these puzzles I am sure that a solution will eventually be found. Whether or not that solution can be regarded as a blockchain is a whole other conversation.