Vitalik Buterin & J.Poon launch Plasma smart contracts

Vitalik Buterin and Joseph Poon lhave announced Plasma smart contracts 
10 August 2017   2955

What is smart contracts?

Smart contracts are computer protocols intended to facilitate, verify, or enforce the negotiation or performance of a contract. 

The aim with smart contracts is to provide security that is superior to traditional contract law and to reduce other transaction costs associated with contracting. The most prominent smart contract implementation is the Ethereum blockchain platform.

As Vitalik Buterin explains, in a smart contract approach, an asset or currency is transferred into a program “and the program runs this code and at some point it automatically validates a condition and it automatically determines whether the asset should go to one person or back to the other person, or whether it should be immediately refunded to the person who sent it or some combination thereof.”

Plasma: Scalable Autonomous Smart Contracts

Today, Vitalik Buterin shared a link leading to a description of Plasma Smart Contracts - the new born child of Joseph Poon and  Buterin himself:

There's no website for the project yet, however, there's some essential information about Plasma provided. Thus, according to the report, Plasma is "a proposed framework for incentivized and enforced execution of smart contracts which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide".

The very first sentence of the abstract, however, seems so complex that most of the users have difficulty understanding it:

Plasma Smart Contracts discussed on reddit.com Plasma Smart Contracts discussed on reddit.com

As Buterin and Poon continue, these smart contracts are "incentivized to continue operation autonomously via network transaction fees, which is ultimately reliant upon the underlying blockchain (e.g. Ethereum) to enforce transactional state transitions".

We propose a method for decentralized autonomous applications to scale to process not only financial activity, but also construct economic incentives for globally persistent data services, which may produce an alternative to centralized server farms.
 

Plasma Team (Buterin & Poon)

Furthermore, Plasma is composed of two key parts of the design: Reframing all blockchain computation into a set of MapReduce functions, and an optional method to do Proof-of-Stake token bonding on top of existing blockchains with the understanding that the Nakamoto Consensus incentives discourage block withholding. As the developers claim, this construction is achieved by composing smart contracts on the main blockchain using fraud proofs whereby state transitions can be enforced on a parent blockchain.

We compose blockchains into a tree hierarchy, and treat each as an individual branch blockchain with enforced blockchain history and MapReducable computation committed into merkle proofs. By framing one's ledger entry into a child blockchain which is enforced by the parent chain, one can enable incredible scale with minimized trust (presuming root blockchain availability and correctness).
 

Plasma Team (Buterin & Poon)

Plasma also has mitigations for the issue of the greatest complexity around global enforcement of non-global data revolving around data availability and block withholding attacks. Thus, it allows for exiting faulty chains while also creating mechanisms to incentivize and enforce continued correct execution of data.

On top of that, Plasma enables persistently operating decentralized applications at high scale.

In case this explanation seems too complex to you, too, here's an easier one kindly provided by one of the reddit.com users:

Plasma Smart Contract discussion on reddit.com Plasma Smart Contract discussion on reddit.com

According to the Plasma project team, the draft is in-progress and may be frequently updated in the next week(s). 

Whitepaper 

Japan to Tighten Regulation Due to Zaif Hack

$ 62 000 000 worth cryptocurrency was stolen from the Zaif exchange few weeks ago
25 September 2018   83

Hacking of Zaif exchange is the reason for toughening control over the market by the financial regulator of Japan, Reuters reports.

The first measure taken was administrative sanctions against the exchange and its operator Tech Bureau Corp. The Financial Services Agency (FSA) has expanded the list of requirements for the latter, pointing out the need to identify preventive measures and search for the organizers of the theft.

Shortly before that, researchers of the Japanese financial company Tech Bureau Corp could not provide details of the theft of $ 62 million from the Zaif crypto exchange at the request of the FSA. The Osaka-based operator had to investigate the causes, consequences of the theft and options for compensating the victims. According to the Agency, the financial company could not cope with the task.

According to the Tech Bureau, the exchange was hacked on September 14 within a few hours. The problem with the server was discovered by the site staff on 17 September. Official confirmation of the incident and notification of the authorities was made only a day later.

Recall, the theft of $ 60 million from the Japanese stock exchange Zaif caused a surge of volatility of bitcoin. For a short time the price was able to overcome the distance of $ 400.