Hedge funds will often use borrowed money to amplify their returns. One aspect that has set the hedge fund industry apart is the fact that hedge funds face less regulation than mutual funds and other investment vehicles. The Enigma team wants to build an environment where traders can also become hedge fund managers.
Understanding of the Enigma (Catalyst) system Platform
Enigma project objective: Enigma (Catalyst) platform wants to make it easy for developers to create trading robots and cryptocurrency funds, and then allow other users to emulate their success by purchasing funds/robots through an open marketplace.
Comment: In the sense that they would like to become the pioneer centralize the bitcoin types digital currencies. It looks like a global digital current exchange headquarter. In regards to the digital currency trend, the economic position of Bitcoin & Ethereum will be equivalent to traditional currencies in future. Regarding to our observation, the solid model of finance especially currencies of US dollar looks no longer become the leader of the world. It is better to develop a new concept to consolidated all the cash flow around the world compatible with popular OS system nowadays. According to the fundamental design, Enigma is the protocol run on protocol layer. In additional a platform so called catalyst. Catalyst is an algorithmic trading library for crypto-assets written in Python.
(Catalyst) system Platform OS requirement – Linux, Mac OS and windows 10
Catalyst platform – You are allowed to download the source code from Website (GitHub) setup your environment for development.
Trading Strategies – You can browse a list of strategies submitted by the community through the Enigma’s web application: open an account, learn from others and create your own!
3rd Party APIs – Quantopian, Zipline, Pandas, Numpy & Matplotlib
matplotlib is a plotting library for the Python programming language and its numerical mathematics extension NumPy. Quantopian is an online platform for algorithm development, testing and execution. It offers a web-based Python editor interface with tight integration with a hosted version of their open-source back-testing framework Zipline. Zipline is a Pythonic algorithmic trading library. It is an event-driven system that supports both backtesting and live-trading. pandas is a software library written for the Python programming language for data manipulation and analysis NumPy is a library for the Python programming language
Discussion checkpoint 1: The project objective of Enigma is going to build an environment where traders can also become hedge fund managers.
A common criteria on programming language – banking environment
J.P. Morgan uses Python for its Athena programme, and Bank of America Merrill Lynch has built Quartz using it. Python is now wide-spread across investment banking and hedge funds.
Discussion Checkpoint 2 : We known that Enigma introduce encryption technique so called homomorphic encryption. A way to encrypt data such that it can be shared with a third party and used in computations without it ever being decrypted.
A technical limitation is that bitcoin takes an average of 10 minutes before a transaction receives a network confirmation. What the benefits of Enigma?
- Bitcoin’s block time is 10 minutes
- Ethereum’s block time is 15 seconds.
- LITECOIN – It takes an average of 2.5 minutes for this process to complete.
- MONERO – 1/5th of the time bitcoin generates a block, which does not include any anonymity features
- RIPPLE – The average Ripple network block is generated in as little as 3.5 seconds.
What is the benefits of faster block time from cyber security viewpoint
Empty blocks are often actually good for the network. There is always a non-zero amount of time before miners calculate their next block template. From technical point of view it avoid a duplicate transaction counterfeit by anonymous party.
Defense in depth
It looks that new technology implement on Enigma digital currency platform (Catalyst) looks perfect. So can we say this is a perfect solution? But what is the background reason lets half million worth of digital currency in unknown status? News article claimed that the incident has been caused by email scam. For more details, please see below url for reference.
With Enigma, the attackers used their access to announce a “pre-sale” via Enigma’s site, messaging channels, and email. They provided an Ethereum “address” they controlled for investors to send money to. And that’s exactly what happened, with users handing over 1,492 Ether — around $480,000 at current prices said Business insider UK.
Enigma crypto technology (see below) found by Nazi Germany during World War II.
Alan Turing (United Kingdom) and his attempts to crack the Enigma machinecode during World War II. The decryption method so called banburismus technique (see below)
But Hacker did not going to spend too much man power to break through the crypto system. They are smart to use social engineering technique (SCAM EMAIL) to mislead the investor send the money to a counterfeit site. This technique similar break through enigma crypto system use intercept technique.
My imagination (assumption and proof of concept)
Banburismus was a cryptanalytic process developed by Alan Turing at Bletchley Park in England during the Second World War. A program was initiated by Bletchley Park to design much faster bombes that could decrypt the four-rotor system (Enigma) in a reasonable time. The conceptual ideal shown as below:
A deduction step used by the bombe; while the actual intermediate values after the plugboard P — the “steckered” values — are unknown, if one is guessed then it is possible to use the crib to deduce other steckered values. Here, a guess that P(A) = Y can be used to deduce that P(T) = Q because A and T are linked at the 10th position in the crib.
Above conceptual idea looks have possibilities to crack the Enigma. But this is not the true structure of Enigma (Catalyst) platform. However value and Y and Q are the significant value and apply to similar concept of architecture design to other crypto system. So this is the design weakness of the equivalent.
Apart from that (Catalyst) system Platform & 3rd party APIs are deployed on Python programming language intensively. We agreed that it is hard to avoid vulnerability found on software and hardware today. But hacker execute code can more easy execute on system platform which install python on top.
A critical vulnerability occurs on Sep 2016 in Python.The vulnerability allows remote attackers to have unspecified impact via a negative data size value, which triggers a heap-based buffer overflow (CVE-2016-5636). As a result it leading to arbitrary code execution. If similar vulnerability happen in future, Hacker not only compromise the fund manger Enigma (catalyst) platform, it might possibilities to amplifying the attack to the Enigma exchange.
Discussion checkpoint 3: Engima official announcement will be held on 11th Sep 2017. Let’ s see how the status of finance market to cryptocurrency world. For sure that we will keep track the activities see whether any details let us to start another discussion.
We hope that the Enigma (catalyst) system will succeed in the future.
Goal and Objective