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Keet Is Introducing P2P Digital Communications, Will Integrate Bitcoin Payments

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Keet Is Introducing P2P Digital Communications, Will Integrate Bitcoin Payments

Cryptocurrency exchange Bitfinex and USDT stablecoin issuer Tether have collaborated with the Hypercore open-source protocol team to launch a new peer-to-peer (P2P) communications application, Keet.

Keet allows a given set of parties to exchange instant video, message and file communications in a truly P2P fashion.

The approach improves upon popular end-to-end encrypted but centralized offerings such as Zoom and WhatsApp because the data being shared isn’t forwarded to a central server at any time; rather, the connection is established purely between the users taking part in the chat — lowering latency and increasing reliability.

Keet is launching its alpha version today, and users can download the application on its website. The mobile version of the app is expected to be launched by November 2022.

Holepunch: The Tech Behind Keet

Keet serves as a demo application of what the underlying technology being worked on by the three teams over the past three years, Holepunch, can achieve.

Holepunch, which leverages BitTorrent-like computer networking infrastructure, will be fully launched to the public as an open-source software development kit (SDK) in December 2022. As a nod to “holepunching” — the act of a computer in directly connecting to another — the backboning infrastructure aims to make it easier for developers to develop truly P2P apps with the Hypercore stack.

Hypercore is a peer-to-peer data network built on signed, append-only logs. These logs work similarly to a blockchain, but without the consensus algorithm and thus without the need for a global ledger state to be kept by all nodes.

Holepunch makes Hypercore more accessible by abstracting away low-level technical details of the protocol. It takes Hypercore one step further by simplifying the architecture and enabling more people to build apps with it — which enabled a single frontend developer to build Keet in under four months, chief strategy officer of Holepunch and CTO of Bitfinex and Tether, Paolo Ardoino, told Bitcoin Magazine.

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“Holepunch offers a range of easy-to-use, collaborative, P2P data structures allowing developers to mainly focus on building great apps rather than having to be networking or P2P experts,” Ardoino and Holepunch CEO Mathias Buus said in a joint statement sent to Bitcoin Magazine. “Having built Keet on top of Holepunch, we know firsthand how powerful the platform is, and we cannot wait to see what other developers will build.”

All communications on Keet are encrypted by default, as the app leverages asymmetric cryptography. The application generates ED25519 private and public key pairs locally upon first launch.

“Keys are generated on device, all locally, and we’re working on adding support for various hardware secure modules (HSMs), like Ledger, to give more flexibility to users,” Ardoino and Buus explained. “This means in the future in addition to keeping their keys on their local device, users can store them on external hardware or their phones.”

Public keys are announced to Holepunch’s distributed hash table (DHT), an open network of computers that can be used by peers to discover and connect to each other.

“Our DHT is used to both discover peers (i.e., mapping a public key to a peer), and to facilitate ‘holepunching,’” Ardoino and Buus said. “In traditional systems, like WebRTC and others, this happens through a centralized server, which leaks a lot of metadata. With Keet this happens using multiple DHT nodes, each only having partial information, meaning much less metadata is lost.”

Holepunch forgoes using a blockchain and a native token entirely, enabling distributed apps to be created for scalability with minimal resources.

“Instead of relying on a shared blockchain between all users of the app, each user constructs many small data structures” which are used for storing the user’s own data as well as that of those in the same call, Ardoino and Buus explained.

“When using blockchains, all of this data has to be stored in one big chain, strictly ordered, and replicated between all users globally, which makes sense for financial systems such as Bitcoin,” they continued. “However, for normal apps, it’s often much more efficient to use a bunch of smaller data structures, only storing local data.”

Speaking of Bitcoin, Ardoino told Bitcoin Magazine the team is working on integrating into the SDK the ability to send Lightning payments. Possibilities for bitcoin in Holepunch apps include allowing users to stream BTC to content creators, make regular P2P payments, and offer tips. The SDK will also support Tether’s USDT.

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“Bitcoin and Tether payments are add-on features to provide payment rails/options for people using applications built on top of Holepunch or plan to build/offer services through the Holepunch network,” Ardoino and Buus said.

Holepunch will provide primitives to support the digital P2P payment options in a non-custodial form.

“Differently from other projects [like] Impervious AI … Holepunch uses pure P2P communication techniques (DHT, distributed holepunching, swarming) … that are decoupled from the payment system in order to achieve the highest level of freedom in reaching the scalability requirements of a mass communication system,” they added.

Holepunch’s team reimplemented low-level networking protocols to independently select the best technology for highly-scalable data streams.

“This approach resulted in a really flexible solution, expanding from the Merkle log data structures used in Hypercore (that inherently offers data verification and integrity) to a platoon of small libraries and modules that can be hooked together to build mesh networks with high-availability,” the executives said.

Ardoino told Bitcoin Magazine that options currently being considered by the Holepunch team in regards to Lightning integration include integrating services such as Blockstream’s Greenlight, which provide low-cost, on-demand but non-custodial Lightning node management. The team is also exploring enabling full Lightning node integration, Ardoino said.

Payments is one facet of communication, Buus and Ardoino highlighted, which can be offered as an optional service to users embarking on P2P, unstoppable video, audio or text chats.

“Keet is a good example to explain all the above. Keet’s goal is to become the most unstoppable communication application, offering a great user experience, with maximum privacy and security,” they said. “This has nothing to do with payments since video/audio/text chats are pure data streams. Payments in the context of Keet are optional and can be used to offer tips, paying for livestreams, sending money to friends and family, etc.”

Keet

In addition to better performance and easier scalability, users also gain lower latency and more privacy in using distributed apps like Keet that don’t leverage inherently inefficient blockchains, the two executives said.

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“Users have to replicate very little data to join a call — in fact we do a series of advanced indexing techniques to ensure that only a subset of data in these small data structures needs to be replicated,” they added.

“In Keet, you can see this in action, if you do things like sharing a big file in the chat. When you do that you’ll notice it instantly pops up for other users, and only when users download the file, do the missing parts start replicating. Once you have the data you can help reshare it with other users, making it very scalable.”

Bitcoin Magazine tested Keet ahead of launch by joining a call with three people. In a test run, a video file of 3 gigabytes was shared by one of the participants, which the other two users were able to start playing in less than one minute.

Keet’s data sharing mechanism leverages concepts made popular by BitTorrent — users collectively download and seed packets of data to each other in a way that removes the need for the original source to keep feeding information for each new user.

This, a characteristic of Holepunch itself as mentioned previously, could for instance enable P2P, censorship-resistant streaming applications to be built with the SDK — which the streamer would be able to host with simple single board computers like a Raspberry Pi. As users join, they begin feeding each other with the streaming data, relieving the burden on the host to share its data packets to all viewers — a reality of streaming services like Twitch and YouTube that necessarily rely on centralized servers to mediate.

Keet abstracts most of the work away from the user in a simple but functional and intuitive user interface. It requires access to a microphone and camera, and while privacy-conscious people can disable the camera within the call, the app won’t function without access to it being granted first.

The Web3-Contrarian Trend

While the Web3 hype that accelerated over the past couple of years has hit the drum of tokenizing all things and putting everything on a blockchain as the best alternative to decentralize the internet, a countertrend has recently emerged.

The creation and development of P2P infrastructure that, despite the Web3 fuss, doesn’t leverage blockchain technology at all is picking up.

One such example is Web5, a tongue-in-cheek response to Web3 and “crypto” by their perhaps most prominent critic, Jack Dorsey. The Block CEO and co-founder and ex-CEO of Twitter has been vocal about the pitfalls of Web3 — which he claims asymmetrically favors venture capitalists at the expense of retail investors and the public for whom the technology was allegedly intended.

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Web5 was announced in June. The initiative, which is being worked on by Block subsidiary TBD, leverages Bitcoin and a plethora of sound computer science technologies to create an ecosystem of decentralized identities, data storage and applications in which the users are in control of their personal information.

Ardoino and Buus argue their solution, Holepunch, is more flexible than Web5.

“Web5, from what we have seen so far, has a more complex and predetermined structure than Holepunch,” the duo told Bitcoin Magazine. “Holepunch provides a set of primitives and the scaffolding to build applications without trying to force specific patterns.”

Another shot at creating a token-free decentralized web was announced in November by Synonym, a company owned by Tether. Despite it being seemingly contradictory for Tether to have two ventures on the same subject, Ardoino and Buus explained the offerings can be complementary.

“Synonym could leverage Holepunch SDK to build part of their services in the roadmap,” they said. “Synonym and Holepunch are not in competition but rather complementary in terms of vision and products they plan to build.”

Which decentralized version of the web will reign as the winner in the future remains to be seen, but surely the one that provides the most value to the end user, not venture capitalists, is more likely to be successful.

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El Salvador Takes First Step To Issue Bitcoin Volcano Bonds

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El Salvador Takes First Step To Issue Bitcoin Volcano Bonds

El Salvador’s Minister of the Economy Maria Luisa Hayem Brevé submitted a digital assets issuance bill to the country’s legislative assembly, paving the way for the launch of its bitcoin-backed “volcano” bonds.

First announced one year ago today, the pioneering initiative seeks to attract capital and investors to El Salvador. It was revealed at the time the plans to issue $1 billion in bonds on the Liquid Network, a federated Bitcoin sidechain, with the proceedings of the bonds being split between a $500 million direct allocation to bitcoin and an investment of the same amount in building out energy and bitcoin mining infrastructure in the region.

A sidechain is an independent blockchain that runs parallel to another blockchain, allowing for tokens from that blockchain to be used securely in the sidechain while abiding by a different set of rules, performance requirements, and security mechanisms. Liquid is a sidechain of Bitcoin that allows bitcoin to flow between the Liquid and Bitcoin networks with a two-way peg. A representation of bitcoin used in the Liquid network is referred to as L-BTC. Its verifiably equivalent amount of BTC is managed and secured by the network’s members, called functionaries.

“Digital securities law will enable El Salvador to be the financial center of central and south America,” wrote Paolo Ardoino, CTO of cryptocurrency exchange Bitfinex, on Twitter.

Bitfinex is set to be granted a license in order to be able to process and list the bond issuance in El Salvador.

The bonds will pay a 6.5% yield and enable fast-tracked citizenship for investors. The government will share half the additional gains with investors as a Bitcoin Dividend once the original $500 million has been monetized. These dividends will be dispersed annually using Blockstream’s asset management platform.

The act of submitting the bill, which was hinted at earlier this year, kickstarts the first major milestone before the bonds can see the light of day. The next is getting it approved, which is expected to happen before Christmas, a source close to President Nayib Bukele told Bitcoin Magazine. The bill was submitted on November 17 and presented to the country’s Congress today. It is embedded in full below.

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How I’ll Talk To Family Members About Bitcoin This Thanksgiving

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How I’ll Talk To Family Members About Bitcoin This Thanksgiving

This is an opinion editorial by Joakim Book, a Research Fellow at the American Institute for Economic Research, contributor and copy editor for Bitcoin Magazine and a writer on all things money and financial history.

I don’t.

That’s it. That’s the article.


In all sincerity, that is the full message: Just don’t do it. It’s not worth it.

You’re not an excited teenager anymore, in desperate need of bragging credits or trying out your newfound wisdom. You’re not a preaching priestess with lost souls to save right before some imminent arrival of the day of reckoning. We have time.

Instead: just leave people alone. Seriously. They came to Thanksgiving dinner to relax and rejoice with family, laugh, tell stories and zone out for a day — not to be ambushed with what to them will sound like a deranged rant in some obscure topic they couldn’t care less about. Even if it’s the monetary system, which nobody understands anyway.

Get real.

If you’re not convinced of this Dale Carnegie-esque social approach, and you still naively think that your meager words in between bites can change anybody’s view on anything, here are some more serious reasons for why you don’t talk to friends and family about Bitcoin the protocol — but most certainly not bitcoin, the asset:

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  • Your family and friends don’t want to hear it. Move on.
  • For op-sec reasons, you don’t want to draw unnecessary attention to the fact that you probably have a decent bitcoin stack. Hopefully, family and close friends should be safe enough to confide in, but people talk and that gossip can only hurt you.
  • People find bitcoin interesting only when they’re ready to; everyone gets the price they deserve. Like Gigi says in “21 Lessons:”

“Bitcoin will be understood by you as soon as you are ready, and I also believe that the first fractions of a bitcoin will find you as soon as you are ready to receive them. In essence, everyone will get ₿itcoin at exactly the right time.”

It’s highly unlikely that your uncle or mother-in-law just happens to be at that stage, just when you’re about to sit down for dinner.

  • Unless you can claim youth, old age or extreme poverty, there are very few people who genuinely haven’t heard of bitcoin. That means your evangelizing wouldn’t be preaching to lost, ignorant souls ready to be saved but the tired, huddled and jaded masses who could care less about the discovery that will change their societies more than the internal combustion engine, internet and Big Government combined. Big deal.
  • What is the case, however, is that everyone in your prospective audience has already had a couple of touchpoints and rejected bitcoin for this or that standard FUD. It’s a scam; seems weird; it’s dead; let’s trust the central bankers, who have our best interest at heart.
    No amount of FUD busting changes that impression, because nobody holds uninformed and fringe convictions for rational reasons, reasons that can be flipped by your enthusiastic arguments in-between wiping off cranberry sauce and grabbing another turkey slice.
  • It really is bad form to talk about money — and bitcoin is the best money there is. Be classy.

Now, I’m not saying to never ever talk about Bitcoin. We love to talk Bitcoin — that’s why we go to meetups, join Twitter Spaces, write, code, run nodes, listen to podcasts, attend conferences. People there get something about this monetary rebellion and have opted in to be part of it. Your unsuspecting family members have not; ambushing them with the wonders of multisig, the magically fast Lightning transactions or how they too really need to get on this hype train, like, yesterday, is unlikely to go down well.

However, if in the post-dinner lull on the porch someone comes to you one-on-one, whisky in hand and of an inquisitive mind, that’s a very different story. That’s personal rather than public, and it’s without the time constraints that so usually trouble us. It involves clarifying questions or doubts for somebody who is both expressively curious about the topic and available for the talk. That’s rare — cherish it, and nurture it.

Last year I wrote something about the proper role of political conversations in social settings. Since November was also election month, it’s appropriate to cite here:

“Politics, I’m starting to believe, best belongs in the closet — rebranded and brought out for the specific occasion. Or perhaps the bedroom, with those you most trust, love, and respect. Not in public, not with strangers, not with friends, and most certainly not with other people in your community. Purge it from your being as much as you possibly could, and refuse to let political issues invade the areas of our lives that we cherish; politics and political disagreements don’t belong there, and our lives are too important to let them be ruled by (mostly contrived) political disagreements.”

If anything, those words seem more true today than they even did then. And I posit to you that the same applies for bitcoin.

Everyone has some sort of impression or opinion of bitcoin — and most of them are plain wrong. But there’s nothing people love more than a savior in white armor, riding in to dispel their errors about some thing they are freshly out of fucks for. Just like politics, nobody really cares.

Leave them alone. They will find bitcoin in their own time, just like all of us did.

This is a guest post by Joakim Book. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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RGB Magic: Client-Side Contracts On Bitcoin

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RGB Magic: Client-Side Contracts On Bitcoin

This is an opinion editorial by Federico Tenga, a long time contributor to Bitcoin projects with experience as start-up founder, consultant and educator.

The term “smart contracts” predates the invention of the blockchain and Bitcoin itself. Its first mention is in a 1994 article by Nick Szabo, who defined smart contracts as a “computerized transaction protocol that executes the terms of a contract.” While by this definition Bitcoin, thanks to its scripting language, supported smart contracts from the very first block, the term was popularized only later by Ethereum promoters, who twisted the original definition as “code that is redundantly executed by all nodes in a global consensus network”

While delegating code execution to a global consensus network has advantages (e.g. it is easy to deploy unowed contracts, such as the popularly automated market makers), this design has one major flaw: lack of scalability (and privacy). If every node in a network must redundantly run the same code, the amount of code that can actually be executed without excessively increasing the cost of running a node (and thus preserving decentralization) remains scarce, meaning that only a small number of contracts can be executed.

But what if we could design a system where the terms of the contract are executed and validated only by the parties involved, rather than by all members of the network? Let us imagine the example of a company that wants to issue shares. Instead of publishing the issuance contract publicly on a global ledger and using that ledger to track all future transfers of ownership, it could simply issue the shares privately and pass to the buyers the right to further transfer them. Then, the right to transfer ownership can be passed on to each new owner as if it were an amendment to the original issuance contract. In this way, each owner can independently verify that the shares he or she received are genuine by reading the original contract and validating that all the history of amendments that moved the shares conform to the rules set forth in the original contract.

This is actually nothing new, it is indeed the same mechanism that was used to transfer property before public registers became popular. In the U.K., for example, it was not compulsory to register a property when its ownership was transferred until the ‘90s. This means that still today over 15% of land in England and Wales is unregistered. If you are buying an unregistered property, instead of checking on a registry if the seller is the true owner, you would have to verify an unbroken chain of ownership going back at least 15 years (a period considered long enough to assume that the seller has sufficient title to the property). In doing so, you must ensure that any transfer of ownership has been carried out correctly and that any mortgages used for previous transactions have been paid off in full. This model has the advantage of improved privacy over ownership, and you do not have to rely on the maintainer of the public land register. On the other hand, it makes the verification of the seller’s ownership much more complicated for the buyer.

Title deed of unregistered real estate propriety

Source: Title deed of unregistered real estate propriety

How can the transfer of unregistered properties be improved? First of all, by making it a digitized process. If there is code that can be run by a computer to verify that all the history of ownership transfers is in compliance with the original contract rules, buying and selling becomes much faster and cheaper.

Secondly, to avoid the risk of the seller double-spending their asset, a system of proof of publication must be implemented. For example, we could implement a rule that every transfer of ownership must be committed on a predefined spot of a well-known newspaper (e.g. put the hash of the transfer of ownership in the upper-right corner of the first page of the New York Times). Since you cannot place the hash of a transfer in the same place twice, this prevents double-spending attempts. However, using a famous newspaper for this purpose has some disadvantages:

  1. You have to buy a lot of newspapers for the verification process. Not very practical.
  2. Each contract needs its own space in the newspaper. Not very scalable.
  3. The newspaper editor can easily censor or, even worse, simulate double-spending by putting a random hash in your slot, making any potential buyer of your asset think it has been sold before, and discouraging them from buying it. Not very trustless.

For these reasons, a better place to post proof of ownership transfers needs to be found. And what better option than the Bitcoin blockchain, an already established trusted public ledger with strong incentives to keep it censorship-resistant and decentralized?

If we use Bitcoin, we should not specify a fixed place in the block where the commitment to transfer ownership must occur (e.g. in the first transaction) because, just like with the editor of the New York Times, the miner could mess with it. A better approach is to place the commitment in a predefined Bitcoin transaction, more specifically in a transaction that originates from an unspent transaction output (UTXO) to which the ownership of the asset to be issued is linked. The link between an asset and a bitcoin UTXO can occur either in the contract that issues the asset or in a subsequent transfer of ownership, each time making the target UTXO the controller of the transferred asset. In this way, we have clearly defined where the obligation to transfer ownership should be (i.e in the Bitcoin transaction originating from a particular UTXO). Anyone running a Bitcoin node can independently verify the commitments and neither the miners nor any other entity are able to censor or interfere with the asset transfer in any way.

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transfer of ownership of utxo

Since on the Bitcoin blockchain we only publish a commitment of an ownership transfer, not the content of the transfer itself, the seller needs a dedicated communication channel to provide the buyer with all the proofs that the ownership transfer is valid. This could be done in a number of ways, potentially even by printing out the proofs and shipping them with a carrier pigeon, which, while a bit impractical, would still do the job. But the best option to avoid the censorship and privacy violations is establish a direct peer-to-peer encrypted communication, which compared to the pigeons also has the advantage of being easy to integrate with a software to verify the proofs received from the counterparty.

This model just described for client-side validated contracts and ownership transfers is exactly what has been implemented with the RGB protocol. With RGB, it is possible to create a contract that defines rights, assigns them to one or more existing bitcoin UTXO and specifies how their ownership can be transferred. The contract can be created starting from a template, called a “schema,” in which the creator of the contract only adjusts the parameters and ownership rights, as is done with traditional legal contracts. Currently, there are two types of schemas in RGB: one for issuing fungible tokens (RGB20) and a second for issuing collectibles (RGB21), but in the future, more schemas can be developed by anyone in a permissionless fashion without requiring changes at the protocol level.

To use a more practical example, an issuer of fungible assets (e.g. company shares, stablecoins, etc.) can use the RGB20 schema template and create a contract defining how many tokens it will issue, the name of the asset and some additional metadata associated with it. It can then define which bitcoin UTXO has the right to transfer ownership of the created tokens and assign other rights to other UTXOs, such as the right to make a secondary issuance or to renominate the asset. Each client receiving tokens created by this contract will be able to verify the content of the Genesis contract and validate that any transfer of ownership in the history of the token received has complied with the rules set out therein.

So what can we do with RGB in practice today? First and foremost, it enables the issuance and the transfer of tokenized assets with better scalability and privacy compared to any existing alternative. On the privacy side, RGB benefits from the fact that all transfer-related data is kept client-side, so a blockchain observer cannot extract any information about the user’s financial activities (it is not even possible to distinguish a bitcoin transaction containing an RGB commitment from a regular one), moreover, the receiver shares with the sender only blinded UTXO (i. e. the hash of the concatenation between the UTXO in which she wish to receive the assets and a random number) instead of the UTXO itself, so it is not possible for the payer to monitor future activities of the receiver. To further increase the privacy of users, RGB also adopts the bulletproof cryptographic mechanism to hide the amounts in the history of asset transfers, so that even future owners of assets have an obfuscated view of the financial behavior of previous holders.

In terms of scalability, RGB offers some advantages as well. First of all, most of the data is kept off-chain, as the blockchain is only used as a commitment layer, reducing the fees that need to be paid and meaning that each client only validates the transfers it is interested in instead of all the activity of a global network. Since an RGB transfer still requires a Bitcoin transaction, the fee saving may seem minimal, but when you start introducing transaction batching they can quickly become massive. Indeed, it is possible to transfer all the tokens (or, more generally, “rights”) associated with a UTXO towards an arbitrary amount of recipients with a single commitment in a single bitcoin transaction. Let’s assume you are a service provider making payouts to several users at once. With RGB, you can commit in a single Bitcoin transaction thousands of transfers to thousands of users requesting different types of assets, making the marginal cost of each single payout absolutely negligible.

Another fee-saving mechanism for issuers of low value assets is that in RGB the issuance of an asset does not require paying fees. This happens because the creation of an issuance contract does not need to be committed on the blockchain. A contract simply defines to which already existing UTXO the newly issued assets will be allocated to. So if you are an artist interested in creating collectible tokens, you can issue as many as you want for free and then only pay the bitcoin transaction fee when a buyer shows up and requests the token to be assigned to their UTXO.

Furthermore, because RGB is built on top of bitcoin transactions, it is also compatible with the Lightning Network. While it is not yet implemented at the time of writing, it will be possible to create asset-specific Lightning channels and route payments through them, similar to how it works with normal Lightning transactions.

Conclusion

RGB is a groundbreaking innovation that opens up to new use cases using a completely new paradigm, but which tools are available to use it? If you want to experiment with the core of the technology itself, you should directly try out the RGB node. If you want to build applications on top of RGB without having to deep dive into the complexity of the protocol, you can use the rgb-lib library, which provides a simple interface for developers. If you just want to try to issue and transfer assets, you can play with Iris Wallet for Android, whose code is also open source on GitHub. If you just want to learn more about RGB you can check out this list of resources.

This is a guest post by Federico Tenga. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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