Crypto Rating Council: “TRX, DOT and CKB can be recognized as securities”
According to the Crypto Rating Council (CRC), regulators are likely to recognize TRX, DOT, and CKB cryptocurrencies as securities.
CRC was founded last year by Coinbase, Circle and Genesis Capital. The organization analyzes the characteristics of cryptocurrencies and estimates the likelihood of them falling into the category of securities using a five-point system. A top score suggests that a digital asset has all the attributes of a security. Ratings are based on the Howie test and may vary depending on the key parameters of digital assets.
According to CRC member Juan Suarez, the organization does not provide legal advice. She seeks to clarify the approach of the US Securities and Exchange Commission (SEC) and the courts to regulate digital assets, and how appropriate it is to apply securities laws to them.
In mid-April, CRC conducted a preliminary analysis of several cryptocurrencies. The organization came to the conclusion that regulators can recognize cryptocurrencies of Tron, Nervos and Polkadot projects as securities – these assets scored 4.75 points out of five. Crypto assets Cosmos, Stellar and EOS received 3.75 points. However, final estimates have not yet been published and may differ from the initial results of the study.
When compiling the estimates, all available information was taken into account: technical documentation, posts on social networks, data in the GitHub repositories, as well as interviews with CRC. In addition, CRC discussed the information received about the projects with independent lawyers, after which the project was assigned a specific score. However, it is not known how carefully these estimates have been worked out. It should be borne in mind that they can change as projects develop and new information emerges from them. For example, a preliminary ranking of Polkadot was made before the launch of its main network. In the future, the transfer of control over the network to the community may change the project rating.
In April, Nervos Network developers interacted with CRC on the characteristics of the CKB cryptocurrency. Initially, the organization classified the distribution of CKBs as dividends, with the Nervos team claiming that CKBs are utility tokens, not share tokens. Nervos executives said the CKB rating will be revised based on new data.
Canaan introduced new miners for bitcoin mining
Shares of the company went up by 17%, however, it is still several times cheaper than the price of the initial offer
On June 2, Canaan, the Bitcoin mining equipment manufacturer, introduced the new AvalonMiner 1146 Pro device, as announced on its Twitter account. The miner is capable of generating a hashrate of 63 TH / s, the energy consumption is 3276 watts.
Representatives of the company noted that the updated model will increase the efficiency of cryptocurrency mining. The weight of the device is 14.5 kg, the warranty will last for 180 days.
Canaan stock quotes reacted positively. On June 2, they grew by 17%, from $ 2.2
to $ 2.5, at the moment rising to $ 3. However, it is 72% lower than the initial offer price of $ 8.99, held in November.
In the first quarter of 2020, demand for miners decreased, which caused Canaan to incur a loss of $ 5.6 million. The company submitted financial statements according to which revenue from January to April amounted to $ 9.4 million, which is 44.6% higher than last year. At the same time, expenses exceeded $ 15 million. This is due to the fact that in order to increase sales, Canaan reduced the price of devices by almost 2 times.
KuCoin Exchange Introduces Chainalysis KYT and Reactor to Track Transactions
KuCoin cryptocurrency exchange announced the introduction of Chainalysis KYT and Reactor to track suspicious transactions and comply with regulatory requirements.
KuCoin executives said the Chainalysis KYT tool, developed by Chainalysis, an analytic firm, will enable real-time transaction monitoring to prevent money laundering, terrorist financing, and other illegal cryptocurrency transactions. In addition, KuCoin will use the Chainalysis Reactor tool to track suspicious activity on the exchange.
In addition to these services, KuCoin has developed its own internal system for tracking high-risk transactions in the early stages to protect users’ digital assets. In April, KuCoin partnered with Onchain Custodian Custodian Service and Lockton Insurance Company to further protect client crypto assets.
KuCoin Global CEO Johnny Lyu said working with Chainalysis will create a safe trading environment for traders. It is not only about providing infrastructure to the blockchain ecosystem, but also about ensuring strict compliance with the rules of regulatory bodies from different countries.
Chainalysis Sales Director Jason Bonds, in turn, noted that the company is pleased to partner with cryptocurrency exchanges, for which user safety and compliance with KYC / AML procedures are priority tasks. In addition, partnerships with Singapore-based KuCoin will expand Chainalysis’s presence in the Asia-Pacific region.
Chainalysis tools are used by different sites. In March, Paxful’s P2P platform also introduced Chainalysis Reactor and KYT, although, prior to working with Paxful, Chainalysis doubted the security of P2P platforms due to low user disclosure requirements. In addition, last year Chainalysis KYT introduced Bittrex and Bitfinex cryptocurrency exchanges.
Microsoft, IBM and Hyperledger create IWA alliance to develop tokenization standards
Microsoft, IBM and Hyperledger formed the non-profit InterWork Alliance (IWA) to create international standards for tokenized ecosystems.
The alliance was led by Microsoft’s chief architect Marley Gray (Marley Gray) and former CEO of Ethereum Entrepreneurship Alliance Ron Resnik (Ron Reznik). The organization includes more than 28 companies working in the field of blockchain, finance and technology. These include Microsoft, Chainlink, Hyperledger, IBM, Accenture, and NASDAQ.
According to IWA executives, startups developing tokenized ecosystems are focused on individual solutions and promoting their platforms. Nevertheless, the creation of international standards that clearly define the concept and operation of smart contracts will facilitate the collective implementation of distributed business models.
The InterWork Alliance intends to develop three different systems of international standards. The Token Taxonomy Framework will introduce a common language and toolkit. The InterWork Framework will help you put together a variety of contracts using the standard guidelines provided by IWA. Thanks to the “System Analytics” (Analytics Framework), firms can analyze various contracts, use the services of artificial intelligence and reporting on market data.
Hyperlinger Brian Belendorf (Brian Belendorf) said that standards play a crucial role in the development of any technology.
To create distributed applications and data exchange services, a certain structure is needed that will allow companies to work at the business level, regardless of the use of technology. Director of IBM WW Digital Asset Labs Nitin Gaur emphasized that such an alliance with a neutral attitude to all platforms will change the “landscape tokenization” and the entire cryptocurrency industry.
Blockchain and cryptocurrency standards are being developed by other organizations. Last summer, the Institute of Chartered Public Accountants (AICPA) proposed a new set of standards for evaluating blockchain-based audit data.
Ethereum Classic blockchain hosts Phoenix hard fork
Ethereum Classic successfully activated the Phoenix hard fork on block 10 500 839. This is the third hard fork on the ETC blockchain within a year.
ETC Labs Core Technology Coordinator Stevan Lohja said that Phoenix has features implemented in the latest update on Ethereum – Istanbul. This will ensure the technical compatibility of tools and use cases for the Ethereum and Ethereum Classic networks, while preserving their features.
Hard fork developers Atlantis, Agharta and Phoenix will conduct further research on how to further “bring together” the ETC and ETH blockchains. According to Lohja, most customers have already switched to Phoenix, and the number of those who remained on the old version is gradually decreasing. Many cryptocurrency exchanges, wallets and infrastructure services are also in the process of synchronization.
After the upgrade, Core-geth, OpenEthereum, and Multi-geth clients synchronized with the new ETC blockchain. Hyperledger Besu, the relatively new Ethereum Classic client, out of sync during the activation of the hard fork, however this will not negatively impact the network. The Parity Ethereum client is no longer supported by the Parity Tech developer and has been transferred to the OpenEthereum project managed by the community. The Multi-geth client is also under community control. Therefore, for security reasons, developers recommend that site holders switch to Core-geth.
Recall that in September, the Atlantis hard fork was successfully activated on the Ethereum Classic blockchain, and the Agharta hard fork was held in October to increase the level of interaction with the Ethereum network.
OMG Network Launches Beta Level 2 Network to Scale Ethereum
OMG Network developers have introduced a beta version of the “add-on” to scale the Ethereum blockchain to several thousand transactions per second.
OMG Network was established in 2017 under the name OmiseGO. In August of that year, she held an ICO and became one of the first “unicorns” in the industry. But the “cryptozyme” of 2018 crippled the capitalization of the project and the development dragged on.
OMG Network Technical Director Kasima Tharnpipitchai said the solution uses the More Viable Plasma (MoreVP) specification to increase Ethereum throughput. It scales transactions with ETH and ERC-20 standard tokens, grouping them and sending them through a set of smart contracts.
These bundled transactions are verified and verified on a decentralized network. It is the “bundling” of transactions that provides high network bandwidth, in which it will be possible to conduct several thousand secure transactions per second, and commissions for end users will be reduced three times from the current cost.
OMG Network developers have presented a trial version of a web wallet with which users can enter the network, make transactions and return funds to the Ethereum blockchain. He also announced the OMG Network Block Explorer service for tracking transaction history, wallet addresses and other information. With the release of further updates, it is planned to introduce OMG staking. Project management has warned users that OMG Network is in beta and may have network problems, so users are advised to exercise caution.
One of the first “residents” of OMG Network may be Tether, which produces the largest stablecoin USDT by capitalization. Due to the transfer of part of the transactions to the second level, the load on the main network of Ethereum should decrease, as well as the size of the fees.
“Thanks to the switch to OMG Network, we will reduce costs, increase speed and reduce the load on the main network of Ethereum,” said Tether Technical Director Paolo Ardoino.
According to Ardoino, in the near future, Tether support based on OMG Network will appear on the Bitfinex exchange, which will allow traders to “respond faster to trading opportunities.”
At the moment, it is transactions with Tether that occupy the lion’s share of operations in the Ethereum blockchain. According to the estimates of the ETH Gas Station service, over the past month, the total volume of commissions for transactions with USDT in the ERC-20 format amounted to $ 1.85 million.
OMG Network is built on Plasma technology, similar to the Lightning Network, which has opponents. Recently, the Ethereum community has switched to waiting for the launch of the Optimism project. In addition, in November, a startup BloXroute Labs introduced a solution to reduce the average time to create a block and distribute it on the Ethereum blockchain to 172 milliseconds.
Study: “Transactions in Ethereum are easier to deanonymize than in Bitcoin”
Hungarian researchers believe that transactions on the Ethereum blockchain are less confidential than on Bitcoin. The reason for this is the Ethereum Domain Name System (ENS).
The study was conducted by three Hungarian educational institutions: the Institute of Computer Science and Control (SZTAKI), the University of Lorand Eötvös and the University of St. Istvan, as well as the Canadian company HashCloack, led by the developer Ferenc Béres. The researchers analyzed the features of Ethereum, which make it easier to track transactions on this network compared to Bitcoin. The Ethereum account-based model is more open due to address reuse.
“The account-based model increases the likelihood of protocol reuse of addresses. Therefore, from the point of view of anonymity, Ethereum-based cryptocurrencies may be inferior to Bitcoin and other UTXO-based digital currencies ”
Ethereum features an Ethereum Domain Name System (ENS) that maps addresses to .eth domains that are easy to read. Researchers managed to find 890 of these domains hosted on open profiles on Twitter. This may already be enough to reveal whether the owners of these addresses committed compromising actions. For example, about 10% of these wallets were used on gambling platforms, and 5% were used to make payments on resources for adults. According to Beres, ENS has become a “starting point” that allows users to be identified by linking signatures to time zones, as well as through gas prices and direct transfers between wallets. In these ways, you can disclose up to 17% of transactions.
Researchers also found that 7.5% of users of the ETH Tornado Cash mixer received coins for the same wallet from which they started mixing. This means that the efforts of these users who tried to mix transactions turned out to be futile. Analysts have focused on the weaknesses of Ethereum, but some of the tricks can be applied to UTXO-based cryptocurrencies. However, in this case it will be much more difficult to deanonymize transactions.
Last year, scientists from Stanford University introduced a “fully decentralized and confidential payment mechanism” on the Ethereum network to encrypt account balances, deposits, transfers, and coin withdrawals from wallets.
How to store cryptocurrency correctly
Digital money is hard to make and easy to lose. We tell you where it is best to keep your coins, so as not to lose them by mistake or because of intruders
The “crawl” strategy is widespread in the crypto industry: investors buy coins for the long term and do not sell, regardless of market fluctuations. But digital money is easy to lose, even if you do not conclude risky transactions. One of the main questions of everyone who is just starting their acquaintance with the field of cryptocurrencies is how to store them. There are several ways, and each of them has its pros and cons.
The easiest and most understandable way to store cryptocurrency: keep it on the exchange. When creating an account, each user has his own wallet. It supports all coins that are traded on the site, they always have quick access. You can sell or buy. Also one of the advantages of this option: the ability to easily restore access to your account.
In contrast, there is a major minus – the problems of exchanges with security. From this point of view, cryptocurrencies remain in the era of the Wild West, because not a single large trading platform has been left without the attention of hackers. Even the leaders of large exchanges urge not to keep funds on them.
“Please do not store more cryptocurrencies on exchanges than you need to trade. Use Ledger and Trezor (hardware wallets), DEX (decentralized exchanges) – not a panacea, look at The DAO. Open source only says that exploits will be detected earlier (probably by bad guys), ”wrote Kraken CEO Jesse Powell on Twitter.
In 2018, ICORating found that most exchanges (54%) have various security issues. Over the past two years, the situation has improved. Now it’s hard to imagine a site that doesn’t offer to install two-factor authentication. But hackers are improving their skills. Therefore, the exchange is worth storing only the amount that is not afraid to lose.
The exchange can go offline at any time. For example, on March 13, when the price of bitcoin fell to a local minimum of $ 3800, the BitMEX trading platform was not available for trading. The user may lose access to their funds at the most inopportune moment.
An indicative case occurred with customers of the Canadian exchange Einstein. Last fall, she owed more than $ 12 million to customers, while she only had $ 45,000 of “solid assets”. One trader said the company owed to him was $ 535,000, according to another lender, several million dollars.
The choice of exchange must be approached with extreme caution, because there is always a risk of getting into scammers.
The safest way to store cryptocurrencies is hardware wallets (devices that often look like a USB flash drive). But here everything is not so simple and you need to be extremely careful. For example, in December last year, Kraken experts found that a KeepKey wallet can be cracked in 15 minutes, and an attack will cost attackers $ 75.
However, this method is still more reliable, since for hacking criminals need to get physical access to the wallet. If it is stored in a safe place, the risk can be minimized.
Last year, the hacking of the largest trading volume Binance exchange doubled the sales of Ledger wallets. But they often find vulnerabilities or errors in work.
When choosing a hardware wallet as an option for storing your funds, you need to remember that losing a PIN code will result in a loss of cryptocurrency. Also minus hardware wallets – the ability to lose or ruin the physical way. For example, at home it can be broken by children or a dog.
This method has similarities with the option of storage on the exchange. The cryptocurrency does not belong to you, and its fate depends entirely on the service on which it lies. Extremely convenient and unsafe way. Hackers have a ton of options on how to steal funds. For example, hacking a user’s account, the service itself or creating a phishing page. You need to be extremely careful and not keep a large amount of funds in an online wallet.
Online wallets are divided into hybrid and traditional ones, depending on how private keys are stored. In wallets of the first type, separate storage of keys using multi-signature is used, of the second – private keys are on the service, and only a backup copy is available to the user.
The main advantage of hybrid wallets is that developers do not have full access to user coins. Payments from such a service cannot be made without the joint participation of the client and the company. This increases the level of protection. On the other hand, the loss of a secret phrase will be fatal, in which case you can forget about cryptocurrency.
One of the most famous online wallets is Blockchain.com. In May, the company announced the addition of support for cryptocurrency interest accounts. They can be used to store bitcoin, the annual yield will be 4.5%.
Another popular wallet is BitGo. It is considered safe, as each transaction requires two signatures. The platform does not have full access to user coins. You can also work with it only after connecting two-factor authentication.
A universal way to store funds is a local wallet. These are applications for PC or mobile devices, extensions for browsers. Finding such a wallet is easy: just go to the official website of the project and download the appropriate option. But this method also has its own difficulties.
The option for mobile devices is suitable for those who need constant access to their coins for transactions. But the cryptocurrency will not be stored on the smartphone, so access to it can be obtained only with the Internet. Even if the device is lost, digital money can be returned.
A local wallet on a PC makes sense only for coins that use Proof of Stake in their algorithm – a confirmation of a share. Because to store cryptocurrency in this way, you need to completely download the blockchain of the selected asset. And it can weigh tens and hundreds of GB. In the case of PoS, while there is some amount in cryptocurrency in the wallet and the computer is turned on, the user is credited with a certain amount in digital money. It is this function that should appear in Ethereum 2.0. You can become a network validator by storing from 32 ETH in your wallet.
Theta Streaming Blockchain Platform Launches Updated Theta Network 2.0
Theta blockchain streaming platform announced the launch of the updated Theta 2.0 network, as well as a partnership with Google. Google Cloud will become one of the corporate validators.
In addition to Google, corporate validators that will confirm transactions on Theta include the Binance cryptocurrency exchange, the Japanese firm Gumi Cryptos, and the Blockchain Ventures venture capital fund. The platform’s management noted that Google is the most preferred cloud computing provider, since after launching Theta 2.0, users will be able to launch sites directly from the Google Cloud platform.
Google Cloud developer Allen Day noted that the blockchain will allow the use of new commercial models that modernize the international digital economy, including the media and the entertainment industry. Theta Labs co-founder and CEO Mitch Liu said that interacting with the Google Cloud in several strategic areas will accelerate Theta’s development and facilitate the use of the platform in various industries.
Today, Theta platform is used for broadcasting e-sports competitions, poker tournaments and major cryptocurrency conferences. In addition, a few weeks before the launch of the updated version of the network, the platform announced cooperation with the South Korean corporation Samsung to launch its application on Android smartphones.
Blockchain is actively used by streaming platforms, allowing you to receive tokens for organizing broadcasts or viewing them. For example, last month, the Refereum platform announced a partnership with Tron, through which gamers and viewers will be able to receive TRX and BTT tokens, and last March, BitTorrent opened up early access to the BitTorrent Live streaming service.
Operations with crypto assets on Samsung smartphones will go through the Gemini exchange
Gemini has entered into an agreement with Samsung to integrate with Samsung Blockchain Wallet. This will enable owners of a new generation of Samsung smartphones in the US and Canada to trade cryptocurrencies.
According to the Gemini cryptocurrency exchange, this partnership will allow Samsung Blockchain Wallet users to connect to the Gemini mobile application to buy, sell and exchange cryptocurrencies. The exchange said:
“Gemini is the first US cryptocurrency and custodian exchange to partner with Samsung Blockchain. This integration will help make cryptocurrencies available to Samsung Blockchain Wallet users in the US and Canada. ”
The exchange notes that the Samsung Blockchain Wallet is a convenient and secure cryptocurrency wallet that allows users to independently store their cryptocurrencies directly on the Samsung Galaxy phone that supports Samsung Blockchain.
Through the partnership, Samsung Blockchain Wallet users will be able to connect to Gemini, buy and sell crypto assets, view the balances on their Gemini accounts, and transfer cryptocurrencies to the Gemini Custody cold storage for the highest level of security.
In February, it was reported that the new generation of Samsung Galaxy S20 smartphones will support cryptocurrencies and tokens. In addition, in the same month, Samsung announced that it would improve the security of its smartphones to increase the protection of user data related to cryptocurrencies.
CryptoKitties Developer Launches NBA Top Shot Beta
The company Dapper Labs, which developed the game CryptoKitties, launches a closed beta version of the game NBA Top Shot with non-replaceable tokens (NFT).
Katy Tedman, vice president of marketing and partner relations at Dapper Labs, said the developers worked with the National Basketball Association (NBA) to create the new game. Fans will be able to buy live video streams of NBA games, store them and sell them as collectibles. We are talking about the tokenization of interactive moments of games: videos, photos or data provided by the provider of sports statistics SportRadar.
Users will buy tokens in the form of arbitrary sets of rare gaming moments. They can be purchased with a credit card, bitcoin or ether. Having accumulated a certain set of tokenized fragments from games, players will be able to solve complex problems and even create status attributes at their own discretion. The closed beta version of the game will appear next week.
NBA Top Shot will run on its own Dapper Labs blockchain, Flow, which will make the game accessible even to those who are not familiar with the blockchain. Flow will allow to process a large flow of transactions in case of expanding the user base. This will help to avoid the increase in fees that CryptoKitties players face. Tedman added that the transition from crypto kittens to international sports was a great achievement for the company. The game attracted companies from various industries, including many athletes and other celebrities.
The management of Dapper Labs reported that previously a group of NBA experts had already explored the possibilities of the blockchain, so when the developers presented their initiative to develop a new game, NBA supported this opportunity. The NBA has a clear idea of how to easily introduce blockchain technology to the masses.
Recall that in February, Dapper Labs announced a partnership with the Ultimate Fighting Championship (UFC), in which it was going to issue collectible tokens for fans of mixed martial arts.
Goldman Sachs named 8 reasons not to invest in bitcoin
The investment bank held a conference at which it listed a lot of minuses of cryptocurrency. Among them – high volatility of the course, lack of features of a protective asset, use in illegal activities, etc.
Bitcoin and cryptocurrencies in general do not belong to the asset class, Goldman Sachs, one of the largest investment banks in the world, said. Today, May 27, the company organized a conference for clients on the current state of the economy, gold and inflation problems. Among other things, the issue of digital money. Materials from this meeting were published by Mike Dudas, the founder of The Block information portal, in his Twitter account.
Goldman Sachs in their presentation listed a number of reasons why cryptocurrency cannot be classified as an asset. The arguments are as follows:
- Does not generate cash flows, like securities;
- Not involved in GDP growth;
- It does not allow diversifying investments due to unstable correlations;
- There is no downward trend in volatility;
- There is no evidence that it can act as a hedge asset against inflation.
A separate point in confirmation of the high volatility in the company indicated a daily drop in the rate of bitcoin by 37%, which happened on March 12. In addition, Goldman Sachs analysts noted that cryptocurrencies can be used to conduct illegal activities. For example, to be involved in the organization of financial pyramids, money laundering, extortion and used in a high-quality unit of account in the darknet.
The company emphasized that, although the issue of cryptocurrencies is limited, the number of digital assets themselves is not. Three of the six leading capitalization coins are “identical clones” of each other. This refers to Bitcoin, as well as Bitcoin Cash and Bitcoin SV, analysts explained.
They added that the crypto industry is still developing, which is why companies working with digital money are at risk of being attacked by hackers. Many users entrust their funds to stock exchanges, which makes them a target for cybercriminals. Representatives of the company cited all the hacks of large trading floors over the past nine years as an example. A total of 44 such incidents were indicated.
In April, the opposite opinion was expressed by Bloomberg analysts. They stated that Bitcoin is being transformed from a speculative crypto asset into a digital version of gold. Reasons: increased interest in cryptocurrency futures and a decrease in volatility.
The non-profit organization Web3 Foundation has announced the launch of the first phase of the main Polkadot network, without the possibility of moving DOT tokens.
The developers at Polkadot said that in the first phase of launch, the Web3 Foundation will still control the network by starting nodes and validating blocks. Holders of internal DOT tokens will be able to access their accounts to propose their candidacy as a validator or to vote for other users. At this stage, users will not be able to send DOT tokens. But judging by the roadmap, developers will gradually transfer control of the network to the community as the network stabilizes.
Web3 Foundation co-founder Peter Czaban said that after releasing Polkadot technical documentation three years ago, developers continued to research and refine the protocol, allowing them to expand their understanding of the Ethereum system. Polkadot’s open control system will allow the network to grow rapidly and accelerate the development of decentralized applications targeted at a wide audience.
Ethereum co-founder Gavin Wood began work on the Polkadot project in 2016. In 2017, Web3 held a private sale of tokens, on which 5 million DOTs worth $ 144 million were bought, and at the end of 2019 another 500,000 DOTs were sold. Tokens were sold using the Simple Future Token Agreements (SAFT) method, according to which investors receive a crypto asset after the network is launched. After today’s official launch of Polkadot, the community will vote on a token exchange within a few months. When it is activated, investors will have full access to their tokens and will be able to trade them.
It is reported that a few weeks ago Web3 proposed a DOT split to increase the total volume of tokens by 100 times. Despite the fact that the Polkadot community agreed with this proposal, the organization decided to vote on this issue after the launch of the network.
Recall that in February, the developers of Polkadot planned to integrate the decentralized oracle Chainlink outside Ethereum, and in March the Web3 Foundation funded Interlay to create a BTC-Parachain that will help put Bitcoin-supported assets into Polkadot.
Each Japanese will be paid $ 930. Why will this money be converted to bitcoin
After the benefits of $ 1,200 began to be paid in the United States, the number of deposits for this amount on the Coinbase exchange increased 4 times. The cryptocurrency market in Japan is even more developed, but there are also barriers that could hamper investments in digital money
On May 26, Japanese authorities began paying benefits to each resident of the country in the amount of 100 thousand yen (about $ 930 at the current exchange rate). According to the Minister for Administrative Affairs and Communications, Sanae Takaiti, the payment of benefits began in 1388 municipalities of the country (79.7% of the total), writes TASS.
The funds for the payment of benefits were taken from the additional budget of 25.6 trillion yen ($ 237 million) for the current fiscal year, which was approved at the end of April. Yesterday, May 25, the emergency mode was canceled in the country. According to the latest data, 17.3 thousand cases of coronavirus infection were recorded in the country, more than 860 people died, 14 thousand recovered.
How US Payments Affected Bitcoin
In April, payments were made to the public in the United States. The government of the country transferred to citizens $ 1200 each, allocated as financial support during the crisis. At the same time, the number of deposits on this amount increased 4 times on the American Coinbase exchange.
However, the correlation between the appearance of stimulating payments and the movement of the price of bitcoin has not been proved, and the theory of their relationship is refuted by statistical and mathematical methods.
On April 17, the average market rate of bitcoin was approximately $ 7100, the next two days it rose by 3% to $ 7300, after which it dropped sharply on April 20, and reached $ 6748 on April 21. From that moment, the value of the asset began to increase sharply. At the moment, the first cryptocurrency costs $ 8787, 24% more expensive than on the day of paying $ 1200 to American citizens. Although, probably, these events are really not connected in any way.
Why the Japanese will transfer payments to exchanges
The Japanese are a financially literate nation, and they always try to increase free funds. Rates on deposits in Japanese banks are near zero; accordingly, due to their knowledge, citizens use a different range of proven financial instruments in the currency, stock and cryptocurrency markets.
The flow of money to exchanges after the payment will be unambiguous, investors will activate trade, especially if they have excess money. But this is not enough to influence the rate of cryptocurrencies and other assets. The course is influenced by global central banks and regulatory authorities. More and more significant is the effect of manipulations on the market. A significant part of the population of Japan has trading platforms on their phones and mobile computers. With the phenomenal penetration of the Internet on all Japanese islands, the trading activity of private investors will increase.
Tight regulation of the cryptocurrency market in Japan
However, payments may not reach the exchanges, despite the fact that in Japan the cryptocurrency market is extremely developed and investments in digital assets are very popular among the population.
The fact is that since May 1 of this year, the regulation of crypto exchanges has been significantly tightened. As a result, foreign exchanges, in particular, Binance and BitMEX, began to leave Japan. This trend will not contribute to the growth of investments in digital currencies, as well as to the increase in market capitalization.
The first cryptocurrency would not hurt the support of users from Japan. The asset is trading below $ 9,000, and previously five analysts immediately gave a negative forecast for its rate. According to Nick Chong of NewsBTC, the price of bitcoin may fall by 50%, as the coin is now in the same position as in 2018, when it fell in price from $ 6,400 to $ 3,150 within a few weeks. Hash Ribbons indicator, which predicts capitulation of manners, speaks in favor of the decline. They will have to sell their cryptocurrency reserves in order to maintain the operation of equipment, the profitability of the use of which decreased due to the May halving.
Glassnode: retail investors buy BTC amid falling prices
The price of bitcoin reached a two-week low, which affected the interest in buying among retail investors.
Over the past seven days, the price of bitcoin has fallen by 9.8%, showing the most serious decline in one week since mid-March. On Monday, a two-week low of $ 8,630 was fixed, and now Bitcoin is trading for $ 8,773, demonstrating a 11% decrease in value compared to the maximum price after the $ 9,960 halving recorded on May 18.
Despite the price drop, the number of addresses containing a small amount of BTC continues to grow. The number of addresses that store at least 0.01 BTC has grown to a record high.
According to Glassnode, the number of unique addresses that host at least 0.01 BTC rose to 8,478,746 on Sunday. At the same time, the number of addresses from 0.1 BTC and more also rose to a record level of 3 053 004 addresses last Friday.
“Retail investors are probably in the accumulation phase,” said Ki Young Ju, CEO of CryptoQuant research company.
However, the increase in the number of addresses with a small amount of BTC does not necessarily mean that a large number of new users have come to the industry, as one investor can store BTC in several places.
In addition, the growth of interest in cryptocurrency among retail investors is unlikely to have a big impact on the price, since the market is still dominated by large players – “whales”. According to Glassnode, over the past two weeks, the number of addresses containing more than 1,000 BTC and 10,000 BTC has declined.
Moreover, activity in the options market suggests that in the near future a more serious drop in bitcoin may occur. “Traders buy put options at a loss,” said Chris Thomas, head of digital assets at Swissquote Bank.
A put option is a bearish bet on cryptocurrency, and a call option is a bullish bet. A losing put option has a strike price that is lower than the market price of the underlying asset. Thomas expects that in the short term, the price of bitcoin will fall in the range of $ 8,000 – $ 8,200.
Monero 0.16.0.0 Nitrogen Nebula Released
Confidential cryptocurrency Monero is moving to a new version 0.16.0.0 called Nitrogen Nebula with support for the Dandelion ++ protocol.
The development team said that the new version of Monero fixed many bugs and improved network performance. In particular, thanks to Bulletproofs technology, the speed of user verification and transaction confirmation from Ledger devices has increased, as well as the amount of data on the blockchain has decreased. In addition, Nitrogen Nebula 0.16.0.0 supports the Dandelion ++ protocol, which distributes transactions on the network so that it is not possible to track the origin of the transaction and reach a specific IP address.
49 developers worked on the update. The new version of the software is available for download with the command line interface (CLI). A wallet with a graphical interface (GUI) will be released shortly.
It is Monero’s confidentiality that is the reason for the removal of this coin from various cryptocurrency exchanges, striving to comply with international anti-money laundering standards and the requirements of local regulators. For example, the BitBay exchange planned to remove XMR from the list of trading pairs in February, and in 2018 Monero was removed from the Japanese exchange Coincheck under pressure from the country’s financial regulators.
At the same time, Monero developers believe that the recommendations of the United States Financial Crime Prevention Network (FinCEN) should only apply to regulated assets, and not to anonymous cryptocurrencies.
OMFIF Launches Digital Money Institute to Study Blockchain and Cryptocurrencies
OMFIF, an independent organization working with central banks on economic policy, has opened the Digital Monetary Institute to study blockchain and cryptocurrencies.
The institute was created in order to unite the world of digital currencies and the traditional banking industry. In addition, the institution will focus on the study of payment instruments that can be used in the wholesale and retail market along with the digital currencies of the Central Bank.
Bhavin Patel, head of OMFIF’s financial technology department, said that according to the results of studies conducted by OMFIF since 2018, the interest of central banks in state cryptocurrencies is growing every year. Patel believes that in the next few years there will be a large number of projects on the development of stablecoins from central banks. These stable cryptocurrencies will be targeted at both institutional and retail customers, and will also be used in various jurisdictions, including the European Union. The Digital Money Institute was created to accelerate this process.
The founders of the institute include specialists working in the field of politics, finance, technology and regulation, as well as the corporate platform Cypherium, which recently joined the Microsoft program, organized for the development of cryptocurrency startups. Patel added that companies in the blockchain industry will share technical knowledge with regulators and financial analysts, raising their awareness of the latest technologies. The Institute plans to regularly hold conferences and forums where government officials and private entrepreneurs will be able to discuss issues related to the use of cryptocurrencies or the introduction of blockchain in their business processes.
Patel said that the recent OMFIF conference was attended by the leaders of the European Central Bank (ECB), the Bank for International Settlements (BIS), the Central Bank of Japan, China, Australia and some European central banks.
“OMFIF’s Digital Money Institute will help economists and financial regulators understand how blockchain can improve international financial systems. The world and financial markets are in constant motion. Given that we live in unstable times, the blockchain will be able to become a tool that will drive the economy to prosperity, ”said Cypherium CEO Sky Guo.
Blockchain opportunities are of interest to many educational institutions. This month, Chinese Webank planned to provide FISCO BCOS platform for the study of blockchain to Singaporean universities, and University College London (UCL) joined the Board of Governors of the Hedera Hashgraph decentralized platform to integrate technology into various industries.
ConsenSys, Microsoft, and EY Successfully Test Ethereum Data Sync Protocol
ConsenSys, Microsoft, and Ernst & Young (EY) have successfully completed Ethereum-based Baseline Protocol testing for enterprise data synchronization.
Protocol development began in March. The testing involved firms in the DLT sector, including Unibright, Provide, and Envision Blockchain. The parties involved were able to perform proof of concept (PoC) verification by safely synchronizing data and fulfilling purchase orders on the Ethereum network without disclosing confidential information. On May 21, the developers of Baseline Protocol presented a demo with a detailed description of how companies can manage purchase orders and agreements on the provision of wholesale discounts on different systems in Ethereum.
When testing the concept, two different ERP systems were used: Microsoft Dynamics and SAP, which provided data synchronization through the blockchain, while information about the company’s activities, as well as its relations with customers and competitors, remained closed. The Baseline Protocol also prevents workflow errors that can lead to data inconsistencies. On May 27, developers will conduct an open review of the system.
Alex Tapscott, co-founder of Blockchain Research Institute (BRI), said that Baseline can be used by international companies to increase the productivity and security of their business processes. Organizations will not have to change existing work schemes, since all data will be protected and contracts can be managed digitally. Therefore, firms will be able to seamlessly interact in digital space through the blockchain.
Blockchain technology is used by many companies for document management. For example, last month, the Polish credit bureau Biuro Informacji Kredytowej, together with fintech firm Billon, developed a blockchain platform that will simplify internal communication for retail banks.
Research: The number of active BTC addresses is 140 times that of XRP
According to a Glassnode study, bitcoin remains the most popular cryptocurrency, including the number of active addresses.
Analysts said that the number of active Bitcoin addresses is 3 times more than the same indicator on the Ethereum network, 11 times more than active Litecoin wallets and 140 times more active XRP addresses.
It is also interesting that Bitcoin is also a leader in the growth rate of new addresses. Every day, the Bitcoin network uses five times more new addresses than Ethereum. So, after halving the award to miners, 470,000 new bitcoin addresses and a total of 90,000 new ether addresses appeared.
Over the entire life of the Bitcoin blockchain, 626 million addresses were used, but 95% of them no longer store coins. And if the number of addresses with a positive BTC balance remains approximately the same, then in the Ethereum network there is a constant increase in the number of wallets with a non-zero balance. Currently, the number of wallets with coins and tokens in the Ethereum network is 10 million more than the number of Bitcoin addresses that store BTC.
The ratio of active addresses in Bitcoin and Ethereum networks to the number of addresses with a positive balance is 3% for BTC and 0.8% for ETH.
The bitcoin network is overloaded. What can it talk about?
In the blockchain of the first cryptocurrency, a queue of unconfirmed transactions formed, and the size of the commission charged by miners increased by 7-10 times compared to April
There was a sharp increase in the number of unconfirmed transactions after halving in the Bitcoin network. According to blockchain.com, by now this figure has reached 72 MB, rising to 98 MB at the moment. Since the beginning of the year, it ranged from 0.3 to 15 MB, occasionally exceeding this value.
The current figure of 72 MB is the second largest since December 2017 and indicates a congestion in the coin network, i.e., overflow of the mempool. A queue has formed of users who want to transfer bitcoins. But the current number of miners is not enough to satisfy demand.
This assumption is confirmed by two other metrics. Firstly, the hashrate in the network of the first cryptocurrency fell. It fell 40% after halving and now stands at 86 EH / s. Secondly, the average value of the commission that miners charge for confirming transactions has increased. In April, this indicator ranged from $ 0.4 to $ 0.9, now it has reached $ 6.6. This suggests that users are willing to pay more so that their funds are transferred earlier than others. Data provided by bitinfocharts.com.
The congestion of the Bitcoin network may speak in favor of an increase in its value. For example, on March 26, 2019, the number of unconfirmed transactions on the BTC network within 10 days soared by 24,500%, reaching 43 MB. At the same time, the growth in the value of the first cryptocurrency began, and in three months it went up from $ 4,000 to $ 14,000.
A similar overflow of the network occurred in early November 2017. After that, the course of the main digital asset during the month grew from $ 6,000 to $ 20,000. However, there are exceptions. For example, the last BTC blockchain overload occurred on November 15 of last year. No cryptocurrency rally followed. The reason for the overflow of the mempool could be a failure in the Blockchain.com service system or an attack on the blockchain coins by Bitcoin SV supporters. This date is considered the project’s independence day, since then there was a Bitcoin Cash hard fork, after which the BSV altcoin appeared.
Another reason for the current network congestion could be that part of the mining farms in the Chinese province of Sichuan disconnected equipment due to a lack of electricity. Since the beginning of the month, the load on the region’s networks has increased by 22%, while the volume of water in rivers has decreased by 20%, which has led to a shortage of hydroelectric power. This led to a drop in the bitcoin hashrate, and then to filling the mempool.
If the price of bitcoin stays the same or falls, the situation with network congestion can only worsen. Miners will begin to turn off equipment, as cryptocurrency mining has become less profitable after halving. In this case, the hashrate will continue to decline, and the load on the blockchain will increase.
French Central Bank announces successful testing of digital euro
The Central Bank of France announced the successful testing of the digital euro based on the blockchain. State cryptocurrency is focused on institutional clients.
According to the French Central Bank (Banque de France) on its website, on May 14, the bank began a test sale of securities for digital euros, after which it continued testing with several financial institutions, including Societe Generale. The pilot project is focused on institutional clients and banks, and not on individual users. The regulator explained this by the fact that when testing the digital euro, the potential of blockchain technology in interbank regulation and the reduction of financial risks is simultaneously studied.
The Bank of France said that in the coming weeks it will conduct additional tests with partners related to the transfer of state cryptocurrency within the European Union. The regulator believes that the digital euro will solve many problems of the European market, namely, it will speed up transfers between banks and their international partners, strengthen the financial system of France and ensure confidence in the currency, while reducing the possible influence of the Libra stablecoin from Facebook.
In January, the Chairman of the Bank of France, François Villeroy de Galhau, stated that digital currencies should not be issued by private companies – central banks should take over these functions. However, Fabio Panetta, member of the Executive Board of the European Central Bank (ECB), believes that even in times of crisis, you don’t need to rely entirely on digital euros, but pay attention to peer-to-peer payments and Target Instant Payment Settlement (TIPS), developed by the ECB.
Satoshi Ghost: Bitcoins moved from a block mined in February 2009
More than ten years after the launch of the Bitcoin blockchain, coins mined on February 9, 2009 started moving. Who conducted the transaction – Satoshi himself or one of the first miners?
Today at 12:54 UTC, 50 BTC left the address 17XiVVooLcdCUCMf9s4t4jTExacxwFS5uh. They were received in block number 3 654, created on February 9, 2009 – exactly one month after the start of mining (the “zero” block was created by Satoshi on January 3, 2009, but the subsequent ones, with which permanent mining began, appeared only on January 9 – approx. Ed.). At that time, only Satoshi himself and a few enthusiasts were engaged in mining.
Although many people write about moving the entire amount (50 BTC), it is more likely that the transaction was completed with only 10 BTC. The remaining 40 BTC in the form of change went to another address of the same wallet, since they no longer move. Both receiving addresses were not used in this transaction before it was completed.
Of course, this transaction generated a wave of discussions and many believe that Satoshi Nakamoto decided to spend his “state” in bitcoins. However, do not forget that at that time at least a few more people were engaged in mining, including the famous cryptographer Hal Finney and the early Bitcoin developer Martti Malmi. The distribution of the news caused a drop in the Bitcoin exchange rate, at the time of publication it fluctuates around $ 9,500, which is almost $ 300 below the morning values.
Let’s return to the mentioned transaction, or rather, a complex transaction chain with 10 BTC sent to the address 3A6AsxxxzgHnGKhiFyW4tYX1Hn2sjNfrQP. Firstly, the transaction was probably sent with a commission inside, because the remaining 40 BTC remained untouched. But 10 BTC most likely went to one of the mixers, since the further chain is divided into transactions with dozens of recipients and different amounts, which is usually done to anonymize the movement of bitcoins in the open blockchain.
The insignificance of the transferred amount suggests that this transaction was not made by Satoshi, but one of the first miners who joined the then-unknown project out of curiosity or enthusiasm. In fact, the owner of more than a million bitcoins (that is, about $ 10 billion at the current exchange rate) hardly has any reason to excite the community in ten years, not to mention large investors, regulators and special services, because of 10 BTC worth less than 100 one thousand dollars. Apparently, large investors are of the same opinion, so the exchange rate did not react to such a significant event.
The personality of Satoshi Nakamoto worries everyone who works in the cryptocurrency industry, but the creator of Bitcoin managed to remain anonymous. According to Charles Hoskinson, co-founder of Ethereum and IOHK, the most effective way to “calculate” Nakamoto is to use the stylometry technique. However, now the deanonymization of the creator of Bitcoin will not cause the storm that could have happened 5-7 years ago, since it has no effect on the operation of the blockchain, and its condition does not exceed 6% of the total amount of BTC mined to date.
Iran will forbid cryptocurrency exchanges to operate without a Central Bank license
The Iranian parliament has proposed that cryptocurrencies be included in the current “currency smuggling” legislation, and cryptocurrency exchanges will be required to obtain a license from the Central Bank of Iran to operate in the country.
According to the proposed amendments, Iranian cryptocurrency exchanges must obtain a license from the Central Bank of Iran, as well as meet the requirements for exchanging foreign currencies. As a result, Iranian entrepreneurs will become more exposed to the risks of getting under US sanctions, and the likelihood of imprisonment of people working with cryptocurrencies increases dramatically.
At the same time, it is unclear how exchanges should receive this license and adapt the standards for working with fiat currencies to the blockchain industry. There are suggestions that in this way, the Iranian government is going to stop the outflow of capital, creating conditions for closing cryptocurrency exchanges.
Cryptoland Cofounder Hassan Golmohammadi said the trading platform operates in Iran, although it is legally registered in another country. Therefore, the question remains how Iran’s new legislation on services and platforms with registration in other jurisdictions will operate. Another example is the UtByte exchange and the KingMoney project are registered in Sweden and are managed by Sweden Invest Group AB of Iranian businessman Reza Khelili Dylami. According to the analytical company Chainalysis, UtByte works closely with Iranian cryptocurrency services and exchanges.
Dan Newcomb, a specialist at Shearman & Sterling Law Firm, commented that U.S. economic sanctions against Iran apply to all individuals and legal entities in the country, and if cryptocurrency companies are advertised in Iran, they run a full-fledged business in the country.
Last weekend, Tron founder Justin Sun reportedly tweeted the Iranian Cryptoland exchange. However, a member of the Tron team stated that the project does not work directly with the Iranian site, and the marketing materials in the Persian language are compiled by the Chinese and Asian Tron team, and not by its American division. Tron denies cryptocurrency marketing in Iran, since Farsi is also used in other countries in the Middle East.
Iranian authorities do not encourage cryptocurrency activities. In August, the Iranian government issued a new law, according to which cryptocurrencies cannot be considered legal means to make payments, and in June, Iranian Energy Minister Homayoun Haeri proposed depriving miners of government subsidies for electricity.
White hackers were able to access the private keys of wallets on the exchanges Lykke and Hubdex
CyberNews analysts discovered vulnerabilities in the cryptocurrency exchanges Lykke and Hubdex, due to which it was possible to withdraw crypto assets with a total value of $ 18 million.
CyberNews cybersecurity experts conducted a study that revealed that the Swiss cryptocurrency exchange Lykke stored more than $ 16.5 million in cryptocurrencies in hot wallets in an open database. White hackers managed to reveal Lykke API keys, gaining unrestricted access to the internal mechanisms of the exchange, after which they discovered 80,000 insecure private keys. In addition, the researchers discovered the “core network keys” that allow access to the $ 25,000 coins used by the exchange for staking.
Experts said that Lykke is not the only exchange where serious violations in data storage were discovered. The Chinese site Hubdex, which claims to be a decentralized exchange, also stored keys in an open database without encryption. In addition to the API keys, “white hackers” managed to gain access to user data and information used to complete the KYC procedure.
In total, analysts managed to discover more than a million private keys. Lykke responded to the hacker notification, confirming and fixing the detected problem. A response from Hubdex was never received, but the exchange also closed the vulnerability.
If this information reached the attackers, they would gain unhindered access to user tools. According to a study by the KPMG audit company, from 2017 to 2020, hackers were able to steal cryptocurrencies worth more than $ 9.8 billion due to the fact that companies do not pay enough attention to security issues.
Without Telegram. The Free TON blockchain platform began distributing its tokens
The developers of an alternative version of Pavel Durov’s project organized three contests, for participation in which you can get the TON Crystals cryptocurrency
The Free TON project, based on the Pavel Durov blockchain platform Telegram Open Network, announced at its official forum the start of the distribution of its cryptocurrency. TON Crystals tokens will be distributed between developers and users of the platform in three competitions. They started today, May 18, and will last until May 25.
Two contests are aimed at developers, they are invited to create solutions to improve the work of the Free Ton blockchain. The task of the third is to come up with the most optimal way to airdrop TON Crystals tokens. It should include the following items:
- signature of the “Decentralization Declaration”;
- subscription to two telegram channels belonging to the project;
- Free Ton promotion;
- protection against bots and fake accounts.
The best offer will receive a reward of 30 thousand TON Crystals tokens. Within each competition, it is planned to distribute from 70 thousand to 100 thousand coins. The selection of the best solution will be chosen by the jury, whose members will also receive an award in the cryptocurrency of the project.
An alternative version of the main Telegram Open Network called Free TON was launched on May 7th. The launch was organized by independent developers, major validators and other participants, but without Pavel Durov. Later, he announced the completion of work on the TON platform, and also urged not to trust their funds and personal data to other projects that use the Telegram name for promotion.
CFPB Recognizes Ripple’s Potential for International Payments
The U.S. Consumer Financial Protection Bureau (CFPB) has recognized the potential of Ripple technology and XRP cryptocurrencies in making international payments.
On May 11, CFPB presented a document that published the results of a study of new trends in the money transfer market. The agency noted the continued growth and expansion of companies working with digital assets, including Ripple. CFPB researchers believe that XRP can be used effectively for cross-border payments, because the Ripple solution allows banks and credit cooperatives to know the exact final amount intended for the recipient, even before sending the payment.
In addition, the report refers to the Global Payments Innovation (GPI) platform from the interbank payment system SWIFT, which was developed to make almost instant payments in the existing banking infrastructure. Last year, SWIFT considered introducing Distributed Registry Technology (DLT) into the GPI, testing the concept with the Corda R3 platform.
Despite the potential of Ripple, CFPB still doubts that in the near future the solution of this company will be used everywhere. Banking networks will not lose influence and continue to dominate the market, even if a more modern payment solution appears on it. CFPB came to this conclusion on the basis of its own assessments and a survey of market players.
This month it became known that a retail bank RAKBank from the UAE joined the RippleNet payment network, and since April, the network has been used by the Thai company Azimo with Siam Commercial Bank, Thailand’s oldest bank, for instant payments from Europe to Thailand.
Ethereum 2.0. What to do with a coin and why buy it
A threefold increase in the number of long positions on the cryptocurrency indicates that the crypto community expects its transition to the second version of the network. How the update will affect the price of altcoin, how much it will turn out to earn on its stacking and what risks this has.
The crypto community is waiting for the Ethereum network to upgrade to the second version. This is evidenced by several factors. For example, on the Bitfinex exchange, according to Tradingview, the number of long positions for altcoins has increased by 215% since the beginning of the year, to the current value of 1.63 million ETH, and reached a historic maximum.
Also, the transition of Ethereum to the new version has become more interested in the Internet. According to Google Trends, the number of Ethereum 2.0 requests is now at an absolute maximum. Since March, this figure has grown more than six times.
The importance of the Ethereum update was emphasized by research analyst at Messari Ryan Watkins. He is sure to upgrade to version 2.0. will have a greater impact on the cryptocurrency market than bitcoin halving. Updating the coin network is fundamental and carries some uncertainty.
“Ethereum 2.0 is a much stronger catalyst than halving bitcoin because it is an uncertain and fundamental change,” Watkins wrote in his Twitter account.
How exactly the transition of Ethereum to the new version will affect the cryptocurrency market and Watkins, in particular, did not specify the price of the altcoin. Therefore, we decided to answer the most important questions: why is the update necessary, how will it help the coin and whether it is worth investing in it.
Why upgrade Ethereum?
One of the problems of the Ethereum network that the update should solve is scalability. At the moment, the altcoin blockchain is capable of conducting up to 15 transactions per second. This figure is more than two times higher than that of bitcoin. However, for a large number of users this speed is not enough. For example, a Visa payment system can carry out up to 24 thousand transactions per second.
Optimistic Rollup development will help solve the scalability problem. According to Vitalik Buterin, creator of Ethereum, its implementation will occur after updating the altcoin network. This will increase its throughput to 1000 transactions per second.
Another solution to this problem is to change the algorithm. Ethereum now runs on the same protocol as Bitcoin – Proof-of-Work. This mechanism implies that the confirmation of transactions in the cryptocurrency network occurs using the computing power of computers, that is, with the help of miners.
Using the Proof-of-Work algorithm hinders the growth of Ethereum network bandwidth. So that it can withstand a large load, more miners are needed. And the growth in their number is slowing down, since from time to time it is becoming more difficult to mine cryptocurrency and, accordingly, more expensive.
For this reason, the Ethereum development team is planning a move to the Proof-of-Stake algorithm. Unlike the first, it does not require the use of computing power of computers to confirm blocks. That is, there is no need for miners. Instead, validators validate transactions. These are users who will keep a certain amount of coins on their wallet, at least 32 ETH. Thus, the system will no longer need expensive equipment.
The main solution to the scalability problem will be the introduction of sharding. The Ethereum network is now a common database. After the update, the blockchain will be divided into autonomous, interacting blocks – shards, each of which will process its transactions and smart contracts. In December 2018, Buterin said that this method will make the altcoin network more efficient by a thousand times.
Update against centralization
Another problem with the old algorithm is the risk of centralization. In the first few years of the existence of Bitcoin, a stationary computer was enough for its extraction. Over time, the complexity of mining has increased, and now this process requires the purchase of expensive equipment and access to cheap electricity. Moreover, the complexity of BTC mining is likely to continue to grow. In this regard, miners will have to constantly update devices in the future in order to maintain their profitability.
Such conditions were weeded out from the infrastructure of small participants. Now Bitcoin mining is mainly engaged on an industrial scale. This leads to centralization of the industry. For example, according to Coinshares, in December, 54% of the hashrate of the first cryptocurrency network accounted for the Chinese province of Sichuan.
Due to the fact that Ethereum, like Bitcoin, works on the Proof-of-Work algorithm, the altcoin also has the risk of centralization. For example, in April, more than 50% of the computing power of the coin network was provided by two mining pools. The solution to the centralization problem is to replace miners with validators. To become them, it will be enough to hold 32 ETH and install a special client. From a technical point of view, this is easier than buying devices for mining and maintaining their performance, as well as looking for access to cheap electricity. According to the developers, this will give Ethereum mining a “massive character”
What will validators get
Validators will confirm transactions in the new Ethereum network. For their work, they will rely on remuneration in the form of passive income, this function is called stacking. Currently, the annual return on stacking is unknown. According to the project roadmap, this value will vary from 1.81% to 18.1%.
Stacking profitability will depend on the number of validators. The more there are, the smaller the amount is supposed as a reward. In this regard, we can suggest that users who become validators at an early stage will be able to get the most profit. However, there will be costs. The roadmap noted that the cost of validating transactions according to “rough calculations” will be about $ 180 per year.
One of the developers of the project, Justin Drake predicted that on average, the validator will receive an income of 5% per year. At the current altcoin exchange rate of $ 200, the user will need to invest $ 6400 to become a validator in the new project network. In this case, taking into account Drake’s calculations and estimated expenses, the annual profit from stacking 32 ETH at a constant price of the coin will be $ 140 ($ 6400 * 5% – $ 180).
Updating Ethereum 2.0 will lead to technical improvement and development of its network, said Viktor Pershikov, leading analyst at 8848 Invest. The transition to a new algorithm and the introduction of sharding will significantly scale the product. Thanks to this, ETH will be able to hold the first place in the ranking of altcoins, since now there are blockchain platforms that, in terms of bandwidth, network efficiency and the number of dApps applications, make Ethereum a competition.
Pershikov said that thanks to the update, Ethereum will be able to compete not only with other cryptocurrencies, but also with DeFi projects. They are currently firmly occupied a niche in which the main profit comes from stacking.
Yuri Mazur, head of data analysis at CEX.IO Broker, added that the launch of the updated platform will provide more benefits for project development and transaction acceleration. For this reason, it is likely that the platform will secure the status of the most popular platform for the deployment of new projects. In addition, Ethereum will penetrate deeper into the decentralized finance market. The amount of commissions for transfers will also decrease. All this in the future will allow Ethereum to compete, possibly even with Bitcoin.
“Updating the network is primarily an extension of the number of users. Today, most blockchain projects are created just on the Ethereum platform. I will give a simple example: now 213 projects working in the field of decentralized finance are officially registered. Of these, 199 are developed on the Ethereum platform. The transition to the updated platform 2.0 will allow attracting even more partners who will use the blockchain for their projects, accelerate transactions and make them almost free. Therefore, Ethereum 2.0 could potentially become a real competitor to Bitcoin, ”Mazur suggested.
Mazur added that the Ethereum update will allow him to gain certain advantages over the main competitors of EOS and TRON. Today, these tokens are actively used by exchanges for stacking. The annual yield on them is 1-3% and 7-9%, respectively.
United Traders Managing Partner Anatoly Radchenko noted that it’s difficult to talk about the success of Ethereum 2.0 since the idea, albeit a good one, is still at an early stage of implementation. At the same time, the transition to the second version, which will consist of three phases, can happen both this year and not the next.
However, there are prospects. Radchenko stressed that the Ethereum blockchain has already become the basis for a decentralized finance infrastructure, decentralized exchanges, landing, stacking and other products. In addition, most stablecoins, including Tether (USDT), which recently entered the top 3 cryptocurrencies by capitalization, also work on the basis of ETH. Thus, Buterin’s platform can become the main one for “financial system 2.0”, the expert admitted.
Despite a number of benefits, updating Ethereum carries the risk of significant negative consequences, Masur warned. Earlier it was reported that the US Securities Commission (SEC) would recognize ETN as a security if the coin switched to the Proof-of-Stake algorithm. In addition, this will change the approach to mining, which is why most retail miners will simply leave the market. Today ETN is the most popular coin for mining at home.
Mazur noted that competition from EOS and Tron should not be discounted. Firstly, most of the projects related to gambling are deployed on these platforms – 80%. The Ethereum ecosystem accounts for only 20%. Secondly, many tokens have been created on the Ethereum platform, which are completely useless or dead. But the very fact of their presence overloads the system, because of which failures occur. If this problem is not resolved in the near future, then Ethereum may lose its position in the market, the expert admitted.
You also need to consider the risk that the price of Ethereum may fall. In order to receive passive income for storage of ETH, it will be necessary not only to have 32 coins, but also to block them through a special transaction. Removing blocked funds does not work instantly. The cryptocurrency withdrawal process will take at least 18 hours. This period may be extended if many users request a return of tokens at the same time, as indicated in the project roadmap. Accordingly, if ETH starts to become cheaper, it will be impossible to sell it instantly. Thus, there is a risk of losing part of the capital and all the income received from stacking.
Study: Bitcoin demand remains high even after halving
A study by Cointelegraph Markets and Arcane Research shows that, despite investor concerns, demand for bitcoin remains high even after halving the reward for miners.
Analysts note that over the past year, the number of Bitcoin vending machines has increased by 90% and reached 8,000. In addition, according to Coinstar, the use of crypto machines has increased by 40% since February this year.
The volume of transactions in Bitcoin also continues to increase – on average, transactions amounting to $ 10 billion are processed in the Bitcoin blockchain per day. For comparison, the volume of ETH and LTC transactions does not even reach $ 500 million per day.
After halving the award to the miners, the price of the first cryptocurrency increased and now Bitcoin is trading at $ 9,400. At the same time, the growth in the rate of the first cryptocurrency was accompanied by large trading volumes, which is a positive sign.
In addition, interest in bitcoin continues to grow among both retail and institutional investors. So, the number of open positions on options for bitcoin on the CME exchange has increased significantly, and the volume of such positions has reached $ 140 million.
Researchers emphasized that the popularity of decentralized loan products has also increased markedly.
Miners began to switch from Bitcoin to Bitcoin Cash and Bitcoin SV
After halving the reward for Bitcoin miners, the hash rate of Bitcoin Cash and Bitcoin SV began to grow again. Obviously, this is due to the transition of some of the miners.
The halving of the award to miners in the Bitcoin Cash and Bitcoin SV networks took place in early April, and after that a significant part of the miners switched to mining the first cryptocurrency. However, a halving occurred on the Bitcoin network the day before yesterday, so miners began to return to mining BCH and BSV.
Immediately after halving, the hash rate in the Bitcoin Cash network decreased by 80%. A little later, he recovered somewhat, but still amounted to no more than half of the previous figure. At the moment, the Bitcoin Cash hash has almost doubled – if on May 10 the network hash was 1.43 Eh / s, then on May 13 it increased to 2.74 Eh / s. The Bitcoin SV hashrate increased from 1.1 Eh / s to 1.78 Eh / s.
In the first day after halving the award to the Bitcoin miners, the hashrate of the first cryptocurrency network decreased by 16%. This was the result of disabling obsolete equipment and the transition of miners from mining bitcoin to mining alternative cryptocurrencies.
It was previously reported that a drop in hashrate in the Bitcoin Cash and Bitcoin SV networks after halving the reward made them vulnerable to a 51% attack.
Bitfly launches Ethereum 2.0 signal chain profitability calculator
The Austrian Bitfly development team introduced a tool for calculating the costs and profits of staking in the Beacon Chain – the “signal chain”, a key component of Ethereum 2.0.
In Ethereum 2.0, transactions will be checked by “stakes” instead of PoW miners. Any user with 32 ETH for staking will be able to participate in the addition of blocks. To reward network members for ensuring the integrity and security of the blockchain, the ETH 2.0 mechanism will periodically distribute their rewards.
Bitfly has released a tool to calculate the return on stake in ETH 2.0. Ethereum users can compare different approaches to staking: with a low and a large number of validators, with and without pools, etc.
According to the calculations available in the Bitfly tool, when staking 32 ETH with a one-time initial cost of $ 1000 and monthly expenses of $ 100 (electricity, depreciation, etc.), staking will become profitable after 260 days.
Earlier, numerous assumptions were made about the amount of periodic rewards for ETH 2.0 stakes. According to the most conservative forecasts of Ethereum developers, the remuneration can be about 4-5% per year. However, independent analyst Adam Cochran believes that the ongoing accumulation processes in the Ethereum network can significantly increase the size of the rewards.
Last week, the Ethereum 2.0 Schlesi test multi-client network was launched. This event took the Ethereum community one step closer to launching phase 0 of the ETH 2.0 core network. The exact timing of the deployment of this update is not yet known.
According to Vitalik Buterin, the developers of ETH 2.0 suggest that the Beacon Chain based on PoS consensus can be launched “in the third quarter” of this year. But according to more pessimistic forecasts, the launch may be delayed until the beginning of 2021.
Will Bitcoin Price Fall With The Stock Market?
A repeated drop in the stock market cannot be ruled out. And in 2020, bitcoin shows a high correlation with it. The price of the cryptocurrency has been decreasing and growing along with the quotes of the leading US S&P 500 index, which includes 505 of the largest companies whose shares are traded on US exchanges.
However, the correlation between the BTC and the S&P 500 has now declined. According to The Block, over the past month, this figure has fallen from 0.53 to 0.15 points. These data are confirmed by trading on the markets of the last days. Since May 12, the index value fell by 4%, to the current mark of 2820 points. However, despite this, the price of the coin increased, over the same period it rose by 15% and now amounts to $ 9700.
If the March fall in quotes of the S&P 500 index repeats, this will not have a strong impact on the price of cryptocurrencies.
The connection of bitcoin with the S&P 500 weakened after the collapse of bitcoin on May 10 by 15%. Yesterday, the S&P 500 index suffered from a speech by the head of the US Federal Reserve Jerome Powell. Bitcoin ignored the fall of background indexes. Today it recovered to $ 9777. Completely blocked the fall of May 10. But this does not mean that he alone will survive the recession of the stock market. If it fixes above $ 10,250, then during the collapse of the American market it will fall less, as there will be more buyers in the second fall than in the first.
A number of experts called Bitcoin a promising investment. Its price can rise to $ 12,000, possibly up to $ 14,000, if it overcomes the resistance formed by $ 10,500. The coin is unlikely to begin to get cheaper until the economic situation in the world stabilizes. And if the fall in the stock market continues, the cryptocurrency rate will not be affected much, since it has become weakly dependent on the S&P 500 index, experts say.
$ 240 million withdrawn from crypto exchanges in Bitcoin after halving
Users began to take cryptocurrency from trading floors in April. The largest outflow of funds occurred with Bitfnex, reserves of some platforms were not affected
Users withdrew more than 24 thousand BTC from crypto-exchanges since May 11, when the first cryptocurrency network hosted a halving. It should be noted that the removal of funds from the main sites began a little earlier, namely in the second half of April. For example, the reserves of the Bitfinex exchange from that moment decreased from 205 thousand BTC to the current value of 134 thousand BTC, bitcoin.com reports.
Other sites showed similar dynamics. For example, Bitcoin stocks BitMEX decreased from 228 thousand to 214 thousand in March. Huobi exchange reserves decreased by about 20 thousand BTC in April. The amount of savings stored on the Coinbase platform, which is the largest in this parameter, has not practically changed. However, there are other examples: an increase in funds occurred on the Bitstamp exchange, its assets increased from 66 thousand BTC to 71 thousand BTC.
In April, the analytical company Glassnode reported that users began to withdraw cryptocurrency from exchanges. As a whole, the reserves of cryptocurrency sites decreased by 10% compared with the maximum established at the beginning of the year. This is because investors are moving to a longer-term strategy.
Trump may affect bitcoin
The US President insists that the Fed impose negative rates. This may lead to negative consequences for the country’s economy and affect the cryptocurrency market.
Most likely, the US economy will continue to fall, United Traders analyst Fedor Anashchenkov believes. According to him, the Fed’s attempt to avoid deflation through a sharp increase in the money supply could lead to inflation. This reduces the attractiveness of government bonds and forces investors to seek new protective assets that are independent of central bank policies.
“This is exactly what Bitcoin provides. Everyone pays attention to its correlation with the stock market, but in reality it is not high. The correlation of bitcoin with gold is much higher, it is historically at the highest level. This is a sign that Bitcoin is becoming a protective asset, ”Anashchenkov emphasized.
Andrey Berezin, Managing Partner of Raison Asset Management, an investment company, agreed with him. He emphasized that negative rates could “push the cost” of major cryptocurrencies well. Firstly, due to the destruction of fundamental principles in the economy, and secondly, there will be even more liquidity, and financial institutions will begin to invest it, including in high-risk assets, such as cryptocurrencies. Bitcoin with recent halving and limited issuance in such a situation may look like a “healthy asset”, which is becoming less and less, the specialist noted.
Now the BTC rate is growing again. The first cryptocurrency surpassed the $ 9000 mark, over the past day it has risen in price by 3%. And since mid-March, the value of the coin has increased by almost 140%. And this happens against the backdrop of the development of the situation with COVID-19 and new problems of various countries in the economic sphere. It is not yet possible to say that Bitcoin has become a defensive asset, but the limited issue really gives it a great advantage over national currencies.
Ripple (XRP) will start loan platform
Ripple has been opening initiatives to diversify and find new ways to use XRP. A new vacancy announcement give information that the company wants to launch a new capital lending platform. By the publication, Ripple is looking for a new person for product manager to lead the all project. The part of vacation:
”This person will bring a new loan product to market from concept to launch for RippleNet customers. This person will bring strong leadership skills as they will need to collaborate heavily with cross-functional internal teams and the financial ecosystem of partners and customers.”
The text does not mention the use of XRP, but loоking for a person who can work with other teams.It is possible the platform assume the use of the token. Eventually, the product manager will have to know how to create a structure that turn around capital lending, but also cross-border payments:
”(The product manager will) create the relevant structures to properly execute on a functional loan offering, develop customer empathy around problems related to working capital needs and cross border payments, develop risk capabilities to properly understand how to price new loan offerings for customers.”
As CNF reported , Ripple has published two vacancies that have some rumors about the starting of a “next generation trading platform”. The platform is presumably based on Ripple’s On Demand Liquidity payment solution and XRP. At this moment the company has not made an official declaration yet. It is also unclear: does the vacancy for the manager of the lending platform is related to this project?