Bitcoin Gold 51% Attacked – Network Loses $70,000 in Double Spends

Bitcoin Gold 51% Attacked - Network Loses $70,000 In Double Spends

The Bitcoin Gold (BTG) network suffered another set of 51% attacks on January 23-24, as roughly 29 blocks were removed in two deep blockchain reorganizations (reorgs). Reports indicate that more than 7,000 BTG was double spent as the chain suffered a loss of $70,000 in two days.

Also read: Bitcoin Gold Hacked for $18 Million

Bitcoin Gold Sees Two Deep Blockchain Reorgs With 29 Blocks Replaced

In May 2018, the Bitcoin Gold (BTG) blockchain was 51% attacked for the first time suffering a loss of more than $18 million. BTG is a fork of the Bitcoin protocol but it doesn’t use the SHA256 consensus algorithm like BTC, BCH, or BSV. The blockchain BTG utilizes a variant of the Equihash algorithm (Equihash 144, 5 or “Zhash”) which can be mined with a GPU. Bitcoin Gold’s creators believed that creating a Bitcoin fork that could be mined with GPUs as opposed to ASIC devices would be more decentralized. However, things went south in the spring of 2018 when a miner gained control of more than 51% of the overall BTG hashrate. After losing $18 million, BTG was also asked to pay the exchange Bittrex back or face being delisted. Since then BTG has been meandering along while other small coins like ethereum classic and vertcoin were 51% attacked too.

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends
The Github gist that explains the recent Bitcoin Gold 51% attack on Thursday and Friday.

Last week on Thursday and Friday, BTG again dealt with a malicious mining entity as more than 51% of the chain’s hashrate was captured and still is. The blockchain suffered from two deep reorgs on both days that saw $19,000 double spent on Thursday and $53,000 double spent on Friday. For instance, at approximately 1:01 p.m. on Thursday, BTG’s chain saw 14 blocks removed and 13 new blocks added. At 7:24 p.m. on Friday, the blockchain saw 15 blocks removed and 16 blocks added during a small period of time. Most of the blame has been directed at the cloud mining operation Nicehash which has been blamed for most of the 51% attacks in the last two years. Some BTG members believe that there are secret ASICs mining the BTG network and community members are begging for a safer algorithm.

“I think it’s time we get a real leader that listens to the members of this community and take action,” one BTG proponent wrote on Reddit. “It is obvious that the first 51% attack was done by ASICs — Why can’t BTG be novel and create a truly new [algorithm]? This coin is a bad investment for anyone looking to buy — None of the devs are qualified.”

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends
The Bitcoin Gold community discusses the algorithm vulnerabilities on Reddit and supporters are talking about “secret ASICs” mining the BTG network.

$719 per Hour to Attack as Nicehash Captures 57% of the Bitcoin Gold Hashrate

During the last few months, news.Bitcoin.com has reported on how the three main SHA256 Bitcoin forks have seen an exponential rise in hashrate. BTG’s hashrate, on the other hand, has not followed the same pattern and has declined significantly since the last 51% attack in May 2018. The lack of hashpower behind the BTG network makes the blockchain extremely vulnerable to more 51% attacks unless the developers change the consensus algorithm. According to statistics from the Crypto51 application, BTG only has 3 million hashes per second (3MH/s) securing the chain. It would only cost $788 per hour to 51% attack the BTG blockchain and cause a reorg with double spending.

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends
According to Crypto51, it only costs $788 per hour to attack the Bitcoin Gold network and cause disruption. Right now Nicehash miners control between 56-74% of the BTG hashrate on January 26, 2020.

The cloud mining site Nicehash sells individuals and businesses CPU and GPU-based hashrate and on January 26, Nicehash commands 57-74% of the BTG hashrate or 2MH/s. A comparison of how much easier it is to attack the Bitcoin Gold chain in contrast to the Zcash (ZEC) network shows it’s far more convenient to attack BTG. Even though they share a similar Equihash variant, ZEC has 5 billion hashes per second (5GH/s) securing the blockchain. Nicehash miners who are mining ZEC only capture 182 MH/s of the overall 5GH/s or a mere 3% of the network. The estimated cost to 51% attack ZEC is much larger than the BTG attack at $11,788 per hour to accomplish the mission.

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends
On January 26, 2020, following the 51% attack last week, BTG prices have spiked around 9%.

Interestingly enough, and similar to coins like vertcoin and ethereum classic, BTG’s market price did not drop in value. In fact, BTG’s price has jumped since the 51% attack and is up over 9.6% for the week and 15% in the last 24 hours. To most observers, it is strange that instead of losing value after two deep reorgs and $70,000 in double spends, BTG is seeing more market demand than it has in months.

What do you think about the 51% attack against Bitcoin Gold (BTG)? Let us know what you think about this topic in the comments section below.


Image credits: Shutterstock, r/bitcoingoldhq, Markets.Bitcoin.com, Crypto51, Wiki Commons, Fair Use, and Pixabay.


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Source: Bitcoinnews.com

Bitcoin’s ’10-Day Returns’ Since 2013 are Off the Charts

bitcoin 10 day returns

Bitcoin can yield thousands of percent of gains within a short time frame. But those returns have been counted only in the best days for the coin.

Bitcoin Moves Sharply, Creating Days of Extraordinary Gains
Recent research revealed that bitcoin prices tend to move on specific days, bringing up the overall gains. But missing that period may mean waiting out a bear market or stagnant prices.

Inspired by Fundstrat’s Tom Lee @fundstrat ’10 best days’ analysis I’ve updated Bitcoin chart and added ETH, XRP & LTC. Below is Bitcoin $BTC. Hope you guys enjoy it, @IamNomad @ahcastor @nic__carter @nlw @Felipether @J0E007 @krugermacro @BTC_Macro @zhusu pic.twitter.com/prFEY57st8
— USD is a shitcoin (@noshitcoins) January 24, 2020

Immediately, 2013 and 2017 stand out, where BTC broke out of its previous range and reached peak prices. Catching the best days in 2013 meant more than 600% in gains. But trading in late 2017 meant 1,173% in profits. The biggest bitcoin bull market turned multiple investors into millionaires, provided they held until the right moment.
But catching those power days was also a matter of luck. In 2017, BTC rallied but also went through one deep correction before the year-end appreciation. In the final stretch of the year, bitcoin would add thousands to its price within days.
BTC Volatility Remains on the Low Side
In the past year, bitcoin was much less volatile, and the 10 best days gave a net gain of 122%. The issue of BTC gains is contentious, as the asset is still extremely volatile. Despite the overall gainful trend, buying bitcoin at the wrong moment means deep losses that cannot be recovered. Determining the best days is also a matter of hindsight, and buying at peak prices may mean losses of above 50% and months in the waiting.
Those wild price swings happened on significantly lower volumes in comparison to the activity in 2020. The 2013 and 2017 peaks have been ascribed to the influence of the Mt. Gox and Bitfinex exchanges, which in their respective years concentrated a larger part of BTC activity.
Now, bitcoin trading is spread out throughout exchanges, and price movements are not as dramatic. BTC has lowered its volatility to about 3-4% even on more active days, down from above 12% during previous rallies.
Bitcoin fights out within the range of a few hundred dollars, as more rallies remain uncertain.

#BTC Quick updatesFirst scenario, bulls are trying to break 8451-8500which i think might succeed to reach 8700 – whichwill be good short position. Likewise 8150 will be good long position as per updated trends on chart REMEMBER WEEKENDS BECAREFUL DYOR pic.twitter.com/kAruG1TIGM
乙Ꭵᗩ ᑌᒪ ᕼᗩɊᑌᗴ ╚»ᵀᴿᴬᴰᴱᴿ ᴬᴺᴬᴸᵞˢᵀ ᴬᴰᵛᴵˢᴼᴿ«╝ (@open4profit) January 26, 2020

In the past months, BTC has also shown a reaction to larger geopolitical factors, as in the case of the US strikes against Iran. Bitcoin continues to move in a generally favorable investment climate, with another year where economic recession may be staved off. BTC is trading around 00, with upside potential seen in the coming days.
What do you think about the potential for bitcoin gains? Share your thoughts in the comments section below!

Images via Shutterstock, Twitter: @noshitcoins, @open4profit The post appeared first on Bitcoinist.com.

Source: Bitcoininst

Sunday Digest: Bitcoin Price Saunters And Ripple Steals Headlines

bitcoin weekly digest

This week saw the World Economic Forum in Davos. What better opportunity for US Treasury Secretary, Steven Mnuchin, to take a dig at 17-year-old Swedish girl, Greta Thunberg? Of course, many took the opportunity to discuss important things like Bitcoin and cryptocurrency.

Bitcoin Price: Meh…
Okay, so I’d like to just write ‘meh!’ and move on, but apparently I’m contractually obliged to give you a little more than that…
Bitcoin’s heroic ascent of the $9k peak was over before they’d even got out the sandwiches. In fact, it had fallen back to $8650 between last week’s Sunday Digest being written and being published.
At least fees were still low.
Price trundled along sideways until Thursday when it took another hit down to the $8300s. On Friday we saw another push upwards towards $8500, but that faltered and BTC price returned to the $8300s, where it has remained ever since.
Let’s finish with a round-up of some pretty diverse bitcoin price predictions from this week. We have had fairly moderate forecasts, such as not revisiting $7k in our lifetimes and $12.5k by May. And of course, we have had more ambitious possibilities, like $100k in 2021, and even $424k in 2021, although to be fair, that last one was more of a ‘what if’ than an actual prediction.
Probably best to see what happens in the next week before we overcommit ourselves, eh?
XRP And Ripple In The News This Week
Netherlands-based fiat-XRP on-ramp XRParrot was forced to close this week due to the country’s strict interpretation of the latest EU anti-money-laundering directive.
Later in the week, XRParrot developer, Wietse Wind’s XRPTipBot for Twitter also got blocked, apparently for impersonating itself.
Ripple-backed Moneygram also confirmed a push towards achieving dominance in the Indian remittances market.
Ripple CTO, David Schwartz, defended the company on Quora, claiming that the XRP network was indeed decentralized, and Ripple cannot block XRP transactions.
The Bank of International Settlements (BIS) chief told the World Economic Forum in Davos that cross-border payments are a top priority, leading many to hope that this could finally be XRP’s hour in the sun.
At the same event, Ripple CEO Brad Garlinghouse sort of confirmed the company’s intention to go public with an IPO in the next 12 months.
We learned that Ripple secured $200 million in round C funding last year, making it the biggest fundraiser in the blockchain space in 2019.
We also found out that in Q4 2019, for the first time ever, Ripple returned 2.7 billion of the 3 billion XRP released from escrow.
Some suggested that if US Courts eventually recognize XRP as a commodity, the price could soar to $500.
Bitcoin and Crypto News In Brief
With US authorities still dragging their heels, it’s nice to see the Australians taking a lead. The Australian Securities and Investment Commission (ASIC) this week approved Raiz Bitcoin investment retail fund. Sure it took 95% of sugary ETF to swallow just 5% of Bitcoin goodness, but it’s a start.
During the ongoing Indian Supreme Court hearing, the Reserve Bank of India (RBI) denied that it had ever banned Bitcoin and virtual currencies.
A number of major central banks including Canada, England, Japan, Switzerland, and the ECB have formed a think tank on CBDCs (Central Bank Digital Currencies).
Bahrain also looked at joining the CBDC party, being the first nation to trial a new CBDC toolkit developed by the world economic forum.
Bitcoin SV had another mini-pump this week. Its mid-week gains were lost again by the weekend, but it still stands 150% up on the price a month ago, leaving many still waiting for the big crash back down.
Facebook’s Libra Association lost another of its founder members in Vodafone, who explained: “We have said from the outset that Vodafone’s desire is to make a genuine contribution to extending financial inclusion. We remain fully committed to that goal and feel we can make the most contribution by focusing our efforts on [mobile payments platform] M-Pesa.”
Ethereum 2.0 actually seems to be making some visible headway towards becoming a reality, as an important smart contract was successfully verified this week.
Furthermore, the eventual move to proof-of-stake gained further proof-of-support, when it was revealed that up to a million ETH could already be staked in anticipation of Beacon Chain.
And Finally…
New York gaining the dubious honor of being crowned the world’s crypto-litigation capital, with twice as many blockchain-related cases as any other venue.
It’s no wonder the city never sleeps. It doesn’t have time.
What was your favorite bitcoin and crypto news story of the week? Let us know in the comments below! 

Image via Shutterstock The post appeared first on Bitcoinist.com.

Source: Bitcoininst

Dubai Launching Crypto Valley in Tax-Free Zone

Dubai Launching Crypto Valley in Its Tax-Free Zone

A Dubai government authority has announced that it is launching a crypto valley in the country’s free zone there is no personal or corporate income tax. With the help of its partners from the Swiss crypto valley, Dubai will offer a variety of services such as incubation for startups, coworking facilities, blockchain training, education, events, mentoring and funding.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

Crypto Valley in Dubai’s Free Zone

DMCC (Dubai Multi Commodities Centre), a Dubai government entity, announced at Davos 2020 on Thursday that it is launching a crypto valley in its free zone, at the heart of the city’s leading business district. DMCC explained that it is “Designed to foster growth, collaboration and integrity across the global blockchain economy,” elaborating:

The ‘DMCC Crypto Valley’ will offer a variety of services including incubation for early-stage startups, co-working facilities, innovation services for corporate clients, blockchain and entrepreneurship training, education, events, mentoring and funding.

Dubai Launching Crypto Valley in Tax-Free Zone

“The launch of the crypto valley in DMCC will enhance the city’s dynamic business environment, and support the wider strategy of the UAE government to attract the innovators, entrepreneurs and pioneers that will shape the future economy,” commented Executive Chairman and CEO Ahmed Bin Sulayem.

Established in 2002, DMCC aims to enhance commodity trade flows through the country. Its free zone offers a range of benefits including 0% personal and corporate income tax. Members can also remit all profits made back to their home countries without restriction. In October 2019, DMCC received the Financial Times Fdi magazine’s “Global Free Zone of the Year” award for the fifth consecutive years. A total of 85 global free zones were nominated in the 2019 competition.

Situated in the heart of Dubai, DMCC is home to over 100,000 people and 17,000 member companies representing more than 170 countries and 20 business sectors. The companies range from startups to multinational corporations. Every month, 170 more companies join DMCC, 95% of which are new to Dubai, the authority says.

Dubai Launching Crypto Valley in Tax-Free Zone
The singing between DMCC and CV CV for the crypto valley collaboration.

Partners From Swiss Crypto Valley

For the crypto valley launch, DMCC is collaborating with Swiss investment company Crypto Valley Venture Capital (CV VC) and its subsidiary CV Labs to develop “a comprehensive DMCC Blockchain Strategy that is aligned with the Emirates Blockchain Strategy 2021, and supports the Dubai Blockchain Strategy launched by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the crown prince of Dubai and chairman of Dubai Executive Council.” The agreement between the companies was signed on the sidelines of the World Economic Forum in Davos.

“We are thrilled to move into the MENA [Middle East and North Africa] region with DMCC as a strong local partner,” CV VC and CV Labs founder Ralf Glabischnig commented, adding:

We are looking forward to bringing our strong partner from crypto valley to Dubai, like Coreledger, Inacta, Lykke, and Tezos which are already active in the MENA region.

With the launch of its own crypto valley, Dubai joins the company of Switzerland and the Philippines, which have already established their own crypto valleys. The Philippines has built a crypto valley of Asia which will soon get its own airport.

What do you think of Dubai launching a crypto valley in its tax-free zone? Do you think it will attract many crypto companies? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Images courtesy of Shutterstock and DMCC.


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Source: Bitcoinnews.com

French Central Bank Exec Opposes Private Crypto Assets

france against private crypto

Central bankers who initially discounted Bitcoin and other public crypto assets as fraud, Ponzi schemes or scams, have suddenly changed their stance. 

Banks Now Love Crypto, But Only if They Can Control It
Bank of France Governor Francois Villeroy de Galhau is the latest monetary policymaker who has recently commented on cryptocurrency and advocated for the technology to be issued and controlled by central banks.
Villeroy de Galhau acknowledged the utility of crypto assets as digital cash alternatives although he added the disclaimer that they should not be issued by private companies, such as Facebook’s infamous crypto Libra.
Villeroy de Galhau insisted he isn’t responding to Facebook’s currency and instead his comments came as a response to the extremely fast pace of development in blockchain and the need for central banks to adapt and implement a digital cash alternative.
Central bankers have started to take note of crypto’s value proposition. Public, permissionless blockchains don’t depend on trusted third-party intermediaries, and in turn, disintermediate central bankers out of their position of power as policymakers who control the money supply.
Villeroy de Galhau expanded on his statements by explaining that many European nations have seen cash usage decline, and that in Northern European nations such as Sweden and the Netherlands, a digital cash alternative is something that could be highly desirable, since cash is already in such low demand.
Making Fiat Digital Doesn’t Solve Problems
With two-thirds of European nations currently suffering negative interest rates, caused by the very same policies enacted by central bankers, it’s hard to see why anyone would trust a central bank crypto issued and controlled by central bankers. Central Bankers don’t seem to think that endless quantitative easing and negative rates are a problem despite generations of economic theory to the contrary.
Satoshi Nakamoto’s motives for creating Bitcoin were very clear. He included a headline in the genesis block of the Bitcoin blockchain to signal why he made the decisions he did when he designed Bitcoin’s deflationary monetary policy. That headline was about the fallout from the 2008 financial crisis, and it read “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. 
Bitcoin was created as a technology to provide relief from Keynesian monetary manipulators and their inflationary policies. It was these same central bank policies that caused the financial crisis in 2008, and it is the bailouts of 2008, which have simply kicked the can down the road for the last 12 years, leading us into our current climate of endless debt monetization and negative interest rates.
These policies are completely unsustainable. These facts combined with the IMF’s recent memorandum, where they basically admit they need to phase-out cash to successfully impose negative rates on savers, should cause an extreme distrust and scepticism of central banks and their policies. This includes any central bank crypto scheme that they may try to sell to the public.
What do you think about France rejecting the idea of crypto issued by a private organization? Share your thoughts in the comments below! 

Image via Shutterstock The post appeared first on Bitcoinist.com.

Source: Bitcoininst

Ripple Price Analysis: XRP Falls Below 100EMA As Bulls Try To Defend

  • XRP decreased by 7% this week, which brought the coin back beneath the 100-days EMA.
  • Against BTC, XRP dropped into the support at the 2600 SAT level.
  • XRP has found strong support at the .5 Fibonacci Retracement level.

Key Support & Resistance Levels

XRP/USD

Support:  $0.218, $0.209, $0.1850 

Resistance: $0.2283, $0.234, $0.25.

XRP/BTC:

Support: 2600 SAT, 2350 SAT, 2455 SAT.

Resistance: 2710 SAT, 2800 SAT, 2900 SAT.

XRP/USD: XRP Holding Support at .5 Fib Retracement 

xrpusd-jan26

Since our last analysis, XRP went on to rise above the 100-days EMA. However, it found resistance at $0.25, which caused it to roll over and drop back beneath this level. It continued to fall until finding support at the short term .5 Fibonacci Retracement at around $0.218.

XRP has returned into a neutral trading condition after retracing below the $0.2345 level. It will need to make fresh ground above $0.26 to be able to be considered as bullish on the next push higher. If XRP were to continue to fall beneath the $0.20 level, the market could be considered as slightly bearish.

XRP Price Short-Term Prediction

If the bulls can defend the current support at $0.218 and rebound, initial resistance lies at $0.228 and $0.234 (100-days EMA). Beyond this, resistance is expected at $0.24 and $0.25 (1.272 Fib Extension). On the other hand, if the sellers push the market beneath $0.218, support lies at $0.209 (short term .618 Fib Retracement), $0.203 (downside 1.618 Fib Extension), and $0.19. 

The RSI dipped beneath the 50 level but is battling to break back above. It currently indicates indecision within the market, meaning it could still head in any direction. Fortunately, the Stochastic RSI is in oversold conditions and is primed for a bullish crossover signal that should send the market higher.

XRP/BTC: XRP Remains Supported By Sideways Range At 2600 SAT

xrpbtc-jan26

Against BTC, XRP continues to be supported at the 2600 SAT region, which has prevented the market from dipping lower during January (besides a brief drop to 2540 SAT). It remains trapped within the range from 2600 SAT to 2710 SAT and must break this range to dictate the next direction it would like to head toward.

As we are trading in a range, XRP remains neutral at this moment in time. However, if it drops beneath the support at 2530 SAT, the market would turn bearish and should head toward Septemeber 2019 lows. To turn bullish, XRP must rise and break above the 3100 SAT level to clear the 100-days EMA and the December highs.

XRP Price Short-Term Prediction

Toward the upside, the first level of strong resistance lies at 2710 SAT. Above this, resistance is expected at 2800 SAT, 2900 SAT(100-days EMA), and 3000 SAT. Alternatively, if the sellers push XRP beneath 2600 SAT, support lies at 2530 SAT (.886 Fib Retracement), 2455 SAT, and 2400 SAT.

Likewise, the RSI has dipped beneath the 50 level but is battling to break back above. The momentum is indeed flat, and XRP must rise well above the 50 level to begin any form of recovery. 

The post Ripple Price Analysis: XRP Falls Below 100EMA As Bulls Try To Defend appeared first on CryptoPotato.

Source: Crypto Potato

Over $70,000 Double Spent As Bitcoin Gold Experiences Its Second 51% Attack

New information indicates that Bitcoin Gold experienced a 51% attack last week. A total amount of over $70,000 was double-spent, which raises questions regarding its security since this is the second similar attack on the network.

51% Attack On Bitcoin Gold

A 51% attack occurs when a single organization or entity takes control of the majority of a particular network’s hash rate. Once its executed, the perpetrators have control over the transactions to modify the ordering, prevent them from being confirmed, reverse them, or facilitate double-spending.

The last one is what has happened to Bitcoin Gold, according to a recent report. It shows that on Thursday and Friday last week, there were two deep reorganizations on BTG transactions that ultimately led to double-spending.

The first one was for 1,900 BTG (approximately $19,400 in today’s rate). The second one was completed in three different batches, and the total amount was for 5,267 BTG (nearly $54,000).

Bitcoin Gold is a hard fork of Bitcoin and uses Equihash (144,5) or Zhash. Unlike the largest cryptocurrency’s hash rate, which is continuously increasing, BTG’s hash rate has noted a severe decline since the middle of 2018. Naturally, this leads to a less secure network, which is the reason why such an attack can occur a lot easier.

Bitcoin Gold Hash Rate. Source: https://bitinfocharts.com
Bitcoin Gold Hash Rate. Source: https://bitinfocharts.com

Not The First Time

The 51% attack that happened last week is not the first one in Bitcoin Gold’s relatively short history. Back in 2018, BTG recorded the first one, which had significantly more harmful consequences.

Confirmed in a blog post, the previous attack targeted cryptocurrency exchanges. At that point, Bitcoin Gold officials said that “we have been advising all exchanges to increase confirmations and carefully review large deposits.” However, the hackers ultimately fabricated BTG’s ledger and managed to defraud at least $18 million in total.

Ethereum Classic also went under a similar attack last year. The total amount stolen by the double-spending hack was 88,500 ETC (worth around $460,000 at the time.) Interestingly enough, the attackers later returned a part of the stolen ETCs.

The post Over $70,000 Double Spent As Bitcoin Gold Experiences Its Second 51% Attack appeared first on CryptoPotato.

Source: Crypto Potato

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

Everybody’s Staking But Who’s Using PoS Blockchains?

The primary use case for staking blockchains is staking. That is their raison d’être, and thousands of cryptocurrency holders have utilized this provision to increase their holdings by earning staking rewards. As the total amount of staked tokens trends towards 80% for some blockchains, however, it raises questions as to what other utility these chains provide.

Also read: The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors

Two Thirds of All Staking Coins Are Locked Up

The total market cap of all Proof of Stake (PoS) coins stands at $12.6 billion, of which $8 billion is locked up in staking wallets. Much of this occurs imperceptibly to cryptocurrency holders due to exchanges managing staking on their behalf. Store tezos on Binance, for example, and you will automatically be eligible for staking rewards. The top five staking networks by market cap have the majority of their circulating supply locked up: Tezos (77%), Cosmos (73%), Decred (51%), Synthetix (81%), and Waves (53%).

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?
The amount of staked coins as a percentage of total issuance has been growing steadily

Just as masternode coins were so-named because running a node was their defining feature, many staking coins now exist primarily to disburse staking rewards. It’s healthy to have coins distributed as widely as possible, and through locking up tokens, holders have a vested interest in seeing the network flourish. If the only users are stakers, however, not only will everyone’s staking rewards be diluted, but the network will wither away after failing to attract the developers, dapp users, and businesses that are its lifeblood.

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?
Leading PoS coins, showing total percentage staked. Source: stakingrewards.com.

Build First, Stake Later

Tellingly, the PoS chains that have achieved wide adoption were slow to add staking rewards, preferring to build a community and establish a diverse ecosystem of network participants. Two examples of this are Matic Network and Waves. The former has spent the past year onboarding dapp developers, forging partnerships, and gaining liquidity through multiple exchanges including Whitebit, where matic token-holders can claim lower trading fees and additional bonuses. Matic is now applying the final touches to its staking program which will see validators stake tokens as collateral and become part of the network’s PoS consensus mechanism. A partnership with South Korea’s Coinone exchange will enable users to lock up matic tokens for monthly periods in return for an APR of 30.29%.

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

Waves, meanwhile, operates Leased Proof of Stake, whereby holders can earn a return through running a full node and generating blocks or by leasing waves tokens to a full node. The current annual reward for staking waves stands at 6.23%, or 3.1% when adjusted for inflation. Like Matic, Waves has more to offer its community than merely staking; recent developments have included interoperable blockchain protocol Gravity Hub, which can communicate with networks such as Waves and Ethereum and serve as an oracle for non-blockchain data.

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

Waves also has a blockchain games marketplace created in conjunction with The Abyss where digital goods and in-game items can be traded. A strong developer community, complete with hackathons, online courses, and workshops, supports third parties creating and launching dapps using the Waves platform.

How Sustainable Are Staking Rewards?

Crypto networks that offer high staking rewards have no trouble attracting users willing to lock up their tokens to make ‘easy money.’ It is hard to see how staking rewards that run into double-digit percentages are sustainable, however. The rapid increase in the circulating supply dilutes everyone’s holdings, while the lack of features beyond staking deters adoption. Livepeer (LPT), for instance, which has 24-hour volume of just $40K, provides a staking reward of 64.8%, but when inflation adjusted, this drops to 18.8%. Fantom promises 57.7%, adjusted to 33%.

As mining has become commercialized and the days of easy altcoin profits have faded, staking and lending have become the primary forms of passive income. Exchanges that provide staking as a service have obviated the need to spin up a node, and the monthly payouts provide a steady source of revenue. Stakers nevertheless have some tough choices to make. Locking up tokens over an extended period increases the risk of loss when measured in BTC. It’s possible to be up in tokens for the month but down in BTC, rendering the whole exercise pointless from a commercial perspective.

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

The Future of Blockchains Lies in Staking

Despite empirical evidence that Proof of Work makes for a more robust blockchain, the days of new PoW coins are over. Grin was the last major mineable coin to launch; today it’s all PoS chains entering the market. Stakingrewards.com lists dozens of Proof of Stake coins that are scheduled to launch, ambitiously including Ethereum 2.0, whose launch date is anything but certain. When the new improved ETH blockchain does see the light of day, it’s expected to offer staking rewards of 3.7%. Other staking options scheduled for 2020 include Polkadot (5%), Cardano (3.7%), and Matic (10%). These blockchains promise to solve a range of problems including scalability, fast payments, and interoperability. Their greatest use case, however, is likely to be staking.

Do you think staking rewards of 20% or higher are sustainable? Do you intend to stake any of the PoS coins that will launch this year? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Indian Prime Minister Modi Awards Young Entrepreneur for Cryptocurrency App

Indian Prime Minister Modi Awards Young Entrepreneur for Cryptocurrency App

India’s Prime Minister Narendra Modi has awarded a young entrepreneur for her cryptocurrency price tracking application while the government is still deliberating on the country’s crypto policies. News.Bitcoin.com caught up with the award recipient to find out more about her app. Meanwhile, the Reserve Bank of India (RBI) is being challenged in the supreme court regarding its crypto action.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

Modi Awards Creator of Crypto App

While the Indian government is deliberating on whether to regulate or ban cryptocurrencies in the country, Prime Minister Narendra Modi has awarded a young entrepreneur for her cryptocurrency tracking app creation. Modi tweeted on Jan. 24: “I am delighted that the very talented Harshita Arora has been conferred the Bal Shakti Puraskar 2020 … She has been focussing on a wide range of sectors. Her passion towards science, technology and human welfare are clearly visible.”

The award recipient, 18-year-old Kumari Harshita Arora, created an app called Crypto Price Tracker, a portfolio management and price tracking tool for cryptocurrencies, which she designed herself.

Interacting with the award winners at his residence, the prime minister said that he is proud to see the awareness of their duty towards society and the nation, local media reported. There were 49 winners in various categories; Arora was awarded the Bal Shakti Puraskar 2020 for her excellence in innovation. Noting that he gets inspiration and energy from the award recipients, Modi was quoted as saying: “When I was getting introduced to you a while back, I was really surprised. The way you all have tried in different fields, the work that has been done at such a young age … is amazing.” The prime minister added:

Whenever I hear about such courageous work of all you young comrades, talk to you, I also get inspiration and energy.

The Bal Shakti Puraskar award is given by the government of India every year “to recognize exceptional achievements of our children in various fields i.e., innovation, scholastic achievements, social service, arts & culture, sports and bravery,” explained the government’s website. It is also “to recognize the contribution of dedicated individuals and institutions, whose tireless efforts complement the actions taken by the government of India for the welfare of children.”

Arora’s Crypto Tracking App

News.Bitcoin.com caught up with Arora who shared some details about her award-winning app. “I created a cryptocurrency portfolio management and price tracking application called Crypto Price Tracker and launched it on the App Store in Jan 2018,” she told the news team, noting that it was later acquired by Redwood City Ventures. The entrepreneur elaborated:

My app received a lot of positive feedback from the crypto community and got thousands of paid downloads in the first 24 hours of launch which led it to becoming the #2 app in the Finance category of the App Store.

Some screenshots of the crypto app Arora created.

Crypto Price Tracker is a portfolio management app that does price tracking and customizable alerts. It tracks the prices of over 1,000 cryptocurrencies from over 18 exchanges in 32 fiat currencies. It also provides price charts for all monitored cryptocurrencies during the last one day, one week, one month, three months, and one year.

Users can create time-based alerts to get prices of a coin as a push notification regularly or at a specific time. They can also create price threshold-based alerts to get notifications when the price of a certain coin drops, rises or changes by a certain percentage. The app is available in the Apple app store, but not in the U.S., however.

Is the Indian Government Changing Its Stance on Crypto?

An entrepreneur winning such a prestigious award from the Indian government for crypto-related work came as a surprise to many in the crypto community since lawmakers have been considering an anti-crypto bill. The interministerial committee (IMC) headed by former Finance Secretary Subhash Chandra Garg recommended a ban on all cryptocurrencies, except state-issued ones. Garg has since resigned but maintains a negative view on the future of cryptocurrencies.

“Now this is interesting,” Varun Sethi, also known as Blockchain Lawyer, tweeted in response to the news of Arora receiving the award, pointing out that the “draft law by the interministerial committee imposes punishment for direct / indirect use of cryptos.”

Indeed, the crypto bill drafted by the IMC states that “No person shall directly or indirectly use cryptocurrency in any manner,” including providing cryptocurrency-related services to consumers or investors. Those in violation face a fine or imprisonment of “not be less than
one year but which may extend up to ten years, or both,” according to the text of the bill. However, the bill has not been introduced in parliament and the Indian crypto community believes that it is flawed and will not be introduced as is.

Indian social media influencer by the name “Shalini” commented, “India is in a love-hate relationship with cryptocurrency,” adding:

While RBI fights against crypto in the supreme court, our prime minister just awarded Harshita Arora a prestigious award for innovation in various fields including crypto (she created a crypto price tracking app).

The Reserve Bank of India has repeatedly displayed its negative stance towards cryptocurrency. In April 2018, it issued a circular banning regulated financial institutions from providing services to crypto businesses. The supreme court is currently hearing the petitions against this ban, which will resume next week.

What do you think of Prime Minister Modi giving an award to Arora for her crypto price tracking app? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Images courtesy of Shutterstock, Harshita Arora, and the Indian government.


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Deutsche Bank Sees How The Internet Compares To Blockchain Technology

An interesting graphic compiled by Deutsche Bank compares the early-stage evolution of the Internet and blockchain technology. It shows that the two have relatively similar difficult beginnings, but ultimately the former receives more mass adoption than the latter.

Internet Vs. Blockchain Adoption Rates

Nowadays, it’s hard to imagine living a normal life without constant access to the world wide web. The Internet was one of the most disruptive and ingenious creations of the 20th century.

Blockchain, on the other hand, has been touted as similarly disruptive and intelligent technology in the 21st century by many. Deutsche Bank recently published a graphic that shows how the two have started, the middle ground, and the projected future adoption. On the left, one can see the number of internet users in millions and on the right – the number of blockchain wallet users (again, in millions).

Internet&Blockchain Adoption Rates. Source: Deutsche Bank
Internet&Blockchain Adoption Rates. Source: Deutsche Bank

The graphic indicates that both had a sluggish start, particularly in the first few years. It reveals that after eight years of existence, the Internet was at around 500 million users, while during the same timeframe, blockchain is at approximately 50 million. This whole 10x difference is projected along the entire graph.

The Internet also required less than 25 years to reach over four billion people around the world. Deutsche Bank’s forecast for blockchain mass adoption suggests that after a quarter of a century, it will be used by around 350 million.

Even though the Internet appears way more dominant, Changpeng Zhao recently offered a different opinion. The CEO of the largest cryptocurrency exchange by volume, Binance, said that “blockchain is going to have a bigger impact on our society than the internet.”

Difficult Beginnings

Despite the Internet’s undeniable impact on the world, it had a difficult initial period of adoption. The history books reveal that it was created somewhere in the 1960s in a widely different form of what it is today. However, it wasn’t until the late 80s and early 90s before it started gaining adoption in Europe, Australia, and eventually Asia.

But even after so many years of existence in some forms, it was expensive to use and frequently unreliable. The largest U.S. internet provider in the 90s charged $9.95/month for 5 hours of unlimited access, and every additional hour cost $2.95.

With all improvements such as the introduction of DSL, 3G, 4G, etc, the Internet became a much better version of itself in the next two decades. A recent report reveals that today’s speed is 136 faster than what it was back then. Moreover, internet access is over 90% cheaper.

How what does this have to do with blockchain? Well, simply put, the latter is at its primary stages, where the promise of its future developments and disruptions is more significant than its actual usage, at least according to some non-believers. Similarly, there’re challenges with costs and scalability that ultimately prevent it from mass adoption.

With that being said, blockchain has come a long way for its relatively short period of existence. Users can safely assume that the improvements will continue with cost reductions, more scalability, and faster transactions.

The post Deutsche Bank Sees How The Internet Compares To Blockchain Technology appeared first on CryptoPotato.

Source: Crypto Potato