Saturday, October 2, 2021

El Salvador mines first bitcoins from volcanic energy


El Salvador officially mined its first Bitcoins using a volcano. At the same time, geothermal energy now accounts for about 22% of the country's market.
Previously presented as a concept, the project of mining cryptocurrency using volcanic energy turned out to be a surprisingly viable idea. So much so that today the President of Salvador Nayib Bukele shared on Twitter a photo from the monitor showing the number of cryptocurrencies mined in this way. By that time, it was 0.01083 BTC, of which 0.0048 BTC is already awaiting withdrawal.

The country not only actively uses geothermal energy personally, but is also one of its largest producers in the world. It is generated by 20 volcanoes located in the region, which scientists have described as "potentially active". Given their number, this use of natural power is hardly surprising, although Bukele's resourcefulness still amazes many miners. In addition, such energy is classified as environmentally friendly, so the "green miners" will also have no claims against the country.

On September 28, the president shared a video on his Twitter account, which showed the delivery of equipment in the form of ASIC miners, as well as the process of installing and configuring them. The local energy company LaGeo is directly involved in the project, thanks to whose specialists the country's authorities were able to quickly implement the idea.

According to Bukele, the equipment is still in test mode and they are testing it, but it has already given the first results. Of course, it was not without spiteful critics, because in the comments and retweets people shared the opinion that the president should use a period of at least three hours of equipment operation for reports, while others even joked about the level of "home mining".

Recall that the law on the legalization of Bitcoin in El Salvador entered into force on September 7, and by the 27th of the same month, according to Bukele, 2.1 million residents were using the state-owned Chivo cryptocurrency.

Compound Founder Says $80M Bug Presents ‘Moral Dilemma’ for DeFi Users


While Robert Leshner seemed to briefly threaten users with the IRS, the reality is that he – and the rest of the Compound Labs community – are now relying on the goodwill of users.

If a decentralized finance (DeFi) protocol accidentally gave you millions of dollars in tokens, are you obligated to give it back?

In an interview with CoinDesk following an $80 million exploit, Compound Labs founder Robert Leshner is arguing users should do just that.

On Wednesday night, a bug in money market Compound's code led to an erroneous disbursement of COMP tokens intended for long-term liquidity mining rewards.

The Compound Twitter handle acknowledged the bug shortly after, saying that no user funds were at risk. The bug only applied to Compound's Comptroller Contract, which is responsible for distributing liquidity mining rewards earned over time.

Nearly the entirety of the Comptroller Contract has now been drained, with 280,000 COMP distributed to users incorrectly, according to Leshner.

Despite the eye-popping sums lost to the bug, however, the community is now captivated by a debate as to what users should be obligated to do with their funds.

"This has been, without a doubt, the worst day in the history of the Compound protocol," Leshner told CoinDesk.

He went on:
"What makes it way worse is that I and most folks are completely powerless to do anything besides sit back and watch this moral dilemma play out."
IRS threats
In a Tweet on Thursday night, Leshner seemed to warn recipients of the erroneous tokens that there could be real-world consequences for keeping them – namely, that the U.S. Internal Revenue Service (IRS) might want to hear about it:

Some members of the DeFi community interpreted the comments to mean that Compound Labs was planning to report recipients to relevant tax authorities. Leshner apologized for the tweet shortly after.

Threats of "doxxing" have proven to be effective in dealing with exploits in the past – last month, a non-fungible token (NFT) team memorably threatened to call in the FBI and ordered soup to a hacker's address. The hacker relented, returning stolen funds.

However, in this instance even if an organization wished to pursue claimants, in practicality it may be an empty threat.

Compound Labs is a real-world entity that is working on the protocol, but there's no clear basis for it to pursue legal action – the structure of the decentralized autonomous organization (DAO) is such that it is now just another member of the community, according to a Compound Labs representative.

The representative also said the Compound interface is hosted on distributed file storage protocol InterPlanetary File System (IPFS) and there's no reportable information about users collected in any way.

However, due to the nature of the bug, many of the recipients of the tokens are not sophisticated hackers – they just happened to hit the jackpot.

Their operational security, or opsec, isn't hacker-grade. Some addresses that claimed large sums of the tokens have interacted with centralized exchanges where their real-world information is stored, and the claims could have an impact on their taxes.

Claiming the funds required no knowledge of the bug, and some users might not have been aware there was an exploit underway – they may have received millions while intending to harvest much smaller sums as rewards.

Leshner said the DeFi community has rallied around the protocol in an effort to find solutions. Yearn.Finance and MakerDAO representatives have been active in community channels in finding short- and long-term solutions.

However, Compound has an "extremely rigid" and slow governance process by design – architecture intended to make the protocol more resilient is now acting as a barrier to a fix. It will take another five days before the community can approve any updates to the contract code.

Technical solutions to the initial bug aside, however, the protocol now faces an even bigger problem: trying to convince users who received tokens to return them to the community.

"In my opinion, this is a bank error in a couple people's favor," said Leshner.

Saturday, August 28, 2021

Lisk announces arrival of ‘new era’ after successful completion of migration to Lisk Mainnet v3


The Lisk Mainnet v2 completed the migration to Lisk Mainnet v3 on August 21, which is the biggest protocol change in Lisk blockchain history, Lisk wrote on their website. Features of the 'new era' include an extremely secure new account address system, up to 98.64% cheaper transactions after moving to a dynamic fee system, and ensured full immutability of transactions.

Migration eliminates all weaknesses of the Lisk Mainnet v2
The migration eliminates all weaknesses of the Lisk Mainnet v2 related to accounts, the consensus algorithm, and fees. The blockchain is now almost fully prepared for the upcoming interoperability release.

With v3, the new account address system is extremely secure with built-in error detection for typos. This does away with the need for account initialization. The previous address and ID system was retired and all current accounts were migrated. As a result, addresses have become longer, virtually eliminating the risk of address collisions and making sure such addresses resist preimage attacks.

Account private and public keys and the 12 word mnemonic passphrase have not changed. It's guaranteed that typos of up to 4 characters in the address will be detected.

Almost 100% cheaper transactions
With the newly introduced dynamic fee system under Lisk v3, transactions will be as much as 98.64% cheaper. This is because the minimum transaction fee has dropped from 0.1 LSK to 0.00136 LSK in an effort to make fees more competitive. By setting a higher fee and the same nonce as the transaction a user wants to overwrite, they can do so as long as the transaction has not been included in the block yet.

Transactions are non-reversible
Another important change that goes with Lisk v3 is total immutability. In other words, transactions are 100% non-reversible. This is the way of the future with interoperability and sidechains coming into the Lisk ecosystem as it prepares for v4. When Lisk Core v4 is released, blockchain applications will be able to support transactions across multiple blockchains. Lisk's newly integrated BFT consensus algorithm ensures they can't be reversed.

Japan’s FSA plots harsher digital currency regulation


The Financial Services Agency, Japan's market regulator, is taking its first steps towards drafting a more restrictive policy for regulating digital currency in the country, in a move that looks set to tighten the rules for digital currency sector businesses.

According to reports in local media Jiji Press, the rule changes are being brought in with a view to better protect consumers, with the regulator having already begun to solicit views on how the new policy could shape up.

The regulations are expected to be brought in before summer 2022, with a view to providing greater investor protections as quickly as possible. With an eye on continuing to encourage innovation and development, the FSA has said the new rules would bring much needed stability to the sector.

It follows the creation of a dedicated panel of experts last month to look at the issues of regulation in decentralized finance, joining other ongoing efforts to address developments in central bank digital currencies and digital currency more broadly.

Japan has historically taken a progressive approach to digital currency, encouraging the development of initiatives in digital currency and blockchain technology. Some of the earliest crypto trading platforms and exchanges were founded in Japan, and the country continues to be a regional hub for trading in East Asia.

Following the substantial Coincheck hack in 2019, a series of new regulations were brought in to strengthen the security at exchanges, and to offer investors a better quality of protection against future attacks. As part of the measures, the FSA has required digital currency platforms operating in the country to register and adhere to its compliance requirements.

The measures have failed to prevent repeat attacks. However, with new regulations coming down the track, and in particular the Financial Action Task Force's (FATF) Travel Rule which is expected to be adopted by 2022, the regulator is hoping to provide more robust oversight for the sector.

Friday, July 30, 2021

Neo N3 - Roadmap to MainNet and Migration


Last week we launched Neo N3 RC4, which we are hopeful will pass all our stability tests and graduate to become the Neo N3 Formal TestNet. Once we have achieved this milestone, we will begin rolling out the Neo N3 MainNet, along with migration and governance.

While we are not yet ready to finalize dates, we can outline how we intend to move from Neo Legacy to Neo N3. We can also reveal some of the migration options that will be available at a high level.

Essentially, the rollout will occur in three phases: TestNet, MainNet Setup, and Mass Migration. Various tasks will be completed during each phase to ensure that the Neo N3 MainNet is ready to support healthy network operations by the time the public migrates tokens en-masse.

Token holders will have two migration options to choose from, depending on their preferences.

The first option will be "Early Bird" migration, which will closely follow the minting of the Neo N3 genesis block. This will provide token holders with an opportunity to be among the first to participate in voting, potentially offering opportunities for a larger than usual GAS yield for a short period of time.

The second option will follow the start of the Mass Migration phase, and will offer token holders direct bonuses based on the amount of NEO tokens they migrate.

Each option has its own benefits which are expanded on further in this article. Additional information will also be provided as we move closer to kicking off migration.

The phases will be carried out as below:

The deployment of the Neo N3 RC4 TestNet was the first step on the final road to Neo N3 MainNet. We have already begun onboarding critical components of the network, such as Initial Council members, NeoFS nodes, and Oracle nodes.

Once we have verified that the network is running with stability, the RC4 codebase will be re-published as Neo v3.0.0 and we will move onto the MainNet launch.

Some of the tasks that will be completed during this phase include:

Governance setup (in progress)
The Neo Foundation recently announced the initial members of the Neo Council, responsible for governance of the Neo blockchain. The initial members of the Neo Council have already onboarded onto the RC4 TestNet to ensure that they are ready and equipped to handle steady operations of Neo before migration to MainNet.

NeoFS & Oracle setup(in progress)
The initial NeoFS and Oracle networks will be operated by Neo SPCC and Neo Foundation, respectively. These are being set up to ensure smooth functionality for the first round of dApps deployed to the Neo N3 network.

Token migration testing (in progress)
The Neo Foundation, community development groups, and exchanges have begun testing NEO and GAS token migration from Neo Legacy using PolyNetwork. Tests have already been completed from Neo Legacy to Neo N3 RC3.

Application testing
The first wave of N3 dApps will begin deploying contracts to the TestNet. Some of these dApps will be participants of the Neo Frontier Launchpad, while others will be projects supported by NGD's Early Adoption Program.

MainNet Setup
Following the graduation of RC4 to Formal TestNet, the Neo N3 MainNet will be launched with the minting of its genesis block - a major milestone for the Neo project. The initial Neo Council members and node networks deployed to the Formal TestNet will begin migrating over to the Neo N3 MainNet.

Early token migration and voting will open during this phase. However, migration options and access to external services, such as exchanges, will be limited.

The focus during the MainNet Setup period will be exactly that - setting up the MainNet. Neo will be laying the foundations to ensure the Neo N3 network can stand up on its own and is ready for mass migration.

Some of the tasks that will be completed during this phase include:

Network setup migration
The initial Neo Council, NeoFS nodes, and Oracle nodes will be migrated to MainNet following a period of smooth operation on the TestNet.

Neo Foundation token migration
The Neo Foundation will migrate its NEO and GAS token supply from Neo Legacy to the Neo N3 MainNet. The Neo Foundation intends to use an allocation of its NEO tokens to vote in the Neo Council, while GAS will be used to support the onboarding of dApps, governance candidates, nodes, and other early setup initiatives.

"Early Bird" token migration / Voting-Starting one week after genesis

Individuals can choose to participate in "Early Bird" token migration via Neo's official website roughly one week following the MainNet launch. Voting will also open alongside migration.

There will be advantages and disadvantages to participating in Early Bird migration.

NEO and GAS can be migrated from Legacy to N3 tokens at a 1:1 ratio. NEO holders who migrate early will have the opportunity to be the first to vote in Neo's new governance system.

Under the rules of Neo's new economic structure, the majority of newly minted GAS is distributed to NEO token holders who have successfully voted for a Neo Council member. As fewer NEO tokens will be used to vote during the Early Bird phase, the GAS will be split among less NEO and may yield a larger than usual GAS generation rate.

However, during this time, there is likely to be very limited N3 support from external service providers such as wallets and exchanges. This may mean that you could find yourself unable to trade your N3 NEO and GAS tokens or store them in your preferred wallet.

Additional migration channels and incentives will be made available in the next phase.

More information on migration will be available in the coming weeks.

Application migration
dApps that intend to be ready for use from day one of mass migration will begin migrating to the Neo N3 MainNet.

Relaunch of Grant programs
Updated versions of the Neo Grants programs will be launched, including the General Grants, Core Developer Grants, and Research Grants. Neo is always looking for talented teams and individuals to join our ecosystem. The Neo Grants programs are a great way to get involved.
Mass migration
Upon conclusion of the MainNet setup phase, we will begin the mass migration of NEO and GAS tokens. We estimate that this phase will begin roughly one month after Neo N3 has minted its genesis block.

By this point, all the pieces should be in place for stable MainNet operation, the first wave of dApps should be ready to start accepting users, and most of the ecosystem infrastructure such as explorers and wallets should be equipped to support the migration.

A token migration incentive program will be launched to encourage token swaps from Neo Legacy to Neo N3. Various migration channels will be available, including Neo's official website, alongside selected wallets and exchanges.

We should note that although we are working hard alongside major exchanges to ensure speedy support for the Neo N3 MainNet, we do not have control over the internal timelines of external organizations. We will make every endeavor to ensure wide and speedy adoption of N3, but ultimately, universal support may come gradually.

Some of the tasks that will be completed during this phase include:

Token migration incentive program opens
An incentive program will begin starting the first week of Mass Migration, offering the following bonuses for NEO migration:

Weeks 1 & 2: NEO holders who migrate will be rewarded with a 1% bonus of the amount of NEO migrated
Weeks 3 & 4: NEO holders who migrate will be rewarded with a 0.75% bonus of the amount of NEO migrated
Weeks 4 - 8: NEO holders who migrate will be rewarded with a 0.5% bonus of the amount of NEO migrated
As NEO is indivisible, incentives of less than 1 NEO will not be issued. Centralized exchanges that facilitate migration may choose to offer fractional NEO rewards at their own discretion. All the token incentives will be issued to the appropriate accounts within 1-3 days after users complete the migration. There is no plan for GAS migration incentives at this moment.

More information on migration will be available in the coming weeks.

Neo Legacy GAS generation stopped
The Neo Legacy blockchain will move into long-term support following the launch of Neo N3. However, having two blockchains that continually generate GAS at slightly different rates makes things complicated for providers, such as exchanges who need to calculate circulating supply.

To solve this issue, Neo Legacy NEO tokens will cease to generate GAS tokens at a yet-to-be-specified block height. The final GAS generation block will be selected after Neo N3 migration has been open for a period of time. The block height and estimated date will be communicated with plenty of advance notice to ensure all NEO token holders have ample warning and time to complete migration.

We have already seen some stellar dApp development using N3 during the Neo Frontier Launchpad. In just a short period of time, developers brand new to Neo and its tooling have been able to produce amazing results. It is a testament to the hard work that has gone into making Neo N3 a public blockchain platform that not only stands up to its competitors, but exceeds them in many respects.

As our tooling continues to mature, documentation continues to improve, and more sample code is written, so will the Neo ecosystem continue to grow. We can't wait to see all the amazing dApps you will build on Neo, and we are grateful to have you along for the journey.

Making BTC national currency is a bad idea, IMF warns


A few months back, El Salvador's president announced that he would be making BTC legal tender in the South American country. This move has faced criticism, including from the citizens who have taken to the streets to protest as well as from global bodies. The latest to weigh in is the International Monetary Fund (IMF) which has described the move as "an inadvisable shortcut."

In a blog post, the Washington-based organization noted that there's a need for digital payments across the globe. However, adopting a decentralized digital currency is a shortcut that any country must not be tempted to take, the IMF stated.

"We believe, however, that in most cases risks and costs outweigh potential benefits," the blog post, written by Tobias Adrian and Rhoda Weeks-Brown, stated. Adrian is IMF's marketing director while Weeks-Brown heads the legal department as general counsel.

The two executives believe that digital currencies are unlikely to get any adoption as legal tender in countries with "stable inflation and exchange rates, and credible institutions." In such countries, households would have very little incentive to use them, relative to existing fiat payment systems, the IMF believes.

And even in countries with less stable economies, "the use of a globally recognized reserve currency such as the dollar or euro would likely be more alluring than adopting a cryptoasset."

The IMF, just like many other legacy institutions globally, pointed to volatility in digital currencies as a key reason they can't function as legal tender—but it doesn't end here for the IMF. It pointed to the significant erosion of central banks' power, especially in monetary policy. With digital currencies, central banks would lose their ability to shape the monetary system, IMF believes. "As a result, domestic prices could become highly unstable," it pointed out.

For the IMF, the use of a digital currency also threatens the integrity of the financial system. "Without robust anti-money laundering and combating the financing of terrorism measures, cryptoassets can be used to launder ill-gotten money, fund terrorism, and evade taxes. This could pose risks to a country's financial system, fiscal balance, and relationships with foreign countries and correspondent banks."

The organization, whose mandate revolves around global monetary cooperation and promoting financial stability, didn't mention El Salvador in its blog post. However, it did little to conceal the target of its attack. "Attempting to make cryptoassets a national currency is an inadvisable shortcut," it warned.

Thursday, July 1, 2021

Now Open: Registration for Initial Neo Council Members


The launch of the Neo N3 MainNet is gradually approaching after the release of multiple TestNet versions. One of the most prominent changes in Neo N3 is an entirely revamped governance model, which will push Neo towards a more decentralized future.

NEO token holders will be empowered to vote on a 21 member Neo Council, of which the top seven will also become Consensus Nodes. The Neo Council will be responsible for maintaining the health of the Neo network, with rights to adjust critical blockchain parameters such as fees.  

In order to ensure the stability of the Neo N3 MainNet in its early phases, the Neo Foundation is seeking candidates to become the initial members of the Neo Council. The primary goal is to ensure that the first members of the Neo Council have a fundamental understanding of the Neo platform and are technically capable of carrying out their duties.

Neo Global Development will seed up to 10 candidates into the Neo Council. The remaining places will be filled by the Neo Foundation, including the seven consensus nodes.

This will be the default Neo Council composition upon MainNet launch. NEO holders can immediately start voting for candidates to receive increased GAS generation rates. Interested parties can also start registering as candidates on-chain and begin soliciting votes.

The Neo Council will remain in the default setting until 20% of the total circulating NEO has been used to vote. Once the 20% threshold is reached, the Neo Council will adjust to reflect the will of the people.

What are the incentives for Neo Council members?
5 GAS is generated every new block and will be rewarded to voters and Neo Council members alike. 10% of the released GAS will be evenly distributed among the 21 members of the Neo Council, while the consensus nodes will also receive the network fees packaged within each newly generated block.

Neo Council members also have the power to adjust blockchain parameters such as system fees and the ability to elect other on-chain roles such as oracle nodes.  

What are the requirements to become a Neo Council candidate?
Anyone can register their interest to be an initial member of the Neo Council. Ideally, we are looking for candidates with the following qualities:

A solid understanding of Neo technology and its ecosystem needs
Experience working within blockchain or related technical fields
The ability to reliably host a consensus node
Once the Neo N3 MainNet launches, anyone can register on-chain to become a candidate and be voted into the Neo Council.

How to apply to become an initial member of the Neo Council?
Applications to become an initial Neo Council member are now officially open. The Neo Foundation will be selecting up to 10 foundation members according to the schedule below:

June 6- June 30 - Application period to become initial Neo Council members
July 1- July 10 - Applications review period
July 10 - July 14 - Announcement of initial Neo Council members
July 15 - Launch of the governance website and community voting
To submit an application, please email with the below information, or complete the registration form found here.

Registration details:
Your full legal name
Position title
Contact phone number
Contact email address
Brief introduction to yourself or your organisation
Why do you want to be a Neo Council member?
What are your plans for governance?
We welcome everyone to join us in building the Neo Smart Economy of the future.  

More information about Neo N3 governance can be found at here.

UK licensing proves too strict as 13 more digital currency firms withdraw applications


Digital currency businesses looking to operate in the United Kingdom are reportedly finding the licensing terms set out by the Financial Conduct Authority (FCA) to be too challenging, amid the latest wave of withdrawn applications.

Some 13 prospective licensees have reportedly withdrawn their applications to the regulator, taking the total number to do so to 64. The figures show an increase of 25% in withdrawn applications for June alone, with others thought to be considering similar moves.

The FCA assumed its role in overseeing the digital currency sector back in January 2020, with a particular focus on compliance with Anti-Money Laundering procedures. This prompted the regulator to bring in the licensing scheme, giving businesses an initial period of one year to comply with the requirements.

However, after being inundated with applications, the resultant backlog prompted the regulator to set up a temporary registration system to allow time for processing.

Firms that withdraw from the licensing process are obliged to cease trading, on pain of fines and legal enforcement by the regulator. However, it is expected that some firms will be able to continue to operate outside of the agency's anti-money laundering remit.

The news comes in a climate of tightening restrictions on digital currency businesses in the U.K. Most recently, the U.K. regulator took action against cryptocurrency exchange Binance, joining regulators in Ontario and Japan in doing so. Binance itself withdrew its application for U.K. licensing last month.

CEO of trading platform eToro, Yoni Assia, said the direction in the U.K. implies a growing intent to regulate the digital currency sector, warning of more stringent regulation to come in future.

It comes at a time of increasingly tightening restrictions on the digital currency sector worldwide, as governments establish their own regimes for regulating the industry.

Watch: CoinGeek Zurich panel on The Future of Trading & Digital Assets

Friday, April 30, 2021

Turkey arrests 62 over alleged $2B Thodex exit scam as leader flees country


Digital currency users in Turkey are going through some dark times. Exchanges in the Middle Eastern country have been collapsing recently, with signs of exit scams. One of these is Thodex, an exchange suspected of taking $2 billion from close to 400,000 investors. Turkish police have since arrested 62 people associated with the exchange but the owner has reportedly fled the country.

It started last week when Thodex announced on its website that it would be unavailable for several days to handle a sales process. The vague message didn't reveal details such as when it would be back and if the users' funds were safe, prompting investors to start voicing their frustration. In addition, a local lawyer filed a lawsuit against the digital currency exchange on claims of aggravated fraud. This prompted the country's authorities to start investigating the exchange.

According to local state media, police have now arrested 62 people associated with the exchange. They are still on the hunt for 16 more as investigations intensify.

Thodex CEO Faruk Fatih Ozer has reportedly fled the country and is now in Albania, according to local sources. Before fleeing Turkey, Ozer reportedly contemplated suicide or giving himself up to the authorities. However, according to Bloomberg, he decided against both.

"So I decided to stay alive and fight, work and repay my debts to you. The day I repay all my debt, I will return to my country and give myself in to justice."

Turkey's Justice Ministry has issued a red notice for Ozer to Interpol, which is used to alert police in all member states about the presence of an international fugitive.

Thodex has insisted that the shutdown is temporary and is not an exit scam. In a statement, the exchange claimed that it had found an 'abnormality' in its accounts and that it shut down the exchange to investigate this. On the CEO leaving Turkey, it claimed this was only to meet overseas investors. He will be returning soon to cooperate with the authorities, the exchange claims. However, for its 390,000 stranded users, this is simply not good enough.

Still in Turkey, a second exchange has shut down just days after Thodex. In a statement on its website, Vebitcoin exchange claimed:

"Due to the recent developments in the crypto money industry, our transactions have become much more intense than expected. We have decided to cease our activities in order to fulfill all regulations and claims. We will provide you with information as soon as possible."

Turkish police have blocked Vebitcoin's domestic bank accounts.
Orkun Godek, an investment researcher based in the capital Istanbul, remarked, "This market looks like a bottomless pit and regulation is absolutely needed. Risks may trigger new risks. People may close positions elsewhere to counter their crypto losses."

As Ether Pushes Ever Higher, Crypto Traders Plot Price in Bitcoin Term


ther (ETH), the native cryptocurrency of the Ethereum blockchain and the second-biggest overall, reached a fresh record high early Wednesday, widening its lead over market leader bitcoin (BTC).

The trend looks set to continue, with ETH/BTC (the ether-bitcoin price ratio) breaking out to a multi-year high in a sign of increased capital flow into ether.

Ether rose to $2,800, surpassing the peak price of $2,762 reached Wednesday, according to CoinDesk 20 data.

The cryptocurrency has rallied by 43% so far this month, decoupling from bitcoin, down 7%. The ETH/BTC ratio has jumped to 2.5-year highs above 0.050, confirming a major bullish breakout on technical charts.

"ETH/BTC has broken out after a multi-year consolidation, and the trend looks very strong," Pankaj Balani, co-founder and CEO of the Singapore-based Delta Exchange, said. "There are no further resistances here, and we expect to see ETH/BTC push through 0.10 eventually."

The implication is the ongoing capital rotation out of bitcoin and into ether is likely to continue over the coming months.

A report earlier this week from digital-asset manager CoinShares showed ether funds and investment products drew $34 million last week, while bitcoin funds lost $21 million.

"The demand is shifting," Meltem Demirors, chief strategy officer at CoinShares, told CNBC earlier this week, adding that capital is moving from one asset to another.

Raoul Pal, CEO and co-founder of Real Vision Group, also foresees continued ether outperformance.

"At this point in the risk cycle, and with Ethereum 2.0 coming (cheaper fees and less supply), I'm struggling to not sell all my BTC and move my entire core position to ETH," Pal tweeted earlier this month. "To be clear – I'm a massive BTC bull, but I think ETH is the better asset allocation for performance right now."

Developers expect the Ethreum 2.0 upgrade or the switch to a proof-of-stake consensus mechanism by the end of this year or early next year. After that, Ethereum founder Vitalik Butrin plans to implement a "sharding" upgrade in a bid to expand Ethereum's capacity to process transactions by splitting its database into 64 mini-blockchains. That may bring down transaction fees, bringing more network activity and stronger demand for ether.

While the path of least resistance for ETH/BTC appears to be on the higher side, it may not be smooth sailing, said Stack Funds' head of research, Lennard Neo.

"The breakout seen on the weekly chart is quite significant as the next resistance dates back to May 2018 at the 0.09 value," Neo said. "ETH/BTC may re-test former hurdle-turned-support at 0.04-0.045 before further gains unfold."

A potential bull market correction in bitcoin, the top cryptocurrency by market value, cannot be ruled out and will likely lead to a temporary pullback in ETH/BTC. That's because a bitcoin drop usually yields bigger drawdowns in ether and other alternative cryptocurrencies.

Bitcoin's bounce from recent lows near $48,000 has stalled near $55,000, and buyers are refusing to step in despite the U.S. Federal Reserve keeping to its pro-easing stance on Wednesday.

The weekly chart MACD histogram, an indicator used to gauge trend strength and trend changes, has crossed below zero, indicating a bearish reversal for the first time since March 2020.

"A break above $60,000 is needed to revive the bullish view," Balani said.

Wednesday, April 7, 2021

High-level Overview of Lisk Interoperabilit


We already revealed that the Lisk interoperability solution aims to enable general cross-chain messages. In this blog post, we now explain how this is achieved by providing a high-level overview of the Lisk interoperability solution similar to the online presentation given in the "First Glimpse at Lisk Interoperability" at the Lisk Updates from the Lisk Center, Berlin event from November 2020. Moreover, we can now unveil our updated roadmap that contains all the objectives of the blockchain interoperability phase.

Technical Solution
Our interoperability solution is based on the paradigm of cross-chain certification introduced in detail in the previous research blog post "Introduction to Blockchain Interoperability". Basically, cross-chain certification means that information from one chain is submitted to another chain utilizing a signed object called a certificate. Let us see more specifically how this will work in the Lisk ecosystem.

Cross-Chain Update Transactions
We will now consider the simplified case of two interoperable chains, where one is the sending chain and the other one the receiving chain. To send information from the sending chain to the receiving chain, the first step is to include a transaction on the sending chain. This transaction then emits one or more cross-chain messages which carry the relevant information that is supposed to be sent to the receiving chain. The cross-chain messages are then transferred to the receiving chain. However, we do not send a cross-chain message to the receiving chain right after the corresponding transaction was included. Instead, several cross-chain messages, possibly from multiple blocks or even rounds, are collected together and are put into a cross-chain update transaction, which is then posted on the receiving chain. This concept is also illustrated below in Figure 1. Cross-chain update transactions are in fact the main transactions facilitating interoperability in the Lisk ecosystem and our realization of cross-chain certification. Therefore, we also called the general technique "cross-chain update" instead of "cross-chain certification" for simplicity in the online presentation given in the "First Glimpse at Lisk Interoperability".

Cross-chain update transactions
Figure 1: The transactions t1 to t3 are included in the sending chain over the course of some blocks, where each one emits one cross-chain message, denoted by m1, m2, and m3. The cross-chain messages are put into one cross-chain update transaction, denoted by CCU, that is posted and included in the receiving chain.

The Lisk ecosystem will, of course, consist of more than just two chains. Therefore, the solution is also slightly more sophisticated than previously explained. That means, for example, that a cross-chain update transaction may contain several cross-chain messages that target different chains. This will be further explained in the sections below.

Note that there is no rule on how many messages must be collected before a cross-chain update transaction is created or for how many blocks one must collect messages before creating one. There is full flexibility, and any user could create a cross-chain update transaction whenever they want by taking all cross-chain messages that were not put into a cross-chain update transaction before.

Content of Cross-Chain Update Transaction
Cross-chain update transactions consist of the following three major parts:

The cross-chain messages.
A certificate.
Information about the current validator set of the sending chain.
We already described the first part, the cross-chain messages, above.

A certificate is an object containing information from a finalized block header that is signed by a large portion of validators from the sending chain and thus authenticates a finalized state of that chain. An authenticated finalized state is a requirement for accepting cross-chain messages on the receiving chain. That means a cross-chain message is applied on the receiving chain only if it was attested that the corresponding transaction on the sending chain belongs to a finalized state.

With the information about the current validator set of the sending chain, the receiving chain knows which validator set is eligible to sign the next certificate.

Neo N3 Official TestNet Launch


After 5 Preview versions, the first release version of Neo N3 (Neo N3 RC1) has been released on 16th March 2021. The most significant upgrade in this version is the integration of NeoFS system into the Oracle module. Numerous improvements and fixes have also been applied in this version for State Root service, Policy native contract, opcodes and etc.

NGD will perform the Neo N3 RC1 TestNet upgrade from UTC 6:00AM to 9:00AM, 25th March 2021. The TestNet might be temporarily unstable during this period. We are sorry for any inconvenience caused.

The comprehensive list of improvements and optimizations in this version:

NeoFS API Completion & Integration into Oracle
neofs-api-csharp is now completed and has been integrated into the Oracle plugin in this version. The NeoFS master nodes in this TestNet are now Neo-go nodes by NeoSPCC and will operate as a side chain. Neo nodes will interact with them through the NeoFS API. These Go nodes will be fully migrated to corresponding Neo master nodes in a later stage.

State Root Improvements
Since the last release, a number of new features and fixes have been added to the State Root service. A new P2P functionality has been added to include the ExtensiblePayload to send signatures. Many bugs are also fixed, such as fixing a faulty logic where the state root witness could be null, checking the magic before enabling state root console commands, and fixing hash calculation logic and etc.

New Opcodes
Two new opcodes POW and SQRT are added into the Neo contract system, which can be used to calculate the power and square root of a value, respectively. This addition will simplify the smart contracts development experience on Neo. Corresponding logic changes across the neo-core, NeoVM, and .NET devpack were also completed.

Other improvements and optimizations
Introduced the concept of side-chains to allow plugins to load with multiple NeoSystems
Added new interfaces on native contracts to record update history
Adjusted some system call fees to match resource requirement calculations
Separated CpuFee and StorageFee for clearer and more rational fee calculations