Track market-moving stories before they get noisy

80% of Colombians Open to Investing in Crypto: New Survey

You can’t really discuss the topic of cryptocurrency mining without getting into issues surrounding the concept of centralization. One of the greatest aspirations of cryptocurrency communities is to decentralize the monetary system and create “trustless” transactions.

While Bitcoin made a lot of headway towards a trustless currency, there are still concerns. The concentration of power among ASIC miners in a few locations make some people wonder if mining is becoming too centralized.

GPUs And Decentralization At present there are two leading forms of mining, as Crypto Briefing has previously explained. Bitcoin, Litecoin and other leading cryptocurrencies can be mined with ASICs, highly specialized devices which can only perform a specific algorithm. Monero, Zcoin and some other cryptocurrencies can only be mined by commercially-available GPUs and CPUs

GPUs are common and relatively inexpensive. A standard gaming PC has at least one GPU in it, sometimes two. These video cards, distributed all over the world, allow for a widespread and highly decentralized network.

ASICs on the other hand, are more specialized, very expensive, and much harder to find. Because they are expensive and harder to set up, ASIC networks tend to be centralized among the wealthier people who have the means to purchase them and set them up on a large scale.

Bitmain Versus Everybody Else It doesn’t just stop at individuals. Relatively few entities control the large mining  pools which dominate the most popular Proof-of-Work coins, particularly Bitcoin. Bitmain, which manufactures the most popular ASICs (there are some competitors emerging on the scene) controls two of the largest Bitcoin mining pools, Antpool and BTC.com.

In fact, at one point in time, their pools controlled nearly 50% of  Bitcoin hashrate, although their share has diminished over the past year.

But just because a pool is centralized, that does not necessarily mean that the miners within the pool are also centralized. If miners notice that their pool is acting maliciously, they can simply switch to another pool.

Advertisement

Even a leading pool operator, like Bitmain, would still have to work in concert with a massive number of miners, which would cost much more than it would return. In an article examining Mining Centralization Scenarios, Jimmy Song points out the extreme costs of attempting to maintain such a large-scale attack.

But when a single manufacturer produces the most popular mining equipment, “back-doors” exploits become more likely. For example, Bitmain could surreptitiously install a “kill-switch” that would reduce block productivity on non-Bitmain pools. However, these back-door tricks would also run the risk of being discovered and decimating Bitmain’s balance sheet as miners switch to different equipment in the future.

So while large entities like Bitmain may be a centralizing force in Bitcoin and a number of other cryptocurrencies, free market dynamics tend toward decentralization, competition, and innovation. Due to competition and improving profitability, the distribution of ASIC mining pools is diversifying, trending away from the possibility of monopolization.

Electricity Costs Around The World There’s also a possibility of geographic centralization, as miners flourish in areas with the cheapest energy. This can be due to economic conditions or because of the availability of cheap sources such as hydro-electric dams.

In much of the United States, residential electricity rates range around the 13 cent per kilowatthour average, but can be as high as 20 cents in some regions and as low as nine cents in a few states. For larger mining operations, industrial rates are quite a bit cheaper, but it can still be pretty tough to compete against regions where electricity is much less expensive.

Because the cost of electricity is hugely important in figuring out the profitability of any PoW mining operation, high-capacity ASIC mining operations are drawn to locations where the electricity is cheap.

That’s why so much cryptocurrency mining is performed in China, where electricity is cheaper than almost anywhere else. Quebec is also attracting attention due to its surplus of hydro-electricity. This could be another weak point, as mining hashpower concentrates in certain regions.

Multi-million Dollar ASIC Farms Versus Multi-million Dollar GPU Farms But even if ASICs fell by the wayside, one could also set up a hugely expensive GPU farm.  GPUs themselves do not negate the centralization problem, although they may reduce it due to their widespread availability and usage.

It would be considerably more difficult to gain control of a GPU network, simply because there are already so many GPUs distributed around the world. But if someone designed a new GPU that was highly powerful, efficient, and expensive, it could result in a similar problem.

Higher Hashrates Theoretically, the more decentralized a PoW network is, the more secure it should be, but it may sacrifice speed for safety. Miners are incentivized to increase their hashing power for more frequent block rewards, which also increases network security.

A high hashrate means that there is more competition among miners, making the network more expensive to mine. The higher the hashrate, the more expensive it is to to set up or rent the necessary hashing power to launch a 51% attack. At some point, it becomes so costly that it just isn’t worth attempting such an attack.

51% Attacks If any single entity or group of colluding entities manage to control 51% of a network, lots of bad things can happen. Most importantly, the 51% controlling entity can essentially double-spend the currency. 

In a typical double-spend, attacker creates a public transaction that spends some currency, typically by moving it to an exchange. Meanwhile, they use their superior hashing power to create a secret, longer chain, which does not include that transaction, and broadcast it to the rest of the network. Since consensus defaults to the longer chain, they have effectively spent the same tokens twice.

Some lower hashrate PoW networks like Bitcoin Private and Bytecoin are susceptible to 51% attacks because it requires relatively little hashing power to take over these networks. Even bigger names like Bitcoin Cash and Ethereum Classic have fallen victim to such attacks.

ASICs can contribute to centralization if a few wealthy and powerful parties manage to gain more than 51% of a network’s hashrate. Bitmain and some of its affiliates control somewhere around 40% of all of the Bitcoin network’s hashing power. Of course, it would not be in Bitmain’s best interests to diminish the value of the Bitcoin network since they have so much invested in it. Yet, there is a degree of trust that is necessary because of the extent of their influence in the present conditions.

Still, it looks like ASICs are here to stay, with their collectively massive computational power ensuring the security of Bitcoin and a number of other PoW-based networks. In the next and final installment in this series on mining, we will take a closer look at the numbers involved in profitable mining and will conclude with an examination of the ongoing battle for greater decentralization.

This is Part 2 of a series on cryptocurrency mining. For Part 1, click here. 

Disclosure: This article was edited by Darren Kleine. For more information on how we create and review content, see our Editorial Policy.

Bytecoin Zero wallet: A technological breakthrough for Bytecoin

Worst performers of the day: Litecoin, Basic Attention Token and Bytecoin

[adinserter block="1"]

The leading crypto exchange Binance has removed 30 trading pairs from its platform.

Binance says it axed the pairs to “improve liquidity and user trading experience among our wide range of available assets.”

The sweep included the removal of BitTorrent Token’s (BTT) relatively recent pairing with Bitcoin. BTT remains paired with Binance Coin, Tether (USDT), Paxos Standard (PAX), TrueUSD (TUSD) and USD Coin (USDC).

Here’s a look at all of the pairs on the chopping block.

ANKR/PAX ANKR/TUSD ANKR/USDC BCPT/PAX BCPT/TUSD BCPT/USDC BTT/BTC DENT/BTC DOGE/PAX DOGE/USDC ERD/PAX ERD/USDC FTM/PAX FTM/TUSD FUEL/ETH GTO/PAX GTO/TUSD GTO/USDC LUN/ETH NCASH/BNB NPXS/BTC ONE/PAX ONE/TUSD PHB/PAX PHB/USDC TFUEL/PAX TFUEL/TUSD TFUEL/USDC WAVES/PAX WIN/BTC [adinserter block="1"]

Back in April, Binance delisted Bitcoin SV (BSV) from its platform entirely.

At the time, Binance CEO Changpeng Zhao denounced the rhetoric of BSV creator Craig Wright and called him a “fraud.”

The exchange also removed Bytecoin (BCN), ChatCoin (CHAT), Iconomi (ICN) and Triggers (TRIG) in October of last year, citing a broad list of criteria required for coins to remain on the platform.

Commitment of team to project Quality and level of development activity Network/smart contract stability Level of public communication and activity Responsiveness to our periodic due diligence Evidence of unethical/fraudulent conduct Contribution to a healthy and sustainable crypto ecosystem [adinserter block="1"] [the_ad id="42537"] [the_ad id="42536"]

The start of the new week came as a sad one for traders as the bears take over the cryptocurrency market, correcting Bitcoin price to below the $9600 region. At the time of writing, the coin is trading at $9,627.

The current volatility in the market could be tied to the ongoing selling pressure and transfer of 600 BTC ($5,753,286) to BitMEX, which took place at block 617782. If the bearish movement continues, Bitcoin could dip further to $9170 and even $9000. At the time of this writing, however, BTC managed to recover and is pushing up to $9,700 once again. 

Our bot just picked this up. Volatility incoming 📈📉

💵 A $5,753,286 (600.0000 BTC) deposit into #BitMEX has been confirmed at block 617782.

— TokenAnalyst (@thetokenanalyst) February 17, 2020

Altcoins, on the other hand, are facing significant price crashes and recorded significant losses. Although the market has started recovering from the sudden slump, Bitcoin Cash (BCH) and Ripple (XRP) are the biggest losers in the top 10. XRP retraced to $0.281 while BCH plunged to ($404). The crash in the altcoin markets briefly pushed Bitcoin dominance to over 63%. As the market started to recover, however, altcoins seem to reclaim grounds as the dominance is currently at 62.4%. 

It’s interesting to see where the market goes from here. It appears that it may have been a healthy correction as over the past couple of weeks bulls were in complete control.  

Total Market Cap: $276 B | Bitcoin Market Cap: $174 B | Bitcoin Dominance: 62.7%

Major Crypto Headlines Binance Applied For Operating License In Singapore, Confirms CEO Changpeng Zhao. Just a month after Singapore released its comprehensive regulation for crypto businesses, Binance has filed for operating license in the country, CZ revealed. 

You may also like: Market Meltdown: MemeCore Crashes 76% as MIM Breaks Peg to $0.50 Brutal Bitcoin Liquidation Cascade Imminent Below $59K, Warns Analyst Bitcoin Price Crashes Below $60K as Strategy’s MSTR Plunges 10% Russia’s Central Bank Completes Blockchain Pilot To Issue Tokenized Assets. The central bank of Russia has reportedly completed a pilot project for the issuance and circulation of digital rights. The platform can be used to digitize goods, services, securities, and other assets.   

IOTA Releases Safe Version of Trinity Desktop But Mainnet Remains Suspended. IOTA Foundation has launched a safe version of the Trinity wallet that will enable users to see their balances and transactions on Desktop. However, the Mainnet remains suspended until the project team finalizes their remedial plans.

Significant Daily Gainers and Losers Hedera Hashgraph (19.82%) HBAR, the native cryptocurrency of the Hedera Hashgraph, emerged as the most significant winner in the top 100 with 19.82% gains on the trading session. The coin’s performance today will definitely leave HBAR day traders basking in euphoria considering the current market situation. At the time of writing, the coin is trading at $0.051 with a market cap of $164,993,621. The Hedera Hashgraph network is growing rapidly, and research shows that the platform processed over 36 million transactions over the last six months. 

Centrality (9.63%) With a 9.63% gain on the trading day, CENNZ wins the spot as a top performer over the last 24 hours. The increase in value today has pushed the coin’s price to $0.100654 and its market cap to $84,797,804. CENNZ is ranked as the 72nd largest cryptocurrency in the world according to market cap. The project has made a lot of progress since its launch. Centrality recently completed its Habanero stage on its roadmap and they are moving to the next phase known as Scotch Bonnet.

Bytecoin (-11.24%) On February 15, BCN made a significant price move and traded as high as $0.000690. However, following the bear market, the coin has slumped to a current price of $0.000456. 

Tags:

Binance Records ‘Highest Buy Flows' in Altcoins; Is Alt-Season Kickoff Coming?

Top 5 Watershed Moments In BTC On-Chain Analysis’ History. Is Your Favorite In?

Market continues its decline as Bitcoin closes in on $8,400

Poloniex plans to shift the majority of its crypto trading operations offshore, according to parent company Circle. The move comes amidst regulatory uncertainty and pressure in the US, which lacks a clear legal framework or guidance for cryptocurrency-related businesses or crypto investors.

Circle CEO Jeremy Allaire says that 70% of Poloniex users are not based in the US, prompting the move to another jurisdiction. Allaire says Poloniex has already secured its Digital Assets Business Act license to operate in Bermuda, reports Coindesk.

Says Allaire,

“The lack of regulatory frameworks significantly limits what can be offered to individuals and businesses in the US.”

In May, the Delaware-based exchange stopped offering nine coins for its customers in the US due to regulatory uncertainty: Ardor (ARDR), Bytecoin (BCN), Decred (DCR), GameCredits (GAME), Gas (GAS), Lisk (LSK), Nxt (NXT), Omni Layer (OMNI) and Augur (REP).

The CEO also confirmed that the company’s recent downsizing, eliminating roughly 30 employees, was partly due to the lack of clarity from US lawmakers. The company’s current focus is global and getting beyond the US bottleneck.

“It took a long time working with the Bermuda government and the Bermuda Monetary Authority.”

“The project to establish a new international operations hub for our market, exchange and wallet services, was a major project.”

The move will also allow Poloniex to explore being able to offer financial services, adding that users could expect to see more “yield-generating crypto accounts.”

Poloniex ranks in the top 100 crypto exchanges in the world with a 24-hour trading volume of roughly $16 million, according to data compiled by CoinMarketCap. It is also listed among Messari’s Real 10 Volume index reflecting legitimate trading volumes from leading industry players.

In the wake of last week’s two congressional hearings on Facebook’s upcoming digital asset Libra, crypto insiders are assessing the highly critical response from US lawmakers who are determined to halt the project in its tracks. The hearings sparked an intense debate about Bitcoin, cryptocurrencies and new corporate digital assets that are all vying for a place in the digital economy.

Politicians have not yet figured out a way to deal with emerging blockchain technology and the many products and services currently in development to bring more financial inclusion for people all around the world. The threat of digital assets lowering costs, rivaling existing infrastructure and challenging the traditional banking and monetary systems has prompted many prominent politicians, including Maxine Waters and Brad Sherman, to demand a moratorium on Libra.

As for Bitcoin, the decentralized system cannot be halted or stopped by any central authority or government.

[the_ad id="42537"] [the_ad id="42536"]

Bitcoin hits new yearly-high as it breaks $12K

Privacy coins have been lauded by some as necessary to protect users’ basic right to privacy. So, what are the top 10 privacy-centric cryptocurrencies?

The Benefits of Privacy Coins Privacy cryptocurrencies occupy a sacred place in the cryptocurrency ecosystem.

While most cryptocurrency transactions are traceable on the blockchain, privacy coins utilize a range of protocols to obscure the addresses of transacting parties. Some privacy cryptocurrencies are private by default. Others offer identity-preserving features as an option.

Some exchanges have even delisted many coins due to regulatory pressures to implement strict KYC requirements. But if protecting one’s identity is a highly valued commodity, it’s important to understand how each of the top privacy coins operates.

Privacy Coins By Default Monero (XMR) Monero is the privacy coin with the largest market cap, at around $1 billion at press time. 

Monero uses the CryptoNight Proof-of-Work protocol to make the network ASIC resistant. The protocol also obscures wallet transaction details and user amounts on the public blockchain. A truly fungible cryptocurrency, XMR coins’ transaction histories cannot be traced. 

CryptoNight uses ring signatures and stealth addresses to hide transaction details. All transactions are private by default.

RingCT (Ring Confidential Transactions), an enhancement of CryptoNight, implements ring signatures to obfuscate transactions on the network by mixing them with other spendable transaction inputs.

The blockchain displays the validity of transactions, but only the sender and receiver involved in a particular transaction can see the amount of coins transferred in a transaction.

Monero is widely considered the most important of this category of cryptocurrencies.

Zcoin (XZC) Zcoin uses a protocol known as Sigma to preserve user identity. Sigma removes the ability to link coins with transaction histories. Only the parties to a transaction have knowledge of the exchange of funds.

The privacy-focused coin has integrated Tor into its network to hide users’ IP addresses. The development team also added Dandelion++ to improve IP address protection when a transaction is broadcast.

The team is currently building toward the launch of Lelantus, an upgrade that would improve the protocol’s scalability, privacy, and ease of use.

Lelantus will usher in completely untraceable transactions. Called HOOMP, Hierarchical One-out-of-Many-Proofs, the algorithm significantly improves on the performance of the One-Out-of-Many Proofs (OOMP).

OOMP is a building block of many other upcoming privacy protocols, such as Beam, Anonymous Zether, JP Morgan’s Many to Many proofs, and Monero’s Triptych and Triptych-2.

Advertisement

On average, Zcoin developers found a 10x faster proving time, as well as a reduction in verification time, using HOOMP. This feature could make it one of the most important privacy coins in the market.

Bytecoin (BCN)  Bytecoin bills itself as the world’s first private untraceable cryptocurrency. To ensure user privacy, Bytecoin deploys CryptoNote technology.

The protocol utilizes ring signatures to bundle transactions as well as making addresses unlinkable through the generation of “non-repeating, one-time address.” 

Bytecoin’s privacy credentials are only enhanced by the fact that the more widely known Monero is a fork of the BCN project.

Grin (GRIN) & MimbleWimble Grin is a privacy-focused cryptocurrency “without censorship or restrictions.” The project deploys two methods to ensure transaction privacy for its users.

First, the Grin blockchain does not store amounts or addresses involved in transactions. Transactions are relayed through “a sub-set of peers” prior to being broadcast.

Secondly, using Mimblewimble allows past transaction data to be erased. That not only contributes to the privacy of transactions, but it also helps the blockchain scale. Beam is another project that uses the Mimblewimble protocol.

To ensure privacy and fungibility, the Litecoin Foundation has considered implementing the protocol on the LTC blockchain. According to the foundation: 

“We have started exploration towards adding privacy and fungibility to Litecoin by allowing on-chain conversion of regular LTC into a MimbleWimble variant of LTC and vice versa. Upon such conversion, it will be possible to transact with MimbleWimble LTC in complete confidentiality.”

Super Zero (SERO) Super Zero is the native token for the SERO Dapp platform. SERO uses Super-ZK for privacy, and is reportedly 20 times faster than the Sapling upgrade of zk-SNARKs.

Its protocol claims to be the first to support smart contracts that use zero-knowledge proofs.

Privacy Coins With Optional Privacy Dash (DASH) Dash, a fork of the Bitcoin protocol that began life as Xcoin in 2014, has an optional privacy feature that allows users to hide transaction details if they want to through the network’s mixing mechanism. Dash’s privacy feature is called PrivateSend.

It has become a very popular way to transact in Venezuela. The feature, an implementation of CoinJoin, mixes coins with other transactions, to obscure the origin of the funds.

Dash is not, strictly speaking, a privacy coin and does not market itself as one.

In fact, the company’s website promotes it as “instant, global, and easy to use.” Transactions cost less than one cent and are near-instant.

Zcash (ZEC) Zcash is another widely-used coin with optional privacy.

Zcash transactions can take two forms: transparent or private. In private transactions, address details are hidden. 

Zcash is a fork of the Bitcoin protocol, adding a privacy layer through a cryptographic proof known as zk-SNARKs. Zero Knowledge Succinct Non-Interactive Argument of Knowledge allows transactions to be verified without any knowledge of the wallet addresses involved or the amounts transferred.

According to the Zcash team:

“’Zero-knowledge’ proofs allow one party (the prover) to prove to another (the verifier) that a statement is true, without revealing any information beyond the validity of the statement itself. For example, given the hash of a random number, the prover could convince the verifier that there indeed exists a number with this hash value, without revealing what it is.”

Horizen (ZEN) Horizen is “a technology platform with optional privacy features that aims to enable an application-rich and inclusive ecosystem to provide people with freedom and everyday usability.”

ZEN is the platform’s native cryptocurrency.

Like other privacy coins, its privacy features are optional, offering both T-Addresses (transparent) and Z-Addresses (private). Z-Addresses utilize zero-knowledge cryptography to allow users to obfuscate transaction amounts and sender and receiver addresses.

Komodo (KMD) Komodo was a source-code fork of Zcash, enabling the project to implement the zk-SNARKs protocol. It is not a privacy blockchain itself, and KMD is not a privacy coin. But the platform allows for the creation of privacy protocols by third parties.

If a project wishes to adopt Komodo’s privacy as a feature, it can choose whether to make it optional or mandatory. (The Komodo project itself is not privacy-centric.)

Komodo developers also built an entirely separate blockchain, Pirate Chain, in mid-2018. Pirate Chain (ARRR) has mandatory transaction privacy using the zk-SNARKs protocol. The team claims it to be one of the most private blockchains in operation.

The Komodo website outlines that Monero’s ring-signature protocol leaves traces of metadata, which the zk-SNARKs protocol does not.

Verge (XVG) Verge, originally DogecoinDark, uses an anonymous network layer and the Tor anonymity tool to hide IP addresses and user locations.

The Wraith Protocol upgrade brought the ability to accommodate stealth addressin to the Verge network.  The upgrade offers senders and receivers the ability to choose to have transactions recorded to the public or the private ledger.

Not only are the locations of senders and receivers private by default, but it also offers stealth addressing.

For these reasons, Verge is a payment option accepted by Pornhub, an ideal use case for privacy coins.

Privacy Coins an Important Part of the Crypto Ecosystem Privacy coins remain an important part of the cryptocurrency ecosystem.

Despite, or perhaps because of, the increased regulatory scrutiny of privacy-enhancing features in the cryptocurrency markets, privacy-focused projects will continue to be important tools against privacy infringements.

Disclosure: This article was edited by Paul de Havilland. For more information on how we create and review content, see our Editorial Policy.