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Ethereum hard fork launching sooner than expected

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A new Ethereum hard fork, “Muir Glacier,” is about to drop, many months earlier than anticipated.  The network will upgrade when block number 9,200,000 is activated, which block explorer sites Etherscan and Ethernodes predict will be mined on Wednesday, January 2. 

The surprise announcement, which came just before Christmas, angered node operators who will have to prepare for the hard fork during their holiday.

The fork, known as “Muir Glacier,” brings only one improvement, EIP 2384, which delays a ticking time bomb in Ethereum’s Proof-of-Work consensus algorithm known as the “Ice Age.” 

If you use a large exchange (such as Binance or Coinbase), a wallet service (such as Trust Wallet or Coinbase Wallet) or a hardware wallet, (Ledger or Trezor),  you won’t have to lift a finger. But if you’re a node operator or miner, you’ll have to download the latest version of the Ethereum client and update your node to keep playing. 

So what does the update do? 

To keep its Proof-of-Work mechanism running smoothly, the Ethereum network maintains an average block-validation time—between ten and twenty seconds—by manipulating the mining difficulty. Separately, there’s a “difficulty bomb,” which increases the mining complexity every 100,000 blocks. 

If the difficulty bomb increases the problem-solving time too much, it “results in a degradation in the usability of Ethereum due to waiting for confirmation for transactions and Dapps as everything takes longer throughout the network,” explained the so-called Ethereum Cat Herders, the contributors who help coordinate hard forks). In other words, the system can jam and slow to a crawl. 

The new EIP delays the difficulty bomb for another 4,000,000 blocks, or around 611 days, meaning the whole network won’t freeze before Ethereum switch to a Proof-of-Stake consensus mechanism, minimizing any disruption to the network. 

Sooner than expected

Ethereum’s developers had expected that the hard fork would drop later in 2020, but unexpectedly announced the  upgrade two days before Christmas, and said that it would occur on New Year’s Day. That irritated a number of node operators who complained that they would have to work over the holidays.  

In addition, the update comes a little over three weeks after Ethereum’s previous hard fork, Istanbul, which occurred on December 7. 

The rationale for the hasty update, according to the Cat Herders, is that Ethereum’s developers got their math wrong. They expected the difficulty bomb would only become an issue in mid-2020, meaning the EIP could be delayed for a while following Istanbul. But “those estimates were wrong,” wrote Hudson Jameson, a developer at Ethereum, in the announcement for the hard fork.

As described on the webpage Ethereum published for the EIP, researchers noticed the difficulty bomb was having too strong an impact on the network on October 5. They revised their calculations, and estimated that the bomb would accelerate exponentially, meaning the network would see block confirmation times of 20 seconds towards the end of December, and 30 second block times by February. “This will start making the chain bloated and more costly to use,” they wrote. 

Though the upgrade came sooner than expected, it’s deja vu all over again for Ethereum node operators and miners. The upgrade is the latest of several delays to the difficulty bomb. Previous delays were implemented through EIP-649 and EIP-1234, which came out in 2017’s Byzantium Hard Fork and 2019’s Constantinople Hard Fork respectively



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Bloxroute Releases Blockchain Distribution Network for Ethereum and Bitcoin Cash

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On December 3, the crypto software firm Bloxroute’s cofounder, Eyal Markovich, announced the launch of the startup’s Blockchain Distribution Network (BDN) Version 1. Markovich explained that the BDN V1 release is a milestone for the company and the scalability service aims to enable exponential blockchain scaling by propagating blocks and transactions faster.

The Blockchain Distribution Network Version 1

The startup Bloxroute, a firm dedicated to blockchain propagation software, recently revealed the launch of BDN V1. The protocol is a “Layer-0 blockchain scalability solution” and Bloxroute’s Markovich detailed that developers have been working “tirelessly” toward the effort. News.Bitcoin.com first reported on Bloxroute back in November 2018, after the Bitcoin Cash blockchain split. After BSV split off from the BCH network, both communities heavily debated how miners and nodes would handle massive sized blocks in the future. At the time, Bloxroute was brought up in these debates quite a bit, because the startup claims the BDN can provide more efficient block propagation for blockchains.

Bloxroute Releases Blockchain Distribution Software for Ethereum and Bitcoin Cash

“In particular, Bloxroute propagates blocks without knowledge of the transactions they contain, their number, and the ‘wallets’ or addresses involved. Miners are free to include arbitrary transactions in a block,” the Bloxroute whitepaper explains.

Since then Bloxroute has been experimenting with multiple blockchains and recent tests include the ETH Mining Test, Bitcoin Cash Miner Test, and the Akomba Labs Test. The results from the Bitcoin Cash Miner Test, in particular, had shown that “BDN propagates large blocks (32MB) between 2-18 seconds compared to up to 193 seconds without Bloxroute.”

Bloxroute Releases Blockchain Distribution Software for Ethereum and Bitcoin Cash
In July, Bloxroute published the results of the Bitcoin Cash Miner Test.

“Block compression technology, such as Compact blocks, improved with the BDN as transaction propagation allowed mempools to be more in sync,” the report highlights. Additionally, China saw the “largest improvement” in propagation times and BDN “sped up fork recoveries,” like missed transactions from compact blocks. Bloxroute has been working with mining pools as well and news.Bitcoin.com reported about one partnership last January when the firm partnered with the mining operation Rawpool.

Bloxroute Releases Blockchain Distribution Software for Ethereum and Bitcoin Cash
Mining operations that helped Bloxroute during the Bitcoin Cash Miner Test.

‘Any Blockchain Project Can Integrate With Bloxroute’

For the latest BDN V1 Gateway software, Markovich details that the protocol is available via Github, Dockerhub, and Pypi. Markovich also notes that Bloxroute expects to see exchanges, decentralized apps, and mining pools adopt BDN V1. People can get a comprehensive overview of the architecture, components, and installation walkthroughs by visiting Bloxroute’s documentation page.

Bloxroute Releases Blockchain Distribution Software for Ethereum and Bitcoin Cash
On December 3, 2019, Bloxroute cofounder Eyal Markovich announced the launch of BDN V1.

“Later this year, we will publish a more technical post on the content of V1 and on the BDN roadmap for 2020,” Markovich said. Additionally, Bloxroute’s website shows a list of blockchain partners who plan to leverage the BDN software. Bloxroute is also backed by investment firms such as Pantera, Coinbase Ventures, Fenbushi, and well known individuals like Fred Ehrsam, and Jack Herrick. In addition to detailing that a technical post and BDN roadmap was in the works, Markovich’s blog post emphasized that “any blockchain project can integrate with Bloxroute.”

“While the first version of the Blockchain Distribution Network (BDN) supports Ethereum and Bitcoin Cash, we are also working to integrate the BDN with a number of new blockchain projects including Ontology, Quorum, Conflux, and Metadium,” Markovich added.

What do you think about Bloxroute’s Blockchain Distribution Network (BDN) Version 1? Let us know what you think about this subject 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. 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.


Image credits: Shutterstock, Bloxroute, Fair Use, and Pixabay.



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Parity steps back from Ethereum, moving client codebase to DAO

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Parity Technologies will no longer run Parity Ethereum, the second-largest Ethereum client after Geth. Instead, the company announced today it would turn over ownership of the codebase and maintenance of the project to a decentralized autonomous organization (DAO). It’s calling the project OpenEthereum DAO.

The move represents another move away from Ethereum for Parity, which has been working on its own blockchain protocol, Polkadot, for over a year.

While it hasn’t named names, the company says it will talk with the “Ethereum Foundation, ETC Labs, Gnosis, POA Network and other contributors” about the DAO. Presumably, some of these will serve as DAO members. Parity Technologies says it will also be a member with the caveat that it will be fairly hands-off. Other specifics have yet to be ironed out, but the company said OpenEthereum DAO will use a “stake-weighted token system” for membership and control.

According to Parity, as important as the Parity Ethereum codebase is, it would rather be working on Polkadot and other projects.

“Parity is increasingly unable to dedicate the level of resources required for even simple maintenance of this project,” it wrote. “As we move to a multi-chain future based on technology that is far more modular, maintainable and interoperable, we find it increasingly difficult to explain to our stakeholders why it makes sense to dedicate our expertise to maintaining legacy technology.” 

It’s also suspending its role in the Serenity development team to devote more time to Polkadot, leaving grant money from the Ethereum Foundation on the table, even though it said it’s excited for ETH 2.0.

Close watchers of Ethereum likely won’t be surprised. Parity, founded by Ethereum co-founder Gavin Wood, caused a disturbance in the ecosystem by helping to develop Polkadot, an open-source platform for making blockchains interoperable. Polkadot is the product of the Web3 Foundation, also founded by Wood, and is seen by many as a competitor to Ethereum.

Key Parity developer Afri Schoedon, a core developer who helped coordinate Ethereum hard forks while also working on Polkadot, fanned the flames by tweeting earlier this year: “Polkadot delivers what Serenity ought to be.”

The blowback from Ethereum community members, upset at the perceived conflict of interest, ultimately led Schoedon to publicly quit Ethereum. Now, it looks like Parity is all but quitting the network too.

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Ethereum locked in DeFi apps hits all-time high

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The amount of Ethereum (ETH) stored in decentralized finance (DeFi) applications has hit a new milestone: 2.7 million ETH, according to data analytics site DeFi Pulse

In dollar amounts, that figure represents roughly $405 million at the moment—which is less in fiat terms than the previous all-time high of 2.4 million ETH, on account of the market collapsing. Nevertheless, the surge in locked ETH across Ethereum-based DeFi apps marks a significant increase in demand for such services.

After starting 2019 at around 55,000 locked ETH, rising demand for DeFi lending protocols, such as Maker, Compound, and InstaDapp, saw the amount of Ethereum locked in smart contracts reach a high of 2.2 million by mid-April. Over the next 3 months, as the price of Ethereum doubled from $160 to over $320 in July, the number of tokens locked up fell to a low of 1.68 million ETH. 

Since then, however, the amount of locked ETH has been on a steady ascent. It hit 2 million at the end of August, 2.3 million by October, and peaked earlier this month at 2.4 million before reaching its latest high of 2.7 million. The vast majority of those funds (74%) are stored in Maker, which currently has 2 million ETH locked up on its platform, according to DeFi Pulse.

The Maker platform is used within Dai, an algorithmic stablecoin pegged to the US dollar. Earlier this week, Maker launched a new multi-collateral version of its stablecoin. Prior to this release, users could only use Ethereum (ETH) tokens to collateralize Dai-based loans. But since the upgrade, users can now use Brave’s Basic Attention (BAT) token, with support on the way for Augur (REP), Golem (GNT), 0x (ZRX), DigixDAO (DGD), and OmiseGo (OMG) tokens. 

A distant second in the DeFi rankings is crypto-lending platform Compound, which has around 317,000 ETH locked up on its network. Just last week, Compound completed a $25 million Series A capital raise, led by investment giant Andreessen Horowitz, which is indicative of the interest that DeFi has gained as of late.

A mere 24 months ago, the total USD value of all locked funds on Ethereum DeFi apps was measured in the low millions, according to DeFi Pulse. Now, it’s in the hundreds of millions.

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Report: What the Ethereum “transaction flippening” means

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A “flippening” of sorts has happened on the Ethereum blockchain. Data revealed in a Coin Metrics report this week notes that, for the first time, the number of ERC-20 transactions has surpassed the number of transactions done in ETH itself. And as popular as those tokens are, they could be on the verge of giving way to the newer class of non-fungible tokens.

So what does that mean? And why should anyone care?

The surge in transactions involving these types of smart-contract based tokens could be evidence that the Ethereum network itself is at last finding its footing with users, as evidenced by a variety of actual use cases. 

Birth of a skinnable token

The Coin Metrics report, written by analyst Nate Maddrey, borrowed the term “flippening”—initially coined to describe the other cryptocurrencies overtaking Bitcoin in value—and applied it to what he termed a “transaction flippening” on the Ethereum network itself.

Maddrey looked back to the creation of the ERC-20 specification, which allowed Ethereum-compliant tokens to be created. While the ease with which these tokens could be minted contributed to the excesses of the ICO boom, the ERC-20 tokens have also created network value—and spawned an almost unimaginable amount of alt currencies.

In fact, by April of this year, more than 181,00 ERC-20 coins existed on the Ethereum blockchain, according to Investopedia.

The Coin Metrics report divided those coins into three types—utility tokens, which allow the bearer to get services, such being able to bet in prediction markets via the Gnosis; exchange tokens, such as Binance’s BNB token (it later moved from Ethereum to the Binance exchange’s own blockchain); and everyone’s favorite, stablecoins, such as Tether and DAI. 

It’s that last category—stablecoins—that, since mid-2018, have contributed most to the number of transactions happening on Ethereum, the report said. You probably won’t be surprised to learn that Tether is the culprit there. “USDT started gaining ground in May and now has over 80% of the share of transaction counts of the top ten tokens,” the report said.

The flippening is just the startening

Net net, all of these ERC-20-based token transactions have been slowly overtaking ETH-based transactions. 

And last week, it finally happened: “As of November 10th, ERC-20’s had about  303,000 daily transactions vs about 290,000 for ETH,” the report said.

But wait! There’s more! Here come the non-fungible tokens!

“While ERC-20s have been the dominant type of token up to this point, we may be on the cusp of the rise of ERC-721s,” the report predicted. You might know that lovable protocol as the NFT standard, which first captured the crypto world’s imagination with the fabulous Crypto Kitties. 

The nifty NFT

The new, new thing is the collectible digital card-based game, Gods Unchained, which has been a smash hit. Users own their trading cards, which are unique and can be sold on a market, which is part of the game’s allure. “Although still early, Gods Unchained could be an example of a real use case for crypto tokens in gaming,” Coin Metrics concluded.

Indeed, after controversy over the game erupted in Hong Kong last month, it sold out its “Genesis Card Pack”—and generated around $6.2 million.

Coin Metrics noted that since the beginning of this year, “the number of deployed ERC-721 contracts has grown by almost 350%, compared to about 39% and 36% for ERC-21 contracts and non-token contracts, respectively.”

Still, Ethereum is not out of the woods. Ever since Crypto Kitties, the blockchain network has struggled to keep pace with demand, and is moving to Ethereum 2.0, which is designed to be faster and more scalable. The Coin Metrics report did not offer an opinion on the bigger question: Is the transactional popularity of stablecoins and NFTs simply a high-class problem to have? Or is it an existential one.

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What the CFTC Chairman Actually Said About Ether Futures and Ethereum 2.0

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The Takeaway:

  • CFTC Chairman Heath Tarbert said last month that ether is a commodity, and he expects to see regulated ether futures in the U.S. in the next six months.
  • The ethereum network is expected to transition from its current proof-of-work consensus mechanism to a proof-of-stake model over the next year, in an upgrade known as Ethereum 2.0.
  • Asked about this shift, Tarbert said Tuesday the CFTC is still evaluating whether ether will remain a commodity under the new model.
  • Ethereum developers and proponents believe proof-of-stake may actually bolster the case that ether is “sufficiently decentralized” to be considered a commodity in the eyes of U.S. regulators.

U.S. regulators are not yet sure about what to make of ethereum’s impending transition to a staking-based protocol.

Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert, who recently declared his view that the world’s second-largest cryptocurrency by market capitalization is a commodity that could support a futures market, said this week his agency is still evaluating whether this will remain true after ethereum upgrades its network sometime in the coming year.

Speaking at CoinDesk’s Invest: NYC conference on Tuesday, Tarbert said the CFTC and its sister agency, the Securities and Exchange Commission (SEC), were both “thinking carefully” about the forthcoming Ethereum 2.0 upgrade which is designed to replace the coin’s current proof-of-work (PoW) model for transaction validation.

In PoW, computer servers called nodes solve computationally-intensive mathematical equations in order to validate transactions and process new blocks. However, in Ethereum 2.0, these same nodes will stake wealth (in the form of ETH) and vote on new blocks rather than solve for them.

“Staking is obviously different than mining in the sense that mining is by its very nature sort of more decentralized, whereas with the stake obviously it reduces energy costs because you’re just giving it to one validator or line of validators,” Tarbert said Tuesday.

The CFTC, which has been looking into ethereum and its potential shift to proof-of-stake (PoS) since at least December 2018, is now looking into how decentralized the ethereum network will be after the 2.0 upgrade. In addition, Tarbert said regulators are also examining the requirements expected of users to run nodes on the Ethereum 2.0 network.

“That’s exactly the kind of analysis that that we’re undertaking and the SEC is undertaking right now,” Tarbert said.

This analysis will be key for any evaluation and eventual approval by U.S. regulators for a regulated ether futures market – which according to Tarbert’s earlier statements is “likely” in the next six to 12 months.

What’s at stake

According to Jehan Chu, managing director of Hong Kong-based crypto investment firm Kenetic Capital, a regulated ether futures market would be game changing in the U.S.

“What regulated futures will do is allow institutional investors to trade this commodity,” Chu said. “They’re not going to be logging on to Bitmex and trading in size. They will potentially on Bakkt, the NASDAQ, etc. This is why you need to have regulated financial instruments and why CFTC’s commodity designation is so important.”

Adding to this, Aaron Wright, founder of ethereum startup OpenLaw, said another core benefit of a regulated futures market would be better “price discovery” for ether.

“Without futures, it’s more difficult for those that think the price of ether is overvalued to signal that to the market,” said Wright. (According to recent remarks by former CFTC Chairman Christopher Giancarlo, the introduction of bitcoin futures in late-2017 brought BTC prices back down to earth.)

Some industry experts say both the demand and maturity of ethereum as a technology is still far too nascent for a futures market to be supported in the U.S. This is because ethereum futures contracts do trade on exchanges based outside of the U.S. – such as on U.K.-based Kraken Futures – but trade volumes for these contracts are relatively thin.

Still, the most ardent supporters of ethereum are optimistic about the successful delivery of Ethereum 2.0. In fact, most believe the case for a regulated ether futures market is only strengthened in light of the upcoming transition to PoS.

There are two reasons why.

1. ‘Better decentralization’

In June 2018, the SEC’s director of corporation finance, William Hinman, argued ether was not a security based on the understanding of the ethereum network as a “decentralized structure.”

Danny Ryan, an Ethereum 2.0 researcher at the Ethereum Foundation, explained one of the key aims of ethereum’s PoS network is “better decentralization.”

“With [PoW], there is some intrinsic centralization due to the hardware component tied to the real-world supply chain in which some people are more entrenched and can get more specialized hardware than average consumers,” said Ryan, adding:

“In ethereum’s PoS, the capital that you need to acquire to participate is much more readily available. … Converting capital into an asset that allows you to stake in the protocol is much cleaner.”

Eric Conner, founder of information site ETHHub and product researcher at blockchain startup Gnosis, said the minimum cost for an Ethereum 2.0 validator to process blocks and earn rewards like a miner would on ethereum today is 32 ETH or roughly $5,800.

According to Connor, this is a comparatively lower barrier to entry than in PoW where “you would have to buy thousands of [machines] because the hash power on the network is so high.”

“What’s interesting about proof-of-stake is that it takes away miner centralization,” Conner said.

To this, Collin Myers, head of global product strategy at ConsenSys, the Brooklyn-based ethereum venture studio, estimates Ethereum 2.0 is targeting roughly 15,600 validators to secure the network at launch. Currently, there are only about 7,000 computer servers running ethereum software around the world.

2. Expectations of profit

Currently, miners on ethereum are randomly selected to process new blocks on the network. By devoting higher amounts of computational energy to the network, miners have a greater chance of being selected to create a new block and earn rewards.

In Ethereum 2.0, validators, who are the equivalent to miners in a PoW network, earn rewards on a more regular and predictable basis. Rather than using up computational energy, validators lock up 32 ETH as collateral to the network and earn rewards in the form of interest on their staked wealth.

“Although the chance for reward is much more regular and frequent on PoS, the amount which you are rewarded as a validator is still related to your ability to participate well in the protocol,” said Ryan. “There is not an expectation of profit by doing nothing and through the work of others. It’s all related to your ability to provide services to the network.”

Indeed, outside of staking, validating transactions and appending new blocks in the PoS network, validators are also expected to actively attest to the validity of a block in a shard or the primary PoS blockchain, called the beacon chain. This happens every six minutes in the new network, according to the Ethereum Foundation.

“I don’t think it changes anything to be honest. Ether is a commodity as far as the … CFTC is concerned. I don’t see a reason why proof-of-stake would change that,” said Gnosis researcher Conner, adding:

“It’s actually very similar to how proof-of-work works today when it comes to reward issuance.”

A blurred line

Given that both efforts for regulated ether futures in the U.S. and Ethereum 2.0 are still largely theoretical, it’s difficult to draw a correlation between how one might impact the other, according to Chu of Kenetic Capital.

“In my mind, the [ETH 2.0] roadmap isn’t impacting the markets yet. I don’t think it’s going to impact a [possible] futures market until … some major milestones come into place,” said Chu.

What’s more, the actual criteria influencing how U.S. regulators make their decisions on what is or is not a security when it comes to cryptocurrencies is still highly uncertain, according to Felix Shipkevich, a New York attorney with a specialization in litigating on cryptocurrencies and blockchain technology.

“We still don’t have clarity from the SEC on what type of tokens are securities and what are not,” Shipkevich said, adding:

“Please explain to me, what does [the SEC] mean by decentralized? What is truly decentralized? … We do not have a legal definition of what decentralized versus centralized ledgers are and why bitcoin and ethereum in the eyes of the SEC [and CFTC] are not securities.”

To put things in perspective, the only other cryptocurrency in the world that has been granted commodity status within the United States is bitcoin. As recently as September, the first physically-settled bitcoin futures contracts were launched and made available for trading on the regulated digital assets platform Bakkt.

However, Shipkevich said bitcoin does not behave in a similar way to other traditional commodities. The majority of people buying bitcoin (and similarly ethereum) do so with the intention to speculate on the asset and earn high returns, Shipkevich said, adding:

“These two cryptocurrencies are treated more like [equity] assets than truly cryptocurrencies. People buy bitcoin today because they want to hold and speculate on bitcoin.”

Whatever the reason, Chu said he is confident U.S. regulators know more about these two cryptocurrencies than they are currently letting on.

“I’m not concerned about the relationship between ether futures and ETH 2.0,” said Chu. “You don’t issue all of these enforcement actions without understanding what you’re enforcing.”

Watch Heath Tarbert’s full remarks at Invest: NYC 2019

Nikhilesh De contributed reporting.

CFTC Chairman Heath Tarbert speaks at Invest: NYC 2019; Image by Joe Jenkins for CoinDesk

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Financial Giant Standard Chartered Joins Enterprise Ethereum Alliance (EEA)

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Financial Giant Standard Chartered Joins Enterprise Ethereum Alliance (EEA)Banking giant Standard Chartered has reportedly joined the Enterprise Ethereum Alliance (EEA), a global standards organization that outlines the specifications for developing large-scale, interoperable blockchain platforms.

The EEA is planning to conduct further research and development (R&D) into the latest trends involving distributed ledger technology (DLT)-based systems.

As an EEA member, Standard Chartered will work cooperatively with major industry players to create Ethereum-based enterprise technology best practices, open standards, and open-source reference architectures.

As noted in the release:

“[Standard Chartered] views blockchain as central to banking and commerce in the digital era, so transactions can be verified, secure and processed in real time.”

Dr. Michael Gorriz, group chief information officer at Standard Chartered, stated:

“Technology enables us to facilitate trade and investment across our footprint markets, improving client experiences and offering new services. We are excited to be a part of the EEA and look forward to opportunities where we can collaborate with other leading industry players to deepen blockchain research and application in the banking sector.”

The EEA members includes companies and organizations from almost every region of the world across key business sectors, such as banking, government, legal, technology, healthcare, energy, pharmaceuticals, marketing, and insurance.

The EEA’s Special Interest and Technical Working Groups are tasked with studying the market requirements needed to support the future versions of EEA’s specification.

The release mentioned that Standard Chartered has been collaborating with industry partners and various Fintech firms, in order to explore the use of technology in making financial platforms “more efficient and accessible,” the release stated.

Standard Chartered is a founding member of Voltron, a blockchain-powered open industry platform that “digitally creates, exchange, approve and issue Letters of Credits (LCs),” the release noted. The bank recently issued the first LC through the platform for the oil sector.

At present, Standard Chartered is co-developing blockchain-based supply chain financing platforms with Chinese firm Linklogis. The companies recently performed a “joint deep-tier supply chain financing transaction for Digital Guangdong and its upstream suppliers,” the release revealed.

Standard Chartered also teamed up with Ant Financial to introduce a blockchain-enabled remittance service from Hong Kong to the Philippines. The bank has also made investments into San Francisco-based Fintech firm Ripple, a major distributed ledger company.

As noted in the release, Standard Chartered is taking part in regulator-led initiatives such as  Project Inthanon in Thailand, which is managed by the Central Bank of Thailand and aims to create a Central Bank Digital Currency (CBDC).

Standard Chartered is also involved in Project Ubin, which is led by Monetary Authority of Singapore to explore the use of DLT for “the clearance and settlement of payments and securities,” the release noted.

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Staking to generate $16 billion in crypto activity on Ethereum 2.0 rollout: report

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Staking blockchain-based tokens, the process of holding crypto for a set period of time and earning rewards, already accounts for approximately $8 billion in market activity. And that figure could soon double thanks to Ethereum, according to a new report from Binance Research.

The report, which Binance touts as the crypto industry’s “first major study into staking,” suggests that the crypto market could soon get a major boost from staking once Ethereum complete’s it planned transfer from a proof-of-work to proof-of-stake (PoS) blockchain network.

“With Ethereum’s impending switch to Proof of Stake, staking is expected to take a more substantial portion of the market’s attention. As more infrastructure players support staking, the entire ecosystem will be able to mature,” the report states.

At the moment, staking represents roughly $8 billion in cryptocurrency activity, according to Binance, with another $15.4 billion in crypto funds available for staking. And once Ethereum makes the switch, these figures are expected to skyrocket, the report claims.

While the study focuses on Ethereum, Binance didn’t hesitate to tout its own products in its report, such as Binance Staking. The new platform is designed to provide analyses of the industry’s staking coins and allows Binance customers to invest in these coins through its platform and gain interest, in a sense, on their holdings.

Ethereum’s move to proof of stake has been in the works for some time, a project that has thus far garnered more than $10 million in grant money from ETH stakeholders, according to Binance’s report.

The study suggests that the switch to PoS is likely to make Ethereum more scalable, a change that couldn’t come soon enough. In an interview with The Sar last August, Ethereum co-founder Vitalik Buterin warned that the Ethereum blockchain was nearly full.

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Ethereum Targets Dec. 4 for Istanbul Mainnet Activation

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Ethereum’s next system-wide upgrade, Istanbul, is scheduled to arrive on mainnet the week of Dec. 4.

The decision was made during an ethereum core developer call on Oct. 25. Later on Friday, Danno Ferrin, blockchain protocol engineer at ethereum venture studio ConsenSys, proposed activating Istanbul at block number 9,056,000 in accordance with the targeted date of Dec. 4.

“From when I calculated … at 14-second block times its 245,544.5 blocks, which puts noon UTC at block 9,055,928.5. So I would propose 9,056,000 as the Istanbul mainnet block target. Please check my math,” Ferrin wrote after the meeting in an ethereum core developers chat room.

During the call, devs also agreed that in the case of any unexpected issues with the upgrade software between now and the week of Dec. 4, Istanbul’s mainnet activation would be delayed one month to Jan. 8.

“The thing about the [Jan.8] backstop date is that if we’re going to ship and change the time, we have to build a new client … and get everyone to install the client,” Ferrin said during the call. “At least four weeks for a re-spin is necessary.”

During the last system-wide upgrade, Constantinople, ethereum developers did indeed need to delay mainnet activation of the upgrade for a month due to a critical code vulnerability discovered just 48 hours before Constantinople’s scheduled roll-out.

This time, ethereum core developers are covering all their bases with pre-determined backstop dates in the event of any unforeseen circumstances.

Said Ethereum Foundation developer Piper Merriam:

“There’s nothing here that says [we can’t launch] the first week of December. We’re just setting some easy backstop dates now and we can always change our mind later if needed.”

What’s going into Istanbul?

Come December, Istanbul is expected to introduce six backwards-incompatible code changes to the world’s second-largest blockchain network.

The most controversial among them, known as Ethereum Improvement Proposal (EIP) 1884, will increase the computational costs of recalling data about the ethereum blockchain for application developers. At the same time, the increased fees will better safeguard the $18 billion platform from potential denial-of-service, or spam, attacks.

The other code changes introduce more pricing adjustments to the ethereum platform, as well as new code operations that application developers can leverage to verify and authenticate blockchain data more quickly.

Last month, Istanbul was activated on ethereum test network Ropsten. Due to its premature timing, however, miners on the network initially faced difficulty rolling out the upgrade.

To prevent further confusion over which version of ethereum software to run for miners (the users who validate transactions and process new blocks on the network), ethereum core developers approved today a new code change called EIP 2124.

Fork IDs and fork coordinators

Originally proposed in May by ethereum core developers Péter Szilágyi and Felix Lange, EIP 2124 introduces a mechanism for users to easily identify what version of software a computer server, also called a node, in the ethereum network is running.

“Generally, clients have a hard time following a non-majority chain so usually you have to tweak the clients [manually] … to make sure they’re on the right chain.” said Szilágyi, adding:

“All these issues can be fixed by including the fork ID.”

Called the “fork identifier,” Szilágyi explained on the call that EIP 2124 is a “tiny and beyond trivial change.” It can be rolled out by any ethereum software client without the need for coordination with other actors.

Outside of this, James Hancock, project lead at ethereum startup ETHSignals who most notably tried to initiate a fork of the ethereum blockchain in June, announced that he was joining the Ethereum Foundation to help coordinate ethereum system-wide upgrades, also called hard forks.

“I’m joining the [Ethereum Foundation] to help with hard fork coordination,” said Hancock. “For me, I want to focus on getting EIPs ready rather than focus on when are we going to release [an upgrade]. … It’s about changing the attitude from how many forks are we going to have this year to getting EIPs ready [for a fork].”

Ethereum image via CoinDesk archives

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What Ethereum Taught Us on How NOT to Do DApps

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Ethereum is known as the first great blockchain platform for decentralized applications (DApps), a pioneer for sure, but which suffered from some very high-profile scaling issues during its heyday, which it now seeks to remedy. As projects like Dash and the upcoming Dash Platform seek to replicate some of this functionality, we would do well to be careful not to repeat some of Ethereum’s past mistakes and hard-learned lessons. This is what we learned to NOT do when designing a DApp platform.

Older blockchains were purposed for immutable financial transactions

The problem comes from the way the original proof-of-work blockchain coins were designed. The key considerations were to maximize the security, decentralization, and immutability of the network in order to let anyone send payments and store funds that are not able to be censored or confiscated. As such, it makes absolute sense to have a security model based on a high network hashrate and where anyone can mine, decentralizing the coin’s supply and preventing a lone actor from acquiring enough of the supply to essentially rule the network. Under such considerations, sub-cent fees, transactions with a reasonable level of security instantly and a high level within a few minutes, and a transaction capacity of several million daily with room to grow with the user base makes sense for payments.

Now, introduce a required use case of transmitting data for DApps and we may have a conflict. Such an application may not need the same rock-solid immutability in short order or need to leverage mining in some way, but it may need faster basic settlement times as well as significantly lower fees and much higher transaction capacity.

The nightmarish cat and ICO tag team and its implications

The disconnect between the two use cases, DApps and sending money, was on full display during the days of high congestion on the Ethereum blockchain. People were trying to use DApps such as Crypto Kitties, filling up the blockchain with low financial value transactions at a feverish pace. In the meantime, potential investors were looking to take part in ICOs at the peak of the investment vehicle’s mania, absolutely needing their money transfer to become recognized as permanent in a short period of time and more than willing to pay a high price for it. This did not work well with a network already full of kitty transactions, spiking fees to Bitcoin-like levels, which in turn ruined the party for DApp applications. With the same network attempting to serve both masters well, it ended up doing neither in that moment.

Other projects, such as Bitcoin SV, are happy to go down this same road, filling up their blockchains with small cases such as pings from weather apps and social media activity. It remains to be seen what exactly will be the result of all this, but if history teaches us anything it will be that, provided the network gets enough demand for usage, there will be a congestion showdown between applications and money, with neither working well as a result.

Dash Platform’s great sidechain experiment

As was recently announced, Dash is approaching this problem differently for its upcoming Dash Platform. Instead of attempting to shoehorn the main blockchain to serve all purposes perfectly, Dash is going the approach of using a sidechain run exclusively by the masternode network specifically to record data state transitions for the various planned applications, and keeping regular financial transactions to the main proof-of-work blockchain. This hopes to allow for completely separate data, speed, and cost considerations forth both use cases of the network. Fees, speed, and transaction capacity suitable to a financial network will still remain untouched for the main chain, with the added benefit of reducing or sequestering complexity and the resulting security risks. Meanwhile, Platform Chain will be able to settle much smaller and cheaper data transactions without optimizing for money applications.

Is Dash Platform doing it right? That remains to be seen, of course. Either way, we hope to have learned from Ethereum’s past challenges in balancing DApps and money.

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