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Tag: Ethereum

  • 2022 Crypto Recap: The Good, The Bad, and The Uglies

    2022 Crypto Recap: The Good, The Bad, and The Uglies

    The crypto industry had a tumultuous year in 2022, with coins tanking at the start of Q2 and never rallying, signalling the beginning of a crypto winter. To make matters worse, the collapse of Terra Luna and FTX led to a devastating contagion across the industry. Despite the challenges, we shouldn’t forget about the progress and achievements the industry has made. Here’s a brief recap of some of the biggest news in 2022.

    Crypto’s Role in the Russia-Ukraine War (February)

    During the Russia-Ukraine war, cryptocurrencies have been immensely valuable to Ukrainian refugees. Russian attacks have destroyed critical infrastructure, rendering many Ukrainians inaccessible to withdrawing money from ATM machines. Therefore, many Ukrainian refugees relied on digital currencies sent from relatives or donors abroad to purchase goods and services.

    All that is needed for them to access their cryptocurrency wallets is a mobile phone and internet access, which was being provided by the thousands of Starlink satellite internet dishes provided by Elon Musk’s SpaceX at the time.

    Feds Interest Rate Hike (March)

    Despite Bitcoin reaching an all-time high of $69000+ in November 2021, what follows is a series of market decline. This is in part due to the U.S. Federal Reserve announcing its first interest rate hike in March to fight increasing inflation. As a result, the macro backdrop began to worsen, not only affecting crypto assets but also every other investment asset class. This also called into question Bitcoin’s reputation as an inflation hedge as Bitcoin itself started to trade in tandem with Nasdaq tech stocks, according to the New York Times.

    Collapse of Terra Luna (May-July)

    The collapse of the Terra Luna ecosystem in May 2022 was one of the most devastating black swan events in crypto history, wiping at least $60 billion off the market which triggered a dangerous domino effect across the industry such as the fall of several high-profile crypto firms, namely Three Arrows Capital, Voyager Digital, and Celsius Network.

    Amid the crash, the UST algorithmic stablecoin, which was supposed to maintain a $1 peg via on-chain mechanisms with Terra’s native token LUNA, depegged, bottoming out at $0.006. This was caused by a massive continuous selloff on both UST and LUNA, resulting in a death spiral. Terraform Labs (TFL) developers and founder Do Kwon are facing multiple investigations as well as lawsuits into its collapse. (Canadian Pharmacy) As of now, South Korean authorities and Interpol have issued a warrant for the search and arrest of Do Kwon and his accomplices.

    Recovery Plan of Terra Luna Classic (August)

    As of now, the Luna Classic blockchain is managed and governed by the community after Terraform Labs (TFL) developers abandoned the chain in support of Luna 2.0. On August 26th 2022, governance was restored as citizens of Luna Classic could delegate, stake, and vote for the future of the ecosystem. Proposals and the associated implementations are being passed by the Terra Classic Decentralized Autonomous Organization (DAO).

    Feds Sanction Tornado Cash (August)

    On 8th August 2022, the U.S. Treasury Department imposed sanctions against Tornado Cash, a privacy-focused Ethereum mixing service that obscures the trail back to the fund’s original source. They claimed that Lazarus Group, a cybercrime group run by the North Korean government, has been using Tornado Cash to launder illicit funds.

    Moreover, one of the developers for Tornado Cash was arrested in the Netherlands. The crypto community and privacy advocates bashed Netherlands authorities as the developer was simply writing code and had nothing to do with illicit activities. Ethereum co-founder Vitalik Buterin also criticized the move as he himself used Tornado Cash to make donations to Ukraine’s cause.

    Ethereum Merge (September)

    On 15th September 2022 at 06:42:42 UTC at block 15537393, the Ethereum Merge was completed. This meant a merger of the Ethereum mainnet execution layer and the Beacon Chain’s consensus layer, transitioning from the proof-of-work consensus mechanism to proof-of-stake. This landmark update brings major changes to the network, including a 99.95% reduction in energy consumption and a 90% cut in ETH issuance.

    This is a significant achievement in the history of blockchain, allowing the Ethereum network to scale effectively as demand for Web3 and DeFi increase. Since Ethereum is the mother of all smart contract platforms, this could put Ethereum in a position to rival Bitcoin in adoption and even value.

    Downfall of FTX and Sam Bankman-Fried (November)

    On 11th November 2022, former FTX CEO Sam Bankman-Fried (SBF) filed FTX, FTX US, and Alameda Research for bankruptcy in the U.S. Once hailed as one of the top crypto exchanges, the sudden collapse of FTX came as a shocking blow to the entire crypto industry, setting off yet another contagion across the space. This affected 130 affiliated companies including several high-profile firms such as BlockFi, Genesis Trading, Grayscale, KuCoin, Gemini, Coinbase, Crypto.com, Sequoia Capital, and Galaxy Digital.

    Apparently, SBF was misappropriating customer funds for his own benefits without customers’ consent and knowledge, conducting unethical flywheel schemes with Alameda Research. As a result, SBF had been arrested in the Bahamas, facing many criminal charges including securities fraud, money laundering, and campaign finance law violations. However, on 22nd Decemeber 2022, the disgraced FTX founder was released on a $250 million bail.

  • Enjin (ENJ) Explained: Blockchain Gaming Platform

    Enjin (ENJ) Explained: Blockchain Gaming Platform

    Enjin is a blockchain gaming platform focused on the creation of digital collectible items that are truly owned by the user. The platform offers methods for creating digital assets (known as ERC1155 tokens) for use across multiple Video Games. Their uses include collectible art or even in-shop coupons. Blockchain gaming allows gamers to have true ownership of their in-game items and trade them for value.

    Enjin Platform uses Blockchain technology for these key benefits:

    • True item ownership – with transactions that cannot be censored powered by the Ethereum blockchain.
    • Convenient Exchange of value – digital items can be traded or sold instantly. The Enjin Wallet also allows users to access decentralised exchanges such as Kyber Network and Changelly.
    • Reserve Value – unwanted digital items can be “melted” into the Enjin Coin cryptocurrency.
    • Single Wallet for all items – the Enjin Wallet users to keep all digital assets in one single location.
    • ERC-1155 Token Standard – a superior version of the ERC20 and ERC721 token. Its transaction bundling and multi-send features mean it will save users’ costs.

    What is Enjin Coin (ENJ)?

    Enjin coin’s (ENJ) value comes from its use case as a stored reserve value in every item created on the Enjin Platform. $ENJ is locked up when items are created and released when items are destroyed.

    Items store (lock up) a certain amount of ENJ, with items such as the infamous “Monolith” storing 1,155,777 ENJ. ENJ from items can only be extracted by destroying the item (“via the melting process”). This creates a situation where more and more ENJ is locked up and overall supply is reduced as the platform is used by more games.

    #meltismurder
    Popular meme “Melt is Murder” discourages the destruction of items

    In terms of economics ENJ is a scarce resource and each game acts as a “value trap” for ENJ – locking up ENJ reserve and increasing the scarcity of $ENJ. With a limited supply of 1,000,000,000 $ENJ, this cryptocurrency acts as a form of “Digital Gold” – its value determined by the dynamics of supply and demand within the game’s ecosystem.

    Enjinx showcases all valuable assets and games on the Enjin Plastofrm

    Cross-game items – Enjin Multiverse

    One of the unique advantages of Blockchain gaming is the ability to create items that can be used across different games by different developers. This means players can carry their items between games like it is a single world (also known as the Multiverse).

    Multiverse items are possible because assets are stored on a decentralised blockchain – so independent developers can all access the item. To encourage the development of cross game items, Enjin announced its newest asset the Stormwall. It is an example of what we can expect with its gaming assets. Stormwall is a shield that moves across Enjin’s Multiverse of games.

    In the below video we see Stormwall being as a playable item in 32 different games including 9Lives Arena, Age of Rust, Cats in Mechs and more.

    Why is a Multiverse Beneficial?

    One of the biggest questions asked about cross-game items is – why is it beneficial for game developers and players? For developers, supporting cross-game items mean that they gain the benefits of additional exposure from games participating in the multiverse and increased retention from players who want to test out the item. This is especially important in this age as player attention is extremely valuable and having players “check out” how an items works in a different game drastically improves player interest.

    For players, having cross-game items mean that their items are naturally move valuable, especially long term value. This means that the effort used to earn valuable items are not wasted if they can be used in new upcoming games.

    The Enjin Coin Ecosystem

    Enjin have created an entire ecosystem where you can create, store, trade and use these items.

    • Enjin Wallet – Cryptocurrency wallet to safely store cryptocurrencies, blockchain gaming assets and exchange value. For more information check our EnjinWallet review.
    • EnjinX – Blockchain explorer to view transactions and items
    • Unity Plugin – Allows game developers to directly implement and issue items in games on multiple platforms like iOS, android, PC and MacOS.
    • Marketplace – buy and list items with the safety of smart contracts that independently facilitate the trade.
    • The Enjin Ecosystem

    Enjin for Mobile Games

    One of the biggest use case for non-fungible tokens is in mobile games. Mobile gaming is currently valued at $63.2 billion USD globally and growing on a year by year basis (Source: newzoo). Enjin has a direct partnership with game engine Unity which hosts the Enjin SDK which allows for easy integration of Blockchain assets directly into the game.

    Enjin Partnerships

    Enjin has a strategic partnerships with increase the rate of adoption of Blockchain Gaming and growth of the ecosystem. On the gaming side there is a partnership is with cross-platform game engine Unity with the introduction of the SDK

    The Enjinwallet has recently become the first wallet to offer full Binance Chain and all BEP-2 (Mithril, ChangeNow) based tokens.

    Enjin and Samsung Partnership

    Samsung’s s10 presentation at MWC Barcelona 2019 that broke the internet

    Enjin has been partnered with smartphone manufacturer Samsung Electronics to as a technology provider. Enjin Wallet directly interacts with the Samsung’s Blockchain Keystore, a trusted zone on new Samsung devices which is specifically designed to key cryptographic private keys safe. Samsung will also support Enjin’s ERC-1155 token standard and increase the adoption of Blockchain based non-fungible tokens.

    Enjin and Microsoft Partnership

    Microsoft Azure Heroes using Enjin ERC 1155
    Microsoft Azure Heroes using Enjin ERC 1155

    Microsoft has chosen Enjin as technology provider with the deployment of Azure Heroes, a program that will directly use ERC-1155 non-fungible tokens as a reward. This Blockchain-based reward will be given to contributors who help produce material for the Microsoft Azure platform, with participants given cute badge(r)s. For example, makers that contribute to the developer community or content heroes will be given rare badgers.

    These collectable badgers are a proof of achievement as an Azure Hero which you can show off on your social media. As these are tokenized assets on the blockchain, they cannot be faked. So no fake achievements or heroes here!

    https://twitter.com/AzureHeroes/status/1310851813164412928

    Enjin has entered the (DeFi) game

    Enjin Coin (ENJ) is now supported by the Aave Protocol. This means users can deposit ENJ in the Aave Protocol and earn interest whilst others borrow your ENJ. The Aave Protocol protects your deposits as it is controlled by immutable and transparent Ethereum smart contracts. Your ENJ is also secured by other cryptocurrencies left on the Protocol as collateral.

    How to connect Enjin Wallet to Aave Protocol

    Now with the Enjin-Aave partnership, you can directly interact with the Aave Protocol with your Enjin Wallet (which in our opinion is the best mobile wallet EVER). Here’s how: On the Enjin wallet, go to “DApp Browser”. On the search bar, go to app.aave.com. Click “Browser wallet” and when asked to choose your market, choose “Aave Market”.

    Connect Enjin Wallet to Aave Protocol
    Connect Enjin Wallet to Aave Protocol

    Enjin and BMW

    After much speculation, Enjin has confirmed they are partnering up with BMW to integrate Enjin Coin token swap into BMW’s Vantage App. The Vantage App is a Korean customer loyalty app for car-owners. Users can use the app to pay for goods/services such as gas, highway tolls and parking fees. There will also be referral rewards for dining and shopping.

    Purchases on the BMW Vantage app are rewarded with BMW Coins which can be used as spending for various activities and be swapped for ENJ.

    Note the token swap feature is not available on the Vantage App yet and according to Enjin, more details will be available once it is live.

    Enjin putting property on NFTs with LABS Group partnership

    Enjin is helping LABS Group put property on NFTs and the blockchain with its partnership.

    LABS Group will be using Enjin’s NFT minting platform to tokenise real estate on the blockchain. LABS Group will be offering fractionalized deeds of real estate for as low as USD$100, allowing retail investors (particularly millennials) to finally enter and invest in the real estate market.

    The range of real estate on offer will include buildings, hotel rooms and apartments. Trades will all take place securely through the regulated LABS Security Exchange.

    This marks the introduction of blockchain into the world’s oldest and largest asset class, valued at approximately USD$228 trillion.

    Enjin enters Japanese cryptocurrency market

    Enjin will be the FIRST gaming cryptocurrency to be listed on Japanese cryptocurrency exchanges. And it is going straight for the top with one of the largest cryptocurrency exchanges- Coincheck.

    Enjin ($ENJ) will be listed on Coincheck from 26th January 2021.

    This is a significant first step for Enjin into the Japanese market. Enjin’s aims are twofold- for ENJ to be approved by Japan’s finance regulators and to promote adoption of the Enjin Platform in the Japanese gaming industry.

    This listing was one and a half years in the making, having to pass the rigorous auditing and monitoring of the Japanese Virtual Currency Exchange Association (JVCEA)- formally recognised by Japanese financial regulators, the Japanese Financial Services Agency (FSA). The approval process for cryptocurrencies in Japan is notoriously difficult, with only 15 cryptocurrencies (including Enjin) being approved for listing on Coincheck.

    Japan also has a fiercely competitive cryptocurrency exchange market with over 20 exchanges in operation. Coincheck is one of the largest cryptocurrency exchanges in Japan based on volume, founded in 2014 with over 1.7m users and counting, and prides itself on being the top downloaded cryptocurrency app in Japan.

    As Enjin now has its foot in the door of the Japanese market, the Enjin team is now in discussions with various domestic companies and projects. With Japan being the pioneers of the gaming world (think Super Mario, Pokemon and Final Fantasy), it will be interesting to see what innovations Enjin can bring to the space.

    See Enjin’s official announcement on the Coincheck listing.

    Frequently Asked Questions

    Does it cost ENJ to transfer tokens on Enjin Chain?

    Enjin isn’t a blockchain, rather it’s a project built on Ethereum. In order to transfer Items (non-fungible tokens), you’ll need to use ethereum (similar to how ERC20 tokens work). In the future Enjin is explorer additional scaling options (Efinity) to allow for free item transfers.

    What is the most EXPENSIVE item on ENJIN

    The Monolith is the most expensive item on ENJIN, with 1,155,777 ENJ locked in the item. At the time of writing, this item is worth $168,000 USD!

    What makes ENJIN valuable

    ENJIN is a scarce resource, used to lock value into ever item created on the ENJIN platform. This means as time progresses and more games create items on ENJIN, more and more $ENJ will be locked up creating scarcity in supply

    Where can I buy Enjin

    $Enj is listed on all major exchanges, such as Binance.

    Other Resources:

    EnjinX – Blockchain explorer that tracks the Ethereum Blockchain, ERC-20 and ERC-1155 items
    Egamers – Enjin Games news website
    Everything Enjin – Great site covering Enjin Related News
    Multiverse Era – Telegram Channel about the Enjin Multiverse
    Castle Crypto – Coverage of Enjin games
    AsiaCryptoToday – cover of Enjin Platform

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

  • 5 Reasons to be excited about Ethereum (According to Vitalik)

    5 Reasons to be excited about Ethereum (According to Vitalik)

    Ethereum Founder Vitalik Buterin recently discussed in his blog post his excitement about Ethereum and its potential. He admits that originally, he was more general about what Ethereum can achieve. But now, after so many projects being developed on Ethereum, he is shifting his gaze to applications already known to work. In this article, we look at some Vitalik’s reasons as to why we should be excited for Ethereum and its potential.

    What is Ethereum?

    Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality. It provides a decentralized virtual machine known as the Ethereum Virtual Machine (EVM). The EVM can execute scripts using an international network of public nodes. Ethereum also provides a cryptocurrency token called “ether” ($ETH). Ether ($ETH) can be transferred between accounts and used to compensate participant nodes for computations performed. Ethereum was proposed in late 2013 by Vitalik Buterin and launched in 2015.

    To learn more about Ethereum, check out our article: Ethereum 2.0 is coming- Here’s what you NEED to know.

    Reason 1: Ethereum as a form of payment

    In countries with fewer links to the global financial system or with extreme inflation, cryptocurrency (and Ethereum) is a valuable asset. Vitalik realised this in December 2021 when he was able to pay for meals using cryptocurrency in Argentina.

    One obstacle to the more widespread use of cryptocurrency, according to Vitalik, was high transaction fees. At the time, fees cost about a third of his meal, and several minutes to confirm. However, since he and the restaurant owner had Binance wallets, they were able to transfer the funds instantly for free.

    Since then, there have been significant improvements to the Ethereum network. After the Ethereum Merge transactions are being processed at a much faster and more stable rate. Scaling technologies such as rollups will even further push Ethereum’s scalability. Technologies such as social recovery and multisig wallets with account abstraction are also improving wallet security. It may take years for these technologies to mature, but progress is certainly being made.

    Donations are a notable use case for cryptocurrency. For example, we saw donations being made to Ukraine and refugees relying on digital currencies as a form of payment.

    To learn more, check out our article: Crypto war- The role of cryptocurrencies in the Russian-Ukraine conflict.

    In addition, countries’ adoption of CBDCs (e.g. China’s DCEP/e-CNY) has led to serious concerns about financial surveillance and control. According to Vitalik, cryptocurrency is the only technology that can combine digitalization with privacy.

    This makes payments one of the major reasons to be excited for Ethereum and its potential.

    Reason 2: Decentralized Finance (DeFi)

    Vitalik also sees huge potential in DeFi. In particular, he considers the following DeFi products to be especially important:

    • Decentralized stablecoins: Decentralized stablecoins are considered a secure and stable digital money. Essentially, halfway between holding crypto assets and withdrawing to fiat currency. They are also usually pegged to a reserved asset, such as the US Dollar, making it less volatile than most cryptocurrencies. Decentralized stablecoins have added aspects of being fully transparent and non-custodial. An example of decentralized stablecoins is the DAI token, DUSD or EOSDT.
    • Prediction markets: Prediction markets have been a reliable part of the DeFi landscape since Augur launched in 2015. They have been gaining traction ever since, demonstrating their utility in the 2020 US election. Allowing people to predict (and profit) from the outcome of the 2020 US elections. In 2022, both crypto-based prediction markets such as Polymarket, and play-money markets like Metaculus are becoming even more popular. Crypto-based prediction markets are advantageous, as they are more trustworthy and accessible worldwide. Vitalik expects these markets to continuously grow in terms of usage and value over time.
    • Other synthetic assets: Major stock indices and real estate have the potential to be replicated in the same way as stablecoins. However, there is a challenge in creating an appropriate balance of decentralization and efficiency to make these assets available at reasonable rates of return.
    • Glue layers: These will be necessary to allow users to easily trade between different assets, such as ETH, centralized or decentralized stablecoins, synthetic assets, etc.

    Reason 3: Blockchain Identity

    Vitalik is bullish on blockchain identity. Blockchain identity uses blockchain technology for aspects of identification such as basic authentication, attestations, naming, and proof of personhood. An example mentioned by Vitalik is the Sign In With Ethereum (SIWE) standard. The SIWE standard lets users log into websites similar to how we use Google or Facebook to automatically log in. But with SIWE, we can log into sites without fear of Google or Facebook accessing our private information, or locking our accounts. SIWE is currently used in end-to-end encrypted email, Skiff and many blockchain-based alternative social media projects.

    Also, ENS allows usernames to be used with proof-of-personhood systems. This can enable users to prove that they are actually human. This is especially useful for airdrops and governance, as it ensures fairness and prevents abuse. Proof-of-attendance protocol can also confirm a person’s participation and thus their eligibility for airdrops and participation in governance.

    Vitalik believes that each of these applications has its individual uses. But the true utility will be seen when these aspects are all combined. For example, users can log on to Blockscan chat using Ethereum, making them visible by their ENS name. Then, to fight spam, Blockscan chat could “verify” accounts by examining their proof-of-attendance protocols. This verification process could show information on a user’s participation, and even verify token balances or a proof-of-personhood profile. In turn, it can be determined whether the user should be eligible for rewards and perks.

    Reason 4: DAOs

    DAOs (Decentralized Autonomous Organizations) are smart contracts that represent an ownership or control structure over an asset or process. Vitalik believes there is still room for improvement for DAOs, particularly in terms of ensuring they are not abused. For example, DAOs are crucial for the long-term survival of decentralized stablecoins. But, there have been cases of malicious actors abusing DAOs to drain DeFi projects out of hundreds of millions.

    Reason 5: Hybrid applications

    Finally, Vitalik believes there are applications that can take advantage of both blockchains and other systems in order to improve their trust models. For example, voting can utilise systems such as MACI to combine blockchains, ZK-SNARKs, and a limited centralized (or M-of-N) layer for scalability and coercion resistance. This will allow voting to be censorship resistant, auditable, and private.

    Conclusion

    According to Vitalik, we are only at the beginning stages of building applications that will push Ethereum’s potential even further. Currently, these applications face the challenges of the limits of present-day technology, such as the lack of scalability of blockchains. There will also be other challenges to come, such as privacy issues.

    However, there are numerous reasons to be excited for Ethereum, because all these problems can be solved. Vitalik believes that it will require us to look beyond the quest for excitement and short-term profit. Because sometimes, it is the more stable and boring applications that become the most useful and valuable in the long run.

  • The End for Ethereum Miners after ETH 2.0?

    The End for Ethereum Miners after ETH 2.0?

    The newly launched Ethereum Merge has rendered mining obsolete. So what will happen to all Ethereum mining pools and its miners as well as the millions of dollars worth of hardware in the ecosystem?

    What is Ethereum Mining?

    Before Ethereum’s Merge on 15th September 2022, the blockchain used proof-of-work, the same consensus protocol as Bitcoin, to validate and record transactions. But unlike Bitcoin which solely uses application-specific integrated circuit (ASIC) miners, you could use graphics processing unit (GPU) of gaming computers to mine ETH. As a result, it was generally easier to mine ETH than Bitcoin since GPUs are more accessible and widely applicable than ASICs.

    There were two main ways to mine ETH – pool mining or solo mining:

    Pool Mining (working together)

    • Work with others to mine and share rewards
    • Get paid per share, on a hourly or daily basis
    • Less random / dependent on luck
    • Pools take some fees (0.5-8% depending on pool)

    Solo Mining

    • You mine the entire block reward (differs based on mining difficulty changes) – no pool fees
    • Random chance and probability – you can go days or months without rewards
    • Not viable if hashrate is low – single GPU might take years to mine a block

    Ethereum mining pools were the go-to options for most miners as solo mining took a very long time to earn rewards. However, this work drew criticism for its impact on the environment and its excessive electricity consumption. It is a highly energy-intensive process as miners around the world pool together large amounts of resources and power to mine ETH. But all of that has changed with the arrival of the Merge on 15th September 2022.

    How does the Merge affect Ethereum Mining?

    On 15th September 2022, Ethereum switched its consensus protocol to proof-of-stake as part of an update known as the “Merge” that links Beacon Chain and the Ethereum Mainnet. The Beacon Chain is what allows users to stake ETH, which has been operational since the end of 2020. Many people have staked their ETH to support the transition as well as earn rewards on their stake. Here’s the kicker, after the Merge begins, mining difficulty will soar due to the “difficulty bomb”. It is a kind of self-destruct mechanism meant to make proof-of-work calculations almost impossible, incentivizing the move to an environmentally-friendly proof-of-stake model.

    What will happen to Ethereum Mining Pools and Miners?

    There is a divide in the Ethereum mining community between the organizations that have helped coordinate the resources of individual miners (mining pools) and the individual miners themselves.

    Good for Ethereum Mining Pools

    For mining pools, the transition does not affect them at all. Since these organizations never did the actual work of generating computing power themselves, they are not affected by the sunk cost of the eventual obsolete mining rigs. Instead, these pooling companies have human capital and infrastructure necessary to organize the pooling of resources, source new clients, and overall manage and maintain the operation and its security.

    For this reason, leading Ethereum mining pools like Ethermine or f2pool can simply transition to staking pools. They do not rely on the actual mining itself. It is not a matter of product, only business model. These companies operate on a fee structure, charging individuals for participating in their pools, and it will be unaffected by the move from mining to staking. They only require business development, customer service, and communication with core developers, softwares, and client teams.

    Bad for Individual Ethereum Miners

    However, for the miners who make up these pools and other independent Ethereum miners, the transition could mean the end for them. People who have benefited from mining ETH, either by managing large mining farms or by contributing moderate amounts of GPU power to mining pools, may be left stranded. They have invested large amounts of money in expensive GPUs or specialized mining rigs that are useless in staking. Some will not even be able to recoup their initial investment as they hoped to profit from mining.

    Although validating via proof-of-stake only requires a home PC with stable internet connection, it would require a minimum contribution of 32 ETH, which is a sum far greater than most people’s savings. Essentially, in order to fully cover the hole of lost mining revenues via staking, individual miners would have to establish and operate their own staking pools, which would be a considerably more difficult task than maintaining their own mining rigs.

    Potential Solutions for Ethereum Miners

    There is really no good option for ETH miners. They can still salvage their GPUs by selling them in the market as gaming computers are still popular products, but it is safe to say that there is certainly no demand for ASICs in the market. They could use them to mine other cryptocurrencies that are compatible with their processors such as Ethereum Classic, Ravencoin or Ergo, but they are also much less in demand than Ethereum. The profit margins are substantially lower.

    However, there are certain staking pools that encourage bringing current miners into the fold. According to Bitfly, EtherMine’s parent company, their goal is to “onboard current miners from proof-of-work to proof-of-stake.” They also noted that most deposits to EtherMine’s new staking platform have come from existing miners. But whatever the case is, there is still no easy answer as to how Ethereum miners will ever again come close to generating the revenue produced by mining ETH.

    But the most popular option for ETH miners is to operate in a new proof-of-work hard fork of Ethereum known as ETHPoW or ETHW.

    What is Ethereum PoW Hard Fork (ETHW)?

    A hard fork is a major change to the blockchain’s protocol that results in the splitting of the blockchain, creating a seperate blockchain that inherits all of its history with the original, but is on its own towards a new direction.

    Hours after Ethereum’s successful merge on 15th September 2022, a group known as ETHW Core launched a proof-of-work hard fork of Ethereum known as ETHPoW or ETHW. The hard fork’s purpose is to preserve PoW and keep ETH mining alive beyond the Merge.

    The Problems with ETHW

    Although ETHW could be a safe haven for ETH miners, there is not a lot of optimism about its success. In fact, there are a lot of underlying issues that the core team has yet to address.

    ETHW Post-Launch Network Error

    ETHW is getting off to a bad start. Shortly after the ETHW mainnet debut, users began experiencing issues accessing the network. It became clear that the problem was that ETHW had chosen a chain ID already in use by a Bitcoin Cash testnet. If ETHW fails to change its network’s chain ID from the Ethereum mainnet, users could be susceptible to a replay attack — an exploit in which the attacker intercepts and then replicates a valid data transmission going through a network. Given the transparent nature of blockchains, this means that hackers can duplicate your transactions, allowing them to withdraw your funds.

    No Backing for Forked Stablecoins

    The two leading stablecoins USD Coin (USDC) and Tether (USDT) have officially confirmed to exclusively support Ethereum 2.0. This results in a smooth transition that is essential for the long-term growth of the decentralized finance (DeFi) ecosystem and its platforms.

    However, that leaves ETHW high and dry as lack of stablecoin support means insufficient liquidity. This is because 1:1 backing will only exist for the officially recognized blockchains, thus USDC and USDT balances cannot be duplicated onto a new blockchain. This is further amplified by the fact that ETHW announced they would temporarily freeze tokens in certain liquidity pools to “protect user funds.” This did not go well with many as this move is done without their consent and the community did not vote on such change.

    No Oracle Support

    Apart from facilitating transactions, decentralized applications (DApps) also interact with external data which requires off-chain computing. This is where blockchain oracle technology like Chainlink comes into play. They enhance smart contracts by connecting them with real-world data, events and transactions.

    On August 8, Chainlink has also officially confirmed to stay with Ethereum 2.0. This means that any DApps on ETHW can be negatively affected since oracle solutions are essential in retrieving and sharing data without jeopardizing the security of the blockchain.

    Lack of Support from Leading DApps and Projects

    On 16th August 2022, Aave, a leading decentralized lending protocol on Ethereum, proposed a governance vote to commit to using Ethereum 2.0, giving power to shut down any Aave deployments on any alternative Ethrereum forks. On their blog post, Aave advised developers and DApp teams on the Ethereum network to halt smart contract operations on forked Ethereum blockchains until they become stable.

    The lack of support from projects means that any tokens or NFTs on the forked Ethereum chain will less likely be accepted in marketplaces or DeFi applications. In turn this would affect investors who are looking to profit from trading these assets.

  • Ethereum ($ETH) Merge: What is it and everything you need to know

    Ethereum ($ETH) Merge: What is it and everything you need to know

    As Ethereum is steadily approaching the transition to a Proof-of-Stake mechanism, one notable thing that has changed, aside from further protocol development, has been the change in terminology.

    We have already covered Ethereum 2.0 extensively in one of our ongoing blogs where we go in-depth on everything you need to know about Ethereum’s transition to PoS:

    Let’s take a closer look at the rebranding from Ethereum 2.0 to the Ethereum Merge, as well as go over the most recent developments in Ethereum’s roadmap as of May 2022.

    Check out our latest video- Ethereum Merge: ALL you need to know (including ETHPOW)

    Ethereum Merge: ALL you need to know (including ETHPOW)

    And check out our video- Ethereum Merge: Things you don’t (but need) to know as an investor

    The Ethereum Merge: Why the shift from Eth2.0?

    The move away from using the former term “Eth2.0” that signified the final transition from PoW to PoS was a result of several different developments and considerations, both technical and cultural.

    On the technical side, the use of Eth2.0 started to become an inaccurate representation of the PoS transition. Originally, the Ethereum 2.0 roadmap envisioned that both the Phase 0 (Beacon Chain) and Phase 1 (Sharding) would be completed before the final transition. (Clonazepam) But the Beacon Chain was developed faster than expected, making researchers realize that the final migration to a PoS mechanism would be delayed by years due to the focus on sharding. In addition, the ever-growing pressure from the masses about the environmental impact of PoW chains made the migration to PoS that much more pressing.

    As the Beacon Chain was deployed, Ethereum L2 rollups started gaining popularity, demonstrating significant scalability potential even for a non-sharded Ethereum blockchain. This released some pressure on solving the scalability challenges that Ethereum’s L1 has faced for years, allowing the R&D team to focus on the remaining Ethereum’s upgrade plans both for the PoW chain, as well the Beacon Chain.

    From a cultural perspective, the use of the old terminology would’ve further perpetuated confusion about the nature of Eth1.0 and Eth2.0, making it seem like once Eth2.0 is launched, Eth1.0 will be gone, which is not the case. In addition, scam prevention was another consideration that favoured the rebrand, as the distinction between Eth1.0 and Eth2.0 would’ve likely resulted in scammers trying to convince users to swap their ETH tokens for fictitious ETH2 tokens.

    The result of all of this was a decision to move away from the confusing Eth1.0 and Eth2.0 terminology, and rather call the transition to the PoS mechanism on the mainnet The Merge. By choosing to name the process instead of the final outcome (which in reality remains, in essence, the same), a lot of headache and confusion has been avoided.

    Progress Towards The Ethereum Merge: Current status 

    Public testnets being battle-tested

    Deployed in late December 2021, the Kintsugi testnet was a public testnet meant to allow execution and consensus client developers and application developers to become familiar with the post-Merge environment. The testnet was bombarded with transactions, bad blocks, and chaotic inputs to battle test it and find bugs.

    A new specification for the proceeding public testnet, called Kiln, was published after edge cases from Kintsugi had been discovered. It’s expected to be the last new public testnet to be created before the existing ones are upgraded. Continued extensive testing of the Kiln has been taking place since The Merge took place on it on March 15th 2022. The Ethereum community practised running their nodes, deployed contracts, tested infrastructure, and threw everything they had at it to see if it breaks.

    Mainnet shadow forks

    Although a lot had been learned since deploying and testing Kintsugi and Kiln testnets, they were still very young testnets with little activity, which prevented proper stress testing of assumptions regarding syncing and state growth. And this is where shadow forking came in. Shadow forking makes it possible to fork an existing testnet, such as Goerli, and the mainnet (with a lot more activity), and add merge related properties to its config, thus allowing the fork to inherit the state of the original testnet.

    These shadow forks are short-lived, allowing for testing on them only for a few weeks until a new beacon chain has to be spun up.

    Three Goerli testnet shadow forks took place in January and March, and the first mainnet shadow fork happened on April 11th 2022, with the second one following on 23rd April.

    The results of the latest mainnet shadow fork have been described by Adrian Sutton from ConsenSys in his twitter thread. The team will continue stress testing main forks, and collaborate with client developers to make them even more robust against edge cases. From now on the main theme as we approach The Merge has been and will be – testing, testing, and even more testing.

    Wen Merge? The Triple Halvening, And Price Predictions

    As to when The Merge will happen is still somewhat up in the air. No one has, understandably, given any specific dates, but the general consensus is that late Q3 is the time when we are likely to see it finally happen. The dev team’s sole focus is on The Merge, with very little else discussed, as can be seen in the latest AllCoreDevs session update by Tim Beiko.

    Price predictions are also under hot debate, as, once The Merge is complete, two factors will influence ETH’s price, one emotional, the other baked into the protocol. Realistic estimates of the fair price of ETH fluctuate around $5000.

    The emotional aspect, as experienced by the market, will result from The Merge successfully completing, which will mark the end of the most significant change in the protocol in Ethereum’s history, and solidify the incredible technical competence of Ethereum core devs and researchers, further giving the market confidence in ETH as an asset and the ecosystem as a whole, driving up the price further.

    The technical reason for why price is likely to pump is due to the Triple Halvening, which will reduce Ethereum’s annual inflation rate from 4.3% to 0.43%. Following last year’s EIP-1559 upgrade, Ethereum now burns about 70-80% of the fees, with the rest going to PoW miners. Post Merge, these fees will go to the PoS validators. This means that ETH stakers will see their rewards rise to about 8-10%. Staking will lock in significant amounts of ETH, as staked ETH cannot be moved or used in the markets, making enormous amounts of ETH illiquid, further driving up the price. EIP-1559 and The Merge combined are predicted to cause the equivalent of 3 bitcoin halvenings, reducing ETH sell pressure by up to 90%.

    In addition, the move to an environmentally friendly PoS mechanism, which will reduce energy consumption by up to 99.95%, will make the asset much more appealing to institutional investors who might’ve been kept away from investing due to public’s pushback on Ethereum’s current energy consumption.

    Great progress is being made by the Ethereum team, and the continued successful merges of mainnet forks clearly demonstrate the culmination of 6 years of back-breaking work, and give hope that The Merge truly is just around the corner. For those interested in the nitty-gritty of The Merge preparations, it’s worth checking out The Merge Mainnet Readiness Checklist which lists in detail all of the various tasks that need to be worked through to make The Merge ready for Mainnet release.

    Why is the Ethereum Merge so important to crypto traders?

    Many cryptocurrency and particularly Ethereum ($ETH) traders are eagerly anticipating the Ethereum Merge because afterward, the issuance of ETH is expected to be reduced by about 90%. This means there will be less ETH in circulation, and in turn, the lower the supply, the higher the demand- potentially resulting in Ethereum prices going up.

    ETH Merge is a huge success!

    On 15th September 2022 at 06:42:42 UTC at block 15537393, the Merge was completed.

    Missed our historical LIVE Merge party? Check it out here!

    Ethereum Merge Party – Watch the Merge live!

    How have Ethereum ($ETH) prices reacted to the Merge?

    Ethereum ($ETH) prices showed a slight pump in the hours following the Merge. Prices hit a peak of over US$1,640 before coming back down to just under US$1,600. The next crucial point in terms of where ETH prices would go would depend on whether there is any hard fork.

  • How to Fix Stuck Transactions on Ethereum

    How to Fix Stuck Transactions on Ethereum

    Ethereum is one of the world’s most versatile blockchains, with functionality that supports innumerable decentralized applications and blockchain assets. Although conceived in 2013 by Vitalik Buterin, Ethereum did not launch until 2015, it has since been at the forefront of blockchain utility, especially with the recent popularity of non-fungible tokens (NFTs).

    An NFT is an asset on a blockchain that is completely verifiably unique and therefore irreplaceable. Today, many people use NFTs to digitize real-world assets and expose these assets to a global audience. NFTs are very popular in art and photography, as they allow creators to access a wide pool of potential fans and buyers. Currently, most NFTs are on the Ethereum blockchain.

    Ethereum is also the most popular network for decentralized applications (DApps). These apps are powered by smart contracts that drive several functions on the blockchain using specified agreements and conditions. Since the NFT and DApp markets exploded, the Ethereum network has become very busy, and sometimes leaves some transactions stuck for long periods.

    Check out our video on how to fix stuck transactions on Ethereum:

    FIX stuck transactions on Ethereum

    Why Do Some Transactions Get Stuck?

    A delay in processing simply means that no miner has picked up the transaction yet. All Ethereum transactions require a gas fee (gwei), a processing fee set to incentivize miners to pick up and process the transaction. This fee is never static, as it depends on the network congestion at transaction time. Sometimes, gas fees may be very high if there are a lot of people transacting simultaneously.

    Ethereum wallets usually recommend a gas fee based on current network specifics but would let the user increase or reduce it as preferred. If a transaction is delayed for too long, it’s likely that the gas fees for other transactions on the network are considerably higher, and miners are ignoring the lower prices.

    What is a Nonce?

    Used in cryptography as an acronym for “Number Only Used Once,” a nonce is a number that functions as an identifier for a transaction. This number is sequential and follows an order such that transactions with lower nonces get processed before others. Since one Ethereum wallet can initiate any number of transactions, nonces represent a (sometimes chronological) sequence that transaction processing follows.

    How to Fix a Stuck Transaction

    There are three main ways to fix a stuck transaction: cancelling the transaction, increasing the gas fee, or introducing a new transaction with a custom nonce. Before fixing a stuck transaction, it is important to verify the transaction in a block explorer like Etherscan to confirm that it is pending. An ETH wallet may provide users with a cancel or reset button that helps to delete the transaction. After cancelling, it might be necessary to close the wallet application or browser and then reopen it.

    If it is a hardware wallet, turning off and disconnecting the device is also required. Although this is a simple and quick way to solve stuck transactions, users should note that this method may not always work. It is also possible to fix a transaction by increasing the set gas fee. If a user initiates a transaction with a low gas fee but later increases it to match the market’s current price, miners will pick up and process the transaction.

    Another way is to use a new transaction to clear the old one by setting a custom nonce. For instance, a wallet might have three pending transactions, each with nonces 3, 4, and 5, respectively. The network would process nonce 3 first before the others. However, if the gas fee for that transaction is low and miners aren’t picking it, all three transactions could remain stuck.

    The solution here is to initiate a new 0 ETH transaction with a high gas price and send the transaction to the user’s own address. To clear out the transaction, the user must ensure that the nonce specified in the new transaction is the same as the old one. Although this will cost some gas, it immediately clears out the clog and resolves all the other transactions.

    How to Prevent a Stuck Transaction

    The simplest way to prevent a stuck transaction is to ensure the gas fee you are setting agrees with current market prices. If the gas fee is high enough, miners pick it up almost immediately and process the transaction without delay. Users can confirm current gas prices from the wallet or from other online sources. If you are looking to save on gas fees, there are gas tracking websites and applications that will help you optimize this process.

    Conclusion

    Fixing a stuck Ethereum transaction is easy and usually takes a few minutes. When the transaction is still “pending” on the block explorer, these methods can help solve any problems concerning transaction delay. However, users should note that it is mostly impossible to fix any transactions where the status has moved from “pending” to “completed.”

  • EtherDrops Review and Tutorial

    EtherDrops Review and Tutorial

    EtherDrops is a Telegram based bot designed to track major crypto markets and NFTs. Many crypto enthusiasts would use data tracking sites such as CoinMarketCap and CoinGecko, and these tools are excellent as ‘wikipedias’ for all the altcoins out there. However, for those with more advanced needs, there are much better resources available that can make your life easier.

    If you’ve been in crypto for several years, you’ll probably have a Telegram account. Most of the crypto projects in existence have official Telegram channels to keep their communities informed and up to date on developments, so the chances are you also use the messaging platform.

    This is just as well, because one thing that makes Telegram very useful is its ability to add bots that serve different purposes to the end-user. This is where EtherDrops comes in, so you can be part of the various crypto communities and track your tokens all on the Telegram app.

    What is EtherDrops?

    Originally created in 2018 as a tool to monitor Ethereum wallets, EtherDrops was mainly used to track the transactions of Ether ‘whales’ as well as one’s own wallets on the first smart-contract blockchain. 

    Four years later, EtherDrops has evolved into something much bigger than wallet monitoring. It is now integrated with Ethereum, Polygon, Fantom, Avalanche and BNB Smart Chain, providing a convenient place to track all your crypto activities within one Telegram bot.

    Users are equipped with simple-to-use tools to follow coin prices, as well as track and receive real-time notifications on wallet transactions, DEX and CEX swaps, NFTs, liquidity pools, Binance funding, gas prices, and more.

    By shaping settings according to your own personalized needs using a unique combination of advanced tools and instruments, EtherDrops becomes a simple yet essential bot that notifies you about anything you want, or alerts you to certain conditions. Thousands of investors, traders, and holders use it to navigate their crypto journeys.

    The bot already has more than 400,000 users on board and keeps growing steadily. With the product sending over 5,000,000 notifications daily, it’s no surprise that each day they welcome hundreds of new users onboard.

    EtherDrops Features

    Major features of EtherDrops include:

    • Price tracking; 
    • Wallet tracking;
    • Liquidity pools;
    • OpenSea integration;
    • Gas price notifications;
    • Integration with Telegram groups and channels; and 
    • Token distribution alerts. 

    Price Tracking

    Tracking the prices of various cryptocurrencies is a basic need for long-term investors or traders. Add coins by name, ticker or contract address. Apply your personalized settings to receive instant notifications about price changes and swaps.

    • Price Change Notifications – Set % Price Change to generate an alert.
    • Swap Alerts – Set $ Value to track Swaps on Uniswap, Sushiswap, Balancer and other supported DEXs.

    Wallet Tracking

    Add a wallet by its address to monitor incoming and outgoing transactions, airdrops, NFT transactions, and created contracts.

    • Transaction Notifications – Choose between different event types and set $ alerts to be notified about transactions.
    • Wallet Balance – Check Balances of assets and NFTs.

    Liquidity Pools

    Add a liquidity pool by its contract address and receive % pool changes should it increase or decrease within the specified range.

    • LP Changes – Set the % change value to stay on top of your added pool.

    OpenSea Integration

    Track the floor price and metrics of NFTs and arts on the Ethereum network. To follow your collection, add it by the name or address and set a % price change or generate a $ price target.

    Gas Price Notifications

    At times ETH gas prices can be really high and leave you with an eye-watering bill in fees to pay if you make a transaction. Set gas price notifications and save yourself a fortune!

    • Set Gas Alerts – Set Gwei amount to generate an alert. As soon as it hits the target or lower, you’ll be immediately notified.

    Check out our Advanced Tips and Tricks to Save on Ethereum Gas Fees:

    Integration with Groups & Channels

    If you are an admin or a community manager of a project using Telegram, or you run a trading group, your channel could benefit from integration with the EtherDrops bot.

    • All Bot Features in your Groups and Channels – The same alerts and notifications you set in your individual account can be applied to groups and channels.

    Token Distribution Alerts

    Token distributions often create market price pressure and increase capitalization. Be the first to obtain such info and assess market conditions to make a play in your favor (if you use Margin or Futures trading). 

    • Token Distribution – Receive distribution alerts from seed, private and other events for tokens that you’ve added to monitoring.

    Tutorial: How to use EtherDrops

    1. How to install EtherDrops bot

    To install EtherDrops, simply follow this link to open the bot in Telegram. It will automatically link the bot to your account. Here is an official list of the available EtherDrops install links. If you experience any delays with bot updates, you can switch to any other official link.

    2. How to add a wallet

    In the Main Menu, select “+Add wallet”. Tick ✅ which networks you wish to add to monitoring for your wallet and press ✔ Done (for example ETH and Polygon). Then type in your wallet address and name it. You’ll now be immediately notified whenever there are any transactions happening within the wallet, including NFT activity, in/out transactions, airdrops, etc.

    3. How to edit wallets

    In the Main Menu, select “Edit Wallets”. Choose the wallet you wish to edit. The menu with available options will open up. You can Delete, Rename, make it your Favourite (if ON, notifications with this wallet will be illuminated for better visibility), follow only IN, OUT or ALL transactions, check Balances, add/remove Networks for this wallet, set Alert Transactions filter (you’ll only be notified about transactions that are bigger than the specified threshold).

    4. How to add a liquidity pool

    In the Main Menu, select “+Add pool”. Choose the network. Next, enter the address of the liquidity pool. Enter the % liquidity change to create a notification. When the liquidity of a pool changes within your specified range, you’ll be instantly notified.

    5. How to edit liquidity pools

    In the Main Menu, proceed to “Edit pools”. Choose the liquidity pool to add additional settings. You can Delete, Rename, turn your Notifications ON or OFF for this specific pool, or change the % notification alert.

    6. How to add a new coin

    In the Main Menu, select “+Add coin”. Next, enter the contract address, symbol, or name of the coin. Choose the coin from the list and select network (ETH, BSC, ERC-20, Polygon, or CEX). Finally, enter the % price change and $ value for swaps (in case the coin is traded on a DEX) to create a notification. Now you are following this coin. Whenever there is a swap or price change within the range you specified, you’ll receive an instant notification.

    7. How to edit coins

    In the Main Menu, proceed to “Edit coins”. Choose the coin. You can Delete, turn your Notifications ON or OFF for this specific coin, change Price Denomination (in USD, BNB, ETH, BTC), change the price % notification alert, create a price alert (if a coin is x USD, you’ll receive a notification), or change swap alerts.

    8. How to add an NFT

    In the Main Menu, select “+Add NFT”. Enter the contract address or name of the NFT. Select the right one and type in the % price change alert to receive notifications.

    9. How to edit NFTs

    In the Main Menu, select “Edit NFT”. Choose the NFT. You can Delete, change % alert or price, set a new price alert, or turn notifications ON/OFF.

    10. How to set gas price alerts

    In the Main Menu, select “Set gas alert”. Type in the desired fast gas price to create an alert.

    Conclusion

    EtherDrops is a simple yet comprehensive one-stop tool for all your crypto tracking needs and continues to add new networks, coins, and exchanges as the market expands so you’ll never be short of what you need. It just takes one click and a few easy-to-follow steps within Telegram to get set up, and that short initial setup time proves to be well worth it.

    For a comprehensive tutorial on the more advanced features of EtherDrops such as quick shortcuts, special commands, managing profiles, how to set up the bot for groups and channels, and subscription options, read to the end of this quide. If TL;DR you can also watch a video tutorial here.

    Follow DropsTab / EtherDrops for more information:

    Website | Telegram | Twitter | Medium

  • Ethereum Merge is Coming, Is This the End of Ethereum Killers?

    Ethereum Merge is Coming, Is This the End of Ethereum Killers?

    The Ethereum network is said to be the fastest and most scalable blockchain after the Merge in September, effectively cementing its position as the front-runner of smart-contract networks. What will this mean for other popular competing layer-1 blockchains known as “Ethereum Killers?” If you are holding any of these coins, you might want to consider its future prospects.

    The Ethereum Merge in September

    Ethereum founder Vitalik Buterin addressed at the Ethereum Community Conference in Paris that the Ethereum network will hit the 55% roadmap completion level after its much-anticipated “Merge” in September. The Merge will mark the beginning of Ethereum’s proof-of-stake upgrade, potentially enabling the network to process 100,000 transactions per second (tps), according to Buterin, which is significantly higher than even centralized financial services like Visa and Mastercard.

    For the longest time, the biggest problem that has been plaguing Ethereum is scalability. In its current state, Ethereum can only process 12 to 25 tps with an average confirmation time of around six minutes. As a result, the network gets congested, leading to extremely high gas fees. To address that problem, the Merge involves many protocol changes that would allow users to enjoy fast transactions and low gas fees. Buterin has even given each of these planned upgrades rhyming names which he calls the “merge”, “surge”, “verge” and “purge.“

    • Merge
      • Refers to combining the Ethereum mainnet with the proof-of-stake beacon chain, also known as EIP-3675.
    • Surge
      • Refers to the addition of Ethereum sharding, a scaling solution which will further enable cheap layer-2 blockchains and lower the cost of rollups or bundled transactions, making it easier for users to operate nodes that secure the Ethereum network. This reduces congestion on the main chain by distributing traffic to 64 shard chains.
    • Verge
      • Refers to the implementaion of “Verkle trees” (a kind of mathematical proof) and “stateless clients”, aimed at making the network more decentralized. These features will allow users to become network validators without having to store large amounts of data on their nodes.
    • Purge
      • Refers to the removal of historical data in a bid to streamline the network, also known as EIP-4444, a proposal focused on storing said historical data in execution clients such as The Graph, BitTorrent and block explorers, since relying to store everything on existing nodes can hamper scalability.

    What are “Ethereum Killer” Blockchains?

    “Ethereum Killers” refer to Ethereum’s competing layer-1 blockchains, namely Solana, Avalanche, Polkadot, Algorand, and Cardano. They inherited the killer name because they offer similar features to Ethereum but at significantly lower costs and faster speed.

    Ethereum Killer coins have been a very popular asset to investors looking for an alternative network to Ethereum. Smart-contract platforms have been dominating the market cap in the crypto space. According to Coingecko, it is the second highest crypto category by market cap, just behind the Ethereum ecosystem.

    What will happen to “Ethereum Killers” after Merge in September?

    If Buterin is able to deliver what he promised, then Ethereum will most certainly be the front-runner of smart-contract networks. People will look to Ethereum to being the primary platform for DApp development, DeFi activities, NFT minting and marketplace and more.

    Although Ethereum Killer coins have been pumping recently due to bullish sentiment surrounding Ethereum and its long-awaited Merge, communities are speculating whether this is just hype as competing blockchains of Ethereum will no longer have competitive advantage in terms of speed and scalability. Even until now, none of them have been able to dethrone Ethereum from its number two spot by market cap. The upcoming merge will only propel Ethereum upward, but that is if Buterin delivers what he promised. He stated that they will soon test the merge on Ropsten (Ethereum’s testnet).

    The largest future problem for Ethereum will most likely remain to be scalability. Although the new system will be faster, it is unlikely to solve the issue of high gas fees immediately since network demand is likely to rise as efficiency increases. But that is not to say that gas fees will forever be expensive on the Ethereum blockchain. But until Ethereum is able to achieve high scalability, Ethereum Killer blockchains remain to be viable alternatives for fast transactions and low gas fees. We will just have to wait and see in September.

  • Top Cryptocurrency News Today (22 July 2022)

    Top Cryptocurrency News Today (22 July 2022)

    Ethereum Massively Scales to 100K Transactions Per Second Post-Merge, What Will Happen to “ETH Killers?”

    Ethereum founder Vitalik Buterin addressed at the Ethereum Community Conference in Paris that the network will hit the 55% roadmap completion level after its much-anticipated “Merge” in September. The biggest problem that has been plaguing Ethereum is scalability. In its current state, Ethereum can only process 12 to 25 transactions per second with an average confirmation time of around six minutes. As a result, the network gets congested, leading to extremely high gas fees.

    The shift from proof-of-work to proof-of-stake post-merge will enable Ethereum to process 100,000 transactions per second, according to Buterin, which is significantly higher than even centralized financial services like Visa and Mastercard. This will greatly benefit the ecosystem as users can enjoy instant transactions and low gas fees. So the question is, “What will happen to Ethereum Killer coins such as Solana or Avalanche?” If Buterin is able to deliver what he promised, then Ethereum will most certainly be the front-runner of all smart-contract platforms. The whole purpose of Ethereum Killers is to have a competitive advantage over Ethereum in terms of scalability. Will we see the end of Ethereum Killers after September?

    Zipmex Suspends Withdrawals, Joins Growing List of Struggling Crypto Exchanges

    Zipmex, a cryptocurrency exchange based in Southeast Asia, has frozen withdrawals until further notice due to “volatile market conditions” and the “resulting financial difficulties of key business partners.” Much like the rest of the crypto fallout, the insolvency of Zipmex’s counterparty has caused the company to face liquidity issues. According to their official statement, Zipmex’s current exposure to crypto lender Babel Finance is $48 million, with an additional $5 million to Celsius Network, which filed for bankruptcy last week.

    With the series of defaults continuing to haunt the industry, investors should be cautious when dealing with any crypto exchange at the moment. Consider holding your funds in hardware wallets like Ledger Nano X, Ledger Nano S or Trezor Model T.

    Coinbase Urges SEC to Begin Regulating Digital Asset Securities after Inside Trading Bust, Desperate Move?

    Coinbase has called on the Securities and Exchange Commission (SEC) to develop a viable regulatory framework for digital asset securities following the arrest of a Coinbase ex-manager involved in inside-trading earlier today. With rumours of Coinbase’s insolvency growing, communities are speculating whether this initiative is an attempt to revive the crypto exchange. Coinbase has yet to comment on that matter but explained that the existing rules for traditional securities being inapplicable to crypto assets calls for new rulemaking. However, they also added that the procedure should involve the public’s input rather than behind closed doors. Will we be seeing Coinbase making a comeback or are they just delaying the inevitable?

    Binance Unveils Scholarship Program! Future of Crypto Looking Good?

    Binance is sponsoring a scholarship program that focuses on improving education that will empower the next generation of blockchain experts. Scholarships will be available for vocational education (currently for 1,000 Ukrainian students), for undergraduate studies and for master’s degrees, providing opportunities for scholars to acquire experience in the blockchain ecosystem.

    This is a huge step forward as education in blockchain and cryptocurrency is still limited and inaccessible to most people, not to mention a growing pandemic of student loan debts worldwide. Fostering an environment for new talent means faster development in the space, especially when the future of crypto is at stake.

  • Will the Launch of Ethereum 2.0 Crash Crypto Prices?

    Will the Launch of Ethereum 2.0 Crash Crypto Prices?

    Ethereum 2.0 is coming soon and the question everyone wants to know is “will it cause crypto prices to crash?” This is particularly as markets around the globe are not looking great, and that includes the crypto industry. Everything has been bleeding heavily for months without a sign of stopping, as central banks keep hiking rates, global supply chains struggle, and spending and investment dry up. Stagflation is a very real possibility, and there is no telling how long it will take for us to cool down the overheated markets that have been going only up since the last recession more than ten years ago. 

    The aforementioned notwithstanding, active development in the blockchain space continues to march forward. Although investments might drop significantly, many builders keep on building no matter the state of the markets. As Ethereum is steadily approaching the long-awaited transition from proof-of-work (PoW) to proof-of-stake (PoS), dubbed The Merge, it might be interesting to think about potential impacts of The Merge on the crypto market prices, especially in the context of a potential extended bear market.

    Learn more: 

    Ethereum 2.0 is coming- Here’s what you NEED to know

    Proof of Stake (PoS) explained

    Ethereum ($ETH) Merge: What is it and everything you need to know

    Plus check out our video!

    About Ethereum 2.0

    In short, The Merge will result in Eth2.0’s Beacon chain (the coordination mechanism of the new network) merging with the current Ethereum mainnet, signifying the move to a fully PoS chain. To secure the network, enormous amounts of ETH will be staked in addition to the ETH already staked in the Beacon chain, making all of this locked ETH illiquid. Combined with the EIP-1559 upgrade, which now burns 70-80% of the fees, The Merge is expected to cause the equivalent of 3 bitcoin halvenings, dropping Ethereum’s inflation rate to 0.43% and locking up a lot of ETH, potentially reducing sell pressure by up to 90%. In addition, the PoS mechanism will reduce Ethereum’s energy consumption by up to 99.95%.

    So all is looking great for Ethereum and projects building on top of it, right? Possibly. However, there is still a decent chance that, given the current market conditions, ETH’s price pump might be short-lived, and would continue to drop, bringing down a lot of other projects with it.

    The Potential Impacts of The Merge

    There are two possible scenarios to look at when discussing the downside impact of The Merge on crypto prices:

    1. The external effect would be caused by Ethereum sucking out liquidity from other PoS alt-L1s and the projects built on top of them (especially if they’re EVM-compatible), as one of the more critical selling points compared to Ethereum is environmental sustainability.
    2. Beacon chain staked ETH unlocks, extended bear market, and poor treasury management of Ethereum-backed projects could see more capitulation events as HODLers and projects sell off their ETH to stay afloat as new investments dry up and stagflation looms.

    1. Ethereum Sucks Liquidity From Other PoS alt-L1’s

    By offering lower gas fees, fast transactions, and relatively high throughput at the expense of decentralization and economic sustainability, many PoS chains have attracted developers, investors, and NFT ecosystems to their networks away from Ethereum. Ethereum’s high demand (=high fees), poor L1 scalability, and the concerning PoW mechanism have severely limited its growth. (https://rpdrlatino.com) Understandably, regular people simply do not want to pay exorbitant fees when minting and trading NFTs, and developing inaccessible dApps on a network that is supposedly destroying trees and warming up the planet.

    The environmental argument will be completely invalid after the merge. Coupled with the enormous innovations in Ethereum’s L2 ecosystem, which have already reduced transaction fees to sub-$1 with no signs of stopping, Ethereum is set to once again become the most sought-after smart contract development platform. As post-Merge buy pressure of ETH increases and scalability improves, alt-L1’s could struggle to offer any significant unique selling points, making new projects opt to build on top of the most secure, established and decentralized smart contract chain out there.

    As more and more people flock to Ethereum, established projects might also decide to migrate to the platform with the most demand and upside potential, effectively sucking out liquidity from other chains, and leaving them dry with evaporated treasuries, limited runway, and reduced demand. The strategy of subsidizing transaction fees during a bull market when funds are plentiful will likely not work when no new investments are coming in during a bear market, and an exodus of users is reducing demand and network revenues.

    Of course, there is plenty of room for growth in this space, and projects existing on other chains might not find it too beneficial to move to Ethereum even though short-term liquidity issues might prove challenging.

    2. Beacon Chain ETH Unlocks in Extended Bear Market Cause Mass Capitulation

    The Merge will unlock a lot of ETH, resulting in a potential aggressive selling spree that might have trickle-down effects on a lot of other coins, especially those that have tight correlation with their ETH pair, are ERC-20 tokens, or have been sitting on ETH treasuries to fund their development. A lot more downside risk due to a selloff is also a very real possibility for ETH and other coins simply due to bad timing (i.e. bear market – with recession slowly creeping into our daily lives due to central banks raising interest rates, supply chain issues, energy crises etc.), the unlocked ETH might serve as a critical lifeline for those who had confidently staked their ETH during the bull market.

    During the bear market, investments will be scarce, and projects that during the bull market had made the decision to not convert their treasury ETH to stablecoins are now seeing their wallets drop in value significantly, forcing them to capitulate by selling at low prices to cover their expenses.

    However, it is important to note that the ETH unlocked from the ETH staked on the Beacon chain will not be immediately available right after The Merge. Rather, this feature – EIP-4895: “Beacon chain push withdrawals as operations”, will be enabled during the Shanghai upgrade. It will probably be deployed much later after The Merge, with estimates ranging from a month to 6 months. This means that any amount of potential sell-off of unlocked ETH would come with a significant delay post-Merge, at which point it’s impossible to predict where the market might be in 6-12 months and how it will behave, with contradicting bullish and bearish narratives clashing against one another in an attempt to drive price in either direction.

    This option does seem a bit far-fetched, however, and no one knows how much more pain we will have to suffer before the momentum shifts towards the upside, so it’s best to be prepared for both the upside and downside, and not fall prey to only bullish narratives.

    Conclusion

    As outlined in the two main points, post-Merge many alt-L1 coins could face a risk of crashing even further due to risks associated with reduced liquidity in a bear market (for non-Ethereum coins), liquidity that might flow towards the Ethereum ecosystem due to its established security, track record, and newly acquired environmental sustainability.

    On the other hand, ETH and other ERC-20 tokens living on Ethereum also run a risk of crashing, if the post-Merge ETH unlock from the Beacon chain results in a mass sell-off of ETH, which could crash other coins and project treasuries.

    As this will be the first time the crypto industry experiences a recession or a stagflation, there is a lot of uncertainty about how low the market could go and, most importantly, how long it could stay so low. This is uncharted territory, so making comparisons with past cycles might not be particularly useful. Nations and companies will keep tightening their belts, and spending will significantly decrease across the board, leaving risk-on markets such as crypto vulnerable to a continued mass exodus to safer investments.