There has been an increase in fees on Ethereum since July, averaging 112 Gwei. The growing popularity of DeFi platforms could be causing the network’s congestion.

Ethereum users are being forced to pay up to more than USD 7 worth of fees to transfer a few US cents from their wallets. Community members denounce it, saying that they hope that there will be a decrease in Gas rates to continue using the network.

Gas rates — fee to pay for each transaction on Ethereum — have increased significantly since last July. According to data from EthGasStation, they currently have an average of 200 Gwei for quick confirmation on the blockchain.

The fee has increased so much that some users are starting to have problems transferring their money since the fee is more expensive than transfers. Reddit user Moneyprintergo-brrr reported that he needed to pay a fee of USD 7.67 to transfer as little as 0.29 US cents worth of DAI. In other words, the fee is 26 times more expensive than the money to transfer.

Another case, not so dramatic but just as expensive, is that of a Twitter user @craiglashmet. He stated that he must pay a fee of USD 14 to the network to move USD 50 from his wallet. In the case of the lending platform Compound, it is necessary to pay a fee of more than USD 10 to conduct any transaction with assets.

According to economist Alex Krüger, high demand on the Ethereum network could be raising the price of fees, even reaching values that nobody had seen since 2015. According to data from Etherscan, it is possible to notice that there has recently been a rebound in the number of transactions on the blockchain, recording more than 1 million transactions per day.

The huge activity on the Ethereum network seems to be related to the popularity of decentralized finance (DeFi) platforms. Applications in this sector have begun to mobilize large amounts of money and daily user traffic, especially those projects specializing in yield farming.

Some users could be becoming rich from the use of these DeFi applications, increasingly demanding transactions from the network. However, these activities could be negatively affected if fees increase on Ethereum. Yield farming requires a lot of movement of transactions and, in the event of arbitrage, the immediate availability of money.

If the network requires very high fees for transferring a few US cents, it will be very difficult for the practitioners of yield farming to perform their activities and generate profits from it. The profitability of these operations for retailers would go entirely to the payment of fees. For that reason, an over-demand from the Ethereum network is detrimental to the use of the DeFi market and could increase the risk in these investments.

In recent days, the Bitcoin network was slightly decongested, but fees have once again reached an average of USD 5 per transaction. As long as the rise in the cryptocurrency market persists, fees are likely to accompany the rise.

By Alexander Salazar

The objective of this project is to detect illicit activities involving cryptocurrencies. Russia will allocate USD 10.3 million for its first stage, which will take place from 2021 to 2023.

By using artificial intelligence tools, Russia will seek to analyze transactions with Bitcoin and other cryptocurrencies to reduce their anonymity. According to government officials, the project is aimed at detecting drug trafficking, tax evasion, cybercrime, contract killings, and financing of extremism.

The “Transparent Blockchain” project will focus on (BTC), Ether (ETH), Omni (OMNI), and privacy-seeking coins like Dash (DASH), and Monero (XMR), according to a local news agency.

The initial stage of “Transparent Blockchain”, which will run from 2021 to 2023, will cost around RUB 760 million (equivalent to about USD 10.3 million). Every year, the Government will allocate a portion of the federal budget that comes from taxpayers to this project.

A meeting between President Vladimir Putin and a group of representatives of the IT industry, which they held on June 10^th, led to the creation of “Transparent Blockchain”. Shortly after, Putin ordered the prompt approval of the project to begin preparations for its execution starting in 2021.

There are great secrecy and lack of details on the subject, beyond the announcements that the Government has made. However, Russian news media have reported that there is already a prototype of the system that has been used in operations against drug trafficking.

Cryptocurrencies Are Legal, But Not For Making Payments

The government announced this project a few days after the enactment of the Law on Digital Financial Assets, which Putin signed on July 31^st. This law, which will take effect on January 1^st, 2021, legalizes cryptocurrencies but prohibits using them to make payments.

Russian experts and enthusiasts warned at the time that this law would delay the development of the cryptocurrency industry in the country. On June 30^th, Putin said that it was “important to lift legislative and administrative barriers for technological pioneers,” but the law seems to contradict his words.

From the moment when the law comes into effect, the Russian Central Bank must approve the issuance of ERC-20 stablecoins and tokens. Besides, the bank itself will be in charge of making them available to qualified investors.

Following the enactment of the law, Sberbank announced that it is preparing for the launch of Sbercoin. This crypto asset will maintain parity with the ruble (RUB) and will be aimed at corporate customers of this institution.

Despite its negative aspects, the sanctioned law represents an advance against the prohibition of Bitcoin and other cryptocurrencies that had prevailed in Russia since 2014. In that year, the State Attorney-General determined that no individual or legal entity can use anonymous payment systems and cyber-currencies.

Finally, that ban has not stopped cryptocurrency users. For instance, many of them frequently use the stablecoin Tether (USDT) in international trade between Russia and China. This tool allows traders to avoid taxes and evade regulations.

By Alexander Salazar

China had 70% of the Bitcoin hashrate in the first quarter of 2020. Jameson Lopp highlights that a 51% attack on Bitcoin is limited and unprofitable.

The operation of Bitcoin depends on its mining, but the mining ecosystem has been not very transparent in recent years. That situation makes it difficult for the community to really understand how it works, according to Bitcoin developer Jameson Lopp.

There has always been the belief that Bitcoin is in danger as China concentrates most of the mining industry. Manufacturing companies, mining pools, and even hundreds of farms are located in the Asian giant. This has directly affected the centralization of the network’s hashrate.

There is a greater vulnerability to 51% attacks if the hashrate of a blockchain accumulates in the hands of a few miners or a single territory. This worries many members of the community, but Jameson Loop says that it is not easy to perpetrate this type of attack since they are highly limited and not very profitable.

These attacks occur when one or more miners manage to concentrate more than 50% of the hashrate of a network like Bitcoin. This gives them the ability to delete the network’s history to replace it with new convenient information. That way, they would be able to spend the coins more than once and get hold of the rewards for mining in a single operation.

If several allied farms manage to concentrate this percentage in a single territory, the logic suggests that Bitcoin could be vulnerable to an attack from China. In the first quarter of 2020, the Cambridge Center for Alternative Finance calculated that 70% of the Bitcoin hashrate was processed in China.

Reasons for Concern about Centralization of Mining in China

On his blog, the researcher states that 51% of attacks sound very dangerous, but they are not that powerful. The miners doing these activities cannot tamper with the consensus laws of the blockchain, so it is a limited attack.

The attacker cannot arbitrarily steal Bitcoin and can only spend twice the amount of Bitcoin in each of the affected blocks. The consensus rules cannot change either, much less accept invalid transactions. In other words, their hands are tied, but they can still do a lot of damage. The Bitcoin Whitepaper exposes all these maxims, which are the laws of the network.

According to Loop, most attackers can be successful if they manage to trade the stolen coins on a highly liquid exchange. This complicates things even more since most of these exchanges have withdrawal limits. Likewise, these platforms usually meet AML/KYC requirements, so they must identify themselves to be able to move large amounts of money.

On top of that, malicious actors will have to exchange money as soon as possible without anyone noticing. When people learn of the attack, the price of Bitcoin will surely drop. Jameson Loop concludes that these attacks are not profitable for the miners, who have to cover the electricity costs of each connected device to achieve more than 50% of the hashrate.

By Alexander Salazar

There are differences of up to 2 million ETH between the multiple results. The supply figure is “an estimate”, according to Vitalik Buterin.

Since last August 7^th, there has been a controversy over the supply of Ether (ETH) on Ethereum, which seems to be close to 112 million. However, the figure may vary depending on the block explorer or website consulted.

Ethereum does not have a mechanism to calculate the supply as Bitcoin does. There is disinterest in the verifiability of the supply in the attitude of Ethereum leaders and the community. This contrasts with the importance that bitcoiners give to transparency in issuance and circulation.

At the time of writing this article, Etherscan.io provides the following result: 112,134,530.78 ETH. This amount includes 72,009,990.50 ETH of the Genesis block that the Ethereum Foundation maintains (64.2%) and 40,115,806.10 ETH generated as mining rewards (35.8%).

However, when consulting CoinMarketCap and Messari, they show 112,125,823 ETH and 111,549,784 ETH, respectively. CoinMarketCap is very close to Etherscan, but Messari is behind by more than 500,000 ETH.

This discrepancy of 500,000 ETH, at a price close to USD 400, leads to a not insignificant difference in the market capitalization, since it is close to USD 260 million.

Whilst CoinMarketCap indicates that Ether’s capitalization is USD 44,509.12 million, Messari shows that it is USD 44,251.84 million. At least, there is a difference of no less than USD 257.28 million.

Bitcoin’s Transparency

Bitcoiner Michael Goldstein explains that it is only necessary to provide a specific command, gettxoutsetinfo, via the Bitcoin client command line. This allows anyone with access to a node to obtain a set of basic Bitcoin statistics, including the total supply, without trusting third parties.

On August 7^th, the also bitcoiner Pierre Rochard offered one million satoshis (about USD 120) to whoever sent a script that would calculate the supply of Ether. He received two responses, but the results did not match.

Vitalik Buterin’s Opinion

Ethereum co-founder Vitalik Buterin did not consider as important the remarks about a lack of accuracy to offer an indisputable figure for the supply of Ether.

Buterin showed a CoinMarketCap line graph where the price and supply of Ether appear along with other variables. He stated that it does take into account the supply of Ether and then said something that created even more controversy.

Concerning why Ethereum enthusiasts did not seem concerned about the remarks on inaccuracy, Buterin said that they knew what the protocol rules stated about the supply of Ether.

Right now, Ethereum is going through a major transition process. From a technical point of view, it aims to change the consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS). This process should be consolidated at the beginning of 2021, with the launch of Ethereum 2.0.

On the other hand, there has been pronounced decentralized finance (DeFi) boom on Ethereum. For example, this has enabled the development of lending platforms that handle collateral funds in Ether worth billions of US dollars.

By Alexander Salazar

Bitcoin, the most famous digital currency started to wake up since a halving occurred in May 2020. The future appears to be very promising and the funding rates of digital assets are playing a protagonist role in this massive game. This article is solely based on what is the funding rate and the way it affects cryptocurrencies in the present time and the near future.

The funding rate: What is it and why is it so important?

It is important to understand some primordial facts before going deeper on what the funding rate is and why it is so important for traders: first, the funding rates are payments that can be long or short established on remarkable differences between perpetual contract markets and spot prices. Once the market is confident, the funding rate is positive and long traders pay short traders. When the market is pessimistic the funding rate is negative and short traders pay long traders.

Small situations may occur regarding the spot price and future price linking to the same instrument. This can cause a divergence; these divergences can be removed once the futures conclude. This event assures the holder of a future the same amount at expiration.

Temporary divergences

The futures market is very solid and these divergences have a temporary tendency depending on these futures market. If the efficiency of the futures market and experienced traders make differences or disagreement leading to arbitrage between futures and spot prices the divergence will be quickly removed without major problems.

A whole new set of categories regarding futures have seen the light thanks to digital assets, these perpetual swaps are linked to the spot price of the same underlying asset, these  With digital assets, exchanges on which they trade have provided a new kind of futures: perpetual swaps. These tradable instruments’ main mission is to copy the spot price without detaining it.

 But there are differences; the most relevant one is perhaps that they never expire, so the investors are properly allowed to hold a position for the time they believe is right.

Consequently, the price of the perpetual swap must be balanced and in line with the spot price of the instrument. Investors pay to hold a position; being the prices lower than the spot price. This eradicates the possibility of paying them if they are holding a perpetual swap position that would be, in other cases, with a higher price of the same underlying asset.

This mechanism is called the funding rate. Its mission is to create daily adjustments to the market and its movements. If the market is moving with strength, and the volatility risk is high, the price of the perpetual swap will show discrepancies toward its low volatility periods. This movement will lead to a funding rate to generate a reduction and close the breach between the futures and the spot price.

By Jenson Nuñez