Ethereum Cancun: An Imminent Blockchain Revolution

Leonardo Perez
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Ethereum Cancun: An Imminent Blockchain Revolution

Ethereum Cancun: revolution in progress for the DeFi ecosystem.

Ethereum Cancun marks an important step in the evolution of the Ethereum blockchain, promising a substantial transformation in terms of scalability, security and efficiency. This update, which constitutes the final phase of the Ethereum 2.0 (Serenity) transition, is crucial for the future of decentralized finance (DeFi) and blockchain applications.

The Heart of the Update: Proto-Danksharding

Proto-danksharding is at the heart of the Ethereum Cancun upgrade. This innovation aims to optimize data management and transaction processing, enabling faster and less costly transactions. It is considered a temporary solution before the full implementation of danksharding that aims for greater scalability and better data management for rolls.

With proto-danksharding, Ethereum is taking a giant step towards increasing its transaction processing capacity, with the goal of achieving a throughput of more than 100,000 transactions per second (TPS). This development is crucial for the “Surge” phase of the Ethereum roadmap, which seeks to significantly improve its performance.

Ethereum Transition to Proof-of-Stake (PoS)

The introduction of Proof of Stake (PoS) is another important stage of this update. By replacing minors with validators, Ethereum aims to reduce its energy consumption significantly, while ensuring security and increased efficiency.

Sharding is built in to increase transaction speed by dividing the Ethereum network into multiple segments, or shards, each capable of processing transactions and smart contracts independently. This approach improves scalability and overall network performance.

Benefits, Risks and Challenges of the Ethereum Cancun Update

Improved scalability and performance. The update promises better scalability and higher performance with improved ability to process a higher number of transactions per second.

Cost reduction and optimization of data management. It also enables reduced transaction costs and optimized data management thanks to innovations such as Bearer Blob Transactions that offer a temporary data storage solution, thereby reducing gas costs.

One of the main challenges will be managing the potential impact of this update on existing smart contracts, as well as the complexities related to the integration of new data storage techniques.

Release Date and Future Outlook

Originally planned for October 2023, the Ethereum Cancun Upgrade is now expected to go live in the first half of 2024. This preparation period is essential to ensure a smooth and efficient transition.

The Ethereum Cancun upgrade is positioned to revolutionize not only the Ethereum ecosystem, but also the broader field of decentralized finance and blockchain. It promises to improve the user experience and expand the possibilities of blockchain applications.

Its success could redefine the decentralized finance (DeFi) landscape, making Ethereum faster, more secure, and more accessible. By addressing crucial issues such as high transaction fees and data processing limitations, Ethereum Cancun is poised to open new avenues for blockchain innovation.

Beyond the Cancun upgrade, the future of Ethereum looks promising. With an active developer community and a clear roadmap, Ethereum is positioned as a leader in the blockchain space and continues to innovate and adapt to changing market needs.

The Cancun upgrade could have a significant impact on the entire blockchain ecosystem, setting new standards for performance, security and scalability. This could encourage other blockchains to follow Ethereum’s model to remain competitive.

The update illustrates the importance of continued innovation and community support to ensure the sustainability and success of these types of initiatives. As Ethereum continues to evolve, it remains a key player in defining the future of decentralized finance and blockchain technology.

By Leonardo Perez

What is the Difference between PoS and LPoS?

Audy Castañeda
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What is the Difference between PoS and LPoS?

Proof of Stake is an alternative method to Proof of Work (PoW) to validate transactions on the blockchain.

The world’s first blockchain, Bitcoin, has always been based on PoW, but this method is relatively slow and, above all, very expensive. In fact, to make a PoW-based network secure, miners need to do a lot of work, and this work consumes electricity.

The Proof-of-Stake (PoS) Based Consensus Mechanism

To speed up and, above all, make the validation of blockchain transactions consume less energy, Proof of Stake was invented, that is, an alternative validation method to PoW.

PoS does not require miners to do any work, so much so that it does not even require the existence of miners. In fact, when Ethereum switched from PoW to PoS in September 2022, ETH mining simply ceased to exist forever.

The concept behind PoS is that those who want to participate in the validation of transactions (the so-called validators) must stake their cryptocurrencies to increase the chances of generating a block.

In fact, it is the validators who have staked, or staked, their cryptocurrencies that generate the blocks that validate the transactions by adding them to the blockchain. In exchange they receive a prize.

Betting on Nodes

PoS-based networks work well if many holders of the network’s native cryptocurrency stake many of their coins. For example, there are over 28 million ETH staked on Ethereum, out of approximately 120 million ETH in the world.

The original PoS simply requires validator nodes to stake their cryptocurrencies on their own node, and to incentivize them to stake many of them, mandatory minimums are often introduced. To run an Ethereum validator node, you need to stake 32 ETH, which is equivalent to almost $63,000.

This effectively excludes the possibility of small ETH holders having a validator node, and thus staking as a service was born, i.e., nodes that also allow other coin holders to add their own coins to stake on the node. This service is offered, for example, by many exchanges or decentralized services such as Lido.

Leased Proof-of-Stake (LPoS)

Staking as a service in traditional PoS is offered by private initiatives that allow third parties to stake their coins on the node owned by those who offer the service. However, there are some networks, such as Tezos and Waves, that are not based on simple PoS, but on LPoS.

LPoS is a variant of PoS that nativizes the lending of coins to nodes, basing it on a decentralized system, unlike stake-as-a-service, which is generally based on centralized services.

Those who lend coins to LPoS nodes can always withdraw them freely, precisely because the system is decentralized and therefore withdrawal cannot be blocked. In fact, the rented coins never leave the user’s wallet, who simply connects the node to his wallet, without transferring their coins to the node.

Delegated Proof of Stake (DPoS)

There is also a third variant of Pos, namely the so-called Delegated Proof-of-Stake (DPoS), in which validator nodes are selected through a kind of election, throughout the network, thanks to a system of representative democracy. Users cast their votes by staking their coins.

Ethereum has shown that PoS alone is not really capable of reducing transaction fee costs, while Tron has shown that DPoS can reduce them significantly. If lately the median average transaction fee on Ethereum is around $3, on Tron it is around $0.1, and this makes the difference very evident.

By Audy Castaneda

Bitcoin Up to Date: Exploring the Latest News and Featured Events

Leonardo Perez
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Bitcoin Up to Date: Exploring the Latest News and Featured Events

Bitcoin in the Spotlight: A weekly digest featuring crucial news from the leading cryptocurrency.

Michael Saylor, the executive president of MicroStrategy, appeared virtually at LABITCONF 2023, held in Argentina, to talk about the importance of using Bitcoin as a reserve asset for companies.

CBOE will become the first US exchange to offer both spot trading and leveraged derivatives trading in one place.

HIVE Digital, has announced a purchase of 4,800 Bitmain S19k Pro ASIC miners.

Bitcoin miners are connecting new platforms to capitalize on the BTC rally ahead of the halving in April 2024.

Finally, according to Google Trends data, online searches related to cryptocurrencies, especially Bitcoin, continue to be very popular.

These are this week’s Bitcoin top news. More details are provided below.

LABITCONF 2023: Bitcoin is an Economic Armor, Saylor Said

During LABITCONF 2023, MicroStrategy CEO and Bitcoin evangelist Michael Saylor offered a unique perspective on the reigning cryptocurrency. He compared it with the rest of the financial assets and made it clear that the digital currency has no rivals in terms of appreciation, security and coverage.

He added that “In a few years, we will see the true potential. There is no operational risk, and Bitcoin is technology. Bonds for the United States are an asset, but Bitcoin is like a bond, but it does not have negative returns.”

He also stressed that “We are going to have an avalanche of both corporate and institutional adoption. “When everyone understands Bitcoin, maybe it will slow down a little bit, but in the long term we have to have a laser focus.”

Chicago Options Exchange (CBOE) to Launch Margined Bitcoin Futures

The Chicago Options Exchange (CBOE) reported that it will launch margined Bitcoin (BTC) and Ethereum (ETH) futures in January 2024. In addition, according to experts, the CBOE measure aims to boost crypto market activity by part of institutional investors.

CBOE Digital President John Palmer said that “Futures have long been valuable hedging instruments in traditional financial markets, and we are very excited to expand access to this tool even further in the asset markets. digital and offer margin trading to our clients.”

Hive Digital Acquires 4,800 New Units for Bitcoin Mining

On Tuesday, Hive Digital announced the purchase of 4,800 Bitmain S19k Pro Bitcoin miners from Bitmain. The Bitcoin (BTC) mining firm plans delivery within the next 30 days to improve the July average efficiency per terahash (“J/TH”).

The company anticipates that these new miners will be operational within a few days, allowing for faster cash flow compared to previous models.

Bitcoin Miners Prepare to Secure Profits Before Halving

According to JPMorgan analysts, the hashrate has reached record levels in recent months, including a notable increase in October.

Gregory Lewis, a brokerage analyst at BTIG who closely follows the top Bitcoin miners in the United States, has observed a growing urgency among them to connect more mining rigs before the halving.

The Bitcoin ETF Effect on Google Searches

Over the past 90 days starting August 13, searches reached one of their highest points, reaching a score of 100 on October 24, after that, interest waned.

Recently, starting November 8, searches have increased again. This is closely related to the news. Major media outlets reported on the possible approval of an exchange-traded fund by the SEC, which generated great anticipation. As a result, people took to the internet to research more about these cryptocurrencies.

By Leonardo Perez

Bitcoin ETF Approval Hampered by Coinbase Integration, Says BitGo CEO

Audy Castañeda
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Bitcoin ETF Approval Hampered by Coinbase Integration, Says BitGo CEO

The SEC has continued to take a cautious stance on approving spot Bitcoin ETFs. Some actors are hopeful that regulated cryptocurrency custody providers can pave the way for ETF approval.

Among asset managers around the world, anticipation has reached a fever pitch for the Bitcoin ETF’s approval. While the potential for these ETFs to generate significant capital and investments in the cryptocurrency industry, including Bitcoin, is notable, there are concerns that analysts may have overlooked.

BitGo CEO Mike Belshe has expressed reservations about the likelihood of the US Securities and Exchange Commission (SEC) approving Bitcoin spot ETF applications due to the integration of Coinbase as an exchange and custodian. Belshe maintains that the risks associated with Coinbase’s multifaceted role have not been fully understood, which could lead to further rejections before positive news emerges.

Could Bitcoin ETFs Face More Rejections?

In a recent interview with Bloomberg, Belshe shared his thoughts on the state of Bitcoin ETF applications and their challenges. While expressing optimism and acknowledging positive conversations between applicants and the SEC, Belshe believes another round of rejections may be necessary to address concerns about market structure.

Belshe cites SEC Chairman Gary Gensler’s emphasis on separating exchanges from custody, drawing parallels with the functioning of the stock market. Belshe also alludes to Coinbase’s role as an exchange, custodian and broker-dealer, highlighting risks within the entity that may not be fully understood.

Belshe’s concerns arise from Coinbase’s integration of multiple features within its platform. While clarifying that Coinbase is not on the same level as bankrupt crypto exchange FTX and its co-founder Sam Bankman-Fried, Belshe says they are employing a “similar playbook.”

Coinbase presents risks that the crypto community may not fully understand by operating as an exchange, custodian, and broker-dealer simultaneously. Belshe suggests that the SEC could require a complete separation of these functions before approving the Bitcoin ETF.

Although JPMorgan analysts stated in an investment note on October 17 that approval could come in the coming months, the general consensus – held by Bloomberg ETF analysts James Seyffart and Eric Balchunas – puts the approval at 90%. possibilities of approval before January 10 of next year.

BitGo CEO Advocates Custodian Role in Bitcoin ETF

While highlighting the challenges of integrating Coinbase, Belshe emphasizes that there are viable solutions available. He points to custodians like BitGo, which specialize in custody services without engaging in exchange or trading activities.

By using custodians like BitGo, the industry can address the need for separation between exchanges and custody, which could pave the way for SEC approval of Bitcoin spot ETFs, Belshe said.

Belshe’s comments reflect broader concerns in the crypto industry about the regulatory landscape and the need for clearer guidelines and structures to gain regulatory approval for innovative financial products like Bitcoin ETFs.

While some regulated cryptocurrency custody providers like Anchorage, BitGo, and Coinbase are independent of cryptocurrency exchanges, debate continues over whether this separation is enough for the SEC to approve a Bitcoin ETF.

Overall, as enthusiasm for Bitcoin spot ETFs continues to grow, BitGo CEO Mike Belshe has expressed concerns about Coinbase integrating as an exchange and custodian. Belshe believes the SEC may reject Bitcoin ETF applications until Coinbase’s functions are completely separated.

As the industry anxiously awaits regulatory decisions, the debate surrounding Coinbase’s role in Bitcoin spot ETFs adds a layer of complexity to the ongoing discussions.

By Audy Castaneda

Tether To Invest $500 Million in a Bitcoin Mining Plan in Latin America, And Other News

Leonardo Perez
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Tether To Invest $500 Million in a Bitcoin Mining Plan in Latin America, And Other News

In the next six months, Tether will invest $500 million to enter the world of Bitcoin mining in Latam.

In an exclusive interview with Bloomberg, Paolo Ardoino, Tether’s next leader, revealed the company’s bold plans to enter the world of Bitcoin mining. Tether will invest $500 million in the next six months.

The strategy focuses on the construction of mining facilities in strategic locations, including Uruguay, Paraguay and El Salvador, with the aim of strengthening Tether’s computing capacity up to 1% of the Bitcoin mining network.

Ardoino outlined the company’s vision in detail, highlighting the construction of mining facilities with capacities ranging from 40 to 70 megawatts (MW) in these selected countries. Additionally, part of the funds will be used to finance the German mining company Northern Data Group, thus solidifying Tether’s position in the cryptocurrency mining sector.

Joana Cotar, Bundestag Deputy, Pushes for the Recognition of Bitcoin as Legal Tender in Germany

Bundestag deputy Joana Cotar has openly expressed her support for the recognition of Bitcoin as legal tender. This announcement raises the possibility of a paradigm shift in Germany’s position towards cryptocurrencies, thus challenging the European Central Bank’s efforts to develop a central bank digital currency (CBDC).

Cotar’s initiative seeks to explore the integration of Bitcoin into the heart of German finance through a “preliminary examination” aimed at establishing a legal framework that formally recognizes Bitcoin as legal tender. Its approach is not limited to Bitcoin acceptance alone, but advocates the creation of a balanced regulatory environment, with special emphasis on legal security for companies and citizens.

Criticism of SEC’s Gary Gensler: Ripple and the Crypto Community Argue Contradictions Between Words and Actions

In response to a recent speech by Gary Gensler, chairman of the United States Securities and Exchange Commission (SEC), Ripple’s lawyer and several prominent members of the crypto community have expressed criticism. Alleging that Gensler’s statements do not match his actions.

Gensler delivered his speech during the 2023 Securities Enforcement Forum on November 16, where he highlighted the words of the SEC’s first chairman, Joseph P. Kennedy. In the speech, Gensler emphasized the need for the SEC to be “a partner to honest business and a prosecutor to dishonesty.”

However, these statements generated immediate responses from members of the crypto community. Stuart Alderoty, legal director of Ripple, questioned Gensler’s consistency, arguing that his recent comments contrast with his actions, accusing him of having “prejudged cryptocurrencies and having sued others without proper investigation.”

This criticism comes amid growing tension between Ripple and the SEC, with Alderoty and others questioning the impartiality and objectivity of the commission chairman, who is currently immersed in a legal battle with the SEC.

SEC Delays Decision on Grayscale Ethereum Futures ETF, Increasing Uncertainty in Crypto Market

The US Securities and Exchange Commission has postponed a decision on the Ethereum futures exchange-traded fund (ETF) introduced by Grayscale Investments. The application, filed in September, proposes a fund that would allow investors to buy shares based on the outlook for the future price of Ethereum.

However, the SEC announced the delay in making a decision, a common practice when it comes to cryptocurrency-related products. In its statement, the SEC indicated that it believes it is appropriate to designate a longer period to evaluate the proposed rule change, thus providing the time necessary to deeply analyze the problems presented.

By Leonardo Perez

Record Activity: Polygon Processes More Than 6 million Transactions, Causing Gas Rates to Increase

Audy Castañeda
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Record Activity: Polygon Processes More Than 6 million Transactions, Causing Gas Rates to Increase

The Polygon network saw a record increase in daily transactions, going from 2.89 million to 6.1 million in just 24 hours. Gas fees on Polygon skyrocketed, with transaction costs rising to over 7,000 Gwei before settling at around 400 Gwei, but remaining below Ethereum fees.

The Polygon network, a major Ethereum sidechain, has witnessed a notable increase in daily transaction activity. In 24 hours, transactions on the network increased from 2.89 million to a record 6.1 million, marking the highest daily transaction count since October of the previous year.

This increase represents a major milestone in network usage, reflecting growing interest and engagement within the Polygon ecosystem.

Gas Rate Dynamics: A Change in Costs

This increase in transaction volumes was accompanied by a notable increase in gas rates. In a dramatic shift, average transaction costs on the Polygon network rose from 100 Gwei to over 7,000 Gwei before settling at around 400 Gwei. according to Polygon Scan.

This volatility in gas rates highlights the dynamic nature of blockchain networks in response to rapid changes in usage patterns. Despite this increase, Polygon’s transaction costs remained significantly lower than those on the Ethereum mainnet, where fees for similar transactions can range from $30 to $50.

The increase in transaction costs especially affected token swaps. on the blockchain. The costs of these operations reached approximately $5, a stark contrast to the network’s usual rates. However, these fees have since moderated to less than $0.50, indicating a return to more typical cost structures.

The Arrival of PRC-20 Tokens and Its Impact on the Market

A key factor behind this transactional boom is the introduction of a new token standard at Polygon, called “RPC-20.” These tokens, inspired by Bitcoin’s Ordinals protocol, are created using transactional call data, a departure from the conventional ERC-20 token standard. PRC-20 tokens, particularly those called POLS, have seen widespread minting, which has contributed significantly to the increase in transaction volumes.

This new token mechanism, which echoes the principles of the Ordinals protocol, employs a different method of incorporating data into individual transactions on the blockchain. Unlike the traditional approach in ERC-20 Tokens, PRC-20 tokens use transaction call data to generate unique tokens or NFT-like artifacts within the Polygon network.

The increase in gas fees and increase in transactional activity can mainly be linked to this new wave of PRC-20 token minting. As demand for block space intensified, users were willing to pay higher gas rates, creating a competitive environment and higher transaction costs.

Current State and Future Perspectives

Despite the recent surge, Polygon offers a more cost-effective solution than the Ethereum mainnet. Although high, current gas fees on Polygon translate to significantly lower costs compared to Ethereum fees. For example, a 4,005 Gwei gas fee on Polygon is roughly equivalent to $0.08, a fraction of Ethereum’s gas fee costs.

However, Polygon’s native token, MATIC, has seen a downturn. In the last 24 hours its value has decreased by 1.95%, with a notable drop in 24-hour trading volume. This decline reflects the market’s reaction to recent grid activity and gas rate fluctuations. Recent developments on the Polygon network underscore the fluid nature of blockchain ecosystems.

By Audy Castaneda

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