Hugo Nguyen indicates that Ethereum 2.0 will increase the problems. Rollups like zkSync 2.0 promise up to 100,000 transactions per second on Ethereum.

Ethereum 2.0 is still on the way. Users are still waiting for the releases that will lead the cryptocurrency created by Vitalik Buterin to a whole new level. However, one developer has firmly criticized this new launch with proof of stake (PoS) and the rollups, which promise to increase the network’s ability to consolidate transactions.

Hugo Nguyen is the founder of the wallet Nunchuk and revealed a Twitter thread bringing arguments against Ethereum rollups. It wants to show why, according to their analysis, they are not a scalability solution but rather a system with many security failures. These problems would get accentuated with the appearance of Ethereum 2.0.

A rollup is a protocol responsible for “wrapping” transactions in a second layer. This action could increase the capacity of transactions per block. However, According to Hugo Nguyen, no one protects second-layer transactions.

Being a verifier in certain rollups needs an expensive infrastructure since it is necessary to have a layer one node and a layer two node. These scenarios, according to Nguyen, can aim at a possible centralization. This situation happens because fewer users will be less willing to invest in having their node, which would make this layer 2 “end up with no validators at all.”

To the struggle of having layer one and layer two nodes, the developers must add the exponential growth that the Ethereum blockchain has had this last year. The higher the weight, the higher the hardware could cost.

Regarding centralization, Vitalik Buterin himself points out in his recently revealed roadmap known as End-Game (end of the game) that this scenario could be possible due to the cost per node in which rollups or solutions would get involved.

However, Vitalik clarified that the centralization that rollups show could get fixed as long as the base network remains strong.

The Punishment System in Rollups

According to Nguyen, Vitalik, and the development team desire to create a justice system that expresses itself beyond code. This situation takes effect because, with Ethereum 2.0, a new system will appear to punish malicious nodes by removing part of the ETH deposited in the staking.

This system will bring more justice to those nodes that work to create malicious transactions. However, there is a problem that Nguyen pointed out, and that is who gets punished and who receives benefits.

Nguyen also added that rollups are not a scalability answer. Take Plasma, another second coat solution created by Vitalik, which got abandoned. Rollups could reach the same destination, according to the creator of Nunchuk. He also points out that searching for solutions doesn’t take anything for granted.

On the other hand, Vitalik Buterin firmly believes in rollups, both in the current Ethereum 1.0, as some define the network currently with proof of work (PoW), and more in what will be Ethereum 2.0. The Russian-Canadian developer has even revealed roadmaps outlining how these solutions could help the network grow.

By: Jenson Nuñez

The volume of cryptocurrencies seized by the US government increased in 2021 to surpass USD 1 billion.

For years, the North American government has been seizing cryptocurrencies before auctioning them off and recently sought help from a private company to oversee the storage and sales of those tokens.

According to the director of the Internal Revenue Service cybercrime unit, Jarod Koopmancryptocurrency seizures currently surpass $ 1 billion in value. Koopman told CNBC that during the fiscal year 2019, the Cyber Crime Unit had around $ 700,000 in crypto seizures. In 2020, the figure amounted to $ 137 million. And in 2021 (in August,)the figure is at $ 1.2 billion.

The government managed to accumulate unprecedented amounts of cryptocurrencies in recent years. This situation led experts to express that as long as cybercrime keeps increasing at the current rate, the government’s cryptocurrency wallet would also keep growing up and reaching new levels.

In fact, in November, one of the upcoming seizures on the auction block reached $ 56 million that authorities seized as part of a Ponzi scheme case involving overseas cryptocurrency lending program BitConnect.

Unlike many other auctions where the funds get redirected and sent to other government agencies, the cash from this crypto sale would help reimburse the victims of the fraud.

What the Bailiffs Have Seized

The cryptocurrency seizure operations led by the government are evolving in such a fast way that it has just enlisted the help of the private sector in managing the storage and sales of its hoard of tokens.

The North American Marshals Service, which is the lead agency in charge of auctioning the government’s crypto assets, has so far seized and auctioned (in full) more than 185,000 bitcoins, which is estimated to be around USD 8.6 billion at current prices.

Proceeds from cryptocurrency sales get stored in the Treasury Forfeiture Fund or the Department of Justice Asset Forfeiture Fund. Once it gets transferred to one of those two profiles, the liquidated cryptocurrency could help support a variety of other things on the budget. In some cases, Congress could even cancel the funds and redirect the money to other initiatives.

According to Koopman, the cryptocurrencies his team has tracked and seized amount to around 60 to 70 percent of the Treasury Forfeiture Fund, making him the single most prominent contributor to the fund.

Additionally, a Justice Department spokesperson highlighted to CNBC that he is “pretty sure” that there is no central database to track any cryptocurrency seizure.

What is known is that the US government has been joining efforts with blockchain analytics platforms to track transactions, specifically, behaviors flagged as suspicious by the US Office of Foreign Assets Control.

It is not the only country where the volume of crypto seizures has increased. In July, UK police revealed that they broke their record by seizing $ 250 million in digital currencies that took part in a money-laundering investigation.

By: Jenson Nuñez

The entity called to be alert to “returns not compatible with reasonable parameters.” There are open investigations in many provinces where these businesses got advertised.

The Central Bank of the Argentine Republic (BCRA) made a statement on Monday, December 20, revealing various warnings about the proliferation of companies that promise profits to investors but are just merely scams.

According to the statement revealed on the entity’s website, the BCRA investigates the actions of companies that catch deposits and offer returns through operations with crypto assets and cryptocurrencies that are not compatible with any reasonable parameter in financial operations.

Given this situation, it alerts savers about the risks of investing through these platforms that do not have underlying assets that allow assessing the risk of the investment.

In addition, the Central Bank of Argentina revealed that it has been leading inspections through the Superintendency of Financial and Exchange Institutions in various provinces.  Among them, Catamarca and La Rioja get listed as regions in which advertising campaigns aimed at attracting investors with really shady schemes.

 In the cases related to this event, the subsequent cessation of the activity will get requested, and the proper legal procedures would meet their opening.

The statement revealed by the highest Argentine banking entity also refers to another message that arrived in May 2021 that suggests that all users should get warned about the risks of operating with crypto assets.

As reported by various media outlets, the Argentine authorities remarked that crypto-assets are volatile, unsafe items that could lead to many criminal activities such as money laundering operations.

This type of fraudulent business model has increased in Argentina in recent times. Many celebrities and influencers have taken part in advertisements and even promoted them on their social networks. All this movement has captured the interest of the National Securities Commission, an entity that has a list of suspicious companies that could be scamming investors based on these schemes.

The Reaction of Argentines on Social Networks

Beyond the seriousness of the statement, Argentine citizens did not hesitate to bring out their ingenuity on the subject and, with humor, criticized the BCRA for being guilty about economic problems in the country. These problems are the devaluation of the currency and the exchange rate for the purchase of foreign currency for savings.

As a clear example, a user responded to the publication of the journalist Juan Pablo Marino, who shared the Central Bank statement on Twitter and wrote that the issuer of pesos, the shitcoin of shitcoin, warns about a lack of underlying assets of cryptocurrencies.

The text arrived with the popular meme of the three Spider-men pointing out to each other that users in the network usually put on circulation to highlight the similarity between many people, things, or even problems.

By: Jenson Nuñez

Argentina is the perfect environment for cryptocurrencies to make an impact, says Buterin. He highlighted the large number of Ethereum projects that emerged in the South American country.

Vitalik Buterin, co-creator of Ethereum, took the stage of La Usina del Arte in the capital of Argentina on December 21. The audience made up of about a thousand people (mostly male under-35), received the Russian-Canadian developer standing up and with a standing ovation worthy of a rockstar.

Many comments that the assistants made referred mainly to Buterin’s clothing; nothing

weird. It is merely the uniform that accompanied him during all his days in Argentina: flip-flops, socks, long pants, and a T-shirt (shirt, flannel).

Democracy Earth founder Santiago Siri and journalist Olivia Goldschmidt joined the Etherean community leader. They were in charge of asking questions and transmitting queries people made via Twitter.

The Vitalik Inflation Tour 2021

The opening words came from Siri, who introduced the so-called Vitalik Inflation Tour 2021 (Vitalik’s inflation tour) and then began the conversation. Among the topics covered for about an hour and a half were Argentina, Ethereum, youth, leadership, scalability and mining, and proof of stake.

Regarding Argentina, a country that Vitalik has visited since last week and in which a mania about the chairman got unleashed, the 27-year-old developer pronounced several qualifiers favorable to its population. He said that Argentina has not a capable state, but more capable people.

He explained that, according to him, this is “the perfect environment for a blockchain to have a great impact.” He referred to the inflation of the Argentine peso and the fact that people understand that their national currency is worthless and less and are looking for ways to protect their heritage.

Accepting Cryptocurrencies as a Means of Payment

“[Argentines] have to constantly work with money, constantly figure out how to avoid being hit by inflation and juggle between different assets,” Buterin described. He added that this situation leads people to be open to new ideas, such as accepting cryptocurrencies as a means of payment.

Buterin also highlighted the large volume of projects with cryptocurrencies that emerged in the South American country. “It’s as if everyone left here,” he joked, adding that, in his opinion, “there is an astonishing amount of talent” in Argentina.

He specifically mentioned Proof of Humanity (PoH), in which he participates, among others, in his interlocutor, Santiago Siri. Various media outlets detail that project associated Ethereum addresses with verified human identities. In addition, those who complete the registration are granted a basic income in the UBI token.

 Buterin has shown support for PoH; He even validated his identity on that platform and burned several of those tokens, which caused an immediate increase in their price.

By: Jenson Nuñez

Confidence in a post-pandemic future contributed to the reactivation of all economic sectors in the United States in 2021. The market capitalization of cryptocurrencies has grown by more than 61% this year.

There could be a reaffirmation of the narrative of Bitcoin as the digital gold in 2022. The balance sheet of the US Federal Reserve will experience dramatic growth, which will lead to injecting liquidity into the economy.

The COVID-19 pandemic caused 2020 to be one of the most volatile years in the history of the economy. That situation negatively impacted the conditions for job creation and supply chains, giving way to fiscal policies due to the growing inflation. However, confidence in a post-pandemic future has fueled the recovery in all sectors of the economy this year.

The difference in yields on 10-year and 2-year Treasury bonds (T10Y2Y) allows predicting recessions or sharp downturns in the economy. Shortly after that indicator has turned negative, there have been recessions.

The trend rose throughout 2020 but began to decline in March 2021. That indicator is currently at 0.80, above 0.25, which indicates that investors expect future growth.

Quarterly Analysis of the US Economy in 2021

Government aid programs for homes and businesses contributed to economic recovery in the first quarter of 2021, when the GDP grew by 6.4%. Consumer sentiment rose to 85%, the average recorded in the last 20 years.

The latest round of direct aid delivery led consumer spending to rise by 10.7% in the first quarter. That quadrupled the 2.7% increase registered in the last quarter of 2020, when the unemployment rate stabilized at 6.2%.

Compared to the fourth quarter of 2020, the market capitalization and trading volumes of cryptocurrencies increased by 240% and 155%, respectively. The market capitalization went from USD 760 billion to USD 1.9 trillion at the end of the first quarter of 2021.

The GDP grew in the second quarter, the unemployment rate remained at 5.9%, and spending was higher than in the first quarter. However, the market value of cryptocurrencies declined in the April-June period, going from USD 1.9 trillion to USD 1.4 trillion, representing a decrease of 26.3%.

The COVID-19 Delta variant affected the main variables of the economy in the third quarter. The GDP grew by only 2%, while consumer spending had decreased significantly, but the unemployment rate dropped to 4.8%. The recovery of cryptocurrencies allowed the market capitalization to return to USD 1.9 trillion, the closing value of the first quarter.

For the last quarter of 2021, analysts expected an increase of 5% in GDP and 7% in consumer spending and a lower unemployment rate of 4.6%. Despite the decline in November and December, the cryptocurrency market has risen to USD 2.26 trillion.

This quarter managed to see an all-time high of USD 3 trillion in the market capitalization of cryptocurrencies in November. Less than two weeks before the end of 2021, the market capitalization of cryptocurrencies has grown 61.4%, according to CoinMarketCap.

Bitcoin (BTC) is currently trading at around USD 48,774 and has accumulated a 1% loss in the last 24 hours. Its daily trading is above USD 21.7 billion, and its market capitalization is about USD 922 billion, according to CoinGecko. The former CEO of Twitter, Jack Dorsey, recently said that the pioneering cryptocurrency would replace fiat money.

By Alexander Salazar