Author: Robert Drage

Robert is a freelance researcher, with a background in information science currently interested in blockchain technology and technical developments in the field.

Categories
Bitcoin Bitcoin Mining Industries

Tesla Powered Megapack Battery Uses 100% Solar Energy to Mine Bitcoin

Tesla, Block, and Blockstream are working together to build an open-source bitcoin mine that operates by only using renewable energy. The project will make all data available and aims to make such “green” mining ventures more viable.

Industry Leaders Team Up for Green Bitcoin Mining

In the Bitcoin (BTC) mining sector, some of the world’s biggest players have started collaborating to build the next generation of mining facilities. According to an announcement from Blockstream and Block Inc (formerly known as Square), both companies will be teaming up with Tesla to build a fully solar-powered bitcoin mining facility in Texas, US.

The facility will be powered by the 3.8 megawatt (MW) Tesla Solar PV array and energy stored in the 12 megawatt-hour (MWh) Megapack. The facility will also be an “open-source” proof-of-concept bitcoin mine operating on 100 per cent renewable energy.

The mine will process an estimated 30 petahashes per second and is anticipated to be complete before the end of this year. The entire project will be conducted to determine the feasibility of a solar-powered mining operation. This project was initiated in mid-2021 when Square invested US$5 million into infrastructure for the solar-powered crypto mine.

Mining Data to be Freely Accessible

By saying the mine will be “open-source” means that regular reports about the economics of the project will be made publicly accessible. Important metrics such as power output, bitcoin mined, and at a later stage, key metrics about the solar performance will be made available.

We figured we would actually make it a reality and public information in a more transparent way that’s usually done for commercial competitiveness reasons so that we can have a more informed discussion […] If we publish the raw data, the raw financial information, it speaks for itself.

Adam Back, Blockstream CEO

The data will be displayed through a 24/7 dashboard accessible through a browser, “providing the industry with a real-world, real-time case study of a zero-emission energy Bitcoin mine”.

People like to debate about the different factors to do with bitcoin mining. We figured, let’s just prove it. Have an open dashboard so people can play along; maybe it can inform other players to participate.

Adam Back, Blockstream CEO

If the project is successful, it will be operable from anywhere without the need for local infrastructure. This makes carbon-free bitcoin mining at scale available to anyone with a few million to spare for the infrastructure.

Advancing Bitcoin and Renewable Energy

Blockstream CEO Adam Back believes that “by collaborating on this full-stack, 100 percent solar-powered bitcoin mining project using solar and storage technology from Tesla, we aim to further accelerate bitcoin’s synergy with renewables”.

The rush for a green bitcoin has seen many companies change and innovate ways to make BTC sustainable. However, a recent report from digital asset management firm CoinShares stated that the network’s contribution to global carbon emissions was “inconsequential”.

Categories
Crypto Exchange Crypto News Hydra Markets Russia

World’s Largest Darknet Market Gets Taken Down

A German/US joint operation has seen Hydra Market – the world’s largest darknet marketplace – shut down. At the same time, the US Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned wallets and a Russian cryptocurrency exchange known for money laundering.

The marketplace offered a variety of services, from allegedly arranging drug transactions to money laundering. OFAC sanctioned more than 100 cryptocurrency addresses related to Hydra, adding them to its Specially Designated Nationals and Blocked Persons (SDN) list.

Darknet market share of total market. Source: Chainalysis

The Russian-based Hydra Market has been the largest darknet market for the past few years, even though it only served Russian-speaking countries. In 2021, Hydra received more than US$1.7 billion worth of cryptocurrency, which accounts for over 75 percent of all darknet market revenue globally.

Money Laundering Staunched by Hydra’s Closure

In fact, since 2020, Hydra received US$645 million worth of cryptocurrency from illicit sources, including other darknet markets, wallets holding stolen funds, ransomware operators, and scammers. Chainalysis believes much of this was due to its widely used money-laundering services.

A vendor listing for a money-laundering service on Hydra.

Russian Crypto Exchange Goes Down With Hydra

Garantex is a sizeable crypto exchange based in Russia and, according to the Chainalysis 2022 Crime Report, is also the largest platform for money laundering in Moscow, having received more than US$10 million from known ransomware strains including NetWalker, Phoenix Cryptolocker, and Conti.

Following the closure of Hydra, OFAC has also sanctioned Garantex, which has been previously investigated for its money-laundering indiscretions.

Illicit Activity a Fraction of Total Transaction Volume

As it stands, illicit activity represents only a small portion of total transaction volume as adoption in the crypto space has soared. The level of criminality on the blockchain has lessened considerably, with illicit transactions accounting for a much smaller segment of the total.

Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to US$15.8 trillion in 2021, up 567 per cent on 2020’s totals. Given the massive increase in adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase in illicit transaction volume was nearly an order of magnitude lower than overall adoption shows that illicit activity may be in decline.

Categories
Axie Infinity Binance Crypto News DeFi GameFi NFTs

Binance Leads $150 Million Round to Reimburse Ronin Attack Victims

Following last month’s record-breaking hack of the Ronin network, responsible for Axie Infinity transactions, Binance has led a funding round to help reimburse affected users.

According to an announcement this week by Vietnamese gaming studio Sky Mavis, a funding round was led by Binance with other venture capital firms – including Animoca Brands, a16z, Dialectic, and Paradigm – to help reimburse funds lost in the US$625 million Axie Infinity hack.

Community to the Rescue

The hack is the biggest decentralised finance (DeFi) hack on record and has done a lot of damage to the Axie Infinity ecosystem Sky Mavis has created. Axie is the best performing blockchain game in the space, having processed 10 times more all-time volume than the next biggest NFT game.

We have seen the tremendous work and growth of the Sky Mavis team since working together on the Axie Infinity project on Binance Launchpad. We strongly believe Sky Mavis will bring a lot of value and growth for the larger industry and we believe it’s necessary to support them as they work hard to resolve the recent incident.

Changpeng “CZ” Zhao, CEO, Binance

Proceeds of the funding round along with funds on the Sky Mavis balance sheet will be used to ensure that all affected users are reimbursed. According to the post, “The Ronin Network bridge will open once it has undergone a security upgrade and several audits, which can take several weeks.”

The post also stated that “the 56,000 ETH compromised from the Axie DAO treasury will remain undercollateralised as Sky Mavis continues to work with law enforcement to recover the funds”.

If the funds are not fully recovered within two years, it has been decided that the Axie DAO will vote on the next steps for the treasury.

Sky Mavis post

Increasing Ronin’s Security

Following the attack, Sky Mavis started the process of implementing rigorous internal security measures to prevent future attacks.

On March 23, Sky Mavis’s Ronin validator nodes and Axie DAO validator nodes were compromised, leading to the record-breaking hack. With the support of Binance, the Ronin chain has now been able to expand its validator set from 5 to 21 – increasing the security of the network – according to Sky Mavis CEO Trung Nguyen.

There have been only a few cases where affected users were reimbursed, especially in a case as large as this. With Axie being the biggest NFT game, major players have come together to help the project get back on its feet. Last year, Rari Capital also reimbursed up to US$25 million after being hacked.

Categories
Crypto News NFTs Stablecoins

Crypto Twitter Baffled by UK Government’s Move to Mint an NFT 

The British Treasury is to create an NFT. Minted by the Royal Mint, the digital asset will stand as a sign of the UK government’s “forward-looking approach” to cryptocurrency businesses and technology.

Notwithstanding this positive move toward crypto, the proposed NFT has garnered some confusion. As revealed in a keynote speech at this week’s Innovate Finance Global Summit, UK Secretary to Treasury John Glen stated that the government will issue an NFT by the northern summer.

Finally, I am announcing today that the Chancellor [Rishi Sunak] has asked the Royal Mint to create a non-fungible token – an NFT … to be issued by the summer, an emblem of the forward-looking approach we are determined to take … and there will be more details available very soon.

John Glen, Economic Secretary to the UK Treasury

The announcement also included the government’s vision for stablecoins and distributed ledger technologies as part of its pro-crypto strategy for the UK’s financial services industry. This bold move is supposed to help position Britain as a “global crypto-asset technology hub”.

The UK is also playing a role in the new OECD crypto-assets tax reporting framework, which aims to enhance tax transparency and hopefully restore consumer confidence in the sector by enabling a level playing field in global tax reporting.

UK Stablecoin Regulation Under Way

The government says it intends to bring new legislation to stablecoins within its regulatory regime. This means that issuers and service providers offering such products in the UK would need to follow standards set by UK authorities. According to Treasury Secretary Glen, “I can confirm that we will be legislating to bring certain stablecoins into our payments framework … creating the conditions for stablecoin issuers and service providers to operate and grow in the UK.”

Sunak says it is his ambition to make the UK a global hub for crypto and blockchain technology through close oversight of the emerging sector. “We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.”

This move by the treasury comes on the heels of Cambridge University launching its institutional crypto research group at the beginning of March.

Crypto Twitter in a Tizz

With levels of inflation in Britain hitting a three-decade high, according to The Guardian, many seem to be wondering what exactly is the purpose of the proposed NFT:

The UK government hasn’t yet provided any additional details – such as what the funds will be used for or how many NFTs will be minted – apart from the suitably vague release date:

UK authorities recently seized US$1.9 million worth of NFTs as part of an elaborate tax vision scheme. This new offering may come at a strange time but the broader move into blockchain tech could be positive for the space.

Categories
Crypto News DeFi Hackers Scams

DeFi Lender ‘Inverse Finance’ Exploited for $15.6 Million

Inverse Finance, a decentralised lending protocol built on Ethereum, has lost over US$15 million in the latest multimillion-dollar DeFi hack of the year. Hackers were able to lean on an exploit and take out massive loans and get away through Tornado Cash.

As spotted by blockchain analytics firm PeckShield, the lending protocol had 4300 ETH stolen:

The hackers targeted Inverse’s Anchor (ANC) money market by artificially manipulating token prices to borrow loans against extremely low collateral:

The hackers were funded with 901 ETH (US$3 million) from Tornado Cash in order to pull off the exploit. By tricking the price oracle into thinking the native INV token was at a much higher price, massive loans were then taken out on Anchor using INV as collateral.

List of stolen crypto. Source: EtherScan

This was done by injecting the funds into several trading pairs on SushiSwap, inflating the price of INV. A representative from PeckShield told CoinDesk that “the attack was high-risk, since the $3 million worth of crypto used to trick the price oracle would have been completely lost if the price of INV [had fallen] back to normal levels before the attacker took out the loans”.

Inverse’s Plan of Action

Inverse has since paused all borrowing and stated in a thread that a plan would be sent to governance to “ensure all wallets impacted by the price manipulation are repaid 100 percent”, adding that it would not mint new INV to repay affected users, which might affect its already falling price.

A bounty has been made available to the hacker but no further updates have been issued. To minimise the risk of future problems like this one, a representative for the protocol added that it is working with Chainlink to build a new INV oracle.

This event only adds to the list of DeFi hacks to have occurred this year. In March, Deus Finance was exploited for US$3 million in a flash loan attack, while in February QiDao also suffered a multimillion-dollar exploit.

Categories
Bitcoin Blockchain Crypto News

MIT Review Says Quantum Computing Not a Threat to Bitcoin

Quantum phenomena are strange things to wrap your head around, with the applications thereof even more so. Some believe that quantum computers will become advanced enough to break current cryptography, endangering trillions of dollars and the blockchains that secure it.

Quantum computing is said to be the next iteration of advanced computation that will completely blow conventional computers out of the water. Due to the nature of the technology, problems can be solved orders of magnitude faster than on a regular computer.

A Looming Quantum Threat?

Theoretically, a quantum computer can ‘easily’ solve the problem of finding the prime factors of large numbers exponentially faster than any classical scheme. This would make these computers exceptionally good at prime factorisation, which is at the heart of breaking the commonly used RSA-based cryptography.

However, building a quantum computer that could crack RSA codes would require many millions, if not billions, of qubits. This means that cracking cryptography is currently way beyond the scope of current computing power.

Quantum Computers Still a Long Way Off

In an article written for Technology Review, Sankar Das Sarma – a condensed matter theory physicist and quantum information expert – states that some of the hype and speculation around this revolutionary technology has “disturbed ” him.

When fully realised, quantum computers stand to change the world in ways we can barely even imagine, but at this stage we are “no closer to having a quantum computer that can solve a problem that anybody cares about. It is akin to trying to make today’s best smartphones using vacuum tubes from the early 1900s,” Das Sarma writes.

Currently, the most advanced quantum computers have dozens of decohering qubits, nothing remotely close to the possible billions required to crack RSA cryptography:

I am all for hope and am a big believer in quantum computing as a potentially disruptive technology, but to claim that it would start producing millions of dollars of profit for real companies selling services or products in the near future is very perplexing to me.

Sankar Das Sarma

Even though the problem lies in the distant future, some projects have already started preparing for the threat quantum computers might pose. In 2020, for example, Australia’s CSIRO and Monash University started working on a “quantum-proof” blockchain protocol.

Categories
Blockchain Cardano Crypto News Institutions Investing

Institutional Demand for Cardano (ADA) Soars 50x in 2022

Since the beginning of the year, Cardano (ADA) has seen a massive 50-fold spike in large transaction volume (LTV) and, according to crypto intelligence firm IntoTheBlock, this represents a significant increase in institutional demand for the decentralised blockchain network.

IntoTheBlock stated in a tweet that such high volumes – last seen in 2018 – indicate “increasing institutional demand”.

The volume of on-chain transactions over US$100k has increased remarkably in 2022 alone. This week, a total of 69.09 billion ADA, worth US$81.4 billion, was moved in these large transactions, representing 99 percent of total on-chain volume, according to the firm.

Large transactions on Cardano: IntoTheBlock

ADA Making Waves on Many Fronts

Cardano’s Total Value Locked (TVL) has also seen a significant increase since the beginning of the year when it started off. The chain’s slow academic approach has seen its token off to a low start but as new functionality is added, the chain becomes more secure and decentralised for users.

ADA TVL. Source: DefiLama

Since smart contracts were enabled on the chain in September 2021, many developers have started building in the ecosystem. Within the first five days of the upgrade, 2,334 smart contracts were deployed on the network.

Since 2021, the average amount of active addresses has also been steadily increasing. As of January 2022, the total addresses with a balance have increased from 3.4 million to 5.05 million, pointing to an exponential increase in usage.

Total ADA addresses. Source: IntoTheBlock

Cardano’s Layer 2 – Hydra also recently started looking into implementing a burning mechanism for the token, but this has caused confusion among some members of the community. With all the progress the chain has made, many are wondering how its price has managed to stagnate:

Categories
Crypto News Fantasy Sports NFTs Sorare Sports

Blockchain Fantasy Football Game ‘Sorare’ Signs Deal with USA Major League Soccer

Sorare has signed yet another football league to its non-fungible token (NFT) fantasy football game. US Major League Soccer (MLS) is the first American league to join the platform for digital football collectibles.

Football leagues across the globe are jumping on the NFT train by enabling a new level of participation and interaction with fans, with the novel technology gaining a lot of traction among sports fans and clubs.

As outlined in an MLS post, Sorare will become the league’s official fantasy football NFT game, adding new players to the fantasy league roster:

MLS Has Youth on its Side

According to Chris Schlosser, MLS senior vice-president of enterprise ventures, “I think [digital] collectibles on their own are a really exciting opportunity, but generally, we’re starting to see more and more in this NFT-as-utility space where people want to use their NFTs to do things, and that’s what Sorare figured out early on.”

MLS is one of the fastest-growing football leagues in the US and has one of the youngest fan bases (average 39.6 years) of any major sports league in the US. According to an article by Forbes, millennials and gen-Zers account for 58 percent of MLS supporters, making NFTs a smart move to get in with the tech-savvy crowd.

US League Joins European Heavyweights

MLS will be joining more than 230 global football leagues, including European heavyweights Bundesliga, Laliga, and Bayern Munich. The platforms’ 350k monthly users across 184 countries will now be able to also collect and use NFTs from the MLS league.

Sorare is a fantasy football game built on the Ethereum (ETH) blockchain. The platform opens doors for users to buy, sell and trade NFTs of their favourite players to build their fantasy team. Scores are tracked based on real-life performances, and players win prizes based on their rank in the league.

The platform’s last funding round in late September 2021 saw it raise US$680 million, boosting its total valuation to US$4.3 billion.

We’re excited to continue our progressive approach to bring NFTs to MLS with industry-leader Sorare. Utilizing the latest technology to provide fans the opportunity to add MLS players and future stars to their personal collections and give them an interactive free-to-play fantasy soccer game made Sorare the obvious choice.

Chris Schlosser, SVP of emerging ventures, Major League Soccer
Categories
Blockchain BNB Crypto News GameFi Gaming Metaverse

BNB Chain to Launch Application-Specific Sidechains to Reduce Network Strain 

BNB Chain is on the move to add application-specific sidechains to the blockchain to help with scalability and streamline data-heavy applications like gaming and the metaverse.

BNB Chain, formerly known as Binance Smart Chain (BSC), the Layer 1 solution developed by Binance, will start including sidechains to improve its scalability. Similar to Polkadot’s (DOT) parachains, these BNB Chain Application Sidechains (BAS) aim to cut costs and increase the speed of transactions for resource-intense applications such as gaming, SocialFi, and the metaverse.

Binance Labs – the core development team of BNB Chain – has yet to reveal all the technical details. However, the possibility has been ruled out that these sidechains become equal layer 1 blockchains, which is the case with parachains.

A BNB Chain spokesperson told The Block:

The BAS is an infrastructure introduced to help developers and node operators build and run their own blockchain as their internal value system for a massive number of users while still maintaining a close connection with BNB Chain.

BNB spokesperson

It’s All About the Use Case

The point of application-specific sidechains is to allow each chain to focus on a specific use case. According to the BNB spokesperson, the sidechains will host BNB-compatible dApps and will be able to operate independently of the mainnet – allowing teams to customise for their own security needs, instead of relying on the mainnet.

Sidechains to Open Doors for Large-Scale Applications

A valid comparison to BAS is Ronin, a sidechain on Ethereum dedicated solely to Axie Infinity’s play-to-earn game. Similarly, the very first BAS testnet will focus on GameFi, according to the BNB spokesperson.

BNB Chain ecosystem coordinator Samy Karim has mentioned previously that “BNB Chain will embrace large-scale applications, including GameFi, SocialFi and the Metaverse. In particular, scaling from one chain to multi-chain, improving scaling solutions and expanding the validator set of BSC from 21 to 41 (with 20 validators functioning as candidate block producers).”

Binance has been making various moves as of late, from acquiring traditional businesses and bringing them into the crypto space to now adding sidechains to facilitate specific use cases. The centralised giant may still have a big role to play in the crypto space.

Categories
Bitcoin Bitcoin Mining Crypto News

Expert Explains Why Bitcoin Won’t Have More Than 21 Million Coins

Bitcoin’s supply has long been a topic of discussion, with many wondering why a limit has been imposed and what will happen when it is eventually reached.

According to Andreas Antonopoulos – a teaching fellow for the M.Sc. Digital Currencies at the University of Nicosia, Cyprus – Bitcoin will never change its fixed supply of 21 million.

Firstly, if Bitcoin core developers and community ever decide to change the supply, it would require a hard fork. Simply put, implementing a hard fork would change the protocol permanently and it would no longer be Bitcoin.

By adding to the supply limit, bitcoins will not endlessly inflate like fiat currency. This ensures the scarcity of bitcoin and helps define it as a store of value. There are also those who believe the Bitcoin model will break down when the supply is reached and that miners will leave if only processing transactions for a few satoshis. Yet that scenario relies on a lot of assumptions about price, hash rate, and its consensus mechanism.

There is No Code Preventing 21 Million Hard Cap

Antonopoulos has also stated that when he went through the Bitcoin source code, he never found a defined limit of 21 million coins, adding that the main reason for implementing the cap was “as a safeguard to prevent bugs”. There’s no mechanism that actually stops the issuance of bitcoin after 21 million is reached.

At the time of writing, Bitcoin’s supply sits at 18.996 million. This means that in a few more blocks, Bitcoin will only be 2 million away from its maximum supply. At this stage institutional investors hold over 30 percent of BTC, with famed Bitcoin evangelist Michael Saylor stating that investing in bitcoin is the best property one can buy.

BTC current supply. Source: blockchain.com

The Evolution of Bitcoin

In December 2021 BTC reached 90 per cent of its total supply mined, though this doesn’t mean the cap has almost been reached. Every four years there is a “halving”, where the mining reward is cut in half. This also cuts in half Bitcoin’s inflation rate and the rate at which new bitcoins enter circulation.

The first 90 per cent took 12 years and it is estimated that the following five per cent will take another four years. By the last halving, Bitcoin could take more than 100 years to be completely issued, with some estimates pointing toward the year 2140.

The progressive reduction in the issuance of bitcoin is how the limit is ultimately reached. No one really knows what will happen to Bitcoin in 2140 when the last bitcoin is mined, however some believe that the consensus mechanism could change to something more advanced.