Bitcoin Price Watch: Currency Sits at $7,400

Bitcoin has experienced another price drop over the past 24 hours and is now sitting at just over $7,400. While the price falls have been small over the last two days (about $100 each), bitcoin remains on shaky ground, and the bears have not yet given up

Op Ed: The Benefits of Incentivizing Node Operators in Public Blockchains

Op Ed: The Benefits of Incentivizing Node Operators in Public Blockchains

The cryptocurrency industry has seen tremendous growth this year, with a 3,363 percent increase in market capitalization and a 216 percent increase in cryptocurrency and asset exchanges. While this is certainly promising, it foreshadows a unique scalability problem. At present, most crypto companies are almost entirely dependent on the charity of “nodes” to establish and enforce the rules of their platform — all with little or no incentive to do so.

For years, this has been the industry standard, and, so long as the system isn’t overwhelmed, it holds up. However, with the recent surge of activity surrounding cryptocurrency, the time and energy required to validate each transaction is becoming more and more time-consuming. With expanding size and scale, the question becomes, is it worthwhile to operate a node in today’s digital climate?

Traditional node operators harness the power of everyday computers to run an overlaying security protocol that polices the blockchain. If a transaction violates the consensus algorithm, it’s immediately flagged and removed. As more nodes enter the system, the more secure the governance layer becomes, increasing efficiencies and fortifying trust. However, as demand increases, so too does the pool of transactions that need to be verified, which ultimately raises the resource burden for node operators — discouraging participation.

Now, if these nodes were incentivized for their participation, crypto companies would be able to entice larger quantities of node operators. Such incentives can take a variety of forms. First and foremost, companies can implement a donation pool in the blockchain, where members are required to pay a small participation fee that will be distributed through a smart contract to node operators. Imagine this as a “price of entry” for blockchain exchanges, where participants in the community pay for the efficiencies and securities that would have been provided for free.

Another possibility is to incentivize nodes with a portion of the mining reward. Here, each node operator receives a predetermined cut of the overall mining return assuming that they meet specific criteria per pay period. This process carries a number of advantages. Unlike donation pools, which are largely contingent upon the number of paying participants in the space, mining incentives are more dependable, maintaining blockchain functionality regardless of how many actors are engaged with the system.

Cryptocurrencies like Dash and ZenCash that have put into place systems that incentivize node operators have seen their networks grow exponentially as a result. By providing a percentage of the mining reward to node operators, in the span of mere months, these cryptocurrencies have seen the number of operators grow in size by hundreds and even thousands. These operators, in turn, have worked to ensure consistency and improved usability in the end-user experience, opening the possibility for creating dApps, smart contracts and other services on top of the network.

In the pursuit of true decentralization, industry experts must start thinking critically about the role that node operators should — and will — play in the future of the industry. To transform short-term gains into long-term successes, it will be increasingly important for crypto companies to bring their platforms to scale, and step one will be to incentivize, instead of expect, node operators to keep the community afloat. Simply stated, with cryptocurrency, we are on the precipice of a new era of innovation, and as the industry grows, we must be prepared to grow with it.

This is a guest post by by Rob Viglione, co-founder of ZenCash. Views expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Media.



This article originally appeared on Bitcoin Magazine.

Bitcoin Price Drop From $20,000 Likely Due to Market Manipulation: Traders

Since December 17, the bitcoin price has been on a continuous decline, falling from $19,900 to $5,980 at its yearly low. While the bitcoin price has seen two mid-term recoveries and corrective rallies, both failed to test two major support levels at $12,000 and $10,000. Market Manipulation Theory Recently, a group of cryptocurrency researchers and

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The Declaration of Currency Independence: A Team McAfee Project

The Declaration of Currency Independence

On Friday, May 25th, 2018 Team McAfee published the Declaration of Currency Independence which is a pledge of solidarity to what many would say are the core principles of the cryptocurrency movement. Although I do not speak for the authors, I was given an advanced copy prior to the mass distribution and have direct contact with some of those inside Team McAfee and can speak to the document’s authenticity and altruistic intentions. Under the leadership of the famous cryptocurrency evangelist John McAfee, Team McAfee is requesting readership of and signatories to this declaration. The promise of cryptocurrency is ...

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Bittrex Review: A Secure and Efficient Crypto Exchange

bittrex review

Cryptocurrency and exchanges go hand in hand. In fact, we need exchanges to trade our currencies. That’s why, if you’re looking to start buying cryptocurrency, you will have to do some research on the various exchanges available to the masses. Coinbase may be thought of as one of the more popular options, but there are other crypto exchanges out there. For instance, meet Bittrex. This is a crypto exchange that has been operating since 2014, and below is our comprehensive review on Bittrex! 

Bittrex Review 

Founded in 2014, and headquartered in Nevada, Bittrex was launched by ...

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BitShares Review

BitShares Review

While it’s true that centralized exchanges have their benefits, such as being easy to use and easy to access, these exchanges also have security risks. This is why decentralized exchanges are spiking in popularity. That said, even though decentralized exchanges are becoming increasingly more popular with every passing day, individuals are still required to do a reasonable amount of research before selecting a crypto trading platform. 

One example of a decentralized exchange is Bitshares. Below is a comprehensive review of the trading platform.

BitShares Review

Launched in the summer of 2014, BitShares is a ...

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Proof of Work Coins on High Alert Following Spate of 51% Attacks

Proof of Work Coins on High Alert Following Spate of 51% Attacks

First it happened to verge. $1.8m of cryptocurrency swiped in a matter of hours. Then to bitcoin gold, plundered in an $18m double spend attack. Then to verge again, this time to the tune of $1.7 million. Along the way, monacoin is also believed to have been hit. Someone is methodically working their way through Proof of Work coins, controlling their hashrate, and then launching 51% attacks. Other PoW teams are now on high alert for signs that their coin could be next.

Also read: Caspian Partners With Bitmex to Offer All-In-One Portfolio Services

Following a Spate of Attacks, PoW Teams Batten Down the Hatches

Verge Struck By Second PoW Attack in as Many Months51% attacks, in which a malevolent miner controls the majority of the network hashrate and then uses it to force through fraudulent transactions, are commonly discussed but rarely encountered. That all changed on April 4 when verge was hit by a 51% attack. At the time, the incident was put down to the general fog of incompetence that surrounds verge; the exploit was quickly patched and everyone moved on. Then, just over a month later, verge was hit again along with bitcoin gold and possibly monacoin too. The spate of attacks has caused a crisis of confidence in Proof of Work coins and forced their development teams on the defensive.

Although called a 51% attack, in reality it’s often possible to control the network with a much lower hashrate. Because verge uses five different hashing algorithms, for example, the attacker was able to reduce the mining difficulty for just one algorithm and focus all their firepower on that, armed with just one fifth of the hashpower they would otherwise have needed. The second time around, they modified their attack slightly and targeted verge with a dual blast using two different algorithms. Bitcoin gold, meanwhile, was targeted due to its equihash algorithm, the same one used by such coins as zcash and komodo.

Proof of Work Coins on High Alert Following Spate of 51% Attacks

The Cost of Staging a 51% Attack

Following the run of 51% attacks, teams have rushed out updates to reassure the community that their coin is safe, and to deter would-be attackers. The cost of attacking ethereum classic has been estimated at $70m, for example, and estimates have been made for doing the same with the top 10 PoW coins. BTC is priced at $2.2 billion to attack, whereas zcash comes in at $87m. In his blog post, Husam Abboud claims that “If a zCash miner with +8% of Nethash [switches] to mine Bitcoin Gold, he is +51% BTG nethash, that brings the cost of 51% attack on BTG to 580 ZEC/day ~$200k”.

Because bitcoin gold has a much lower hashrate than coins such as zcash, it is a far easier target to pick off. Now that the feasibility of double spending a recognized PoW coin has been proven, aspiring attackers are calculating the costs of renting hashing power from a provider such as Nicehash and using it to take over a target of their choosing. This is one of the dangers with an altcoin using an existing algorithm: it’s easy for an attacker to switch from mining one to another at the flick of a switch, leaving low hashrate PoW coins vulnerable to hostile takeover without warning.

Proof of Work Coins on High Alert Following Spate of 51% Attacks

There’s a Storm Brewing

PoW teams are hitting back, and have enacted various measures to thwart future attacks. On request, Binance has upped the number of confirmations required to deposit equihash-based coins onto the exchange. The more confirmations that are required, in theory, the more likelihood there is of detecting and thwarting a 51% attack. Maidsafe, meanwhile, has proposed a new consensus mechanism called PARSEC, though some believe it may be vulnerable to other threats such as Sybil attacks, which are a recurring theme with staking algorithms.

Proof of Work Coins on High Alert Following Spate of 51% Attacks

For the coins that are committed to remaining with Proof of Work, most of which descended from Bitcoin at some point in time, it’s a case of remaining on high alert for possible signs of foul play. One PoW altcoin team has set up a script to constantly monitor their hashrate. In the event of a spike of over 10%, they will be automatically notified. Should the newly added hashrate emanate from an unknown pool, or be in danger of tipping an existing pool over 50%, they have a large quantity BTC on standby with Nicehash ready to purchase their own firepower to counter the attack. It’s a high stakes game and PoW teams can’t leave anything to chance. No one wants to be the next bitcoin gold.

Do you think the spate of 51% attacks is over for now, or is there more trouble ahead? Let us know in the comments section below.


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ICO PR Stunt Turns Tragic after Guide Dies Scaling Mt. Everest

A promotional stunt for a Ukranian startup’s upcoming initial coin offering (ICO) turned tragic after a sherpa reportedly died while helping a group of climbers hide a cryptocurrency wallet at the summit of Mt. Everest. According to FT Alphaville, social networking startup ASKfm sponsored a promotion to hide a Ledger wallet containing 500,000 ASKfm tokens … Continued

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ClearCare Launches Home Connect API for Home Care Solutions

ClearCare, home care technology platform provider, announced the Home Connect API. The API enables home care providers to connect to health plans, hospitals, doctors, and other players in the healthcare ecosystem. By seamlessly connecting home care agencies with the applicable medical, billing, or insurance firm, ClearCare hopes to increase the affordability and accessibility of home care.