Is The Lightning Network Becoming More Centralized? 10% Of Nodes Hold 80% Bitcoin

The Lightning Network has been touted as the possible solution for the Bitcoin scalability concerns. However, various researches have indicated that there is a small percentage of nodes that handle most of the funds in the network. Is the decentralized finance product becoming more centralized?

The widespread adoption of the Bitcoin has now come with the scalability of the technology the BTC is built on. With reports indicating that the Bitcoin has the ability to process only a specific number of transactions per second proportional to the size of a block and its release frequency.

The Bitcoin Lightning Network (LN) has been touted as the solution to the scalability concerns. It is a “Layer 2” protocol that operates on top of Blockchain-based cryptocurrencies. An attempt to create a payment platform that overlaps over a cryptocurrency such as Bitcoin affording users cheaper and faster transactions.

A research paper points out that there is unequal distribution of wealth in the Lightning Network with some nodes holding most of the funds. Notably 10% of the nodes are controlling 80% of the funds in the Network. This exposes the vulnerability as they cannot afford to lose the nodes as they are too essential to operations.

“As only about 10% (50%) of the nodes hold 80% (99%) of the bitcoins at stake in the BLN… Removing hubs leads to the collapse of the network into many components… suggesting that this network may be a target for the so-called split attacks.”

This could be solved by lowering the barriers which may incentivize individuals such as hobbyists to take up running routing nodes. Meaning they could setup infrastructure at reduced costs as Christian Decker lightning engineer at bitcoin tech startup Blockstream explained.

After detailed analysis by researchers on the evolution of the global nodes that carry out transactions in different geographical locations they were able to determine the various nodes transactions pass through.

The end nodes are mostly passive as they just await to send and receive. However, it was the center (routing) nodes that picked up the slack by directing transactions throughout the network. This has resulted to some of them overcharging a little for their services.

In a report by Hebrew University researchers demonstrated how to exploit vulnerabilities and carry out a congestion attack that would render some routes locked for up to days. The results were damning as they proved they could effectively lock up most of lightning’s liquidity causing instability to the network.

Mr. Decker was not worried as he explained that criticizing their model could only lead to progress.

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Author: Lujan Odera

Tron Launches A New TIP While BTFS Prepares to Deliver Next-Gen Decentralized Storage

  • Sprinkle of good news: TPS to add new features to TVM, number of accounts on Tron Network exceed 4.7 million, partnership with Steemit, and BTFS mainnet launch
  • Deluge of bad news: Community upset Justin Sun gets involved in SR election and Tron-based $300 million USDT migrating back to Ethereum

A new TRON Improvement Proposal (TIP) number 32 has been launched on Friday, announced Tron CEO Justin Sun on Twitter.

If approved, this proposal will introduce three new features in Tron Virtual Machine (TVM). These features will include support for parallel signature verification, multiple signature verification, and judging whether the address is the contract address. Justin Sun said,

“After the proposal is approved, it will further enrich the application scenarios of smart contracts.”

Sprinkle of Good News

While a new proposal has been put forward to add more functionality to TVM, the total number of accounts on Tron Network surpassed 4.7 million, as per Tron Scan.

With the total number of accounts now reached 4,713,075, “the TRON ecosystem is growing at a steady pace,” and welcoming more developers and users to join their community.

Amidst the ever growing Tron network, it recently also partnered with Steemit and in less than five days, it would launch the BTFS mainnet v1.0.2 in Beta, before which it supported prod upload payment, fixed crash bugs, implemented offline signing javascript sdk, and added documentation on opening static ports on Linux, Mac, and Windows. BitTorrent Inc. wrote.

“With this revolutionary upgrade, BTFS will deliver a next-gen decentralized storage service to countless users.”

Deluge of Bad News

The Tron community has many milestones and partnerships to be excited about, but earlier this week, Sun voting in the Super Representative (SR) election left the community angry.

The election was to be “100 community driven” when the Tron-Ace and Tron-Bet received favoritism from the main guy, Sun himself. The Zion addresses, that is the same one that received 99 billion TRX during the network’s mainnet launch, voted 200 million and 310 million to Tron-Bet and Tron-Ace respectively.

Naturally, the community demanded an explanation as despite the Tron documentation clearly stating that Justin Sun or Tron Foundation, both not to be engaged in community voting, there was involvement.

As we already know, Binance is already the top Tron SR controlling majority, over 50% of the network.

In yet another news, Tether took a shot at Tron by choosing Ethereum over it. The company announced the conversion of $300 million dollars worth of USDT back to the Ethereum network.

USDT first joined Tron last year and the issuance of USDT-TRX grew rapidly to the point of reaching $1 billion. But now, Tether is migrating a third of Tron-based USDT back to Ethereum that already dominates with more than half of $4.6 billion USDT.

For now, there’s no clarity on what prompted this change, neither from Tether or always active Tron’s side.

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Author: AnTy

DeFi App Celsius Partners With Simplex to Integrate Fiat Onramp To Buy Crypto Direct

The UK-based crypto lending firm Celsius Network has just closed a partnership with Simplex so that it can offer in-app crypto purchases, an announcement from February 18 says.

More and more crypto business from all over the world are trying to integrate into their operations the fiat onramp options for their customers to jump into crypto more easily. Simplex is very popular for being a fiat-to-crypto payments provider, especially since it services exchanges like Binance and now it will unlock direct crypto purchases for the users of the Celsius app.

Celsius Clients Will Be Able to Buy BTC and ETH via Credit or Debit Cards

The partnership enables Celsius clients to buy cryptocurrencies such as the Bitcoin (BTC) or the Ether (ETH) just by using their credit or debit cards. Just like other fiat onramps powered by Simplex, the feature supports payments made with via Visa and Mastercard.

Aside from making in-app crypto purchases possible, the partnership will greatly cut the costs of unloading BTC on the Celsius platform. This means transaction fees will be reduced by 50% and the credit or debit card crypto purchases will only charge 3.5%.

The US Dollar Accepted as the Only Currency

When it will be launched, the Celsius platform will accept only the US dollar as a new payment option, says a Celsius spokesperson. More than this, the monthly crypto purchases will have to remain at under $20,000. Simplex was founded back in 2014 as a crypto-enabled payment processor. On February 14, it has unlocked another 15 fiat currencies for Visa and Mastercard payments on Binance.

In the past, Simplex was also providing its services to OKCoin and KuCoin. The Celsius Network reached at the end of 2019 the total crypt loan origination of $4.25 billion.

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Author: Oana Ularu

Mnuchin Tells Congress Tougher Laws Will Be Introduced On Cryptocurrency Payments Soon

  • US Financial Crimes Enforcement Network (FinCEN) is on track to releasing new requirements for the dynamic cryptocurrency space, Steve Mnuchin assured Congress.
  • Authorities need to follow funds to ensure they don’t end up for Money Laundering purposes

During a recent Senate Finance Committee hearing, Steve Mnuchin the U.S. Treasury Secretary called on the FinCEN, a U.S financial regulatory authority, to put in place new cryptocurrencies regulations and guidelines in a bid to reduce the money laundering, illicit trades and activities that cryptocurrencies purportedly enhance.

Mnuchin was in Congress answering Senator Maggie Hassan (D-N.H.), on how the budget increases Treasury plans to bolster monitoring and prosecution of terrorists and criminal rings that funnel funds using crypto. He didn’t give much details but he stated that they had zeroed in on cryptocurrencies, a topic they had given much thought after lengthy discussions with other agencies and watchdogs.

They would want technology to progress with caution by ensuring that digital assets aren’t simply being stashed for criminal enterprises. This would be made possible only if the authorities would be able to follow a trail ensuring that the funds weren’t for money laundering purposes.

“We want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts.”

In a previous White House briefing Mnuchin has argued that the cryptocurrencies in place have been breached by criminal fronts to facilitate illegal dealings such as ransomware, extortion and even in extreme cases Human and Narco trafficking. He added that the regulators wouldn’t stand by as crypto firms facilitate such with mentions of BTC and Libra.

“To be clear: FinCEN will hold any entity that transacts in Bitcoin, Libra, or any other cryptocurrency to its highest standards.”

FinCEN Tough Stance

FinCEN’s top brass has constantly reiterated their position on Crypto regulations. Previously Kenneth Blanco, director FinCEN has offered stern warning to crypto firms and start-ups that don’t follow BSA and AML regulations of dire consequences. The Securities and Exchange Commission(SEC), Commodity Futures Trading Commission (CTFC) and FinCEN recently released a joint press statement where they reminded actors in the crypto space to follow BSA and AML regulations set aside by regulatory authorities.

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Author: Lujan Odera

Bitcoin Network Achieves A New Milestone, Processing Its 500 Millionth Transaction

Bitcoin Network today reached a new milestone of processing 500 million transactions. For the first time since it went live in 2009, the network crossed the threshold of 500 million transactions today.

In Sept. 2017, the network had processed 250 million transactions and since then it has been on an incline. The growth rate as per the data site Satoshi didn’t show any signs of slowing come bear or bull market.

At this rate, in the next two years, we will be celebrating another milestone of crossing 1,000 million transactions on the Bitcoin network. Casa CTO Jameson Lopp commented about the importance of this block:

“Today, as of block 00000000000000000001145bf2e7cb7f04df55feaf3b55d9f6511522bbbf333f at height 616064, Bitcoin surpassed 500 million transactions confirmed on the blockchain.”

Bitcoin enthusiast Rhythm Trader also notes how Bitcoin has kept on going without stopping all this time.

“The 500 millionth transaction was just sent on the Bitcoin Network. No government, bank or third party had to verify these half a billion transactions, nor could they have stopped them if they wanted to. The power of bitcoin.”

On February 3rd, the Bitcoin network also saw $3.5 billion changing hands for the first time since the bull run of 2017. A big chunk of it, $1.7 billion was because of one cryptocurrency exchange Bitfinex which changed addresses.

These highs and milestones are being made irrespective of the Bitcoin price which has been through serious ups and downs during these times.

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Author: AnTy

Zap Lightning Network Wallet Founder Launches Strike, The ‘Best Shot’ of Achieving Mass Adoption

The Lightning Network wallet Zap founder Jack Mallers has announced a new application called Strike that will allow you to make Lightning payments with your debit card or bank account. This means, there will be no wallet, no channels, nodes, swaps or liquidity management anymore.

Built on Olympus, it is “designed to usher in an era of Bitcoin that we believe has the best shot of achieving our mainstream hopes and desires.”

Mallers explains in his Medium post that volatility is the prime issue they had because while it is an opportunity in the market, in a consumer-merchant setting it is a non-starter, making it “extremely” difficult for them to accept bitcoin.

Another big issue is taxes. In the US, bitcoin is taxed as property and spending it a taxable event which even extends to the Lightning Network.

“As a merchant, this was arguably a bigger issue. (…) The tax headache was not worth it, and nearly all merchants opted out of accepting bitcoin.”

Creating a wallet, custody and owning Bitcoin was another as people didn’t want to. With Strike, Mallers says,

“We aren’t just changing how Bitcoin looks, but also how it feels. We’re changing a consumer’s relationship with Bitcoin and Lightning, how it is used, and how it is viewed. We’re opening up new ambitions, new ideas, new possibilities, and a new, mainstream audience.”

This product can be used to buy Bitcoin and sell it and by simply scanning the QR code and clicking pay, used for remittance payments and for internet tipping as well.

But it isn’t a custodial wallet so if you are hacked and your BTC stolen, then no one can do anything about it and you have completely lost them.

The second layer on the Bitcoin network, Lightning Network offers real-time cheap settlements, where Strike aims to make the barrier of entry low but high flexibility and ease of use.

Strike is expected to be live on App Stores in the coming months meanwhile to join the beat list of the project, you can go to strike.zaphq.io.

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Author: AnTy

Harmony To Start Rolling Out ONE Token Swap To Native Blockchain

Holders of Harmony’s ONE token who want to participate in the network activities should prepare to swap their BEP-2 (Binance chain) and ERC-20 (Ethereum) tokens for Harmony’s native blockchain coin.

The announcement that the Harmony’s token swap is ready to start was made on a blog post Thursday and it said:

“The native ONE token of Harmony blockchain will serve as the bridge for building an open platform without sacrificing performance, decentralization, community-based governance, and verifiable security.”

No Way to Conduct the Swap Manually

Different from token swaps that have taken place before, like EOS for example, this swap doesn’t allow users to conduct it manually. This means they’ll have to load their tokens onto an exchange that participates as a Harmony bridge. As soon as the ERC-20 or BEP-2 based tokens are sent to the exchange, the tokens will become available for withdrawal, returning as the ONE coins on the native chain.

Bitmax Is the Only Exchange Operating the Swap at the Moment

After the initial coin offering boom, token swaps were happening everywhere back in 2018. However, things have changed since then, as companies no longer sell cryptocurrency before being functional. A spokesperson from Harmony says Bitmax is the only one with the swap live at the moment. Binance is also supposed to operate the swap until February 3.

The staking service HonestMining and the exchanges Huobi, Kucoin, and Gate.io are expected to enable the swap very soon too. Holders will have the ability to earn more ONE coins through staking and if they have the native version of the coin.

Harmony Integrated Offline Storage Wallets

Harmony has made sure it has integrated a few offline storage wallets like SafePal and Ledger. While some features of it are not live yet, the Harmony network is. Validating nodes is permissioned and expected to open soon. Validators will receive ONE tokens as rewards for keeping the network secure, under the Proof-of-Stake (PoS) system from Harmony.

The company had a 12.6 billion pre-mine of ONE tokens that were issued on Binance and Ethereum chains. It sold 36.9% of them in the launchpad and seed sale. A deadline for the swap hasn’t been given yet.

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Author: Oana Ularu

Bitcoin’s Privacy Update Schnorr/Taproot Reaches a New Milestone

  • One of Bitcoin’s biggest upgrades that will improve the privacy of the network has been published on the GitHub as BIP 340, 341, and 342

One of Bitcoin’s largest to date upgrades that would bring privacy and scalability to the world’s biggest network has passed a new milestone.

Earlier this week, a BitcoinCore contributor, Pieter Wuille published the update Taproot as the Bitcoin Improvement Proposal. A pull request, however, doesn’t mean it is official rather that it is now ready for developers to take a look and for it to get accepted into the ecosystem.

What’s most interesting is that because Bitcoin isn’t controlled by a single entity, major changes like these have to be agreed by everyone in order for it to be implemented.

Bitcoin Core contributor Anthony Towns conducted a review group for developers to assess the BIPs and submit their comments and suggestions. Towns said:

“This is a way to make sure more people understand the proposal as early as possible.”

16 of the developers submitted their feedback and everyone approved of the changes. Jake Chervinky, General Counsel at Compound Finance pointed out:

“Schnorr/Taproot is not only a significant upgrade for Bitcoin, but also an important data point for the ongoing study of Bitcoin’s governance model.”

If the community agrees to Taproot, it could be the biggest change to the world’s leading digital currency since the scaling upgrade Segregated Witness (SegWit) in 2017.

The Schnorr/Taprioot proposal is published on GitHub as BIP 340, 341, and 342. Schnorr is a cryptographic signature scheme to prove the ownership of BTC. It eliminates the need for a multi-signature scheme by combining the signatures of all the transaction inputs into one.

Schnorr signatures do not reveal any information about the inputs which means only the owners of the private keys are capable of unlocking scripts.

In comparison to traditional ECDSA signature, these signatures are easily verifiable and offer a higher degree of flexibility and robustness.

Using Schnorr, Taproot strengthen privacy by adding smart contract-like capabilities to Bitcoin. This technology makes Bitcoin transactions look exactly the same on a blockchain explorer, hence boosting Bitcoin’s privacy.

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Author: AnTy

Block.One’s ‘Voice’ Social Network Has An Open Door Policy To Other Blockchains, Not Just EOS

During its June ICO, Block.one had indicated that its Facebook rivaling social network dubbed Voice, would be launched on the EOS network. However, plans seems to have changed as CoinDesk reports.

Voice has been touted as a different form of social media network which will have in-built crypto and have the capacity to deal with bots since each account will be verified. However, after the announcement in June, the firm went mum but in Dec, it announced that Voice will be launched on Feb. 14.

The announcement came with additional information like a FAQ page found on the Voice website which indicated that a private EOSIO software will be used to run the application. However, the firm was non-committal on whether Voice will be run on EOS saying that other blockchain networks can also be used.

The statement in the FAQ is contrary to a press statement made in June which indicated that the social network would run exclusively on EOS. Still in June, to indicate its commitment to run on EOS, Block.one had reserved a large space of RAM within the mainnet.

Asked to comment on the latest developments, Block.one spokesperson turned down the request.

It is important to understand that Block.one mostly develops software but they are mostly run by other firms. For instance, while it developed EOSIO software, it was launched by a group of organizations from different parts of the world to what is today known as EOS.

Despite the eminent uncertainty, the CEO of EOS Dublin, Sharif Bouktila, remains bullish that Block.one will use the EOSIO for Voice. He explained that if Block.one fails run its apps on the EOS it would raise eyebrows in the industry as who else is better suited to use the blockchain. He said,

“There hasn’t been a decision that I can see but if Block.one didn’t need to use the EOS mainnet for its apps it would raise serious questions as to why and who else should use it.”

EOS has been in the news for the wrong reasons in the recent past due to performance issues. There have been allegations companies running on EOS prioritize speculative profits rather than the technology. The revelation of EIDOS smart contract that paid users for the number of transactions made is just one of the many. These could be the reasons why Block.one is considering other blockchains.

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Author: Joseph Kibe

Liquid Exchange Refunds GRAM Sales To Investors After Telegram Fails To Launch Blockchain

The sale of TON (Telegram Open Network) Gram tokens has just been invalidated by Liquid Exchange. The company sent out a blog post on 10th January 2020 announcing to the investors of this new development. It, however, sent out refunds to all the crypto enthusiasts who had taken part in this unsanctioned auction.

Reports indicate that the main reason why this sale had to be called off was that numerous interruptions were being experienced in the introduction of the TON mainnet. By the time this sale was taking part in the month of July 2019, many, including people working for the exchange were of the belief that the mainnet would have gone live by the end of October 2019.

The SEC Investigation

But this was never to be, as the unveiling was eventually harbored by an unforeseen and unexpected SEC investigation. The investigation by the authorities was focused on the very first offering of these tokens. It’s an investigation that was initiated by reports that seemed to indicate that the sale was, in fact, an unregistered auction of securities.

When launching this particular auction, the exchange had stated that it would issue refunds to all buyers in the event that TON didn’t end up going live by the end of November 2019.

Cointelegraph Reports

Prior to the sale, Cointelegraph had published numerous news reports noting that the token sale being undertaken by Liquid Exchange wasn’t related to Telegram in any way. According to the terms of sale released by Telegram:

“Participants in the original initial coin offering (ICO) are not allowed to resell or swap the tokens in any way until 18 months after the launch of the network.”

But according to the ICO page that had been posted by the Liquid Exchange, it was expected that the tokens would get delivered in several tranches as soon as the TON mainnet was operational.

Many crypto pundits believed that Liquid was acting as the transactional agent for Gram Asia. Unconfirmed reports had stated that Gram Asia was at the time the biggest entity holding the Gram tokens in all of Asia.

But this was denied by a news report published by Cointelegraph which quoted sources at Telegram who had gone on record to state that they had never heard about this company.

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Author: Daniel W