Bitcoin Core Upgrades to Version 0.20.0; 117 Devs Contributed to the Protocol Changes

The latest Bitcoin core upgrade, 0.20.0, has been released marking the 28th one since the first protocol was rolled out by Satoshi. In the new upgrade, a number of features were removed while others were added in a bid to fix underlying bugs and improve the performance of Bitcoin’s ecosystem. A blog update by Bitcoin Core reads that the release,

“includes new features, various bug fixes and performance improvements, as well as updated translations.”

Tweeting on June 3, the Bitcoin Core team said that this new upgrade is now available for download on its website.

Source; Twitter

According to Jameson Lopp, a BTC veteran, this milestone is a result of a combined effort by 117 people over a period of 6 months. Notably, the contributing number of developers was 102 higher than in the previous upgrade, 0.19.1.

Bitcoin Core 0.20.0 Updates

The new update for Bitcoin’s protocol sets out to make the nodes more stable and efficient. As a result, the developers came up with Autonomous System Numbers to serve as a new configuration in Bitcoin’s IP mapping. While it does guarantee full efficiency in node connectivity, the 117-developer team is optimistic of more responsive BTC nodes going forward.

Another major change is the removal Bitcoin Improvement Proposal (BIP) 61 which had been deployed under the 0.19.0 update. This feature would allow BTC node operators to broadcast ‘reject messages’ to other network participants in the case where a block or transaction is rejected. Ideally, this should help sort out throughput challenges faster but it appears it did not work as expected. Marco Falke, a Bitcoin Core contributor highlighted that,

“[n]odes on the network can not generally be trusted to send valid (“reject”) messages, so this should only ever be used when connected to a trusted node.”

Bitcoin’s open software library, OpenSSL has also been removed in the new core upgrade. London Bitcoin Devs, Michael Folkson, who contributed ‘a little’ in this upgrade has echoed that the OpenSSL was a source of bugs. In fact, this feature began being phased out as early as 0.12.0 with BTC developers favoring secp256k. According to Folkson, the complete elimination of OpenSSL in the 0.20.0 upgrade offers more security and “reduces attack surfaces”.

It is quite noteworthy that there are more underlying changes other than the ones highlighted. Folkson emphasized that,

“more significant things happening below the surface that users won’t see.”

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Author: Edwin Munyui

BitMEX Aims to Achieve ‘Near-Zero Downtime’ with ‘Aggressive’ Hiring After Major Outage

BitMEX has released the postmortem of the downtime it suffered on May 19 ensuring that “at no point during this event were any customer funds at risk,” and that no liquidations occurred while the exchange was offline.

The event resulted in 38,437 cancel-order instructions just 17 minutes before the resuming full functionality of the platform. Also, all the pending and new customer withdrawals were processed within 90 minutes of coming back online.

Working on improvements

As per its report, the exchange’s trading engine server “unexpectedly restarted” because of underlying hardware issues, which took the platform offline. After being recovered partially, it restarted a second time prompting the team to trigger a recovery procedure that utilized a new failover mechanism introduced earlier this year.

The whole ordeal took less than 2 hours while withdrawal wasn’t processed until an hour and a half after the trading resume successfully.

The crypto derivatives platform says it is taking steps to minimize the risk of any downtime which involves making architectural improvements so that the impact of hardware/software failures on the platform is reduced.

They have already replaced the technology behind its primary database that improves recovery times 4x and opens opportunities to scale it 15x over the next few months.

BitMEX is also growing its teams “aggressively” with most of its positions that involve data engineer, developer, analysts, and AML operations managers among others for primarily Hong Kong, Singapore, and San Francisco locations.

Trying to live up to the expectations

BitMEX’s market share has been declining ever since the March sell-off when the crypto derivatives platform reportedly suffered two DoS attacks and the price of bitcoin went down to $3,600 on it and could have crashed to zero, compared to $3,800 on other exchanges.

But still when BitMEX that offers 100x leverage went down, the market felt the effects as Crypto Twitter came alive.

“The burden of being on top. And no guarantee it lasts forever. This is just complacency,” said trader Ledger Status.

While Binance has been capturing its market share, BitMEX’s BTC balance also took a hit and diminished by 32% since then, although exchanges’ bitcoin balance has been on a downtrend on almost all the exchanges.

“The cryptocurrency industry has come a long way in a short amount of time. We know that the expectations on us have risen and we’re working 24/7 to further improve the resiliency of our platform,” said the company which aims to achieve “near zero down-time.”

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Author: AnTy

a16z Analyzes Crypto Price-Innovation Cycle; Appears ‘Chaotic’ But Showing Steady Growth

Popular crypto oriented VC, Andreessen Horowitz (a16z), has released an analysis on the ‘crypto price-innovation cycle’. According to this report, the crypto market moves in cycles alternating between high and low activity. Based on the stats gathered, there have been three cycles since Bitcoin was launched.

The very first market peak was in 2011 followed by 2013 and finally 2017 when BTC rallied to its all-time high. Andreessen Horowitz noted that these cycles are influenced by an underlying order which starts with a surge in Bitcoin’s price. Consequently, the activity on social media spikes together with a general interest leading to more contribution in the crypto space. Startups then join the market resulting to new products which in turn inspire new people.

Notably the Compound annual growth rates (CAGR) for all metrics have consistently increased despite the up and down trends within the cycles.

Source; Andreessen Horowitz

The Three Crypto Market Cycles

As highlighted earlier, Andreessen Horowitz found the crypto market to have lived through three cycles given the above analogy. During the first one (2009-2012), stakeholders were still intrigued on Bitcoin’s value proposition although it didn’t seem to have any practical use. This cycle peaked in 2011 which saw some of the largest wallet providers, miners and exchanges make a debut in the crypto market.

In the second cycle (2012-2016), Bitcoin became known past the tech world. The cycle peaked in 2013 and is characterized by startups joining the crypto industry and the launch of Ethereum blockchain.

As for the final cycle (2016-2019), crypto implications captured the attention of mainstream media. Since BTC rallied in 2017, the space has seen more developers, startups and exciting projects featuring games, finance and payments amongst others.

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Author: Edwin Munyui

Andreessen Horowitz-backed DeFi Exchange, dYdX, Rolls Out BTC-USDC Perpetual Contracts

dYdX, one of the leading Ethereum based DeFi’s, has released its BTC perpetual contracts for trading to the public. This initiative was initially under a private alpha testing phase but will now be fully integrated with Ethereum’s DEX ecosystem. However, the perpetual contracts are not available for U.S investors.

According to an earlier publication in April, the contract is the first of its kind within the dYdX decentralized exchange. Following this launch, the private alpha appears to have been successful hence the bold step to introduce Bitcoin’s liquidity in the form of a perpetual contract. Antonio Juliano, the founder of dYdX, has since told Coindesk in a private message that this is a big milestone in the world of crypto derivatives,

“For the first time, users can trade the most popular financial product in crypto – BTC perpetual contracts – on a decentralized exchange,”

dYdX BTC Perpetual Contracts

Complex financial products seem to spill over for replication in the upcoming crypto market. Today, crypto exchanges have evolved from simple trading to products like spots and futures whose underlying are digital currencies. Perpetual swaps in the dYdX non-custodial exchange will further diversify investors’ options in the crypto derivatives market.

Basically, the assets have no expiry dates like normal future contracts hence the whole idea of ‘perpetuity’. Margin differences in the dYdX BTC perpetual contracts will be settled in USDC, a USD backed stablecoin.

However, the DEX plans on adding more pairs in the near future. Notably, dYdX offers up to 10x leverage on the perpetual contracts as it looks to hit a$10 million daily traded volume by the end of 2020. A post by the firm has echoed that the private alpha already recorded impressive numbers,

“To date, almost $5M has been traded since going into Alpha, with $3M of that coming since Sunday. We are excited to launch our Perpetual Markets to the public, and gather additional feedback from our community.”

With such progress, dYdX could gradually become a threat to big boys like BitMEX and Binance who have long dominated this market. The platform’s decentralized advantage means that individuals get to execute and audit on-chain as opposed to centralized exchanges where such confirmations are not an option. dYdX also said that it will be scaling the scope of its perpetual market in the coming months to feature other prominent cryptocurrencies as well.

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Author: Edwin Munyui

CoinShares Reveals 5 Possible Scenarios Post BTC Halving; Which Outcome Is Likely?

CoinShares, a crypto investment advisory firm released a research report discussing various outcome scenarios of the upcoming Bitcoin block reward halving and its impact on the crypto industry. The halving event has brought back the attention on Bitcoin more than ever as it is evident from Google metrics data showing that the searches for the ‘Bitcoin Halving’ term have risen by 4 times that of pre-2016 halving event. Apart from that many other metrics such as the number of non-zero bitcoin wallets, numbers of new users, have peaked significantly as well showing the mammoth interest that the event has generated.

The pre-halving period has also brought back the trend of price predictions among several trade pundits many of whom believe that post halving Bitcoin price would rise to 5-figure mark. While price prediction in the crypto space has never aged well, that does not seem to deter these analysts from putting their bet on Bitcoin. A majority of the crypto-verse is highly bullish about the outcome, however, there are few others who also believe the halving event won’t have any major impact on BTC price.

CoinShares research on such possible outcomes was published on May 4th where the investment advisory firm’s head of research, Christopher Bendiksen discussed five possible outcomes of the event.

CoinShares Research on Possible Outcomes

1. The Halving Would Cause a Mining Death Spiral:

The first possible outcome of the halving which was considered by CoinShares was the chances of Halving leading to a Mining death spiral, where it was speculated whether the low cost of Bitcoin post halving would force miners to bailout from the Bitcoin game, which in turn would have a catastrophic impact on the network as no miners mean no transaction confirmation which would completely shut the Bitcoin network down.

However, the research found that the likelihood of such an outcome is zero and it is next to impossible that anything of that magnitude would occur.

2. Bitcoin Would Follow Stock-to-Flow and Rise to New Highs:

The second possible outcome post halving could be that the Bitcoin price follows the stock-to-flow chart and reach new highs. Stock-to-flow chart measures the scarcity of an asset and how the supply-demand scenarios play in. Bitcoin with its 21 million limited supply is only behind Gold in terms of scarcity and the upcoming halving event would make it even scarcer than gold.

The research believes there is a high likelihood of Bitcoin following the stock-to-flow chart which predicts its price to reach near $288k by the end of 2024

3. Traders Who Bought the Rumors Would Sell the News:

The third scenario under consideration was that a majority of the traders have jumped in prior to the bitcoin halving event based on rumors of a possible bull run. The Coinshares analysis suggested that although it is hard to analyze this outcome since it would require hard data on what percentage of trades bought in based on the rumors.

However, traders mostly invest based on retail demands, and thus they concluded that the chances of this scenario playing out are highly unlikely and even if traders sell their assets it wouldn’t be on a scale that it would impact bitcoin’s price.

4. The Halving Will Cause Extra Selling Pressure From Miners, Driving Prices Down:

The fourth scenario under consideration was that the block reward halving would cut down the profits of miners and if the prices don’t pick up they might be forced to sell their holdings leading to falling in Bitcoin price.

The Coinshares research analyzed that miners enjoy Bitcoin prices higher than their ROI breakeven mining costs, can help them in saving coins they get in the mining process, which in turn helps the Bitcoin price as well. However, if the Bitcoin price falls below the ROI breakeven line and is less, miners are not only forced to sell their mined coins but also their reserves which could lead to a decline in Bitcoin price.

CoinShares concluded that the chances of this scenario playing out is quite thin and chances of it even occurring would require a few other factors to play in especially scenario three.

5. The Halving Will be a Big Fat Nothing-Burger (At Least Initially):

The final possible scenario that might occur is actually, ‘nothing.’ This scenario suggests that Bitcoin halving would not have any impact on its prices i.e bitcoin would move between 1%-5% on both sides, but nothing out of the blue or headlines worthy would follow the Bitcoin halving event.

This scenario is based on the assumption that the supply-demand dynamics would take some time to kick-in but it would not have any impact right after the halving. CoinShares research suggest that the chances of this scenario playing out is highly likely and has been the case in the past event. Where Bitcoin halving in 2016 did not have any impact on BTC price almost for one and a half years before BTC broke into a bull run by the end of 2017

The study concludes saying,

“In our opinion, the likely outcome of the halving is a positive supply-side impact over the mid- to longer-term. The dual mining shakeout from the recent drop plus the halving has accelerated a reinvestment cycle among the lowest cost miners who have been the last ones to make the switch into the most modern generation of mining gear.”

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Author: James W

Litecoin Core Major Release Builds ‘Functional Testing Framework’ for Privacy & Fungibility

Litecoin has released the latest version of Litecoin Core 0.18.1 and is recommended for everyone to upgrade which comes with new features, performance improvements, and various bug fixes.

This new major version release is supported on the Linux kernel, macOS 10.10+, and Windows 7 and newer. It should also work on most other Unix-like systems but is not as frequently tested on them.

In order to upgrade, you need to shut down the older version. Once it is completely shut down, you have to run the installer on Windows or copy /Applications/Litecoin-Qt on Mac or litecoind/litecoin-qt on Linux.

The issue in this version is with Wallet GUI as such is recommended not to use coin control features with multiple wallets loaded.

As for the notable changes, there have been new RPCs, configuration option changes, and when called to getblocktemplate, it will fail if segwit rule is not specified in relation to mining.

Also, when creating a fee above the default 0.1 LTC, as the feeRate argument is specified in LTC per kilobyte, not litoshi per byte, instead of rounding down the fee, the RPC commands, walletcreatefundedpsbt and fundrawtransaction will now fail.

Furthermore, in about next year, starting with Litecoin Core 0.20, Litecoin Core will default to native segwit addresses (bech32) to provide additional fee savings. If they see enough additional adoption, they will instead default to bech32 receiving addresses in Litecoin Core 0.20.

Mimblewimble Implementation Update

On May 1st, David Burkett, Grin++, and Litecoin developer posted April progress update on the Mimblewimble integration of Litecoin, claiming that a “functional testing framework” has been built.

Burkett has started integrating with the Litecoin codebase, which began with ConnectBlock logic that validates blocks before adding them to the chain, and has mostly completed end-to-end block validation tests.

Back in March, Burkett had predicted that the Mimblewimble would be running on the Litecoin testnet by the end of this summer.

As for Grin++, they have prepared to have the first non-beta version of Grin++.

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Author: AnTy

Will Blockchain Voting Be Used As A Solution In US Congress During COVID-19 Outbreak?

The United States Congress released a staff memo dated April 30th, which suggests that they are considering the use of a blockchain-based voting system to conduct remote voting for upcoming senate elections as the COVID-19 outbreak has made it impossible to conduct the election in the traditional way.

The memo was drafted after the “Roundtable on Continuity of Senate Operations and Remote Voting in Times of Crisis,” hosted by the Permanent Subcommittee on Investigations and chaired by Senator Rob Portman of Ohio.

The staff memo revealed that Congress is looking to use end-to-end encryption along with blockchain to ensure security and privacy of votes. Although the memo did not endorse blockchain directly, the main focus of the topic was on authentication and encryption. The memo did note that “the Senate may consider blockchain.”

The Finer Details of the Memo

The staff memo noted that both chambers of Congress have always met in person to conduct all types of business be it committee hearing, floor deliberation or voting and they have no plans to conduct these critical functions remotely. However, given the critical times that the world is facing, they are looking into encrypted distributed ledger.

The memo discussed that encrypted blockchain can ensure the transmission of vote securely while verifying the correct vote. The memo explained:

“With its encrypted distributed ledger, blockchain can both transmit a vote securely and also verify the correct vote. Some have argued that these attributes make blockchain useful for electronic voting broadly. Blockchain can provide a secure and transparent environment for transactions and a tamper-free electronic record of all the votes. It also reduces the risks of incorrect vote tallies. Moreover, some firms have already begun to deploy blockchain-like technology to help countries, like Estonia, run elections entirely online.”

The memo further also discusses certain risks involved with using blockchain technology, especially the majority control. The memo noted that if majority control of the blockchain falls into the wrong hands, it might be manipulated.

Given the small size of the senate, any remote voting system based on blockchain would be required to set up with utmost care eliminating risks of 51% attack, so that no bad actor can get their hands on the voting chip.

However, this is not the first attempt to use a blockchain-based system for remote voting, prior to this discussion, the blockchain-like system was deployed for Estonia’s 2019 parliamentary elections which saw 44% of the total vote being cast using the system.

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Author: James W

Ripple Reports Zero XRP Sales in 1Q 2020 Through Exchanges, OTC Sales Dropped by 86%

For the second time in a row, Ripple didn’t sell any XRP through exchanges. As per the Q1 2020 report released by Ripple, the company’s XRP sales declined by 86.6% which involved only the institutional direct sales that are done over-the-counter (OTC) to strategic partners.

Total XRP sales were $1.75 million compared to $13.08 million in the previous quarter to focus solely on its OTC sales to “build XRP utility and liquidity in strategic regions including EMEA and Asia.”

ripple-xrp-Sales-Summary
Source: Ripple’s Q1 2020 XRP Markets Report

Total sales as a percentage of total volume had a 99.3% drop QoQ from 8bps to 0.6 bps.

The reported daily volume for XRP increased in Q1 2020 from 4Q19, from $187.34 million to $322.66 million, it was even higher than 3Q19’s $198.10 average daily volume.

Volatility also increased from 3.1% to 6.2% which was higher than BTC’s 5.8% but lower than ETH’s 7.3%.

This past quarter Ripple released 3 billion XRP but used only 300 million and the rest were moved to a new escrow account as usual.

The most success reportedly was seen in Ripple’s On-Demand Liquidity (ODL) where the dollar value transacted increased by more than 294%.

Interestingly, Ripple signed on another partner, a UK-based digital transfer services Azimo to use the digital asset XRP for cross-border payments. Azimo is using ODL to send payments to the Philippines that helped the company save 30% to 50%.

“XRP the preferred digital asset for funds transfer”

The world’s fourth-largest cryptocurrency by market cap, as per Messari is currently trading at $0.224, up from $0.134, the level it dropped to during the March sell-off. This growth was mainly this month as the digital asset jumped nearly 30% in April.

In its Q1 2020 report, Ripple also pointed out how digital assets are seen as safe-haven assets during market turmoil in the financial markets.

But while the Bitcoin and Ethereum networks became overwhelmed during the Black Thursday as investors rushed to transfer digital assets to either sell out their positions, meet margin calls, or take advantage of price disruption, the XRP Ledger (XRPL) “remained stable” in terms of transactions pricing and speed, “making XRP the preferred digital asset for funds transfer.”

In the light of continued uncertainty about the long-term economic extent of this crisis and recession, Ripple expects the market volatility to continue. Also, cryptos will have a “sustained test” regarding whether they perform as a safe haven asset class.

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Author: AnTy

Crypto Futures Trading Volume Hits $2.1T, Spiking 314% in Q1 of 2020: TokenInsight Report

As per a recent report titled “2020 Q1 Cryptocurrency Derivatives, Exchange Industry Report” released by TokenInsight, the crypto derivatives market trading volume spiked to 314% in the 1st quarter of 2020 against the fourth quarter of 2019. The report suggested the futures trading volume in cryptocurrency realized $2.1 trillion.

The report further revealed that the trading volume of derivative market in Q1 of 2020 grew by 8 times when compared to the trading volume of first quarter of 2019. The report included futures trading volume from some of the well-known exchanges like BitMEX, KuMEX, Binance, Binance Futures, Deribit, Bitget, Huobi DMJEX, FTX, Gate.io, BFX.NU, Bitz, and OKEx along with several emerging derivative trading platforms.

The report also found that the average daily trading volumes for derivative products skyrocketed by 274% when compared to Q1 of 2019 and the trading volume peaked at $23.3 billion. The researchers behind the study commented,

“We believe the cryptocurrency futures have already possessed some attributes of market-leading indicators, and spot market participants can refer to futures trading volume for position management.”

Futures Trading Volume Correlation With Spot Trading Volume

The study revealed that the associated factor with futures and spot trading volume saw a significant drop and came down to 0.31 when compared to 0.76 registered in the 4th quarter of 2019. Researchers believe that the declined associated factor suggested that the futures trading market participant may have been acting independently of the spot trading market.

The research paper also suggested that when there is a spike in the futures trading volume the spot trading register significant fluctuation. The report explained,

“At this time, investors need to adjust their positions. Besides, in the market downturn, only when the future volume finally shrinks, the market may experience a meaningful rebound.”

Binance Emerges as the Biggest Player in the Futures Market

Binance, the leading crypto exchange by market volume has spread its operational portfolio significantly over the past year and its futures trading platform has emerged as the largest player in the space. Even during the recent market crash on March 12th which is now infamously known as the black Thursday crash saw Binance Futures emerge as #1 amid the sell-off spree.

The Black Thursday crash saw Binance Futures register daily trading volume at a whopping $2.8 billion.which was more than that of major players like BitMEX which registered $2.1 billion in daily trading volume and Huobi with $2.46 billion.

Binance has always maintained a lead in terms of trading volume and even during these troubled times, in the first quarter of 2020, Binance registered its all-time high trading volume which the firm revealed during its token burn event.

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Author: James W

Facebook’s Calibra Releases ‘Twins’ A New Method For Byzantine Fault Tolerance (BFT) Testing

Facebook’s Calibra team has recently released a new research paper with a different process for Byzantine fault tolerance (BFT) testing called “Twins.” The new methodology invented by the Calibra team is believed to be a lightweight method of BFT implementation. The research paper also highlighted that despite extensive study towards BFT systems for over two decades, there aren’t any principal strategies for testing BFT implementations.

The new methodology invented by Calibra runs two instances of the same node with the same identity to mimic Byzantine behavior. The research paper also noted that its Twins methodology allows the operator to create systematic Byzantine attack scenarios, scale them under control, and then look for desired protocol properties.

What is Byzantine Fault Tolerance?

Byzantine Fault Tolerance is a concept that was derived from an academic paper from 1982 published by Leslie Lamport, Robert Shostak, and Marshall Pease. It is a metaphor derived from a scenario where a group of Byzantine Generals have surrounded a castle and are ready to attack. In order to successfully execute the attack, each one of them must carry out simultaneously, however, there is a traitor amongst them which makes it difficult for them to execute the attack in a union.

In the case of a blockchain network, the Byzantine Fault refers to a situation where all the players in the network are trying to coordinate among themselves to nullify the risk of malevolent parties trying to pass wrong info as in inaccurate data to disrupt the network. Bitcoin overcomes this issue through its POW mining consensus, where numerous miners input their computational power simultaneously to mine the next block.

Calibra’s BFT implementation Twins emulate several attacks on the BFT protocols and the research paper also claimed that the BFT attacks which took the community almost two decades would be possible to detect in a matter of few minutes using Twins. David Marcus, the co-creator of Calibra noted,

While Twins methodology is capable of finding several Byzantine seniors, at the same time some Byzantine behavior is not detectable by the new methodology including those which do not include complete divulgence of an unusual past.

Facebook’s Libra Project Make Changes to their White Paper Again

Facebook’s nascent crypto project Libra has been in hot waters ever since its announcement last year. The whitepaper and working model of the digital currency did not impress regulators who believed Libra would disrupt the financial sovereignty of the government and the idea of a stablecoin backed by multiple fiat currencies really irked them.

Since the announcement, the Libra project has made several amendments to the whitepaper, the most recent one being a couple of weeks back where instead of launching one stablecoin backed by multiple fiats, now they are planning to launch multiple stablecoins for different markets. However, despite these changes, the regulators seemed unhappy and pointed out that these changes were not enough as they did not address the faults pointed out by them in the first place.

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Author: Rebecca Asseh