PoS

Tron’s Steemit Acquisition Exposes Delegated-Proof-of-Stake Centralization

03/03/2020 by Idelto Editor

Tron's Acquisition of Steemit Exposes Delegated-Proof-of-Stake Centralization

The Steemit community is mired in controversy over the recent Tron takeover that managed to change the Steem blockchain’s governance. Steem witnesses attempted to soft fork the blockchain on February 24 to remove the powerful voting power Tron and Steemit hold. However, the soft fork wasn’t able to prevent the Tron takeover and Steemit community members are blaming Tron founder Justin Sun and three popular exchanges for gaming the outcome.

Also Read: Ethereum vs Tron: Comparing Data, Defi and Stablecoins from Both Chains After Viral Tweet

Tron’s Steemit Takeover Becomes Contentious

Steemit has always claimed to be a “decentralized blogging platform” but its decentralization and use of delegated-proof-of-stake (DPoS) have been controversial. Centralization concerns heightened after Steemit was sold to Tron. On February 14, former Steemit CEO Ned Scott tweeted: “Steemitans and Twitterers, after four beautiful years, I have sold Steemit to [Justin Sun].” Following the Steemit sale, a number of Steemitans were very upset with the decision and believed the acquisition would ruin the project.

The controversy prompted members of the Steemit community to invoke a soft fork that would reduce the voting power of the company Steemit Inc. and the Tron Foundation. However, the soft fork did not go as planned and on Monday, March 2, Steemit community members accused Poloniex, Binance, and Huobi of creating a “hostile takeover.” Reports detail that Steemit and Tron reversed the soft fork by leveraging over 42 million steem power (SP).

Your stake in Steem on centralized exchanges was just used to take over the Steem Blockchain https://t.co/AFn0LvEkUC

— Luke Stokes (@lukestokes) March 2, 2020

The reversal and the move to utilize 42 million SP caught the attention of the entire cryptocurrency community. Tron founder Justin Sun called the group of people who attempted to soft fork the Steemit chain “hackers.” “[Steemit] has successfully defeated the hackers [and] all funds are super SAFU. Steem Network and [the] Steemit community is now stronger than ever since we united [and] solved the difficulties,” Sun wrote. “On February 22, some malicious hackers froze 65 million steem legally owned by Steemit, the core steem developers,” Sun tweeted. “When we found out, the hackers already hijacked steem [and] threatened to nullify the existing steem. We had a difficult choice.”

Following the reversal and the statements from Justin Sun, Ethereum developer Vitalik Buterin commented on the DPOS incident. “Apparently Steem DPOS got taken over by big exchanges voting with depositors’ funds,” Buterin tweeted. “Seems like the first big instance of a “de facto bribe attack” on coin voting (the bribe being [exchanges] giving [holders] convenience and taking their votes).” The incident has started a debate about the vulnerabilities of the DPoS system and proof-of-stake systems in general. “The exact same thing occurs on EOS,” Youtube show host Colin Talks Crypto responded to Buterin’s tweet. “Just not as an extreme to an extent. This is why governance is important to nail down in DPOS — so a few huge exchanges don’t own your entire blockchain.”

Should an Exchange Use Customer Stakes to Vote on Governance?

Bitcoin Core Developer Jorge Timón also replied to Buterin’s criticism on Twitter and said that “DPOS is plutocracy voting.” “Not your keys, not your coins — This is not an attack, this is simply how [DPOS] works. [POW] is superior to both DPOS and ‘regular’ POS. POS is simply a bad replacement for [proof-of-work] — Eventually, you’ll have to accept this fact,” Timón stressed. Meanwhile, other crypto community members on social media discussed whether it was right to use customer stakes held on an exchange to leverage governance rights with a blockchain voting scheme. “The depositor may have a “balance” at the exchange, but do not have rights on that blockchain,” Bitcoin proponent Bob Loukas wrote on Twitter. Loukas added:

They exchanged that right for a paper guarantee, all for the purpose of speculation. If they had cared about the stake, they would have demanded that within their paper exchange.

“Na man, fork me? No, fork you.” #tron #steemit @justinsuntron pic.twitter.com/PEdPeE82Tj

— John Paul Faour (@olejpf) March 3, 2020

Steem Power Withdrawal Restrictions, Steem Developers Remove Apps, and Leaders Abruptly Resign

Despite the community outrage, what’s done is done and a recent blog post written by “the Tron folks and Steemit Inc. together” notes that the attempted soft fork was “maliciously structured.” “For the next 4-6 weeks, the Steemit team will be using the voting rights to resume the order of the community while having an open channel for meeting community members and Witnesses,” the post explains. The announcement also highlighted that Tron and Steemit wholeheartedly believe the soft fork attempt was “criminal and illegal.” “After the 4-6 weeks period, the Steemit team will give the governance back to the community when it’s back in order and mutual agreement,” the blog post states.

Members of the Steemit community are also upset because powered-up SP cannot be withdrawn for 13 weeks. Tron and Steemit also stressed that a hard fork would be taking place in order to change the power-down waiting period. The blog post notes it wants the “Steem blockchain running in parallel with Tron” and the team plan on providing more “rewards to witnesses.” In addition to this promise, the blog post claimed Steemit could acquire “more users” thanks to Tron’s “thriving ecosystem” and “active 15 million user community.” The post also added that the Steemit community would notice more development and developers from Tron contributing to the Steem network.

Still, the blog post doesn’t seem to be swaying the greater Steemit community and a few software engineers are removing their Steem apps from the ecosystem. Further, well known Steemitans like Andrew Levine have abruptly resigned from their governance duties.

What do you think about the recent incident with the Tron community and Steemit community? Do you think DPoS, or POS in general, can be gamed easily by exchanges? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images credits: Shutterstock, Archive.org, Steemit, Twitter, Fair Use, Wiki Commons, Steemit and Tron logos,

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Cryptocurrency Payment Gateway Gocrypto Onboards 1,000 Locations Worldwide

02/03/2020 by Idelto Editor

On February 28, Gocrypto CEO Dejan Roljic revealed the payment gateway has officially onboarded 1,000 merchant locations during a recent company update that expanded upon the firm’s growth. Roljic also explained Gocrypto now has several locations in five countries and the company recently started expanding into South America in November 2019. The Latin American expansion means Gocrypto will be open in 13 new markets and the team hopes to onboard as many stores in the region as possible.

Also read: MTV Airs Only the Negative Parts of Crypto Youtuber ‘Ya Girl’ Rachel Siegel’s Bitcoin Analysis

1,000 Locations and International Expansion

The payment gateway Gocrypto has been making strides toward cryptocurrency adoption and this week the firm’s CEO Dejan Roljic announced the team has onboarded 1,000 locations worldwide. News.Bitcoin.com first reported on Gocrypto in June 2018, when the business helped create a “genuine Bitcoin City” within the confines of Slovenia’s largest shopping center.

Slovenia is Gocrypto’s home base and after the launch of Bitcoin City, the company continued to make headway onboarding merchants throughout the country. Last year, news.Bitcoin.com explained that Slovenia has the most BCH-accepting physical locations worldwide and this was fueled by Gocrypto’s efforts. Roljic’s CEO update on Friday not only announced that Gocrypto has captured 1,000 locations worldwide, but the firm has been expanding internationally.

“We entered Croatia in May 2019 and continued our expansion to Switzerland, Hungary and Bulgaria,” Roljic wrote. “Gocrypto is also available for customers in the United Kingdom, Czechia, Slovakia, Romania, and Portugal.”

Roljic further highlighted that Gocrypto is now present in South America and the company recently partnered with Xpay.cash. “[The startup Xpay] is a partner provider of easy crypto payments [and is] successfully growing its presence in Columbia and Venezuela,” Roljic’s update explained. “150 locations strong, they are also planning on expanding to other South American countries.” The Gocrypto CEO said that now that the firm has legal approval in the region, the company plans to “boost these markets with a systematic approach.” Roljic stated:

Our SWAT mobile sales teams will open up to 13 new markets; in each, the goal is to onboard 20–50 stores to start accepting Gocrypto payments, launch the ambassador program and acquire as many PSPs as possible.

Gocrypto Plans to Upgrade the Merchant Dashboard and Offer New Point-of-Sale Terminals

Additionally, Roljic revealed that a new merchant dashboard is being constructed and soon merchants can become a crypto exchange by leveraging the firm’s hardware point-of-sale (PoS) terminals.

“We are in the final stage of testing our own physical PoS terminals that will enable merchants to buy and sell selected cryptocurrencies as well as to accept crypto payments,” Roljic stressed. Lastly, the firm is also in the midst of attempting to obtain a license for financial services from the central bank. Roljic conceded that the project is “demanding” but will represent “a big step forward in the crypto industry.”

Roljic added that Gocrypto wants to conquer the world, and in the future they can envision every merchant having the ability to become their own exchange by being able to sell digital currencies at the counter. The Slovenia-based firm is also currently talking with companies worldwide that manage “millions of physical merchants” and the firm aims to integrate Gocrypto into their point-of-sale (PoS) or cashier systems.

What do you think about Gocrypto’s expansion and the 1,000 locations the company has onboarded to-date? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Pixabay, Map.Bitcoin.com, Fair Use, and Gocrypto.

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Bitpay Enables Bitcoin Cash Payments at 100,000 Point-of-Sale Devices

13/02/2020 by Idelto Editor

Bitpay Partnership With Poynt Enables Crypto Payments at 100,000 Point-of-Sale Devices

On February 11, the Atlanta-based payment processor Bitpay announced the firm’s recent partnership with the company Poynt. Now retailers will be able to support cryptocurrency payments using point-of-sale devices and crypto users will be able to pay with digital currencies at more than 100,000 Poynt retailers worldwide.

Also Read: Ethereum vs Tron: Comparing Data, Defi and Stablecoins from Both Chains After Viral Tweet

Crypto Payments Available at 100,000 Poynt Retailers

Bitpay has revealed the company is collaborating with the open commerce platform Poynt in order to bolster crypto payments worldwide. On Tuesday, Bitpay announced the integration of Bitpay’s cryptocurrency payments service with Poynt’s Smart Terminal point-of-sale (PoS) devices. “With just the scan of a QR code at checkout, consumers can now pay merchants using Poynt’s devices with the currency of their choice, including bitcoin, bitcoin cash, ethereum, and three dollar-pegged stablecoins,” the firm disclosed. Bitpay already processes over a billion dollars in crypto payments every year and the firm’s CEO and cofounder Stephen Pair is excited about expanding with the new partnership.

“We’re thrilled to team up with Poynt, who’s proven to be a real driver of point of sale innovation,” Pair noted during the announcement. “It’s a massive growth opportunity for Bitpay and an important milestone in our now nine-year mission to make payments faster, more secure and less expensive for people and businesses.”

The Poynt point-of-sale (PoS) smart terminal.

Poynt Believes Crypto Will Help Expand the Firm’s Growth

Poynt is known for building it’s Smart Terminal PoS device that works with an app and can “easily email receipts, refund transactions, and settle with the tap of a button.” Devices have a hybrid MSR/chip reader and the machine supports major NFC/contactless schemes. It also has a front and back camera like a smartphone and connects to WiFi, with optional features like LTE/3G cellular modem support as well. Poynt PoS devices further support audio and they come with a stereo speaker and built-in microphone. The firm thinks expanding payment options to include digital currencies is simply a natural progression.

“Poynt was built on the idea of open commerce,” the company’s founder and CEO Osama Bedier said. “Poynt OS lays the foundation for developers and merchants to collaborate and drive limitless growth. The addition of open-source, decentralized currencies like Bitcoin is a natural fit in our open-commerce environment.”

Bitpay and Poynt’s partnership enables cryptocurrency payments at point-of-sale at 100,000 locations worldwide.

According to Bedier, Poynt recently touched a milestone of nine billion dollars in gross payment volume in a twelve-month period. The open commerce firm believes expanding to crypto payments will keep that trend going forward.

What do you think about Bitpay partnering with Poynt’s open commerce infrastructure? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Poynt, Bitpay, Fair Use, Wiki Commons, and Pixabay.

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Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

26/01/2020 by Idelto Editor

Everybody’s Staking But Who’s Using PoS Blockchains?

The primary use case for staking blockchains is staking. That is their raison d’être, and thousands of cryptocurrency holders have utilized this provision to increase their holdings by earning staking rewards. As the total amount of staked tokens trends towards 80% for some blockchains, however, it raises questions as to what other utility these chains provide.

Also read: The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors

Two Thirds of All Staking Coins Are Locked Up

The total market cap of all Proof of Stake (PoS) coins stands at $12.6 billion, of which $8 billion is locked up in staking wallets. Much of this occurs imperceptibly to cryptocurrency holders due to exchanges managing staking on their behalf. Store tezos on Binance, for example, and you will automatically be eligible for staking rewards. The top five staking networks by market cap have the majority of their circulating supply locked up: Tezos (77%), Cosmos (73%), Decred (51%), Synthetix (81%), and Waves (53%).

Everybody’s Staking But Who’s Using Proof of Stake Blockchains? — The amount of staked coins as a percentage of total issuance has been growing steadily

Just as masternode coins were so-named because running a node was their defining feature, many staking coins now exist primarily to disburse staking rewards. It’s healthy to have coins distributed as widely as possible, and through locking up tokens, holders have a vested interest in seeing the network flourish. If the only users are stakers, however, not only will everyone’s staking rewards be diluted, but the network will wither away after failing to attract the developers, dapp users, and businesses that are its lifeblood.

Build First, Stake Later

Tellingly, the PoS chains that have achieved wide adoption were slow to add staking rewards, preferring to build a community and establish a diverse ecosystem of network participants. Two examples of this are Matic Network and Waves. The former has spent the past year onboarding dapp developers, forging partnerships, and gaining liquidity through multiple exchanges including Whitebit, where matic token-holders can claim lower trading fees and additional bonuses. Matic is now applying the final touches to its staking program which will see validators stake tokens as collateral and become part of the network’s PoS consensus mechanism. A partnership with South Korea’s Coinone exchange will enable users to lock up matic tokens for monthly periods in return for an APR of 30.29%.

Waves, meanwhile, operates Leased Proof of Stake, whereby holders can earn a return through running a full node and generating blocks or by leasing waves tokens to a full node. The current annual reward for staking waves stands at 6.23%, or 3.1% when adjusted for inflation. Like Matic, Waves has more to offer its community than merely staking; recent developments have included interoperable blockchain protocol Gravity Hub, which can communicate with networks such as Waves and Ethereum and serve as an oracle for non-blockchain data.

Waves also has a blockchain games marketplace created in conjunction with The Abyss where digital goods and in-game items can be traded. A strong developer community, complete with hackathons, online courses, and workshops, supports third parties creating and launching dapps using the Waves platform.

How Sustainable Are Staking Rewards?

Crypto networks that offer high staking rewards have no trouble attracting users willing to lock up their tokens to make ‘easy money.’ It is hard to see how staking rewards that run into double-digit percentages are sustainable, however. The rapid increase in the circulating supply dilutes everyone’s holdings, while the lack of features beyond staking deters adoption. Livepeer (LPT), for instance, which has 24-hour volume of just $40K, provides a staking reward of 64.8%, but when inflation adjusted, this drops to 18.8%. Fantom promises 57.7%, adjusted to 33%.

As mining has become commercialized and the days of easy altcoin profits have faded, staking and lending have become the primary forms of passive income. Exchanges that provide staking as a service have obviated the need to spin up a node, and the monthly payouts provide a steady source of revenue. Stakers nevertheless have some tough choices to make. Locking up tokens over an extended period increases the risk of loss when measured in BTC. It’s possible to be up in tokens for the month but down in BTC, rendering the whole exercise pointless from a commercial perspective.

The Future of Blockchains Lies in Staking

Despite empirical evidence that Proof of Work makes for a more robust blockchain, the days of new PoW coins are over. Grin was the last major mineable coin to launch; today it’s all PoS chains entering the market. Stakingrewards.com lists dozens of Proof of Stake coins that are scheduled to launch, ambitiously including Ethereum 2.0, whose launch date is anything but certain. When the new improved ETH blockchain does see the light of day, it’s expected to offer staking rewards of 3.7%. Other staking options scheduled for 2020 include Polkadot (5%), Cardano (3.7%), and Matic (10%). These blockchains promise to solve a range of problems including scalability, fast payments, and interoperability. Their greatest use case, however, is likely to be staking.

Do you think staking rewards of 20% or higher are sustainable? Do you intend to stake any of the PoS coins that will launch this year? Let us know in the comments section below.

Images courtesy of Shutterstock.

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Bitcoin Cash Represents 93% of November’s Crypto Spending in Australia

08/12/2019 by Idelto Editor

News.Bitcoin.com recently reported on web portal Bitcoinbch.com’s in-depth report, which detailed BCH outshining BTC retail spending in Australia by a wide margin during the month of September. The next month, BCH captured 90% of October’s crypto spending in the country. Now the website has published its November report that discloses all the crypto-based expenditures at retail businesses and once again, BCH is “dominating the Australian retail scene.”

Also Read: Bitcoin Cash Captured 90% of October’s Crypto Spending in Australia

October’s Crypto Retail Expenditure in Australia

Bitcoinbch.com’s Hayden Otto has published the third monthly Australian Cryptocurrency Expenditure at Retail Businesses report and bitcoin cash (BCH) usage continues to shine in the region. Otto’s latest report says that October’s numbers derive from “large retail payments” that come from businesses and professionals like “lawyers, accountants, engineers, electricians, and builders.” In order to source the data for October’s report, Bitcoinbch.com used statistics from the underwriting firms Travelbybit (TBB) and Hula (Hockings Underwriting Logistics App).

“The Hula system has expanded and provided valuable BCH visibility on the largely hidden retail peer-to-peer economy in Australia. Surprisingly, less than 20% of the Bitcoin BCH merchants are visible via the Hula data, lending confidence to these Bitcoin Cash retail numbers,” Otto writes. “On the other hand, our source of BTC retail data (and that of other cryptos) is more extensive due to their localisation to a single point-of-sale platform in Australia, the Travelbybit point-of-sale (PoS).”

A few of the highlights from the report note that BCH recorded a “267% month-on-month growth” and bitcoin cash payments accounted for approximately “$51,996.73 of the total $55,725.05 expended during the month.” Otto stresses that while BCH sales are swelling, BTC recorded less than a transaction per day and the Lightning Network (LN) statistics were even worse. Bitcoinbch.com’s expenditure report also emphasized that the “professional sector accounted for a small number of large payments” in October compared to the last two months of data.

Bitcoin Cash Captured 93% of November’s Crypto Spending in Australia

As far as platforms that allow merchants to accept bitcoin cash payments in-store, Otto’s report detailed that Bitcoin.com’s Cash Register PoS shined. The Australian crypto expenditure research underlined:

The Bitcoin Cash platform of choice in Australia is the Bitcoin.com Cash Register App, a simple, effective and very fast point-of-sale system that continues to gain market share from its rivals, recording 93% of expenditure in November up from 90% in the previous month.

The research goes on to say that Australia was the first country to see a large populace of BCH-only acceptance. Because of this, Otto says not only does the region have a high concentration of BCH accepting retailers, the vast majority of these merchants also “walk-the-talk with only a Bitcoin Cash crypto payment option.” Moreover, the report details that in Australia there’s been some BCH development and several of these projects, not immediately visible, are attributing to the expenditure growth. The report concludes that as BCH saw 267% growth and represented 93% of all crypto retail expenditure, Australian fiat turnover saw a measly 0.2% growth last month.

What do you think about the Australian Cryptocurrency Expenditure at Retail Businesses report for November 2019? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Bitcoin.com’s Cash Register, the third monthly Australian Cryptocurrency Expenditure at Retail Businesses report, Pixabay, and Bitcoinbch.com.

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