PoS

Vitalik Buterin Says People Difficulties Not Technical Difficulties Slowed the Ethereum 2.0 Rollout

03/06/2021 by Idelto Editor

The cofounder of Ethereum, Vitalik Buterin, recently discussed the highly anticipated full transition from a proof-of-work (PoW) consensus model to proof-of-stake (PoS) as its replacement. Buterin admitted at Hong Kong’s Startmeup HK 2021 Festival that the transition was taking too long and highlighted that it wasn’t technical problems but “related to people.”

Buterin: ‘If You Build a Team, It Is Important to Know Who You Are Working With

Vitalik Buterin has discussed the anticipated Ethereum 2.0 transition during the Startmeup HK 2021 Festival in Hong Kong this past week. The Ethereum cofounder detailed that he understood the changes were taking a long time and said that it was mostly people deterring the improvements.

“One of the biggest problems I’ve found with our project is not the technical problems, it’s problems related with people,” Buterin said during his interview with Forkast news. “Ethereum is now in a better economic position, but it took us five years to get to where we are now. We have a lot of internal team conflicts in these five years. If you are building a team, it is important to know who you are working with.”

When Buterin was asked about Ethereum 2.0, he said that the developers have been calling it by that name less and less these days.

“We actually call it Ethereum 2.0 a bit less because we want to emphasize that, this isn’t throwing out the existing Ethereum platform and making a totally new one. It’s a much more kind of incremental set of changes,” the programmer remarked.

Scalability and Proof-of-Stake Are Important Says Ethereum Cofounder

Buterin further said that sharding and rollups would greatly improve the scalability of Ethereum by a factor of 50 to 100. “The two of them stack on top of each other so once you have rollups and sharding, Ethereum and things on top of Ethereum will actually be able to have the kind of scalability that the large scale enterprise applications are expecting,” Buterin told the video host.

Buterin then explained that there’s a lot of people building and said that the transition to PoS will be important going forward. Buterin stressed:

There’s a lot of other things that people are building in the Ethereum space, but the blockchain’s ability to handle all the transactions is having a hard time keeping up with the demand, which is exactly why all of these things that we’re working on the technology side with scalability and proof of stake are so important.

During the end of the interview, Buterin’s conversation grazed up on decentralized finance (defi) and the non-fungible token (NFT) space. The Ethereum cofounder expects the defi ecosystem to continue evolving, and he sees some unique applications coming in the future.

“The functionality and programmability that crypto and defi provides could eventually provide the tools to do a lot of much more interesting things,” Buterin noted.

What do you think about Buterin’s statements about people difficulties rather than technical difficulties concerning the Ethereum 2.0 upgrade? Let us know what you think about this subject in the comments section below.

US Convenience Store Chain Sheetz to Accept Cryptocurrencies for Payments

28/05/2021 by Idelto Editor

The American chain of convenience stores and coffee shops, Sheetz, announced on Thursday that the firm would be accepting digital currencies like bitcoin, ether, and dogecoin for payments. The major Mid-Atlantic chain’s executive payments manager says accepting crypto-asset acceptance bolsters Sheetz’s mission to provide customers with the “ultimate one-stop-shop.”

Convenience Store Chain Sheetz Adds Digital Currency Payments, Fuel Pump Crypto Payments to Roll out This Summer

On May 27, Sheetz revealed the company will be accepting crypto payments via the digital payments network Flexa. The company, headquartered in Altoona, Pennsylvania, operates 622 convenience stores and coffee shops in Ohio, Virginia, North Carolina, Pennsylvania, West Virginia, and Maryland.

Sheetz noted in its announcement that the firm aims to “provide customers with the ability to pay for items inside the store or fill up their cars, trucks, and RVs at the pump using digital currencies like bitcoin, ether, litecoin, dogecoin, and more.”

“Above all else, our mission at Sheetz is to continue providing our customers with the ultimate one-stop-shop where they can refuel their car and refresh their body,” Linda Smith, the payments manager for Sheetz said. The Sheetz executive further added:

As a result, we are constantly innovating and exploring new offerings to truly give our customers what they want, when they want it, 24/7/365 — that includes accepting many forms of payment. We’re very excited to be working with Flexa to roll out support for cryptocurrencies and other types of digital assets at our stores.

Sheetz Leverages NCR payment gateway for Crypto Point-of-Sale

According to the announcement, Sheetz will leverage Flexa’s “climate-neutral payments technology” at a number of select cafes and stores at first. Later this summer, the company will roll out crypto payments for the firm’s fuel pumps. Sheetz customers can also tether their “Sheetz Rewardz” loyalty points to Flexa-enabled applications. Further, Sheetz is also leveraging Flexa’s point-of-sale (POS) partner NCR.

“Connecting through the existing POS solution to the NCR payment gateway enables retailers to quickly integrate new solutions making it easy to introduce new innovations enabled by digital currencies,” Tim Vanderham, the chief technology officer of NCR noted during the Sheetz crypto acceptance announcement. “Retailers benefit through increased loyalty, lower transaction fees, and reduced fraud while improving convenience and choice for shoppers,” Vanderham added.

Trevor Filter, the cofounder of the payments firm Flexa, detailed that his company looks forward to helping Sheetz roll out digital asset payments at the fuel pumps.

“Sheetz is one of the most forward-thinking brands in the business and understands their customer base better than anyone else. We’re absolutely elated that Flexa can help them become the first convenience and retail chain to accept digital currencies directly at the pump,” Filter remarked.

What do you think about Sheetz accepting digital currencies like bitcoin, ether, and dogecoin for payments? Let us know what you think about this subject in the comments section below.

As Bitcoin Drops in Value, Proof-of-Stake Tokens That Use Less Energy See Double-Digit Gains

15/05/2021 by Idelto Editor

Crypto markets have been very volatile in recent times and a great number of digital assets have dropped more than 30% in value during the last three days. Although, not all the coins in the crypto economy are doing badly, as coins that do not leverage proof-of-work (PoW) consensus algorithms have actually done well after the recent Tesla controversy. Distributed ledgers that use delegated validation nodes and proof-of-stake (PoS) blockchains have made double-digit gains in recent days.

Green Energy Gains: Cardano, Polkadot, and Polygon Shine

As soon as Elon Musk and Tesla sparked the proof-of-work (PoW) consensus algorithm controversy, a few blockchains that use less energy and alternative consensus algorithms have seen massive gains. For instance, cardano (ADA) tapped an all-time high at $2.37 per unit on Saturday.

ADA is up a whopping 4,362% against the U.S. dollar during the last 12 months. Seven-day stats show ADA has gained 40% and more than 18% during the last 24 hours. The Cardano network leverages proof-of-stake and the project is backed by the Ethereum cofounder Charles Hoskinson.

Meanwhile, XRP, which also does not use a PoW consensus algorithm, hasn’t gained massive percentages but has remained stable during the downturn. Ripple Labs cofounder Chris Larsen recently explained that BTC would lose its dominance if it didn’t address the energy problems just before Elon Musk stirred the controversy.

Polkadot (DOT) is also a proof-of-stake blockchain and it has remained profitable after Musk’s environmental concern statements. The PoS crypto-asset DOT has seen a 40% gain during the last seven days.

Crypto Industry’s First PoS Coin Comes Back to Life

Stellar (XLM) has done well, polygon (MATIC) is up 25% today, and dogecoin (DOGE) markets held steady because Musk recently said he was working with DOGE developers. The biggest gainers on Saturday include kicktoken (KICK +132%), stakenet (XSN +91%), origin sport (ORS +42%), and peercoin (PPC +40%).

In fact, the Peercoin project is the first PoS blockchain to pioneer distributed ledger systems without using massive energy. The token peercoin (PPC) was invoked in 2012 and the website calls it a “green cryptocurrency for a sustainable future.” For years now PPC floundered as an old and mostly forgotten PoS coin but since the recent concerns over PoW, the Peercoin project has made a strong comeback.

What do you think about all the PoS coins that are seeing gains because they don’t leverage PoW? Let us know what you think about this subject in the comments section below.

Ripple’s Chris Larsen Believes Bitcoin Dominance Could Fall Over Proof-of-Work’s Energy Consumption

25/04/2021 by Idelto Editor

Ripple Labs cofounder Chris Larsen has a bone to pick with bitcoin and crypto networks that leverage proof-of-work (PoW). Larsen’s latest write-up explains that the crypto industry needs to reconsider PoW because of the effects on the environment. The Ripple executive believes that other types of consensus algorithms have been effective at being secure while only “using a tiny fraction of the energy.”

Ripple Cofounder Believes Crypto Networks Leveraging Proof-of-Work Should Consider Alternatives

While the global economy struggles after a year of Covid-19 lockdowns and business shutdowns, a great number of people are very interested in tackling climate change. Ripple Labs cofounder Chris Larsen has written a blog post about the environment and why the crypto industry should reconsider leveraging PoW. Larsen believes that if the Bitcoin (BTC) network’s verification model doesn’t get addressed, then at some point, it will lose out to a crypto asset network that does.

“With more individual investors and corporations taking significant bitcoin positions— PoW is heading for levels society will find tough to tolerate as the world works to avert a climate disaster,” Larsen’s blog post says. The Ripple cofounder notes that Bitcoin network participants have been committing to renewable energy and green sources of fuel, but Larsen stresses this is only “part of the solution.”

To Larsen, consensus algorithms that leverage proof-of-stake (PoS) have “proven effective in securing their stored value while using a tiny fraction of the energy.” He understands that a consensus algorithm is necessary to validate transactions and keep the blockchain secure.

Larsen says that the crypto industry has had a decade to review these alternatives and also noted that many PoS and non-PoW coins have captured over 43% of the entire market capitalization.

“Today, non-PoW-based coins (including Ethereum’s anticipated switch) make up 43% of all cryptocurrencies by market cap, and the majority of new cryptocurrencies introduced today choose to eschew PoW. It’s clear which way the trend is moving,” Larsen explains.

The Ripple executive adds:

The XRP Ledger has been using Federated Consensus to validate transactions and secure its public ledger for almost nine years. It’s closed 62+ million ledgers without downtime, uses the energy equivalent of just 50 U.S. homes per year, and is already carbon neutral.

A Myriad of Studies Claim PoW’s Security Strength Is Superior to Federated and PoS Systems

Larsen’s blog post covers a comprehensive look at all the negatives involved with PoW consensus algorithms. However, the blog post doesn’t go over any negative arguments against the security and vulnerabilities associated with PoS and non-PoW coins. There’s a myriad of papers and studies that have been written over the last decade that indicates PoS algorithms have not proven to be as secure as PoW. For instance, Ripple’s Federated Consensus or any type of federated blockchain mechanism has been considered centralized in comparison to networks like BTC.

For instance, blockchain and fintech attorney Nikhil Mehta from Smithamundsen LLC has said that Ripple’s issues with the U.S. Securities and Exchange Commission (SEC) were invoked because the regulator thinks XRP is a security due to centralization.

“The SEC has already indicated that bitcoin and ethereum are not securities due to their decentralized nature, which is a hallmark of blockchain applications”, Mr. Mehta stressed in his paper. “Ripple, on the other hand, is viewed differently by the SEC, which has taken the position that the development and distribution of XRP was conducted by Ripple in a centralized way,” he added.

Further, Larsen’s paper fails to mention the PoS coin networks that have been attacked on various occasions during the last decade. One example is how Tron’s Steemit acquisition exposed vulnerabilities within delegated-proof-of-stake networks. PoW and PoS systems also have different attack costs, and one paper notes that the attack costs for a PoS protocol can be down to zero.

“In fact, if the attacker’s motivation is large enough (and this is common knowledge), he will succeed in his attack at no cost,” the paper highlights.

Ripple’s Chris Larsen addresses in his paper that he wouldn’t consider PoW models outdated, but that maybe these types of networks should be separated from those that provide low energy/low carbon verification systems.

“We should see PoW for what it is — a brilliantly designed technology that is becoming outdated in today’s world,” Larsen’s blog post details. “In no way does this suggest that bitcoin and other PoW cryptos themselves are outdated. Their widespread adoption speaks for itself. But they need to separate themselves from this early technology that is not built for today’s climate needs, and embrace low energy/low carbon alternatives to secure their ledgers,” the executive adds.

Plenty of Papers Have Knocked Bitcoin’s Use of Energy

There has been a myriad of papers, studies, and complaints in regard to PoW’s use of energy. Much of which has been highlighted more often during 2021’s thrilling crypto bull run. However, most of these arguments have been debunked and just recently one bitcoin miner claimed that “Bitcoin is one of the most environment-friendly financial networks.”

Moreover, there are not that many academic papers that have found security loopholes, attacks, or vulnerabilities when it comes to Satoshi Nakamoto’s proof-of-work system. Still, Larsen believes that the energy issues could be the Bitcoin network’s Achilles heel in the future.

“I would argue that such a change is critically important for Bitcoin to remain the world’s dominant cryptocurrency,” Larsen says. “PoW’s current energy demands and carbon footprint are already unsustainably high, with Bitcoin alone consuming an average of 132 TWh a year (equivalent to roughly 12 million U.S. homes), and releasing an estimated 63 million tons of CO2 annually,” the Ripple Labs executive’s paper concludes.

What do you think Chris Larsen’s opinion about PoW networks like Bitcoin and reconsidering PoW consensus? Let us know what you think about this subject in the comments section below.

Crypto Earning vs. Savings Accounts: How You Can Get Up to 17% Annually Holding Digital Assets

20/02/2021 by Idelto Editor

The mainstream has caught a whiff of the gains cryptocurrencies like bitcoin and ethereum have seen, but many people are not aware of the passive income crypto users are getting as well. While financial incumbents are giving people with savings accounts a measly 0.35% to 0.60%, digital currencies can give people 1-17% or even more by leveraging certain tactics.

Crypto Returns That Outpace the Savings Account

You may have heard the term “make your money work for you” in the past, and that’s what savings accounts do if they earn a percentage of interest over time. Certainly, a person can be a bit riskier and invest in stocks and such but with a savings account, the money simply sits there and accrues a return over a period of time. The more money held, the more interest an account will get but these days banks don’t like giving interest. We can see that some of the top banks in the world will only give 0.35% to 0.60% returns according to the best savings account rates on bankrate.com.

Now you can do the same thing with cryptocurrencies and get a much better annual percentage yield (APY). A lot of centralized exchanges offer anywhere between 1-12% in interest for staking or holding a digital asset on the trading platform for a period of time. For instance, on the trading platform Coinbase you can earn 1.25% APY for holding USDC. Coinbase aso offers earning rewards for staking algorand (ALGO), cosmos (ATOM), and tezos (XTZ). These three coins see payout rates either daily (ALGO), every three days (XTZ), and once a week (ATOM).

People can also leverage the exchange Crypto.com, which gives customers up to 2% to 6.5% per annum (PA) for a myriad of cryptocurrencies and up to 12% for holding specific stablecoins. Crypto.com users can choose an interest rate by selecting a term which can either be flexible, one month long, and three months long.

Flexible means you can withdraw and use the cryptocurrencies at any time and you can get 2% for supported crypto assets and 8% for stablecoins. A 30-day term with Crypto.com gets the person 4.5% for the average crypto asset, while stablecoins will get up to 10%. 90-day terms accrue 6.5% for coins like ETH and BTC, and stablecoins like USDC can get up to 12%.

Coinbase and Crypto.com are not the only exchanges or custodial solutions that offer interest bearing accounts. Other interest-bearing products are offered by Blockfi, Linus, Outlet Finance, Gemini, Kraken, Youhodler, Coinloan, Nexo, and the Celsius Network. Each and everyone has different terms and interest rates depending on the crypto asset being held.

Most of these platforms offer higher percentage rates for stablecoins, as fiat-backed crypto assets can get savers larger returns. Of course, custodial solutions are coins held with a third-party, and people opting to gather interest in this fashion should understand there’s a greater risk. A custodial platform could fake reserves, get hacked, or even run the business into the ground by making poor business decisions. As the old adage goes “not your keys, not your coins,” so holding funds on an exchange means you are trusting them.

Leveraging Proof-of-Stake Tokens, Ethereum 2.0 Staking

Individuals who want to make passive income can also do so by leveraging noncustodial platforms and staking concepts. Staking involves using a proof-of-stake (PoS) crypto asset and the person needs a staking wallet to perform this function (validating transactions) in order to obtain stake. Similar to a savings account, staking simply means holding the asset and being rewarded coins for the amount the user holds. The more tokens held while staking, the more interest the user will obtain.

Currently, some people are staking ethereum (ETH) using the new ETH 2.0 staking feature. However, in order to earn ETH this way in a noncustodial fashion, the user needs a total of 32 ETH to participate. Although, the person can earn anywhere between 5% to 17% PA. People can also stake ETH in a custodial manner via exchanges like Kraken and Coinbase. The San Francisco exchange Coinbase gives “between 3-7.5% reward on any ETH that you stake.”

Defi Apps Built on Ethereum, Bitcoin Cash, Polkadot, and Tron

Additionally, besides staking, people who want to acquire yield-bearing returns on their crypto assets can do so by leveraging a decentralized finance (defi) application. There are numerous defi apps like Compound, Aave, Nuo Network, Ddex, and Dydx that can offer a person a return simply by providing liquidity or lending. A good portion of these noncustodial defi apps also provide higher yields these days for stablecoins.

Using these types of apps, people can earn returns based on a period of time with numerous ERC20 tokens like TUSD, LINK, DAI, ETH, WBTC, and USDC. Moreover, there are other blockchains that are moving toward creating defi ecosystems as well including networks like Tron, Bitcoin Cash, EOS, and Polkadot.

One example on the BCH network is the Anyhedge protocol developed by the General Protocols team, a concept that allows people to leverage BCH with the noncustodial application Detoken.

“The first product available on Detoken is the Anyhedge BCH-USD futures contract,” the team detailed when the app first launched. “This is a smart contract which allows users to Hedge or Long their BCH while earning funding premium. Users also retain control of their own money throughout the entire process.”

Make Your Money Work for You

All of the aforementioned platforms and tools offer people a chance to make their money work for them. Individuals can earn a return by doing something they probably were doing before they knew they could earn interest – simply holding. This decentralized form of liquidity will continue to grow, as long as the demand for crypto assets remains strong.

If mass adoption continues to increase, liquidity and potential earnings can only get better over time. Once the mainstream catches on to these massively larger interest rates, instead of the banks’ petty 0.35% to 0.60% rates, it won’t be long before they will want to move their funds into something that gathers real interest over time.

What do you think about all the platforms and services that allow people to make passive income just by storing their crypto assets? Let us know what you think about this subject in the comments section below.