Stanford

A New Academic Paper Describes 3 Attack Methods Against an Ethereum PoS Chain

31/10/2021 by Idelto Editor

Following the Altair upgrade on the Ethereum network, the protocol’s native cryptocurrency reached a new all-time price high. Altair is the next step for the Ethereum’s network’s proof-of-stake (PoS) transition. However, a recently submitted white paper explains that a group of computer scientists from Stanford University and the Ethereum Foundation believe there are three attack vectors “on [a] proof-of-stake Ethereum” blockchain.

The 3 Attacks Against Ethereum Thesis Aims to Describe a Proof-of-Stake Problem Based on Evidence

The Ethereum network currently has a proof-of-work (PoW) consensus mechanism and in time, the protocol plans to fully transition into a proof-of-stake (PoS) network. Recent upgrades like Berlin, London, and Altair have been applied to help smooth the transition toward the PoS goal. Just recently, after Altair was implemented, the price per ether skyrocketed toward a new all-time high (ATH) at $4,467 per unit.

At the same time, network transfer fees have also swelled significantly as high as $50 for the average ether transaction on Saturday morning. Furthermore, on Saturday morning in the U.S. vertical trends from Twitter indicate the term “ETH 2.0” started trending. Some of the individuals discussing the ETH 2.0 upgrade have shared a new white paper written by computer scientists from Stanford University and the Ethereum Foundation.

The BTC proponent Tuur Demeester shared the paper on Saturday and two quotes from the paper that theorize how an adversary can attack the chain. The paper called “Three Attacks on Proof-of-Stake Ethereum” was submitted on October 19.

Quotes from ETH 2.0 attacks paper, via @KyleLogiks:

“With 99.6% probability an adversary with .09% stake can execute a 1-record for any given day”

“Under adversarial network delay, an adversary can perform a 10-reorg by merely controlling 19 validators”https://t.co/HGazdB0acV pic.twitter.com/MsZoyUGdev

— Tuur Demeester (@TuurDemeester) October 30, 2021

The white paper was authored by Caspar Schwarz-Schilling, Joachim Neu, Barnabé Monnot, Aditya Asgaonkar, Ertem Nusret Tas, and David Tse. Essentially, the white paper reveals that two Ethereum network attacks were presented in recent times and the paper’s authors refined the techniques.

In addition to the refinement of the first two which theoretically create “short-range reorganizations” and an “adversarial network delay,” the computer scientists came up with a third attack.

“Combining techniques from both refined attacks, we obtain a third attack which allows an adversary with vanishingly small fraction of stake and no control over network message propagation (assuming instead probabilistic message propagation) to cause even long-range consensus chain reorganizations,” the paper’s authors note. The three attacks to ETH PoS paper adds:

Honest-but-rational or ideologically motivated validators could use this attack to increase their profits or stall the protocol, threatening incentive alignment and security of PoS Ethereum. The attack can also lead to destabilization of consensus from congestion in vote processing.

White Paper Says Attacks ‘Also Enable aPriori Malign Actors to Outright Stall Consensus Decisions’

Meanwhile, Ethereum network critics used the paper to highlight the possible vulnerabilities associated with these attacks when the network transitions to a full PoS system. The founder of the Chia project and the creator of Bittorrent, Bram Cohen, also tweeted about the new study on Saturday.

Some issues with ETH2 consensus “we obtain a third attack which allows an adversary with vanishingly small fraction of stake to cause even long-range consensus chain reorganizations” https://t.co/Vz3KG3ai1W

— Bram Cohen🌱 (@bramcohen) October 30, 2021

A Chia proponent responded and told Cohen: “Let’s revisit your tweet in a year and see what Chia has accomplished vs ETH. Please consider your attitude is turning away community members like myself.” The Ethereum attacks paper does provide a possible method of attacks against an Ethereum PoS chain, but also offers solutions. The paper’s authors believe the attacks provide incentives to malicious actors.

“Our attacks also enable apriori malign actors, perhaps ideologically motivated, to delay and in some cases outright stall consensus decisions,” the paper’s authors conclude. “The refined attack of Section 4.2 gives the adversary a tool to do just that, even if the adversary cannot control message propagation delays (which instead are assumed to be probabilistic).”

What do you think about the recently published paper on three attacks against an Ethereum PoS system? Let us know what you think about this subject in the comments section below.

Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges

26/01/2020 by Idelto Editor

On January 3, 2020, a small group of crypto enthusiasts celebrated the second annual Proof-of-Keys day with hopes to get people to withdraw funds from centralized digital currency exchanges. However, exchanges holding massive amounts of BTC only saw their reserves grow larger and data shows that Coinbase now holds 1 million BTC ($8.4 billion). Crypto users are still keeping large sums of digital asset holdings on trading platforms despite the fact that 2019 saw the most exchange hacks in one year over the last decade.

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

Despite Proof-of-Keys Day, Seven Trading Platforms Have More Than $25 Billion in Crypto Reserves

2019 saw a significant amount of trading platform hacks and exchange losses according to a recent report authored by the blockchain surveillance firm Chainalysis. The company noted that even though there were more attacks there was less money stolen. However, Chainalysis highlighted that malicious hackers are becoming smarter. “2019 saw more cryptocurrency hacks than any other year,” the report underlined. “But of the 11 attacks that occurred this year, none of them came close to matching the scale of major heists such as [2018]’s $534 million Coincheck hack.” Last year digital currency exchanges lost approximately “$283 million worth of cryptocurrency” due to breaches and malicious hackers.

About a month before the second annual Proof-of-Keys day initiated by Trace Mayer, news.Bitcoin.com reported on the vast number of coins centralized exchanges held in reserve. The list was provided by Bituniverse using the firm’s Exchange Transparent Balance Rank (ETBR). The ETBR list had shown that Coinbase held roughly 966,000 BTC during the first week of December 2019. Today, the ETBR report from Bituniverse shows the San Francisco-based exchange now has 1.03 million BTC ($8.5 billion) held in reserves. The data from Bituniverse stems from onchain exchange balances recorded by Etherscan and Peckshield.

Additionally, the numbers from Bituniverse can also be cross-referenced with data from Chain.info’s crypto exchange reserve list. Chain.info’s data is slightly different, showing that Coinbase holds 983,000 BTC but most of the data is fairly consistent with the findings from the Bituniverse application. Figures indicate that Huobi is the second-largest cryptocurrency exchange by reserve count with 462,000 BTC ($3.8 billion), 1.8 million ETH, and a large number of USDT as well. Binance has around 307,000 BTC ($2.5 billion) as of Saturday and 2.6 million ETH held in reserves as well. Then there’s Bitfinex (290,000 BTC or $2.8 billion), Bitmex (274,000 BTC or $2.28 billion), Bitstamp (242,000 BTC or $2 billion), Okex (211,000 BTC or $1.83 billion), Kraken (173,000 BTC or $1.8 billion), Bittrex (125,000 BTC or $1.2 billion), and Gemini (95,000 BTC or $922 million).

Proof-of-Solvency and the Recent Trend of Independently Recorded Crypto Reserve Lists

Other exchanges with a vast amount of digital assets held in reserves include Bitflyer, Gate.io, Poloniex, and Hitbtc. Bituniverse and Chain.info’s data shows that overall the centralized exchanges accumulated more reserves since the first week of December. Not only are a few crypto advocates afraid that large exchanges could be compromised for billions in digital assets by hackers, but there’s also the fear of fractionally reserving bitcoins.

There have been many articles and academic papers discussing the subject of proof-of-reserves when it comes to cryptocurrencies. Researchers from Stanford University published a report in 2015 called “Provisions” which tackles the subject of exchanges and reserve transparency. The Stanford researchers explained that proof-of-solvency “demonstrates that the exchange controls sufficient reserves to settle each customer’s account.” The paper introduces a privacy-preserving proof-of-solvency. “Whereby an exchange does not have to disclose its Bitcoin addresses,” the 33-page long academic paper notes.

During the last few months, platforms like Bituniverse and Chain.info have published reserve lists based on data provided by independent parties like Peckshield. Exchanges shown on these lists have neither confirmed or denied the bitcoin reserve data is legitimate. A number of community members within the cryptosphere believe trading platforms should provide their own reserve numbers so they can exemplify transparency themselves. Meanwhile, even though a lot of crypto influencers and proponents tell people regularly to store cryptos in a noncustodial fashion, the great majority of digital asset owners continue to store them on centralized trading platforms.

What do you think about the billions worth of BTC held on centralized digital currency exchanges? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Bituniverse App, Stanford, Chainalysis, Chain.info, Wiki Commons, Fair Use, and Pixabay.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

The post Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges appeared first on Bitcoin News.

Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning

23/02/2019 by Idelto Editor

Digital asset holders and organizations have been donating funds to a number of well-known universities. These days a slew of popular colleges like Stanford, MIT, Cornell, Puget Sound, and Princeton all accept digital currency donations or have high-net-worth crypto backers funding these schools. On the flip side of higher education, many of the world’s prestigious universities also offer elective courses that teach blockchain technology.

Also Read: University of Michigan Endowment Backs Crypto Venture Capital Fund

Universities See an Increasing Trend of Cryptocurrency Donors

One growing trend has been the way in which the digital currency ecosystem is fueling education through cryptocurrency donations and backers. For instance, during the first week of January 2019, entrepreneur Mike Novogratz donated some of his cryptocurrency profits to Princeton’s Bridge Year Program. The initiative allows students to get sponsored by schools so they can live and study abroad for nine months in areas like China, Bolivia, Senegal, Indonesia, and India. The CEO of Galaxy Digital is a member of Princeton’s class of 1987 who earned a degree in economics.

“Proud to put some of our crypto winnings (2017) to a good cause. A year living in a different culture can change your life for the better. Build bridges, not walls,” Novogratz told his 114,000 followers on Twitter.

Then there’s the list of Stanford’s corporate donors who help fund the school’s engineering section. Stanford’s endowed faculty chairs and fellowship organizations include the Ethereum Foundation, Vechain, and Omisego. During the first week of 2019, Holberton School in New Haven received $10,000 worth of BTC from the Scroll Network’s founder Nathan Pitruzzello. Back in November 2017, the Echolink Foundation donated $50,000 worth of BTC to UC Berkeley. In 2014, the co-founder and vice chairman of Blockchain, Nicolas Cary, donated $10,000 to the University of Puget Sound. Cary’s donation of 14.5 BTC used Bitpay to facilitate the transfer, which would be worth $58,000 today, but the gift was turned into fiat immediately.

The Largest Endowment Funds in Higher Education Are Investing in the Cryptocurrency Ecosystem

Furthermore, universities with huge financial endowments are hedging with cryptocurrency funds as well. Last May, sources familiar with the matter explained that Ivy League school Yale had invested in the cryptocurrency fund Paradigm. Yale’s endowment is the second-largest in higher education and Paradigm is backed by Pantera Capital’s Charles Noyes and Coinbase cofounder Fred Ehrsam. Moreover, on Feb. 21, public documents revealed that the endowment of the University of Michigan has backed a cryptocurrency investment fund supervised by Andreessen Horowitz. Yale and the University of Michigan are not the only endowments investing in cryptocurrency related ventures, as MIT, Stanford and Harvard are knee-deep in digital asset funds as well.

42 Percent of the Globe’s Top 50 Universities Offer Crypto Courses

Tech publication The Information’s research report says that many Ivy League schools are invested in at least one or more crypto related investments. Moreover, a great majority of the universities that have endowments invested in digital assets or have received digital asset donations offer cryptocurrency-related courses. Most of these schools also provide students with academic credits for courses on smart contracts and blockchains. Both the Holberton School in New Haven and Boston’s MIT offer students graduate certificates that are processed using the BTC chain.

Because of the level of innovation involved, higher education and crypto technology go hand-in-hand, and trends over the last few years have shown how they share a symbiotic relationship. This has led to 42 percent of the globe’s top 50 universities offering at least one accredited course that teaches blockchain-related research. A Coinbase research study details that because schools are offering these lessons, students are becoming interested in learning about the digital currency ecosystem. For instance, the report explains that David Yermack, the finance department chair at New York University Stern School of Business, created a blockchain course in 2014 and 35 students registered for the lesson, which is a few less people than many of the school’s traditional electives. The study reveals that by the spring of 2018, Stern had to move the class to the largest auditorium because students registering for the course spiked to 230.

What do you think about school endowments getting involved with cryptocurrency funds and backers donating large sums of digital assets to universities? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Stanford, Coinbase Reports, Twitter, and Pixabay.

Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH, and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.

The post Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning appeared first on Bitcoin News.

Lightning Network Co-Creator Is Designing a Scaling Solution Called Utreexo

20/01/2019 by Idelto Editor

A blockchain researcher has been working on a scaling effort for the unspent transaction output set found in the Bitcoin protocol. According to Tadge Dryja’s recently published description of research, the software engineer is working on a dynamic accumulator called Utreexo. The project could theoretically allow network participants to verify the state of the chain’s consensus rules with smaller sets of cryptographic proof.

Also read: Venezuelan BCH Proponents Bolster Cryptocurrency Use Cases and Adoption

Utreexo Could Allow Bitcoin Full Nodes on a Mobile Phone

A few years after Bitcoin was born, developers and network participants discovered the protocol needed to scale in order to facilitate transactions for a growing number of users. The software stores a record of every transaction and all the newly minted coins within a distributed ledger. This makes full node maintenance cumbersome over time and a big reason for this is because of a collection of Unspent Transaction Outputs or UTXOs. In order to help solve the scaling issue, Tadge Dryja from MIT has written a description of the current research project he’s been working on called Utreexo. The protocol is a hash-based dynamic accumulator, which essentially brings the millions of UTXOs recorded onchain down to under a kilobyte. “There is no trusted setup or loss of security; instead the burden of keeping track of funds is shifted to the owner of those funds,” Dryja’s description explains.

“With Utreexo, though, rather than having to store the entirety of the bitcoin state, bitcoin holders could simply verify if it is correct using a cryptographic proof,” Dryja’s paper adds. “This approach could minimize storage requirements to the extent that it might even be possible to run bitcoin on a mobile phone.”

Millions of Unspent Outputs Represented in Under a Kilobyte

Dryja’s Utreexo and accumulators have been getting some attention in recent months. In the podcast episode Grey Mirror #1, host Rhys Lindmark interviewed Tadge Dryja about the project, which has slowly become a prototype. Dryja explained to Lindmark how blockchains could bootstrap upgrades in a “non-fork” fashion by using a bridge node to Utreexo. Furthermore, Stanford University cryptographers Ben Fisch, Dan Boneh, and Benedikt Bünz have also written a paper that involves accumulators. The study discusses batching techniques for accumulators with applications to IOPs and stateless blockchains. In addition to the group’s 46-page paper, the research studies vector commitments in groups of unknown order.

With Utreexo, the protocol places the cost of maintaining the network “to the right place,” explains Dryja’s documentation. The millions of onchain transactions that have been the cause of many arguments could be maintained by shrinking the UTXO set down to a few kilobytes of proof. While some blockchain developers have discussed the Utreexo concept, engineers from other projects have been experimenting with different ideas as well. For instance, there’s been a number of conversations about Bloxroute, a company that claims it can provide blockchain networks far better efficiency by propagating blocks in a neutral manner. Additionally, there’s Jonathan Toomim’s Xthinner, which leverages the benefits of lexicographic transaction ordering (LTOR) on the Bitcoin Cash (BCH) network. Purportedly Xthinner can compress the information in blocks by 99.6 percent and Toomim’s other project Blocktorrent could be even more efficient. The torrenting protocol Blocktorrent breaks a block down into fractions and each chunk can be independently verified.

Accumulators May See Action on Another Chain Due to Stubborn Bitcoin Core Developers

Even though accumulators may be a long-term scalability solution, the idea has been discussed for over nine years with little advancement. Some believe accumulators will likely see the light of day with developers who are not so stubborn when it comes to scaling the protocol such as Ethereum and Bitcoin Cash programmers. BTC developers have been criticized by many for their refusal to raise the block size via a hard fork upgrade, while the developers’ soft fork to introduce segregated witness still has less than 40 percent adoption after more than a year. Accumulators were talked about during a Bitcoin Core Dev discussion on Dec. 18, however, and Pieter Wuille reviewed UTXO accumulators on Dec. 7.

There’s still a lot of work to be done with Utreexo, but Dryja has compiled some rough code. The Stanford programmers are working on their idea which is different to the MIT engineer’s work. There have been many scaling concepts announced over the last few months and 2019 might just be the year of scalability for several public blockchains.

What do you think about Tadge Dryja’s Utreexo project and the general concept of dynamic accumulators? Let us know what you think about this project in the comments section below.

Images via Shutterstock, Twitter, and Pixabay.

Have you seen our widget service? It allows anyone to embed informative Bitcoin.com widgets on their website. They’re pretty cool, and you can customize by size and color. The widgets include price-only, price and graph, price and news, and forum threads. There’s also a widget dedicated to our mining pool, displaying our hash power.

The post Lightning Network Co-Creator Is Designing a Scaling Solution Called Utreexo appeared first on Bitcoin News.

South Korean Business School Launches Crypto MBA Program

23/12/2018 by Idelto Editor

A major business school in South Korea is now offering a master’s degree in cryptocurrency. Crypto MBA is a one-and-a-half-year program that covers topics such as Bitcoin, Ethereum, smart contracts, crypto funds, Dapp planning, game theory, and how to write persuasive whitepapers. Meanwhile, the government is working on follow-up crypto regulations.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Crypto MBA

Seoul School of Integrated Sciences and Technologies, often known as Assist, announced on Friday that it is now offering a Master of Business Administration (MBA) degree program dedicated to cryptocurrency and blockchain technology. The new course is “a master’s degree program in blockchain, cryptoeconomics and token economy courses from technological, cryptoeconomic and business strategic perspectives,” the school described.

Claiming that it has “launched the world’s first crypto MBA course for a business graduate school,” Assist wrote:

The mission of Assist business school’s Crypto MBA program is to remedy the lack of academic research and systematic education currently available in the industry, despite a high level of social interest in the blockchain and cryptocurrency.

The professional graduate school has been offering master’s degrees and doctorate degrees in business administration since 2004. Its website claims that the school “has been evaluated as the no. 1 graduate school for business administration,” noting that large corporations such as LG Electronics, KT, Doosan Infracore, and Korea Electric Power Corporation continuously use its courses.

Crypto Curriculum and Regulation

According to Friday’s announcement, “The curriculum includes Bitcoin, Ethereum, smart contract, cryptology, EOS, deep learning and system dynamics mechanisms. The cryptoeconomics curriculum consists of digital currency studies, microeconomics, macroeconomics, behavioral economics and theory on currency finance, game theory and mechanism design.” In addition, students will learn about “management mechanisms, strategic statistics, digital financial accounting, digital marketing strategies, crypto funds, Dapp planning and writing strategy for the persuasive whitepaper.”

The South Korean government is currently working on additional crypto regulatory measures following the implementation of the real-name system in January. Initial coin offerings (ICOs) have been banned domestically since September last year. However, a number of lawmakers have introduced several bills to regulate them.

Recently, a fintech startup filed a complaint with the country’s constitutional court alleging that the government’s ICO ban is unconstitutional.

Crypto Classes on the Rise

While Assist offers an actual MBA degree in crypto, a growing number of business schools worldwide have added crypto classes including Stanford Graduate School of Business, Wharton School of the University of Pennsylvania and Georgetown University Mcdonough School of Business. Cnbc previously reported that these top schools “are expanding classes in digital currency and blockchain to keep up with demand from students and their future employers.”

Stanford’s business school, ranked number one globally by the Financial Times this year, added a course called “Cryptocurrencies and Blockchain Technologies.” The school’s website describes, “The course covers all aspects of cryptocurrencies, including distributed consensus, blockchains, smart contracts and applications. We will focus in detail on Bitcoin and Ethereum as case studies.”

Wharton, ranked number one by Forbes, added a class in the fall called “Blockchain, Cryptocurrency, and Distributed Ledger Technology,” while Georgetown offers an elective that teaches topics such as the history and evolution of fintech, blockchain technology, and their applications.

What do you think of the Crypto MBA program? Let us know in the comments section below.

Images courtesy of Shutterstock, Assist, and the South Korean FSC.

Need to calculate your bitcoin holdings? Check our tools section.

The post South Korean Business School Launches Crypto MBA Program appeared first on Bitcoin News.