Autor Cointelegraph By Brayden Lindrea

BTC energy use jumps 41% in 12 months, increasing regulatory risks

Bitcoin (BTC) has seen a 41% increase in energy consumption Year-on-Year (YoY) despite dramatic improvements in energy efficiency and a more diverse and sustainable energy mix — but there are concerns the rise could see regulators clamp down on mining. The data comes from a Q3 2022 report by the Bitcoin Mining Council (BMC) which represents 51 of the world’s largest Bitcoin mining companies.The report found Bitcoin mining to consume 0.16% of global energy production, slightly less than the energy consumed by computer games according to the BMC — and an amount it considered to be “an inconsequential amount of global energy.”Bitcoin mining also emitted 0.10% of the world’s carbon emissions which the BMC deemed to be “negligible.”The increase in Bitcoin energy consumption comes as the network’s hashrate increased 8.34% in Q3 2022 and 73% YoY, despite fewer blocks being produced and downward price pressure.In Q3 2022, #Bitcoin mining efficiency increased 23% YoY, and sustainable power mix was 59.4%, above 50% for the 6th quarter in a row. The network was 73% more secure YoY, only using 41% more energy, and is now 99% of all crypto hashing power.https://t.co/B0jlkWHYgg— Michael Saylor⚡️ (@saylor) October 18, 2022Blockchain data analytics firm Glassnode is of the view that the “hashrate rise is due to more efficient mining hardware coming online and/or miners with superior balance sheets having a larger share of the hash power network.” While the report also claimed Bitcoin mining efficiency to have increased 23% YOY and 5,814% over the last eight years, further increases in overall energy consumption may draw the ire of regulators examining the issue. Pressure is ramping up on Bitcoin miners from environmentalists who claim its power consumption is harmful to the environment. Greenpeace is currently running the “change the code not the climate’ campaign to encourage the Bitcoin network to move to proof of stake, however the official account has only amassed 1100 followers so far. FACT: #Bitcoin mining is driving millions of tons of new global warming pollution in the USMYTH: Burning “waste” methane can green bitcoinREALITY: Burning waste gas does nothing to reduce fossil fuel consumption and is even keeping old gas wells open https://t.co/o4Er21GVoo— Greenpeace USA (@greenpeaceusa) October 17, 2022

On Oct. 18, the European Union (EU) released documentation outlining an action plan to implement the European Green Deal and the REPowerEU Plan — with both planning to keep a close eye on crypto mining activities and their environmental effects. The European Blockchain Observatory and Forum (EUBOG) also suggested the EU adopts mitigation measures to lessen the adverse impacts on the climate caused by the digital asset sector.This suggestion has already been put into effect to some degree, with the EU asking for its member states “to implement targeted and proportionate measures to lower the electricity consumption of crypto-asset miners” to combat the severe cut in the energy supplied from Russia. Related: Researchers allege Bitcoin’s climate impact closer to ‘digital crude’ than goldThe push for tighter regulation comes despite the EU rejecting a proposal in March that would have enforced a total ban on crypto mining.As for the United States, regulatory movements appear to be a step behind its EU counterpart. In September the White House Science Office published a 46-page document that looked into the climate and energy implications of crypto-assets, however, mixed conclusions were reached and no significant plan is in the works yet.

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Ripple wants to bring Ethereum smart contracts to the XRP Ledger

Ripple users may be able to interact with Ethereum-compatible decentralized applications (DApps) in the future following the launch of a test phase of Ripple’s new XRP Ledger sidechain.The launch of the sidechain was shared in a Tweet by blockchain development firm Peersyst Technologies on Oct. 17, noting that the new sidechain is compatible with Ethereum Virtual Machine (EVM).This means that Ripple users could eventually have access to decentralized applications like Uniswap (should it port over) and Web3 wallets such as Metamask and XUMM Wallet. The new sidechain also comes with a cross-chain bridge built to transfer XRP and other assets between the EVM-supported sidechain and the XRP Ledger Devnet.According to RippleX software engineer Mayukha Vadari, the release “means developers no longer have to choose between XRPL or EVM-compatible blockchains.”Developers will also be able to access XRPL’s fast, low-cost transactions and bring Solidity-based smart contracts onto XRPL, he said. The XRP-based EVM-compatible sidechain was custom-built by the Tendermint protocol, and aims to process 1000 transactions per second (TPS). Tomorrow we will publish a user guide for all #XRPLcommunity to use and test the #EVMsidechain and create their $XRP accounts on @MetaMask— Peersyst Technology (@Peersyst) October 17, 2022Vadari noted that the first phase of the EVM sidechain is now currently available for testing on the XRPL Devnet. Phase two will see the EVM-compatible sidechain transition to a “permissionless” chain with improved scalability.Vadari said the aim is to achieve block times similar to that of the XRP Ledger for the second phase, which looks set to roll out in early 2023.“The end goal is phase three: a permissionless EVM sidechain and bridge available on the XRPL Mainnet,” she added.Related: Evolve or die: How smart contracts are shifting the crypto sector’s balance of powerThe news didn’t appear to affect the price of Ripple’s XRP token too much, which is currently priced at $0.476 and is up 23.86% for the month.The latest announcement comes amid a nearly two-year long lawsuit against Ripple by the U.S. Securities Exchange Commission (SEC), which has arguably affected the adoption and development of the global settlement network. Ripple also continues to make moves in the Central Bank Digital Currency (CBDC) space since it first piloted a CBDC Private Ledger for banks in Mar. 2021 — having most recently partnered with The Royal Monetary Authority of Bhutan in Sept. 2022.

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'Not even a single TX has been censored on ETH' — Cyber Capital founder

Ethereum bulls have hit back against claims the network has become prone to censorship post-Merge, with one arguing that “not even a single” transaction has been censored on the network. In a 19-part thread to his 29,100 followers on Oct. 17, Cyber Capital founder and CIO Justin Bons argued that contrary to “what some Bitcoiners are falsely claiming,” not a single transaction on Ethereum has been stopped as a result of Office of Foreign Assets Control (OFAC) sanctions. Bons was referring to recent reports suggesting Ethereum has become too reliant on OFAC-compliant Miner Extractable Value (MEV)-Boost relays since the Merge. Last week, it was reported that more than 51% of Ethereum blocks are now complying with the U.S. sanctions after transitioning to proof-of-stake (PoS). The crypto-fund manager argued that despite the increasing presence of OFAC-compliant MEV-Boost relays, it only becomes censorship when producers refuse to build on non-compliant blocks, though that would result in forking and splitting of the chain, explaining: “Even with 50% OFAC compliance, a non-compliant ETH TX will be confirmed within 30 sec! Compared to BTC’s more variable 10min!”Bons further argued it only takes one contributing validator to include what may be an OFAC-sanctioned transaction in the canonical chain. “This means that a very small minority of validators/miners can counter such censorship over both ETH & BTC! Easily less than 1% can prevent censorship,” he explained.Having attributed most of this backlash to “Bitcoiners,” Bons also argued that Ethereum with its new PoS consensus mechanism is “less vulnerable” and “far more secure” than Bitcoin under proof-of-work (PoW) because institutional players are not economically incentivized to try split the chain.Related: Ethereum may now be more vulnerable to censorship — Blockchain analystEthereum developers have also working to improve Ethereum’s censorship resistance too — with Ethereum developer Terence Tsao of Prysmatic Labs on Oct. 17 announcing that he and fellow developer Marius van der Wijden had begun building a solution to address the issue:Together with the legend @vdWijden, we have started prototyping features to enable the proposer to select between a local block and a builder block with the highest fee.The first step for censorship resistance️https://t.co/HyzUBZuB6V https://t.co/GGuAIegW5H— terence.eth (@terencechain) October 17, 2022Ethereum co-founder Vitalik Buterin recently proposed a Partial Block Auction solution, where a block builder only has the right to decide some of the contents of the block.Ethereum research and development organization Flashbots is also looking to soon roll out its fully decentralized and EVM-compatible block builder — Single Unifying Auctions for Value Expression (SUAVE) – in order to combat censorship issues.Ethereum protocol upgrades in order of importance over the next 6-12 months:- Beacon Chain withdrawals- PBS/crLists/related censorship-resistance upgrades- Proto-danksharding (EIP-4844)Just my humble opinion – censorship resistance is more important than scaling right now— sassal.eth ️ (@sassal0x) October 15, 2022

On Aug. 8, the United States Treasury Department added more than 40 cryptocurrency addresses allegedly connected to controversial mixer Tornado Cash to the Specially Designated Nationals list of OFAC, effectively barring U.S. residents from using the mixing service. 

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Koreans to have access to blockchain-powered digital IDs by 2024

South Koreans could soon allow its citizens to use blockchain-based digital identification (ID) instead of physical cards as soon as 2024, as the nation further embraces blockchain technology. According to an Oct. 17 report from Bloomberg, a plan from the government will see digital IDs embedded as an app within mobile devices in the future, working in a similar fashion to physical resident registration cards. The digital IDs are expected to launch in 2024, with around 45 million citizens expected to adopt the technology within two years. An economist at Korea’s Science and Technology Policy Institute Hwang Seogwon said the digital IDs could be used in finance, healthcare, taxes and transportation, while the Director-General of Korea’s Digital Government Bureau Suh Bo Ram said the technology could help businesses that haven’t yet transitioned fully online.The plan would also see the government adopt a decentralized identity system, meaning the government will not have access to information stored on phones, including the digital ID being used, how they’re used and where, according to Suh. Such technology isn’t new to the tech-savvy nation, which ranks first among all nations in applying technology to life, business and government, according to the Portulans Institute, an American think-tank. It also wouldn’t be the first blockchain-based digital ID solution put into effect in the country either. In Aug. 2020, over one million South Koreans had implemented a blockchain-powered drivers’ licence which operates via Korea’s PASS smartphone application.Shortly after in Sept. 2020, a South Korean government agency — Korea Internet & Security Agency (KISA) — began pilot testing on a similar system.Related: Are decentralized digital identities the future or just a niche use case?While South Korea is seen leading the way in all things blockchain and Metaverse, other nations are expected to soon follow. A Jun. 2021 study from market research firm ReportLinker estimates that the blockchain identity market will grow a further $3.58 billion by 2025 — a compounded annual growth rate of 71%. However, Brenda Gentry, Blockchain Advisor and CEO of Bundlesbets.com recently told Cointelegraph that no matter how capable and decentralized the ID management system is, it’ll still require recognition from government authorities or corporations:“If the issuing authorities don’t recognize the validity of the blockchain IDs, then the same cannot be used for availing a majority of public services. This in my opinion is the biggest limitation.”

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North Korea’s Lazarus behind years of crypto hacks in Japan: Police

Japan’s national police have pinned North Korean hacking group, Lazarus, as the organization behind several years of crypto-related cyber attacks. In the public advisory statement sent out on Oct. 14,  Japan’s National Police Agency (NPA) and Financial Services Agency (FSA) sent a warning to the country’s crypto-asset businesses, asking them to stay vigilant of “phishing” attacks by the hacking groupaimed at stealing crypto assets. The advisory statement is known as “public attribution,” and according to local reports, is the fifth time in history that the government has issued such a warning. The statement warns that the hacking group uses social engineering to orchestrate phishing attacks — impersonating executives of a target company to try and bait employees into clicking malicious links or attachments. “This cyber attack group sends phishing emails to employees impersonating executives of the target company […] through social networking sites with false accounts, pretending to conduct business transactions […] The cyber-attack group [then] uses the malware as a foothold to gain access to the victim’s network.”According to the statement, phishing has been a common mode of attack used by North Korean hackers, with the NPA and FSA urging targeted companies to keep their “private keys in an offline environment” and to “not open email attachments or hyperlinks carelessly.”The statement added that individuals and businesses should “not download files from sources other than those whose authenticity can be verified, especially for applications related to cryptographic assets.”The NPA also suggested that digital asset holders “install security software,” strengthen identity authentication mechanisms by “implementing multi-factor authentication” and not use the same password for multiple devices or services.The NPA confirmed that several of these attacks have been successfully carried out against Japanese-based digital asset firms, but didn’t disclose any specific details.Related: ‘Nobody is holding them back’ — North Korean cyber-attack threat risesLazarus Group is allegedly affiliated with North Korea’s Reconnaissance General Bureau, a government-run foreign intelligence group.Katsuyuki Okamoto of multinational IT firm Trend Micro told The Yomiuri Shimbun that “Lazarus initially targeted banks in various countries, but recently it has been aiming at crypto assets that are managed more loosely.”They have been accused of being the hackers behind the $650 million Ronin Bridge exploit in March, and were identified as suspects in the $100 million attack from layer-1 blockchain Harmony.

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