Autor Cointelegraph By Erhan Kahraman

WhatsApp crash: Are decentralized blockchain messengers a real alternative?

WhatsApp crash: Are decentralized blockchain messengers a real alternative?

Uverejnil používateľ | nov 4, 2022 |

Since the introduction of ICQ — the progenitor of online chat applications — the expectation from instant messaging (IM) services has never changed. Users simply want them to work, which apparently turned into a tall order, given the frequent downtimes most popular chat apps experience nowadays. Launched the same year as Bitcoin (BTC), WhatsApp is one of the most widely used chat apps on the planet. Owned by Meta (the stable of which also boasts Instagram and Facebook), WhatsApp stands as the epitome of centralized services. That’s why when the service goes down, it has a much broader impact than just leaving over two billion monthly users scratching their heads and complaining on Twitter.WhatsApp embodies the qualities of a centralized mindset perfectly: It has mainstream reach, an industry giant backs it and despite nearly one-third of the planet using it, people have absolutely no say over the final product. Why do centralized chat apps go down?When a product is controlled and managed by a central entity, it tends to follow certain processes during its lifecycle. Someone has to shoulder full responsibility for the various aspects of the centralized product. The massive scale of the product turns even tiny updates into a chaos of human errors, database issues and not having enough time to test the version before pushing out the update to meet stakeholder expectations. Coupled with the numerous cyber attacks on the infrastructure itself, the more the service is centralized and managed by a single entity, the more the “usual suspects of failure” fill the room. Can decentralized services fix downtimes?Communication-focused decentralized apps (DApps), on the other hand, provide anti-fragile systems, co-founder and CEO of Web3 service provider Heirloom Nick Dazè told Cointelegraph. He said that decentralized messengers get stronger with every user onboarded because they essentially function as “nodes” that keep the system functioning properly. “The key difference is that there is not one single point of failure,” Dazè stated, likening it to a balloon that is compressed on one part, which becomes geometrically smaller while still containing the air from the compressed section: “All of the air still exists. It is just pushed to a different section of the balloon.”Recent: The state of crypto in Southern Europe: Malta leads the wayOf course, decentralized apps come with their own set of challenges, and one of them is scaling. DApps can’t compete with centralized services without being able to take on a billion-level user base, but Dazè believes DApps can overcome scaling issues by answering two questions: “Where does all of this data ‘live?’” and “How do we reduce network spam?”Addressing the first issue, Dazè sees public key-based addressing as a decent solution, “As it serves as a limiting function on the amount of data necessary to handle.” Regarding the second issue, Dazè said that disincentives for spam must be created, accompanied by Captcha servers. Redundancy is the name of the gameCointelegraph also reached out to Chris McCabe, the co-founder of the Oxen Project — known for its decentralized IM app Session. When asked how decentralized IM apps handle crashes and downtimes, McCabe pointed to redundancy: “Decentralized networks have a lot of redundancy built in. If one server goes down, another one is there to take its place.” He said the Oxen Service Node Network, a set of incentivized nodes serving as the infrastructure of Oxen and its offerings, has over 1,600 nodes operated by hundreds of people worldwide.“It would take a catastrophic event to take the network down,” McCabe claimed, adding that the network is equipped to continue as usual despite experiencing major events from time to time.“In the past, we saw one-fifth of nodes go offline suddenly, but Session continued sending messages as normal. The network self-heals, and it hasn’t had a total freeze of communication as we have seen with centralized networks.”Session can currently handle about five million users — a tiny portion of WhatsApp’s user base. However, McCabe said the team will continue to release updates for a more extensive decentralized storage network and higher network bandwidth.The Oxen co-founder admitted that whether a decentralized network could handle the traffic that WhatsApp or Messenger face daily has yet to be proven. However, he is hopeful that Session could be the first app to test that theory.“Session is gaining popularity not only because it hasn’t gone down,” he summarized, adding, “But also because people are sick and tired of having their data systematically collected, analyzed and weaponized against them.” Unmanipulated, unreadable and untraceableThe decentralized ecosystem offers a wide range of projects and apps with different priorities. One such is TransferChain, a peer-to-peer messaging app that focuses on privacy. Tuna Özen, the co-founder of TransferChain, told Cointelegraph that while the scalability aspect in decentralization is a gray area, being scalable or non-scalable is the result of design decisions. Recent: How low liquidity led to Mango Markets losing over $116 million“The main misconception that drives products to be non-scalable is assuming that any blockchain design can meet all needs,” Özen said. He suggested that multiple variables including block volume, block generation rate, consensus, selection algorithm, token integration, network cost and benefit structure and network participation structure should be taken into account:“Just as it is reasonable to expect a track-proven race car built purely for speed to deliver the same performance in off-road conditions, it is just as reasonable to expect a blockchain approach that is not specifically designed for products and services to be scalable.”Tuna Özen and his team describe TransferChain as a cloud platform powered by a decentralized decision-making mechanism on a distributed ledger. The app differs from its centralized counterparts with where and how the communication data is saved as well as the transparent storage of the process — which is unmanipulated, unreadable and untraceable according to Özen.Although decentralized services offer more resilient infrastructures, they still have a long way to go to catch up with their centralized counterparts in terms of user base and mainstream adoption. Another thing to remember is that as DApps get more popular, they will probably need to face more regulatory scrutiny and governments worldwide would definitely have trouble with this new form of communication — given they only recently started to get a grasp of the new form of money.

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Near Foundation sets up $40M fund to bail out USN investors in case of collapse

Near Foundation sets up $40M fund to bail out USN investors in case of collapse

Uverejnil používateľ | okt 25, 2022 |

Near Protocol’s in-house stablecoin, USN, recently became undercollateralized, forcing Near Foundation to recommend winding down USN to prevent a situation similar to the Terra (LUNA) and UST collapse. Supporting this move, the Near Foundation opened up a $40 million fund to protect investors and help them cash out of USN with equal amounts of wrapped Tether (USDT.e).On Oct. 24, Near Foundation revealed setting up a $40 million fund, allowing eligible USN holders to redeem their USN tokens on a 1:1 basis with USDT.e. The program was launched after Decentral Bank (DCB), the issuer of NEAR-native stablecoin USN, raised concerns about the stablecoin depegging due to algorithmic failure.In response to a recent issue with USN, the @NEARFoundation is funding a protection Programme to safeguard USN holders.More details below https://t.co/NDMZUO2Wim— NEAR Protocol | Create Without Limits (@NEARProtocol) October 24, 2022The USN Protection Program aims to cover the collateral gap of $40 million, which the foundation confirmed was not linked to the NEAR token price. Taking proactive measures to protect investors from a possible collapse, Near stated:“The NEAR Foundation is recommending that DCB wind down USN in an orderly manner. To assist with this process, the NEAR Foundation has provided a $40m USD grant to a subsidiary of Aurora Labs – one of the NEAR ecosystem’s most prominent contributors – to set up the USN Protection Programme.”The grant was provided to an Aurora Labs subsidiary and was immediately made available for users to exchange their depegged stablecoin tokens. However, redemptions will begin only after DCB commences the winding down process. According to DCB, USN tokens were no longer algorithmic after the initial algorithmic version of USN (v1) was upgraded to v2 — making the stablecoin “susceptible to undercollateralization during extreme market conditions.” While the eligibility criteria for investors were not disclosed, Near confirmed that the drive will remain active for one year until 24th Oct. 2023. Furthermore, Near announced plans to set up a stablecoin-centered funded initiative that prevents collateralization-related issues to safeguard the investors from such catastrophes.Near Foundation has not immediate responded to Cointelegraph’s request for comment.Related: Inflation-pegged ‘flatcoin’ launches testnet to track the cost of livingThe Acting United States Federal Deposit Insurance Corporation (FDIC) chairman Martin Gruenberg recently discussed stablecoin use cases in relation to the FDIC’s approach to banks considering engaging in crypto-asset-related activities.While Gruenberg raised concerns about the ever-evolving use cases and business models of crypto-assets, the FDIC confirmed its efforts to gather crucial information to aid it in comprehending and eventually providing supervisory feedback on crypto assets.

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Japanese port city wants to become the Web3 hub for the country

Japanese port city wants to become the Web3 hub for the country

Uverejnil používateľ | okt 24, 2022 |

In Japan, the city of Fukuoka is looking towards the future of Web3 in its latest partnership with Astar Japan Labs – the company behind Japan’s leading blockchain, the Astar network.Fukuoka is the country’s second-largest port city and has officially been designated as a National Special Strategic Zone. Now it also plans to become the country’s hub for all things Web3 and crypto.The Astar Japan Labs partnership will allow both entities to work together on new use cases for Web3 technologies. Fukuoka joins more than 45 companies working with Astar, including Microsoft Japan and Amazon Japan.According to the announcement, the city wants to attract global, competitive businesses to the area. Representatives from Astar will regularly visit the city to provide education and new use cases both locally and throughout the country in collaboration with local governments.The Mayor of Fukuoka, Soichiro Takashima, also stood behind the city’s new aspirations in Web3:“We have to do in the context of Web3 what large companies did for the world when Japan was strong.”Astar Network founder Sota Watanabe likened the city’s attitude toward crypto to those leading the crypto scene abroad. “In the US, some cities like Maimi and New York have positive attitudes toward Web3 and crypto. We are going to work closely with Fukuoka City to attract more developers and more entrepreneurs.”Related: Which countries are the worst for crypto taxation? New study lists top fiveThis new development comes after a flurry of changes in Japan regarding the crypto and Web3 scene. The country has been touted as one of the toughest in terms of crypto regulations, which have the potential to deter its allure. On the other hand, it also recently loosened a set of regulations as to listing new currencies on authorised exchanges.On Oct. 3 the Japanese prime minister said in a speech that the government has plans of major investment in Web3 and metaverse initiatives.The government recently utilized nonfungible tokens (NFTs) to reward local authorities.

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Apples and oranges? How the Ethereum Merge could affect Bitcoin

Apples and oranges? How the Ethereum Merge could affect Bitcoin

Uverejnil používateľ | okt 18, 2022 |

It’s been a month since Ethereum said goodbye to an essential feature its blockchain shared with Bitcoin (BTC). Called the Ethereum Merge, the long-hyped upgrade was widely celebrated, with the blockchain ecosystem. However, for the mainstream audience or even for the average trader, it felt more like a Star Wars Day celebrated by sci-fi geeks than an early Christmas.As the Ethereum Merge occurred on Sept. 15, the most extensive blockchain ecosystem parted ways with the proof-of-work (PoW), the energy-hungry consensus mechanism that makes Bitcoin tick. The Ethereum blockchain now works on a more eco-friendly proof-of-stake (PoS) mechanism that doesn’t require any mining activities, leaving thousands of miners worldwide scratching their heads. Price-wise, Bitcoin is yet to take a hit from the fundamental shift of its closest competitor. A whole month has passed since the Ethereum Merge, and the BTC price is still stuck between $18,000 and $20,000. However, the overarching mainstream narrative of “Bitcoin should contribute to the world, not destroy it by depleting energy resources” is rekindled with Ethereum’s significant switch to a system that keeps blockchain alive with minimal resource consumption.Ethereum avoided a dead endCointelegraph reached out to industry insiders to get a clearer picture of the Ethereum Merge’s impact on Bitcoin. “PoW was a dead end for Ethereum,” says Tansel Kaya, a lecturer at Kadir Has University and the CEO of blockchain developer Mindstone, “Because an Ethereum network that doesn’t scale can not live up to its promise.”However, the Bitcoin community is not happy with the way its biggest price competitor took, according to Kaya. The BTC community often criticizes PoS for being vulnerable to censorship, he remarked, adding:“If what [Bitcoin maximalists] say is true, Ethereum will either turn into a docile fintech network that is censored by governments, or a centralized structure like EOS, controlled by wealthy investors.”Speaking to Cointelegraph, Gregory Rogers, CEO and founder of crypto-based gifting platform Graceful.io, noted that the Merge solidified the two distinct blockchains’ positions in the market. “Ethereum remains the transaction chain of choice with its increased speed and reduced fees,” Rogers said, adding, “Bitcoin is now the store of value of choice. They were already headed in this direction, but the Merge simply clarifies it.” Recent: What new EU sanctions mean for crypto exchanges and their Russian clientsFrom a price point, though, multichain marketplace UnicusOne founder and CEO Tashish Raisinghani believes that Bitcoin price will take a hit. “The crypto industry had a hard time because of macro-level challenges which resulted in the current bear market,” he said, adding that the Merge would make Ethereum more sustainable compared to Bitcoin, “Which hasn’t yet been able to recover from the Chinese mining crackdown in 2021.”PoW is unrivaled in network securityAddressing the energy side of the argument, John Belizaire, CEO of eco-focused data center company Soluna Computing, told Cointelegraph that even though Ethereum’s switch to PoS could save energy, “It will also undermine the core decentralization aspect of cryptocurrency.” Although Bitcoin’s PoW consensus mechanism is energy-intensive, it is also fundamental to the blockchain and “is the best choice for any cryptocurrency that prioritizes network security.” Co-locating flexible crypto mining centers with renewable energy plants can help stabilize the electric grid, solve renewables’ wasted energy issue, and provide an abundant source of cheap energy to crypto miners, Belizaire added.The Merge united crypto minersBitmain also brought down the prices of Antminers, its flagship crypto mining units, to help miners get back into profits, he added: Despite the Merge, Ether (ETH) miners won’t simply forgo PoW mining just because Ethereum Classic (ETC) is not minted via mining anymore, according to Andy Lian, author of the book NFT: From Zero to Hero. Lian told Cointelegraph that the EthereumPoW (ETHW) project — the result of a hard fork after the Merge — is working hard and the miner community is more united than ever. “These various factors helped the miners offset their operating costs in this bear market, keeping them alive.” Joseph Bradley, the head of business development for Web3 service provider Heirloom, likened Bitcoin to “a global risk asset that is correlated to TradFi markets.” Bradley told Cointelegraph that, although Ether may be traded similarly, it still has neither the market depth nor the size that Bitcoin has. “Do we expect the world to become more or less chaotic in the coming years?” he asks rhetorically, answering: “Most people would lean towards more chaotic. Security will matter during this time. Bitcoin will become even more important. Expensive energy will create innovation with miners — They will most likely move toward positioning Bitcoin mining as an extension of the electrical grid itself.”Bitcoin and Ethereum: “Apples and oranges”Not everyone agrees that the Ethereum Merge will have an impact on Bitcoin, though. Martin Hiesboeck, head of research at crypto exchange Uphold, dismissed a direct comparison between Ethereum and Bitcoin as “apples and oranges.” Hiesboeck told Cointelegraph that Ethereum is basically a “company controlled by venture capitalists,” that’s why the transition to proof-of-stake aims to improve its economic and environmental credentials:“Bitcoin doesn’t need to do that. Bitcoin is not a brand. Bitcoin is a computer network. Its output represents money. Nobody owns it. There is no brand. No CEO.” Khaleelulla Baig, the founder and CEO of crypto investment platform Koinbasket, supported Hiesboeck’s argument, telling Cointelegraph that the Merge won’t have any meaningful impact on Bitcoin as these assets serve different purposes. Recent: How decentralized exchanges have evolved and why it’s good for usersBitcoin’s purpose is “to prove itself as a superior store of value to fiat currencies,” according to Baig. The PoW mechanism goes well with the purpose of Bitcoin, “As it helps the network maintain the scarcity of 21 million BTC via its difficulty adjustment rate,” he added.Bitcoin as a PoW and Ethereum as a PoS network are making significant contributions to the crypto-asset ecosystem by competing with their best features. Tansel Kaya summarizes: “Having two distinct approaches rather than one is more suitable for the spirit of decentralization.”

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Positivity blazing through a bear market: Blockchain Economy Istanbul 2022

Positivity blazing through a bear market: Blockchain Economy Istanbul 2022

Uverejnil používateľ | júl 30, 2022 |

Held at Hilton Bomonti, a fancy hotel next to a renovated and repurposed beer factory in Istanbul, the fourth iteration of the Blockchain Economy Summit 2022 (BE2022) proved to be a significant step-up compared to its pre-pandemic predecessors.The previous summit, BE2020, was held at the WOW Convention Center two years back. In addition to being situated in a harder-to-reach part of Istanbul, the summit coincided with the COVID-19 outbreak, further impacting the overall attendance. Since the sole purpose of that venue was organizing large-scale events, the crypto community from two years prior was just not big enough to fill the space. As a direct result of the aforementioned factors, the BE2020 felt like a two-day trip to a ghost town. Pre-show pictures: Great music and performances at @BEconomy_HQ. Also, nice shirt @ErhanKahraman; We wonder where you got it from . (Cough, https://t.co/OmCXzstsi5 )#BEinstanbul2022 pic.twitter.com/hZABaJhfso— Cointelegraph (@Cointelegraph) July 27, 2022Attendees of Blockchain Economy Istanbul 2022 described the summit as dense, vivid and full of energy, drawing a stark contrast to the BE2020 in almost every aspect. It was also the first international crypto and blockchain event held in the region ever since Turkey revoked travel ban restrictions. As a result, the crypto community members — from Western and Eastern countries — could join in on the celebration.The event roster had a good balance between the local companies and global crypto players. While big shots like Binance, Huobi or FTX were visibly absent from the event, logos of major companies like KuCoin, Gate.io, Bitget, Bitmex and Uphold were filling the main hall. Despite its recent troubles, Gari Network donned the main sponsor badge for the whole event. For two days, the main hall never saw a dull moment: People were there mainly for networking purposes after two years filled with lockdowns and travel bans —and it’s hard to say they missed much by not attending sessions at the main conference stage. The Cointelegraph ground team enjoying a special goat milk-based Turkish ice cream called “Maraş dondurması.”Sure, some exciting names like MicroStrategy’s Michael Saylor (although he joined via video call) or Davinci Jeremie, the “Please Just Buy One Bitcoin (BTC)” guy, were on the keynote schedule. But, unfortunately, the program saw greater participation of more local or regional speakers than necessary for an international event of this scale — and the supercooling in the conference room didn’t help either. People got chilled, lost interest in the simultaneous translation, and headed back to the main area where a giant-sized samurai dog statue from the blockchain-based battle royale game Katana Inu welcomed them in an intimidating way. The best part? Most keynote speakers made themselves available for a little chat in the main hall after their stage performances.KuCoin Labs head Lou Yu explaining latest trends in Web3 developmentCointelegraph reached out to several keynote speakers for some quick commentary and in-depth conversations, including KuCoin Labs head Lou Yu and AAX exchange exec Ben Caselin.The BE2022 event was most beneficial for the young and talented developers of the community, of which Turkey houses plenty. During the event, Ali Dursun was able to pitch his blockchain gaming ecosystem Ratic to an array of global exchanges and venture capitals. Aybars Dorman introduced Metavest, a fresh take on decentralized finance (DeFi), to the participants, and Yotta21 founder Yunus Cebeci made important industry contacts at the smoking area.Zignaly co-founder Abdul Rafay Gadit explaining their project to Cointelegraph business development executive Anton Kabatov and editor Erhan KahramanTwo things were clear: First, the COVID-19 pandemic could not slow down the crypto ecosystem’s growth. For many participants, Blockchain Economy Istanbul 2022 was their first networking experience with the rest of the industry, and they thrived in making the most of it. And second, no matter how bearish a crypto market gets, the price fluctuations can’t shake down the positivity of the crypto ecosystem.Considering everything that transpired during the event, the Blockchain Economy Istanbul 2022 summit solidified that no matter the market conditions, the crypto ecosystem is ready to invest time, money and energy to stay positive.

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