Autor Cointelegraph By Wahid Pessarlay

How to survive in a bear market? Tips for beginners

How to survive in a bear market? Tips for beginners

Uverejnil používateľ | jún 13, 2022 |

Usually, bear markets bring about a feeling of uncertainty in any investor. Even more so for a newcomer, for whom it can feel like the end of the world. It may even be common knowledge that during bull cycles, investors are sure of making gains. Whereas in bear markets such as this, an unimaginable amount of pessimism sets in.The co-founder and strategic lead at the Kylin Network, Dylan Dewdney, told Cointelegraph that the two major mistakes that investors make while feeling anxious are “One, over-investing and two, not investing with conviction.”“You need to find the sweetspot where you have enough conviction in your investments while managing the resources devoted to them such that you are 100% comfortable with being patient for a long time. Lastly, bear markets are where the magic really happens — buying Ether at $90 in December 2019, for example,” Dewdney said.According to data from blockchain analysis firm Glassnode, traders made almost 43,000 transactions buying and selling requests on crypto exchanges in early May. This accounted for a whopping $3.1 billion worth of Bitcoin. But, the panic that caused those requests came from the crash of Terra, which saw the market dip even further.Bear markets occur when there is a general dip in the prices of assets, of at least 20%, from their most recent highs. For example, the current bear market has Bitcoin (BTC) down by more than 55% from its November record high of $68,000. Bitcoin is now trading below the $25,000 mark at the time of writing.Bear markets: Genesis, severity and how long they lastBear markets are often tied to the global economy, according to Nerdwallet. That is, they occur either before or after the economy goes into recession. Where there is a bear market, there’s either an ongoing economic meltdown or an upcoming one.Essentially, a sustained price dip from recent highs is not the only indicator of an ongoing bear market. There are other economic indicators that investors must still factor in. This is to enable them to learn whether a bear market is playing out or not. Some of the indicators include interest rates, inflation and rate of employment or unemployment, among others.However, the relationship between the economy and a bear market is even simpler than that. When investors notice that an economy is shrinking, there are widespread expectations that corporate profits will soon start to reduce as well. And, this pessimism brings them to sell off their assets, thus, pushing the market even lower. As Scott Nations, author of The Anxious Investor: Mastering the Mental Game of Investing, says, investors often overreact to bad news.In any case, bear markets are shorter than bull markets. According to a recent CNBC report, bear markets last about 289 days. Bull markets, however, can go even above 991 days. Additionally, an Invesco data analysis report puts the losses attached to bear markets on an average of 33%. So, down cycles are usually not as effective as the average gain of 159% of a bull market.Recent: DeFi pulls the curtain on financial magic, says EU Blockchain Observatory expertAlthough no one knows for sure how exactly long a bear market might last, there are a few tips on how to weather it.Navigating a bear marketAs an investor, there is probably nothing anyone can do to prevent an unfavorable market condition or the economy at large. Nonetheless, there are lots of potentially great moves that one can make to protect their investments.Dollar-cost averagingDollar-cost averaging (DCA) describes an investment strategy in which an investor buys a fixed dollar amount of a certain asset on a regular basis, regardless of that asset’s price in dollars. The strategy is based on the belief that over time, prices will generally pick up the pace and eventually trend upward during a bull run.The head of research at CoinShares, James Butterfill, told Cointelegraph that Bitcoin now has a well-established inverse correlation to the United States dollar:The symbolic bear and the bull in front of the Frankfurt Stock Exchange. Source: Eva K.“This makes sense due to its emerging store of value characteristics, but it also makes it incredibly sensitive to interest rates. What has pushed Bitcoin into a ‘crypto winter’ over the last six months can by and large be explained as a direct result of increasingly hawkish rhetoric from the Fed. The Federal Open Markets Committee (FOMC) statements are a good indicator of this, and we can observe a clear connection to statement release times and price moves.”When this prudent investment approach is mastered, the investor’s buy price is averaged over time. That is, one can enjoy the benefits of buying the dip and also avoid investing all their life savings during market highs. After all, as dreaded as bear markets are in the investment world, they are also the best times to buy crypto assets at the lowest prices.Diversify your portfolioFor investors who have a diverse range of assets in their portfolio, the impact of bear markets may not be as severe. When bear markets are fully in progress, the prices of assets generally plunge but not necessarily by the same amounts. So, this valuable strategy ensures that an investor has a mix of winners and losers in their assets during a bear run. Thus, total losses from the portfolio will be reduced to the barest minimum.Consider defensive assetsDuring prolonged bear markets, some companies (mostly smaller or younger) tire out along the way. Whereas other more-established firms with stronger balance sheets can withstand the harsh conditions for as long as necessary.Therefore, anyone looking to invest in company stocks should go for stocks of those companies that have been in business for a long time. Those are defensive stocks. And, they are usually more stable and reliable in a bear market.BondsBonds can also offer an investor some relief during bear cycles. This is because the prices of bonds usually move opposite to stock prices. So, bonds are a key part of any near-perfect portfolio, giving an investor relative ease to the pain of a bear market.Index funds or exchange-traded fundsSome sectors are known to thrive reasonably well during market downturns, including the utilities and consumer goods sectors. And more than any other sector, they can perform to earn them the name “stabilizing assets.” Investing in the sectors mentioned above through index funds or exchange-traded funds (ETFs) can be a smart move. This is because each index fund or ETF holds shares across various companies.Play blindThere is no doubt whatsoever that a bear market will tempt investors to run and never look back. Their will and endurance will also be tested. But, as history has shown, bear markets don’t last forever and neither will the current one.According to Hartford Funds, more than 26 bear markets have occurred between 1928 and now. And, each one of those bear markets was immediately followed by a bull market, bringing more than enough profits to make up for whatever losses might have been incurred.So, it is important to always take your mind off the prevailing downturn, especially if you’re investing for the long term, like for retirement. Eventually, the bull markets you’ll witness along the way will outdo the bear markets.The ultimate decisionAs earlier explained, there are massive risks that come along with bear markets. But, they also offer a good basis for success in the next bull run. That is, however, dependent on good strategic investment planning mixed with patience. So, profits can be assured when the market finally turns around, whether you’re always DCA-ing, diversifying into other assets, investing in ETFs and index funds, or stocks.Losing money is always a hard pill to swallow, but the best way to get through market dips is not by running. Instead, take note of the wide array of recovery options and keep calm.Recent: Bitcoin and banking’s differing energy narratives are a matter of perspective“While Bitcoin’s price performance has been weak in the face of an aggressive Fed, this current hiatus in price-performance may very well be short-lived. We believe a policy mistake by the Fed is highly likely where Bitcoin prices are likely to diverge from growth equities. Meanwhile, the former is likely to benefit from a dovish Fed and weaker USD while the latter underperforming in the face of a recession or stagflation,” says Butterfill. He added: “Sadly, we believe that the U.S. and the rest of the world are likely to slip into economic decline in 2023, although there are many unknowns. Perhaps it will be stagflation that then progresses into recession? As the liquidity trap really takes a grip on central bankers, we believe Bitcoin is a good insurance policy in the face of this monetary policy mess.”

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MimbleWimble adds new features for Litecoin, but some exchanges balk

MimbleWimble adds new features for Litecoin, but some exchanges balk

Uverejnil používateľ | jún 9, 2022 |

Litecoin is one of the earliest alternative coins (altcoins) that came to light after Bitcoin (BTC). Created in October 2011, it is now the 20th most valuable cryptocurrency, boasting a market capitalization of over $4 billion, according to CoinMarketCap data.The MimbleWimble upgrade was first conceived more than two years ago as part of the Litecoin Improvement Proposal. That was in November 2019, as the network started planning on enhancing anonymity between senders and receivers of a transaction on its network.And now, the MWEB is finally out following approval from the majority of nodes. The upgrade was done at Litecoin’s block height of 2,257,920 and came with significant privacy feature changes to the Litecoin network.But, there’s more to the MWEB than just the newly-added privacy features for LTC users. The MWEB also brings key improvements to activities on the blockchain. For instance, it helps reduce needless transaction data from the blocks to the barest minimum using its cut-through feature. The cut-through feature ensures that long transactions are broken down into a single one. That is, instead of recording each input and output separately, the block would only record one input-output pair, thereby removing excess data.Following long years of development and anticipation by its community, Litecoin (LTC) finally activated its MimbleWimble Extension Blocks (MWEB) upgrade on May 19. But, with the blockchain upgrade mainly focused on carrying out private transactions on the network, global regulations could undoubtedly be flouted. South Korean regulations underminedDespite the buzz around the transactional confidentiality that has now been launched by Litecoin, there seem to be issues on the regulatory front, particularly with regard to Anti-Money Laundering (AML) and Know Your Customer (KYC) laws. In fact, it was for this reason that leading exchanges in South Korea delisted the coin from their platforms. On June 8, 2022, Upbit, alongside four other leading crypto exchanges in South Korea, removed support for Litecoin. The other exchanges include Bithumb, Coinone, Korbit and Gopax. However, each of the exchanges has cited similarly worded reasons, claiming that the MWEB upgrade does not align with the provisions of the Act on the Reporting and Use of Specific Financial Transaction Information. According to the provisions of the law, all Korean crypto exchanges are expected to meet KYC and AML standards. Upbit wrote in part:“The optional function that does not expose transaction information included in this network upgrade corresponds to an anonymous transmission technology under the Specific Financial Information Act.”Upbit has always reiterated its resolution to mitigate money laundering and illicit activities of all sorts. Therefore, it is no wonder that it, alongside other top exchanges, is not ready to be caught on the wrong side of the law, especially with the recent privacy-focused MimbleWimble upgrade on the Litecoin blockchain.Bithumb and Upbit collectively account for most trading volume in South Korea and with their recent delisting, more South Korean exchanges are expected to follow suit.Recent: US central bank digital currency commenters divided on benefits, unified in confusionSouth Korean exchanges have avoided privacy-related cryptocurrencies after regulators introduced stringent and explicitly prohibited darkcoins in 2020.How exchanges may stay compliantMeanwhile, all hopes may not be lost just yet regarding Litecoin in South Korea. On June 3, blockchain analytics and crypto compliance firm Elliptic announced what it claims will be a solution to the curious situation brought about by the MWEB upgrade.The firm insists that it doesn’t intend to trace whoever is behind any masked LTC transactions. However, it believes it can help regulated businesses to continue supporting Litecoin transactions, all while being in compliance with standing AML regulations.According to Elliptic, its solutions will help enable merchants to figure out when a Litecoin transaction or wallet holds funds that have passed through an MWEB transaction. With such information, businesses may then decide against proceeding with such activities that will be analyzed as “high risk.”Essentially, this means that businesses, including South Korean crypto exchanges, can keep on supporting Litecoin as long as they are in the know at every point in time the privacy feature is activated by users.According to Tom Robinson, chief scientist and co-founder at Elliptic:“By providing visibility of Mimblewimble activity, Elliptic’s transaction and wallet screening solutions provide businesses with the risk insights they need to continue to support Litecoin while meeting their legal obligations.”Robinson, in fact, spoke specifically about exchanges and the possibility of having to delist Litecoin. He claims that the exchanges do not have to, as they can carry out their businesses perfectly well without necessarily flouting any AML regulations in support of Litecoin. Furthermore, he added that at some point, one has to realize that virtually all cryptocurrencies have some way to hide their transaction flows, including conjoins on Bitcoin or Tornado Cash (TORN) on Ethereum.Recent: The business of a Bitcoin standard: Profit, people and passion for good foodInterestingly, this is not the first time Elliptic will be lending solutions to privacy-protecting technologies such as the MWEB. In 2020, the crypto compliance firm also added support for the Zcash (ZEC) and Horizen (ZEN) privacy coins.Growing adoption of MimblewimbleWithout a doubt, the introduction of Mimblewimble has been a remarkable achievement in the blockchain industry. Especially with its cut-through feature and other benefits attached to the upgrade. In light of this, a few other blockchain projects like Beam and Grin might already be exploring the potential of implementing the MimbleWimble design, albeit in technically different ways. While Beam uses the Mimblewimble protocol to reduce blockchain bloating and also improve scalability, Grin uses it to remove past transaction data that might weigh on its platform if such data is kept on-chain. For now, however, there is still an air of uncertainty regarding the possibility of Mimblewimble seeing a significant level of adoption, especially considering its tendency to bring about regulation compliance issues. Nonetheless, the idea is very young and undoubtedly very promising as well.

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GPU prices are still on a decline: Is Bitcoin’s sorrow gamers’ joy?

GPU prices are still on a decline: Is Bitcoin’s sorrow gamers’ joy?

Uverejnil používateľ | máj 25, 2022 |

The prices of graphics processing units (GPUs), also known as graphics cards, are undoubtedly still a far cry from the manufacturer’s suggested retail price (MSRP). However, they aren’t what they used to be either, especially considering what GPU prices looked like just a year ago.For instance, the price of a GPU from Nvidia GeForce RTX 30-series is 14% over its MSRP, according to reports from 3D Center. Whereas AMD’s Radeon RX 6000 is up 7% from its MSRP from April 17 and May 8. On the other hand, it is the first time since January that AMD’s Radeon RX 6000 dropped below 10% over MSRP.Meanwhile, just a month ago, these same prices were 19% and 12% above their MSRPs, respectively.The Nvidia RTX 3080 currently goes for a price range between $1,000 to $1,300. Despite being at such a long distance away from its $699 MSRP, the price is still down by almost 30% from its peak at $1,800.Regardless, the question on everyone’s mind remains whether, perhaps, the falling GPU prices are in some way related to the current cryptocurrency market situation. Presently, there’s almost no digital asset big or small that hasn’t been hit by the crypto market tsunami. While crypto continues to crash, GPUs are becoming increasingly affordable. So, one might wonder what is responsible for the continuous fall of GPU prices in recent times.The founder and CEO of Aldrin, Hisham Khan, believes that the bull market in the crypto space benefited GPU makers such as Nvidia a lot. If the current market downturn and sell-off continue, together with a prolonged period of low activity in the crypto space, that would “definitely impact GPU makers.” He told Cointelegraph:“If you’re mining Bitcoin and other cryptos with an Nvidia graphics card, the amount of time that you would need to spend mining after committing capital to buy these GPUs would depend on the price of the crypto assets. If the price drops you would need to mine longer to breakeven, which might deter people from jumping into mining.”Factors that cause GPU price hikesGPU prices can go frenzy for several reasons, and some of them include high demands for new products, global chip shortage, supply chain issues, and increased demand that stems from the crypto boom.Firstly, as happens with almost every upcoming product, there’s a promise of better features or performance over the predecessor resulting in an increased demand for the product and an unavoidable price increase.For instance, while Nvidia and AMD are set to release their next-generation graphics cards, one can expect some sort of overpricing. That should also, in a way, lower the prices of cards that are already out on the shelves.According to a report by Digital Trends, some believe that once both the Nvidia and AMD launch their new products, any other GPU that currently exists will undoubtedly dip in price or go even below their MSRPs.Secondly, when chip shortages happen, producing graphics cards becomes even more cumbersome and then there’s a struggle to lay hands on the few GPUs in circulation. Just as expected, demand rises and prices inevitably shoot up as well. Lastly, there’s a strong link between graphics cards and the cryptocurrency market, as GPUs can be used to solve the cryptographically intensive process of proof-of-work (PoW) blockchains like Bitcoin.According to a Digital Trends report in 2021, around 25% of all graphics cards sold in the first quarter of the year went to crypto miners. That accounts for nearly 700,000 GPUs; as seen many times in the past when crypto is booming, GPU prices are mostly up and vice versa.Recent: Enforcement and adoption: What do UK’s recent regulatory aims for crypto mean?Bitcoin’s sorrow, gamers’ luckKhan believes that whether gamers are into nonfungible tokens (NFTs) or crypto, “I would say that the branding and so far on what NFTs and the crypto community has done” for the gaming space has not been received very well. He said:“There’s a common sentiment if you just look at the top streamers that play games that NFTs and crypto are extremely bad, everything is written off as just a scam. So, there is a necessity for good actors in the space to create a fun and sustainable game that would benefit from leveraging crypto and tokenization technology, not the other way around.”The current fall in GPU prices may be attributed to the current cryptocurrency market situation. Crypto prices took a dive, and, in the same manner, graphics card prices are declining in price as some smaller miners reliant on ad-hoc operations with GPUs exit the market. However, some believe that graphics card prices have been falling consistently over some time. In fact, in February 2022, a report by Tech Times already suggests a price slash across the board on the GPU scene. It should be noted that the crypto market crash did not exactly happen overnight either, as the market has been in a general downturn since the year started.Although volatility and the crypto market go hand in hand, the past week has been one of the wildest ever in the crypto space. Ever since reaching all-time highs in November 2021, the two leading cryptocurrencies, Bitcoin (BTC) and Ether (ETH), have been on a downward spiral. And, once it got to the aforementioned top two, the bear market or the so-called crypto winter came for the whole ecosystem.According to a Reuters report, however, the recent crash saw the cryptocurrency market lose about $800 billion in value within a month. And, though GPU prices and gamers live for this to happen, miners do not.Recent: El Salvador’s Bitcoin play: What does the current slump mean for adoption?Miners are usually rewarded 6.25 BTC for completing a block, according to Investopedia. This means that around last November, when Bitcoin’s price was around $55,000, the reward for completing a hash would have been around $344,000. But today, BTC trades at roughly $30,000, and the reward figure is expected to be around $188,000 for completing a hash. Meanwhile, increasing electricity costs and a higher mining difficulty are cutting into the profit margins of cryptocurrency miners, which may be driving some to exit the market. In addition to the current market conditions, there’s also the issue of Ethereum’s migration to a proof-of-stake (PoS) model. This form of consensus mechanism will rely not on miners solving cryptographic puzzles to verify transactions but on staked tokens to maintain the health of the network, entirely defeating the aim of mining and thus opening up a massive supply of GPUs to the regular gamer.Recent research from the popular analyst and pioneer in the graphics industry Jon Peddie, who is also the head of Jon Peddie Research (JPR), has claimed that cryptocurrency miners usually make massive, bulk GPU purchases for their operations. So, now that crypto prices are on a downward trend, the graphics card market is set to be largely affected.Meanwhile, it is quite important to understand that the crypto may eventually recover, and when the market does recover, chances are that GPU prices could go up again, especially considering the ties between GPU prices and the crypto market that have been established so far. 

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Blockchains are forever: DLT makes diamond industry more transparent

Blockchains are forever: DLT makes diamond industry more transparent

Uverejnil používateľ | máj 13, 2022 |

Diamonds are some of the world’s most valued gemstones, and the global diamond industry has managed to remain afloat despite being partially eclipsed by the emergence of modern stocks and novel virtual assets.The diamond industry, however, appears to be undergoing a paradigm shift in recent times — incorporating modern technology such as blockchain to improve diamond production, tracking and ultimate sales. Leanne Kemp, CEO of independent technology company EverLedger, stressed the need for blockchain integration in the industry to improve the tracking of a stone’s provenance.Speaking on the issue of data manipulation concerning a diamond’s provenance four years ago, Kemp noted that “we see document tampering where one stone has been claimed across similar timelines with multiple insurers.”While it has yet to directly provide a solution to all the concerns of the diamond industry, blockchain is being used to solve a few of them by facilitating transparency that helps track the provenance of diamonds. This is primarily aimed at suppressing the sales of “conflict diamonds.” Diamond mining corporation De Beers Group has pointed out the potential of blockchain in the industry for increased accuracy, trust and transparency with regard to determining a diamond’s origin.The diamond industry maintains its distinctionDespite being impacted by the Great Recession of 2008, which saw the general stock market slump by an unprecedented margin, the diamond industry has managed to maintain its prominence notwithstanding a noticeable drop in global production of rough diamonds.The idea of integrating blockchain into the industry — which was only introduced in recent years — is likely to reawaken mainstream interest and further improve global production.The years leading to 2008 saw a steady increase in rough diamond production. According to data from German database company Statista, from 2005 to 2008, global production of rough diamonds never went below 160 million carats. Following the economic decline of 2008, however, the average production in the last decade has averaged 142 million carats with 116 million carats produced in 2021. The year 2017 saw the largest turnover in the decade, with 152 million carats of diamonds produced.About 99% of the global diamond mining process is carried out in nine countries with Russia, Botswana, The Democratic Republic of Congo, Australia and Canada respectively considered the top five countries involved. Diamond mining is almost monopolized, with companies such as ALROSA and De Beers controlling a large portion of the industry.Ethical concerns about the diamond industry aboundThere are a few reasons why investors do not seem to be flocking to the 68-billion-dollar enterprise that is the diamond industry, especially in recent times.Lucrative as it is, ethical concerns regarding the backbone of the diamond industry are prevalent. This has scared away potential investors, especially in times like these when investor behavior is increasingly affected by consumers’ moral and ethical positions.According to Johannes Schweifer, CEO of Crypto Valley’s CoreLedger, security and transparency challenges, as well as ethical concerns plague the diamond industry. Since over a decade ago, there have been claims of a link between diamond mining and regional hostilities, as noticed in some parts of Africa. Schweifer told Cointelegraph:“The biggest problem in the diamond industry has always been transparency. Most gemstones aren’t able to tell their origin stories. But, what if the stone on your wedding ring is actually a blood diamond, wouldn’t you want to know that? Knowing the origin and ensuring transparency from the ‘mine to the finger’ can not only help you sleep better, but it can also save lives.” Conflict diamonds, otherwise called blood diamonds, are diamonds mined in territories controlled by rebels opposing a legitimate government and subsequently used to fund these rebel movements. Diamond prospectors in Sierra Leone. Source: APSome instances of the unethical utilization of blood diamonds were evident in the 1990s in countries such as the Democratic Republic of Congo, Angola and Sierra Leone. Evidence proved that these diamonds were mined and used to purchase arms and ammunition for military and paramilitary movements.Aside from the sale of diamonds to fuel conflict, numerous reports of unscrupulous labor tactics used to exploit workers in mining sites have surfaced. Child labor also appears to be prevalent in the majority of these areas.Furthermore, the diamond industry has come under fire for the patent monopoly that exists regarding the control of mining processes, distribution and sale of diamonds. This has fueled concerns of an existing cartel that dictates the flow of the industry.In addition, the industry appears to be swarmed with problems such as the environmental concerns of mining, hazardous working atmosphere and insecurity, to name a few.Recent: How blockchain archives can change how we record history in wartimeWhere traditional methods end, blockchain beginsIn light of the problem of blood diamonds, global mining giant De Beers announced the pilot of its blockchain program Tracr, which will ensure that the company does not handle blood diamonds, particularly in distribution and sales. This announcement was made in January of 2018.However, De Beers would not be the first to make plans to track diamonds in order to resolve the issue of conflict in diamond distribution. Almost 20 years ago in 2003, the United Nations established the Kimberley Process Certificate Scheme with the goal of inhibiting the flow of blood diamonds into the global diamond market. This decision was reached following the Fowler Report of 2000 which showed that blood diamonds were still being used in conflict funding by the National Union for the Total Independence of Angola.However, the Kimberley Process has been condemned by organizations such as the Canada-based nongovernmental organization IMPACT, and Global Witness, an NGO headquartered in London which looks to prevent natural resource exploitation and human rights abuses, among other things. They alleged inefficiency.Speaking to BBC in 2011, Global Witness founding director Charmian Gooch noted that “nearly nine years after the Kimberley Process was launched, the sad truth is that most consumers still cannot be sure where their diamonds come from.”Gooch noted that the initiative has failed three separate tests especially in addressing unique concerns in Ivory Coast, Venezuela and Zimbabwe as her NGO left the process.Furthermore, IMPACT cited a failure to give accurate reports of the origins of diamonds and a “false confidence” given to consumers as reasons for its criticism of the Kimberley Process. Joanne Lebert, executive director at IMPACT, noted this as the NGO pulled out of the initiative in January of 2018. IMPACT pulled out of the process a few days after the announcement of De Beers’ Tracr. Tracr was piloted in early May 2018 with initial plans to launch later in the same year and a vision to make the platform accessible to the global diamond market. In the pilot, De Beers announced that it was able to successfully track 100 diamonds of high value as they passed through the conventional journey from their birthplace, the mine and to the ultimate retailer.“Blockchain technology and tokenization can provide a way to fractionalize ownership — instead of going full-risk on a single stone, one can spread the risk across many investors. Even the assessment and evaluation process can even be outsourced or shared. From an investment perspective, tokenization is a great way to open up diamonds to the average person,” Schweifer added.Tracr uses an identifying tag that De Beers dubbed Global Diamond ID, particular to each diamond, which identifies the diamond’s individual attributes such as clarity, color and carat weight. The unique information peculiar to a particular diamond as noted by its ID is then logged on a public ledger which Tracr uses to follow the diamond’s progress along the distribution chain.Tracr was officially launched earlier in May with De Beers noting that the initiative is already integrated into its business module globally. About a quarter of De Beers’ production by value has already been logged on Tracr in their first three Sights of 2022. A Sight is a term for a sale event with a respective lot of diamonds that are put up for sale.De Beers also pointed out some of the key benefits of the blockchain used which involve immutability, security, data security, privacy, transparency and speed. According to De Beers, the blockchain is expected to be able to “register one million diamonds a week onto the platform.”Blockchain increases transparency for every party involvedDe Beers is not the only company working on blockchain tracing solutions for the provenance of diamonds. IBM unveiled the TrustChain Initiative in April 2018 in collaboration with an association of jewelry companies.The TrustChain Initiative was created with the goal of increasing transparency for consumers by tracking the origins of jewelry using the IBM blockchain platform.On January 12, 2021, diamond marketplace Rare Carat partnered with EverLedger to provide more transparency on the origins of diamonds on its platform by using EverLedger’s blockchain.Recent: Rising global adoption positions crypto perfectly for use in retailThe global diamond industry is top-tier despite its several challenges and bleak past. Like finance and a host of other sectors, blockchain has proven to be useful in improving the diamond industry, especially in addressing issues with regard to the origins of diamonds.The proper ledger to use in tracing the provenance of jewelry should be immutable and transparent, hence a public ledger without a central point of control should be employed. Otherwise, the whole idea of transparent evaluation is dead on arrival as was allegedly noted in the Kimberley Process.“When it comes to transparency, the largest beneficiaries of blockchain are consumers and authorities. Ultimately, this will hold the industry to a higher standard and hopefully improve the working conditions of miners as well. In a business as murky and dangerous as diamonds, this can truly be seen as a benefit,” Schweifer said.He added that diamonds are high-value-density assets, so “it is almost impossible for the average person to own a large, investment-grade stone.” Even for those that can afford them, diamonds are a tricky investment, as a lot of experience is required to avoid being cheated or losing money.

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Can Solana become the dominant PoS chain despite persistent outages?

Can Solana become the dominant PoS chain despite persistent outages?

Uverejnil používateľ | máj 10, 2022 |

Like most new-age networks, Solana was developed to resolve major issues confronting the blockchain industry. While the network has addressed some of these issues by its very nature. However, it has also encountered a few unique problems.From resource exhaustion to a halt in block confirmation, the Solana network has suffered a number of setbacks that resulted in repeated power outages, causing the network to shut down for hours on several occasions.The network went down on December 4, 2020, about three years after Solana was introduced, causing confusion in the community.The chain appears to have stopped validating new blocks at slot 53,180,900, preventing transaction confirmations. The network engineers discovered and fixed the problem, but it had been down for approximately six hours.Furthermore, on September 14, 2021, the official Solana Support Twitter handle revealed that the network had been experiencing “intermittent instability” for approximately 45 minutes.According to the report, resource exhaustion was a likely cause of the issue that resulted in a denial of service. According to the support handle, the engineers were working on the issue and looking into the possibility of a restart if it persisted.The network recently experienced another outage, making it the seventh time that it has been disrupted. This time, the problem was caused by bots initiating a large number of transactions on Metaplex, a nonfungible token (NFT) marketplace built on Solana. The outage lasted approximately seven hours.Currently, the Solana validators are being slowed down, according to George Harrap, co-founder of Step Finance — a Solana portfolio manager — because bots are spamming NFT mint and arbitrage transactions. These have immense bandwidth requirements, so a significant number has an impact. “Solana is not a centralized entity with one person who can make decisions. It’s up to the 1700+ validators to decide what to do. Many of them are implementing fixes and reaching consensus on what is to be done in the best interests of the network,” Harrap told Cointelegraph. He said: “According to Nansen research, there are often 10-times more transactions on Solana than Ethereum. This means Solana is dealing with demands not faced by other blockchains and this is new territory. So, hiccups are expected.”While Ethereum’s OpenSea has been one of the most well-known NFT marketplaces thus far, Metaplex, built on the Solana network, is gradually gaining traction and allowing users to mint and sell NFTs on the Solana blockchain.Given the recent marketplace issue and Solana’s persistent blackouts, however, it would not be surprising if some users begin to reconsider.Harrap added that “there are currently some validator node updates in the pipeline and under research to fix this. This is mainly in the form of new communication protocols between nodes (like QUIC) and changes to the Candy Machine contract used by NFT minters where failed transactions incur a fee.”Solana seeks to address the blockchain trilemmaSolana went fully operational two years ago. The network is considered to be one of the Ethereum killers by the crypto community. These Ethereum killers are networks that aim to outperform the Ethereum blockchain in terms of adoption by addressing some issues that have arisen as a result of the Ethereum blockchain’s current heavy reliance on the proof-of-work (PoW) consensus mechanism.Solana was designed with the blockchain trilemma in mind, a concept proposed by Vitalik Buterin, a Canadian-Russian programmer and co-founder of Ethereum.According to the blockchain trilemma, while decentralization, security and scalability are the three main features of a successful blockchain, a typical blockchain would only be able to provide two of them while sacrificing one.The Solana network aims to address this by incorporating a proof-of-history (PoH) mechanism into a proof-of-stake (PoS) blockchain. With PoH, the network delegates a central node to determine a transaction time that the entire network can agree on. This speeds up transactions, but it sacrifices decentralization, which is a key feature of a blockchain.According to Hisham Khan, founder and CEO of Aldrin, users have turned to layer 2s and other layer 1s like Avalanche as well as temporary solutions to Ethereum. But, it doesn’t really solve the current scalability issues, transaction costs and speed. He told Cointelegraph:“If you look at the transactions per second, Solana ranks consistently in the top five. To gauge how promising an ecosystem is, look at the number of developers. Unsurprisingly, Solana continues to grow with the most developers joining.”“Scalability and stress tests are a necessary part of the process to shape the ecosystem to maturity — we are not just dealing with financial transactions but initial DEX offerings, NFTs, bots and much more,” Khan said, “All these issues might not exist in five years. And, just like the early days of the internet, the user experience and backend still have room for improvement. While users may not notice the difference, there will be a smoother process as underlying smart contracts and technology continues to be developed.”Concerns have been raised about whether the Solana network is truly decentralized. While most crypto enthusiasts acknowledge the network’s low fees and notable scalability, they argue that the network is not completely decentralized, citing its reliance on PoH, nearly 50% token allocation to insiders and reliance on the Solana Foundation for core node development.And, despite all this, its scalability still appears to be in doubt. In early January 2021, the official Solana Support Twitter page acknowledged a decrease in performance, which translates to a decrease in transaction throughput across the network. According to the tweet, the network capacity was reduced to “several thousand transactions per second,” causing some users’ transactions to fail.Related: The birth of ‘Ethereum killers’: Can they take Ethereum’s throne?Solana employs the proof-of-stake mechanism, which means that users can stake their native coin Solana (SOL) in the pool to earn rewards. These coins are then commissioned to validators in order to increase their polling influence in the blockchain consensus. This quickly confirms the transaction sequence produced by the ongoing PoH generator, selects new PoH generators and penalizes mischievous validators.While many users have taken advantage of the Solana staking opportunity, particularly as a side income source, a few users on the official Solana Reddit channel have reported issues staking their SOL using Moonlet wallet and Solana’s Phantom wallet.A long way to goThe Solana ecosystem has produced a number of decentralized applications (DApps), including lending protocols such as Apricot Finance and Francium, decentralized finance (DeFi) projects such as Orca, Saber, and Raydium, NFT marketplaces such as Metaplex and Solanart and Web3 apps such as Audius and the Brave Browser.However, with only 71 projects, the ecosystem falls far short of major ecosystems such as Ethereum’s, which has approximately 3,249 projects. Orca, a decentralized exchange on the Solana blockchain, has been the most used DApp on the Solana ecosystem in the last seven days. Orca has a user base of 272,000 people, while NFT Marketplace Magic Eden comes in second place with 121,000 users.In contrast, while the most popular DApp on the Ethereum ecosystem in the last seven days has been NFT Marketplace OpenSea with approximately 148,000 users, the Ethereum ecosystem’s total value locked (TVL) is far above its rival’s with a value of $113 billion, according to DeFi TVL aggregator platform DeFiLlama. Solana has a TVL of $6 billion.The low fees that the Solana network promises have enticed developers and users alike, but frequent network outages have hampered full network utilization and scared away some potential stakeholders that have stunted the ecosystem’s growth.Promising upgrades aheadIn response to these concerns, Solana Labs — the technology firm behind the Solana blockchain — has revealed plans for “flow control” upgrades that will potentially address these growing network outage concerns.Austin Federa, head of communications of Solana Labs, hosted CEO Anatoly Yakovenko and other members of the Solana development team on Twitter earlier this year in a Twitter Spaces session to discuss possible solutions. This came after the network experienced several blackouts in January alone, causing users to become concerned.Yakovenko stated during the session that plans are in the works to implement upgrades to assist in dealing with these issues and that they will be rolled out in the coming weeks. He also pointed out that some of them had already been implemented.Recent: Largest NFT mint ever: Making sense of Yuga Lab’s ‘virtual’ land bonanzaIt would not be out of place to expect a significant improvement in Solana chain stability in the coming months, owing largely to the fact that it is still in its infancy and should be given some time to develop. However, the problems appear to be majorly unique to the network, raising questions about whether they will be ultimately resolved within the crypto space.In a more technical sense, one could argue that the current release is still in the beta phase and that the full release will include upgrades to address these issues. However, in response to a Reddit post, a Solana moderator revealed that the “beta” attached is “just a word that could be removed at any time.”In April 2021, there were proposals to implement an on-chain governance protocol to allow coin holders to influence the chain’s upgrade democratically. This would aid in the delegation of upgrade decisions to holders and stakers.Solana is expanding, and with a market cap of $30 billion, the native coin SOL has risen to sixth place among the most valuable digital assets.According to a recent Finder poll, the price of SOL is expected to reach $222 by the end of the year. Despite the outages that appear to be unique to the network, the rapid growth of the ecosystem has given reason to believe that Solana could one day become one of the dominant PoS chains. Harp concluded:“Solana isn’t strictly a PoS consensus like other PoS systems, rather it is trying something new. Whether it will stand the test of time and scale remains to be seen.” 

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