Posted on

Cryptocurrency Grin Follows Through With Anticipated July 17 Mainnet Hardfork

The cryptocurrency Grin has followed through with stated plans to hardfork its mainnet on July 17, as part of an ongoing effort to prevent ASIC mining.

Privacy-focused cryptocurrency Grin has completed the first hardfork so far on its mainnet. The fork occurred at block height 262,080 on July 17, as shown on the Grin block explorer Blockscan.  

According to an official announcement from Grin core dev Quentin Le Sceller, the latest blockchain hardfork is designed to discourage Grin mining through dedicated application specific integrated circuits (ASICs) and also includes a new iteration of its “bulletproof rewind scheme” for Grin wallets.

As previously discussed by Cuckoo Cycle author John Tromp, there is reportedly no sign of users deploying ASICs to mine Grin yet; however, Grin’s secondary Proof-of-Work scheme Cuckaroo29 is intended to be continually iterated upon in order to prevent ASIC mining:

“In the 133 days of Grin mining so far, there is no sign of any ASIC mining. We do know of several ASIC products planned to come out in summer. To the extent that any such ASICs have built in support for Cuckaroo29, we want our tweak to brick that support.”

As previously reported by Cointelegraph, Grin proposed the mainnet hardfork for the aforementioned height and date on June 5. Grin has also planned to continue hardforking its mainnet at regular intervals, with each fork occurring approximately once every six months upon reaching 262,080 new blocks. 

As these are hardforks, previous transactions on the blockchain will no longer be recognized whenever a new mainnet version is launched. Additionally, Grin apparently uses the “Mimblewimble” protocol, a cryptographic protocol named after a tongue-tying curse from the popular Harry Potter fantasy series. This protocol reportedly allows for transactions to be obfuscated, with the upshot of maintaining user privacy and guarding against double spending.

Posted on

Study: Over 74% of Bitcoin Mining is Powered by Renewable Energy

Cryptocurrency investment products and research firm CoinShares estimates that 74.1% of bitcoin mining is powered by renewable energy.

Cryptocurrency investment products and research firm CoinShares estimates that 74.1% of bitcoin (BTC) mining is powered by renewable energy in its bi-annual mining report published on June 5.

The report also claims that “at current prices, the average miner is highly profitable, with even older gear and high-cost producers currently able to make positive ROI.” The paper also notes that bitcoin mining operations are concentrated where there is ample renewable energy supply. Still, the report also notes:

“The renewables estimate is down from 77.8% in our November 2018 report and reflects increased visibility of the industry on our part as well as movements within the industry.”

The correlation between bitcoin mining and renewable energy reportedly makes bitcoin mining “more renewables-driven than almost every other large-scale industry in the world.” The report also notes that since November last year, the total hashrate of the network increased from 40 quintillion hashes per second (EH/s) to 50 EH/s.

This means that — during this period — the growth of the computing power invested in maintaining the network was slower than its 10-year average but in line with the five-year average.

The report also points out that the temporary decrease in hashrate (of about 40%) registered at the end of last year was the first registered instance in which there has been a major and prolonged decrease in the network’s computing power.

CoinShares believes that the recent increase in bitcoin’s hashrate is caused by old mining hardware being powered on again after the higher price rendered them profitable to run, and the deployment of next-generation, more efficient, application specific integrated circuits (ASICs).

As Cointelegraph reported in May, Canadian bitcoin mining company Hut 8 made almost $50 million in revenue last year but triggered total losses of almost $140 million. The company’s chief operating officer Andrew Kiguel noted at the time that he believes margins will improve if BTC’s price continues to rise.

Also in March, cryptocurrency mining giant Bitmain was reportedly planning to set up 200,000 units of mining equipment in China to benefit from low-cost hydroelectric power in the country.

Posted on

Privacy-Centric Coin Grin Sets Mid-July Target Date for First-Ever Hard Fork

Privacy-centric cryptocurrency Grin is finalizing its timeline for its first-ever network hard fork.

Privacy-centric cryptocurrency Grin is finalizing its timeline for its first-ever network hard fork, according to a proposed timeline uploaded by Grin core developer Quentin Le Sceller to Github dev community forum Gitter on June 5.

Grin is a privacy coin that implements scalability- and privacy-focused Mimblewimble protocol  — named after a fictional tongue-tying curse from the popular Harry Potter novels.

Mimblewimble is in part a variant of the cryptographic protocol known as Confidential Transactions, which allows for transactions to be obfuscated yet verifiable so as to achieve both heightened privacy and the prevention of double spending.

According to Le Sceller’s document, the activation block number for the forthcoming hark fork is 262,080, which is estimated to be hit on July 17.

The hard fork — the network’s first since its launch in mid-January of this year — is one of four system-wide upgrades scheduled for the first two years of the coin’s circulation. Each hard fork is set for every 262,080 blocks — roughly six month intervals.

The proposed timeline also includes a hard fork on Grin’s testnet, dubbed Floonet, on June 15, set at block height 216,000.

As part of its ASIC-resistance roadmap, Grin uses a strategy of frequent tweaking to one of its two proof-of-work algorithms. The imminent hard fork represents the first such tweak that aims to ensure the network remains resistant to mining that uses specialized hardware over the long term.

As previously reported, ASIC refers to mining hardware that uses application-specific integrated circuit chips, which are tailored to efficiently mine cryptocurrency based on a specific hashing algorithm.

Meanwhile, set-ups that use graphics processing units (GPUs) are less specialized, and have ostensibly to date struggled to compete for network rewards due to their reduced efficiency.

Aside from this, the hard fork will include an upgrade designed to increase the Grin wallet’s flexibility and usability — specifically an improvement to its so-dubbed “bulletproof rewind scheme,” which will enable new kinds of wallets including multisig and watch-only wallets, which allow users to detect their outputs, but not spend them.

As recently reported, China-based blockchain platform Neo has just implemented a new iteration of its consensus algorithm on its mainnet. The new algorithm includes a procedure for reintegrating failed nodes back into the network, and also adds a “commit phase” of consensus, which alleviates forking issues by including a step that forces node assignment to new blocks.

Posted on

Examining Australia’s Updated Regulations for ICOs and Crypto Trading

Australia’s top financial regulatory watchdog issues updated guidelines for ICOs and cryptocurrency trading.

The Australian Securities and Investment Commission (ASIC) on May 30, 2019 published an updated guideline for initial coin offerings (ICOs) and cryptocurrency trading. These new guidelines are aimed at helping cryptocurrency-related businesses understand their compliance requirements vis-à-vis existing laws contained in the Australian Corporations and ASIC Acts.

The ASIC’s revampled ICO and cryptocurrency trading framework does not, however, cover guidelines for other regulators like the country’s tax agency and consumer protection group. The securities regulator say crypto businesses will have to refer to the published laws by those respective bodies.

By updating its ICO regulatory provisions, the ASIC is setting the stage for more robust and comprehensive governance of Australia’s cryptocurrency landscape. It also provides greater clarity to established rules that govern crypto-related businesses in the country.

One careful step at a time

The ASIC guidelines published on May 30 are the second update to Information Sheet 225 (INFO 225), which was originally released in September 2017. The first update to the document was back in April 2018.

At the time of publishing its first ICO guidelines, the ASIC said it wanted token issuers to be aware of the potential applications of the country’s Corporations Act of 2001 to ICOs. Commenting on the first-ever ICO framework, ASIC Commissioner John Price declared:

“We want to ensure innovative firms understand the regulatory framework they may be operating under and ensure they meet any obligations they may have when raising funds in Australia.”

Australia’s initial attempts at creating a governance infrastructure for crypto came at a time when China’s blanket ban on ICOs and digital currency trading was making the news headlines. The ASIC guidelines constituted a different approach to Beijing’s anti-cryptocurrency stance.

Rather than reinventing the wheel, the ASIC set forth modalities with which token issuers could apply already existing financial regulations to their cryptocurrency offerings. Many of the early regulations mirrored those already in place for private and public companies in the country.

As reported by Cointelegraph at the time, the 2017 guidelines classified ICOs into three broad groups — managed investment schemes, shares or derivatives and noncash payment (NCP) facilities. Token issuers were to ensure that their marketing activities clearly identified which group their tokens belonged to.

Apart from intimating stakeholders about the legal requirements for ICOs and cryptocurrency trading, in 2017, the ASIC also wished to convey important points about the risks inherent in digital currency investments. Speaking at the time, Commissioner Price said:

“ICOs are highly speculative investments, are mostly unregulated and the chance of losing your investment is high. Consumers should understand the risks involved, including the potential for these products to be scams, before investing.”

By the time of the first update in April 2018, the ASIC’s focus shifted to investor protection. Commissioner Price enjoined stakeholders to be aware of their responsibilities regarding ethical practices in the industry.

New ASIC guidelines for ICO and crypto trading

Fast-forward to 2019’s update and the ASIC seems to be laying out the groundwork for a more comprehensive regulatory environment. According to the latest update, token issuers and investment advisors dealing in tokens deemed financial products require an Australian Financial Services (AFS) license.

For cryptocurrency exchange platforms that list tokens that are deemed to be financial products, an Australian market license is mandatory. Such platforms may also require a clearing and settlement (CS) facility license.

The ASIC guidelines encourage token issuers to accurately determine whether their ICO is a financial product or not. In Australia, the definition of a financial product also extends to offerings that involve a financial product. So, ICOs offering securities, derivatives, NCPs and managed investment schemes are deemed financial products.

The ASIC’s new governing principles for cryptocurrencies create an avenue for nonfinancial ICOs (utility tokens) to exist. Such a paradigm differs greatly from a jurisdiction like the United States, where its Securities and Exchange Commission (SEC) has consistently maintained that ICOs are always likely to be securities.

According to the ASIC, many ICOs turn out to be managed investment schemes that the commission says often exhibits the following characteristics:

  • “People contribute money or assets (such as cryptocurrency or other crypto-assets) to obtain an interest in the scheme (subject to limited exceptions, ‘interests’ in a scheme are generally a type of ‘financial product’ and are regulated by the Corporations Act)
  • Any of the contributions are pooled or used in a common enterprise to produce financial benefits or interests in property (e.g. using funds raised from contributors to develop the platform), for purposes that include producing a financial benefit for contributors (e.g. from an increase in the value of their tokens), and
  • The contributors do not have day-to-day control over the operation of the scheme but, at times, may have voting rights or similar rights.”

For the ASIC, the important consideration for ICOs deemed to be managed investment schemes are the “rights” held by token owners. Consequently, issuers of such tokens must adhere to strict registration, licensing and reporting requirements.

Is an ICO a managed investment scheme?

For example, they must register the ICO with the ASIC and obtain an AFS license. It is also compulsory to create a compliance plan, as well as a constitution that guides the ICO. Additionally, such token issuers need to put forward a product disclosure statement (PDS).

The PDS is an important compliance document for ICOs. Any misleading or inaccurate information contained in the PDS would mean investors who suffer losses from participating in the scheme would be entitled to a full refund of their initial investment.

Having created a framework that broadly classified ICOs as managed investment schemes, the ASIC also provided some details about token offerings deemed to be securities. For Australia’s top financial regulator, ICOs that closely resemble initial public offerings (IPOs) are what the commission considers to be “security tokens.”

These offerings provide owners many of the rights ascribed to shareholders, such as voting privileges. Being similar to IPOs, the ASIC mandates security token issuers to prepare prospectuses and follow all the licensing, registration and compliance requirements that apply to IPOs.

Since most ICO tokens would be deemed financial products under the ASIC’s newly updated regulatory paradigm, cryptocurrency exchanges may face extra compliance and licensing requirements. According to the updated guidelines, platforms that list tokens deemed to be financial products automatically become designated as financial markets. An excerpt from the guidelines explaining exchanges as financial markets reads:

“To operate in Australia, the platform operator will need to hold an Australian market licence unless covered by an exemption. There are currently no licensed or exempt platform operators in Australia that enable consumers to buy (or be issued) or sell crypto-assets that are financial products. Platform operators must not allow financial products to be traded on their platform without having the appropriate licence as this may amount to a significant breach of the law.”

Cointelegraph reached out Zebpay, a cryptocurrency exchange that recently moved to Australia, regarding the implications of the updated ASIC guidelines on its operations. Responding via email, Kevin Lim, the head of compliance and legal at Zebpay, said: “We welcome the new regulatory framework as it brings more clarity and transparency to the crypto-market in general, and clarity is always welcome.”

Explaining further, Lim said that Zebpay’s listing is restricted to cryptocurrencies that do not fall under the definition of financial products, adding:

“We can state categorically that as a matter of company policy the Zebpay platform only lists tokens that ASIC regards as digital currencies (e.g. Bitcoin, Ethereum and Litecoin), and we do not anticipate deviating from this company policy for the foreseeable future. We have not seen anything in the most recent changes which suggest there has been any change to that position. ASIC has previously confirmed that trading platforms that confine themselves exclusively to the trading of digital currencies are not, in their view, a financial market or purveyor of financial services.”

Combating “rising” cryptocurrency fraud

For the ASIC, these updated guidelines also form part of the commission’s efforts to fight cryptocurrency-related fraud in conjunction with other relevant agencies, such as the Australian Competition and Consumer Commission (ACCC). As previously reported by Cointelegraph, the ACCC declared that crypto scams amounted to $4.3 million in the country in 2018.

Compared to the previous year, 2018’s crypto scam figures constituted a 190% increase in such crimes. However, cryptocurrency scams as a whole still only represented a minute figure (less than 6%) of the total proceeds from fraudulent activities recorded in the country.

A similar situation also occurred in Japan, where the National Police Agency (NPA) released its money laundering report for 2018 that showed an increase in crypto-related money laundering activities. Compared to the total losses of recorded cases, cryptocurrency money laundering accounted for less than 2%.

One thing to note is that in its updated guidelines, the ASIC has repeatedly warned against providing misleading information about token offerings. Since 2018, the financial regulatory watchdog has began taking concrete steps in combating ICO fraud. Back then, the ASIC declared that it would ensure that all “threats of harm” from the digital currency market are mitigated.

Posted on

Australian Securities Regulator Releases Cryptocurrency, Mining, ICO Guidelines

The Australian Securities and Investment Commission published new initial coin offering and cryptocurrency guidelines.

The Australian Securities and Investment Commission (ASIC) published new initial coin offering (ICO) and cryptocurrency guidelines on its official website on May 30.

The regulator detailed the prerequisites that a cryptocurrency business needs to follow in order to comply with both the Australian Corporations and ASIC Acts, but did not cover regulations enforced by other national institutions. Notably, the guideline specified that if a crypto asset is a financial product, then the issuer and firms dealing with it are required to hold an Australian financial services license.

The report also notes that miners will be considered part of the clearing and settlement process in at least some instances:

“Where miners and transaction processors are part of the clearing and settlement (CS) process for tokens that are financial products Australian laws apply.”

The regulator also noted that “entities and their advisers need to consider all the rights and features of the ICO (regardless of how it is named and marketed) in determining whether the crypto asset is a financial product or involves a financial product.” The report further specifies that exchanges managing such assets will need to hold a license as well, since the guidelines notes:

“Businesses offering crypto-assets, or offering services in relation to crypto assets, need to undertake appropriate inquiries to satisfy themselves they are complying with all relevant Australian laws.”

Lastly, the ASIC also noted that Know Your Client and Anti-Money Laundering norms apply to crypto assets, as does the Australian Consumer Law, including cases when the assets are issued or managed from abroad.

As Cointelegraph reported earlier this week, the ASIC has warned the public that crypto project OneCoin “could be involved in a scam.”

At the end of April, Australia’s tax agency, the Australian Tax Office, confirmed that it will seek to contact cryptocurrency traders personally about tax issues as part of a new data collection scheme.

Posted on

Monero Developers Consider Adopting New Proof-of-Work Algorithm in October

Privacy-centric cryptocurrency monero will reportedly switch to a new proof-of-work algorithm in October.

Privacy-centric cryptocurrency monero (XMR) plans to switch to a new proof-of-work (PoW) algorithm in October. The new algorithm follows an agreement with permanent storage network Arweave, which will fund an audit of the new algorithm, an Arweave spokesperson told Cointelegraph via email on May 23.

Arkweave said that monero will be the first to use the RandomX algorithm, thus replacing CryptoNight. Until now, monero developers reportedly hard-forked the network once every 6 months to ensure application-specific integrated circuit (ASIC) resistance by implementing small changes to CryptoNight.

However, this approach was criticized for being overly centralized, the spokesperson notes. Arkweave claimed that RandomX requires less developer intervention to stay ASIC-resistant, and will render graphics processing unit-based mining uncompetitive.

Arweave has purportedly partnered with monero developers to co-fund the audit, which is expected to reach $150,000 of funding and will be conducted over the next two months.

The GitHub page dedicated to RandomX also notes that the algorithm requires miners to dedicate over two gigabytes of RAM to the process, which could make cryptojacking attempts harder to hide.

As Cointelegraph recently reported, a global threat report from Check Point Research has concluded that the three most common malware variants detected in April were crypto miners, which often mine monero.

At the beginning of May, security intelligence firm Trend Micro Inc reported that cybercriminals are now reportedly exploiting known vulnerability CVE-2019-3396 in the software Confluence, a workspace productivity tool made by Atlassian, to mine monero.

Posted on

Ethereum Core Devs: Funding for ProgPoW 3rd-Party Audit Approved

Ethereum core developer Hudson Jameson announced that an audit of the ASIC-resistant Proof of Work algorithm ProgPoW has been funded.

Ethereum (ETH) core developer Hudson Jameson announced that a third-party audit of the Application Specific Integrated Circuit (ASIC)-resistant proof-of-work algorithm ProgPoW has been funded. The dev made the announcement during the latest bi-weekly Ethereum core developer meeting held on April 26.

During the call, it was specified that the targeted funding amount of 50,000 units of decentralized, Ethereum-based USD-pegged stablecoin DAI had been reached. The funds were reportedly crowd-sourced through donations.

Jameson noted that the audit is set to begin “this week or next week hopefully.”

ASIC refers to mining hardware that uses single-purpose chips, which are tailored to more efficiently mine cryptocurrency based on a specific hashing algorithm. Meanwhile, set-ups that use graphics processing units (GPU) are less specialized, and have therefore to date struggled to compete for rewards on the network with those that deploy ASICs.

ProgPoW aims to decrease the efficiency advantage of ASICs over GPUs.

As Cointelegraph reported in February, after having first approved ProgPoW’s implementation, core developers changed their mind and delayed the decision until a third-party audit was completed.

A recent Cointelegraph analysis uncovered that as of lately, stablecoin DAI has been struggling to keep its peg, but its proponents apparently believe that it will soon become crypto’s default stablecoin.

Posted on

Report: Chinese Publicly Listed Construction Company Turned Mining Firm Lost Over $23 Million

A Chinese publicly listed construction company turned to cryptocurrency mining firm has been reportedly sold after its value decreased by over 90%.

Chinese publicly listed construction company turned to cryptocurrency mining firm, Huatie HengAn, has reportedly been sold after its value decreased by over 90%. The development was reported by English-language local crypto-focused media 8btc on April 19.

The firm has been reportedly sold for around 12 million yuan ($1.8 million), after its value decreased from 170 million Chinese yuan ($25.3 million) in under a year. Per the report, Huatie HengAn started as a subsidiary of the publicly listed parent company Huatie and claims to be mainly engaged in providing cloud computing services.

Still, 8btc notes that its financial filings reveal that the company’s main business appears to be cryptocurrency mining, since in 2018, it purchased 36,500 machines from Avalon and Ebang. While the report allegedly calls the machines servers, the producers are actually known for the production of cryptocurrency mining Application Specific Integrated Circuits and reportedly don’t produce servers in the traditional sense.

8btc claims that the sale of the company attracted much attention from the local crypto community, since it could be the country’s first listed company that has been revealed to engage in crypto mining. The loss sustained by the parent company because of the depreciation of its mining business reportedly amounted to over 95 million yuan ($14 million).

This value purportedly exceeds the initial investment of around $25 million. Furthermore, 8btc notes that the company’s revenue for the year was 53 million yuan ($7.9 million) and that as of Feb. 28, the net loss increased to nearly 158 million yuan (roughly $23.5 million). All of this reportedly decreased the net asset worth of the company to only 12 million yuan ($1.8 million).

A tweet published on April 12 by the research arm of major cryptocurrency derivatives platform BitMEX estimates that Bitcoin SV (BSV) miners have accumulated gross losses of $2.2 million.

As Cointelegraph recently reported, a Chinese government agency is considering the elimination of crypto mining in the country. Also, at the beginning of the current month, the secretary of Hong Kong’s Financial Services and the Treasury has stated that crypto mining operations are regulated by local trading law and an infraction is punishable by fine or imprisonment.