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Constantinople Not enough, Addressing Ethereum Gas Fees A Top Priority

By all standards, Ethereum is an improvement of Bitcoin. It remains an open source ledger infused with decentralized controls supporting general computing as well as digital economic activities. underpinning Ethereum capabilities is the ability to create highly programmable programs, smart contracts, that are flexible, running as programmed without downtime.

Because of this, products and services can be built and deployed on this decentralized network with the knowledge that they will remain tamper proof and secured by the swarms of global computers with the only expenditure being a small fee payable to miners, incurring a social cost to the network as a whole.

Aside from the economic abstraction question, Ether (ETH) is the only currency acceptable in the network. Like Bitcoin, Ether possess three key properties—it can be a store of value, a medium of exchange—as an extended functionality of Bitcoin since it is programmable and lastly it is a unit of account.

Constantinople and EIP 1014: Skinny CREATE2

The last optimization upgrade saw Ethereum moving closer to Casper FFG after the successful activation of Constantinople. By incorporating approved proposals, a major takeaway was Thirding where miner rewards were slashed from three to two via EIP 1234 and CREATE 2 via EIP 1014—a proposal by Vitalik allowing for Ethereum smart contracts to interact with third party programs. It is summarized as follows:

“Allows interactions to (actually or counterfactually in channels) be made with addresses that do not exist yet on-chain but can be relied on to only possibly eventually contain code that has been created by a particular piece of init code. Important for state-channel use cases that involve counterfactual interactions with contracts.”

Address Gas Fees, Conner’s Proposal

However, according to Eric Conner, these optimizations are not enough. Through EIP 1559, he is proposing the scrapping of the existing auctioning model–first price auction, believing that it is “a major source of frustration” and an obstacle for full interaction and adoption of Ethereum.

Although we must acknowledge that GAS fees are charged in all blockchain network to prevent Sybil attacks, a change is necessary because the network is increasingly becoming popular and some users are reporting difficulty in estimating gas fees.

Coupled by their propensity of paying minimum for every transaction, their transactions are sometimes binned by miners always prioritizing transactions where initiators are willing to pay a premium for processing.

What users Stand to Benefit

These are pain points that need to be addressed as fast as possible. Accordingly, he is proposing a new auctioning model where the existing model is slightly adjusted “so that users submit bids as normal, then everyone pays only the lowest bid that was included in the block.”

The introduction of base fees and miner tips will reduce inefficiencies and when infused with Vitalik’s proposal draws high reliability allowing wallets to automatically set gas fees regardless of network’s activity. Base fees amount varies according to demand bringing value to ETH. To stem manipulation, these base fees are destroyed as they are “burnable”.

In his proposal, miners will benefit from tips. If this new fee system is incorporated, Eric lists the following benefits that users will set to draw:

  • Save up to 90% of transaction costs
  • Greatly improve user experience by automating the fee bidding system
  • Provide a predictable fee system for advanced users
  • Reduce unexpected wait times for transaction confirmations
  • Allow users to still “jump” the line when network is congested
  • Disincentive selfish mining even if fees dominate rewards
  • Enshrine the economic value of ETH at the protocol level

Do you think Conner’s system will be taken into consideration? Let us know in the comment section below.

The post Constantinople Not enough, Addressing Ethereum Gas Fees A Top Priority appeared first on Ethereum World News.

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Ethereum Wallets, Mining Rigs Still Targeted by Hackers at Low Prices

Ethereum has been one of the hardest hit cryptocurrencies during this year’s bear market. Its woes are nowhere near over as mining hardware has been targeted by hackers looking to cash in before prices plummet even further.

In a recent report tech based news outlet ZDnet revealed that hackers have unleashed a large scale scanning network designed to target Ethereum wallets and mining hardware. The campaign has been running for at least a week since December 3 according to cyber security researchers.

The target specifically is port 8545 which is the standard port for the JSON-RPC interface used by Ethereum wallets and mining hardware. The API interface allows locally installed apps and services to scan for fund related and mining data.

Some less secure wallets and mining machinery leave this interface exposed publicly via the port which can then be compromised.  By default the interface does not have a password set and relies on the user configuring one. If left exposed hackers can exploit the port to access the interface and lift cryptocurrencies from the wallet.

This is not a new threat however as the Ethereum team issued a warning back in August about insecurely configured Ethereum clients. The recommendations included password protecting the interface or filtering traffic through the port using a firewall.

A number of mining rig vendors have already taken steps to mitigate the issue by removing the interface altogether or limiting usage of port 8545. There are still a lot of vulnerable Ethereum clients online however and the scans are ramping up.

According to Chinese cyber-security firm Qihoo 360 Netlab over $20 million in Ethereum at July’s exchange rate has already been stolen by one group. When crypto prices surged it was expected that scans and attacks would also be on the up.

What is surprising this time around is that there has been an uptick in scans despite the price of Ether entering what some have described as a death spiral. “Despite the price of cryptocurrency crashing into the gutter, free money is still free, even if it’s pennies a day,” Bad Packets LLC co-founder Toy Mursch told ZDnet.

Scan activity has tripled over the past week according to the cyber security firm. Further searches show that nearly 4,700 devices, mostly Geth mining equipment and Parity wallets, are currently exposing their 8545 port.

Cryptocurrency prices may be on the floor but that does not deter hackers from paying attention and seeking opportunities to grab some free loot.

The post Ethereum Wallets, Mining Rigs Still Targeted by Hackers at Low Prices appeared first on Ethereum World News.

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Ether, ADA Crypto Prices Hit Lowest Levels In Over 1 Year

Two of the top 10 cryptocurrencies by market capitalization are now trading at their lowest level in a year.

Ethereum, the world’s second largest cryptocurrency by market capitalization, fell to its lowest price since 2017 on Wednesday, a development shared by Cardano, the world’s ninth largest by market capitalization.

At 16:00 UTC, during the middle of Wednesday’s trading period, the cryptocurrency dropped to $211 for the first time since July 30, 2017, according to CoinDesk price data.

Ether was last seen trading at $221.88, marking roughly a 4.95 percent decline since the day’s open and a 19.83 percent decline over 24-hours.

At press time, ether is one of the biggest losers among the top 10 cryptocurrencies by market capitalization and is reporting a 7-day loss of 20.06 percent. Its individual market capitalization also fell by more than $5.8 billion within that period.

Ether has now effectively erased most of the gains seen during last year’s bull run and is down 84.2 percent from its all-time high of $1,357. According to CoinDesk price data, ether was trading at $337 exactly one year ago, leaving some to speculate on the possibility for a rebound.

The cryptocurrency is just one of a number of networks to see declining values during the Wednesday session. Well-known cryptos including XRP, EOS and bitcoin cash have all seen 24-hour losses in excess of 15-20 percent.

Cardano, the only other cryptocurrency asset in the top 10 to experience last year’s prices, has dropped 19.07 percent over a 24-hour period and was last seen changing hands at $0.085.

The total market capitalization of all cryptocurrencies is down nearly $27 billion from its yesterday’s top of $238.7 billion and is currently sitting just above $210 billion, CoinMarketCap data shows.

Disclosure: The author holds USDT at the time of writing.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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A Phone Call Could Impact Ethereum's Future – And It's Happening Today

Miners, investors, developers and more.

That’s a summary of the diverse set of ethereum stakeholders that will be in attendance at an upcoming developer call, according to Ethereum Foundation communication officer Hudson Jameson. Set to take place at 14:00 UTC Friday, the live-streamed meeting aims to address some of the platform’s most challenging questions ahead of its system-wide upgrade planned for October.

As part of that upgrade, there are several non-contentious ethereum improvement proposals (EIPs) already ready for testing, but also included are others that have stirred up controversy.

In particular, three concepts – the difficulty bomb, ether issuance and ASIC resistance – are at the heart of the debate, since each could have a lasting impact on how the blockchain operates. For instance, these code proposals could alter the regularity of ethereum upgrades, change the network’s economic policy and prevent specialized hardware from mining on the blockchain.

As such, core developers that usually attend the meetings have called for a larger set of voices, namely ether miners and investors, to be present to discuss a way forward.

“There is a strong community sentiment toward delaying the bomb, to reduce the block reward and to introduce changes to the hashing algorithm, however, it’s unclear how we proceed from here,” communications officer for ethereum software provider Parity Technologies, Afri Schoedon, told CoinDesk.

In the run up to the meeting, debate has been building on social media, with many of the platform’s stakeholders holding incompatible view points. And because the outcome will impact stakeholders in conflicting ways, Jameson has invited a number of people to the call to give their positions on the proposals.

“We have multiple miners, including nearly 50 percent of the ethereum hashing power (46 percent) either attending the call or making statements that will be read during the call,” Jameson said.

He told CoinDesk:

“Our aim was to have a variety of voices collaborate on this issue.”

Investors

Adding urgency to the current discussion is the so-called “difficulty bomb” – a piece of code locked into the platform that makes its blocks steadily less efficient to mine over time.

Because delaying the bomb also impacts issuance, there are a total of six conflicting proposals, each offering slightly varying methods for moving forward.  

Two proposals on the agenda for Friday’s meeting seek to reduce issuance — something some ether holders believe is too high. (Currently, the inflation rate is fixed at 3 ETH per block — down from 5 ETH since last October.)

While there’s a host of ethereum investors who have yet to publicly comment on the matter, several investors have taken to social media to call for a reduction in ethereum issuance, contending that the current inflation rate is an unnecessarily high tax on the holders of the cryptocurrency.

For example, some are pointing to a quote attributed to the creator of ethereum Vitalik Buterin in 2017 that states: “In the foreseeable future, the supply will not go far above 100 million,” a figure which as now been surpassed.

Others are going so far as to blame the inflation rate as the reason for ether’s market value decline, which hit a 2018 low of less than $300 earlier this month.

“Ether issuance is wildly over where it should be,” one user wrote.

Still, because it decreases the quantity of ether that miners are awarded to mine blocks, there’s a risk that too high an issuance reduction with be harmful to miners, forcing them to move their equipment onto another network.

Miners

That said, some are arguing that despite high issuance, miners that rely on general purpose hardware are already suffering.

“There is basically zero profit right now for normal GPU miners,” one user claimed on Github.

As detailed by CoinDesk, while ethereum was previously thought to be a GPU-friendly, ASIC-resistant cryptocurrency, the specialized mining chips have been available for use on the network since March. Leading advocates of GPU mining argue that efforts should be made immediately to remove the hardware from the platform.

In the past few months, the questions of ASIC resistance largely fell quiet, but questions around tweaking the difficulty bomb and underlying issuance model have caused the arguments to reactivate. And that’s because proponents argue that a reduction in issuance could push the last remaining GPU miners off the network, that are already competing against a rising hashrate.

Several stakeholders are pointing to a proposal named EIP 1057 as a method for ASIC resistance, that uses a randomizing, ASIC-resistant proof-of-work algorithm originally designed for monero to remain resilient against ASIC hardware manufacturers.

Speaking to CoinDesk, Peter Pratscher, the founder and CEO of Ethermine, an ether mining pool, said that among the company’s miners, the question of ASIC resistant eclipses all other concerns.

“We have reached out to our miners and from their response, it is clear that the most important point for them is to include a [proof-of-work] change to obsolescence ASICs,” Pratscher said, adding that the attitude around issuance was “somewhat ambivalent.”

Still, it’s a question that has proven to be divisive, with some users taking to Reddit to warn it is “not the answer,” and could impinge on valuable developer time in the run up to proof-of-stake.

Developers

Of all the platforms stakeholders, developers are perhaps the most difficult to pin down – especially as many avoid taking a position in polarized debates, preferring instead to focus on delivering code.

Still, among this group, there’s a general tendency to be less interested in the question of issuance — in part because there’s an attitude that the high valuation of ether reduces its usefulness within the platform.

For many ethereum developers for example, the question of ASIC resistance is also of important ideological importance, because it relates to the underlying decentralization of the network — and therefore its resilience to attack.

Others hold the inverse position, believing that by raising the cost of attacking the network — ASICs are comparatively much more expensive than GPUs — the hardware is good for security.

That said, there is a topic that remains of particular interest to the developers – the difficulty bomb.

“Delaying the bomb is the easiest part, everyone pretty much agrees we should do that,” Schoedon told CoinDesk.

And while it’s true the consensus roughly is that the bomb should be delayed, there’s some disagreement about whether to remove its code entirely or to keep it embedded in the software. Because it was installed to prepare the network for the change to proof-of-stake, some argue that it is now irrelevant given the delay in that change’s timeline for execution.

Still, others believe that it has developed an entirely new function — forcing ethereum to come together and find consensus on complicated problems, just like these.

Speaking to this, because of the difficulty bomb, core developer Nick Johnson told CoinDesk:

“People are welcome to stick with the status quo, but they have to make an affirmative decision to do so, rather than letting inertia do the work for them.”

Phone via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.