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Ethereum’s ProgPoW Mining Change to Be Considered for Istanbul Upgrade

The code designed to enact ethereum’s next system-wide upgrade, Istanbul, may feature the inclusion of a controversial mining algorithm said to allow for broader participation in its network. Discussed Tuesday during a meeting of project managers working on the world’s second-largest blockchain, Ethereum Improvement Proposal (EIP) 1057, also known as Progressive Proof-of-Work (ProgPoW), has been long debated. […]

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Ethereum (ETH) Developers Cut Block Rewards By 33% To Curb Inflation

From 3 ETH To 2 ETH Every 14 Seconds

As with the growth of any asset, product or service, development is key. And it seems that the team behind the Ethereum project has taken development to heart, recently holding an hour-long meeting to discuss the future of their brainchild.

Friday’s meeting, dubbed “Ethereum Core Devs Meeting Constantinople Session #1,” covered a variety of topics that include ASIC resistance, an updated consensus algorithm (ProgPoW), future hard forks and a so-called “difficulty bomb,” which are all topics that pertain to October 2018’s planned Constantinople hard fork.

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But the curiosity of many investors, traders, analysts, and miners piqued when the 15 meeting attendees started to discuss the rules surrounding this issuance of Ether, which has become a hot topic within cryptocurrency community.

After discussing Ether issuance for a good period of time, the attendees, which were mainly composed of core developers, decided to confirm a 33% block reward reduction, from 3 ETH to 2 ETH as per Ethereum-Improvement-protocol 1234.

While this announcement may seem mundane on the surface, some were over the moon about this decision. Eric Conner, an Ethereum proponent, highlighted the statistics of the current Ethereum Network and when the Constantinople upgrade occurs.

Conner revealed that as it stands, there is a 7.4% annual inflation rate of Ether, which amounts to a hefty 7,378,402 ETH ($2.065 Billion). This is evidently ludicrous, with many pointing out that a 7.4% inflation rate eclipses the declining purchasing power of ‘popular’ fiat currencies. But once EIP-1234 sees full implementation, the Ethereum network’s inflation rate will drop to a respectable 4.7%, or 4,918,935 ETH a year ($1.37 Billion).

It was added that this move will essentially put Ether’s inflation rate nearly on-par with Bitcoin’s, which will both hover around 4% annually by the start of 2019.

Alex Kruger, an Argentina-based cryptoanalyst, questioned why the market “isn’t reacting more bullishly to this.” But as seen by this week’s news cycle, the market has seemingly stopped reacting to news altogether, with bullish and bearish news alike not making any dents on the often irrational price action of crypto assets.

Eduardo Gomez, a Venezuelan cryptocurrency commentator, likened this move to a Bitcoin block reward halving event, adding that prices will first dump “then moon” in the months following the event.

Gomez is alluding to the theory that a smaller block reward will only bolster prices in the long-run, as miners will need to put in more ‘effort’ (funds, electricity etc.) to garner the crypto they are craving for. And as seen by the previous Bitcoin halving events, this seems to be more of a reality than a theory, as the price of the foremost crypto asset surged in the months/year following the move from 25 BTC to 12.5 BTC per block.

In related news, along with reducing block rewards, the Constantinople EIP-1234 move intends to delay Ethereum’s difficulty bomb, which will give developers more time to work on the Casper protocol, which would move the network from a PoW-centric system to a Proof of Stake (PoS) model.

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Bitmain Subsidiary BTC.Com To Launch Ethereum (ETH) Mining Pool

While prices may be down in the gutter, the mining industry is still growing at a rapid pace, with firms like Bitmain, Canaan, EBang, and others doing their best to excel in the face of an overall market downtrend.

Bitmain, the world’s most valuable cryptocurrency firm, has forged ahead, recently revealing that its subsidiary will open an Ethereum (and Ethereum Classic) mining pool in the coming days.

You may know for its relative dominance over the Bitcoin network, hosting a hefty 16% of the hashrate outputted by BTC miners. The Bitmain-backed pool also holds a similar level of dominance over Bitcoin Cash, which the ASIC manufacturer is a proponent of, with a relatively substantial 14%. But now, has unexpectedly set its eyes on the Ethereum blockchain, down just one rung from Bitcoin in terms of market capitalization.

As per statements gathered by The Next Web, Zhuang Zhong, the director of’s mining pool operations, expects his firm’s operations to “grow to 12 percent of ETH total hashrate in the next 12 months.” Although this goal sounds rather ambitious, some believe that the Bitmain subsidiary can reach and surpass their ambitions, as has become an integral part and a trusted name of the crypto ecosystem.

For now, this new pool will support Ethereum and Ethereum Classic, with users being given the opportunity to automatically switch between the two assets to maximize mining profitability. Zhong then elaborated on how exactly the pool is going to work, writing:

Because contracts are charged per line of executed code and miners are rewarded for dedicated hashes using GHOST, Ethereum provides multiple different reward incentives to contribute hash power to the network. We hope to expand Ethereum’s network by relaying those rewards through our FPPS system.

Oddly enough, the executive noted that the new pool will likely be able to support Ethereum’s long-awaited Casper protocol integration, which will see the consensus of the Ethereum network switch from solely Proof-of-Work to a Proof-of-Stake (POS) focused model. Zhong added that a pooled POS design “is still possible,” but will likely “increase the complexity to design such a pool since miners need to deposit Ether to the mining pool, but we have a lot of hands-on experience with wallets and Ethereum smart contracts to make a PoS mining pool possible.”

For those who are unaware, Ethereum’s Casper protocol will allow users to ‘stake’ their Ether, with a reported ~500-1000 ETH being a minimum for a solo ‘staker’. So if successfully transitions to a PoS model, it is likely that its service will garner lots of support and staked Ether.

Earlier this year, Bitmain, who has plans to go public in the near future, released the first-ever Ethereum ASIC mining machine, which threw many for a loop. The ASIC, named E3, was capable of outhashing a graphics card by many magnitudes, leaving some to believe that Ethereum’s time as a GPU-mineable coin was up.

Following the announcement of even more EthHash ASICs, some claimed that it was time for Ethereum to fork away from ASIC support. But as it stands, no moves towards ASIC resistance have been made as of yet.

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Satori Botnet Scouring the Web for Open Ethereum Mining Rigs

With increasing crypto prices comes a rising tide of cybercrime and pernicious elements looking to exploit the gains of others. Even though markets are currently still falling from their peak in January, Ethereum is still a hot commodity trading at around $675, up over 600% from this time last year.

Unsecured mining rigs have become the latest targets for a botnet that is sweeping the internet. According to security researchers at SANS ISC, Qihoo 360 Netlab, and GreyNoise Intelligence, operators of the Satori botnet are mass-scanning the web for exposed mining rigs. The hackers are specifically looking for open port 3333 which is often used for remote management features by cryptocurrency-mining hardware.

Reports indicate that the activity started on May 11, as alerted by China-based 360 Netlab;

GreyNoise researchers delved deeper into the spurious activity and managed to connect the digital dots to the Claymore mining software;

“GreyNoise observed a large spike of TCP port 3333 scan traffic today. This is the default port for the “Claymore” dual Ethereum/Decred cryptocurrency miner. Once the attacker identifies a server running the Claymore software they push instructions to reconfigure the device to join the ‘dwarfpool’ mining pool and use the attacker’s ETH wallet,”

The scans were linked to a group of Mexican IP addresses that had thousands of GPON routers compromised a few days ago. Satori is one of five botnets that were using the exploited routers to scan for Claymore miners, deploy an exploit, and hijack the devices to mine Ethereum and Decred cryptocurrencies for the botnet operators.

According to Zdnet the bugs allowed anyone to bypass the router’s login page and access pages within, simply by adding “?images/” to the end of the web address on any of the router’s configuration pages. Once in control of the routers the hackers can inject their own scripts or bots to do their dirty deeds, which in this case was seeking out vulnerable Ethereum miners.

Back in January the same Satori botnet under the designation Satori.Coin.Robber issued three payloads when a vulnerable miner was located. The first was a package which gathered the mining state of the rig, another replaced the mining pool’s wallet address by updating the reboot.bat file, and the third which rebooted the host with the new address, leading to the theft of any ETH the victim had mined.

Intense scans of this nature will continue to increase along with the number of vulnerable internet routers and mining rigs, the days of the crypto botnets are only just beginning.

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Prosecutors File Charges in Alleged $250 Million Crypto Mining Fraud

Authorities in South Korea have reportedly filed suit against a U.S. cryptocurrency mining firm, alleging a multi-million dollar fraud.

According to Korean news source Yonhap, prosecutors from the Incheon district of South Korea alleged in a press briefing that a company called Mining Max LLC solicited 270 billion Korean won – an amount worth roughly $250 million – from investors for cryptocurrency mining activities between September of last year and this past October.

Yet that money was largely spent enriching those behind the firm, prosecutors are arguing, despite offering investors high returns on their stakes. Further, it has been alleged that the results being shown to the investors, who number some 18,000 people from 54 countries, were falsified. As reported by Yonhap, just $70 million of the $250 million raised went to mining.

Within that group, an estimated 14,000 were based in South Korea, with 2,600 in the United States and 600 and 700 in China and Japan, respectively.

According to the prosecutors, 21 suspects from the firm have been indicted, while the top executives from the firm are still at large, including its chairman and vice chairman.

U.S. presence

Public records found by CoinDesk indicate that the company maintained a presence across several U.S. states.

According to the website of Mining Max LLC, the company is headquartered in California and describes itself as a maker of ethereum mining equipment that also offers “premium cryptocurrency cloud mining rigs.”

Business records show that Mining Max LLC is registered at least in two states in the U.S., California and Nevada (where it is currently in default), with two different business addresses: 3600 Wilshire Blvd Ste 1200, Los Angeles, CA, and 6069 S Fort Apache Rd #100, Las Vegas, NV.

Both registration documents indicate that the manager and CEO of the firm is a person called Park Nam Ho. It appears that Park Nam Ho, also known as Daniel, is also the operator of another mining-related site,, and is the founder of a legal service named Angel Legal Service that is located at the same building as Mining Max.

Based on Mining Max’s business registration in California, that legal service is also its registration agent, having been filed by a person called Lee Jin Ho.

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AMD CEO Sees 'Leveling Off' in Cryptocurrency Mining Demand

Graphics card maker AMD reported a major sales jump in the third quarter of 2017 amid significant demand from the world’s cryptocurrency miners.

On its Tuesday afternoon earnings call, the company reported $819 million in revenues from its computing and graphics division for the third quarter of 2017, a whopping 74 percent increase over the prior year’s quarter.

While the company’s graphics processing units (GPUs) have been traditionally used by video gamers, cryptocurrency enthusiasts are quickly snatching up the tools for mining ethereum and other coins. In a possible nod to that circumstance, AMD said the revenue was “primarily driven” by strong sales of its Radeon GPUs and Ryzen desktop processors – both of which are employed for crypto-mining.

In particular, AMD noted that sales of the Vega 56 and Vega 64 GPUs ramped up significantly during the quarter. These are among the most highly sought-after devices in the cryptocurrency market because of their significant processing power compared to other products.

With stagnant growth in its other core business segments, the surging GPU sales fueled a 26 percent year-over-year increase to a total revenue of $1.64 billion, making it the company’s highest-grossing quarter since 2011.

But while the numbers are eye-popping, the company’s shareholders weren’t impressed with the Q3 results.

AMD shares ultimately dropped 12 percent, from $14.25 at closing on Tuesday to as low as $12.43 in after hours trading. This coincides with the investment communities highly cautionary stance towards AMD’s exposure to the volatile and potentially fleeting cryptocurrency market.

Plus, AMD forecasted a decrease in cryptocurrency-related revenues for the fourth quarter, expecting its fourth quarter revenues to decrease by 15 percent from the third quarter, give or take three percent.

As CEO Lisa Su said on the earning call:

“In terms of the headwinds … we’re also predicting that there will be some leveling-off of some of the cryptocurrency demand.”

Overall the message was mixed. While she issued bearish statements about the future of cryptocurrency mining as it relates to AMD’s earnings, she also seemingly left the door open for other opportunities, although those seemed less clear.

“There’s also [a] commercial blockchain component that we believe is interesting and likely to continue into the medium term,” she said.

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The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at