Ethereum is a Dark Forest. A horror story. | by Dan Robinson | Aug, 2020 | Medium

In the Ethereum mempool, these apex predators take the form of “arbitrage bots.” Arbitrage bots monitor pending transactions and attempt to exploit profitable opportunities created by them. No white hat knows more about these bots than Phil Daian, the smart contract researcher who, along with his colleagues, wrote the Flash Boys 2.0 paper and coined the term “miner extractable value” (MEV).Phil once told me about a cosmic horror that he called a “generalized frontrunner.” Arbitrage bots typically look for specific types of transactions in the mempool (such a DEX trade or an oracle update) and try to frontrun them according to a predetermined algorithm. Generalized frontrunners look for any transaction that they could profitably frontrun by copying it and replacing addresses with their own. They can even execute the transaction and copy profitable internal transactions generated by its execution trace.

Source: Ethereum is a Dark Forest. A horror story. | by Dan Robinson | Aug, 2020 | Medium

Negen Nederlandse bitcoinstartups gestopt vanwege strengere regels – Emerce

Negen Nederlandse bitcoinstartups gestopt vanwege strengere regelsNiet minder dan negen Nederlandse bitcoinpartijen zijn gestopt vanwege de strengere regels voor bedrijven die cryptomunten aanbieden. Dat meldt Bitcoin Magazine.Zonder vergunning mogen bedrijven die geld omwisselen in crypto’s of wallets aanbieden sinds vorige week niet meer actief zijn in Nederland. De regels zijn ingevoerd om witwassen tegen te gaan.Transacties boven de 15.000 euro moeten worden gemeld. Daarnaast moeten bedrijven onderzoek doen naar de identiteit van hun klanten. Ook worden de bestuurders en andere betrokkenen doorgelicht.De partijen moeten de kosten voor het toezicht daarnaast zelf betalen. Per bedrijf komt dat neer op 20.000 euro.Een van de bekendere namen is Bitkassa, voortgekomen uit een bitcoininitiatief in Arnhem. Een andere bekende naam is Bittr, waar gebruikers een vast bedrag aan bitcoins konden aanschaffen via een simpele bankbetaling.Ook de Rotterdamse broker Nocks is gestopt. De software is overigens al verkocht.Coingarden uit Utrecht noemt de ‘te hoge kosten’ als voornaamste reden om te stoppen. De oprichters gaan door met goudbroker Bitgild.Post-a-coin, een giftcarddienst van Bèr Kessels, valt eveneens onder de wet, net als de miningpool Simplecoin, bitcoin gamingplatform Chopcoin en BitZeb. Een negende startup Bitqist is reeds overgenomen doot Bitvavo. Geen van deze startups had kennelijk voldoende financiële draagkracht.

Source: Negen Nederlandse bitcoinstartups gestopt vanwege strengere regels – Emerce

Brave New Coin

  • Earning interest on crypto asset holdings has become easier than ever, thanks to the Compound protocol and DApps like Dharma and Celsius.
  • Converting your ETH to other Ethereum tokens can be done securely and privately decentralized exchanges such as Uniswap or IDEX.
  • Hedging your cryptographic asset portfolio is now possible thanks to decentralized derivatives trading platforms, such as dYdX.
  • Insuring yourself against the failure of smart contracts has become possible thanks to Nexus Mutual.
  • Betting on the outcome of elections, sporting events or whether John McAfee’s bitcoin price prediction will come true can be done on prediction markets platforms, such as Augur.
  • Storing funds in crypto-backed stablecoins during times of extreme market volatility is now as easy as buying DAI.

In Code(rs) We Trust: Software Developers as Fiduciaries in Public Blockchains by Angela Walch :: SSRN

Abstract

This chapter addresses the myth of decentralized governance of public blockchains, arguing that certain people who create, operate, or reshape them function much like fiduciaries of those who rely on these powerful data structures. Explicating the crucial functions that leading software developers perform, the chapter compares the role to Tamar Frankel’s conception of a fiduciary, and finds much in common, as users of these technologies place extreme trust in the leading developers to be both competent and loyal (ie, to be free of conflicts of interest). The chapter then frames the cost-benefit analysis necessary to evaluate whether, on balance, it is a good idea to treat these parties as fiduciaries, and outlines key questions needed to flesh out the fiduciary categorization. For example, which software developers are influential enough to resemble fiduciaries? Are all users of a blockchain ‘entrustors’ of the fiduciaries who operate the blockchain, or only a subset of those who rely on the blockchain? Finally, the chapter concludes with reflections on the broader implications of treating software developers as fiduciaries, given the existing accountability paradigm that largely shields software developers from liability for the code they create.

Keywords: Blockchain, DLT, Bitcoin, Ethereum, Distributed Ledger Technology, Cryptocurrency, Digital Currency, Blockchain Technology, Governance, Fiduciary, Law

Source: In Code(rs) We Trust: Software Developers as Fiduciaries in Public Blockchains by Angela Walch :: SSRN

Cryptocurrency Markets Lost $18 Billion Overnight – Slashdot

Blockchain exists for ~10 years and still there are no mainstream use cases where it replaced the incumbent tech, other than illegal activity. There is a fundamental reason for that.BCh offers a single unique feature: distributed trusted transaction (DTT). DTT competes with a centralized transaction == transaction with a trusted third party (T3P). DTT is by definition distributed and as such is *always* more expensive than a T3P all other things being equal: reaching consensus with multiple parties is harder than with a single party. In order for DTT to be competitive with the old tech T3P, the distributed nature of DTT must offer some advantage for people to be willing to pay the required premium. So far the only use case where people or willing to pay this premium is circumvention of regulation, when the trusted third party does not exist. This brings us to this list of use cases:1. Circumvention of regulation.This is the only meaningful use of DTT.China has capital flow controls which effectively bar companies and individuals from moving money out of China. To get around these regulations people buy video cards and electricity in China for CNY, mine cryptocoins, sell them in the States for USD. That’s the largest market right now, much bigger than buying drugs on the likes of Silk Road. This use case also includes ICOs and other pump and dump schemes.2. Selling picks and shovels.Derivative of (1). If 1 goes away, 2 will go away too.https://finance.yahoo.com/quot… [yahoo.com]3. Marketing & FMOAdd blockchain to the company name and see your valuation pop.”We must work on blockchain because it’s the future”.All kinds of blockchain projects in banks, etc which are going mainstream “any time now”. All of them can be done easier/cheaper/more reliably with a T3P, no exceptions.Reply to This Share

Source: Cryptocurrency Markets Lost $18 Billion Overnight – Slashdot

The Blockchain Stack – Mechanism Labs – Medium

At a fundamental level, blockchains are composed of multiple distinct layers, similar to other technology protocols like the internet paradigm (Link, Network, Internet, Transport, Application). Here, we present a framework of the layers that compose blockchains. The layers are defined such that each layer depends on the one(s) below it. Here, we discuss what each layer provides as opposed to how each layer is implemented.

Source: The Blockchain Stack – Mechanism Labs – Medium

Bitmain Nears 51% of Bitcoin’s Network Hashrate

Bitcoin’s mining hardware (hashrate) has tripled since December, as can be seen above, even while price has fallen by 3x since December.It is now therefore a lot more expensive to mine a bitcoin than in December, while at the same time one mined bitcoin is worth a lot less.At some point miners are unable to afford energy costs or to keep up with adding more and more hardware as their old one becomes useless due to the constant increase of hashrate difficulty. So they close shop.Some miners, however, like Bitman, have lower costs, presumably because they manufacture themselves the mining hardware.So as other miners struggle, like Bitfury which has now dropped to 2%, Bitmain starts gaining more and more hashrate to the point they are now nearing 51%.The above bitcoin hashrate chart, however, even in a common sense way, looks quite unusual because it rarely goes down, if ever.Rather than responding to the price action, the hashrate appears completely detached. A situation that can not go for much longer because that increased new hardware itself puts pressure on price as the new barely profitable miners need to sell everything to cover costs.

Source: Bitmain Nears 51% of Bitcoin’s Network Hashrate

The Dutch Blockchain Research Agenda

In the last few months Balazs was participating in the creation of the Dutch Blockchain Research Agenda for NWO, the Dutch Science Agency.

The Agenda spells out the research priorities, and topics where more interdisciplinary research is needed.  To quote the Agenda: “Given the complex fabric of technological and societal questions around blockchain, future research seems to require at least the awareness of this multi-disciplinarity, or even seek collaboration across the boundaries of disciplines. Blockchain research carries many challenges on the level of research design and methodology. As is the case with systems focused research, the proper demarcation of scope of future research projects and programmes is essential. This scope also sets the disciplinary mix that needs to be involved. At the same time, it should be ensured that the required disciplinary progress can happen, especially since different disciplines require research at different time scales.

Since blockchain technology is a moving target, in terms of research methodology one must also consider more exploratory, theory generating,
high risk and open-ended approaches, including tools such as mathematical modelling and analysis, business modelling, techno-economic analysis, functional and non-functional design and testing, action research, simulations and experiments in research labs and living labs, horizon scanning, etc. As this research agenda includes both fundamental and applied research, it requires active involvement from non-academic stakeholders from public bodies, industry, market sectors and the general public.

Another methodological challenge is the futureproofing of research. In such a volatile field, it is often difficult to distinguish issues relevant only in the short term, versus long term blockchain specific problems, versus fundamental research questions that cut across multiple digital technologies and have been and will be with us for decades.


There are several streams of investment that fuel research in the blockchain technology domain. Private investment through venture capital and
ICOs (crowdsourcing) as well as public investment by governments, universities, and research funding bodies should be aligned in a smart way.
In that context it seems inevitable to identify the fields that Dutch academia, research institutes and research departments of Dutch organisations are
best positioned to answer, either because they already excel in certain domains, or because they want to build skills and research capacity through
strategic investment.

The Agenda is now public And can be downloaded from here:
 

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