Connect with us

Crypto News

What does Proof of Stake mean to You?

Published

on

What does the proof of stake algorithm mean for your investment in a cryptocurrency? This new way of creating coins has the potential to attract different types of investors and offer great rewards for those who get involved. Are proof of stake coins worth more than proof of work coins? What potential investment opportunities does crypto mining have for the average person? Get the answers to these questions and more now.

Some key points about proof of stake:

-The proof of stake algorithm has the potential to change the way cryptocurrencies are created in the future.

-This new way of creating coins has the potential to attract different types of investors and offer great rewards for those who get involved.

If you’re looking to understand what proof of stake means for you, it’s important to first understand the difference between the two processes: proof of work and proof of stake. Miners are participants in a network that uses proof of work to add and verify blocks of data to the blockchain, while forgers or minters are participants in a network that uses proof of stake as the process of adding and verifying blocks of data to the blockchain. (So for you NFT enthusiasts, every time you ‘mint’ an NFT your using the proof of stake algorithm to add your unique item to the blockchain so it can be traded.)

There are two prevalent ways of verifying and adding blocks of data to a particular blockchain: proof of work and proof of stake.

With proof of work, validators use computing power to solve a complex mathematical riddle, and if they are successful, they receive a reward in the form of the currency that is being mined. With proof of stake, validators put up a stake in the currency that is being forged, and they have a chance of being selected by other stakeholders to validate a block of data. If they are successful in validating the block, they receive a fee in the form of the currency that is being forged. The proof of work protocol favors those with more computing power, while the proof of stake protocol favors those with more coins to stake.

Within proof of work, the more computers that are involved in the network, maintain that network’s blockchain security and validity. Within proof of stake, the risk of losing your stake for validating improper or illegal transactions, maintains the security and validity of the blockchain. At the time of this writing, the proposed stake to become a forger or minter within the Ethereum platform is ETH 32 (US$62,996). Risking $62,996 for a chance of being selected to receive the fee for validating and adding a block of data to the blockchain is quite a substantial investment. It is important to appreciate the comparative expense of purchasing a $5,000 – $20,000 computing system and running it for $100 – $1,000 a month for a chance to win a comparable reward of cryptocurrency.

Advertisement

In the month of May in the year 2021, the Ethereum network generated roughly $89 million in transaction fees,

the highest in the cryptocurrency’s history. That is a substantial cash resource for forgers on the Ethereum blockchain to draw from. I wasn’t able to find the stats on how many forgers share in this pool or who was the highest earner at the time of this writing. But, if I had to bet, I believe each forger received more than they would if they had a comparable amount of value in a savings account at your local bank.

There are some things to consider with proof of work and proof of stake protocols. For proof of work, mining consumes a lot of electricity. In fact, the amount of electricity used to mine bitcoins in a year could power countries like Iceland over the same time period. Additionally, it requires a tremendous amount of computing power to solve the mathematical problem at the core of the algorithm. The cost of the hardware components needed to compete for a chance to solve the problem can range from $5,000 to $100,000. Obviously, since these units are being manufactured and sold, there are people willing to spend $100,000 and more to be involved in cryptocurrency mining and forging. Sure seems funny to me that these supercomputers are made in China, but the Chinese are officially banned from using cryptos to buy goods and services. One of those things that make you go hmmmmmm!!

Proof of stake is a more environmentally friendly way of validating blocks on the blockchain than its proof of work counterpart.

With proof of stake, less computational power and electrical energy is required. This makes it a more sustainable option in the long run. In addition, fees associated with validating blocks on the blockchain are typically ‘incentivized’ to encourage investors to stake large amounts of capital (e.g. $1,000,000 or more). This way, they stand to gain greater returns than if they had invested in something like US Treasury notes, which only yield around 2%.

The creators of the proof of stake protocol have also implemented penalties for those that want to get in, get paid, and get out fast. If you choose to withdraw your stake in forging, it’s a process that takes time. The time required to withdraw your stake ensures that all the transactions you verified were accurate and not part of any misdealing. If any invalid transactions are found that were verified by you, you will be penalized a very large portion of your stake. This is to prevent people from trying to game the system and ensures that those participating in forging are doing so honestly. Another aspect to consider while investing in a proof of stake protocol is that all the coins available in a currency are created at the start of that currency’s life. The number of coins produced within the proof of stake system does not grow. It’s become apparent that when institutional investors realized they could make a lot of money from cryptocurrency investments, the average person missed out on a great opportunity to get rich quick through mining Ethereum and other cryptocurrencies. The rich people with access to large amounts of capital have pushed small investors out of the cryptocurrency mining business.

Proof of Stake has the potential to be a great investment for those who are willing to get involved now. Those who invest early in this technology have an opportunity to benefit greatly from its advances. Those who wait on the sidelines, however, forfeit their opportunities. Getting in early may be the key to reaping the rewards associated with Proof of Stake. The future is here, research your investment choices thoroughly then act. Doing nothing gains nothing.

New to finwars? Read more about crypto currency here

Advertisement

Crypto News

North Korean Hacks Target Crypto’s DeFi Platforms

Published

on

By

Hacks

Hacks made off with around $1.9 billion worth of cryptocurrency: Chainalysis
The DeFi protocols standard is still the industry’s primary Achilles’ heel.
According to a research published by a company that specializes in blockchain analysis, the value of assets that have been stolen from cryptocurrency exchanges has skyrocketed this year. This is due to the fact that decentralized finance protocols have become an easy target for attackers.

According to Chainalysis, hackers have made off with digital tokens worth approximately $1.9 billion up until July of this year. This is a 58% increase from the same time period in 2021.
According to the article, “This trend does not appear set to change any time soon,” as there was already a $5 million attack of numerous Solana wallets and a $190 million hack of the cross-chain bridge Nomad in the first week of August.

After a number of high-profile hacks this year, the DeFi protocols, and particularly the cross-chain bridges used to transfer tokens between different blockchains, have emerged as one of the crypto industry’s most vulnerable linkages. According to Chainalysis, since such protocols rely on open-source code, it is simple for criminals to uncover faults or other weaknesses that can be exploited.

According to the findings of the study, “it’s probable that protocols’ motivations to reach the market and grow swiftly contribute to gaps in security best practices.” [Citation needed]

Criminal cryptocurrency activity, on the other hand, appears to be more resistant to falling values of cryptocurrencies than the general market for digital assets as a whole. This is a worrisome indicator. According to the analysis, the number of transactions Chainalysis classified as illegal reduced by 15% from July 2017 to July 2018, but the number of lawful transactions plummeted at a rate that was more than double that of the illicit transactions. In the month of March, hackers stole around $600 million from Axie Infinity’s Ronin bridge, while in the month of June, hackers stole $100 million from Harmony’s Horizon bridge.

Additionally, DeFi protocols have turned into a common target for hacker groups who are sponsored by the state. According to estimations provided by Chainalysis, entities with ties to North Korea have been responsible for the theft of nearly one billion dollars’ worth of cryptocurrency using DeFi protocols so far in 2018.

In spite of the fact that hacks are still a huge concern, Chainalysis found that illegal behavior in other facets of cryptocurrency has decreased significantly. According to the report, fraudulent activities using cryptocurrencies have generated $1.6 billion so far in 2022, which is 65% less than what they generated in 2021. The so-called darknet marketplaces have seen a 43% decrease in revenue this year, primarily as a direct result of the raid that took place in April on the Hydra marketplace.

Advertisement

Read More Cryptocurrency News Here

Continue Reading

Crypto News

The Latest Court Ruling In The Ripple Case Gives The SEC Another Shock.

Published

on

By

Ripple

This week, the fight against Ripple got more interesting, and the American watchdog SEC took a hit.

With several losses in a row, the SEC has good reason to be worried right now. In their most recent fight, Judge Netburn agreed with Ripple’s request to verify the public statements made by SEC officials.

At first, the SEC didn’t agree with this motion. They said that Ripple was trying to reopen fact discovery.

The crypto community is still interested in the SEC vs. Ripple case even though it has been going on for another month.
The case has been going on for a long time and doesn’t look like it will end any time soon.

The SEC had put a condition in the above motion, which was filed on August 4, if Ripple were to go through with the motion.

“The Defendants agree to reopen discovery” was a condition of the agreement.

This could make it possible for the SEC to send its own subpoenas to get copies of recordings that haven’t been named yet.

Advertisement

James Filan, a well-known lawyer, keeps writing about this case on his blog. He has been very angry about how the SEC has handled the situation. In this case, he pointed out,

“The SEC’s response is just an abuse of the court system and a waste of the Court’s time, as shown by the fact that it took the SEC five days to file a one-sentence response in which it misunderstood Ripple’s original request.”

The behavior of the SEC has also been called into question recently by the crypto community.

One fan with the Twitter handle Ashley PROSPER said, “The case could be thrown out if the SEC acts badly.”

Don’t forget that judge Netburn has already called the SEC’s actions “bad faith” and “unfaithful allegiance to the law.”

This week, the fight against Ripple got more interesting, and the American watchdog SEC took a hit.

With several losses in a row, the SEC has good reason to be worried right now. In their most recent fight, Judge Netburn agreed with Ripple’s request to verify the public statements made by SEC officials.

At first, the SEC didn’t agree with this motion. They said that Ripple was trying to reopen fact discovery.

Advertisement

The crypto community is still interested in the SEC vs. Ripple case even though it has been going on for another month.

The case has been going on for a long time and doesn’t look like it will end any time soon.

The SEC had put a condition in the above motion, which was filed on August 4, if Ripple were to go through with the motion.

“The Defendants agree to reopen discovery” was a condition of the agreement.

This could make it possible for the SEC to send its own subpoenas to get copies of recordings that haven’t been named yet.

James Filan, a well-known lawyer, keeps writing about this case on his blog. He has been very angry about how the SEC has handled the situation. In this case, he pointed out,

“The SEC’s response is just an abuse of the court system and a waste of the Court’s time, as shown by the fact that it took the SEC five days to file a one-sentence response in which it misunderstood Ripple’s original request.”

The behavior of the SEC has also been called into question recently by the crypto community.

Advertisement

One fan with the Twitter handle Ashley PROSPER said, “The case could be thrown out if the SEC acts badly.”

Don’t forget that judge Netburn has already called the SEC’s actions “bad faith” and “unfaithful allegiance to the law.”

At the same time, it has been said that both sides are responding to the motions to exclude expert testimony.

Right now, these answers are under wraps. But the crypto community is still interested in what will happen next in this legal battle that seems to never end.

Continue Reading

Crypto News

India is Investigating Ten Cryptocurrency Exchanges For Money Laundering.

Published

on

By

India

The Enforcement Directorate of India is now pursuing an investigation against ten cryptocurrency exchanges that are suspected of being involved in the laundering of over 1 billion rupees, which is the equivalent of over $125 million in digital currency.

According to The Economics Times, the cryptocurrency exchanges, which have not yet been named, were used by several companies that have been accused of money laundering to make purchases of more than 100 million rupees worth of cryptocurrency, which were then transferred to other international wallets, the majority of which were linked to mainland China.
The exchanges had a poor control on the activities of their users.

In addition, the sources mentioned that the exchanges acquired KYC data of questionable provenance, as the accounts that were followed belonged to individuals who lived in faraway places “with no relation to the transactions.”

However, the exchanges asserted that they were in conformity with KYC laws, despite the fact that they did not provide any suspicious transaction reports (STRs) that could have led to the discovery of information regarding alleged instances of money laundering.
Therefore, the failure to comply with the measures required by regulators made it more difficult to trace the account, which, upon learning of the investigation, reportedly proceeded to withdraw their funds and log off, according to sources close to the investigation. This made it more difficult to track down the account.
“As soon as these companies discovered that they were being investigated, they shut down their operations and utilized the crypto way to transfer the money overseas. The unregulated nature of the cryptocurrency business combined with the opaque nature of the ecosystem for cryptocurrencies offered the necessary cover for these companies to park their funds offshore.

The cryptocurrency exchanges Binance and WazirX are currently under investigation in India.

Following a series of Twitter spats between the CEOs of both firms about ownership and regulatory non-compliance by WazirX, the ED has decided to focus its attention on Binance and WazirX, as was recently published on CryptoPotato.com.

After the argument between the two companies, the ED blocked WazirX’s bank accounts, which together held more than $8 million, on the grounds that the exchange had “actively” assisted in the laundering of illicit funds for more than 15 different fintech companies.

Advertisement

In reaction, Binance stated that it expects WazirX to “take full responsibility for its operations and users’ funds,” while emphasizing that the global cryptocurrency exchanges has nothing to do with WazirX’s operations. Binance also emphasized that it has nothing to do with WazirX’s operations.

Although the ED is investigating several cryptocurrency exchanges for money laundering, an industry executive who spoke to the Economic Times stated that the exchanges are the second point of failure in these crimes. This executive stated that the money comes in and out of these crimes primarily from traditional banks, which did very little or nothing to trace the funds, which is why “it wasn’t caught at the banking level.” Despite the fact that the ED is investigating several cryptocurrency exchanges for money laundering, the executive stated that the exchanges are the second point of failure.

Read More Cryptocurrency News Here

Continue Reading

Trending

© Copyright 2022 | All Rights Reserved RISK DISCLAIMER There is a very high degree of risk involved in trading. Past performance is not necessarily indicative of future results. Financial Wars and all individuals affiliated with this site assume no responsibility for your trading and investment results. All the material contained herein is believed to be correct, however, Financial Wars will not be held responsible for accidental oversights, typos, or incorrect information from sources that generate fundamental and technical information. Options trading carries significant risk. Futures and futures options trading carries significant risk. Trading securities, security options, futures and/or futures options is not for every investor, and only risk capital should be used. You are responsible for understanding the risk involved with trading options. Prior to trading any securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options. The indicators, strategies, columns, and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of Financial Wars may have a position or affect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. All of our partners or affiliated companies are in no way associated with the proprietary information provided by the Financial Wars Trading Method or software. All returns are based off buy side analysis and do not include commission costs. All projections are based on current returns. The projections do not account for any possible draw down effects on performance and performance projections. Actual returns and projected returns may fluctuate over the course of the service. "VIP" or "Lifetime" designation refers to the lifetime of the product only and not to be assumed to be the lifetime of any individual. Any person who chooses to use this information as a basis for their trading assumes all the liability and risk for themselves and hereby and absolutely agrees to indemnify and hold harmless Financial Wars, its principals, agents and employees. As a Student and Chat Subscriber, we ask that you please cross check the information posted here. We ask that you challenge any information you feel is incorrect. We do not guarantee any of the information that is posted in the chat. All company names are trademarks or registered trademarks if their respective holders. Use of a mark does not imply any affiliation or endorsement by them.

Social Media Auto Publish Powered By : XYZScripts.com