Welcome to the Crypto Weekly Update, where we organize all the crypto news from the previous week for your reading pleasure. The Crypto Weekly Update will be released every Monday afternoon. Think we can improve? Let us know in the comments section below
Bitmain Introduces New Antminer E3
The rumors surrounding the existence of an ASIC capable of mining Ether was confirmed this past week. Bitmain announced that it’s Antminer E3 will be available by the end of July. The machine is capable of delivering 180 MH/s (megahashes per second) which is similar to the computational power of a GPU mining rig. However, the Antminer E3 costs roughly a third of the price (for the first batch at least).
Understandably the Ethereum mining community is outraged. Most individuals demanded that the development team update the network software to resist the ASIC takeover. But the developers, especially the founder Vitalik Buterin, did not seem too enthusiastic in taking that approach when it was discussed at a dev meeting a few days later.
Buterin stated, “”I’m not convinced it’s worth expending resources caring too much, except to push faster on Casper.” This may signal that the Ethereum platform is closer to moving to Proof of Stake sooner than most expected. A move to PoS would deem the ASICs ineffective as computing power of this kind would no longer be needed to secure the network.
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XMR Successfully Forks
Last week we wrote about Monero’s own battle with ASICs. New hardware released by Bitmain was incredibly more efficient at mining on the Monero platform. The community decided to resist the new hardware. The developers successfully forked the Monero network at block number 1,546,000.
A drop in the network hashrate was expected because ASICs mining on the old network software would be left behind once it was upgraded. However, to the surprise of most people, the hashrate dropped by approximately 85%. Not all of this can be associated to the ASICs that were mining on the network. Miners using GPUs might have forgot to update the software they are using. But it does show the tremendous influence ASICs had acquired on the Monero platform.
It will be interesting to see how different projects will approach the ASIC question. As platforms develop and their native cryptocurrencies become valuable ASICs will continue to pop up. In the case of Monero the decision was made to actively avoid the problem. It will be interesting to see if other projects learn from the approaches taken by Monero and Ethereum when deciding how best to deal with Bitmain and further centralization of approval power.
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Reserve Bank of India Shuns Crypto
The markets were watching developments out of India very closely last week after months of anti-crypto rhetoric came to fruition. The Reserve Bank of India (RBI) confirmed that banks falling under their regulatory jurisdiction would be banned from providing services to or supporting in any way entities that deal in the settlement of cryptocurrencies.
This is not technically a ban on cryptocurrencies in the country. But it does limit the ability of Indian citizens to acquire and use cryptocurrencies. The RBI is limiting access to the the country’s financial infrastructure. Cryptocurrency adoption in India will be near impossible if the RBI continues to hold firm on this stance.
An online petition enacted by Change.org was initiated and has been signed by close to 8,000 people so far. In a public statement the group calls on India to become “the forefront of the Blockchain Applications movement.” They also state, ““Crypto and blockchain as a concept can’t be stopped. You can just decide whether you want to participate with full throttle or get left behind.”
If cryptocurrency is derailed in India it may have large impacts on the growth of the market. India is the worlds second largest country by population. A large amount of people in the country are under-banked and cryptocurrencies were seen as an especially attractive solution to this problem.
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Verge Network Is Compromised
The Verge network uses 5 different consensus algorithms and switches between them periodically in an effort to vastly decrease the chances of a 51% attack occurring. A 51% attack on a network happens when one miner acquires a majority of the approval power. When this happens that particular individual or organization can manipulate the network.
It seems that one smart hacker found a way around the controls to mine vast amounts of Verge in just a matter of minutes. A bug in the underlying network software allowed the individual to spoof timestamps. This prevented the network from switching algorithms like it was supposed to. The hacker was able to mine blocks continuously using the same algorithm, generating more and more XVG with essentially no competition.
The development team caught wind of this shortly after the network was compromised and pushed a fix to stop the hacker. But the first fix did not work and the miner happily continued to mine. It wasn’t until the second fix was pushed that the problem was eliminated. A 51% attack is a major concern for any network. The fact that the development team wasn’t able to handle it on the first go around is a major concern.
The timing could not be worse because Verge is set to announce the “biggest partnerhsip in cryptocurrency” on April 17th. Surprisingly the price of XVG was not negatively affected. Our advice would be to stay away from XVG until these issues are sorted out.