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  • Pushing Bitcoin to become more scalable with zero-knowledge proofs
    by Cointelegraph Research on 17/08/2022 at 4:14 PM

    Cointelegraph Research explains the EC-STARKs technology and discusses what this means for the cryptocurrency market. For all the good that Bitcoin brings to the table, it also possesses a commonly accepted issue in scalability. Bitcoin can only process a limited number of transactions per block and, as of Aug. 17, 2022, can handle about five transactions per second, which in comparison to most other blockchains is low. The factor limiting scalability lies in Bitcoin’s cryptographic algorithm.The Elliptic Curve Digital Signature Algorithm (ECDSA) is the essential cryptographic algorithm that powers Bitcoin and ensures that only the rightful owner can access and manage their funds. Currently, verification of the ECDSA, a Bitcoin signature allowing to carry out transactions and send Bitcoin (BTC), is not efficient and limits the scalability of the Bitcoin blockchain. A potential solution is using zero-knowledge proof (ZKP) technology, allowing higher degrees of privacy and security.A recent Starkware paper presents the method for efficiently verifying ECDSA from within the STARK ecosystem, potentially resolving the blockchain trilemma for Bitcoin — i.e., achieving scalability, security and decentralization simultaneously.Foundations of the technologyA ZKP is a cryptographic technique that enables the prover to confirm another person’s claim without supporting data. ZKPs are cryptographic protocols that keep third parties away from users’ privacy. ZKPs can also be a helpful building block for many cryptographic protocols, ensuring participants follow the protocol’s specifications. Privacy and scalability are enhanced with ZKPs because only certain data is revealed and transacted without disclosing all the information that needs to be proven.Based on the ZKP technology, STARKs, or Scalable Transparent Argument of Knowledge — invented by Starkware — is a type of cryptographic proof technology that makes it possible to communicate data with a third party — e.g., sign transactions without revealing the data. It also allows moving computations and storage of validated data off-chain, thus increasing scalability. STARKs is a quantum-resistant system based on hash functions used by Ethereum, not elliptic curves utilized by Bitcoin. Importantly, STARKs systems are considered more advanced than their predecessors, zk-SNARKs, and can resist attacks from quantum computers.EC-STARKs: The next step in Bitcoin’s scalability?Earlier, Starkware announced governance token issuance for its StarkNet — a decentralized permissionless STARK-based validity rollup that operates as an Ethereum layer-2 chain — to decentralize the network further and maintain STARK technology as a public good. However, Ethereum’s underlying storage cost constraints the scalability advantages of the technology. However, its application for the Bitcoin blockchain may present a better platform for decentralized applications in the near future.Related: zk-STARKs vs. zk-SNARKs explainedEC-STARKs are the next generation of this technology, aiming to increase Bitcoin’s scalability and security by replacing hash functions with elliptic curves — i.e., making already-existing scalability solutions for Ethereum to be compatible with Bitcoin. With EC-STARKs, one can run an off-chain protocol for Bitcoin and keep proofs in STARK. Simply put, Bitcoin can be emulated inside STARK, allowing highly sophisticated protocols to be built on Bitcoin-backed tokens with the same elliptic curve keys. Thus, utilizing this technology may not only increase the scalability of Bitcoin but serve as the gateway for developers to create DApps on Bitcoin, potentially creating a rival for Ethereum.

  • Bitcoin price dives pre-FOMC amid warning $17.6K low was not the bottom
    by William Suberg on 17/08/2022 at 2:59 PM

    The bottom “is not in” for either stocks or crypto, one analyst believes, as alarming data shows copycat moves from 2008 by the S&P 500. Bitcoin (BTC) dropped to weekly lows at the Aug. 17 Wall Street open as upcoming Federal Reserve comments unsettled risk assets.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewDollar climbs as Fed minutes dueData from Cointelegraph Markets Pro and TradingView tracked a more than 2% daily decline in BTC/USD, which hit $23,325 on Bitstamp.Already showing signs of weakness, the pair slid further as United States equities began trading, hours before the Federal Open Markets Committee (FOMC) was due to release minutes from its latest meeting.While not involving a decision on interest rates, the meeting was cued to give an insight into the Fed’s thinking in terms of the next rate tweak due in September.“The important event tonight with the FOMC minutes, through which information can be received whether the FED is going to be hawkish or dovish,” Cointelegraph contributor Michaël van de Poppe summarized in his latest Twitter update. “I don’t think it will have a massive impact, however, crypto tends to give it a ton of value and, therefore, lots of volatility.”Stocks had hit major resistance in line with crypto during the week, leading some concerned sources to continue to predict a further major retracement across the board.Justin Bennett, the founder of crypto education platform Crypto Academy, warned that the S&P 500 was copying behavior from immediately prior to the 2008 Global Financial Crisis.“This is mind-blowing. The S&P 500 is mimicking the 2008 crash. Even the timing since the ATH is nearly identical,” he commented on a comparative chart. “The bottom is NOT in for stocks or crypto.”A telltale sign on the day came in the form of an advancing U.S. dollar, with the U.S. dollar index (DXY) seeking to attack resistance in place throughout August.“$DXY could be on its way to 112-113 after the fakeout below 105.50. That’s going to weigh on stocks and crypto,” Bennett added.U.S. dollar index (DXY) 1-day candle chart. Source: TradingViewBuyers eye lower bidsOn shorter timeframes, the trend on Bitcoin was also rapidly losing steam as bid support inched down the Binance order book.Related: Bitcoin price sees firm rejection at $24.5K as traders doubt strengthOn-chain monitoring resource Material Indicators captured the action, concluding that “even if we get another pump, still believe the Bear Market Rally is losing momentum.”An upside target could come in the form of the 100-day moving average, a separate post explained, lying at $24,544 at the time of writing.“Been warning about this breakdown for Bitcoin the past few days,” commentator Matthew Hyland concluded. “Structure has shifted overall weak recently. Market seemed to have its first signs of life just last week. That seems to be short lived.”BTC/USD buy and sell levels (Binance). Source: Material Indicators/ TwitterThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

  • Fake Manchester United token soars 3,000% after Elon Musk jokes about buying team
    by Yashu Gola on 17/08/2022 at 2:11 PM

    Other Manchester United-related assets also rallied after Musk’s tweet, as well as Manchester City’s fan token. Manchester United Fan Token (MUFC) is a dead coin and not related to the sports franchise, but one Elon Musk tweet was enough to revive it on Aug. 17.Also, I’m buying Manchester United ur welcome— Elon Musk (@elonmusk) August 17, 2022 Fake Man U token pumps after Elon Musk’s tweetTo clarify, MUFC is not an official Manchester United crypto token. It came to life in August 2021 after a team of programmers, who are said to be hardcore Manchester United fans, falsely claimed that holding MUFC would give buye influence on the football club’s decisions.The team later conducted an “airdrop” round of 10,000,000,000 MUFC in November 2021, promising to provide 10,000 MUFC to users who followed its official social media handles. The prospects of getting free MUFC tokens helped its price rally to as high as $1.But the project turned out to be vaporware, eventually leading MUFC down by 100% after November. It was deemed extinct until a tweet from billionaire entrepreneur Elon Musk on Aug. 17 revived it from oblivion.The Tesla CEO tweeted that he would buy the Manchester United football club, which he later admitted was a “long-running joke.”No, this is a long-running joke on Twitter. I’m not buying any sports teams.— Elon Musk (@elonmusk) August 17, 2022 Nonetheless, the message sent the financial assets related to Manchester United soaring, including its stock MANU, which rose 1.97% in pre-market trading, and Tezos (XTZ), the club’s official blockchain and training partner, whose market valuation surged by $138.85 million.Even Manchester City’s official crypto token, CITY, popped higher by nearly 14% to reach $7 per piece after Musk’s tweet, despite Manchester City being a different football club.CITY/USD daily price chart. Source: TradingViewOn the other hand, MUFC surged by over 3,000% hours after Musk’s tweet about buying Manchester United, according to data fetched by MUFC price and volume performance (last seven days). Source:”Manchester United fan token” has zero liquidityHowever, the MUFC rally appears to be price manipulation due to extremely poor liquidity and volume. Notably, in the last 24 hours, MUFC had been trading only against two crypto assets: WBNB and USDT. While the liquidity for the WBNB/MUFC pair was mere $106.84, it was even lower for the USDT/MUFC pair at around $10, according to data from PancakeSwap, a decentralized exchange.MUFC pools statistics as of Aug. 17. Source: PancakeSwapMeanwhile, the net volume that backed MUFC’s 3,000% rally was approximately $39,000 in the last 24 hours, suggesting fewer traders behind the major upside move.MUFC volume record. Source: PancakeSwapThus, a small number of speculators likely used MUFC’s poor liquidity to artificially pump the token. The number of traders who bought the false upside narrative remains unclear, but given thatMUFC has already dropped by 50% from its local top, the prospect that its rate would return to zero is high.Related: Crypto scams fall 65% after gullible noobs exit the market: ChainalysisMeanwhile, the incident reasserts Musk’s strong influence on the crypto market, especially on memecoins like Dogecoin.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

  • Blockchain VC Shima Capital debuts with $200M Web3 fund
    by Sam Bourgi on 17/08/2022 at 2:10 PM

    The venture firm, which was founded in 2021, is prioritizing decentralized social media, DAOs, DeFi, metaverse, zero-knowledge proofs and layer-1 solutions. Shima Capital, a new venture firm focused on early-stage blockchain projects, has launched its debut fund to support emerging digital asset companies — and has received considerable backing in doing so.The Shima Capital Fund I raised a combined $200 million from several high-profile crypto investors, including Dragonfly Capital, Animoca Brands and OKX, the company announced Wednesday. The fund is set to deploy between $500,000 and $2 million in pre-seed funding for crypto- and blockchain-focused companies at the intersection of consumer products, decentralized infrastructure and futuristic blockchain technology. In particular, Shima has identified decentralized identity, decentralized social media, decentralized autonomous organizations (DAOs), blockchain gaming, metaverse and decentralized finance (DeFi) as target areas. On the blockchain infrastructure side, the fund also plans to invest in layer-1 and layer-2 technology, as well as projects focused on security and the development of zero-knowledge proofs.Capital injected into early-stage companies will go towards hiring and retaining talent, building communities, marketing and conducting technical research and development, Shima said. Web3 aims to revolutionize participation in a wide variety of fields, from technology to the arts. However, it needs those participants to see what its potential holds, argues @nitingaur, founder and director of @IBM Digital Asset Labs— Cointelegraph (@Cointelegraph) March 13, 2022 Founded in 2021 by crypto hedge fund investor Yida Gao, Shima Capital has recruited an executive team that includes the former head of DeFi at Ripple Labs, a former venture partner at Old Fashion Research and the former head of talent at Atomic VC. Shima’s new venture fund demonstrates that VCs are still enticed by crypto and Web3’s value proposition despite the ongoing bear market. The downtrend, which has been brutal even by crypto standards, has flushed out overleveraged investors, flawed stablecoin projects and centralized finance companies that failed to maintain proper risk management practices. Related: Web3 dominates venture capital interest in blockchain industry in Q2 2022In the background, venture capital has continued to fund blockchain startups, especially those with Web3 ambitions. According to Cointelegraph Research, Web3 companies accounted for 42% of crypto VC raises in the second quarter.

  • Binance assures users after 3rd-party glitch briefly halted withdrawals
    by Savannah Fortis on 17/08/2022 at 1:59 PM

    The exchange cited technical issues as the reasons for halting withdrawals across multiple networks earlier this morning. Cryptocurrency exchange Binance announced a temporary freeze on withdrawals on Wednesday morning. The suspension took place across multiple networks as a result of a technical issue by a third-party provider, according to Binance. In a tweet, the exchange said the incident took place around 7:00 am UTC and was resolved by the team within an hour. Earlier today, around 07:00am UTC, #Binance temporarily closed withdrawals for multiple networks due to an issue with a third-party technical provider. Our team responded quickly, resolving the issue within 1-hour.Funds are SAFU. Thank you for your patience and understanding.— Binance (@binance) August 17, 2022 Binance also assured users that despite the freeze, funds are “SAFU.” This acronym stands for the exchange’s monetary fund, Secure Asset Fund for Users (SAFU). The fund was created in 2018 by Binance to compensate customers in light of a hack on the exchange. It holds 10% of all trading fees. After questions about the fund from Twitter users, the exchange promptly clarified the purpose and its $1 billion value. Here’s everything you need to know about SAFU.— Binance (@binance) August 17, 2022 This comes only days after Binance recovered and froze nearly $450,000 worth of the stolen assets from the Curve Finance hack. In June, Binance also halted Bitcoin (BTC) withdrawals due to major network congestion. Binance is the world’s largest crypto exchange and deals with nearly 3.224 million transactions per day. Volatile market conditions have caused major turbulence for crypto companies. The crypto exchange Celsius also halted withdrawals in June, though it cited market instability. Shortly after it declared bankruptcy. As a forewarning, Coinbase announced it will halt deposits and withdrawals of Ethereum (ETH) and ERC-20 tokens during the upcoming Ethereum Merge, scheduled to take place this September. Related: The worst places to keep your crypto wallet seed phraseMarket volatility has caused some hodlers to reexamine where they store their digital goods. Many are turning to hardware wallets as the answer. One Twitter user responded to Wednesda’s Binance freeze with:ANOTHER NEAR MISS…”Funds are SAFU” …. Until they are not …… how many warnings do people need?…NOT YOUR KEYS NOT YOUR COINS— HEX Ⓜ️achine Not in it for the tech. soz (@HexMachineV2b) August 17, 2022 According to a July report, the global hardware wallet market should outpace the global exchange market. It has an anticipated value of $1.1 billion by the year 2027, whereas the exchange market should reach a value of $675 million by 2028.

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