New data blockchain explorer Blockchair reveals that a hacker took advantage of an exploit in Dogecoin’s (DOGE) blockchain, causing the majority of its nodes to crash. Earlier this week, a Dogecoin monitoring platform noticed that the number of DOGE nodes dipped from 647 to just 205, a decrease of about 69%. “Our monitoring made us […]
The post Hacker Exploits Dogecoin (DOGE) Flaw, Causing 69% of Nodes To Crash appeared first on The Daily Hodl.
Blockchain mining software firm DEBT Box has been accused of lying to investors about its involvement in crypto mining and its "node licenses."
The United States Securities and Exchange Commission has obtained a temporary asset freeze against Utah-based crypto company Digital Licensing Inc, accusing the firm of perpetrating a $50 million fraudulent crypto scheme.
On Aug. 3 the SEC announced it had obtained a temporary asset freeze, restraining order, and other emergency relief against Digital Licensing Inc., which was operating as “DEBT Box.”
The firm’s four principals, Jason Anderson, his brother Jacob Anderson, Schad Brannon, and Roydon Nelsonand, and 13 other defendants were included in the enforcement action.
The SEC has alleged the firm was selling unregistered securities since March 2021, which it called “node licenses.”
On its website, DEBT Box claims to be a decentralized eco-friendly blockchain “where crypto meets commodities.” It claims to sell “software mining licenses” which need to be activated before they begin mining.
Daily rewards are promised via a number of “projects” that appear to be linked to various industries such as real estate, commodities, agriculture, and technology.
The firm has 30,000 X (Twitter) followers and was still active up until Aug. 3. It has a native token called DEBT which has tanked 52% since the SEC action.
In its complaint, the SEC said the firm falsely claimed that these “nodes” would generate crypto tokens through mining and that revenue-generating businesses would drive up the token values, resulting in huge gains for investors.
We obtained a temporary asset freeze, restraining order, and other emergency relief against DEBT Box and its four principals, Jason Anderson, his brother Jacob Anderson, Schad Brannon, and Roydon Nelson in connection with a fraudulent scheme to sell crypto asset securities.
— U.S. Securities and Exchange Commission (@SECGov) August 3, 2023
In a statement, the SEC called the node licenses a “sham” intended to obscure the fact that the total supply was created by the company using blockchain code.
Tracy Combs, director of the SEC’s Salt Lake Regional Office, said:
“We allege that DEBT Box and its principals lied to investors about virtually every material aspect of their unregistered offering of securities, including by falsely stating that they were engaged in crypto asset mining,”
The defendants also allegedly lied about the revenues of businesses supposedly increasing the token values, according to the SEC.
Related: Cryptocurrency versus the SEC: A fight for fair digital investing
The SEC is seeking permanent injunctions, return of ill-gotten gains, and civil penalties against the firm.
Cointelegraph reached out to Digital Licensing Inc. for comment but did not receive an immediate response.
Magazine: Deposit risk — What do crypto exchanges really do with your money?
“We’re seeing another wave of Bitcoin interest, largely driven by business and institutional adoption,” says Alex Leishman, River CEO. “It’s not fueled by hype.”
The tide might have gone out on Bitcoin Ordinals, but there’s a strong undercurrent of investments in Bitcoin-only companies. River, a U.S.-based Bitcoin (BTC) technology and financial services company is the latest to make a splash.
River announced a $35 million Series B equity funding round despite the bear market. Kingsway Capital led the round, with notable contributions including Paypal co-founder Peter Thiel, Cygni, Goldcrest and Valor Equity Partners.
According to Alex Leishman, the CEO of River, the new wave of Bitcoin interest is “largely driven by business and institutional adoption.” He added:
"It’s not fueled by hype. This year’s bank failures and bailouts have been a wake-up call, revealing the cracks of the traditional financial system and reminding us why Bitcoin is so important–it’s a secure path to a stronger and more transparent global economy."
The San Francisco-based company manages one of the largest Bitcoin lightning nodes, enabling payments and managing liquidity for the Bitcoin Lightning Network.
The River Lightning API enables companies to easily integrate with the Lightning Network. The service has already taken charge of one of the key players in the Bitcoin payments landscape; El Salvador's Chivo wallet use River for near-instant and near-free Bitcoin payments.
River was an early adopter of the Lightning Network, similar to global crypto exchanges including Bitfinex and Kraken.
Moreover, the world’s largest exchanges, Coinbase and Binance, may soon adopt Lightning as the world slowly warms up to the low-fee, high-throughput payments network. At the Advancing Bitcoin conference in London, River CEO Leishm told Cointelegraph:
"I still think that we are very early. Yeah, there’s a lot of cool things happening. We’re building this really amazing foundation protocol-wise."
He said that it’s important to see more people “ working backward from the real human problems as well. We need more of that.” In light of the surge in mainchain transaction fees due to meme coin mania, more and more exchanges and crypto companies may turn to the Lightning Network as a solution.
Related: The state of the Bitcoin Lightning Network in 2023
River joins a burgeoning list of Bitcoin companies making raises during the bear market. Custody service provider Unchained Capital recently raised $60 million, while El Salvador’s education program received a flood of investments from Bitcoin advocates around the world.
The bill aimed to have only state authorities impose regulations and taxes on individuals and businesses running blockchain nodes, as opposed to those at the city and county level.
Katie Hobbs, the governor of the state of Arizona, has vetoed legislation that would have largely stopped local authorities from imposing taxes on individuals and businesses running blockchain nodes.
In an April 12 decision, Governor Hobbs issued a veto to Arizona Bill 1236, first introduced in January. The legislation aimed to revise sections of statutes pertaining to blockchain technology, largely reducing or eliminating regulation and taxation of node operators at the state level.
“A city or town may not impose a tax or fee on any person or entity for running a node on blockchain technology in a residence,” said the Senate engrossed version of the bill. “The imposition of a tax or fee on a person or entity running a node on blockchain technology in a residence is of statewide concern and not subject to further regulation by a city or town.”
Under the bill, the same restrictions for cities and towns on node operators would have also applied to counties. Following approval in the Arizona Senate and House, lawmakers sent the bill to Hobbs’ desk, where she vetoed the legislation on her 100th day in office.
It was a great day celebrating the first 100 days of my administration with folks from across Arizona.
— Governor Katie Hobbs (@GovernorHobbs) April 13, 2023
There’s so much more to do, but I’m excited about the foundation we’ve laid and where we’re going next.
Thank you, Arizona. #Hobbs100 pic.twitter.com/piL6GEXb9m
Related: Colorado governor says he expects state to accept tax payments in crypto by summer
Some Arizona lawmakers have introduced legislation aimed at making the U.S. state a pro-crypto regulatory environment for both companies and individuals. State Senator Wendy Rogers proposed Arizona’s government make Bitcoin (BTC) acceptable as legal tender, and joined with other lawmakers in a resolution having crypto be a tax-exempt property under the state's constitution.
To what extent does the surge in the use of custodial wallets and difficulties in running a Lightning node undermine the Lightning Network?
The Lightning Network, a layer-2 payment solution built on top of the Bitcoin blockchain, is six years old.
Products, users and the amount of Bitcoin (BTC) sent on the Lightning Network (LN) has sky-rocketed in 2023, despite the price per Bitcoin slipping under $20,000.
The LN has benefited from the integration into the Nostr protocol — in which users can send one another satoshis (small amounts of Bitcoin) — and the proliferation of custodial and noncustodial LN wallets, and its formal integration in territories such as El Salvador and Lugano.
From Mediterranean cities to Senegal, the LN is also growing as a peer-to-peer means of payment. Nonetheless, despite its growth, concerns still stymie the network, according to key opinion leaders interviewed during Advancing Bitcoin Developer Conference in London.
Eric Sirion, co-founder of Bitcoin mobile app Fedi and maintainer of the Fedimint protocol, explained that running a Lightning node in 2023 is still difficult and that some people don’t bother when faced with the complexity:
“To keep your own Lightning node running, to keep well connected, like keep your connections up to date with the nodes that are relevant — it’s a part-time job essentially.”
Matthias Koller, co-founder of Swiss company Pocket Bitcoin, said, “It has become substantially easier compared to early 2018. However, it is still not ‘easy’ for the masses.”
“But it’s exciting to see the development around full node implementations and the progress that’s been made.”
Sirion, who wrote the open-source code Fedimint and now works on the Fedi team, explained that custodial Lightning wallets, such as Wallet of Satoshi, are popular among Bitcoin advocates. He’s right: It is the wallet of choice for Nostr, a space dominated by Bitcoiners.
However, the reliance on custodial wallets could be a problem for the LN. Trusting a third party with funds, such as Wallet of Satoshi, is contrary to the Bitcoiner mantra, “not your keys, not your coins,” Sirion said.
Furthermore, Koller explained that the reason many Bitcoiners end up sidestepping the “not your keys, not your coins” mantra is that some of the custodial solutions are just so easy. “It’s set up in seconds, ready to transact,” he said, noting:
“But in fact, it’s no different from keeping Bitcoin on an exchange — it’s not your Bitcoin. It’s risky if people aren’t aware of the risks involved and the amounts kept in custodial wallets grow in size.”
However, Koller conceded that custodial solutions are fine for “pocket money.” The LN is ideal for micropayments, but even so, trusting centralized wallet providers could erode privacy. In response to the rise in custodial wallets, one Twitter user explained, “If payments are being made from custodial mobile wallets to custodial mobile wallets it’s very simple to link senders and receivers.”
Sirion hopes that the rollout of Fedi will undermine the reliance on third parties and provide a straightforward and privacy-centric route to using Bitcoin and Lightning. Fedi uses the open-source protocol Fedimint in which trusted members of a community share ownership of Bitcoin:
“If you’re already using custodial service, at least use one where you have a reason to trust the people that are.”
Moreover, the reliance on Lightning custodial wallets could be in part due to the difficulties in running a Lightning node. Node software businesses, such as Amboss and Umbrel, attempt to remedy the issue with improved UX, but in comparison to downloading Bitcoin Core to run a Bitcoin node, there are more steps, and a deeper understanding of Bitcoin is required to run a Lightning node.
Furthermore, in the world of Venmo, Revolut and other near-instant centralized payment services, there’s a risk that Lightning’s free and frictionless payments do not necessarily solve a pressing problem. During Advancing Bitcoin, Alex Leishman, CEO of Bitcoin firm River Financial, told Cointelegraph, “Bitcoiners use Lightning mostly because it’s interesting and it’s cool. It’s not solving deep problems in their life.”
Related: Bitcoin Lightning Network growth is organic, coming from real-world adoption
Koller joked that the LN is “Bitcoin on steroids. Fast, cheap and perfect for small, daily transactions.” Plus, it’s still substantially more private than Google Pay or using Visa or Mastercard at a checkout:
“The pain I feel every time I have to use a credit card online is just gut-wrenching. Give me Lightning everywhere!”
Leishman would like to see more people working backward from real human problems observed worldwide and see where Lightning can fit in. For example, in the West, the LN could resolve inter-institutional transactions.
“It can really move the needle on a number of things in the West and in the developing world.”
In El Salvador, some Salvadorans use the Lightning Network, but cash is still king. Leishman mentions the Taro protocol, which, once implemented, could allow for assets to be issued on the Bitcoin blockchain.
“Do people actually just want dollars? And does that mean we want to try to build stablecoins on Lightning with Taro?” he said.
These assets could be deposited into Lightning Network payment channels and transacted instantly. In theory, LN users could hold several balances in their wallets, including different stablecoins or dollars.
Currently, developers can mint, send and receive Taro assets on the test network of the Bitcoin blockchain. In the meantime, LN developers will continue to seek out more user-centric Bitcoin solutions.
During the Execution Layer Meeting streamed on March 16, 2023, Ethereum developers announced that the blockchain is scheduled to upgrade on April 12, in 27 days. The upgrade, known as the Shanghai-Capella upgrade or Shapella, will include the implementation of Beacon chain push withdrawals. This will enable Ethereum network validators to support withdrawal operations following […]
The Bitcoin blockchain has 40.49 gigabytes (GB) to go until it reaches half a terabyte (TB), and with the recent trend of Ordinal inscriptions, it’s likely to get there faster. The average block size reached a high of 2.52 megabytes (MB) on Feb. 12, 2023, but block sizes have subsided and dropped to an average […]
BlueWallet seeks to promote self-custody solutions and greater decentralization with its decision to sever the connection to LndHub.
BlueWallet is sunsetting its lightning node connection to Lndhub, according to an official statement. BlueWallet will cease custodial lightning operations, meaning that BlueWallet users of the Bitcoin (BTC) Lightning Network must connect to nodes to continue using BlueWallet lighting services.
What does BlueWallet sunsetting LndHub mean for you?
— calle ⚡️ (@callebtc) February 23, 2023
- If you use BlueWallet for on-chain bitcoin: ✅ nothing
- If you use other LndHub services (like LightningTipBot, LNbits, Alby): ✅ nothing
- If you use the Lightning account hosted by them: ⚡️ Move your sats out
Read on
Calle, a lightning developer who tweeted about the change, told Cointelegraph:
“The most important thing is that people don’t panic and suddenly noobs move out their on-chain funds or wrong lightning balances.”
The Lightning Network is a layer-2 payment solution built upon Bitcoin. The Lightning Network is used to send small amounts of Bitcoin around, called satoshis or sats, often using a lightning wallet.
Blue Wallet is a popular Lightning Network wallet with over 42 BTC ($1 million) liquidity. Its largest channel has a 4 BTC ($95,000) capacity, according to data from Amboss. BlueWallet is a popular lightning wallet, often recommended by well-known Bitcoiners.
Calle continued, “It’s important to realize that lndhub is a protocol that helps you connect wallets to accounts. The wallet (in this case) is BlueWallet but other wallets also support LndHub (like Alby or Zeus).”
“The account is shutting down, not LndHub or Bluewallet itself. The account here is hosted by the BlueWallet team and they don’t want to do this anymore.”
While users will still be able to withdraw their sats, creating new or refilling existing lightning wallets on the LndHub node will no longer be possible. BlueWallet publicly stated that users with sats connected to BlueWallet’s lightning node, they should move them as soon as possible.
The service will be shut down on April 30th, so it is crucial that BlueWallet users move their sats to another service or wallet of their choice. However, regular Bitcoin wallets are not affected by this change.
Related: Bitcoin Lightning Network growth is organic, coming from real-world adoption
While some may view the change as a thorn in the side of Lightning Network adoption, it is important to note that BlueWallet will “only support self-custody solutions,” according to the website. The change seeks to promote decentralized solutions and self-custody.
Disclaimer: Cointelegraph reached out to BlueWallet for comment. BlueWallet said to check the blog post on BlueWallet’s website.
As Ordinal inscriptions approach the 150,000 mark, blocks larger than 3 MB have become commonplace, with many blocks near the 4 MB range. Meanwhile, after the average transaction fee on-chain rose 122% higher at the beginning of February 2023, the average fee has remained the same over the last few weeks and is currently coasting […]
The initial “Dfura” marketplace, which is currently in development, is expected to include up to 10 Web3 data providers.
Infura is developing a decentralized marketplace of data providers that will help to prevent Web3 app crashes in the future, according to a Feb. 6 Cointelegraph interview with Infura researcher Patrick McCorry.
McCorry stated that the new “Dfura'' or “decentralized Infura” will help to ensure that blockchains remain decentralized by distributing data provider services among multiple providers in a marketplace. It will have “up to 10 providers initially” that will “work together to bootstrap the network and then […] Gradually iterate and get more players.” Some potential partners will meet at ETH Denver in late February or early March to discuss the project's next steps.
The new project will not be a new blockchain. Instead, it will be a marketplace that matches consumers of blockchain data with data providers, as McCorry explained:
“There'll be a marketplace where basically the new providers will sign up, they'll have some stick in the system. They can place the resources that they have available, so I can say, I can satisfy these requests at this price. Users could come along and then buy those resources and then it's like a matchmaking service of users.”
McCorry believes this will make the Web3 ecosystem more resilient by allowing users to rapidly switch to a new provider if the one they are currently using experiences an outage. He also stated that the new “Dfura” might be more censorship-resistant than the current service because providers will be spread out over many different geographical areas and operating under different jurisdictions.
Related: Are we still mad at Metamask and Consensus for snooping on us?
Infura is a suite of APIs and developer tools that is used by Web3 app developers to pull data from blockchains. It is used by many different Web3 apps, including Metamask, Gnosis, Aragon, and others. It is also used by many centralized exchanges to track deposit and withdrawal transactions.
Although blockchain networks charge transaction fees to prevent too many transactions from overloading servers, these fees are only charged to users writing data to the blockchain. Infura has emerged as one way to charge developers or users for reading data, which does not usually incur a transaction fee on-chain.
As Infura has become increasingly used by developers, it has come under fire for allegedly being too centralized. In November 2020, the Metamask wallet app stopped working for most users when Infura servers went down, and some centralized exchanges were prevented from getting accurate transaction data from it anymore. This led some critics to question whether Ethereum can be genuinely decentralized as long as developers depend on Infura to provide data for their users.
Parts of this article were based on an interview with Patrick McCorry conducted by Cointelegraph’s Andrew Fenton at Starkware Sessions 2023 in Tel Aviv.
