Proof-of-Stake

CEO of $4,700,000,000 Crypto Asset Manager Says Upcoming Ethereum Upgrade an ‘Exciting Prospect’ – Here’s Why

August 26, 2022 The Daily Hodl

Millions of dollars in ETH lie unclaimed in presale wallets — but there’s a way to get them back

August 26, 2022 Coin Telegraph

Bitcoin

Did you know that over 500 Ethereum presale wallets are yet to be recovered… and collectively, they have a value of several billion dollars?

Out in the cryptosphere, there's a vast amount of wealth that's seemingly out of reach.

A long-running statistic suggests four million Bitcoin — almost 20% of the total supply — has been lost forever. Much of it was mined when the network was just beginning, with early adopters tearing their hair out after losing their private keys. One Welshman has endured a nine-year battle as he attempts to receive a hard drive containing 7,500 BTC from landfill.

But this isn't the only treasure trove that's worth exploring. For example, did you know that over 500 Ethereum presale wallets are yet to be recovered… and collectively, they have a value of several billion dollars?

The presale for ETH — which is now the world's second-largest cryptocurrency — took place back in the summer of 2014. At the time, 1 Bitcoin would buy you 2,000 Ether. Fast forward to now, and the exchange rate is much less generous: 1 BTC will only fetch 12 ETH. A whopping 8,893 people participated in this presale and were given tokens in the genesis block — but according to experts, hundreds of wallets remain untouched.

Some of these wallets contain tens of ETH — a figure that's worth tens of thousands of dollars today. Others have more than 10,000 ETH inside, meaning their owners are missing out on a life-changing $20 million.

All of this conjures up big questions: Are these wallets a lost cause? Will the upcoming merge — where Ethereum moves from a Proof-of-Work to a Proof-of-Stake blockchain — mean these funds are just irretrievable? And what's more, who in their right mind would lose access to their crypto after taking part in a presale?

Well, there are a plethora of factors that can lead to the private keys of presale wallets being lost. It could have been a problem with a browser, challenges with foreign language keyboard settings, or poor security practices. Let's not forget that crypto was shiny and new back then — and many early investors were figuring things out as they went along.

So… what should the people who own one of these presale wallets do? Give up, and dream of what could have been? Use this experience as a gripping story at dinner parties — regaling people of how you missed out on millions of dollars? Or fight back, and begin the painstaking process of reclaiming what's rightfully yours?

How to recover a presale wallet

It can be done. The first step is to head to Etherscan, a blockchain explorer, and check the balance of the address that you're struggling to retrieve. If there's crypto yet to be claimed, there's work to be done — and it's time to take a step back and reflect on what the password requirements would have been for your wallet.

This next bit is a little more challenging. You need to try and remember the passwords that you commonly used at the time. Software called Hashcat can be used to test a plethora of variations — alternating between uppercase and lowercase characters, and changing letters like a and i for special characters like @ and !. With the right GPU card, you'll have the opportunity to perform 200,000 password checks per second.

All of this may seem like a long shot — and there's still a risk that you'll end up empty handed, unable to find the elusive password to your Ether presale wallet. But this doesn't mean that you're out of options. Next, it's time to get the help of professionals who have a track record of cracking the code and reuniting owners with their crypto.

KeychainX says forgotten presale wallets often have specific parameters — and it has created custom-made software to successfully recover lost crypto.

The project told Cointelegraph: "Lost crypto wallets are a big headache for many crypto owners. KeychainX has helped over 200 people in the last 12 months to recover millions of lost Ether, Bitcoin and Dogecoin."

The proof is in the pudding

One Ethereum enthusiast contacted KeychainX after being part of the Ether presale — amassing 1,000 ETH for just $300. At the time of writing, this crypto sum would be worth a cool $2 million. There was just one problem: the customer believed the wallet was corrupt.

He was pretty sure of the password, but there were two main problems: firstly, he was half French, meaning there might be a problem with the decryption of foreign characters. Second, the password was 99 characters long. (And to top it all off, the password was of a sexual nature, meaning the project's specialists needed to find common phrases in both English and French that could be tested.)

KeychainX managed to figure out how to translate the special characters that had encrypted his wallet — treating them as they were Cyrillic. It was a process that took several weeks — and on top of all that, it took three days to track down the customer and give them the good news.

The project isn't just working to retrieve long lost crypto, but prevent the investors of tomorrow from ending up in a similar situation. It's received a patent in the U.S. and Japan for a keyless crypto wallet that uses geolocation data and biometrics to store private keys. And what's more, it's planning to launch an automatic crypto recovery site that will enable people to use their surplus GPU power to join a social recovery system.

Ethereum co-founder Vitalik Buterin recently shared his vision for social recovery at the Blockchain Futurist Conference in Canada — explaining how the world of Web3 could offer a more effective approach for retrieving accounts than Web2 ever could. As an example, users could nominate five recovery contacts — two of them institutions and one of them an employer, as well as their father and a friend. Three of these trusted sources could then come together to confirm that an account should be unlocked.

Losing crypto can be devastating — but projects like KeychainX are working to ensure far, far fewer people experience this in the future.

Learn more about KeychainX

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

Ethereum dev addresses node centralization concerns in runup to the Merge

August 26, 2022 Coin Telegraph

Coin Telegraph

A majority of 4,653 active Ethereum nodes are being run through centralized web providers like Amazon Web Services, which experts believe could become a central point of failure.

Ethereum is a few weeks away from officially moving to a proof-of-stake (PoS) mining consensus from its current proof-of-work (PoW) one. The transition officially dubbed the Merge is slated for Sept. 15, but in the run-up to the major upgrade, Ethereum node centralization has become a hot topic.

As Cointelegraph reported last week, the majority of 4,653 active Ethereum nodes are being run through centralized web providers like Amazon Web Services (AWS), which experts believe could expose the Ethereum blockchain to the central point of failure post Merge.

*Distribution of Ethereum nodes from web service providers. Source: Ethernodes*

The same concern was put forward by Maggie Love, co-founder of Web3 infrastructure firm W3BCloud. She claimed that the centralization of nodes in the Ethereum PoS network could become a big concern that nobody seems to be focusing on.

Ethereum lead developer Péter Szilágyi addressed the mounting centralization concerns and claimed that they have been aiming to prune the database since Devcon IV. "Pruning" refers to reducing the size of the blockchain to a point where developers can create a reliable registry with a certain size.

We've been saying it since Devcon IV. Either the state gets pruned, or you will end up with nobody running home nodes.

Everyone went crazy at the thought of state rent. Alexey almost got crucified for researching it. Well, now you're seeing the effect of no pruning.

¯_(ツ)_/¯ https://t.co/SkmD2Q39wE
— Péter Szilágyi (karalabe.eth) (@peter_szilagyi) August 26, 2022

Szilágyi added that the idea received heavy backlash at the time and the current centralization in nodes is a direct result of that. He explained that the Ethereum state needs to be a constant size for people to be able to run their own nodes.

Ethereum state refers to a large data structure that holds not only all accounts and balances but a machine state, which can change from block to block according to a pre-defined set of rules. Szilágyi explained:

“Ethereum state needs to be ‘constant‘ in size. That way it can run forever. The constant can be pushed up like the block gas limit if need be, but it mustn't grow unbounded. Until that's solved, there's no light at the end of the tunnel.”

He noted that active efforts are being made by several parties to resolve the issue, however, in the meantime, the common public shouldn’t be blamed for “not wanting to maintain an ever larger "infrastructure" for running a node.”

At present, the cost of running an individual node is very high, something that crypto analytic firm Mesari flagged in its report. Due to such infrastructure costs, people often turn to cloud infrastructure service providers such as AWS. However, high centralization could prove to be a vulnerability in the long term.

ATOM price is reaching for the Cosmos, but why?

August 25, 2022 Coin Telegraph

Coin Telegraph

Like all altcoins, ATOM price fell as $550 million of BTC, ETH and altcoin positions were liquidated last week. Which is exactly why its 35% rebound is raising eyebrows.

As a market crash takes place, assets become oversold and typically there’s an “oversold bounce,” “return to mean,” “mean reversion,” or some price snapback to the bottom of the pre-crash range.

Afterward, the asset under study either consolidates, continues the downtrend, or returns to the bullish uptrend if the downside catalyst was not significant enough to break the market structure. That’s all kind of basic trading 101.

This week Cosmos (ATOM) price appears to be following this path and the altcoin is showing a bit of strength with a 35% gain since Aug. 22, but why?

Depending on how you look at it, and technical analysis is by all means a subjective process, ATOM price is either in an ascending channel or one could say a rounding bottom pattern is present with price close to breaking above the neckline.

Resistance above $13 (the horizontal black line in the bottom chart) is currently close to being tested and with sufficient volume and “stability” from the wider crypto-market, the price could be en-route to the 200-day moving average at $17.20.

Of course, if Bitcoin goes belly up at the daily close, or hawkish talk starts to leak out of Jackson Hole, the whole bullish structure for ATOM is likely kaput. So if one is trading, prepare and size accordingly.

If price manages to reach the $17 zone, without skipping a beat, your favorite technical analysts will then say something along the lines of:

“If ATOM price manages to flip the 200-MA to support, continuation to the $27 level could occur.”

Surely you’ve seen that on crypto Twitter lately, but let me find an example.

I bought this $ATOM retest as it's been leading the market

Looking for a move towards $14.4 as long as the lows hold here. pic.twitter.com/FjP8mzdFHK
— CryptoGodJohn (@CryptoGodJohn) August 25, 2022

So, it’s only up, sir?

What traders need to find out is whether ATOM’s upside momentum is simply the result of a “stable” market and Bitcoin and Ether trading in a relatively predictable range, or is there some Cosmos-related set of fundamentals which validate the current move and warrant opening a swing long?

Apparently, the analysts at VanEck, a multi-billion dollar asset management fund, think ATOM price will do a 160x move by 2030.

Hard to believe isn’t it and perhaps a little bit far fetched, but see for yourself. Here’s what they said:

“Based on our discounted cash flow analysis of potential Cosmos ecosystem value in 2030, we arrived at a $140 price target for the ATOM token, with downside to $1. With ATOM’s price at $10 as of 8/2/2022, we like the 14-1 odds presented and believe this is a buying opportunity for the token.”

Let’s take a brief look at their rationale for $140 ATOM.

Product to market fit and a secure cross-chain bridge could thrive post Merge

VanEck analysts Patrick Bush and Matthew Sigel cite Cosmos’ Inter-Blockchain Communication Protocol (IBC) as a bullish catalyst primarily because “separate Cosmos SDK blockchains can open up communication channels to exchange data, messages, tokens and other digital assets.”

According to the analysts, “IBC architecture then enables each blockchain to perform activities on another blockchain without relying upon a trusted third party.” And it is this “permissionless and trustless” aspect of IBC which:

“...solves many of the issues presented by trusted bridging solutions that have led to over $1B in funds stolen through bridge hacks.”

The analysts also cite the Cosmos SDK, clear product to market fit and strong token value accrual being partially influenced by staking and a soon to launch “interchain security” mechanism by the Cosmos Hub as reasons for their long-term bullish perspective.

What’s happening on the development side and roadmap?

ATOM is set to become a primary collateral asset in three new stablecoins that will launch within the Cosmos ecosystem.

Why $ATOM is mooning?

The main collateral in three new @MakerDAO inspired stablecoins in the @cosmos ecosystem:$USK by @TeamKujira $IST by @agoric $CMST by @ComdexOfficial

These 3 chains will need $Atom to mint their stablecoins, locking up the supply.
— Ericzoo.eth (@ericzoo) August 24, 2022

Minting stablecoins will require the “lock” or depositing of ATOM tokens and according to the Cosmos Hub 2.0 roadmap, liquid staking is also expected to roll out in H2 2022.

*ATOM roadmap details. Source: Cosmos Hub*

During DeFi Summer and the post-summer revival, stablecoin issuance and liquid staking were two phenomena that boosted TVL for DeFi-oriented blockchains and while questionable and somewhat ponzi-esque, liquid staking adds buy pressure to a protocol’s native token, while also equipping it with utility within various aspects of the lending, borrowing and leveraging wings of decentralized finance.

*Staked percentage of ATOM's circulating supply. Source: Staking Rewards*

Current data from StakingRewards shows that 65.84% of issued ATOM tokens are staked for a minimum yield of 17.85% and additional data from the analytics provider shows a near 189% rise in the number of ATOM stakers over the past 30-days.

*30-day increase in ATOM stakers. Source: Staking Rewards*

The above appears to align with the thesis that liquid staking and stablecoin minting will soon launch. Despite the confluence of these bullish indicators, it’s important to remember that asset prices do not exist in a vacuum. While there may be a handful of bullish signals flashing from ATOM, the wider cryptocurrency market (including BTC) hangs at a precipice.

No-one is sure that the elusive “bottom” is in and cryptocurrencies are risk-off assets that exist in a macroeconomic climate where most institutional and retail investors are opposed to risk. The value accrual propositions for ATOM are strong and staking, stablecoin minting and liquid staking proved to be powerful bullish catalysts for DeFi tokens and altcoins in the past. But everything works until it doesn't, right?

Remember Waves, Terra (LUNA) and Celsius (CEL)? All experimented with liquid staking, lending, asset collateralization and stablecoins, yet today they’re belly up from a value perspective.

Of course Cosmos isn’t LUNA, Waves or CEL. It’s a wide-ranging, cross-chain equipped ecosystem with a $12.6 billion market capitalization, according to data from CoinGecko.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Coinbase Launches Custom Crypto Asset As Ethereum Merge Approaches

August 25, 2022 The Daily Hodl

Coinbase Launches Wrapped Ethereum Liquid Staking Token Ahead of The Merge

August 25, 2022 Bitcoin.com

ETH whales move holdings onto exchanges before Merge

August 25, 2022 Coin Telegraph

Coin Telegraph

The top-10 Ethereum non-exchange addresses have seen an 11% decline in their holdings while on-exchange whale addresses have seen a 78% increase over the past three months.

Ethereum blockchain is slated for one of the biggest updates since its inception, as it will transition to a proof-of-stake (PoS) mining consensus from its current proof-of-work (PoW) one.

The Merge date is scheduled for Sept. 15, after the successful Goerli test net integration — the final test net merger before the actual transition. Ether (ETH), the native token, was on a bullish surge after the announcement of the Merge date in July with the ETH price rising to a new six-month high of over $2,000 but failed to consolidate the critical resistance.

The bullish enthusiasm in terms of token price and market sentiment seems to be on a decline as we near the Merge. A significant chunk of ETH whales has seen a sharp decline in their holdings.

Data from crypto analytic firm Santiment indicates that the gap between Ethereum's top-10 largest non-exchange addresses and exchange addresses is closing. Over the past three months, top whale addresses have sent a significant amount of ETH onto exchanges as non-exchange addresses saw a decline of 11% while exchange-based addresses have seen a 78% surge.

*Ethereum top-10 exchange and non-exchange wallet Source: Santiment*

The flow of crypto onto exchanges is considered a bearish sentiment and is often done by traders to take a profit by selling their tokens. The increase in the amount of ETH by whale addresses on exchanges suggests these whales are expecting the price to go lower in the near future.

Many market analysts also believe that the Merge would be a "buy the rumor, sell the news" type of event. Where the market rallied in the aftermath of the Merge date confirmation, but could eventually see a price decline after the key event. The saying means that if good news is expected sometime in the future, the price will often move higher in anticipation of that date, but not necessarily after.

I think #Ethereum will drop so hard on the Merge day.

The whole anticipation is getting not bought up on the spot market but on the futures market.

Be warned.
— Crypto Rover (@rovercrc) August 23, 2022

The Merge would mark the completion of the second of three phases in Ethereum's transition to the PoS consensus. The PoS transition process began in December 2020 with the launch of the Beacon chain.

The current phase was scheduled to be completed by mid-2021, however, due to several delays, it is now slated for the third quarter of 2022. The third phase would be the most crucial as it would introduce several scalability features such as sharding and reducing blockchain’s energy consumption significantly.

The Sept. 15 event is a significant milestone for Ethereum, however, at the same time, the Merge would only mean a change of mining consensus. Key benefits such as high transaction capacity, lower gas fees and reduction in energy consumption would all come after the completion of the third phase.

Coinbase introduces wrapped staked ETH asset ahead of the Merge

August 24, 2022 Coin Telegraph

Business

“Our hope is that cbETH will achieve robust adoption for trade, transfer, and use in DeFi applications,” said the crypto exchange.

Coinbase has launched a new asset in which Ether tokens are staked and wrapped through the crypto exchange.

In a Wednesday announcement, Coinbase said it will be listing Coinbase Wrapped Staked ETH (cbETH) on the Ethereum network as an ERC-20 token, allowing customers to use their staked Ether (ETH) while earning rewards on the exchange. According to its website, users can withdraw the tokens to Coinbase, stake them, and then wrap the ETH2 into cbETH, with the new wrapped staked token balance visible on their accounts. The tokens are expected to be available for trading on Aug. 25 “if liquidity conditions are met.”

“Our hope is that cbETH will achieve robust adoption for trade, transfer, and use in DeFi applications,” said Coinbase in its cbETH white paper released in August. “With cbETH, Coinbase aims to contribute to the broader crypto ecosystem through creating high-utility wrapped tokens and open sourcing smart contracts.”

Coinbase will add support for Coinbase Wrapped Staked ETH (cbETH) on the Ethereum network (ERC-20 token). Do not send this asset over other networks or your funds will be lost.

What is cbETH? Let’s dive in pic.twitter.com/n3Dp4OA6HO
— Coinbase Assets (@CoinbaseAssets) August 24, 2022

According to the white paper, cbETH will essentially function as a compound token, or cToken, given they are “most widely compatible with dApps in DeFi today due to the fact that they are ERC-20 compliant”:

“ETH and cbETH are not pegged or expected to be interchangeable. In fact, as the underlying staked ETH continues to accrue rewards, each cbETH token is expected to represent more staked ETH, which may result in a divergence in prices for these assets over time.”

The Ethereum Foundation announced on Wednesday that the network will be activated on the Beacon Chain with the Bellatrix upgrade starting on Sept. 6, with the Merge to Proof-of-Stake expected before Sept. 20. Coinbase announced on Aug. 16 that it planned to “briefly pause” deposits and withdrawals of ETH and ERC-20 tokens “as a precautionary measure” to handle the migration.

Bug bounty quadruples for Ethereum network — Up to $1M payouts ahead of Merge

August 24, 2022 Coin Telegraph

bug bounty

According to the Ethereum Foundation, identifying “critical bugs” — those that have a high impact or likelihood of a high impact on the blockchain — will be worth up to $1 million.

The Ethereum Foundation has announced it will be increasing the network’s bug bounty payouts fourfold ahead of the blockchain’s transition to proof-of-stake.

In a Wednesday blog post, the Ethereum Foundation said between Aug. 24 and Sept. 8, all “Merge-related bounties for vulnerabilities” will be quadrupled for white hats testing the network. According to the foundation, identifying “critical bugs” — those that have a high impact or likelihood of a high impact on the blockchain — will be worth up to $1 million. The bounty program also allows submissions for low, medium and high-risk bugs.

• Merge Bug Bounty Bonus: There is a 4X MULTIPLIER between now and 08 September on all bounties and vulnerabilities, with critical bugs worth up to $1mm USD

• See full post for updated Execution Layer (EL) and Consensus Layer (CL) client links, more on The Merge, and an FAQ
— Joseph Schweitzer | (@JBSchweitzer) August 24, 2022

As part of the transition to proof-of-stake, the foundation said the Ethereum Network “must first be activated on the Beacon Chain with the Bellatrix upgrade,” an event expected to happen on Sept. 6, with the Merge likely following between Sept. 10 and 20. Core developers previously announced a tentative Merge date of Sept. 15 when the Total Terminal Difficulty, or TTD — the difficulty of the final mined block — will trigger the end of proof-of-work and the start of proof-of-stake.

“The incremental difficulty added per block is dependent on the network hash rate, which is volatile,” said the foundation. “If more hash rate joins the network, TTD will be reached sooner. Similarly, if hash rate leaves the network, TTD will be reached later."

The foundation added that Ether (ETH) holders and users largely did not need to take any action prior to the Merge other than to “be on the lookout for scams.” Mining will no longer be possible following the transition, while stakers and node operators will both need to run an execution layer client, with the latter doing so with a consensus layer client.

In July 2020, the Ethereum Foundation announced it had launched public “attack networks” for Ethereum 2.0 for white hats to attempt to exploit potential issues in the clients, offering a $5,000 bounty at the time. However, in August 2021, a vulnerability affecting earlier versions of one of Ethereum's software clients, Geth, caused more than half the network’s nodes to split. The Merge will require the latest version of Geth as an execution client.

Other projects have offered up to $1 million or more in bug bounties aimed at finding exploits resulting in the theft or risk of losing millions, as Sky Mavis did in April 2022 following a $600-million hack on the Ronin Network. In June, Ethereum bridging and scaling solution Aurora paid a $6-million bounty to a white hat hacker who discovered a critical bug.

Nexo CEO Says Ethereum (ETH) ‘Could Go Much Higher’ in Coming Months Under These Conditions

August 23, 2022 The Daily Hodl

How to recover a presale wallet

The proof is in the pudding

So, it’s only up, sir?

Product to market fit and a secure cross-chain bridge could thrive post Merge

What’s happening on the development side and roadmap?

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