Curve Finance awards dev $250k for finding reentrancy vulnerability

May 1, 2024 Coin Telegraph

Jack Dorsey wants to decentralize Bitcoin mining with new investment

November 29, 2023 Coin Telegraph

Ocean, which raised $6.2 million in a funding round led by Jack Dorsey, plans to enable miners to get block rewards directly from Bitcoin.

Twitter (now X) co-founder and Bitcoin (BTC) advocate Jack Dorsey is backing a new BTC mining pool to help miners regain control of block rewards and transaction fees.

Dorsey has led a $6.2 million seed round for Mummolin, the parent company of the new decentralization Bitcoin mining pool called Ocean, according to an announcement on Nov. 29.

The seed funding will support the launch of Ocean, which is designed to decentralize and reshape the process of Bitcoin mining. The mining pool specifically aims to provide more mining process transparency and enable miners to receive block rewards directly from Bitcoin rather than from BTC mining pools.

Luke Dashjr, Mummolin co-founder and long-time Bitcoin Core developer, believes that the role of mining pools must change for Bitcoin to exist as a truly decentralized currency.

“Ocean is a new type of pool that enables miners to be truly miners again. We are launching as the most transparent pool and also the only noncustodial pool where miners are the recipients of new block rewards directly from Bitcoin,” Dashjr stated.

Mummolin co-founder and president Mark Artymko stressed that traditional BTC mining pools take exclusive custody of block rewards and transaction fees before distributing them among miners. “This gives them the ability to withhold payment from individual miners, whether by their own choice or by legal requirement,” Artymko said, adding:

“OCEAN's non-custodial payouts directly to miners from the block reward remove this risk and the pool's undue influence over miners.”

Committed Ocean supporter Dorsey is confident that the platform will solve the problem of further centralization of pools and mining pools that could plague Bitcoin. He noted:

“When I see a project that is good for Bitcoin broadly, and that's also good for me and my companies personally, it becomes a simple decision for me and I'm happy to be a part of it.”

The launch of Ocean was announced at the Future of Bitcoin Mining Conference in the shadows of Barefoot Mining’s 150-year-old hydroelectric dam in rural South Carolina. Barefoot Mining, the first client of Ocean, has fully repurposed the dam, converting excess energy to Bitcoin mining at scale.

Ocean's launch comes 139 days before Bitcoin's fourth halving event, expected to occur on April 17, 2024. After the halving, the current 6.25 mining reward per block will drop to 3.125 BTC, significantly decreasing incentives for Bitcoin miners.

Magazine: Real AI use cases in crypto, No. 2: AIs can run DAOs

Bitcoin miner mulls refunding 20 BTC reward to Paxos

September 14, 2023 Coin Telegraph

Bitcoin mining

Chun’s reservations about whether to return the funds to Paxos stems from him being “annoyed” that “the person claiming it (the funds) kept saying EST instead of EDT/UTC.”

A Bitcoin (BTC) miner who mistakenly received 20 BTC — worth over $500,000 — from crypto exchange Paxos for settling a 0.008 BTC ($200) transaction is now reconsidering their decision to return the jackpot to its rightful owner.

On Sept. 13, Paxos revealed to Cointelegraph that it overpaid the BTC network fee on Sept. 10, to a miner who goes by the pseudonym Chun. While confirming that the event did not impact the traders' funds, the platform admitted that a system bug resulted in the disbursement of 20 BTC in mining rewards on one transaction.

While Chun initially agreed to refund the reward, he decided to reconsider his decision and reached out to the crypto community for advice.

I was annoyed and regretted agreeing to refund that 20 BTC. Especially when I saw the person claiming it kept saying EST instead of EDT/UTC. Last time a Zcash guy did that, I blocked his entire company.

Ref:https://t.co/MQh0ijLR11 https://t.co/lxtcFH9mq3

So what should I do?
— Chun (@satofishi) September 13, 2023

Chun’s unwillingness to return the funds to Paxos stems from him being “annoyed” that “the person claiming it (the funds) kept saying EST instead of EDT/UTC.”

*Bitcoin miner Chun asks crypto community for opinion on return of Paxos funds. Source: X*

Adding to Chun’s dilemma, the crypto community on X (formerly Twitter) shared mixed opinions — each supported by solid reasonings. However, most people believe Chun has no obligation to return the 20 BTC reward and agree that instead, it should be distributed among the Bitcoin mining community.

Depending on one’s physical location, Bitcoin mining business can have a varied profit margin. A recent report from CoinGecko showed that only 65 countries are profitable for solo Bitcoin miners, based solely on household electricity costs.

*The most unprofitable countries to mine 1 BTC. Source: CoinGecko*

Based on the data shown above, mining 1 BTC in Lebanon is 783x cheaper than Italy, where it costs $208,560 to produce 1 Bitcoin.

Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines

TeraWulf increases self-mined BTC in Q2 while Hut8 looks to USBTC merger

August 14, 2023 Coin Telegraph

Bitcoin mining

U.S. miner TeraWulf expanded its Bitcoin mining capacity in 2023, resulting in 70% more BTC mined in in Q2.

Bitcoin (BTC) mining firm TeraWulf has seen a drastic increase in BTC rewards after increasing its mining capacity in the first half of 2023.

According to the company’s latest quarterly filing with the U.S. Securities and Exchange Commission, TeraWulf mined a total of 1441 BTC through the first half of the year. 508 BTC were mined in Q1, while the firm added another 375 self-mined BTC to its balance sheet in Q2.

The increase in hashrate and mined BTC also led to an uptick in quarterly revenue for the company, up from $11.5 million to $15.5 million in Q2. The company pointed to their increased hashrate and the recovering market value of Bitcoin as primary reasons for its improved quarterly financials.

The firm now has over 50,000 new generation Bitcoin miners which it operates across its Lake Mariner site in New York and its Pennsylvania nuclear-powered Nautilus operation. TeraWulf’s operational hash rate sits at 5.5 EH/s while it has 160 MW of capacity for miners at the two sites.

TeraWulf's nuclear-powered Nautilus mining location.

The company also confirmed that it plans to expand its operation at Lake Mariner by another 43 MW by the end of 2023. The new building in New York is set to host 18,500 new generation S19j XP miners from Chinese manufacturer Bitmain.

TeraWulf estimates that its additional capacity at Lake Mariner will increase its self-mining hashrate by a further 58% from 5.0 EH6 to 7.9 EH/s.

Meanwhile Hut8 announced that it had seen a decrease in hashrate and self-mined Bitcoin in Q2 of 2023 as reflected in its mid-year results. The company mined 399 BTC in Q2, noting a 58% decrease compared to Q2 2022.

Hut8 put the drop in mined BTC down to three factors, which including the overall increase in Bitcoin mining difficulty, the suspension of operations at the firm's North Bay Facility and electrical issues that are ongoing at its Drumheller site.

Hut8 is also diversifying the use of its infrastructure away from solely mining Bitcoin. It’s high performance computing operation continues to generate an average of $4 million per quarter, while this number is expected to grow once its five year deal as an computing infrastructure provider to Interior Health begins towards the end of 2023.

Hut8 added that its Drumheller site had been hamstrung by high energy input levels that had led to some of its mining equipment to fail. The firm said 20% of its installed hash rate had been affected as a result.

Hut8 self-mined Bitcoin balance sits at 9,136 BTC, currently valued at $368.7 million. The company sold 396 of the 399 BTC it mined through Q2, resulting in $14.7 million in revenue. Hut8 expects to increase its hash rate capacity once a planned merger with USBTC is complete.

Magazine: Deposit risk: What do crypto exchanges really do with your money?

Crypto staking rewards are taxable once received: IRS

August 1, 2023 Coin Telegraph

Coin Telegraph

The United States tax collector will require taxpayers to count staking rewards as gross income at the time they gain “dominion" over the tokens.

United States crypto investors must report crypto staking rewards as gross income in the year it was received, according to a new ruling from the country’s top tax authority.

On July 31, the Internal Revenue Service issued Revenue Ruling 2023-14, giving clarification about how income earned from staking digital assets should be treated for taxation purposes.

*Excerpt from Rev. Rul. 2023-14. Source: IRS*

Gross income includes income realized in any form, whether in money, property, services and now staking rewards.

The ruling applies to cash-method taxpayers who receive any crypto as remuneration for validating transactions on proof-of-stake blockchains and applies both when staking cryptocurrency directly and when staking through a centralized crypto exchange.

The ruling stated that the fair market value of the crypto rewards should be included in annual income and determined when the assets are received.

“The fair market value is determined as of the date and time the taxpayer gains dominion and control over the validation rewards."

“Dominion” was defined as the time when the investor controls and has the ability to sell, exchange, or otherwise dispose of the cryptocurrency rewards.

The IRS previously subjected crypto-mining rewards to both income and capital gains tax but had no provisions for staking rewards up until now, according to crypto tax firm Koinly.

Head of tax at Koinly, Danny Talwar, elaborated to Cointelegraph:

“The revenue ruling compounds the understanding of many accounting professionals in that staking rewards are only taxed as gross income when they are able to be sold. This means in that rewards accrued but locked won’t be taxable until the recipient can exercise ‘dominion and control’ over their staking rewards.”

Messari founder Ryan Selkis said the IRS is treating crypto staking like stock dividends.

What PoS blockchains do at scale is embed state-level taxes into their protocols.

The IRS says PoS rewards should be included in gross income, which means crypto has taken the concept of a "stock dividend" and made it taxable.

You get a taxed for slicing a pizza in 10 vs. 8. pic.twitter.com/3qlm6lAGQv
— Ryan Selkis (@twobitidiot) July 31, 2023

Meanwhile, Jason Schwartz, tax partner and digital assets co-head at Fried Frank, said: “While the ruling is therefore unsurprising, it’s still disappointing,” adding:

“Tax law has always required the existence of a payer, such as an employer or other counterparty, for taxable income to accrue to someone. Even treasure trove discoveries are deferred payments.”

The IRS tax bulletin comes at a time when U.S. federal regulators such as the Securities and Exchange Commission are targeting crypto-staking service providers and exchanges, alleging that they are offering illegal securities sales.

Magazine: Best and worst countries for crypto taxes – plus crypto tax tips

Arkham Intel Exchange approves $5K bounty for info on Do Kwon and Terra wallets

July 24, 2023 Coin Telegraph

Arkham Intel Exchange approves K bounty for info on Do Kwon and Terra wallets

Blockchain

Terra co-founder Do Kwon is currently in a Montenegrin prison as the platform remains under scrutiny in South Korea, but crypto users continue to seek out information on wallets.

A platform aimed at “deanonymizing the blockchain” has accepted its first submission concerning information on wallet addresses connected to Terraform Labs and its co-founder, Do Kwon.

In a July 24 announcement, Arkham Intel Exchange said it had accepted a submission from two “on-chain sleuths,” resulting in a bounty payment of 9,519.2625 Arkham (ARKM) — roughly $5,000 at the time of publication. An anonymous user and Ergo, a self-described “glorified accountant” working with OXT Research, sent the platform “evidence of wallets” owned by Kwon and Terra. Ergo said this information could contradict public statements from Terra on holding only one Luna Foundation Guard wallet, in which a reported 313 Bitcoin (BTC) remains in reserve.

Expanded labels for the LFG BTC address activity after running off with funds intended for defense of the UST depeg have been added to Arkham as a part of their bounty program.

Details and additional color on the attribution are provided below. https://t.co/RzEqz4jj01
— ∴glorified accountant∴ (@ErgoBTC) July 24, 2023

Launched on July 10, Arkham has incurred negative reactions from many in the crypto space, who describe the platform as little more than a glorified snitching service. The firm allows users to post bounties requesting information on blockchain transactions, which will be released to the public 90 days following approval at Arkham. This suggests all information on the Kwon and Terra wallet addresses may become available in late October.

Terra was at the forefront of controversy in the 2022 crypto market crash when the platform’s algorithmic stablecoin, TerraClassicUSD (USTC), depegged from the United States dollar. Kwon’s whereabouts were largely unknown from May 2022 until March 2023, when authorities in Montenegro arrested and later sentenced him to four months in prison for using forged travel documents.

Individuals connected to Terra in South Korea are also currently under scrutiny from local authorities investigating the exchange. In July, co-founder Shin Hyun-seong — also known as Daniel Shin — reportedly had his first hearing for charges related to allegedly illicit profits from the sale of LUNA tokens.

Magazine: ‘Terra hit us incredibly hard’: Sunny Aggarwal of Osmosis Labs

LayerZero partners with Immunefi to launch $15M bug bounty

May 17, 2023 Coin Telegraph

LayerZero partners with Immunefi to launch M bug bounty

Coin Telegraph

The program offers a maximum reward of $15 million for anyone who identifies vulnerabilities classified as high severity.

Cross-chain messaging protocol LayerZero and security platform Immunefi have teamed up to launch a $15 million bug bounty program.

The program offers a maximum reward of $15 million for anyone identifying a vulnerability at the highest severity level. According to its terms and conditions, rewards are based on the Immunefi Vulnerability Severity Classification System and paid according to vulnerability impact.

LayerZero is an omnichain interoperability protocol that allows developers to interact with contracts across blockchains. In bug bounty programs, ethical hackers are rewarded for finding and reporting application vulnerabilities and bugs.

To be considered for a reward, bug reports must include a proof-of-concept (PoC) demonstrating an end effect on assets in scope. Explanations and statements are not accepted as PoC and code is required, according to the eligibility criteria.

Critical smart contract vulnerabilities reported on Ethereum, BNB Chain, Avalanche, Polygon, Arbitrum, Optimism and Fantom pay the higher of $250,000 or 10% of the assets’ value at risk at the time of reporting. The payout for critical vulnerabilities starts at $25,000 for all other chains. Non-critical rewards are based on internal criteria.

*Bug bounty reward thresholds. Source: Immunefi*

Bounty hunters are also required to comply with Know Your Customer standards, such as submitting a copy of their passport or government ID and proof of address, as well as being screened by the United States Office of Foreign Assets Control.

According to Immunefi, over 1,248 reports have been processed since its inception in 2020, totaling $65,918,994 in crypto bounties paid as of December 2022.

Other software companies offering thousands of dollars in bug bounties include Microsoft, Intel and OpenAI. Microsoft offers a maximum payout of $250,000 for critical bugs. Intel’s bug hunters can earn rewards up to $100,000, while OpenAI offers rewards up to $20,000 for exceptional discoveries.

Magazine: Should crypto projects ever negotiate with hackers? Probably

Bitcoin Miners Contend With Fifth Network Difficulty Increase of 2023

April 20, 2023 Bitcoin.com

Less than 1% of staked ETH estimated to sell after Shanghai upgrade: Glassnode

April 12, 2023 Coin Telegraph

Beacon Chain

The analytics firm backed up its prediction, stating only 253 validators have signed up to fully exit their staked Ether position.

An estimated 170,000 Ether (ETH) of the total 18.1 million ETH staked on the Beacon Chain will be unlocked within the first week of the Shanghai hard fork being executed on Ethereum, Glassnode has predicted.

The figure will comprise 100,000 Ether ($190 million) staking rewards and 70,000 ETH in staked Ether ($133 million) hitting the market the on-chain intelligence platform predicted in its April 11 report.

Glassnode backed up its prediction by explaining that only 253 depositors are waiting to exit their stake and that a few mechanisms are in place to prevent a flood of Ether supply from hitting the market all at once.

The highly anticipated Shanghai/Capella hard fork is scheduled to take place on 12-April-2023, enabling the withdrawal of staked #Ethereum.

In this extended edition of the Week On-Chain, we shall evaluate the overall Ethereum staking landscape, develop a framework to establish… pic.twitter.com/EVgsz3s6GG
— glassnode (@glassnode) April 11, 2023

The 253 exiting depositors own a total of 1,229 validators, while another 214 slashed validators will be forced out as soon as Shanghai is activated on Ethereum with Glassnode confident the hard fork will not have a "dramatic" impact on Ether's price action:

“Even in the extreme case where the maximum amount of rewards and stake are withdrawn and sold, the sell-side volume still falls within the range of the average weekly exchange inflow volume.”

“Therefore, we conclude that even the most extreme case will have an acceptable impact on the price of ETH,” the firm added.

Data shared by Glassnode found that only 22% of the 253 exiting depositors are currently in profit too.

*The types of organizations, size, age and profitability of each of the 253 exiting Ethereum validators. Source:* *Glassnode*

Glassnode expects a large amount of Ether to be withdrawn from the crypto exchange Kraken after the legality of its staking services was challenged by the United States Securities and Exchange Commission (SEC).

It also anticipated that crypto lending platform Celsius may withdraw a large amount to sell its staked Ether as part of its bankruptcy proceedings.

However, it is unlikely that Kraken and Celsius will make these withdrawals as soon as Shanghai is activated, it said.

*Approximately 11.2% of the Ether staked on the Beacon Chain is operated by Kraken’s staking service. Source:* *Glassnode*

The average deposit price across all staked ETH is $2,136, down 12.7% from Ether’s current price of $1,865, which equates to a net unrealized loss of $4.7 billion, Glassnode said:

“After the peak unrealized loss of $16B in July 2022, the net unrealized loss now amounts to $4.7B. It is mainly carried by the Whale sized depositors, who hold a 76% share of the unrealized losses.”

Global financial firm Fidelity Investments is also of the view that Shanghai won’t have too much of an impact on Ether's price action.

It explained in an April 5 report that “selling pressure will be muted due to the likelihood of partial withdrawals being re-staked as well as the length of time the withdrawals will take.”

The Shanghai upgrade is set to take effect on April 12, 10:30 pm UTC according to blockchain infrastructure firm Blocknative.

The unlocking of staked Ether will be enabled by Ethereum Improvement Proposal-4895.

Of the five EIPs that will be activated by Shanghai, it is by far the most anticipated one as it will move Ethereum one step closer to a fully functional proof-of-stake system.

Magazine: ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide

Ticketmaster Launches NFT-Gated Ticketing Service for Avenged Sevenfold Shows

March 28, 2023 Bitcoin.com

Rewards