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Ethereum’s Constantinople Hard Fork Coming by Mid-January 2019

Ethereum’s Constantinople Hard Fork Coming by Mid-January 2019

A lot has been going in and around the arrival of Ethereum’s upcoming Constantinople hard fork update. The hardfork which was earlier scheduled for this month, is now likely to launch on the 16th of January 2019. Last month, during the testnet launch of Constantinople, it ran into a series of hurdles. The core developer team conducted a meeting during the October end, where they decided not to rush through the process.

This new date of January 16th is a tentative decision, made through a non-verbal agreement. However, note that this isn’t final or fixed. Developers have made it earlier clear that the hard fork can even see a possible further extension provided any additional problems arise.

Developer’s Opinions on Upcoming Hard Fork

Core developer Péter Szilágyi said:

“We can just say mid-January, it doesn’t make difference if we decide on a date or not. We can always postpone.”

Another developer Lane Rettig provided insights into the research done regarding the Ethereum’s difficulty-bomb.

The difficulty bomb means the increase in difficulty of mining new blocks on the Ethereum network. Over a period of time as the complexity increases, it will ultimately reduce in a slowdown in the number of blocks added. Ultimately it might prove to be a deterrent for the miners. However, Ethereum is planning to move from Proof-of-Work (PoW) to Proof-of-Stake (PoS) going ahead.

Rettig said that the difficulty bomb can be visible since January. Furthermore, it can also lead to a 30-second block time by the April or May of the upcoming year. “So we have time, there’s no critical concern,” Rettig said.

Back in September itself, the developers agreed to postpone the difficulty bomb to a further 18 months. Moreover, they also agreed upon reducing the mining rewards from 3 ETH to 2 ETH. Apart from this, the Constantinople hard fork will bring several upgrades underlying the code.

ProgPow Implementation

During the last conference call, there was a discussion of adding a ProgPow protocol during the Constantinople upgrade. The ProgPow aims at enhancing Ethereum’s resistance to specialized mining hardware like ASICs. There is a fear that the existing use of ASIC chips can centralize mining power in the hands of a few powerful miners. However, its implementation wasn’t discussed during the latest conference call. The developers noted some issues regarding the implementation saying that a formal specification for the code is still incomplete.

Developer Szilágyi, however, urged that all the software upgrades implementing the Constantinople hard fork should be released before the end of this year. “All clients should release a stable version with the baked in block number before Christmas,” Szilágyi said.

Ethereum’s Constantinople Hard Fork Coming by Mid-January 2019

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SEC Charges EtherDelta Founder For Running Unregistered Securities Exchange

SEC Charges EtherDelta Founder For Running Unregistered Securities Exchange

Zachary Coburn, the founder of Ethereum-based decentralized crypto exchange (DEX) EtherDelta, is now in the middle of a new trouble. The U.S. Securities and Exchange Commission (SEC) has charged Coburn for running an unregistered cryptocurrency exchange. The securities watchdog also notes that it is the first enforcement action from the agency on a platform operating “as an unregistered national securities exchange.”

Moreover, in the official press release, the SEC describes the existing anomalies in the EtherDelta’s functioning. The decentralized exchange EtherDelta is also a secondary marketplace allowing customers to trade ERC20 tokens. The ERC20 is a popular protocol for tokens issued on the Ethereum blockchain network through Initial Coin Offering (ICO).

Issuing DAO Tokens Regarded As Securities

EtherDelta used the Ethereum-based smart contracts to execute the buy and sell orders for ERC20 tokens. However, the SEC says that exchange issues several tokens deemed as securities and thus violated several federal securities laws. Last year in 2017, the securities watchdog issued a DAO report. The report noted that all digital assets, such as the DAO tokens, shall be deemed as securities.

As a result, all the exchanges trading such security tokens will have to adhere to the SEC’s requirement of operating as a registered exchange or pursuant to an exemption. While offering such security tokens, EtherDelta failed to register with the SEC

Stephanie Avakian, Co-Director of the SEC’s Enforcement Division, said: “EtherDelta had both the user interface and underlying functionality of an online national securities exchange and was required to register with the SEC or qualify for an exemption”.

Steven Peikin, Co-Director of the SEC’s Enforcement Division said: “We are witnessing a time of significant innovation in the securities markets with the use and application of distributed ledger technology. But to protect investors, this innovation necessitates the SEC’s thoughtful oversight of digital markets and enforcement of existing laws.”

On the contrary, EtherDelta founder Coubern consented to the SEC order and agreed to pay the penalty. The SEC has also appreciated Coubern’s cooperation and decided not to impose a greater penalty.

Discerning EtherDelta’s Decentralized Operations

The major reason EtherDelta was regarded as a decentralized exchange is that it processed orders on the Ethereum network. However, the platform was run by a single person i.e. the founder. With a single point of failure, the platform can’t be deemed to be completely decentralized.

With the SEC slapping charges on EtherDelta, one thing is clear that the agency won’t leave a loose hand on the decentralized exchanges. Andrew Hinkes, an adjunct professor at the New York University School of Law commented on the recent charges.

“This tells you that an exchange that used a distributed set of nodes instead of a centralized server isn’t going to be treated any differently,” Hinkes said. “Just because you make it and then it gets operated by a decentralized network of others doesn’t mean that any prospective responsibility or liability is gone. It’s just possibly relocated.”

Preston Byrne, a partner at the law firm Byrne & Storm, P.C also shared similar views.

“It doesn’t matter whether you sell the business or operated it a year ago or a few years ago. American securities laws are going to be enforced,” Byrne said.

SEC Charges EtherDelta Founder For Running Unregistered Securities Exchange

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Ethereum’s Constantinople Hard Fork Set for November Release

The complexity and uncertainty over Ethereum’s scalability solution have been growing!  Ethereum enthusiasts are eagerly awaiting the next big system-wide upgrade of the Constantinople hard fork.  Last week, Ethereum developers announced their plans to postpone Constantinople’s release on the test network Ropsten. The release date of the hard fork is now shifted to the next month of November.

However, in a bi-weekly developers meeting on Friday, October 12, open-source coders backing this project said that it is very much on time. Attendees of yesterday’s meeting said that the upgrade has been already coded in all major Ethereum clients, including those by U.K. startup Parity and Ethereum Foundation.

During the meeting call, developers said that the upgrade is most likely to go live this year itself. However, they have yet to finalize a date wherein the activation time, which gets triggered at a particular block, will be integrated into the code. The upcoming Constantinople hard fork brings five backward-incompatible changes to the Ethereum network. This includes mining code optimizations to some of the complex and controversial changes like reducing the mining rewards for the block transactions.

All the changes are implemented in the form of Ethereum Improvement Proposals (EIPs). All of these five EIPs introduce changes that include: fairer pricing structures for changes made to smart contract data storage; code optimizations to improve processing times for developers; changes to ethereum’s economic policy; and a code edit making scaling solutions through state channels easier to occur on ethereum.

Note that before releasing the Constantinople upgrade on the Ethereum mainnet, it needs to undergo a smooth release on the Ethereum testnet called Ropsten which is a primary platform for testing the new code. The release on Ropsten is scheduled for tomorrow, October 14, Sunday.

Earlier the testnet release was scheduled to last week which has been postponed to tomorrow after a bug was discovered in one of the five changes of Constantinople. But during yesterday’s call meeting, several software clients confirmed that they are ready to move ahead with the testing process.

In a word with CoinDesk, Hudson Jameson, a communications officer for the Ethereum Foundation, told “The core developers are excited about the upcoming testnet release of Constantinople. We are on the right track to hopefully release Constantinople on mainnet less than 1 month after Devcon.”

We hope that all goes smooth and fine with tomorrow testnet implementation of Constantinople so that we can proceed ahead with the mainnet launch by next month.

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Dr. Doom Calls Buterin a Scammer, Ethereum’s Creator Shoots Back Revealing His Possessions

It is not a secret that the crypto community is divided into two parts, the first is actively supporting digital currencies, while the other one is zealously criticizing cryptos. One of the most prominent figures of the latter is an american economist Nouriel Roubini, known for predicting the most recent global financial crisis and called Dr. Doom. He has criticized the crypto industry quite long, and one of his latest targets of attack is Vitalik Buterin, Ethereum founder.

It all started with Buterin’s prediction that the market would see a financial crisis between now and 2021. Buterin stated that he didn’t come from a place of analysis of the market or even from volatility, but to simply be the “guru” to expose the crisis.

Roubini was quick to respond. He said:

“Vitalik, just shut up and speak about stuff that you can claim u know about. You have promising Proof of Stake since 2013 and we are still waiting for a system that is scalable, decentralized & secure. But that is impossible as your inconsistent trinity principle proves.”

The response of Buterin was as follows:

“Design is basically done and we’re in development stages now, referring to the proof-of-stake protocol.”

Roubini went on to attack the crypto sphere as a whole, using today’s drop in prices as an argument. He said:

“The Crypto Meltdown & Apocalypse continues. Yesterday ETH, XRP & other key crypto-currencies plunged another 10% for a total loss from peak of 90%. Crypto is in total meltdown but all the panicking scammers, bots, shills, trolls, criminals, carnival barkers are out to attack me!”

He mentioned lots of arguments about cryptocurrencies: that they have no intrinsic value; that they impose transaction costs too high for small payments, which makes them useless as currencies; and that they use up too much energy to generate.

Further, on his Twitter, Roubini labeled Buterin and Ethereum co-founder Joseph Lubin as thieves and scammers.

In response, Vitalik Buterin explained how much he possesses and where the funds come from.

Buterin also stated that as there are no laws prohibiting pre-mining, it was irresponsible for Roubini to call him a criminal. And if the public knows that the currency is pre-mined, the ecosystem does not take the project as a scam.

Later, Ethereum founder revealed details on all his holdings and trades. The developer holds no more than 365,003 ETH, currently worth just under $72 million. In 2017, this amount would have been worth more than $500 million, but according to the Ethereum founder, he had less than 0.9% of all ETH at the time.

According to Buterin, the Ethereum Foundation currently holds around $660,000, and owns around $3 million.

Earlier, Ethereum was planning to launch Constantinople hardfork, a system-wide upgrade scheduled on the test network Ropsten. However, last week, Ethereum developers announced postponing the event, saying that the main reason for the delay is the recently discovered vulnerability in one of the five Constantinople upgrades.

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Ethereum’s Upcoming Constantinople Hard Fork Gets Postponed

On Thursday, October 4th, Ethereum developers announced to postpone the upcoming Constantinople hardfork, a system-wide upgrade scheduled on the test network Ropsten. On behalf of the entire developers’ team of the Ethereum Foundation, team lead Peter Szilagyi announced that the main reason for the delay is the recently discovered vulnerability in one of the five Constantinople upgrades.

The major reason for the delay is to give clients some more time to run “nodes” or computer servers supporting the Ethereum network. This delay will also give Ropsten users to prepare itself for the possible network split which is expected as a result of implementing Constantinople. Simultaneously, Ropsten users are also said to be working on other Ethereum projects like the off-chain scaling solution Raiden.

The Constantinople hard fork upgrade involves important changes like code execution, block reward issuance, data storage, and other things. The active nodes of Ropsten have to make sure that it implements all the upgrades simultaneously. Else there lies a risk of splitting the network into two different blockchains.

As a result, Raiden network developer Lefteris Karapetsas told other Ethereum developers on a public forum that even a temporary network split for a short period of time on Ropsten would “effectively make testing almost impossible” for their project, which is “rather close to mainnet release.”

Hence to avoid further complications on the testnet, Ethereum core developer Alexey Akhunov proposed another alternative which was to launch a separate temporary testnet on Ropsten and resolve all the code issues while postponing the main implementation. Constantinople’s new release date is set for October 14, expected to occur at block 4.23 million.

Proof-of-Stake Chances Look Slim

There has been a lot of buzz around the last few months about Ethereum shifting its consensus protocol from Proof-of-Work to Proo-of-Stake. Ethereum co-founder Vitalik Buterin has, several times, voiced his opinion in support of the latter. The Proof-of-stake implementation is considered to shift the decision making power on the Ethereum network from network miners to Ethereum token holders. This is considered to be a more egalitarian approach on who should be deciding the network changes.

However, Chen Min, CEO and founder of a Shenzhen-based startup Linzhi, says that there are very slim chances of Proof-of-Stake to arrive. To bring it to your notice, Chen’s startup has invested over $4 million in developing the fastest specialized ASIC mining chip for Ethereum. Chen has already worked as lead ASIC designer at Canaan Creative, one of the top global companies dominating crypto-mining hardware.

The latest iteration of Linzhi’s ASIC promises to replace all the previous Ethereum ASIC designs. Linzhi’s ASIC chips claim to have higher energy efficiency and better computing power over all the previous models. However, for Linzhi’s mining chip to function, it is important that Ethereum continues with the existing consensus protocol i.e. Proof-of-Work (PoW). In a word with CoinDesk, Chen said:

“I don’t know if [ethereum] will or will not switch to proof-of-stake. Proof-of-stake has a lot of problems.”

Chen believes that Proof-of-Work is the much better system because of its effective management of rewards distribution. As a result, she consider the Proo-of-Stake as “not a smart thing”.

“There are so many people, so many users, developers and hardware invested in that coin. If they ignore the work that has been done and switch to proof-of-stake, maybe later they can also ignore your stake and switch to proof-of-some other idea,” Chen said.

Simultaneously, there is also a consideration of another proposal called ProgPow which asks for having less expensive GPU chips in place of ASIC. Chen again denounced this saying that this proposal still doesn’t address the larger concern of how Ether rewards are actually distributed in the community. Chen said:

“ProgPoW is being pushed by large farms that have not disclosed their real intentions,” Chen said, adding: “The fear of Bitmain is driving the [ethereum] community into the arms of some very powerful well-funded farms that they don’t even know about.”

However, ProgPow lead developer -Kristy-Leigh Minehan – was quick to contradict Chen’s views saying “large-scale GPU farms don’t really exist.” To put Chen’s arguments at rest, the developer is further making a case wherein ‘GPUs can promote a larger number of participants in securing ethereum’.

Well, it ould be too early to comment on anything at the moment and yes industry players are surely expected to have biased views drawing the line of thought. However, we expect that the Ethereum community in large takes further decisions which are in the best merit of all.

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