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Ethereum Devs Propose Activating Constantinople Hard Fork in Late February

UPDATE (Jan. 18, 2019, 15:40 UTC): Constantinople hard fork activation has been set for block number 7,280,000, scheduled to hit on February 27th, according to developer Péter Szilágyi.

Ethereum core developers have proposed activating Constantinople – a planned system-wide upgrade that was called off earlier this week – in late February.

Also called a hard fork, Constantinople is now estimated by developers to go live some time between Feb. 26 and Feb. 28, with a block number to be determined at a future date.

The proposal was made during a core developer phone call on Friday morning, and participants on the call included ethereum creator Vitalik Buterin and other developers, including Hudson Jameson, Lane Rettig, Afri Schoedon, Péter Szilágyi, Martin Holste Swende, Danny Ryan and Alexey Akhunov, among others.

The decision comes after smart contract audit firm ChainSecurity flagged on Tuesday a security vulnerability in one of five Ethereum Improvement Proposals (EIPs) set for inclusion in Constantinople relating to data storage costs on the blockchain.

As a result of the vulnerability, Constantinople, now set for activation next month, will not feature inclusion of the buggy EIP, which will be tested and refashioned for inclusion in a subsequent hard fork.

Instead, Constantinople will be issued in two parts simultaneously on the main network. The first upgrade will include all five original EIPs and a second upgrade will specifically remove EIP 1283.

This strategy – first suggested by Szilágyi during today’s call – is meant to ensure that test networks and private networks that have already implemented the full Constantinople upgrade can easily implement a fix without rolling back any blocks.

“My suggestions is to define two hard forks, Constantinople as it is currently and the Constantinople fix up which just disables this feature…By having two forks everyone who actually upgraded can have a second fork to actually downgrade so to speak,” explained Szilágyi.

The decision comes after smart contract audit firm ChainSecurity flagged on Tuesday a security vulnerability in one of five EIPs set for inclusion in Constantinople relating to data storage costs on the blockchain.

Speaking to CoinDesk on Tuesday, Matthias Egli – COO of ChainSecurity – highlighted that the issue was likely not picked up by core developers when running tests on the software given that the impact is rooted in smart contract development, not necessarily “[ethereum virtual machine] core” development.

A prompt decision to reactivate Constantinople sooner rather than later was needed in part due to prolonged activation of ethereum’s difficulty bomb – a piece of code embedded into the blockchain making block times increasingly longer over time.

Meant to encourage transition to a new consensus algorithm known as proof-of-stake (PoS), a delay of the bomb was suggested in EIP 1234 due to insufficient research at present for a transition to PoS.

Once activated on mainnet, Constantinople will include EIP 1234 and delay the difficulty bomb for a period of 12 months.

Editor’s Note: The article has been updated with additional information.

Binary code image via Shutterstock

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What We Know About Google Ads Allegedly Blacklisting ‘Ethereum’ as a Keyword

Crypto startup claims that Google Ads has blacklisted keywords mentioning Ethereum.

 

On Jan. 10, Serbia-based smart contract auditing startup Decenter reported that Google has blacklisted keywords mentioning Ethereum (ETH) on its advertising platform, Google Ads.

Google Ads: We can’t confirm that Ethereum is eligible to trigger ads, see our policy

Specifically, the startup tweeted that they saw “a hard stop” on Google Ads containing the keyword “Ethereum” starting from Jan. 9. Decenter also tagged the advertising platform’s official account in the tweet, asking whether they had introduced any new policy changes.

The Google Ads account then replied, stating that cryptocurrency exchanges targeting the United States and Japan can be advertised on the platform, while targeting other countries could be the reason for the ad rejection. While Decenter is based in Belgrade, Serbia, it does not provide services as a crypto exchange.

Further, when the startup explained that they are a group of developers doing smart contract security audits, and that they were seeing an error message when trying to use “ethereum development services” and “ethereum security audits” as keywords, the official Google Ads account answered that they were not able to preemptively confirm that the “Ethereum” keyword was eligible to trigger ads.

“We’d recommend that you refer to the ‘Cryptocurrencies’ section of our policy on Financial products and services.”

In the referred section of their policy, Google Ads states that “due to the complex and evolving nature of regulations related to cryptocurrencies and related products and services,” the company only allows advertising mining-related services and cryptocurrencies exchanges. The latter is approved for promotion only in Japan and the U.S., however.

The Google Ads guide then explicitly mentions that ads for initial coin offerings (ICOs) and similar services, along with “ad destinations that aggregate or compare issuers of cryptocurrencies or related products” — such as crypto trading signals — are prohibited.

Blanket ban followed by relaxation: Brief introduction to the relationship between Google and crypto

In 2018, after a lengthy period without regulation, Google’s politics regarding cryptocurrencies became significantly stricter. Specifically, on March 14, the search engine giant updated its financial services policy, announcing that it was going to ban all cryptocurrency-related advertising of all types come June.

To justify its crypto ad ban, Google said that it was protecting its customers from fraudulent offerings, including, but not limited to, “initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice.” The company’s executive, Scott Spender, told CNBC at the time:

“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.”

The move was later described as “unfair” and “troubling” by industry insiders. Interestingly, the news of a crypto ad ban came just days after crypto advertisers using Google Adwords reportedly noticed a drastic drop in the number of views of their advertisements. However, as per Finance Magnates, Google Ads had, at that time, denied any change in their financial services regulations that would block cryptocurrency- or ICO-related advertisements.

Further, on Sep. 25, the U.S. tech giant partly backpedalled on its blanket ban of ads. Google announced it was set to update its ad policy in October, reallowing some crypto businesses to advertise on its platform.

According to the official statement, starting in October, Google would allow registered crypto exchanges to advertise on its Google Adwords platform, targeting the U.S. and Japanese audiences:

“Advertisers will need to be certified with Google for the specific country in which their ads will serve. Advertisers will be able to apply for certification once the policy launches in October.”

The cryptocurrency section of the Google Ads’ policy has since been updated, but the precise amount and nature of crypto businesses that have since been allowed to advertise there remains unknown.

Decenter: “Ethereum” keywords isn’t working for other companies too, Google Ads is to provide a definite explanation within 48 hours

After communicating with Google Ads over Twitter, Decenter took to Reddit to ask the r/Ethereum subreddit users about the alleged policy changes. In the post, the team specified that they have tested keywords for “ethereum smart contract audits” and “eos smart contract audits” and found that only the EOS-referenced keyword showed ads.

The community largely reacted by criticizing Google’s position as a neutral third party. The top comment reads:

“Google has various political and economic agendas, and they are quite willing to use their various services to promote their preferences. AdSense and YouTube are notorious for this, but there have been some incidents regarding the Play Store as well.”

Other users mostly cited the previous blanket ban and the abundance of scam projects as potential reasons for Google Ads to prohibit such advertisements. Some users reported having problems with other crypto-related keywords besides “Ethereum.” “I have been unable to use the ‘bitcoin’ (or even ‘blockchain’) on my google ads as well,” one of the comments read.

When reached by Cointelegraph, Decenter CEO Andrej Cvoro said that there are other startups which started having difficulties with the “Ethereum” ad keyword this month:

“We are aware of at least five different competitors that used to have Google Ads shown for search phrases such as ‘Ethereum smart contract audit,’ all of which stopped showing at the same time.”

When asked to clarify the names of the companies allegedly dealing with the same problem, Cvoro replied that he was not able to answer that “with certainty”:

“All we know is that there are other companies that used to have their ads displayed for search phrases such as ‘Ethereum smart contract audits,’ which is no longer the case. Due to the intricacies of Google Ads keyword setting mechanism, this does not necessarily mean that these companies had explicitly entered ‘Ethereum’ as one of their keywords, although there is a good chance that this is the case.”

Thus, according to Cvoro, the ads are still showing for other crypto-related tags, but “Ethereum” does not seem to be working — neither for those companies, nor for Decenter itself. That, the startup’s CEO adds, suggests that Ethereum has indeed been blacklisted:

“For example, ‘X smart contract audit’ phrase will show several different ads for any X, except when X = ‘Ethereum.’ Furthermore, we are currently not able to find a single search phrase involving the term ‘Ethereum’ that shows any ads on Google, which strongly implies that ‘Ethereum’ as a keyword has been blacklisted (intentionally or otherwise).”

Indeed, a Google search for “EOS smart contract audit” seems to bring up a few ads — including Decenter and similar startups — while the search engine does not show any ads when “Ethereum smart contract audit” is googled.

However, Cvoro does not link the blacklisting to the previous Google restrictions regarding crypto-related ads, as his company allegedly did not face such problems with the keyword “Ethereum” even during the time the ban was fully active:

“We don’t think this is directly related to Google’s blanket ban on cryptocurrencies from the last year. That is something that we have been aware from the very beginning of our Google Ads campaign, but none of our ads were directly (and oftentimes not even indirectly) related to cryptocurrencies, so they were going through the manual reviews even when they were initially put on hold by the algorithm. So what is happening now is different in a sense that keywords containing ‘Ethereum’ aren’t passing manual review anymore, which doesn’t seem to be the case for other blockchain-related terms or phrases.”

On Jan. 15, Decenter received an email from the Google Ads team, the company told Cointelegraph. The answer was originally written in Croatian, but the startup has shared their English translation of the brief statement:

“Thank you for sending an inquiry about the status of your Google Ads with key phrases that contain the term ‘Ethereum’ as one of the keywords.

“Due to how sensitive it is to advertise products and/or services related in any way to cryptocurrencies, I have directly contacted the responsible department with a request for a detailed explanation of why your ads are not showing for the mentioned keywords.
Please be patient and I will get back to you with a final solution within 48 hours.”

Cointelegraph will continue to report on the developments of this story further when more information becomes available. Cointelegraph has also reached out to Google for further comment, but the company has not replied as of press time.

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Bitcoin Hovers Over $3,650 as Top Cryptocurrencies Mostly in the Red

Most of the top 20 cryptocurrencies are reporting moderate to slight losses, with Bitcoin hovering over $3,650.

Saturday, Jan. 12 — most of the top 20 cryptocurrencies are reporting moderate to slight losses, while some are reporting up to double-digit gains. Bitcoin’s (BTC) price is still hovering over $3,650, according to Coin360 data.

Market visualization

Market visualization from Coin360

At press time, Bitcoin is down under 1 percent on the day, trading at around $3,665. Looking at its weekly chart, the current price is lower than $3,878, the price of BTC one week ago, and $4,108, the mid-week high reported on Tuesday.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: CoinMarketCap

Ripple (XRP) is down over 1 percent on the day, trading at around $0.333 at press time. On the weekly chart, the current price is lower than $0.359, the price at which XRP started the week — but also lower than $0.381, the midweek high reported on Jan. 10.

Ripple 7-day price chart

Ripple 7-day price chart. Source: CoinMarketCap

Ethereum (ETH) has seen its value decrease by over 1 percent over the last 24 hours. At press time, ETH is trading at around $126, having started the day around $127. On the weekly chart, Ethereum’s current value is significantly lower than $157, the price at which the coin started the week.

Ethereum 7-day chart

Ethereum 7-day chart. Source: CoinMarketCap

Among the top 20 cryptocurrencies, the ones experiencing the most notable price action are Bitcoin SV, which is up over 12 percent, and Bitcoin Cash (BCH) and Ethereum Classic, which are up around 2 and 1 percent respectively.

The combined market capitalization of all cryptocurrencies — currently equivalent to about $122.2 billion — is lower than $133 billion, the value it reported one week ago. The current value is also substantially lower than the intra-week high of $138.6 billion reached on Jan 10.

Total crypto market cap 7-day chart

Total crypto market cap 7-day chart. Source: CoinMarketCap

As Cointelegraph recently reported, the number of active Bitcoin wallets, many of which have long been dormant, has seen an uptick that could herald some major market movements.

The state legislature of the American state of Wyoming has reportedly passed two new house bills this week that aim to foster a regulatory environment conducive to cryptocurrency and blockchain innovation.

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Insiders Say ConsenSys Faces a Hurdle to 2019 Rebound: Joe Lubin’s Grip

“Just rely on the fact that it’s all funded by Papa Joe.”

That’s how one former employee, who asked to stay anonymous, citing fear of legal repercussions, described the sentiment that prevailed until recently at ConsenSys, the ethereum-centric venture studio headed by ethereum co-founder Joseph Lubin.

In other words, the entrepreneurs building blockchain apps and services under the ConsenSys umbrella didn’t need to worry about business models as long as Lubin approved of the technology they were building.

But now, following a 90 percent crash in the value of ethereum over the past year, Lubin’s paternalistic approach poses a problem for the nearly 50 startups, or “spokes,” that ConsenSys seeded since its inception in early 2015.

Beginning last month, layoffs have swept across nearly every corner of the distributed, 1,200-person firm. Lubin announced that “ConsenSys 2.0” would seek efficiencies – and a broader reliance on outside partners and investors. “Spinning out” these ventures has gone from an aspiration to a mandate.

“We have been interacting much more with external investors, mostly VCs, over the last nine or 12 months,” Lubin told CoinDesk during an interview in early December. “We’re gonna be ramping that up significantly.”

But even if ether prices recover and ethereum-based tokens come back into vogue across the broader marketplace, former employees and prospective investors tell CoinDesk they worry the road ahead for these projects may be rocky.

Simply put, because of the unusual way ConsenSys structured its investments, it will be hard persuading outsiders to put money into them.

According to six sources familiar with the company’s strategy, ConsenSys often held at least half, if not more, of the equity for each of its “spokes,” and Lubin resisted early efforts to seek external investors.

ConsenSys declined to comment on how much equity the company owns in various projects across the conglomerate, but said that “people who contribute significant value” to spokes are able to “develop significant equity” or “participate in profit sharing.”

One former spoke advisor told CoinDesk that ConsenSys previously “felt uncomfortable owning less than 50 percent of the spoke.” He added Lubin’s insistence on control, in turn, discouraged other investors from funding these projects, even during the 2017 bull market.

“A ton of funds and individuals were uncomfortable having Joe on the cap table at all, let alone [with a] controlling stake,” the advisor said. “We heard from the occasional group that they would’ve been interested had ConsenSys not been involved.”

Re-slicing the pie

Indeed, one anonymous investor – who is currently in talks with several ConsenSys spokes about potential equity deals – told CoinDesk that these projects will face considerable challenges attracting external investment.

According to this investor, it’s not clear how much equity ConsenSys owns in many of the spokes that the company is trying to “spin out.” In some cases, the startup founders themselves may not know with certainty.

“You’re effectively investing in Joe Lubin’s company and it’s unclear what his relationship, and what ConsenSys’ relationship, is to that company,” the investor said. “You want to invest in a company where the owners and founders are building it, because they are the most motivated.”

Even at the spokes where ConsenSys is not a major stakeholder, there is still a lack of clarity and uniformity surrounding ownership complicating negotiations as well, the prospective investor said.

The spokes will need to overcome these hurdles to raise capital quickly in order to stay afloat. The prospective investor said:

“My expectation is that very few of these projects will be able to [raise].”

ConsenSys disagreed in a statement, offering the ConsenSys-incubated company Trustology as an example since it raised capital from Two Sigma Ventures in December. However, given the range of company structures involved with ConsenSys, an incubated company may not face the same challenges as ones that seek to “spin out.” 

The company appears to be ramping up traditional accelerator programs run by its ConsenSys Ventures arm instead of seeking new projects to fund and then spin out as businesses.

To be clear, “spinning out” is different than layoffs, and Lubin’s team says all spokes have the option to spin out. Still, company representatives tell CoinDesk, “there will be a number of core projects that will remain internally incubated.”

Yet one current ConsenSys employee, who spoke on the condition of anonymity, told CoinDesk that no one at the company feels secure in their job these days.

He personally expects ConsenSys will be reduced to 200 fintech-focused technologists and consultants – roughly one-sixth of its current size.

An expected 13 percent reduction in staff was announced last month. But it’s difficult to say how many layoffs are yet to come, in the traditional sense, because even beyond “spinning out” many former employees said they worked with short-term or informal contracts.

In a statement emailed to CoinDesk, ConsenSys said that all spokes are being prepped to engage with external investors while ConsenSys itself looks to make “active seed stage investments” in new projects. 

The survivors

Meanwhile, Kevin Owocki, co-founder of the ConsenSys spoke GitCoin, told CoinDesk he hopes people will pay more attention to the work ConsenSys spokes are still doing, regardless of staff reductions.

“Clearly it’s a time of contraction right now, but I hope that we can focus on the positive points,” Owocki told CoinDesk. “I’m still very happy with ConsenSys as a backer and I think they’re doing good things for the ecosystem.”

Despite the “crypto winter” impacting the broader ethereum community, Owocki’s 11-person team is still focused on shipping a diverse range of products.

“We didn’t do a token sale. We’ve focused on product traction,” he said. Speaking to the broader ethereum ecosystem, including ConsenSys spokes, he added:

“The Ethereum Foundation grants have, up until now, done a great job of giving one-time cash infusions. … What’s really needed is reoccuring, stable funding so that people can focus on their roundmaps. And that’s what we’re looking to provide.”

Among its products and services, GitCoin arranges various processes for using cryptocurrency to fund contributions to open source projects. So far, the startup is earning up to $9,000 a month from a tokenized grant product and an advertising system called CodeFund.

With regards to grants, GitCoin has helped distribute more than $738,221 worth of crypto bounties related to hundreds of open source projects. Users include the Ethereum Foundation and other ConsenSys spokes, like the in-browser crypto wallet MetaMask.

Owocki said that the overall platform handles close to $90,000 worth of crypto each month. One of GitCoin’s clients, the stablecoin startup MakerDAO, recently contributed almost 1,000 DAI tokens a month (worth $1,000) to a GitCoin grant for open source contributions to a commissioned project Owocki’s team is also working on, a specialized crypto wallet.

“We’re all working on Ethereum 2.0 as an ecosystem and people need sustainable ways to fund their work,” Owocki said of this grant system, adding he also has high hopes for a subscriptions model that monetizes some GitCoin services.

“I would love to be one of the first staffs that gets to profitability with a subscription model in Web3,” he said, referring to the goal of a decentralized internet.

Owocki admitted these early sources of revenue are not enough to cover his team’s salaries, but said he is not concerned because the team could seek additional venture capital in 2019 if needed. Furthermore, ConsenSys added a statement saying:

“While 2018 did represent a contraction in the ecosystem as it overextended itself in 2017, we expect 2019 to be a year of exceptional growth.”

Decentralized?

Despite the media narrative that some ConsenSys employees weren’t diligently seeking results, former employees said a lack of clarity about decision-making power beyond Lubin was a greater hindrance than any lack of motivation.

One former ConsenSys employee, who tallied income and asked to stay anonymous, told CoinDesk that revenues from some decimated and rearranged spokes “were positive and growing nicely.”

Reassignments started in September, former employees said, and some teams were assured they had plenty of runway just weeks before the layoffs abruptly began. Another former employee, who also asked to stay anonymous, told CoinDesk he was discouraged from critiquing technical solutions because spokes were desperate for clients.

“You can’t turn to the [spoke] CEO because they have no power,” the former employee said, referring to ConsenSys’ “extremely high” percentage of equity. “Joe created the company in such a way that no one is able to make decisions without him. No one had the budget.”

While some projects operated with more independence than others, some participants expressed concerns that part of Lubin’s aim for ConsenSys was to boost the value of the ethereum network, which he invested in considerably and is widely believed to own a significant portion of ETH.

A 2018 report by the hedge fund Tetras Capital estimated the ConsenSys INUFRA project with centralized servers cost Lubin more than $10 million a year to subsidize infrastructure for many of the ethereum applications that attracted new investors to the ecosystem, even though ethereum’s distributed network wasn’t ready to support high transaction volumes.

Indeed, ConsenSys reps say the company’s early focus was on priming the pump for future advancements:

“ConsenSys 1.0 was about fostering an appetite for a decentralized approach to the IT infrastructure that supports a wide variety of society’s systems.”

Yet that may have gone hand-in-hand with other motives. Speaking to how Lubin’s personal net worth and businesses both benefited from soaring ether prices, the former spoke advisor said:

“The core business model seemed to be: do things to better the ethereum network then capture value when the price of ETH appreciates.”

Although it has been a long time since ConsenSys partners and employees were compensated in cryptocurrency, the question for many remains where ConsenSys spokes will go from here, one year into the bear market. Lubin’s team said they are proud of the company’s “continued commitment to collaborating with others in the space on open, shared infrastructure.”

Perhaps that’s why the former employee who worked with income statistics told CoinDesk he remains optimistic, adding:

“ConsenSys is an experiment. We’ll see what’s really left from spokes in a couple of months.”

ConsenSys image via CoinDesk archives. Photo credit: Michael del Castillo

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Ethereum Classic Reels From 51% Attack: Double-Spends Reported

Coinbase has frozen trading of Ethereum Classic (ETC) as developers continue to clarify reports that the coin’s network suffered a blockchain reorganization attack.


Coinbase, China And ASICs

Originally reported as rumors January 6, ETC 00 has since succumbed to a mystery offensive which officials have yet to explain.

The Coinbase move came following allegations from the exchange that ETC had undergone a reorganization and malicious parties had double spent coins worth almost $500,000, following what is known as a 51 percent attack, where one mining entity gains control of more than half of a network’s hash rate.

On social media, ETC appeared uncertain about the true nature of the situation.

In a now deleted tweet from Monday, officials claimed it was “more likely selfish mining” which had caused the upset. Subsequently, however, it became apparent that no questions had been definitively answered.

“To be clear we are making no attempt to hide or downplay recent events,” they wrote in a more recent tweet.

Facts are facts and as the situation develops we’ll soon get a full picture of what actually took place.

Exposure Woes

At the same time, ETC poured suspicion on one mining entity, Linzhi, and its use of ASIC mining equipment. When quizzed by cryptocurrency news outlet CoinDesk, however, the Chinese company had already flatly rejected any implication of foul play.

“We are categorically denying such claims, they are entirely baseless and may be part of the attack itself,” director of operations Wolfgang Spraul wrote in an email.

ETC/USD fell as the news surfaced, reaching 6 percent losses in 24 hours and dropping below $5.

Elsewhere, commentator grubles noted the “liability” factor for exchanges such as Coinbase was less with ETC versus Ethereum (ETH) itself than with the Bitcoin Cash (BCH) hard fork and Bitcoin (BTC). A split of BCH had likewise undergone a reorganization after it formed its own chain.

“ETC has 4.8% of ETH’s hash rate bcash has 3.7% of Bitcoin’s hash rate. [Bitcoin Cash] is more of a liability for exchanges than ETC,” he wrote. Though 51 percent attack resource Crypto51 shows that a rented hash power attack would cost roughly $10,000 for BCH per hour compared to $4,700 for ETC.

Vertcoin and Bitcoin Gold have also suffered 51 percent attacks in 2018, proving that market capitalization is a poor metric for measuring network security.

Coinbase will keep hold of all ETC funds deposited with it until further notice.

What do you think about the Ethereum Classic network attack? Let us know in the comments below!


Images courtesy of Shutterstock