Crypto Weekly #2 - Steemit and TRON Reversed a fork, Bitcoin's Hash Rate Smashes ATH
Blockchain enthusiast developer and writer. My telegram: ksshilov
That lack of central authority is the primary reason why we’re into crypto. No more central banks to issue or destroy money out of thin air. No more governments to control us with their conventional currencies. A totally new system governed by people.
That’s why, in the process of rebuilding the monetary system, we are skeptical of everything. When something remotely questionable happens in crypto, it immediately makes the news, as we’ve seen it one week ago
with Tether issuing 300 million new tokens.
Fortunately, that was just a technicality in the event of a planned token swap. This week is for real. This week we felt the real power of a new central power that’s forming right in the middle of the decentralization movement!
If you have a project and want your news to be explained, contact me on telegram: @ksshilov
March 1-7th summary:
- Steemit and TRON reversed a community-triggered fork with the help of major exchanges
- Beijing-based startup won official Chinese government support
- Filecoin roadmap update: Novel solution towards removing storage trust
- Bitcoin's hash rate hit a new all-time high
- From ETHDenver 2020: An interesting talk about why crypto doesn’t have working projects and applications yet (spoiler alert: we need better leadership)
If you want to know why these company updates might have the highest impact in the near future, check out our short “why this matters” opinion sections below:
Why should you care?
If you care about decentralization, this is a big attack on everything that defines it. When Vitalik Buterin decided to roll back
the Ethereum blockchain due to the DAO hack, that was a decision that affected the concept of decentralization but it had a good cause backing it up.
Now, in the shadow of this event, we can truly see the power of the project’s founders and exchanges in the face of the community.
And, even if you don’t really believe in complete decentralization (which is totally fine), the community reaction is not gentle – almost 100 dApps
might migrate away from Steemit and this can affect you in many indirect ways.
How did it happen?
On February 14th, Steemit company announced
a "strategic partnership" with the TRON company. This really meant TRON acquiring Steemit Inc., then migrating the decentralized social media platform, Steemit, and all the other dApps from the Steemit blockchain to TRON blockchain. Not really a bad thing, as TRON blockchain has a better infrastructure
After the acquisition, it would also mean that the TRON team would become the owner of 40% of Steem tokens
and with them voting power close to a centralized authority.
With this fear, the Steem community decided on February 24th to implement a soft fork to deactivate the voting power of a large number of tokens owned by TRON and Steemit.
But, guess what, their biggest fear came true! On March 2nd, TRON, Steemit, and various exchanges
(Binance, Huobi, Poloniex, and others) formed an alliance and collectively put in over 42 million Steem Power to cancel the soft fork.
Unfortunately, they succeed.
Now, there are two big questions:
Can we trust these companies who are holding a big percentage of the overall tokens? (most of them pre-mined billions of tokens before even announcing the initial ICO)
And, whose tokens did Binance, Huobi, Poloniex used? Aren’t those the depositors' funds? What kind of custodial relationship is this?
After this event, many dApps built on top of Steemit blockchain announced their migration off Steemit. The team behind SteemWallet, for example, announced
that it has already removed the app from the Apple App Store. And Steem Engine
also took down its website. There are almost 100 active dApps. What blockchain will these teams choose for their migration?
Is China supporting the idea of a public, permissionless blockchain now?
Well, the Chinese government never expressed negative thoughts about blockchain. It’s true that they are cracking down
on trading cryptocurrencies and, especially ICOs. But, when it comes to decentralization, they are actually encouraging public-network development projects as we’ve seen with NEO, Qtum, VeChain, and, now, Conflux.
Conflux is developing a scalable public blockchain system. As many are trying to improve their TPS (transactions per second) number without compromising decentralization – Conflux introduces Tree Graph (TG) technology; removing important consensus-related bottlenecks and bringing high TPS to the Proof of Work mechanism (for the first time!)
There is a lot of money behind the company. No, not from an ICO. If that would have been the case, we wouldn’t be here to write about them.
- The firm has raised $35 million from backers including Sequoia China and Huobi Group via a private token sale in 2018.
- Now, it got the Chinese government support plus research grants and offices.
- And, it plans to launch its main network within the next two months with the possibility of another private token sale.
But, their success within China is mostly backed by the fact that the company is adapting the public blockchain model to China's regulatory framework
and it has pledged to never launch an ICO or get involved in public token sales in any form.
Smart, but there’s one thing to consider:
If an exchange would list Conflux tokens for secondary trading, it would be outside the firm's control. So, keep your eyes on the decentralized exchanges* ;)
*PS. Not the ‘ERC-20 only’ ones. Conflux is developing a custom blockchain infrastructure. Your best chance is with the cross-chain DEXs.
Do we need trustless storage?
If you want a decentralized Internet, yes. Actually, there are only two things that we need for a decentralized internet: decentralized storage and a decentralized domain protocol. With the handshake mechanism
already solving the latter, let’s talk about what Filecoin can bring to the table.
Moving away from it and getting a bit more technical, Filecoin recently completed their Testnet Phase 1 proving storage capacity of 3.6PiB+ (those are pebibytes) That’s an impressive amount and it makes us think that the network really has the capacity to sustain the inception of a decentralized internet (which, to be fair, it would be a migration of all the websites from the current darknet)
But, the biggest update out of all is that Filecoin offers a novel solution towards removing storage trust. A trustless solution like this is now actually making DeFi apps possible. Imagine all the information (loans, trade positions, contract interactions, etc.) aggregated and stored in a trustless, permissionless environment. The possibilities are endless!
The network’s hash rate reached 136 quintillion hashes per second.
If you are curious how high is this compared to the past values, please check the network’s history in the image below:
While this is news, it shouldn’t be in the context that the halving is almost here.
If you don’t know already Bitcoin is going to have a new network update, called ‘the halving
’ when the per-block mining rewards are going to be halved. Currently, the miners are rewarded 12.5 BTC per block. After this update, you guessed it, they will only gain 6.25 BTC.
The exact time of the event is not known yet, as the blockchain’s time is calculated in mined blocks. The block number of the event is #630,000. Given that the chain is currently is the #620,000+ blocks, the halving is expected to happen somewhere in May this year.
Of course, well-established miners would want to ramp up their investments BEFORE it will be reduced forever. As Jonathan Hamel, a Bitcoin advisor and researcher for the Academy of Bitcoin and the Montreal Economic Institute, states
: “I’m aware of a few major projects backed by traditional investment and private equity funds [doing so]”
Personally, I’m refusing to fall into the conspiracy theories like investment funds trying to bring the halving date closer (higher hash rate = more blocks mined per hour) in order to spike the price up and dump their 2017 bags.
From my perspective, it’s strictly business, and the halving will be the best time to see who has the best mining operation and can remain profitable even with less revenue. It’s clear that the least performant ones won’t be able to mine at loss for a long period and, eventually, they will pull the plug. That’s when the decentralization of Bitcoin will be questioned again. But that’s another story for another time.
Here is a direct link to watch it yourself if you have ~20 minutes to spare (it’s between the 29:15-47:10 timestamps)
But, if you don’t have the time, we got you covered. Here’s a short summary:
The main hypothesis of the speech is that crypto has too few working projects and applications. Which is true if you are comparing it with the overall tech industry.
But, if you’re comparing it with certain novel industries (as you should) like self-driving cars and you add up that blockchain technology is here for only a decade, you’d rapidly realize that the industry has a healthy growth.
Anyway, following Lisa’s speech, she is blaming poor leadership for the slow development of most crypto companies. If “the visionaries” were the ones creating crypto, and the “gamblers and traders” the ones who brought it to the mainstream, “fair leaders” should be the ones to push the industry to the next step.
To understand what a fair leader is, here are the 6 tips for founders and CEOs in order to bring fairness to their organizational environment:
- Bring women into your leadership
- Hire experience
- Accept the reality that you are not your customer
- Create practical solutions and think small
- If you have to make a change, don’t wait too long
- Leverage your sense of purpose
Only in this way, based on Lisa’s opinion, we’re going to see more mainstream adoption and more players joining the space.
And it needs to happen fast before tech giants will take over crypto, as we already see Facebook attempting to join crypto payments with Libra or JPMorgan controlling crypto trading with the introduction of Fidelity.
What do you think? Is it a bad thing that big companies are joining the crypto movement? Or is this the ultimate proof that crypto succeeds and realizing they can’t shut it down, better join it?
Next, we’ll keep an eye on the following key points:
- What blockchain network will benefit from the Steem dApps mass-migration
- Conflux mainnet launch this year (and on what markets it will be available to buy)
- What new dApps will be developed using Filecoin’s newest solution (especially DeFi)
- What mining operation will win the hash rate battle
- Understand if there’s a direct relationship between good leadership and crypto industry development
And, of course, the product updates in the upcoming week. See you next week with a new summary! Let us know in the comments if anything else caught your attention. We might give our own interpretation of it during next week’s summary.
If you have a project and want your news to be explained, just contact me on telegram: @ksshilov
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