Ethereum Launches Casper Testnet, Paving the Way for Proof-of-Stake

Ethereum developers have launched an alpha test network (testnet) for Casper, paving the way for the cryptocurrency to eventually transition to a proof-of-stake (PoS) consensus algorithm.

Like bitcoin, ethereum currently operates on a proof-of-work (PoW) consensus algorithm, meaning that the network is secured and new currency units are issued through “mining,” whereby participants solve cryptographic puzzles to validate transactions and create new blocks.

However, PoW has attracted criticism over the years, both for its tendency to centralize mining hardware into a few pools and for the amount of electricity it consumes.

Ethereum to implement Proof-of-Stake

Ethereum aims to address these problems by transitioning to Casper, a proof-of-stake (PoS) consensus algorithm. Under Casper, participants can become validators by locking up or “staking” ether. Validators will take turns proposing and voting on blocks, and both the weight of their votes and the size of their rewards will hinge on the size of their stakes.

According to developers, moving to Casper will greatly reduce the amount of electricity “wasted” through PoW mining. In addition to limiting its environmental impact, PoS will allow ethereum to dramatically reduce its rate of currency inflation since validators will have much lower overhead and will thus require smaller rewards to incentivize them to continue to serve as validators.

Moreover, PoS will also reduce the incentive that validators have to centralize their influence. With decreased centralization comes increased security and, importantly, resistance to dreaded 51 percent attacks.

Ethereum is not the first project to attempt to integrate a PoS consensus algorithm. However, most previous PoS implementations have been criticized because, in the event of a blockchain split, validators are incentivized to try to make blocks on top of every chain rather than resolving the consensus back to a single blockchain.

casper
Source: Ethereum/Github

Casper aims to solve this problem by imposing economic penalties on malicious validators that violate the network’s rules. This ensures that validators are properly incentivized to achieve consensus on a single blockchain in the event of a network split.

Following three years of development, Casper has officially entered alpha testing, and the first full-featured testnet has launched. The software must still traverse several release checkpoints before it is ready to launch on the main network, but this alpha release nevertheless marks an important step toward its eventual activation on the main ethereum network.

Casper
Source: Vitalik Buterin/Twitter

Users can join the testnet by following the instructions in this guide, and once online they can send transactions and become validators, just as they would on a normal network, although the network’s performance is not indicative of how production clients will operate once the project receives an official release.

Venezuela Plans to Launch First Government Cryptocurrency – Petro – In a Matter of Days

venezuela

Government cryptocurrency is coming, whether we want it to or not. On the 28th of December in Caracas, Venezeual’s Information Minister Jorge Rodriguez said: “It is a matter of days before we announce the first issuance of the ‘petro’ cryptocurrency.” Information Minister Jorge Rodriguez said these words at a press conference regarding ‘Petro’, broadcast on state TV Thursday.

Early in December, Venezuelan President Nicolas Maduro announced that Venezuela would be issuing their own cryptocurrency in order to circumvent U.S.-led financial sanctions.

According to Rodriguez on Thursday, the Petro will help Venezuela face the increasing international diplomatic opposition regarding President Nicolas Maduro’s crackdown on any political opposition at home. Rodrigues also hopes the Petro will help him skirt sanctions or attacks on Venezuela from the international financial system at large. “It will allow us to overcome any financial blockade.” He said.

Not the first announced government cryptocurrency, but Petro could possibly be the first to market

While not the first announcement of a government-issued cryptocurrency, nor nearly the first time that government has meddled in crypto,  the Petro is the first cryptocurrency to be backed by physical assets. Maduro stated on Wednesday that more than 5 billion barrels of Venezuelan oil will serve as the backing for the cryptocurrency. This oil should be able to back around $267 billion worth of currency, compared to the Bitcoin’s current market cap of $247 billion.

While he didn’t give any further details on mining or how this would be secured or “decentralized,” Rodriguez did say that miners were already lined up. Needless to say, we’re eager to find out how this government cryptocurrency will function.

Venezuela to launch Petro cyrptocurrency

User Finds Starbucks in Buenos Aires Wifi Hotspots Hijack Customer Devices to Mine Monero

starbucks mining monero

A Starbucks in Buenos Aires, Argentina was mining Monero (XMR) on customer’s devices without their permission. Twitter user Noah Dinkin noticed that a Starbucks location in Buenos Aires was utilizing their WiFi captive sign-in portal to force a 10-second delay when users first connected to the wifi in order to mine Monero. The user originally assumed that the Starbucks WiFi was attempting to mine Bitcoin, but it was in fact mining Monero. XMR is currently trading at $286.27 according to the Block Explorer Monero Price Index

Starbucks has not responded to the outcry on social media about their use of Coinhive

Coinhive is in-browser software that allows users to mine Monero in-browser with JavaScript using their ‘extra’ CPU power. Coinhive usage has been increasing and expected to increase both legitimately and illegitimately.

The Palo Alto Networks Research Center has stated that they have seen 36,842 instances of Coinhive being implemented. Out of these 36,842 instances, they claim that a large quantity of these fall into the category of ‘compromised’, likely being the result of malicious script injection into vulnerable servers. In some cases, multiple copies have been injected and use up 100% of the user’s available resources. One specific payee identity alone is tied to over 35,000 of these instances.

 

Edit: Since the time of writing, Starbucks issued the following statement:

As soon as we were alerted of the situation in this specific store last week, we took swift action to ensure our third-party support provider resolved the issue and made the changes needed in order to ensure our customers could use Wi-Fi in our store safely.