Despite the Venezuelan government embracing cryptocurrency with open arms – even launching their own oil-backed Petro cryptocurrency in an effort to solve the country’s economic crisis – according to a new report from local Venezuelan media, the country has taken a stand against cryptocurrency mining, outright banning related computer equipment from entering the country.
The report states that the Venezuelan government made a policy change at the end of April that restricts computer equipment such as GPUs or ASIC miners. Customs authorities have been seizing related devices received by air and sea since the change went into effect.
Shipping companies such as Liberty Express and DHL, who ship these mining devices to Venezuela on behalf of their customers, have either updated their pages on restricted products entering Venezuela to include mining equipment or have sent out notices to their customers notifying them of the changes to avoid any inconveniences they may experience as a result of the policy change.
The policy change has already gone into effect, but only on a temporary basis until officials from the National Association of Cryptocurrencies meet with the Superintendence of Cryptoactives and Related Venezuelan Activities to address the issue next week.
Weeks ago, Superintendent Carlos Vargas indicated that the country was evaluating authorizing companies to import digital mining equipment to sell in Venezuela:
“We are in an evaluation process to select and authorize companies that are qualified to import and market digital mining equipment and be responsible for the respective guarantees in our country.”
Vargas warned individuals mining cryptocurrency to be “prudent at the moment of acquiring the equipment since until now no company has been endorsed or certified,” by Venezuelan regulators.
Considering Vargas’ statement, the ban appears to be temporary until the government finalizes authorizing company’s to begin importing mining equipment for resale in Venezuela.
The privacy-focused cryptocurrency Verge, is quickly becoming a running joke within the cryptocurrency industry, after repeatedly suffering 51% attacks and having hackers exploit a vulnerability that’s led to millions of dollars in Verge tokens being stolen.
It started back in April, when Verge suffered a small 51% attack that resulted in 250,000 XVG being stolen by hackers. Verge responded by hard-forking their blockchain, however, the 51% attack was repeated just last week when hackers added a second algorithm to exploit the same vulnerability previously used by the attackers.
51% attacks happen when hackers use a malicious code to mine multiple blocks per minute on a blockchain, allowing the attackers to gain majority control over network hashrates and move XVG to their wallets. At the peak of the second attack, the hackers were mining 25 blocks per minute, or roughly 8250 XVG or $950 a minute being stolen by thieves.
Verge downplayed the attack as nothing more than a DDoS attack, but according to reports, over 35 million in XVG tokens, amounting to over $1.7 million dollars, was stolen as a result of the attack.
Today, the prominent BitcoinTalk ocminer user who discovered the last two attacks, is reporting that Verge has yet again suffered a 51% attack. In the BitcoinTalk forum thread titled “Network Attack on XVG / Verge” ocminer says “Yup… attack again.. as already said, simply reducing drift time doesn’t fix it..”
Verge’s blockchain isn’t the only location hackers have targeted. Verge’s twitter account was also compromised this past March in an unrelated attack.
On a more positive note, Verge made news for becoming the first ever cryptocurrency to be accepted by adult entertainment website Pornhub for their premium subscription services. As one Redditor so cheekily said “Maybe they should take a note from Pornhub and learn to plug up the holes on their blockchain.”
In a highly-attended public hearing held on May 14, 2018, the Chelan County public utility district (PUD) approved a three-month extension of a moratorium on the approval of electric service for new cryptocurrency mining operations. The low energy costs in the Mid-Columbia Basin have attracted cryptocurrency miners from as early as 2013. However, when Bitcoin soared in value in late 2017, the region saw a large increase in inquiries and applications from cryptocurrency miners.
The current moratorium in Chelan County was unanimously approved in March, with officials requesting time to review and assess the potential impacts of increased cryptocurrency mining and electricity demands within their communities. Citing similar energy concerns, the City of Plattsburgh in New York became the first municipality to ban cryptocurrency mining in early March, enacting an 18-month moratorium on all cryptocurrency mining operations.
Chelan County is one of three rural Washington counties (Chelan, Douglas, and Grant) served by five hydroelectric dams operating in the Mid-Columbia Basin. The dams generate approximately six times the amount of energy required by residents and businesses, allowing the PUDs to subsidize local energy cost by exporting the surplus energy at premium rates. While cryptocurrency mining operations may bring economic value to the rural region of Chelan County and surrounding areas, residents are also concerned that the increased local demand for electricity will result in an increase in household energy costs.
The availability of low-cost electricity has also attracted unauthorized mining operations to Chelan County and the Mid-Columbia Basin. These operations are sometimes established in residential areas, where the infrastructure and equipment are not designed to support heavy loads of electricity. Chelan County PUD cited the risks posed by these unauthorized operations in its initial announcement of the moratorium, emphasizing the health and safety risk to its staff and county residents. Shortly after implementing the moratorium, the Chelan County PUD directed its staff to enforce compliance with the moratorium by imposing fees and fines, disconnecting service, and reporting the unauthorized use of energy to law enforcement as theft.
While restrictions on cryptocurrency mining activity have primarily been implemented at a local level, governments could take steps to regulate mining activity at a larger scale. In January, Bloomberg reported that China was discussing taking steps to regulate energy usage by cryptocurrency mining operations, a move that could have a large impact on the global mining industry. Given the increased attention to the energy demands of proof-of-work cryptocurrencies like Bitcoin, it seems likely that energy regulation will play an important role in the increasingly complex regulatory environment for cryptocurrencies.
Last month, privacy-focused cryptocurrency Verge was the victim of a ’51 percent attack’ – an unfortunate scenario (for Verge and its investors) that resulted in roughly 250,000 XVG being stolen. Verge responded with a hard fork, but unfortunately, it appears the vulnerability still persists today despite countermeasures being taken.
According to OCMiner, the bitcointalk.org user who initially discovered the empty blocks – thus alerting the cryptocurrency community to the initial Verge hack back in April – the same glitch that was exploited previously was targeted again by hackers, resulting in yet another attack. This time, though, a staggering 35 million XVG tokens were stolen – worth over $1.7 million according to data from CoinMarketCap.
Like the previous 51 percent attack, hackers were able to mine multiple blocks one minute apart from one another, and gain control over the majority network hashrate, compromising the blockchain and resulting in XVG tokens being stolen by the hacker.
In a Reddit post raising awareness of the exploit, user Flenst explains that the new hack simply adds a second algorithm in addition to the one used in the previous attack, to achieve the same dominance over Verge’s blockchain. The Reddit post also claims that the hackers were mining 25 blocks per minute, “resulting in 8250XVG or 950$ per minute” being stolen by the hacker.
Verge took to Twitter to downplay the hack, saying their mining pools were “under dos attack,” causing a delay in block mining – but the community isn’t buying it, even replying to Verge’s tweet with a link to the aforementioned Reddit post outlining the entire attack. Ironically, even Verge’s official Twitter account was hacked back in March in an unrelated attack.
Despite all the bad news lately for Verge, the company revealed a huge partnership with Pornhub last month, with Verge being the official cryptocurrency accepted by the adult content provider for premium subscriptions.
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