cryptocurrency communities

If it weren’t for strong cryptocurrency communities, we wouldn’t be where we are today.

There would be no debates on whether Bitcoin is better than Bitcoin Cash. Telegram wouldn’t have raised  $1.7 billion in its token sale, EOS probably still wouldn’t have launched its mainnet, and, well, it’s hard to tell for sure if crypto would even exist as we know it.

Block Explorer identified the strongest crypto communities and figured out why they were so important for the blockchain universe.  

The Strongest Crypto Community #1:  Bitcoin 

Bitcoin began as a small community of cryptography geeks and cypherpunks. They shared ideas on obscure forums and mailing lists years before it gained mainstream attention.

Satoshi Nakamoto was the one who created and envisioned bitcoin, but it gained traction because a dedicated community worked together on the development. (Note: you can read the very first community thread about bitcoin here)

In the ten years since, the bitcoin community has grown across the world. Bitcoin has suffered some huge price drops and dips in popularity, but every time, it comes back stronger. After bitcoin reached almost $1,200 in December 2013, it went down to $400 in just three months and did not grow back till the beginning of 2017.

But even in spite of all the roller coasters and bad publicity, bitcoin is still alive and thriving due to the large community of believers around. At the moment of writing, the Bitcoin Core client is the product of almost 19,000 unique code contributions from almost 600 individual developers. 

Its public Github repository also tracks so-called “forks” of the code, the copies that can be modified for any specific purpose. To this date, the developers have forked Bitcoin Core reference client over 21,000 times. That’s a massive amount of people involved. 

And let’s not forget the number of bitcoin wallets created so far – more than 30 million people have registered Blockchain wallets, and more than 20 million created Coinbase accounts. 

No, bitcoin most likely won’t be disappearing any time soon.

The Strongest Crypto Community #2:  Ethereum 

purple ethereum logo on blue background

If it wasn’t for the strong community, we can’t even imagine where Ethereum would be right now. 

Let’s recap some disasters. Remember 2016 and the imperfections of the DAO (Decentralized Autonomous Organization)? At that time more than $50 million worth of ether was stolen from the infamous DAO and transferred into its smaller version called “child DAO.”

DAO explained: A DAO is an organization or business without a central authority. Instead, it makes decisions using digital “smart contracts” and voting mechanisms on the Ethereum blockchain.

Forking the blockchain was the only way to fix it. That meant a change to Ethereum’s code that split the currency into two versions. Users had to choose between by either updating their software or not. 

It was risky. However, the fork was successful with 85% of users moving over to the new version.

Want to know more about this hack? Read our beginner’s guide to Ethereum.

What is Ethereum

 

 

 

 

 

 

 

 

In 2017, another hack breached a vulnerable Ethereum wallet, but the community quickly stepped in to re-route the funds and prevent a further theft. And, well, Ethereum is still around. 

The Strongest Crypto Community #3: EOS  

EOS was developed by Block.one, as a faster, cheaper alternative to Ethereum. EOS begins with one of the most respected minds in the industry, Dan Larimer, who also created Bitshares and co-founded Steemit. 

He has been described as a visionary and was very articulate about the need to eliminate fees in decentralized applications long before EOS appeared.

On top of the fees elimination, EOS intends to help fix the scaling problem in Ethereum. EOS implemented an alternative network that could, one day, manage millions of transactions per second and introduced a developer-friendly sandbox for creating new, fast decentralized applications (dapps). 

Also, it has a great appeal for new blockchain entrepreneurs since it suggests a simple alternative for fundraising – switching from initial coin offering (ICO) to airdrops and airgrabs.

So, it’s not surprising that in a year-long ICO, EOS raised $4 billion for its blockchain and smart contracts platform.

However, even though the project is in its early stages, it has already experienced significant shakedowns. At one point hackers managed to gain control of Block.one’s Zendesk account and used it to send persuasive phishing emails. 

Hackers could have got away with millions of dollars if it weren’t for the community to spread the word about the incident. 

Less than a week away from the EOS mainnet launch, an internet security firm from China, called Qihoo360, reported that it found several vulnerabilities in the EOS system. The holes would allow hackers to gain remote control of EOS nodes and even access private keys. 

Then, the much anticipated mainnet launch event was a disaster by itself. It was scheduled on the 2nd of June, 2018. But almost a week later the blockchain was not yet live because it required EOS token holders to vote. 

And the voting process itself was very confusing and not very friendly to a non-techy audience. But that case only demonstrated the power of the project’s community. At the time, dozens of brilliant and helpful members of the EOS ecosystem developed a bunch of handy tools for voting along with the sets of instructions and guidelines. That promptly enabled the ability of token holders to vote for the mainnet launch and the network was successfully started on the 14th of June, 2018.

The Strongest Crypto Community #4: Monero

Monero logo

Monero’s community is united around a core group of principals: privacy, security, and decentralization.

Recently, the Monero community rallied together to fund a deep audit of its new bullet-proofs technology. The audit ultimately turned up a vulnerability that could have lead to a 51% attack.

It would have been easy to ignore a security audit, but the Monero community felt strongly enough about security to fund it themselves.

Further, the Monero community actively fights against the use of mass-market mining tools (ASICs) to protect its decentralized nature. A community that puts its core principals ahead of economic gain is one worth keeping an eye on.

What’s your favorite story about the strongest crypto communities? Go ahead and share it in the comment section below.

Learned something new in this article? Subscribe to the Block Explorer newsletter.

stellar overtakes EOS

On the back of a storming price surge, Stellar Lumens (XLM) has overtaken EOS as the fifth-largest cryptocurrency by market capitalization. XLM is the token associated with Stellar – a cross-border payments project built on blockchain technology.

XLM has soared 16% in the last seven days to hit a market capitalization of almost $5.4 billion. It has now surpassed the market cap of EOS which dipped below $5 billion.

How Stellar Overtook EOS

Stellar is riding a wave of optimism over the last week, culminating in the news that Blockchain.com will facilitate a $125 million XLM airdrop to new wallet holders.

Blockchain.com, one of the world’s most popular crypto wallets, will gift new users a small amount of XLM in a bid to increase user adoption.

It’s reportedly the largest cryptocurrency airdrop in history, marking a new level of crypto marketing.

Speaking of the airdrop, Stellar founder Jed McCaleb said:

“We believe that airdrops are central to creating a more inclusive digital economy. Giving away lumens [XLM] for free is an invitation to communities to design the services they need. Our hope is to eventually have global citizens own and use lumens, in both developing and developed economies. By working with Blockchain to increase the availability and active use of lumens on the network, leveraging their almost 30m wallets, we will increase the network’s utility by many orders of magnitude.”

Gaining on Ripple XRP?

Stellar is often seen as a competitor to Ripple in the sense that it facilitates super-fast, cross-border transactions. While Ripple is working closely with banks, Stellar has partnered with IBM and aims to bring international money payments to the developing world.

Founder Jed McCaleb was instrumental in the early development of Ripple before leaving to begin work on Stellar.

Overtaking EOS marks a powerful step in the Stellar journey and places it within touching distance of its rival.

Will XLM maintain its position as fifth-largest cryptocurrency? We’ll keep you updated.

Learned something new in this article? Subscribe to the Block Explorer newsletter.

one bitcoin on blue and pink background

Welcome to your daily crypto roundup on Block Explorer. Here’s everything you need to know on the markets on Tuesday:

Bitcoin struggles on in “purgatory” mode – a term coined by Wall Street for this seemingly endless $6,000 – $7,500 range. Most of the top 20 coins are treading water today or making small losses.

1. Bitcoin – $6,451 (+ 0.1%)
2. Ethereum – $284 (- 2.8%)
3. XRP – $0.33 (+ 0.6%)

Bitcoin is still rejecting any attempts to pass $6,500, while ethereum battles against the $300 mark. Keep your eye on these numbers because a move higher could trigger a stronger recovery.

(Prices correct at time of publishing: 6.45am ET).

Biggest winner and loser in the top 20

vechain logo

Biggest winner – Vechain (+ 5%)
Biggest loser – Tezos (- 14%)

Vechain is among the few tokens in the green today as it thrives on its new mainnet, Vechain Thor. Vechain has gained more than 50% in a week.

XRP also finds some strength today compared to the rest of the market. Ripple (the company linked to XRP) revealed that xRapid – its pioneering money transfer platform – is finally ready. xRapid, which actively uses the XRP token for liquidity, will now enter production mode after a year of pilots.

Coinbase volume down 83% since January

coinbase logo

Today’s market weakness was triggered by news from Coinbase. Trading volume at the largest cryptocurrency exchange in the US is down 83% since bitcoin-mania peaked in January.

Here’s where it gets interesting, though. While Coinbase, which executes trades between USD and crypto, has seen a decline in volume, rival exchange Binance reported an increase in the last month.

Binance only executes crypto-to-crypto trades. In other words, even though investors aren’t rushing to the market with USD, trading among the core crypto community remains relatively stable.

The best blockchain? EOS, according to China

EOS logo

China has released its official blockchain ranking for August. The blockchain projects are ranked according to their technology, innovation, and application.

Bitcoin finds itself in tenth position, while Ethereum comes in second place. At the top of the charts is EOS, likely due to its transaction speed and ability to host decentralized apps (dApps).

Venezuela pegs its hyper-inflated currency to crypto

Venezuela’s national currency, the Bolivar, is fighting against 1 million percent inflation. People in the country are fleeing to neighboring Ecuador or turning to bitcoin to protect their money.

But the government thinks it has a solution. As of today, the Bolivar will be pegged to a cryptocurrency called petro. Petro was created by the Venezuelan government, and its value is derived from oil reserves in the country.

Yet again, we see people (and now governments) turning to crypto when economies fail.

That’s all for today, folks. We’ll see you tomorrow for another blockchain roundup.

Today’s long read: What is EOS? The world’s best blockchain, according to China

Blockchain

“The authorities in EOS just instructed the block producers to censor transactions from 27 accounts with no reasons given.” – @ferdousbhai on twitter

On the 22nd of June, the EOS Core Arbitration Forum, ‘An Arbitration Forum for and by the EOS Community’ ordered EOS block producers to refuse transactions from specific addresses “indefinitely”. ECAF’s order further went on to state “The logic and reasoning for this Order will be posted at a later date”, followed by a handwritten, dated signature.

Following the first order, on the 24th, an additional order was released that retroactively revokes all tokens in 5 accounts from the time of the original order.

After the initial order, one of the EOS Block Producers made a steemit post, in which, as part of an update, the reasoning behind the order was disclosed. Apparently, each account had currency stolen from it.

What happened to trustless systems?

One of the core ideas behind (most) cryptocurrencies is that the system is trustless. Meaning that no matter what, no trust is required to use the cryptocurrency. With EOS, it would seem that you are required to trust that ECAF will not decide to freeze or revoke your assets, with or without reason, much in the same way that you trust a bank with your fiat currency.

What happens if you speak out against ECAF? What is in place to prevent someone in power from freezing or outright revoking your assets? Said hypothetical person of power would not even have to come up with a convincing reason for the action. To quote the above orders: “The logic and reasoning for this Order will be posted at a later date”.

According to a post on ECAF’s forums, when freezing assets, those responsible are required to open a case against themselves regarding the decision, and if found to be in error, are liable for the results of the freeze. The liability is reactionary, there does not seem to be anything directly preventing someone from freezing or revoking assets.

Even if ECAF does what it believes is right, why do they get to decide? What gives them the right? Why are they better at deciding than anyone else? Why should anyone trust them? How is it any different from a government, or the leadership of a company? How can those that DO trust them be sure that there are no ulterior motives in play?

The only way to be sure is for the system to be trustless.

What happened to decentralized systems?

Another core idea behind cryptocurrencies is that they are decentralized. There is no central target to attack. No single group of people that can make changes to the blockchain. With EOS, there are ‘Block Producers’ who are responsible for adding blocks to the blockchain. Block Producers follow orders from ECAF. This communication line is a single point of failure (or a large attack surface, depending on your view).

What happened to immutable systems?

Immutability, meaning the inability to change, is a word often used to describe blockchains. The idea is that once something is on the blockchain (a transaction, for instance), it cannot be changed or undone. For PoW coins like bitcoin, this works by means of cryptographic hashes, a block contains its parent’s hash. Therefore, in order to change something behind a block, you must change every block after it. The immutability of a blockchain is one of its strengths. For transactions, immutability means that you cannot undo a transaction, or change how much currency was sent within it. Thus removing the need for trust between parties.

EOS has shown its ability (and intent) to rewrite history ‘when necessary’, which ruins immutability and tears apart the trustless nature of its blockchain. How can you trust what you see on the blockchain if you know that what you see can be changed at will?

In the case that prompted this article, the reasons for the change are to prevent losses accounts that may have been compromised. A familiar tale for anyone who knows about the origins of Ethereum Classic.

Hypothetically, assuming that an account is compromised, and is used to transfer currency in the form of payment for services to another account, what happens to the service provider? Do they get the short end of the stick and lose what they earned? Or does the service provider get to keep what they earned, while the compromised account is also re-credited with currency? The former seems unfair, and the latter seems insane. If you can simply create currency out of thin air, what is to stop someone in power from making themselves rich?

The only solution here, while maintaining a trustless system, is for the blockchain to be immutable.

What is left for EOS?

From my perspective, the only thing left with EOS is the tech behind it and the hope that there are no malicious actors within its ranks. I feel that EOS has walked away from what cryptocurrencies are, and towards what they were created to fight against.

Trustless. Decentralized. Immutable.

EOS

What is EOS?

EOS is a blockchain that is designed specifically for facilitating “decentralized applications”, or DApps. This is different from Ethereum which has made its mark by focusing on “smart contracts”. A smart contract is a way to make a record of an agreement that is settled in one transaction. A DApp may continue to run indefinitely over many transactions, where each transaction is one step of an overall computation. EOS can, therefore, be thought of as a distributed computing resource, taking advantage of otherwise idle computing power and applying it to complex problems that require more power to solve than any one user may have in their possession.

Overview

There are two significant problems that must be overcome in order to make DApps worthwhile. One is that transactions must be inexpensive, because if a DApp becomes more expensive as the number of operations increase, then the cost of running the program might outweigh the benefits of its results.

The other problem is the speed of transactions per second. While every blockchain aspires to clear as many transactions as it can with every block, the ultimate goal of facilitating human beings making individual transactions, such as purchases, puts a rough upper boundary on how many transactions would be expected. For example, Bitcoin is often compared to whether or not it could handle a throughput of transactions similar to Visa, at 1600 transactions a second. However, any DApp could create an algorithm that expands to create nearly unlimited operations, limited only by what any programmer hopes to achieve.

EOS claims to solve both these problems. Its distributed proof-of-stake, or DPOS, a method of validating the blockchain requires no transaction fees from users, giving DApp developers access to all of the computing power of EOS at no cost. The same DPOS mechanism also shares computing power in such a way that EOS developers claim can process millions of transactions a second.

Purpose

A DApp is a program that is run on a blockchain so that the work required to make it run is spread out over all the computing power supporting that blockchain. Examples of DApps running on EOS are Everipedia, a recreation of Wikipedia, Ono, a decentralized social network, and Oraclechain, an Oracle service provider.

One may note that all these DApps are versions of applications that exist in other forms elsewhere, so there does not yet seem to be a service that could not exist without the support of EOS. The current offering of DApps establish EOS as a viable way to run a program, but the killer app has yet to be found.

Technical

EOS uses a distributed proof of stake algorithm. Instead of blocks being more likely to be mined by people who have more computing power, blocks are verified by people designated as “witnesses” who are selected by an ongoing process of voting. In this way, bad actors can’t overtake the system as unwelcome actions will cause them to be voted out of their position. Also, it increases speed because blocks are not verified through a competition of computing power. A proof-of-work system puts all participants in competition with everyone else, driving an incentive for more and more computing power. In a proof-of-stake system, the designated witnesses are limited to a small pool, so there is reduced incentive to commit vast resources to compete with others. The savings in computing power by not competing can be put toward improving the throughput of calculations. According to EOS developers, they can handle millions of transactions a second, as compared to Ethereum’s 15 transactions per second.

Market

Currently, EOS is 5th overall in market capitalization, with a little over 12.5 billion dollars invested. However, by having a clearly defined niche in distributed computing power, its success is not necessarily relevant to other top cryptocurrencies like Bitcoin or Ethereum, as they are going after different use cases. While a large market capitalization is an indicator of market confidence so far, EOS still has a ways to go to establish itself, in particular by demonstrating itself with a particularly popular DApp, which has yet to emerge. Until that time, competitors such as Golem, who are going after the same use case, could have a chance to catch up.