One of the most anticipated blockchains of 2022, Aptos, launched its MainNet. Tron became an official means of payment in Dominica. Mango Markets lost more than $110 million due to price manipulation. The mining of empty blocks is a headache for Bitcoin SV. Google accepts cryptocurrencies as payment for its cloud services.
Aptos blockchain was launched
Smart contract platforms have taken over the top positions of the crypto market. Excluding stablecoins, as many as seven out of ten of the largest cryptocurrencies are smart contract platforms.
So-called Ethereum killers have been good investments. New projects have entered the market to challenge Ethereum’s dominance with better scalability. In other words, with fast and cheap transactions. Investors made huge gains in 2021 with the price rises of BNB Chain, Solana, Avalanche, Polygon, and others.
Nothing revolutionary has happened in this sector since the start of the bear market. Finally, something new is happening. The project is called Aptos, which we wrote about two months ago already.
The project took an important step yesterday by launching its MainNet. This means the production version of the blockchain.
Mainnet has arrived.https://t.co/wZajVZMa5Q
— Aptos (@Aptos_Network) October 17, 2022
Aptos is challenging existing smart contract platforms with the same features as Solana. The project promises up to 160,000 transactions per second (TPS), more than half the theoretical capacity of Ethereum 2.0.
Like Solana, Aptos has all the biggest VC firms in the industry behind it, including a16z, Tiger Global, and FTX. It has raised over $300 million in funding between the spring and summer of 2022. The project was also founded by people involved in the Meta’s Diem (ex-Libra) project.
There is still very little public information about the project. We will publish a more comprehensive guide before the end of the year. The official website can be found at aptoslabs.com and the Medium blog at aptoslabs.medium.com.
The ticker of the native token of Aptos is APT. Among the largest exchanges in the market, KuCoin and Binance have announced that they will list the token as early as tomorrow (19 October).
It is still difficult to assess the chances of success of Aptos. If the old signs hold true, its token will be heavily shilled on social media. This could well lead to a rally. Investors should be careful not to fall victim to a classic pump & dump.
Tron becomes an authorized digital currency in Dominica
Last week there was some surprising news from the Caribbean regarding the status of cryptos as an official means of payment. The small island nation of Dominica announced that it has chosen the Tron blockchain as its official partner.
In practice, the announcement means two things. Dominica is launching its own “fan token” called Dominica Coin (DMC). It will be used, among other things, to promote tourism in the country. Fan tokens have become familiar through football clubs. In addition, the TRX, the native currency of the Tron, was given official payment status in Dominica.
This is what Tron co-founder Justin Sun tweeted a week ago.
It is official! All #TRON cryptos including #TRX #BTT #JST #NFT #USDD #USDT #TUSD are granted statutory status as authorized digital currency and medium of exchange in the commonwealth of Dominica effective on October 7th 2022 🇩🇲 https://t.co/p97zJkzhUe pic.twitter.com/kbejwXrkXt
— H.E. Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) October 12, 2022
In addition to TRX, six other tokens in the Tron blockchain also received the same status. Four of these are stablecoins.
The status of official means of payment means that you can use these tokens to pay taxes and other Dominican public services. Private companies can choose to receive them as payments if the infrastructure is in place to carry out the transactions.
In addition, the conversion of these tokens into Eastern Caribbean dollars is not a taxable transaction. The status is therefore very similar to that of Bitcoin in El Salvador.
Tron has held up surprisingly well during this bear market. The blockchain is used for micro-transactions due to its low cost and fast transfers. For example, there are currently more Tether stablecoins issued on Tron than on Ethereum.
Mango Markets lost more than $100 million
The crypto market has been in a downward spiral for almost a year. Most investors have stepped aside to lick their wounds, but there is one sector where more and more is happening. Cybercriminals, or hackers, have been very active.
The past 12 months have been a golden age for crypto hackers. Just last week we reported on the $570 million hack of the BNB Chain token bridge. In addition to token bridges, there have also been a huge number of small- and large-scale attacks on DeFi services.
Mango Markets, a DeFi protocol running on the Solana platform, is the latest victim.
Another protocol goes down because it allowed too large debt positions against illiquid markets of its own $MNGO token.
In the VC jargon this would be "scaling too fast". https://t.co/cgksWJw9JS
— Mikko Ohtamaa 🐮 (@moo9000) October 12, 2022
The attacker managed to manipulate the value of their investments, or collateral, on the service. This was done by driving the value of Mango Markets’ own MNGO token through the roof. A huge loan was then taken out against the incorrect collateral value, creating a hole of over $110 million in the Mango Markets protocol balance sheet.
This time, however, there was an interesting twist in the plot. One of the attackers was revealed quite quickly and came out publicly on Twitter. Avraham Eisenberg admitted to being one of the perpetrators but said he was operating entirely within the restrictions of the protocol.
Statement on recent events:
I was involved with a team that operated a highly profitable trading strategy last week.
— Avraham Eisenberg (@avi_eisen) October 15, 2022
Eisenberg did not, in his own opinion, commit any crime. He exploited (with a larger team) the weak structure of the protocol in a perfectly legal way. There are opposing views obviously too.
In any case, Eisenberg made a deal with Mango Markets to return the funds, as a result of which none of the users will lose a single euro. Eisenberg returned $67 million, giving him a bug bounty of $47 million. Therefore, the story ended happily for everyone.
Bitcoin SV blockchain is under attack
Bitcoin SV has been very little in the headlines in recent years. The cryptocurrency, which forked from Bitcoin Cash in late 2018, is mainly known for its founder Craig Wright. He has declared himself to be Satoshi Nakamoto.
Craig Wright has been in the headlines lately due to his lawsuits against Peter McCormack and Hodlonaut, among others. BSV has received considerably less media space if any at all. In the last few days, the situation has changed, as there has been a discussion on social media about an attack on Bitcoin SV.
Bitcoin SV has started to be plagued by a single miner who mines empty blocks, meaning the miner does not include any transactions at all. Why is this a problem, and how is it possible?
This is possible due to the technical structure of Bitcoin SV. The block size has been increased up to several gigabytes, but due to low transaction costs & low usage, the rewards per block are too low. The miner doesn’t want o not spend time building a large block but grabs the block rewards alone. He is therefore more likely to win the block for himself.
Bitcoin SV’s low hash rate has made it easy for a single player to get in on the action and grab most of the mining power. The attacker has mined 70-80% of the blocks in the last few days.
Bitcoin SV uses the same mining algorithm as Bitcoin, SHA-256. There are tons of Bitcoin miners in the world that can easily switch from Bitcoin to Bitcoin SV, Bitcoin Cash, etc. This security risk applies to all cryptocurrencies that use the same mining algorithm as a much larger cryptocurrency.
Yesterday, the Bitcoin Association, which supports Bitcoin SV, issued a statement saying that it intends to bring criminal charges against this hostile actor.
Announcement: We're taking action to freeze all block rewards associated with a breach of contract & will be pursuing criminal charges against the entity responsible.
— Bitcoin Association (@BitcoinAssn) October 17, 2022
According to BA, the miner of the empty blocks is in breach of contract. It is also appealing to the exchanges and other miners to freeze the address and block fees used by this attacker.
It is very challenging to counter such an attack. It is difficult for so-called honest miners to win blocks if the attacker has a much higher hash rate and honest miners build large blocks instead of empty blocks. The only sustainable solution would be to get a huge increase in the hash rate, but that doesn’t happen by snapping your fingers.
The only way to resolve the situation right now is for the attacker to simply stop mining. We will follow developments in next week’s news.
Incidents like these serve as a reminder of why the huge mining capacity makes Bitcoin so secure. The commonly reported threat of a 51% attack is not the only way in which the blockchain can be manipulated and disrupted. A sufficiently high hash rate ensures that attackers have no financial incentive to even attempt to hijack mining.
Google accepts cryptocurrency payments for cloud services
One of the biggest news stories of the last week is about Google. The search engine giant announced that it will accept cryptocurrencies as a payment method for cloud services. In theory, this sounds great, but in the end, the news had very little to offer.
According to Google, only a select group of business customers will be able to start paying with cryptocurrencies in early 2023. The partner in this operation is Coinbase, whose payment service Coinbase Commerce acts as an intermediary. Accepted currencies are Bitcoin, Bitcoin Cash, Dogecoin, Ethereum, and Litecoin.
Coinbase is similarly moving part of its infrastructure from Amazon’s AWS service to Google Cloud. Both Google’s and Coinbase’s share prices rose by more than 5% after the announcement.
Not everyone was particularly excited by the news. Well-known Bitcoin maximalist Jameson Lopp tweeted the following.
Google, one of the biggest computing companies in existence, decided to integrate a trusted third party rather than building the infrastructure to directly accept crypto payments themselves. pic.twitter.com/nu9nYU6wGX
— Jameson Lopp (@lopp) October 12, 2022
Admittedly, Lopp also has a point in his tweet. Even if one would have expected an “in-house solution” from Google, the cooperation with Coinbase is in any case good publicity for the crypto industry. If Google accepts Bitcoin as a means of payment for its services, what is the excuse for other companies?
Google is one of the world’s largest technology companies, and its foray into cryptocurrencies has been expected for years. At the moment, it seems that Google Cloud has emerged as a strong competitor to Amazon’s AWS. Many crypto projects have recently started collaborating to leverage Google’s cloud services. Examples include Near Protocol and BNB Chain.