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Ethereum transactions monitored by US Government?

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With significant enhancements like the Merge taking center stage, Ethereum [ETH] has surely been the buzz of the crypto town. In addition, the network’s switch to proof-of-stake [PoS] has fueled rumors that ETH will be classified as a security. Now, the SEC asserted in a lawsuit against crypto influencer Ian Balina that ETH transactions that took place in the United States immediately fell under the government’s radar, further bolstering this case.

Balina was accused of selling unregistered tokens, for which it was sued. Before launching an initial coin offering [ICO] in 2018, he failed to register his project as a security. The crypto influencer flat-out refuted these allegations. The crypto community is presently making assumptions about the SEC’s extensive statement in the case, though. The lawsuit claimed that it had the power to prosecute Balina since the SEC has authority over the Ethereum network in the 69th paragraph.

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Source: Twitter

The Balina-curated investment pool reportedly included a range of investors situated in the United States. Additional ETH contributions were validated by a network of Ethereum blockchain nodes. As a result, the SEC claimed,

“ETH contributors were validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country. As a result, those transactions took place in the United States.”

Furthermore, it should be noted that 3340 out of the 7819 Ethereum nodes, or 42.56 percent, are currently located in the US.

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Source

Ethereum’s stance

Following the Merge, there has been a significant backlash against the Ethereum network. As was already indicated, some were speculating that since the network would now be regarded as a security, the SEC would have jurisdiction over it. Others, though, were criticizing ETH’s degree of decentralization.

In the midst of all of this, the network would suffer from the SEC’s most recent pronouncement. Several legal experts pointed out that the wording of the complaint would be observed even if it would not have any legal relevance.

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Source: Twitter

Furthermore, at the time of writing, Ethereum (ETH) was priced at $ 1,361.54 and had taken a plunge of 0.50% over the last 24 hours.

A Lesser Known Ethereum Fork PoW Chain Is Making Its Presence; Here’s How

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Ethereum’s Merge created two forked proof-of-work chains, one which is popularly led by Chandler Guo to create ETHPoW and ETHW and the other relatively obscure called EthereumFair, [ETF].

Looks like the lesser-known sister project has finally woken up from its deep slumber as its team announced creating Telegram groups for several languages.

EthereumFair even claimed on Twitter that it was the first PoW currency to break away from the mainnet. This account, which was created in January 2020, has about 14,000 followers.

Despite having a two-year foothold, it is fewer than the just over 15,000 Twitter followers EthPoW has gained since its establishment in July.

EthereumFair is managed by a group of Chinese miners, and its major documentation is available in Chinese. But given that it started creating social media groups in several languages and announced rewards and support, things might change from now onwards.

Its block explorer revealed that ETF has 6.7 million total transactions and 1.8 million wallet addresses.

According to Coingecko.com, the price range for ETF has been between $1.48 and $3.50 per unit, with a $3.43 million global trade volume. The price of ETF reached an all-time high two days ago at $20 per unit and then fell to its lowest level that day at $0.99 per coin.

The coin is currently exchanging hands at $6.43, down 30% over the past 24 hours.

Ethereum Forked Projects Gained Major Adoption

Poloniex, a leading exchange that accepted EthereumFair, announced its initial endorsement “based on the market condition, users’ consensus, and the community.” Later, Poloniex changed the name of ETHF to ETF and added support for ETHW.

Additionally, the coin is now traded on the cryptocurrency exchanges Huobi and BitCoke. ETHW, on other hand is also traded on OKX, XT.COM, Deepcoin, Bybit, and CoinW.

Just recently, the hash rate of the well-known forked coin reached an all-time high of 80.56 terahashes per second [TH/s], before plummeting later and ubsequently losing 53.35% of its hashpower.

That said, a little portion of the hashrate left over from the Merge has been collected by the other forked project EthereumFair. At press time, there are seven nodes specifically dedicated to the network, and its hashrate stood at 7.9 TH/s.

Cardano’s PoS Do Not Lock Users Fund Unlike Ethereum: Charles Hoskinson

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Cardano founder Charles Hoskinson is back in the limelight with his recent Twitter musings. Hoskinson emphasized that Ethereum’s implementation of the Proof-of-Stake consensus protocol was flawed as it restricted investors to access their staked ETH.

A shared discord message from an Ethereum developer revealed that there is still some uncertainty regarding the timing of withdrawals even after the Shanghai upgrade.

This was corroborated by a Twitter user @StakeWithPride who shared screenshots from Discord, saying that there is no ETA [estimated time of arrival] for ETH withdrawals.

Many however expected that holders would be able to access their staked Ethereum immediately after the Shanghai upgrade, slated to be six months to a year from now.

In the subsequent screenshots, the head of Serv.eth Support, Micah Zoltu, claimed that the information about withdrawals resuming only after the Shanghai upgrade comes from exchanges. But he admits that it is crucial at this point to allow investors “to exit in 2023, rather than in 2024.”

Hoskinson- Here’s What Makes Cardano Unique From Ethereum

In a previous post, the same Twitter user claimed to have revealed another screenshot from a conversation with Zoltu, who said that Ethereum stakes do not need to withdraw their ETH right immediately and may wait until later because they are wealthy and can afford to buy expensive specialized hardware.

Charles Hoskinson intervened at this very time, criticizing Ethereum for resembling the Hotel California of the cryptocurrency world, a famous song by the American rock band Eagles.

The song was widely believed as an allegory of self-destruction, and greed in the music industry of the late 1970s.

Hoskinson continued by asserting that because ADA is staked without ever leaving a user’s wallet and can be withdrawn at any time, Cardano’s PoS does not necessitate having users’ ADA locked. As a result, in this case, the “needs of users” are given precedence above stakeholder needs.

The IOG founder further said that everyone can stake Cardano‘s PoS protocol; one does not need to be affluent to do so. He underlined that this is a key area where Ethereum and Cardano differ.

Ethereum Tool Provider Unveils Plan For A Decentralized Protocol

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Ethereum tool developer Infura has outlined its vision to create a Decentralized Infrastructure Network in 2023, as per the Tweet.

This is to enable network nodes to run effectively so developers and users of apps like MetaMask don’t have to do it themselves. For Ethereum and other blockchains like Polygon and Near, this would be like Amazon Web Services.

“In the past, this complexity presented itself as a centralization hurdle as it restricts who can run such a service as part of a decentralized infrastructure network”, the blog read.

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Ethereum Tool Provider Unveils Plan For A Decentralized Protocol 5

Access to Web3 products will be made available to “millions of future consumers” via this new network, “without disruptions and downtime due to a single point of failure,” according to a statement.

In recent years, several teams have overcome these technological, logistical, and financial hurdles. There is now a flourishing ecosystem of highly reliable infrastructure providers and this makes it the perfect time to take the next step in the journey toward progressive decentralization.

Infura, a part of ConsenSys, offers Web3 businesses the backend infrastructure they need to introduce their goods. It gives companies a method to connect to decentralized ledgers like Ethereum without having to manage their own nodes.

Joseph Lubin founded ConsenSys, which also runs MetaMask, the most well-known self-custody cryptocurrency wallet. Infura offers services to more than 430,000 developers globally and its competitors include Alchemy and Blockdaemon.

Apart from that, Infura is also exploring issuing a token, so clients could pay for usage, Galano said. Infura is already accepting applications from operators interested in joining its early access program.

Infura Handles Over 50% of Transactions On The Ethereum Network

“It helps solve one of the concerns about the centralization problem with Ethereum,” Eleazar Galano a co-founder of the startup said. “What we are doing is, when people are accessing the data it can be done in a decentralized way.”

Galano also claimed that more than 50% of transactions on the Ethereum network have at times gone through Infura.

Nevertheless, its proposal to offer a decentralized version of the service, in the first half of 2023, might therefore have major implications for Ethereum stakeholders. Investors and authorities alike are keeping a clsoe watch on that.

Ethereum PoS nodes being centralized? 2 addresses dominate 40%+ nodes

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The merge was a significant event not just for the Ethereum network alone.  The conclusion of one of the most anticipated events in history was celebrated by the whole crypto sector. Many people and a select few view the network’s switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS) as revolutionary. While ETH miners and Bitcoin maximalists opposed this change, the majority of the crypto community was eager to see how it would affect the network.

Meanwhile, there has been a new discovery regarding the PoS nodes. According to Santiment’s analysis, only two addresses control 46.15% of Ethereum’s PoS nodes.

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Source: Twitter

Approximately 188 blocks, or 28.97% of the nodes, have been validated by the first address hours after the Merge, and 105 blocks, or 16.18%, have been validated by the second address. The data became a contentious subject on Twitter as users discussed how the Merge would affect centralization for the biggest network in the globe.

Five firms held 64% staked Ethereum prior Merge

The blockchain analytics platform Nansen published a report before the Merge that showed five firms held 64% of all staked ETH, with Coinbase, Kraken, and Binance accounting for over 30% of ETH staked. Reports also indicated that centralized web service providers like Amazon Web Services control the majority of the 4,653 active Ethereum nodes (AWS).

Ryan Rasmussen, crypto research analyst at Bitwise, further explained,

“Since the successful completion of the Merge, the majority of the blocks — somewhere around 40% or more — have been built by two addresses belonging to Lido and Coinbase. It isn’t ideal to see more than 40% of blocks being settled by two providers, particularly one that is a centralized service provider (Coinbase).”

Since PoS rewards those with a higher token supply over those with a lower one, it is frequently thought to promote centralization. For instance, the Ethereum blockchain’s new consensus mechanism relies on validators, rather than miners, to validate transactions. Participants must stake 32 ETH, which at the time of publication is equivalent to about $48,225, in order to run a validator and be rewarded.

Supporters of PoS, however, contend that the technique is safer and more environmentally friendly than PoW. Vitalik Buterin, the co-founder of Ethereum, predicted that the transition would not only reduce energy consumption by about 95% but also help scale the network, with features that are anticipated to take place in the second half of 2023. Transaction processing is expected to match that of centralized payment processors.

Ethereum’s core devs got their eyes on Shanghai upgrade

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The merge finally transpired after years of waiting. Ethereum’s historic switch to proof of stake occurred early on Thursday morning without a hitch.

The Ethereum merge dominated the attention and energy of the network’s elite cadre of core engineers for almost half a decade, with tens of billions of dollars’ worth of digital assets on the line and no room for error.

Ethereum’s core developers won’t meet in groups or make decisions regarding the network’s future for the next two to three weeks. This break from rapid-fire decision-making, though, won’t last long.

The network’s core developers will have to decide together within the next month whatever features they intend to incorporate in Ethereum’s upcoming update, Shanghai. Within the group, opinions are divided. Again, the decision will have far-reaching financial effects. Ethereum core developer Micah Zoltu told local media,

“Lots of people have lots of things they want to go in [Shanghai], but there isn’t yet consensus on what will actually make it.”

The ability for Ethereum validators to withdraw staked ETH is perhaps the most urgent feature under consideration for the Shanghai upgrade.

The recent merging has changed Ethereum to a proof-of-stake system; as of right now, no longer will energy-intensive “miners” confirm transactions on the Ethereum network, but rather users and organisations who have staked significant amounts of ETH. These organisations will be able to create and accumulate fresh ETH through staking as compensation for demonstrating the processing capacity required to validate transactions and protect the network.

However, ETH can currently only be placed into it’s staking system. It cannot be taken back. Until ETH’s developers introduce a withdrawal feature, the nearly $21 billion in ETH already staked on the network will remain there.

It seems sense that practically every core developer has withdrawal capability at the top of their list of priorities for the Shanghai upgrade.

Next in line for Ethereum

Updates to the Ethereum Virtual Machine (EVM), the developer-focused mechanism at the foundation of the world’s second largest cryptocurrency that establishes the norms dictating how blocks interact on the network, are the second most probable set of improvements to be included in Shanghai. The EVM hasn’t been updated in more than two years, in part because developers would have had a terrible time integrating such enhancements into the merge.

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Source: Twitter

Proto-danksharding, which has to do with the rollups of scaling technology, is another long-rumored ETH feature that has attracted a good amount of interest.

By condensing groups of transactions into a single transaction and presenting it to the ETH blockchain as a single transaction, rollups are solutions that solve the Ethereum mainnet’s sluggish pace and high gas prices.

Proto-danksharding would be the early iteration of danksharding, a method for verifying vast amounts of data on rollups using only a small sample of the total data. Essentially, the change would greatly speed up and simplify the verification of enormous volumes of data on Ethereum layer-2 networks like Optimism and Arbitrum.

Although layer-2 customers find the idea of danksharding to be quite appealing because the upgrade would probably reduce transaction times and gas costs, it would also have a price.

The upgrade will be more difficult and, most crucially, postponed the more complicated the set of features incorporated in Shanghai.

How long it will take to implement Shanghai cannot yet be predicted. However, Van Der Wijden is certain that the improvement will take place in the upcoming year.

However, that deadline likely be postponed as more Ethereum users and developers focus on more ambitious and urgent network enhancements, such as proto-danksharding.

Ethereum Plummets as the Merge Comes to a Completion

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The Ethereum Network ultimately made the move to proof-of-stake on Thursday, September 15, 2022, eliminating the proof-of-work mining model. With the blockchain now using 99.95% less energy than it did before, the development ushers in a more environmentally friendly era in the crypto sphere.

Long into the development, the improvement was eagerly anticipated. The network was frequently held accountable for the effects it had on the environment. That will probably stop as a result of the merge.

The change has made it difficult for miners since validators have taken their positions. Many people ultimately looked for other mineable currencies, such as ETC.

But ETH didn’t fare well in terms of price post-merge.

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Ethereum Plummets as the Merge Comes to a Completion 9

Ethereum dips post-merge

It created a large hourly one after printing two little red candles. At the time of writing, Ethereum has dropped from $1,636 to $1,473 overall, or more than 6.95%.

Earlier today, Capriole Investments fund creator Charles Edwards tweeted that the Merge is being referred to as a sell-the-news event by many. Given that he considers the Merge to be an “Ethereum halving” event, he hoped it wouldn’t take place. With the switch to the proof-of-stake protocol, the supply of ETH will grow considerably more slowly.

The CIO of Moskovski Capital, however, thinks that the current price decline is the result of traders selling the news of the ETH Merge. However, a lot of industry professionals think that “ETH is severely underpriced.

At the time of writing, Ethereum is trading at $1473, a 6.89% drop in the last 24 hours. The slumping of the market began after a slight recovery that the market was displaying. As the CPI numbers were out, it triggered the market to expect a higher interest rate hike.

ETH is also 13.6% down in the last 7 days. But it will probably have a positive price outcome in the long term.

Will Ethereum attract SEC scrutiny? Here’s why it seems like it

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The Merge wasn’t a significant occurrence just for the Ethereum network. One of history’s most eagerly awaited events had happened, and the whole crypto sector rejoiced. The network’s switch to Proof-of-Stake [PoS] from Proof-of-Work [PoW] is viewed as revolutionary by some and harmful by others. The majority of the cryptocurrency community was excited to see how this initiative plays out for the network, despite the fact that Bitcoin maximalists and ETH miners weren’t on board with this shift.

Vitalik Buterin and Joseph Lubin, the creators of the world’s second-largest cryptocurrency, were busy celebrating and thanking everyone involved in the process. While doing so, several of them praised the smooth conversion of the ETH network to PoS. Eli Ben-Sasson, the president of StarkWare, compared the Webb Telescope to the Merge on Twitter.

Along with all the compliments, there was also criticism. As was already indicated, many have noted that ETH was breaking the rules of the cryptocurrency market by allowing the Merge.

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Source: Twitter

Samson Mow poked fun at Ethereum’s seamless conversion to PoS and commented,

“ETH fanboys watching the Merge with anticipation is funny. There can be no technical failures in Ethereum because Ethereum’s existence isn’t predicated on any technology – it already failed in 2016 with the DAO fork. What exists today is a database run by a marketing company.”

SEC to get involved post-Ethereum Merge

Amidst this historic event, Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), reiterated his support for monitoring on Thursday by stating that staked cryptocurrencies may be governed by federal securities laws. This comes after Ethereum switched to a similar system.

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SEC chairman Gary Gensler

The Wall Street Journal quotes Gensler as saying that proof-of-stake (PoS) blockchains, which create new coins for creators who pool their holdings, take on characteristics similar to investment contracts and may fall within his agency’s jurisdiction. The Journal reported that the man claimed he wasn’t referring to a specific coin.

However, the remarks, which came hours after Ethereum successfully completed its PoS shift through the Merge, suggest that the significant technological improvement may have more effects on the second-most popular blockchain than only reducing its energy consumption. Its native ether currency was one of only two cryptos, along with bitcoin, that was explicitly classified as commodities by federal regulators as a proof-of-work chain.

Largest Ethereum Mining Firm To Cease Operations As Merge Goes Live

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Ethereum’s transition to merge has been completed. Since the blockchain has finished its historic technological update, Ethermine, the largest Ethereum mining service provider by computer power, has shut down its servers for miners.

The announcement was made previously with the widely anticipated “Merge” software update for Ethereum, which will switch the most popular blockchain from a proof-of-work to a proof-of-stake consensus mechanism.

This implies that currently, ETH miners will no longer be able to mine Ether on the ETH network because investors who hold Ether will take the position of the powerful graphic cards that were previously needed to verify transaction data. These validators will go forward securely validating network data and securing the Ethereum blockchain.

“As a consequence of this transition, the Ethermine ETH mining pool will switch to withdraw-only mode once the Proof-of-Work mining phase has ended. At that point, “all Ethermine stratum servers will be shut down, and you will no longer be able to connect your miner to the Ethermine ETH pool.”

Ethermine tweeted on Wednsday

The much-awaited Ethereum merge is live

Since the Merge, the network has shifted over to proof-of-stake (PoS). On September 15 at 06:42:42 UTC at block 15537393, the Beacon Chain’s consensus layer and the ETH Mainnet’s execution layer were combined, bringing about the long-awaited Merge. The network will no longer depend on a proof-of-work consensus algorithm as a result.

The Ethereum Foundation claims that The Merge will boost the energy efficiency of the Ethereum network by around 99.95% and open the door for future scaling alternatives like sharding.

The Merge will fundamentally alter how businesses see ETH, even if it may not have an impact on the majority of current commercial use cases.

In addition to actual energy savings, the transition to proof-of-stake increases ETH’s security and lays the way for potential future advancements.

Here’s how Ethereum is rising like a phoenix post Merge

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After years of development and delay, the enormous upgrade of Ethereum known as the Merge is finally under way, transferring the digital machinery at the centre of the second-largest cryptocurrency to a system that uses a great deal less energy.

At the time of publication, the network has officially stopped depending on power-hungry cryptocurrency miners, having reached a critical point of no return.

The long-awaited upgrade is still being watched closely by Ethereum’s core developers, though. The key metrics that will show whether validators, the administrators of Ethereum’s new proof-of-stake network, are acting as expected and adding new transactions to the blockchain’s ledger are still being anxiously awaited by blockchain developers and enthusiasts gathered in Zoom conferences and joyful livestreams.

Switching from the proof-of-work method of running a blockchain to the proof-of-stake method is no easy task. Before the Merge took place, Justin Drake, a researcher at the nonprofit Ethereum Foundation, told local media,

“The metaphor that I use is this idea of switching out an engine from a running car. I like to think of it as kind of like the switch from gasoline to electric .”

If Ethereum’s dress rehearsals for the Merge are any indication, some initial problems are anticipated. But if it works, the benefits will be enormous. Already, Ethereum should use 99.9% less energy than before. One assessment compares it to Finland abruptly shutting down its electrical grid in terms of carbon output.

The network, which is home to a $60 billion ecosystem of cryptocurrency exchanges, lending organisations, non-fungible token (NFT) marketplaces, and other apps, will be upgraded, according to developers, if the Merge is successful in its entirety.

How ready was the Ethereum community to welcome the merge?

There were many methods available to those who wished to view the ETH network’s historic switch to proof-of-stake (PoS) in real-time.

An hour and a half prior to the anticipated time of the Merge, the Ethereum Foundation had organised an Ethereum Mainnet Merge Viewing Party live feed, which promptly went live on YouTube at 4:00 am UTC.

The Merge happened after the network’s total terminal difficulty, which was 58750000000000000000000, was reached. After that, the next block would have been created using a proof-of-stake algorithm.

The Ethereum Cat Herders, writers from Bankless and The Daily Gwei, and other guests are scheduled for The Ethereum Foundation’s live webcast.

Other “notable guests” were also alluded to in the description, possibly including Ethereum co-founder Vitalik Buterin and “The Daily Gwei” founder Anthony Sassano, who have both taken part in testnet live streaming in the past.

Viewers who joined two hours before The Merge could “participate in a POAP art canvas,” according to the YouTube description.

Google, Wenmerge.com, and Blockchain.com all maintained a rolling tally of the current total Total Terminal Difficulty and a projected Merge time for users who desired the most up-to-date countdown to the Merge. BTC.com also has a countdown of its own.

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Here’s how the Ethereum merge will alter the cryptoverse

Ethereum Merge: Talk of the town

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Source: Twitter

Furthermore, now with the completion of the Merge, ETH was priced at $1,632.81 with a steep rise of 2.63% over the last 24 hours.