Category Archives: Smart Contracts
Nov 23, 2023 | Updated Nov 23, 2023
Script is a purposefully non-Turing complete language and this makes smart contracts on Bitcoin limited in their functionality.
Layer-2 blockchains and solutions are present for Bitcoin to improve its smart contract offerings while keeping its security intact.
Bitcoin is the worlds first blockchain and cryptocurrency. Its primary use case is peer-to-peer payment transfers. Often Bitcoin is referred to as digital gold, with it offering a secure and decentralized way to store and manage value. This core value proposition is what led Bitcoin to become the most popular and widely used crypto network so far. And its these same core values that many other networks have taken inspiration from while creating new use cases and innovations.
To explain, while Bitcoin was created purely to store and manage value in a decentralized manner, other networks expanded into other territories, creating ways to host decentralized applications. Decentralized apps (DApps) have taken the world by storm, and as such, there has been a push to create these types of apps that work using the most popular network, Bitcoin. However, this was not the reason Bitcoin was created, thus its a bit more complex than many smart-contract-ready networks like Ethereum.
So how do Bitcoins versions of smart contracts work? And what kinds of functions are available using this method?
Lets explore the concept of Bitcoin smart contracts and dive into the different types of smart contracts on the Bitcoin network.
Yes, the Bitcoin blockchain supports smart contracts. Developers can use Script, a scripting language, to write and deploy smart contracts on Bitcoin.
So, why is Bitcoin never the first thing people think when the topic of smart contracts pops up?
Often, youll hear people say Bitcoin is not Turing complete. But in fact, thats not quite true. Instead, its all to do with something called opcodes. Or more, Bitcoins lack of them.
Opcodes are essentially small pieces of code that represent functions that can be executed on a specific network. On some blockchains, for example, Ethereum, some of these opcodes have the power to read and write the current state of the blockchain. Then from there, you can combine many of these opcodes to create complex automated tasks triggered by a blockchain transaction. These groups of opcodes are better known as smart contracts and are responsible for countless blockchain apps and platforms.
However, Bitcoin script doesnt contain these types of opcodes. That also means that Bitcoin doesnt have a recorded current state at any given moment. Instead, it simply records who owns what, and allows people to send and receive coins via UTXOs, with a limited choice of conditions of how that value transfer executes.
So, now you know why Bitcoin smart contracts arent exactly what you might expect, so lets see how they work.
Bitcoin smart contracts, like their counterparts on other networks, are simply pieces of code that automatically execute when some predefined conditions are met. So, you can imagine, they work in a similar way.
Firstly, its important to know that Bitcoin operates using its own computing language: Script. And script uses something like a lock and key system to execute smart contracts. The sender sets a condition or rule in order for the transaction to be processed acting as the lock. To follow, the recipient must provide a matching key also a piece of code in Scriptthat fulfills the condition set by the sender.
Now, what kind of conditions can be set?
Lets find the answer to this by exploring the various types of smart contracts present on Bitcoin.
This is the most common type of transaction. The sender addresses Bitcoin to the receivers public keys hash. To access the funds, the receiver must prove they own the corresponding private key.
This is like locking a box and giving the key to one person.
MultiSig requires more than one signature for a transaction to be valid. An example is a 2-of-3 MultiSig, which needs at least two signatures from a group of three to execute a transaction. This adds an extra layer of security and is often used by businesses.
This is like a safe that needs two or more keys turned at the same time.
This allows a transaction to be created at any given time, but only be valid at a specified future date or block height. Its a way to postdate a Bitcoin transaction and is useful for various financial agreements. Its a sort of timelock that pertains to transactions.
Time-locked transactions were made possible with BIP-65 and BIP-112s introduction of new opcodes concerning the nLockTime and nSequence fields.
Essentially, these opcodes allow an entry to specify the earliest time it can be added to a blockstopping the transaction from completing until a certain number of blocks, or amount of time has passed. In short, these time-locked opcodes are important, as without them the entire Lightning network could not exist!
Instead of locking outputs to a public key, P2SH locks them to a scripts hash. The spender needs to provide the script matching the hash and satisfy its conditions. This enables complex scripts without burdening the sender with their details. P2SH came into play with the BIP-16 upgrade.
For instance, you challenge a friend with a puzzle. If they solve it, they get the bitcoins.
P2TR is a privacy-preserving complex script that allows multiple parties to create a signature that looks like a single one, enhancing privacy and efficiency.
It is a combination of P2PKH and P2SH with a lot more privacy. This was part of the BIP-341 proposal, popularly known as the Taproot upgrade.
Miniscript was introduced to make the complex spending conditions (that Bitcoin was already capable of) much easier for developers to use and implement. In short, its a simple coding language that facilitates a number of functionalities. Essentially it allows your Bitcoin wallet to handle more advanced actions like requiring multiple keys for an account or having a wallet with some spending conditions that are only active after some amount of time.
While this isnt strictly a smart contract, this is one of the more flexible custody schemes miniscript offers.
Now that you know about some advanced functions, lets dig into something more tangible.
What about NFTs on Bitcoin do they even exist in the first place?
The Ordinals protocol launched on Bitcoin in January 2023, enabling Ordinal NFTs by attaching data to individual Satoshis. Each Satoshi gets a unique number through an intuitive ordering system.
Ordinal NFTs reside fully on the Bitcoin blockchain without the need for a separate token. However, that means, inscribed Satoshis now compete for block space on the network, resulting in a spike in network fees.
BRC-20 a token standard for Bitcoin Ordinals uses JSON data to facilitate various token functions. At present, the BRC-20 token standard offers three primary functions:
The BRC-20 token standard is relatively new and young. Hence, the functionalities are limited and not entirely user-friendly.
Bitcoin L2s or layer-2 solutions can help Bitcoin overcome this limitation.
Bitcoin smart contracts have limited functionalities. However, layer-2 blockchains on Bitcoin allow developers to code more complicated smart contracts.
To better understand how they work, lets look at a few examples of Bitcoin layer 2 chains.
The Lightning Network (LN) is a layer 2 scaling solution for Bitcoin, designed to facilitate fast and low-cost transactions by conducting most of the transactions off-chain. It operates using payment channels which are like private off-chain tunnels between users that facilitate payments.
Apart from instant payments and low fees, LN enables the creation of more complex smart contracts like Hashed Time-Locked Contracts (HTLCs) within Lightning Apps or LApps. These contracts are programmable, most often implemented for functions such as micropayments, instant swaps, and streaming payments.
The Lightning network is also home to Discreet Log Contracts (DLCs). To clarify these contracts allow two parties to engage in a bet, using a connection to an oracle to verify real-life events. While the oracle is crucial for the settlement of these bets, it is not directly involved in the transactions that create and settle the contract. These are directly negotiated among the parties making the bet.
Stacks is a chain that works alongside Bitcoin. It enables developers to build smart contracts and decentralized applications (dApps) on top of Bitcoin.
They employ Proof of Transfer (PoX) an approach to allowing the Stacks blockchain to process its transactions while leveraging Bitcoins security.
Smart Contracts on Stacks
Using Stacks, developers can create a wide range of applications, from decentralized finance (DeFi) platforms to non-fungible tokens (NFTs) and decentralized social networks.
It acts as a more diverse and expansive ecosystem while maintaining the robustness and security of Bitcoin as the base layer.
Two applications of Stacks-based smart contracts on Bitcoin are:
Hiro Wallet: It is a non-custodial wallet enabling secure connections and transactions within the Stacks ecosystem. Bitcoin users can participate in Stacking, a reward system that distributes BTC to users for supporting the network and locking STX tokens for a specified period.
Bitcoin Naming Service (BNS): BNS, a decentralized name system for Bitcoin, similar to Ethereums ENS, saw a recent surge in registrations. To own a BTC name, users have to interact with the smart BNS contract on the Stacks chain.
Understanding how Bitcoin smart contracts work is imperative to participate safely in crypto and DeFi. Its even better when a user can understand smart contract code to assess if a smart contract is safe to interact with.
And as with using smart contracts on any blockchain, you should prioritize the security of your private keys. The best way to do that is to use Bitcoin applications through a hardware wallet like Ledger.
Ledger hardware wallets keep private keys offline at all times and also enable clear signing. This helps users clearly read the transaction details before they approve it.
Moreover, Ledger hardware wallets offer support to Hiro Wallet by which users can pair them and start stacking STX and delegating them to trustworthy validators.
Now you know everything about smart contracts on Bitcoin, youre ready to dive in. So get yourself a Ledger, connect to Ledger Live, and start exploring the Bitcoin ecosystem. The time for education is now, and accessing Bitcoin from the Ledger ecosystem is secure and easy to understand.
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In the fascinating world of blockchain technology, smart contracts are like the bricks that build a house. They bring automation, transparency, and trust to decentralized applications. But just like a brick house isnt immune to a storm, smart contracts have their own set of vulnerabilities. Lets take a journey into the hidden dangers that threaten these digital agreements and explore how we can make them stronger.
Re-entrancy Attacks: The Unseen Threat
Imagine a function in a contract being called over and over again before it can finish its previous tasks. This is what we call a re-entrancy attack. Its like a silent intruder that can change the contracts state, possibly draining funds or causing unexpected behaviour. Remember the DAO hack in 2016? That was a re-entrancy attack. It taught us a valuable lesson about the importance of handling state changes and external calls carefully.
Unchecked External Calls: The Weak Spot
Smart contracts often need to fetch data from outside sources, like other contracts or oracles. But if we dont check these external calls carefully, were leaving a door open for vulnerabilities. An unchecked response could mess up the contracts logic, compromise its integrity, and potentially lead to significant financial losses or system malfunctions.
Integer Overflows/Underflows: The Math Gone Wrong
When arithmetic operations in smart contracts arent handled properly, we can end up with integer overflows or underflows. These can result in unexpected calculations, potentially allowing attackers to manipulate values and disrupt the contracts intended functionality.
Access Control Issues: The Unlocked Door
If a smart contract doesnt have proper access controls, its like leaving your house door unlocked. Unauthorized users might get the ability to execute critical functions or change the contracts state. This can lead to unauthorized manipulation of data or functionalities, posing severe risks to the entire blockchain system.
Front-Running: The Race to the Front
Front-running is like a sneaky racer who exploits the predictability of transactions by changing their order within a block. Attackers can get ahead by executing transactions before others, potentially gaining an unfair advantage or disrupting the contracts intended execution flow.
Unchecked User Input: The Open Gate
If user inputs arent checked properly, its like leaving the gate open for various vulnerabilities. Improper handling of user inputs can lead to denial-of-service attacks, unexpected behaviour, or unauthorized access, compromising the security and stability of the contract.
Mitigating the Risks: Building a Stronger House
Understanding these vulnerabilities is like knowing where the weak spots in our house are. We can then work on strengthening these areas. By adopting secure coding practices, conducting comprehensive audits, and using established frameworks and tools like formal verification, we can significantly reduce these risks. Rigorous testing, continuous monitoring, and fostering a security-first mindset within the development community are key to building a stronger house, or in our case, a more secure smart contract.
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Critics have questioned the security of Blast's smart contracts.
Since Blast enabled deposits on Monday, November 21, users have transferred stablecoins and ETH worth over $400M to the platform in just 3 days.
An Ethereum Layer 2 designed to maximize staking yields, Blast is backed by the NFT marketplace Blur, alongside Venture Capital investors Paradigm and Standard Crypto. But although its high-profile supporters have helped the new platform attract users, the multi-signature Gnosis Safe that holds deposits has cybersecurity hawks concerned.
Blasts deposit mechanism is governed by Ethereum smart contracts developed by the Blur founder, known pseudonymously as Pacman.
As Polygon developer Jarrod Watts has pointed out, this means Pacman could potentially have access to all funds deposited on the platform.
In an X thread exploring the topic, Watts observed that the ownership of the contract has been transferred to a multi-signature Gnosis Safe contract, which requires 3 out of 5 signatories to execute a transaction.
This is a common strategy among Web3 developers who want to gain the trust of users while maintaining a contracts upgradability. By dividing signatures among parties, the use of Gnosis Safe contracts helps to build trust, while still maintaining the possibility of updating applications at a later date, providing enough signatories cooperate.
But although the practice is fairly standard, Watts flagged one major concern with Blasts Gnosis signatories: all 5 of these are pretty fresh wallets, with unknown owners.
For their part, Blast and Pacman have been suspiciously silent on the matter.
Unlike other L2s, which have dedicated security councils made up of independent members holding one Gnosis signature each, there is no publicly available information explaining who has the power to amend Blasts smart contract.
Despite condemning its security failings, Watts ultimate conclusion was more muted: Personally, if I had to guess, I dont think the funds will be stolen. Moreover, he acknowledged that the idea for native L2 yields was genuinely original.
In an X thread, Pacman explained that Blast was largely inspired by existing limitations that have constrained Blur.
For example, they said the new L2 will lower NFT gas fees and enable institutional-grade perpetual futures contracts based on NFT floor prices.
Pacman also noted that once users deposit crypto assets in Blurs bidding pool, they can no longer be staked to generate rewards. This means that Blur users are losing money through depreciation.
Although Blast was designed to solve this problem for Blur, the projects founder said it will also be useful for other decentralized apps that face similar issues.
When users deposit ETH, they receive equivalent rebasing L2 tokens in return, while a Blast smart contract automatically stakes their deposit via Lido liquid staking pools. Meanwhile, users who bridge stablecoins receive USDB, Blasts auto-rebasing stablecoin, which generates yields via MakerDAOs on-chain T-Bill protocol.
Although Blast was designed to solve this problem for Blur, the projects founder said it will also be useful for other decentralized apps that face similar issues.
Driven by an influx of Blur users, the $400M total value locked (TVL) on Blast puts on on par with major L2s like Base and zlSync Era. Considering its comparatively simple architecture, some critics have argued that it doesnt deserve to be called an L2. But whatever its technical merits, Blasts impressive inflows demonstrate a clear demand for what it offers.
In the end, the project is in its infancy. At the moment, governance issues and a lack of transparency threaten to limit its potential. But when withdrawals open in 3 months time, Blast is expected to debut more advanced features. Hopefully, it will also rectify the current security concerns.
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In the wake of Bitcoins rise, we have witnessed significant demand for decentralized applications and smart contracts.
Likewise, the need for scalable and efficient blockchain solutions has never been more valid given the issues that plague Layer 1 chains such as Ethereum.
These solutions dedicated to enhancing the scalability and efficiency of Layer 1 blockchains are referred to as Layer 2.
In reference to our article on Layer 1 Blockchains, we understand that Layer 1s are the foundation, base layer, or structure upon which the entire decentralized ecosystem is built.
While layer 1 chains have paved the way for decentralized applications, they have scalability problems that affect the transaction throughput and confirmation times as users increase.
As a result, users may experience high fees and slow transaction processing during periods of network congestion.
Layer 2 are blockchain solutions to Layer 1. These layer 2 solutions are created to improve and correct the scalability problem inherent in Layer 1 blockchains by moving certain processes off-chain.
Layer 2 chains or protocols operate on top of independent and existing blockchains whilst handling transactions or smart contracts in a more scalable manner. They seek to reduce the burden on the main blockchain, enabling faster and cheaper transactions.
Layer 2 protocols are mostly parallel or dependent on the framework of Layer 1 (framework often includes (consensus mechanism, sharding, e.t.c).
However, there are Layer 2 protocols independent of the main chain or Layer 1 framework, as in the case of Polygon Network.
Although there are four types of Layer 2 solutions, namely state channels, sidechains, plasma, and rollups, our main focus is on Rollups.
Before we dive into Rollups, lets briefly discuss other types.
Rollups work to improve layer 1 blockchains by processing every transaction upon Layer 2 networks before submitting them for validation on Layer 1.
The "rollup" is used to describe the way the Layer 2 chain bundles up many different transactions to be submitted on the main chain.
Rollups are of two types - Optimistic rollup and Zero-Knowledge rollup.
The difference is in how they validate the transaction before Layer 1 processes them.
While Optimistic rollup is optimistic that the transactions are valid, Zero-knowledge rollup "attempts" to prove the validity of the transactions without checking the content.
Examples of Layer 2 protocols using optimistic rollups include Boba Network, Arbitrum, and Optimism.
With ZK Rollups, some of the Ethereum Layer 2 protocols include Starknet and ZkSync.
Rollups provide the main chain with cryptographic information that helps to verify transactions quickly. They also check for correctness of data, which reduces the main chain workload by more than half with verification and publishing on layer 1.
ScalabilityThis is the primary benefit of Layer 2 solutions. As transactions are offloaded from the main chain, Layer 2 blockchains can handle a much higher volume of transactions, reducing congestion and lowering fees.
Following a reduction in on-chain activity, transaction fees on Layer 2 solutions are generally lower than those on Layer 1 blockchains. This makes decentralized applications more accessible and cost-friendly for users.
Increased Transaction SpeedLayer 2 blockchains provide faster transaction confirmation times since the majority of transactions occur off-chain. The improved speed is vital for applications that require real-time interactions.
Less Environmental Impact
By taking off the strain on the main blockchain, Layer 2 solutions offer a sustainable blockchain ecosystem, as they often require less energy consumption compared to their Layer 1 counterparts.
Layer 2 Challenges While Layer 2 blockchains present substantial advantages, they are not without challenges.
The security of off-chain transactions and maintaining interoperability with the main chain are considered to be issues that limit the adoption of L2s.
In addition, widespread adoption and standardization of Layer 2 solutions will be necessary to achieve a seamless and interconnected decentralized ecosystem.
Layer 2 blockchain solutions provide a critical step in the evolution of blockchain technology, as they address the scalability concerns that have affected the broader adoption of decentralized applications.
Given the blockchain space continuous innovation, Layer 2 solutions would likely play a pivotal role in creating a more scalable, efficient, and sustainable decentralized future.
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Crypto investors anticipate bull markets as they are closely associated with massive capital gains for smart individuals, whales, and institutions that invest wisely during bear markets.
The market is showing signs of recovery from a bear that has reigned supreme since 2022 began. It was fueled by several macroeconomic factors, including the collapse of major crypto institutions such as lending and borrowing platforms, increased hacks and malicious technical attacks on DeFi protocols, centralized exchanges, and the downfall of billion-dollar ecosystems.
The current macroeconomic factors indicate a far more positive outlook for the future of DeFi. Major organizations like BlackRock and Grayscale have filed crypto ETF applications, showcasing an increasing pro-crypto investor outlook.
Chainlink is a decentralized bridge run by advanced smart contracts that mediate between on-chain and off-chain data. The project was conceived in 2017 by Sergey Nazarov and Steve Ellis, who integrated the networks smart contracts in 2019. Chainlinks open-source technology platform runs a network of oracles that link computational resources with on-chain data. The platform contains a system of nodes that work interchangeably to collect, approve, and execute data from numerous sources through the knowledge of blockchain technology and cryptography. The node operators are typically rewarded with LINK, the native crypto asset of the network, which they can redeem for stablecoins or cash out for fiat. Chainlink is one of the largest cryptocurrency platforms in the space.
Bitcoin forks have become increasingly popular in the last decade. The rise, advancement, and improvement of technology has led to the attempts of many developers to solve Bitcoins trilemma challenges. However, most forks do not achieve mainstream adoption as they clone Bitcoins code and have no real-world utility to justify their reason for forking the network. Only a few, like Bitcoin Spark, might bear the true potential to disrupt DeFi.
In the evolving world of digital currencies, utility or solving blockchain-related challenges is the key to achieving success. The Bitcoin Spark founders conducted years of research to develop the ideal Bitcoin hard fork that other Bitcoin alternatives cannot compete with. The developers have a technology background and are actively involved in developing the project.
They have found a way to introduce more advanced smart contracts than those issued by the Ethereum blockchain while scaling transaction speeds to outperform Bitcoins throughput. Leveraging current technology has also allowed the developers to make the Bitcoin Spark network lightweight for easy management and decentralization.
Bitcoin Sparks fork has yielded a high-performance blockchain with high transaction speeds, increased scalability, and reduced transaction costs, which the team is working to eradicate from the network. By establishing on-chain and off-chain income sources, Bitcoin Spark will gain enough funds to replenish mining pools and constantly reward the founders to an extent where charging transaction fees will not be required.
The network will, therefore, transition into an autonomous network controlled algorithmically by a stream of computer-generated systems that enhance decentralization and promote quality for all, regardless of the mining equipment used or the stake size.
Bonus giveaways are an excellent way for new DeFi starters to award early developers. Bitcoin Spark is planning an ICO event that will revolutionize the entire ICO opportunity the investors have had since phase 1 began. The bonus event will include massive giveaways worth hundreds if not thousands of dollars in the next few months, heavily rewarding participants for their participation. The details concerning the bonus are still being planned and will be relayed through Bitcoin Sparks social accounts, including the projects official medium account. To get the updates and become an early participant in the event, follow Bitcoin Spark on all social media platforms.
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Kaspa price rally stunned the entire crypto market as the altcoin, within a week at the beginning of November, shot up by nearly 200%. Adding its rise throughout the year, the altcoin took the spot of the best-performing cryptocurrency year to date. But behind its massive success, there is nothing but a hollow Layer 1 project that offers nothing worthy enough to make its token a $3 billion project.
Kaspa garnered attention this past month owing to its spectacular rally, but with it came critics as well. Some did not appreciate a new small-cap token rising to such heights, while others genuinely looked into the project to highlight its flaws. CyberCapital founder Justin Bons took to X, formerly Twitter, to showcase that Kaspa is not just lacking a few things; it has basically nothing that makes it a big deal.
He highlighted that Kaspa has no Turing-complete smart contracts or Proof of Stake (PoS) consensus mechanism. PoS, in a way, has become the default and the standard consensus mechanism across the crypto industry as it is not only energy-conservative but also far more secure and decentralized.
Furthermore, without smart contracts, Kaspa is simply a scalable Layer 1 chain that offers practically nothing. This is because, since the advent of cryptocurrencies, Bitcoin has been acting as a scalable L1 chain, albeit offering significantly massive scalability.
Although Kaspa stated it might bring smart contracts in the future, Bons noted that there is an issue with it as well, saying,
"Kaspa claims they will implement smart contracts in the future. But this takes the form of deploying L2s to achieve this, a terrible non-solution. This is woefully inadequate, considering the massive trade-offs in "L2 scaling" Promises should not be taken at face value: The reason why KAS cannot directly implement smart contracts Is [sic] because of the "GhostDAG" consensus algorithm DAGs, generally speaking, are unable to maintain a reliable global state Due to branches not always converging, a trade-off for DAGs massive scalability quality.
Another key feature that the project is lacking is governance. Given the massive adoption of crypto across the globe, governance is the one true form of ensuring the decentralization of a chain. It is further important to ensure that the governance is built on the same blockchain as the project to ensure immutability. Bons added,
"With slogans like "led by the people" & "democratic" Is straight-up deceptive, as there are no robust voting systems in place at all, as I do not count Discord...
Thus, this growth needs to be justified by Kaspa and its creators, as right now, the project gave no reason as to why it should be worth over $3 billion.
Kaspa price trading at $0.1405 has noted a 22% increase in the past three days after losing a chunk of its gain from the previous rally. The altcoin was closing to flipping its bullish momentum to bearish, but last-minute recovery prevented a crash that could have brought devastating losses to its investors.
Continuing its massive year-to-date 2,587% rally, KAS is exhibiting bullish signals across the Relative Strength Index and the Moving Average Convergence Divergence (MACD).
This is key in ascertaining KAS forms fresh 2023 all-time highs of $0.1437. As long as investors choose not to book profits, the altcoin could continue growing even after marking the new 2023 highs.
KAS/USD 1-day chart
However, given how lucrative the option looks, KAS is not safe from a sudden crash caused by sudden selling among investors. Such an incident would send Kaspa price falling towards $0.1200, losing which would invalidate the bullish thesis and result in further decline below $0.1000.
Some victims of the $48 million KyberSwap hack are no doubt waiting anxiously for the DeFi platforms attacker to make their next move.
Others, though, seem to be taking a more proactive approach: talk directly to the exploiter through the Ethereum blockchain.
Hello! You did amazing job, you are amazing man! one person wrote in a message attached to a transaction overnight.
Im drained for over $155k USDC, you can check my wallet. Could you please send some $ to help my family? I can get you the funds into any wallet just help me out please! :(.
Other messages are much more formal: Hello sir/madam! I was lp [liquidity provider] on [Arbitrum] 259809.7 DAI.
I would like to negotiate, and ask how much would you be willing to take as a bounty? I believe code is law, and its totally up to you. Thanks in advance!
KyberSwap aggregates liquidity across DeFi into a single pool, enabling services such as decentralized exchanges and wallets to offer end-users instant token swaps through a web of smart contracts.
Chain watchers first spotted something was up with KyberSwap on Wednesday evening. Millions of dollars in crypto were suddenly siphoned from KyberSwap contracts deployed to Ethereum, Polygon, Coinbases Base, Arbitrum and Optimism, with the latter two hardest hit.
A complicated series of flash loan attacks and other targeted exploits had resulted in emptied token liquidity pools.
KyberSwap responded by urging users to pull funds from the platform, with about $77 million quickly withdrawn. Now, less than $8 million is kept with KyberSwap, per DeFiLlama.
So far, the stash remains in the hackers various addresses. After the attack subsided, the hacker initiated a transaction with the following message:
Dear Kyberswap Developers, Employees, DAO members and LPs, Negotiations will start in a few hours when I am fully rested.
That was about a day and 18 hours ago. Nothing since.
While some messages tell the hacker they could keep some of the crypto if they return the rest, its unclear whether notes like if that money are gone my children can school anymore, because dont have money again, please help me are legitimate stories from real victims.
Some messages are more lighthearted: One says: hi. congrats for the hit thats a crazy thing, you looks like a smart, arrogant & funny guy, could we talk in telegram or else? 🙂
Another: Hi legend pls send me 1mill to become the top g for life, thx love u
There are others that offer advice: I dont know what you want to do next, but just want to remind that stablecoins like USDC have an address blocking function in the smart contract code. A few even apparently sent tips, including some for 0.001 ETH ($2.06) and one for 0.0000069 ETH ($0.014).
Often hackers wait days, months, or even years before attempting to launder stolen crypto. Sometimes, the hacker returns the funds after taking 10% or 20%, playing off the whole thing as a gray-hat stunt.
Who knows where the Kyber case will end up.
In any case, it wasnt bad enough that Ethereum network participants had to cryptographically verify the integrity of CryptoDickButts and Pixelverse Poops.
Now, they must forever ensure nonsense like, Could you teach me your ways senpai? I too would like to make generational wealth in seconds please, remains untampered-with, forever written to the blockchain. Great.
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As a tech enthusiast and writer, Ive been closely watching the evolution of software development. Its 2023, and the pace of innovation in this field is astounding. There are several groundbreaking technologies emerging that could potentially revolutionize, or even end, traditional coding as we know it by 2024. Heres a look at seven such innovations:
Artificial Intelligence has already made significant inroads in the field of coding. AI-assisted tools, such as GitHubs Copilot, can now write code snippets and suggest improvements to existing code. These tools learn from a vast repository of code and can significantly reduce the time developers spend on writing boilerplate code.
Example Code Snippet:
Low-code and no-code platforms have democratized software development, enabling people with minimal coding knowledge to build applications. These platforms provide intuitive interfaces where users can drag and drop components to create apps. This could lead to a future where traditional coding is reserved for highly specialized tasks.
Quantum computing, though still in its infancy, promises to bring about a paradigm shift in how we approach problem-solving and algorithms. Quantum algorithms have the potential to solve complex problems much faster than traditional computers.
The advancements in neural networks, a subset of AI, have been phenomenal. These networks are getting better at understanding and writing code, potentially leading to AI systems that can develop entire software applications with minimal human intervention.
Blockchain technology and smart contracts introduce a new way of writing decentralized applications. This innovation could change how we think about
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice, and is solely the writers opinion.
Amid the ongoing bull run, Cardano [ADA] concluded its 2023 Summit in Dubai earlier this month. The projects co-founder Charles Hoskinson shed light on some crucial matters on the sidelines of the event. In particular, he emphasized the importance of building a unique global governance system acceptable to authorities from across the world. This way, an alternate legal system around the smart contracts ecosystem can be built, recognized by institutions from across the world.
Hoskinsons concerns are critical for us to understand how the crypto industry is trying to develop a global governance and legal infrastructure in the face of a myriad of regulatory actions across the world.
Lets dive right into the history of the cryptocurrency that still remains one of the most popular proof-of-stake- (PoS) based projects.
After Ethereum [ETH] co-founder Charles Hoskinson left the project due to disagreements, he teamed up with another wizard who used to work at Ethereum, Jeremy Wood. The duo began working on the development of the Cardano project in 2015. The project finally got launched two years later in 2017.
The Cardano blockchain uses aproof-of-stake (PoS) consensus mechanism. Its PoS protocol is called Ouroboros that can run both permission-less and permissioned blockchains. Hoskinson is very appreciative of Ouroboros due to its energy efficiency.
PoS is frequently contrasted with proof-of-work (PoW) as both consensus mechanisms are behind most of leading blockchain networks.It is critical at this juncture that we understand what both these mechanisms are and how they differ.
A consensus mechanism consists of the rules and protocols that govern how a blockchain network reaches an agreement on its state. PoW requires the utilization of computational power by miners to solve challenging mathematical riddles and validate transactions. Instead of requiring miners to solve problems, PoS requires validators to stake some of their coins as collateral.
PoS is considered more scalable and energy-efficient than PoW. The Cardano network was one of the early adopters of the PoS mechanism.
In the beginning, the Byron Era laid the groundwork for Cardano. It established the mainnet and introduced other foundational tools. A federated network, dominated by Input Output Global and Emurgo, marked the inception.
The Shelley Era witnessed a hard fork in July 2020, with Cardano transitioning from centralized Byron rules to a decentralized setup. The communitys stake pool operators took the reins, showcasing Cardanos commitment to decentralization.
The following Goguen Era unveiled progressively. It brought forth features such as Smart Contracts and dApps. The Goguen Era took place in three steps: Allegra, Mary, and Alonzo eras.
The Allegra Era introduced token locking support.The Mary Era pioneered native tokens and multi-asset functionality. The Alonzo Era enabled smart contract support, solidifying Cardano as a versatile platform for diverse applications.
The subsequent Basho Era focused on scaling and optimization. Innovations included sidechains for enhanced network capacity and the introduction of parallel accounting styles, broadening use cases, and interoperability.
The latest Voltaire Era is focused on decentralized governance, empowering the Cardano community with voting rights on network evolution, technical enhancements, and funding decisions.
Since its launch in 2017, ADAhas emerged as the eight-largest cryptocurrency. At press time, its market cap stood at $13 billion. Its price has risen more than 50% since the recent crypto rally began in mid-October.
Cardanoscryptocurrency is named ADA after Augusta Ada King, Countess of Lovelace (18151852), who is commonly regarded as the first computer programmer.
When the Securities and Exchange Commission (SEC) in the United States sued Binance [BNB]andCoinbase [COIN] in early June this year, the regulating body included ADA in its newly classified list of securities.
Cardano vehemently dismissedthe SECs claim that ADA can be viewed as a security.
Regulation through enforcement action does not provide either the clarity or certainty to which both the blockchain industry and consumers are entitled. By design, blockchain is transparent, auditable, immutable, and fair. It needs regulation that recognizes those values and understands the role blockchain can play in a modern world.
Besides DeFi and crypto, another major development that has grabbed public attention is ChatGPT. It is an OpenAI-developed large-scale artificial intelligence (AI) language model trained on an enormous amount of data. This allows the bot to understand and generate responses to complex queries from the user.
It is a language model whose primary purpose is to generate responses like a human. The bot can make logical inferences if presented with data from the indicators and can even analyze multiple indicators to make an overall inference.
Although it tries to be accurate, the user must verify the information it generates as the bot isnt 100% accurate. It merely mimics a human.This is an important distinction as it forces the prerogative of the user to fact-check and verify what ChatGPT says.
I decided to test if ChatGPT can answer some of my queries regarding the Cardano network and its native token, ADA.
At first, I asked it about the impact of the Ripple [XRP]-SEC verdict have on the status of ADA (Cardanos native token) as a security.
The court had given a ruling in July that while the institutional sale of XRP tokens constituted a sale of securities, the programmatic sale of those tokens to retail investors didnt meet the criteria of being a security agreement.
ChatGPT said its limited knowledge until January 2022 made it unaware of a definitive verdict on the Ripple case.
It was at this point that I decided to jailbreak it using the DAN (Do Anything Now) prompt.
While the classic version said it didnt have access to real-time information, the jailbroken version talked at length about the potential implications of the Ripple-SEC verdict for ADA.
But the bot said the verdict sent shockwaves through the crypto space. This is completely untrue as the crypto community celebrated the verdict as a partial victory for Ripple.
The bot further claimed that ADA emerged relatively unscathed as regulators provided clear guidelines distinguishing it from securities. This again is completely false as the regulating body had specifically classified ADA as a security in its lawsuits against Binance and Coinbase. Recently, the SEC again reiterated its claim regarding ADA being a security in its latest lawsuit against Kraken crypto exchange.
ADA was exchanging hands at $0.3961 at the time of writinga surge of nearly 60% since the bull run began in mid-October. Now, let us look at some of the on-chart indicators of ADA.
Both its Relative Strength Index (RSI) and Money Flow Index (MFI) rested comfortably above the neutral 50-level. The metrics suggested a further bullish price movement in the short run.
Its here that one should note that besides technical skills, a traders experience is of great importance in anticipating a price rally.
I asked ChatGPT what it thought the price of Cardano would be by the end of 2023.
The bot claimed ADA will become one of the top-performing cryptocurrencies, thanks to itsgroundbreaking developments, widespread adoption, and a surge in demand. But it refused to provide a specific price prediction.
I again asked it the same question using a different jailbreak prompt. (There are hundreds of such prompts available online.)
This time, the bot was able to provide a clear answer but seemingly, a preposterous one. It said it expected ADA to rise to $5a 12x surge within a month. Though the world of crypto is indeed very volatile and unpredictable, a 12x surge within a month is a very tough tasknearly impossiblegiven the metrics.
I then asked it to predict ADAs price towards the end of 2024.
The bot said ADA will reach $10 by the end of 202425x surge within a year. It looks like the bot assumed it would anyway hit $5 by December 2023 and keep rallying further.
It is possible to go on and on taking different indicators together, altering and tweaking their input values, and backtesting their signals. However, we shall move towards risk management. Risk management is what separates a trader from a gambler. It also helps undercut the emotions a trader might feel during a trade.
Fear almost always arises when the trader has risked more than they can stomach. This can negatively impact profitability.
Diversification is necessary because crypto is a highly volatile market. The assets are, for the most part, positively correlated with Bitcoin.
ChatGPT predicted ADA will reach the price mark of $10 by the end of 2024. Its on-chart metrics also suggested a further price rally.
However, it is important to remember that though ChatGPT responds to humans, it isnt 100% accurate. Diligent traders must analyze on-chart indicators and the latest news to make their investment decisions.
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