The week in review: Ethereum miners rake in record fees
Decentralised finance (DeFi) continues to shake up the crypto world, with Ethereum miners enjoying record transaction fees this week. Elsewhere, Russian authorities baffle the community with amendments to legislation prohibiting mining rewards. And stateside, Michigan saw success using blockchain voting at a Democratic convention.
Here’s all the biggest crypto headlines this week.
Ethereum miners generate ATH fee revenue of $17m
With the decentralised finance (DeFi) boom in full swing, Ethereum miners are raking in huge gas fees. According to The Block research, Ethereum miners generated all-time high fee revenue of $17 million on 1 September.
That figure is 3.7 times higher than the previous record amount, set during December 2017 and January 2018 when crypto prices skyrocketed.
At the same time, bitcoin miners generated $1.5 million in transaction fees, totalling only 9% of Ethereum miners’ fees. Bitcoin miners’ all-time high is $21.4 million, which was also set during the December 2017 bull run.
Larry Cermak, director of The Block research, says he believes the surge in Ethereum fees, and thus miners’ revenue, could result in an increase in prices of Ethereum miners in the secondary markets. If this holds true, mining chip manufacturers like AMD and Nvidia could see a significant spike in demand.
Russian ministry proposes amendment to law banning crypto transactions
Russian authorities continue a back-and-forth in crypto regulations, even after passing its first crypto law.
Russia’s Ministry of Finance has reportedly proposed a set of amendments to the law on “Digital Financial Assets” (DFA), effectively banning many operations associated with crypto.
Local news agency Izvestia reported that the proposed amendments will include a “blanket ban on any operations with virtual money for individuals and individual entrepreneurs”, except during three scenarios. These include obtaining assets through inheritance, bankruptcy and enforcement proceedings.
In a bid to prohibit miners from receiving mining rewards, the amendments determine standalone crypto mining is legal, but “it loses its financial value because the payment is usually processed in Bitcoins and “Ethers,” Izvestia reported.
The news muddies Russia’s current legalities around crypto even more. After the nation finally passed its DFA bill in July 2020, local authorities said the regulation will be set out in another law known as the bill “On Digital Currency”. The DA bill is expected to pass later this year, with the DFA law scheduled to be adopted in January 2021, effectively banning crypto-denominated payments.
In another frosty move against crypto, Russia’s telecom regulator Roskomnadzor blocked the country’s largest crypto-related website, BestChange.ru last month.
Vitalik Buterin on why a 51% attack on Eth 2.0 “wouldn’t be fatal”
Ethereum co-founder Vitalik Buterin has dismissed concerns that a 51% attack on Ethereum 2.0 would be “fatal”.
Following the popularity of Yearn.finance’s yETH vault, which has already amassed more than 137,000 ETH on its first day, Arcane Assets’ Chief Intelligence Officer Eric Wall suggested yETH vault admins will probably end up controlling enough Ether to theoretically launch an attack on Ethereum 2.0.
ITT: We come up with fun ways yETH vault strategists can take advantage of the fact that yETH is probably going to control more than enough stake to 67%-attack ETH 2.0 PoS
— Eric Wall (@ercwl) September 2, 2020
Buterin brushed off the risks associated with 51% attacks targeting Eth 2.0, citing the shift to Proof-of-Stake (PoS).
We need to get past the myth that it’s *fatal* if one entity gets enough to 51% attack PoS. The reality is they could attack *once*, and then they either get slashed or (if censorship attack) soft-forked away and inactivity-leaked, and they lose their coins so can’t attack again. https://t.co/utash1hUDU
— vitalik.eth (@VitalikButerin) September 2, 2020
Buterin emphasised the heightened risk 51% attacks pose to Proof-of-Work (PoW) networks, used by bitcoin and Ethereum 1.0.
Senate banking committee chairman seeks clarity on crypto payment rules
The chairman of the US Senate Committee on Banking, Housing and Urban Affairs is urging the Office of the Comptroller of the Currency (OCC) to design a policy on crypto payments.
On 1 September, Sen. Mike Crapo wrote a letter to OCC acting comptroller Brian Brooks advising that it would be “prudent” to provide clarity on payments following the office’s recent announcement that national banks’ and federal savings associations are eligible to custody crypto.
“The U.S. should develop clear rules of the road that protect businesses and consumers without stifling future innovation,” read Crapo’s statement.
The letter also requested an update on any input the OCC has received related to its Advanced Notice of Proposed Rulemaking (ANPR). The June ANPR offered a comment period up until 3 August. Prompts in the ANPR included aspects related to fintech use in national banks, but Crapo specifically requested feedback related to prompts on ledger technology, cryptocurrencies and emerging payment technologies.
Crapo previously headed up Senate hearings related to blockchain and crypto as chairman of the Banking Committee.
Blockchain voting a “success” at Michigan Democrat convention
Michigan has made history as one of the first virtual conventions in the US to successfully utilise blockchain voting. More than 1,900 delegates were able to nominate candidates using blockchain voting platform, Voatz, for the state’s Supreme Court, state Board of Education, and boards at state universities.
This is the fourth time the blockchain-based voting system has been used by the Michigan Democratic Party, but it’s the first rollout at a virtual convention during the COVID-19 pandemic. While the app facilitated different elections across a few other states, Voatz is not without controversy.
The company faced public criticism for a lack of transparency, particularly in relation to data security. Researchers at MIT released a report earlier this year in which they identified security vulnerabilities within the app’s core framework, although Voatz later dismissed the report calling it “flawed”.
The bugs could potentially allow bad actors to compromise existing vote tallies and the individual privacy of users. Despite blockchain voting’s massive potential, it’s vital the companies designing such apps operate with integrity and transparency. With voting fraud such a contentious issue in the upcoming US election, could it be a solution or another false hope?