The week in review: Reddit calls on devs to submit Ethereum scaling proposals
The week kicked off with uncertainty as both the BTC price and stock markets tumbled in sync. Luckily, both seem to have recovered, though unfortunately rumours of a decoupling seem to have been squashed for the time being.
In the big wide world, John Bolton’s long-awaited Trump exposé is rumoured to have some Bitcoin revelations, there’s more good news for blockchain innovation and Reddit is looking for developers to solve Ethereum’s scaling problem. We’ve got more on all the and the rest of this week’s headlines here.
Reddit calls on developers to submit Ethereum scaling proposals for its token project
Reddit is looking for Ethereum developers to submit scaling solutions that will support its new initiative to distribute ERC-20 community reward tokens to their users.
In a post announcing the move, Reddit explained: “Our goal is to find a solution that will support hundreds of thousands of Community Points users on mainnet today, and can eventually scale to all of Reddit (430 million monthly users).”
Last month, the company announced it began beta testing two ERC-20 tokens, $MOON and $BRICK, which will be issued to members of subreddits /Cryptocurrency and r/FortniteBR, respectively. The project enjoyed a great kickoff and has already attracted over 17,500 users, who made a total of over 20,000 transfers over the past month.
However, the token project’s growing popularity may be hindered by Ethereum’s current limited throughput. Currently, the network is able to process around 10 to 20 transactions per seconds (tps) and struggles with fee spikes and network congestion.
“It’s unclear how to determine the best solution. There is a lot of code, a lot of documentation, and a lot of hype out there. But there are very few objective real-world reviews or comparisons of various products/implementations,” Reddit said. “We need the Ethereum community’s help to figure this out.”
The company spelt out specific requests for the new scaling solutions, saying: “Most existing scaling solutions focus on the exchange use case, which favors optimizing for transfers. Many of these designs don’t take into consideration the costs of obtaining tokens or entering the scaling system, which can be significant.”
According to the post, Reddit’s use case has proven to be rather expensive: “Community Points distributions have cost an order of magnitude more gas than all other operations combined, primarily due to on-chain storage costs associated with onboarding new users.”
Developers have until the end of July to submit the proposal, and all demos need to stimulate Community Points usage for 100,000 users. The post also stipulated there’s no prize for the chosen solution.
Thailand’s central bank set to prototype digital currency-based payment system for businesses
The central bank of Thailand has announced plans to prototype a new payment system for businesses based on the digital currency system it’s developing, known as Project Inthanon.
According to the Bank of Thailand’s press release, the project aims to study the feasibility of a central bank digital currency (CBDC) system and to “develop a process to integrate CBDC” with Thailand’s business platforms.
The central bank also announced that, as part of the project, it plans on integrating the CBDC prototype with the procurement and financial management system of the Siam Cement Public Company, one of Thailand’s largest building material companies. The work is set to start in July and conclude by the end of the year.
“The prototype is expected to serve as a financial innovation that enables higher payment efficiency for businesses such as increasing flexibility for fund transfers, or delivering faster and more agile payments between suppliers,” the Bank of Thailand said in the release.
First announced by the bank in 2018, Project Inthanon is a collaboration between the central bank and Thailand’s eight leading financial institutions aimed at developing a wholesale CBDC. At the beginning of the year, the bank completed a cross-border payment prototype with assistance from the Hong Kong Monetary Authority.
Trump told Treasury Secretary to “go after Bitcoin”
In an exchange around imposing sanctions and tariffs with China, Donald Trump allegedly told US Treasury Secretary, Steven Mnuchin “Don’t be a trade negotiator,” and to instead “Go after Bitcoin [for fraud]!” Mnuchin responded with “If you don’t want me on trade, fine, your economic team will execute whatever you want.” Obtained by the Washington Examiner, the exchange comes from an excerpt in former US National Security Advisor John Bolton’s new book.
It appears the conversation took place in May 2018, around the same time the crypto community celebrated Bitcoin’s 33% rise against the dollar. It’s unclear what led to the heated exchange and whether or not Trump and Mnuchin were discussing cryptocurrencies at the time.
The US’s regulatory stance around crypto has always teetered on the murkier side of things, as industry figures have called for greater clarity from regulators. Representatives from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) both expressed the desire to avoid “hindering” innovation.
Trump’s position, on the other hand, has always been clear. He tweeted: “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….”
Mnuchin’s stance appears more open-minded as he took no issue with the Libra project, as long as it adheres to US regulations.
Bolton’s book, “The Room Where It Happened” is scheduled for release on 23 June. The Justice Department has since filed a lawsuit against Bolton claiming it contains classified information. Time will tell how the ordeal will unfold.
South African bank’s $60m loss after master key is stolen
Oh, the joys of centralisation and single points of failure. South Africa’s Postbank, the banking subsidiary of the state-owned South African Post Office reportedly lost more than $3.2 million in fraudulent charges after employees allegedly stole the bank’s master key.
According to the Sunday Times, employees printed the code from an old data centre in December 2018, meaning the bank will have to replace more than 12 million customer cards. From March to December 2019, the master key was used to facilitate more than 25,000 transactions, slowly pumping out R56 million ($3.26m) from customers’ accounts.
Unfortunately for the bank, the process of replacing customer cards – both banking cards and government benefit cards – will cost Postbank more than R1bn.
An unnamed researcher from the Bank Security Twitter account told ZDNet the bank codes are generally split across various managers and executives in order to mitigate such breaches. Additionally, the banks also often change the key and alternate between key holders. The costly catastrophe highlights the dangers of having single points of failure.
The news comes during a time in which blockchain-based cryptos are surging in popularity, as highlighted in Luno’s Banking on Africa: The Bitcoin Revolution documentary. In May alone, Bitcoin trading in Africa broke a volume record just two weeks after setting the previous all-time high.
Roughly 75% of Fortune 100 firms explored blockchain initiatives
2017’s crypto boom seems to have inspired some of the US’s largest companies to experiment with blockchain technology. Based on its novelty and proven display of technological innovation, companies like IBM have heralded the tech’s potential to shake up entire industries and “even the world.”
According to research by The Block published this week, 72% of the top 100 firms on the Fortune 500 list have either explored blockchain opportunities or have launched blockchain-based services. The list encompasses 500 of the largest US companies by total revenue.
Of the 72% firms that have explored blockchain products, around 42% have yet to pass the blockchain exploration phase. The remaining 58% of firms have either piloted blockchain products or launched blockchain-based products and services. The most popular among those is Hyperledger Fabric. Its dominance lies in the fact that most firms working on blockchain efforts are working with IBM blockchain, which is built on the Hyperledger Fabric blockchain framework.