Dash Cryptocurrency: Single Wallet Owner Possesses 51% of Hashrate

The NicheHash crypto mining marketplace contains the majority of the hashpower on the Dash network. A concerned Reddit user raised the alarm today.

Single Miner Mining More Than 50% of All Dash Blocks

Dash has a total of almost 1,900 Terrhashes per second at time of writing. Meanwhile, NiceHash is responsible for more than 1,000 TH/s across over 25,000 miners.

Over $2.2 Million Earned by Single Miner

Analysis by the concerned Reddit user found that three of the top addresses over the last few thousand Dash blocks are controlled by the same entity. They write:

This particular transaction has three of the four top addresses as inputs meaning one entity controls all three. These three alone gather 53% and more. You can also see this started 6 months ago/around September last year, and I think the fourth unknown pool also belongs to this entity yet it is seperated on the blockchain. It started to gather a lot of hash at the same time.

The addresses in question are:

Combined, these addresses have mined 26,665 Dash to date, at time of writing. That is a total of 573 BTC or $2.2 million at current prices. Yet, the financial aspect is the least of anyone’s worries.

51% attacks create significant security liabilities in decentralized blockchain networks. Charlie Lee recently said that networks must be vulnerable to 51% attacks for decentralization. Miner centralization threatens networks as well, however.

51% Attack Possible Before Chainlocks

nicehash crypto mining marketplace

The Reddit user Flenst concludes his post:

So it is possible someone could try to perform a 51% before DASH implements their chainlocks. The actor could start right away. Anyone offering a service with DASH must keep an eye on the chain as long as this doesn’t change and be very careful.

He is referring to a recent announcement by the Dash development team that they are working on something called “Chainlocks.” In November, Dash said they are introducing the new feature in order to combat 51% attacks. Such attacks are in the news again with recent issues surrounding Ethereum Classic. Chainlocks also deals with block reorganizations and modifies the “longest-chain” rules that Dash inherits from Bitcoin. From Dash Improvement Proposal 8:

When a node encounters multiple valid chains, it sets the local “active” chain by selecting the one that has the most accumulated work. This is generally known as the “longest-chain” rule as in most cases it is equivalent to choosing the chain with the most blocks.

If both chains have the same amount of accumulated work (and in most cases the same block count), a decision can’t be made solely based on the longest-chain rule. […] If another block is then received which extends the non-active chain so that it has the most accumulated work, it becomes the active one. For example, even if a chain is currently 6 blocks longer than any other chain, it’s still possible that a shorter chain becomes longer and thus the active one. This is generally known as a chain reorganization.

What’s clear is that someone has invested a massive amount of money into mining Dash with ASICs. Dash’s X11 algorithm once thwarted ASIC development. ASIC developers found that by adding memory to the miners, they were able to handle the X11 algorithm. When this happened with Monero, developers decided to fork away to a modified algorithm.

Author: P. H. Madore
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A Snapshot Of Cryptocurrency Forks Shows The Biggest Winners And Losers

Forking cryptocurrencies, usually Bitcoin or one of its offshoots, was all the rage 12 months ago. Today, the spate of new forks has dwindled to a trickle. With the benefit of hindsight, and armed with over a year’s worth of data, it’s possible to determine which forks succeeded and why.

Fork-o-mania Is Over

Forking mania has come and gone. Nine months ago, all manner of dead and dying coins were being artificially revived and their prices pumped under the guise of forking them into something better. At least that was the promise. Who can forget Zclassic, this year’s worst performing altcoin, which would now require a 70x for ATH buyers to break even? That wouldn’t be a problem if the forked coin ZCL holders were receiving had performed relatively well, but Bitcoin Private has also proven disastrous. It’s currently trading shy of $3, from a peak of $77, making it 2018’s second worst performing coin. Even the McAfee “magic” couldn’t save BTCP.

A Snapshot of Cryptocurrency Forks Shows the Biggest Winners and Losers
Bitcoin Private

It is no coincidence that three of the 10 worst performing coins this year are all Bitcoin forks: Bitcoin Gold, Bitcoin Diamond, and Bitcoin Private are all down by over 90%. Not all forks have resulted in failure however: Bitcoin Cash remains a top four coin by market cap, and top three by adjusted 24-hour transaction volume according to Onchainfx. In many respects, it was the success of BCH that fueled the glut of forks that followed, their developers eyeing the potential rewards of launching a new cryptocurrency under the Bitcoin banner.

While Bitcoin Cash forked fairly with no pre-mine, the same could not be said of Bitcoin Gold. Then there was Bitcoin Private, whose developers, led by Rhett Creighton, made their money by loading up on Zclassic before announcing the fork. The failure of high profile forks such as BTCP and the disaster-prone BTG, both of which created far more losers than winners, have played a major role in dampening public enthusiasm for forks.

A Snapshot of Cryptocurrency Forks Shows the Biggest Winners and Losers
This year’s worst performing coins according to Onchainfx

There’s More Than One Way to Fork a Coin

Forkdrop.io is a leading resource for tracking cryptocurrency forks. It’s produced a guide detailing the number of Bitcoin forks and their fate to date. It explains: “There are 96 Bitcoin fork projects in total. Of those, 69 are considered active projects relevant to holders of Bitcoin (BTC). The remaining 27 are considered historic and are no longer relevant. Additionally, there are 21 altcoin fork projects which have some similarity to Bitcoin fork projects, but have their heritage from a major altcoin.”

A Snapshot of Cryptocurrency Forks Shows the Biggest Winners and Losers

42 of these projects have active blockchains that can be used for transacting, while another 27 are allegedly under development. It remains to be seen, however, what sort of traction is gained by such coins as Bitcoin Pizza or Bitcoin Holocaust. 41 of the coins Forkdrop.io has data on were created as a straight fork, in which the newly birthed coin shares the same history as its BTC parent. 22 were issued as passive or active airdrops and another six used a combination of these methods to distribute coins. After Bitcoin, the most commonly forked cryptocurrencies are Ethereum (7 forks), Monero (5), and Litecoin (4).

A Brief Study Of Cryptonetwork Forks

In a report published this week, Placeholder VC has taken a deep dive into forked coins and reached similar conclusions to Forkdrop.io, noting that “The vast majority of child networks resulting from chain forks are in disuse and have lost significant value relative to their parent networks…Users and developers tend to remain loyal to the original network, while most miners are loyal to economics only, directing hashpower to the most profitable network of the moment.”

Bitcoin Has Now Forked Almost 70 Times

Placeholder VC does find, however, that “Despite lower use metrics, child networks trade at higher user and transaction value multiples (e.g., NVT ratio) than their parent networks.” It concludes: “Contrary to the narrative of frictionless forking sucking value away from large networks, child chains to date have struggled to attract demand and developer talent from their parent communities.”

Just as the craze for tokenizing everything diminished once the ICO market took a tumble, the same has happened with forked coins. The last time anyone checked in on ZLC/BTCP forker Rhett Creighton, he’d quietly abandoned his plans to do the same with Primecoin to create Bitcoin Prime. The developers of new altcoins, forked coins, and blockchains all vying to create a better Bitcoin have learned that Bitcoin isn’t easily bested. As The Wire’s Omar Little put it, “Come at the king, you best not miss.”

Author: Kai Sedgwick
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Payments Giant Qiwi Unveils Crypto Investment Bank

Qiwi, one of the largest e-payment providers in Russia, is launching a crypto investment bank, called HASH, to advise investors and help Russian companies tokenize their assets once the appropriate regulation in Russia is in place.

The company announced it was launching a new enterprise based on its fintech subsidiary Qiwi Blockchain Technology, created this past March. HASH, branded as “the first crypto investment bank in Russia,” will manage clients’ ICOs, help them build their blockchain networks and raise funds. The company has already partnered with an array of fintech companies around the world, including Bitfury Capital, Itech, InVenture, Target Global, Hosho, Wings, and RootStock, said Constantine Koltsov, partner at Qiwi Blockchain Technology.

He added:
“We are going to make an international crypto bank providing trading services, research and ICO advisers … When the proper regulation is in place, we are going to help companies from traditional sectors of economy, like natural resources and heavy industry, to raise money through ICOs.”

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HASH will also advise financial institutions on the quality of cryptoassets they are going to buy. Now many of them have a considerable apprehension towards the ICOs, Koltsov said, as there is a lot of scams on the market.

Koltsov claimed that HASH was already working with a major private oil and gas company on launching an ICO to raise $20 million, though he declined to name the firm.
ICOs can be helpful at a time when major Russian banks are under sanctions, and can have difficulty borrowing money from organizations in the West, he said.

As Russia has yet to pass regulations for blockchain and cryptocurrencies, HASH will initially work with projects registered in other jurisdictions, but Russian investors are free to participate in various ICOs with the company’s help, Koltsov said.

Qiwi expects that the Russia’s parliament to pass the bills regulating cryptocurrencies and blockchain this fall. Otherwise, the company will continue focusing on projects in different legal landscapes, he added.

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Author: Anna Baydakova
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