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Blockchain

Bitcoin Must Solve Blockchain Bloat to Sustain its Growth

The Bitcoin blockchain is growing at a staggering rate, making it a challenge to run a full node. But a solution might be just around the corner.

Republished by Plato

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In brief

  • The Bitcoin blockchain currently weighs around 320 GB and is expanding at more than 50 GB per year.
  • This can make running a full node a challenge, since many devices lack the necessary spare storage.
  • A number of solutions to the issue are in the works, including Bitcoin light wallets and Utreexo.

In the decade-plus lifespan of Bitcoin (BTC), the cryptocurrency has seen considerable growth in several key areas—from adoption to utility, and value. 

But it’s also grown in another, less desirable way—its sheer size.

Like every database (decentralized or otherwise) the Bitcoin blockchain stores data. But unlike standard databases which often see older or unwanted data purged or deleted, the Bitcoin blockchain only gets larger over time, since it contains a complete record of all the transactions that ever occurred—including all the data they contain. Nothing ever gets deleted. 

This has caused the Bitcoin blockchain to swell from just over 60 MB in January 2011 to over 320 GB ten years later in January 2021. The Bitcoin blockchain has now been growing at a linear rate for the past four years, adding an average of around 50 GB per year.

The Average Block Size is Increasing

There are a number of reasons why the Bitcoin blockchain is growing at such a staggering rate. For one thing, there are simply fewer empty blocks now. 

Since the Bitcoin blockchain has been operating at almost maximum capacity for the last four years straight, most blocks are completely full—and there has been no major change in the maximum number of transactions the Bitcoin network can handle in the last two years.

Bitcoin transactions per day (Image: Coin Dance)

Despite this, the average size of each block has been slowly increasing since Bitcoin first launched, climbing from 0.02 MB in January 2011, to 0.6 MB in January 2016, and finally to 1.3 MB in January 2021. This can be largely attributed to the increased adoption of Segregated Witness (SegWit), which allows for larger total block sizes, while keeping the size of each transaction down. 

According to Woobull’s SegWit Adoption chart, there has been a steady uptick in the use of Segwit transactions since the upgrade was activated in August 2017—and close to 50% of all transactions are now SegWit. 

With increasing block size, the rate at which the size of the Bitcoin blockchain grows can also be expected to increase. At the current average block size of around 1.31 MB and 144 blocks mined per day on average, we can expect the Bitcoin blockchain to expand by up to 70 GB in the next year alone—sending it to almost 400 GB.

The Bitcoin blockchain currently weighs 320 GB, but will likely pass 400 GB in 2022 (Image: Blockchain.com)

With most popular laptops and tablets still shipping with under 512 GB of storage space, it is becoming increasingly challenging for casual Bitcoin users to dedicate the space necessary to store the entire Bitcoin blockchain when running a full node. Likewise, with the cheapest consumer hard drives coming in at around $16/GB, those looking to run a full node will need to spend around $5.12 for the storage to do so in 2021.

Though this might be a simple task in many developed countries, it can limit the uptake of Bitcoin in developing economies, where the average income per household is much lower. This partially explains why more than 60% of Bitcoin nodes are concentrated in North America and Europe, while Africa and South Asia have just a small number of online nodes—despite their large populations. 

The vast majority of Bitcoin nodes are concentrated in developed countries. (Image: Bitnodes)

Potential Solutions

More nodes contribute to a faster, healthier, and more censorship-resistant Bitcoin network, while decentralization is one of the core tenets of blockchain-based cryptocurrencies. Fortunately, there are a number of potential solutions in the works, which could help to make running a full node more accessible. 

Overall, the cost of hard drives decreased from a minimum of $0.025/GB in 2017, down to as little as $0.15/GB in 2020—a decrease of 40% in 3 years. If this rate of decline continues, then by 2022 hard drives will get cheaper faster than the Bitcoin blockchain grows in size—thereby making it more economical to host a full node over time. 

But there are also a number of technical solutions to the problem, which act to reduce the size of the storage burden on full nodes. One of the most common workarounds is known as a light node. These are essentially nodes that use a method known as Simplified Payment Verification (SPV) to verify transactions instead. These only need to download a small fraction of the blockchain, but do need to rely on a third-party full node that hosts the entire blockchain.

Another promising solution is Utreexo—a scaling solution currently being developed by Lightning creator Tadge Dryja. According to a July 2020 Medium post by the developer, Utreexo acts to make Bitcoin nodes smaller and faster by using cryptography to condense the information nodes need to store. Unlike a standard light wallet, this system doesn’t rely on an external full node to host the full blockchain and also maintains the user’s privacy like a normal full node.

However, Utrexxo is still very much in its early stages of development, and is currently only available to use as a demonstration release. It will likely be several months, if not years before it is ready for mainstream use. 

Bitcoin’s blockchain will keep on expanding—that’s the nature of blockchains. But if these technical solutions work, and they can be implemented, blockchain bloat may no longer present the barrier to Bitcoin’s growth that it currently does.

Blockchain

Members of WallStreetBets Forum Alleged in Telegram Crypto Scam Stealing $2M in BNB and ETH

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Members of the popular WallStreetBets Reddit forum were suspected of a presumable cryptocurrency fraud that could have caused losses of no less than $2 million. By creating a designated Telegram group, they duped investors by guaranteeing remarkable returns through capitalizing on the recent crypto market rally.

The Core of the Hoax

Per a report by Bloomberg, alleged members of the WallStreetBets Reddit Forum used the Telegram messaging service to execute a blatant scam. A particular account by the name of ”WallStreetBets – Crypto Pumps” presented users the chance to purchase a new token certified as WSB Finance before it was listed on crypto exchanges. The operation is known as a pre-mine sale.

The essence of the fraud was connected to the recent cryptocurrency boom as bitcoin and most altcoins skyrocketed in value lately. With some of the digital assets reaching 1,000% gains, the targeted WSB members conned investors into sending money without asking questions and with the potential of netting huge profits.

The notorious account also urged users to transfer popular cryptocurrencies such as Binance Coin (BNB) and Ethereum (ETH) to a designated crypto wallet and then to reach its ”token bot” to gain WSB Finance coins.

However, the perpetrators never dispatched those coins. Furthermore, another message on Telegram revealed that the people who had already issued a payment had to send an equivalent amount again or they would risk losing their initial investment.


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The Aftermath

After executing the hoax, more than 3,451 Binance Coins were withdrawn on Tuesday (May, 4th) from the wallet inside the Crypto Pumps messages.

Since the price of BNB at that point was approximately $625, the fraud caused losses of more than $2.1 million. Following the scam, thousands of people expressed their frustration and tried to expose the individuals behind the account. Moreover, the quantity of the other cryptocurrency – ether – still remains a mystery.

Two weeks ago WSB admins warned about offers that might try to take advantage of the forum’s name in order to allure the crypto audience. The ”WallStreetBets – Crypto Pumps” account has been removed from Telegram but whoever managed it left a message that might stun the affected victims:

”Buying Lambo now.”

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Source: https://cryptopotato.com/members-of-wallstreetbets-forum-alleged-in-telegram-crypto-scam-stealing-2m-in-bnb-and-eth/

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Blockchain

South Korean Crypto Exchange Accused Of $1.5 Billion Scam

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The South Korean cryptocurrency exchange platform V Global was accused of luring 40,000 people into illicit multi-level deceit. The entire scheme amounts to more than 1.7 million won, which equals $1.5 billion.

The Investigation

As reported by the Korean officials, the police raided many places in the country related to a virtual cryptocurrency exchange, and its notorious CEO – known as LEE – alleged to fundraising without regulatory permission. The authorities blocked the exchange’s cash deposits as a part of the investigation.

In total, the Gyeonggy Nambu Police Agency reported that it searched the exchange’s headquarters in southern Seoul along with 21 other places and froze more than $214 million left in the account.

Another report from today shed more light on the developments. According to Yonhap News, the name of the organization is V Global. The Korean police are examining the accusations against them for fraud under the Certain Economic Crimes Weighted Penalty Act, the Similar Receiving Act, and the door-to-door sales business.

The main accusation against the exchange is gaining a deposit of 1.7 trillion won ($1.5 billion) from 40,000 members in the period between August 2020 and January 2021. The announcement revealed that most of the people were elderly or housewives with no experience in cryptocurrency trading.


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Too Good To Be True

The investigation revealed that the exchange urged investors to entrust their funds to an account and lured the members that the expected return would be three times higher than the initial investment. According to the authorities, there was a pyramid element in the scam as the exchange promised to grant an introduction fee of 1.2 million won ($1,065) for every newly recruited member.

The report affirmed that the trading venue paid some members in the form of a block. Therefore, people who signed up earlier received funds from individuals who entered the exchange later.

Moreover, the Korean police seem confident to deal with the fraud case as it revealed its intention to confiscate 240 billion won ($214 million) left in the V Global account as of the 15th last month, even before the prosecution process.

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Source: https://cryptopotato.com/south-korean-crypto-exchange-accused-of-1-5-billion-scam/

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Blockchain

Georgia’s central bank is exploring ‘Digital Gel’ CBDC

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The National Bank of Georgia said that it is considering launching a central bank digital currency.

In an announcement today, the central bank hinted at the issuance of a central bank digital currency, or CBDC, in an effort “to enhance efficiencies of the domestic payment system and financial inclusion.” The National Bank of Georgia, or NBG, said it would be inviting fintech firms and other financial institutions to participate in the project, named Digital Gel after the symbol for the country’s fiat currency, the lari.

“CBDC holds the promise to unlock the tremendous value of innovative business models for the benefit of society,” said the announcement. “The introduction of CBDC could increase financial intermediation efficiency, help introduce new financial technologies, facilitate financial inclusion, and reach previously unbanked populations.”

However, the bank mentioned the possibility of risks in the launch of a CBDC in the Republic of Georgia given the “new and potentially disruptive technology.” The NBG said it may conduct extensive testing of the CBDC in a controlled environment to ensure a smooth rollout, but did not provide any details regarding a timeline for launch.

With a population of roughly 4 million and a gross domestic product of approximately $15 billion, a nation like Georgia falls at the smaller end of countries exploring CBDCs. The Bahamas officially rolled out its Sand Dollar central bank digital currency in October, while China has been piloting its digital yuan in select cities prior to a full-scale launch. In the United States, Fortune 500 company Accenture announced this week it would be partnering with the Digital Dollar Foundation to conduct CBDC trials.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/georgia-s-central-bank-is-exploring-digital-gel-cbdc

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