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Bitfinex Says Withdrawals Are Fine, But Crypto Exchange Customers Disagree

Crypto exchange Bitfinex said Monday that withdrawal services are operating “without the slightest interference” – but some of its users would seem to disagree. “Processing complications” led to crypto exchange Bitfinex suspending fiat deposits into customer accounts last week, according to the October 15 blog post. Its move to pause …

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Bitcoin Price Jumps by 11% to Reach One-Month High Above $6.9k

Bitcoin, the world’s largest cryptocurrency by market capitalization, jumped by 11 percent on Monday, pushing prices above $6,900 for the first time in a month. CoinDesk’s Bitcoin Price Index shows that ,just after 5:00 UTC on Monday, bitcoin saw a sudden spike of $400 over the course of 60 minutes, …

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Bitcoin Price Spikes But Bull Reversal Is Still $1K Away

Bitcoin (BTC) spiked 11 percent Monday, likely due to a sell-off in tether (USDT), but a bullish reversal is still not confirmed, technical charts indicate. The leading cryptocurrency jumped to a 2.5-month high of $7,788 at 06:45 UTC on Bitfinex – the cryptocurrency exchange that manages USDT developer Tether LLC. …

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US City Mulls Roll Out of Tougher Rules for Crypto Miners

Plattsburgh, New York, is considering bringing in stricter requirements on commercial cryptocurrency mining farms operating in the city. Patrick McFarlin, a councilor of Plattsburgh’s Common Council, proposed a new law last week that aims to introduce “zoning regulations” for commercial crypto mining activities. According to an update from the council …

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Sony Builds Digital Rights Management System on a Blockchain

Japanese electronics giant Sony has developed a new blockchain-based digital rights management system that may see commercial rollout. According to a press release from the firm Monday, the system will help manage copyright-related information for digital content, citing educational content as a prime use case. The firm states that, with …

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Crypto Exchange OKEx Lists 4 New Stablecoins

Hong Kong-based cryptocurrency exchange OKEx has announced that it is adding four U.S. dollar-pegged cryptocurrencies to its platform for trading. Rolling out the new additions over Monday and Tuesday, the exchange said in a support notice that it will list TrustToken’s TrueUSD (TUSD), Circle’s USDCoin (USDC), the Gemini Dollar (GUSD) …

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Binance Pauses Tether Withdrawals After Denying Delist Rumor

Crypto exchange Binance, the world’s largest by volume, suspended withdrawals of the tether (USDT) stablecoin Monday morning during what it called a period of heightened activity. Withdrawal functionality has since been returned, according to Binance’s website, which previously stated “wallet maintenance, withdrawal suspended” on the page for USDT. A customer …

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Fidelity Is Launching a Crypto Trading Platform

Financial services provider Fidelity Investments is launching a cryptocurrency trading and storage platform. Fidelity Digital Asset Services, LLC will provide cryptocurrency custody and trading services for enterprise clients, the company announced Monday. Tom Jessup, who is heading up the new division, announced the platform at Bloomberg’s Institutional Crypto event. It …

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Ethereum’s Constantinople Upgrade Stalls on Test Network

UPDATE 18:27 UTC, 10/13/18: Block creation on Ropsten testnet continues to feature 0 transactions, indicating Constantinople may have failed to activate. UPDATE 17:36 UTC, 10/13/18: Block 4,230,000 has been mined, but features 0 transactions. Ethereum’s main test network, Ropsten, is currently at a standstill. Code for ethereum’s upcoming hard fork, …

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Ethereum’s Constantinople Upgrade Stalls on Testnet

UPDATE 18:27 UTC, 10/13/18: Block creation on Ropsten testnet continues to feature 0 transactions, indicating Constantinople may have failed to activate. UPDATE 17:36 UTC, 10/13/18: Block 4,230,000 has been mined, but features 0 transactions. Ethereum’s main test network, Ropsten, is currently at a standstill. Code for ethereum’s upcoming hard fork, …

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Not Everyone Wants to Fix Bitcoin’s ‘Time Warp Attack’ – Here’s Why

Bitcoin's open-source developers don't agree on many things, but you'd be forgiven if you thought something best known as an "attack" might be one of them.

Still, there's a divide forming in conversation surrounding bitcoin's long-standing "timewarp attack" – and for good reason. First and foremost, Blockstream co-founder Mark Friedenbach recently found that the exploit could be harnessed to help bitcoin scale – that is, reach more users and process more transactions faster, if developers embrace and implement the idea.

But since its unveiling last week, the discovery has driven a shift in the conversation around the attack, meant to describe how miners might submit blocks featuring timestamps that are larger than they should be to push down the difficulty of creating new blocks (a trick that could help them to earn and collect more bitcoin rewards).

The result is that prominent thinkers in the bitcoin development community now appear split on an issue that's been the subject of discussion since 2012..

Greg Maxwell, a Blockstream co-founder and one of bitcoin's most prominent developers, for example, recently called for a fix to the long-standing bitcoin attack on the bitcoin mailing list, the leading gathering point for development conversation globally. Maxwell has been silent on Friedenbach's proposal specifically, but the call did occur after chatter began about the research, formally called "forward blocks."

As a result, this divide might be likely to continue.

Friedenbach's research, after all, proposes an idea that developers seeking to secure the protocol find enticing: It allows bitcoin's block size to be increased without asking all of those operating the software to upgrade. (Seeing as this minor parameter has been a hot point of contention among the community for so long, some see it as a sort of "breakthrough.")

That said, some argue Friedenbach's new research makes fixing the attack even more pressing.

Time traveling

To begin, however, it helps to understand why the attack exists to begin with.

Individual actors (miners) on the network report the time an event happens – when a transaction was made or when a block was created. So, there's a small chance someone can manipulate the time a little bit, even while following the rules of the bitcoin code that network nodes are constantly checking.

As such, miners report blocks with the wrong time on occasion. It's easy to tell because every once in a while, a block rolls in with a timestamp that's earlier than the block before it (essentially appearing out of order).

To explore why this happens, blockchain analysis company Chainalysis recently pulled together a report exploring how the error rates have changed over time.

"The declining error over time in timestamps reflects the evolution of people getting involved," Gladwell, who co-authored the report, told CoinDesk, arguing that according to the data, timestamp errors seem to "spike" when the mining industry sees a technology shift.

For example, when miners started joining together to form "pools" early on in 2012 the percentage of timestamp errors rose to 8 percent of timestamps.

Gladwell argues that this data suggests the errors are accidental, rather than done for malicious reasons, as miners need to get used to new equipment.

The timewarp "attack" is a bit different, though, in that it requires much more specific manipulation by miners who twist the rules in the hopes of earning money. This can happen when miners collude together to report incorrect timestamps that are farther apart, messing with the rate at which blocks can be mined.

Luckily, this attack is difficult to execute.

"I, and I assume others, haven't put a big priority into fixing this vulnerability because it requires a majority [of mining] hashrate and could easily be blocked if someone started using it," Maxwell said.

In the case where one group of miners were to collect most of the hashrate, a time attack would be the least of bitcoin's worries. ("And then there will be other problems," as Chainalysis chief economist Philip Gladwell put it in conversation with CoinDesk.)

For one, it would mean centralization of the network. And the main thing that is supposed to set bitcoin apart from other cryptocurrencies is that it isn't controlled by any one entity. Not to mention, at this point, the miners in power would be able to perform what's known as a "51 percent attack," thereby using their numbers to exert influence over the network.

The proposals

But even if it's difficult to execute, developers see it as a problem, one that can be fixed easily if so desired.

In his call for proposals, Maxwell mentioned that he had an idea that he tried out on bitcoin's testnet years ago, but he wants to make sure there isn't some other, better idea out there before plugging away at his fix.

"Before I dust off my old fix and perhaps prematurely cause fixation on a particular approach, I thought it would be useful to ask the list if anyone else was aware of a favorite backwards compatible timewarp fix proposal they wanted to point out," Maxwell continued.

"Backwards compatible" is key here. The requirement is for the change to not have a chance of splitting the network.

At Maxwell's request, a few different proposals have trickled in.

Bitcoin Core contributor Johnson Lau put forward a couple of ideas, both good and bad, to show the tradeoffs of various approaches. He argued that the most "naive" approach would be to just require a block to not submit a time lower than the block before it.

But since this would require a certain type of change, it could lead bitcoin's software to split into two versions. Lau argues the trick is finding a solution that decreases the likelihood of a timewarp attack, while also not risking a split.

"The aim is to find a [time value] which is small-enough-to-prohibit-time-warp-attack, but also big-enough-to-avoid-split," he said, adding that he thinks this can be accomplished with a "weaker" version of this naive approach.

Lau's idea even sparked a little philosophical discussion about "soft forks," a backwards-compatible way of making such a code change in bitcoin, and how different types can have different consequences.

"In general, soft forks are better when they don't cause orphaning on non-upgraded miners," wrote BitTorrent creator Bram Cohen, who's been focusing his developer efforts on cryptocurrency these days.

All in all, though, he supported Lau's proposal, but argued for a time window of three hours. "It suffers from still allowing the attack a little bit, but three hours out of every two weeks seems like no big deal," Cohen said.

Another developer, Scott Roberts, submitted a proposal that turned out to not be "off the mark" for bitcoin in particular, he told CoinDesk. In the end, he agrees with Cohen, though he thinks three hours might be "too tight."

"I don't know what the decision will be, but I think the fix is as simple as limiting timestamps to plus or minus something like three to 24 hours from the previous timestamp," Roberts said.

Another idea

But the problem is that eradicating the time warp attack would ruin forward blocks.

"'Fixing' the time-warp attack in the sense of making time warp impossible would prevent entirely forward blocks from achieving on-chain scaling. It might still be worth deploying for the proof-of-work upgrade or increase censorship resistance of sharding," Friedenbach told CoinDesk, adding:

"But the main advantage [of scaling bitcoin] which excites people would be gone."

Thinking about this, Friedenbach came up with another proposal, one that would preserve forward blocks, but would expunge the "worst exploits" of the timewarp attack. He went on to argue it "could be deployed early to prevent reckless exploitation of the time-warp bug," he added.

But many bitcoin technologists seem unsure that pure forward blocks are worth preserving.

Blockstream CEO Adam Back argues that while he thinks it's interesting research, he's not sure the community would support it.

"I think it's useful to explore the technical possibilities, which is what Mark has done. But the main limitation is, will there be consensus for making a big tradeoff of decentralization, censorship-resistance and self-validation cost for brute-force layer1 scale," Back told CoinDesk.

While forward blocks are interesting because they increase bitcoin's capacity without a hard fork, a type of change that could split bitcoin in two, it's still forceful.

And since forcing through a change that not everyone wants and could decrease decentralization was a key reason why the community fought so zealously in bitcoin's years-long scaling debate, Back argues the community wouldn't take this type of a change lightly either.

He went as far as to argue that "there are likely simpler, less hacky approaches" than Friedenbach's to boost bitcoin's layer-one scale.

With this type of criticism still rolling in, it seems to be an ongoing discussion, as Friedenbach continues to argue forward blocks are worth preserving as a tool:

"The dangerous outcomes of the time-warp bug can be prevented without fixing the bug entirely, and therefore without blocking off forward blocks or related scaling solutions."

Clock photo by Srikanta H. U (@srikanta) on Unsplash

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Nevada’s Utilities Agency Eyes Blockchain for Energy Credit System

The Public Utilities Commission of Nevada, a government agency charged with supervising and regulating power utility services in the state, is looking to implement blockchain for its energy credit tracking system. The commission last month investigated whether a blockchain-based solution would help track and certify Portfolio Energy Credits (PECs) in …

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SpankChain Says Hacker Returned Stolen Crypto Funds

A hacker who stole 165.38 ETH from the SpankChain platform has returned the funds. The payment platform focused on the adult industry announced Thursday that the hacker, who stole the funds from the platform last weekend, shared the private key for the wallet holding the ETH after speaking to SpankChain …

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FinCEN Blasts Iran’s ‘Malign’ Use of Crypto to Bypass Economic Sanctions

A U.S. regulator is urging domestic exchanges to help prevent the Iranian regime from using cryptocurrency to bypass economic sanctions. The Financial Crimes Enforcement Network (FinCEN) published an advisory Friday, stating that Iran’s “illicit and malign” use of cryptocurrency to “exploit” the financial system includes at least $3.8 million-worth of …

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