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Bitfury Reveals New Generation of Bitcoin ASIC Chips

Bitfury Group has developed a new, more efficient bitcoin mining chip, the firm announced Wednesday.

The Bitfury Clarke application-specific integrated circuit (ASIC) chip "offers the strongest performance among bitcoin mining chips and is unparalleled in efficiency," the company claims in a blog post.

The new chip, according to the firm, is customized for the SHA256 algorithm, boasts power efficiency up to 55 mW/GH and a hashrate up to 120 GH/s. It has 8,154 rolled hashing cores, fully integrated controllable clock generation and an integrated power-on-reset circuit.

In a statement, CEO Valery Vavilov said that the company "is looking at all factors, including silicon packaging, chip efficiency, optimal power distribution, cooling designs and speed of development when designing our mining hardware."

He added:

"We think that this will lead to solutions that deliver the best [return-on-investment] to our customers — regardless of ASIC size."

According to the description, the ASIC can switch quickly between tasks, so that "the chip uses one task buffer for SHA256 calculations," while the other can be filled by a "task-write" command.

The company is already looking to integrate its new chip into its own mining products, the blog post notes.

Bitfury already operates mining farms in Canada, Norway, Iceland and the Republic of Georgia. The new Clarke chip is being installed in these facilities as well, the firm indicated.

Bitcoin image via Shutterstock

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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The Latest Bitcoin Bug Was So Bad, Developers Kept Its Full Details a Secret

This week's major bitcoin bug was even worse than developers initially let on.

The bug originally rocked the bitcoin world when it was reported the vulnerability could be used to shut down a chunk of the network.

While this sounded bad enough for many, it turns out developers for Bitcoin Core kept a second, bigger part of the bug a secret. As disclosed through an official Common Vulnerabilities and Exposures (CVE) report, an attacker could have actually used it to create new bitcoin – above the 21 million hard-cap of coin creation – thereby inflating the supply and devaluing current bitcoins.

Such a perversion of the rules would, at worst, according to many, make users not trust the cryptocurrency anymore.

Because of the disastrous implications of the bug, developers decided to keep it a secret, buying themselves time to fix the exploit and urge miners and users to upgrade their software.

The CVE report written by Bitcoin Core developers explains:

"In order to encourage rapid upgrades, the decision was made to immediately patch and disclose the less serious denial of service vulnerability, concurrently with reaching out to miners, businesses and other affected systems, while delaying publication of the full issue to give time for systems to upgrade."

And for now, the plan seems to have worked.

Over half of bitcoin's mining hash rate has upgraded to the patched software version, meaning the attack can no longer be used, and developers are "unaware of any attempts to exploit this vulnerability," the report states.

Who found it?

Finding such a serious bug was a stressful position for developers to be in.

According to the report, an anonymous user originally filed a report about the denial-of-service bug to top developers of Bitcoin Core and Bitcoin ABC, the main software implementation of bitcoin cash. About two hours later, Chaincode engineer and Bitcoin Core developer Matt Corallo realized the bug could have been exploited to print unlimited bitcoin.

Based on the seriousness of the vulnerability, the developers decided to keep those details secret at first.

Instead, beginning with Slush Pool, they started pushing miners to upgrade. And for bitcoin users running a full node, the call to action is the same.

"You should not run any version of Bitcoin Core other than 0.16.3. Older versions should not exist on the network. If you know anyone who is running an older version, tell them to upgrade it ASAP," bitcoin subreddit moderator Theymos remarked in a post currently pinned to the top of the forum.

Yet, another problem exists now – the possibility of a bitcoin chain split

Since users are now running different versions of the bitcoin software, there's a risk the network will temporarily split into two, then come back together again. Transactions on the chain running old software, then, might ultimately be lost.

While the situation is being monitored closely, Theymos thinks the risk of this happening is small. But, he argued that people should still take precautions, such as waiting longer to make sure a bitcoin transaction actually gets verified.

Theymos added:

"For the next week or so you should consider there to be a small possibility of any transaction with less than 200 confirmations being reversed."

Fake bitcoin?

What's on some users' minds, still though, is whether it's possible the bug has already been exploited.

"How do we know if that vulnerability wasn't exploited already and there is someone out there with a bunch of fake bitcoin?" asked one bitcoin user.

Luckily, Bitcoin Core contributor Pieter Wuille explained, due to the power of code, bitcoin users would have been able to detect suspicious activity by now.

When downloaded for the first time, full nodes double check every transaction made in bitcoin's history. A node running the new software, 0.16.3, would detect the problem immediately.

Even so, questions remain regarding what would have happened if the bug wasn't caught in time.

According to Theymos: "Even if the bug had been exploited to its full extent, the theoretical damage to stored funds would have been rolled back."

Theymos continued, saying that rollback would be much like what happened during the so-called "value overflow incident" in 2010 when 187 billion bitcoins were created out of thin air but, ultimately, were destroyed.

Still, while Bitcoin Core, litecoin and several other coins that were based Bitcoin Core's code have released a patch for the exploit, others have not – and might still be vulnerable to the inflation bug.

Code image via Shutterstock

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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Trading Legend Don Wilson: Asian Demand High for Bitcoin Futures

Don Wilson, founder of high-speed trading firm DRW, said bitcoin derivatives trading in Asia hours is almost equal to the volume he’s seen in the U.S., something he says is an anomaly when compared to other financial instruments. In a fireside chat at the CoinDesk Consensus Singapore 2018 conference with …

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Bitcoin Price Lacks Direction After Defense of $6,200

Bitcoin (BTC) is trapped in a no-man’s land between $6,200 and $6,600, technical charts indicate. A bear flag breakdown witnessed Monday was expected to yield a drop to $6,000 (February low), but bitcoin’s resilience spoiled the bear party. The leading cryptocurrency bounced off trendline support at $6,202 on the same …

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Coinbase Disputes Claims in New York Attorney General’s Exchange Report

A recent report published by the New York Office of the Attorney General (OAG), which claimed several cryptocurrency exchanges it investigated are vulnerable to market manipulation, has drawn backlash from industry players. In a blog post published Thursday, Coinbase’s chief policy officer, Mike Lempres, wrote that the OAG’s assertions in …

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Bitcoin Price Sees High-Volume Recovery From Five-Week Lows

Bitcoin’s (BTC) has made a high volume recovery from five-week lows, although a bullish reversal is still not confirmed, technical studies indicate. The leading cryptocurrency fell to $6,100 on Bitfinex at 18:00 UTC yesterday – the lowest level since Aug. 14 – signaling a downside break of the trendline connecting …

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This Tech Lets You Send Any Cryptocurrency to the Lightning Network

Did you know? Lightning addresses and bitcoin addresses are not compatible.

What that means is that a user can't send money from their lightning address directly to a recipient bitcoin address, or vice versa, without going through an additional step to transferring their lightning funds into a bitcoin account of their own.

Seems counterintuitive, especially since the layer-two technology for transacting off-chain, is touted as a way to revolutionize the protocol to scale – more users and more transactions. And yet, there's this incompatibility between new off-chain lightning transactions and old-school on-chain bitcoin ones.

One developer, though, has been working on a possible solution, and it was inspired by an interoperability technology that's been slowly gaining steam – atomic swaps.

Lightning Labs developer Alex Bosworth was looking into atomic swaps, a technology that allows the native cryptocurrency of one blockchain to be traded with another with no middleman when it hit him that it could be used to swap lightning for old-style on-chain bitcoins.

Called "submarine swaps," that technology is now being tested on the live lightning network.

Although, trying it out might actually be dangerous. Much like even transacting on the still-nascent lightning network, Bosworth admitted when he announced the project's mainnet launch that using submarine swaps at this stage is a risky venture.

"There's still lots to build, but it's more fun to try on mainnet," he tweeted, using the "reckless" hashtag, what's become a rallying cry for developers utilizing the experimental technology with real money.

For his work, Bosworth has set up a connection between the bitcoin blockchain and the lightning network with the technology. Currently, the tech only supports funds being sent from a blockchain to the lightning network, and not yet the other way around.

But swapping lightning network payments for on-chain coins should be possible one day as well.

And, far beyond that, Bosworth envisions a future when every bitcoin or cryptocurrency wallet someday supports the technology, and as such, it would be just as easy to send litecoin, dogecoin or any coin to a lightning address.

An ethereum test

Meanwhile, this multi-coin world Bosworth is itching for is already being tested.

Jason Wong, an aviation software developer also interested in cryptocurrency, started playing with submarine swaps not long ago, starting by showing something priced on the lightning network can be bought using litecoin.

"Same chain swap is good but cross-chain swap is even better," as Wong put it in a recent blog post.

But Wong told CoinDesk he wanted to go even further.

"It will reach ... more users if submarine can support ethereum," he said.

So, a couple weeks ago he implemented another version of the technology, allowing items priced on lightning to be purchased with ether, the native cryptocurrency of the ethereum blockchain, the second largest by market cap. And with Bosworth's help, Wong showed that the trade can be executed.

ethereum, lightning

Serious swapping

While the technology is novel, there are serious use cases for it as well.

One is "refilling" lightning channels, which will very likely be a common need.

That's because one tricky thing about lightning is that users need to set up channels with a set amount of money in them. This process of setting up a channel costs on-chain transaction fees, and those have been known to surge when more people are using the cryptocurrency.

Say you open a lightning channel for $20 dollars worth of bitcoin. But then you quickly use up those funds transacting with others.

Instead of opening a completely new channel – and incurring more transaction fees – a slightly cheaper route would be topping up the existing channel by using a submarine swap to trade on-chain funds for extra off-chain funds.

At sites like Satoshis.place, made solely for lightning payments, with submarine swaps users could then potentially pay in whatever coin they want, be it on-chain bitcoin, ethereum, litecoin and many more.

Perhaps, though, one of the more interesting use cases for submarine swaps is crypto-to-crypto exchange. While atomic swaps are usually seen as the main technology working toward this goal (allowing users to transfer bitcoin to litecoin or dogecoin to ethereum), in some ways submarine swaps could do the job even better.

That's because in order to make an atomic swap, lightning needs to be enabled on both cryptocurrencies, and for right now, only a handful of cryptocurrencies have a functioning lightning network.

But with submarine swaps, only one side of the trade needs lightning.

This type of swap then, according to Bosworth, requires less work from developers who want to support a variety of different coins, without having to go through the time-consuming process of integrating each one individually.

Speaking from a developer's perspective, Bosworth told CoinDesk:

"I want to support your choice of coin spends, but I don't want to add support for lots of different coins."

'Utopian swap future'

Bosworth's ambitions for swaps go beyond these uses, though.

In a lecture describing his vision for the tech a couple months back, Bosworth went as far as to envision a "utopian swap future" – highlighting a variety of swap types.

Beyond submarine swaps, for instance, HTLCswaps could allow users to trade lightning payments trustlessly for data.

Still, there's a long way to go before that future comes to pass, even as it relates specifically to submarine swaps. For instance, through testing Bosworth has uncovered "a lot of challenges."

"My concept was that swaps could be something that were very cheap to provide, like that a mobile phone could do," he said, outlining that one problem with that particular notion is that submarine swaps are more challenging to execute when a blockchain is seeing higher transaction volume.

Since the bitcoin testnet is currently being blasted with transaction spam, clogging up the network, Bosworth found that out the hard way when he was experimenting with the technology there.

Yet, it hasn't stopped his pursuit. Instead, Bosworth's short-term goal is to figure out a way to scan through this spam efficiently, in hopes of ensuring smartphones could always handle a submarine swap.

Submarine interior image via Shutterstock

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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Inside Bitewei: The New Bitcoin Miner Being Hailed as a Serious Bitmain Rival

Things haven't been easy of late for Bitmain.

After CoinDesk revealed the China-based crypto mining giant was planning an initial public offering (IPO) for September, the company has faced a wave of perhaps unprecedented scrutiny. On social media, allegations emerged Bitmain was everything from insolvent to presenting a rosy outlook for its financials, all the while investors linked to the funding effort backed away from the deal.

Now it appears Bitmain is facing a new and well-capitalized competitor.

Revealed exclusively to CoinDesk, Bitewei, a Shenzhen-based mining chip manufacturer led by Yang Zuoxing, the former director of design at Bitmain, has raised 140 million yuan (around $20 million) to bring to market mining chips that long-time mining industry insiders believe could lead it to rival at least one area of Bitmain's business.

Tyler Xiong, COO of the bitcoin mining pool operator Bixin, which joined Bitewei's initial investment, told CoinDesk that it believes the company's Whatsminer line of mining chips to be "a game changer."

Founded in Shenzhen in July 2016, Bitewei is now considered by some to be the most efficient hardware manufacturer on the market.

According to test results published by Bitewei, the upcoming WhatsMiner M10 is roughly 30 percent more efficient, in terms of electricity consumption than Bitmain's most recent flagship product the AntMiner S9 Hydro.

Yang told CoinDesk Bitewei has so far received pre-orders of over 1,000 units of Whatsminer M10, a product scheduled to officially launch on September 19, but that started its pre-sale in mid August. With an average price around $1,600 depending on the shipping batch, the new product could already be generating a revenue beyond $1.6 million.

That said, Bitewei admittedly has a long way to go, as IPO materials suggest Bitmain controls 85 percent of the global cryptocurrency mining hardware market. Further, it has a well-developed software-based business, with its BTC.com and Antpool mining pools providing mining tools to 30 percent of the network's miners.

This large market share is viewed with skepticism by cryptocurrency developers, who believe it conflicts with efforts to open access to cryptocurrency protocols and the digital monetary rewards they create.

As such, the fact that hardware distributors are already selling Whatsminer products has created excitement among those who believe the rise of additional, competitive mining chip providers could benefit the industry while better ensuring its ethos.

David Vorick, CEO of Obelisk, a company that set out to challenge Bitmain with an application specific integrated circuit (ASIC) miner for the Siacoin cryptocurrency, said he believes Bitewei proves that competition is possible, if difficult to achieve.

Vorick told CoinDesk:

"There should be a lot more players in the bitcoin mining space and a lot more manufacturers, especially if we can figure out everything that Whatsminer is doing to get the efficiency gains that they've been getting."

Others, however, say efficiency isn't everything, and that Bitewei must still prove it can execute, avoiding the pitfalls that have seen other mining firms go bankrupt despite competitive products.

"It takes a lot, luck included, for a company to grow to that size and influence," Xiong said, comparing Bitewei to Bitmain. "It's hard for a new hardware company to get that influence now. Besides, there are only 4 million bitcoins left to mine."

Cutting-edge products

Still, Bitewei's test results suggest its product far exceeds the current norm.

Ahead of the Whatsminer M10's formal launch, Bitewei kicked off the pre-sale by publishing two rounds of testing results on August 10 and 25, respectively. In both cases, Bitewei claimed the machine was performing at a level that consumed 66 watts to 68 watts of electricity per 1 trillion hashes (66W/TH).

In comparison, according to the official specifics published by Bitmain about its latest AntMiner S9 Hydro, the mining giant's flagship product has a power consumption that's around 96 W/TH.

Speaking of growing competition from other bitcoin miners that recently launched products featuring 7nm chips, including Canaan Creative and GMO Internet, Yang said his next step is also to roll out a 7nm-chip bitcoin miner in 2019.

Yet, Vorick said he believes Bitewei now has a considerable edge compared to both other startups and incumbent competitors, as Yang's 50-people team combines experience with cutting-edge chip designs.

"It seems like the majority of the design talent at Bitmain is now at Whatsminer [Bitewei]," Vorick said.

Perhaps that's why Yang doesn't appear deterred by fierce competition during the summer's overall bearish crypto market, with bitcoin's price sliding below $7,000. "The market always has ups and downs and 2018 is somewhat like 2014, during which the bitcoin price kept declining for a year," Yang told CoinDesk.

He added:

"Nothing can stop the enthusiasm for people inside the industry. Outsiders may hesitate, like Intel or NVIDIA, but not us."

The chipmaker

Bolstering the enthusiasm for the company is that this isn't Yang's first industry effort, as his experience with bitcoin mining started long before he joined Bitmain.

After earning a Ph.D. in engineering physics from China's Tsinghua University, Yang started in 2014 as a chip designer at ASICMiner, a bitcoin miner maker founded in 2012 by Jiang Xinyu – a.k.a Friedcat on bitcointalk.org – whose unexplained disappearance in January 2015 is still one of the bitcoin industry's unsolved mysteries.

Promptly after Friedcat's disappearance, Yang presented his full-custom chip design to Micree Zhan, co-founder and chairman of the Beijing-based Bitmain. It was the design that would soon become Bitmain's Antminer S7, as Yang joined Bitmain's team in the spring of 2015.

The full-custom methodology adopted by Yang, in layman's terms, allows a designer working with integrated circuits to completely customize the layout of each transistor and how they connect to each other.

The benefit is that, as opposed to other methods such as semi-custom which uses pre-designed layout to some extent, the full-custom method allows a designer with the right skill-set to maximize the chip's output at the lowest point of power consumption.

But, as Yang told CoinDesk, this method is also highly costly and time-consuming. That's why it is best suited to large-scale production, like Bitmain's factories.

It could have been a perfect match. However, Yang said he decided to move from Bitmain's Beijing's office back to Shanghai after just two weeks because he didn't fit in with Bitmain's "working environment," adding he "didn't feel respected." So he continued working part-time on designing the Antminer S7, balancing that remote job with a new side project of his own.

After Bitmain officially rolled out Antminer S7 in August 2015, Yang said he had five rounds of negotiations with Bitmain about equity, all while keeping control of his designs for the Antminer S9 for the company, soon to be Bitmain's flagship product (revealed in May 2016).

Yang said while Jihan Wu – also co-founder of Bitmain – agreed to offer him 2 percent of Bitmain's equity, Zhan did not go along with that plan and made an alternative offer of 0.5 percent.

When negotiations went sour, Yang ended his Bitmain contract in June 2016 and launched Bitewei one month later.

Beyond Yang himself, Bitewei attracted several other bitcoin industry veterans.

The startup's list of early investors included notable figures in the Chinese bitcoin mining community, such as co-founders of the F2POOL Wang Chun and Mao Shixing, as well as Wu Ying, chairman of an investment firm called China Capital Group. Based on a Chinese business registration database, both Mao and Wang are now Bitewei board members.

Bad blood

Bitewei's rivalry with Bitmain intensified during the past two years as they battled over the intellectual property Yang designed.

Last year, Yang told CoinDesk Bitmain filed a patent infringement lawsuit against him over Bitewei's adoption of the so-called "serial power circuit design" for Whatsminer – a technology that Bitmain secured a patent for in March 2016.

In retaliation, Yang filed a claim to revoke Bitmain's patent on the grounds that serial power supply circuit designs were widely used and documented.

China's State Intellectual Property Office (SIPO) invalidated Bitmain's patent on April 8. The SIPO's statement about revoking Bitmain's authorized patent, for lack of unique creativity in the Antminer's design, said:

"If a technological solution sought by a patent has different characteristics than existing technologies, but such difference is public knowledge, then it is obvious the solution would incorporate this public knowledge."

The Urumqi Intermediate Court in China's Xinjiang province, where the legal complaint was initially filed by Bitmain, then followed the SIPO's lead and dismissed the case on August 31, according to a court document Yang shared with CoinDesk.

Bitmain declined to comment.

By this point, Xiong noted that the animosity between these manufacturing teams was common knowledge in bitcoin mining circles. But the controversy surrounded Bitmain has gone far beyond this patent fight and its ongoing hardware and mining pool dominance.

Bitmain co-founder Jihan Wu has long been an outspoken supporter of the cryptocurrency bitcoin cash, created by a disagreement over the technical direction of the bitcoin software, a fact which has made him a persona non grata among bitcoin's developers.

Yet as argued by the research firm Alliance Bernstein, Bitmain's strong belief in bitcoin cash may have caused it an issue of declining cash flow, and may put it in a further position to be challenged by a competitor. Analysts wrote in a recent report that Bitmain now holds about 5.7 percent of the total supply of bitcoin cash, which they said was "likely" purchased using its operating cash and bitcoin holdings.

"These BCH holdings, valued at $890 million as of [Q1 2018], pose another major risk as BCH is illiquid and has depreciated nearly 20 percent since [Q1 2018]," the report noted at the time.

Bitmain's controversy could turn out to be a boon for Bitewei, which has avoided entanglements with blockchain industry rumors and conflicts.

If Wu and Bitmain are bitcoin cash believers in their core, then Yang is simply the chip guy.

"Full-custom methodology can be applied to literally every type of chip," Yang said of his vision for Bitewei, which is to become the greatest chip maker, hinting in the long-term, the firm is not limited to just making crypto miners.

He concluded:

"Our miners' market share may go above 50 percent. But our own hashing power will never go above 50 percent, in fact, 10 percent will be already good enough."

Bitcoin mining via Shutterstock

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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Gas Ain’t Gold: Why Ether’s Price Could Tank Even If Ethereum Succeeds

Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative. The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers. The virtuous circle that saw buyers of ethereum-based ERC-20 tokens …

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A New Line of Powerful ASIC Miners Is Coming to Ethereum

A chip designer with extensive experience in developing bitcoin mining devices is turning her sights on the ethereum protocol. Chen Min, the former chief chip maker at bitcoin mining chip developer Canaan Creative, launched a new venture to build cryptocurrency mining devices called Linzhi. The firm’s first project tackles the …

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Landmark Crypto Crime Case Ends With Jail Sentence for GAW CEO

Josh Garza, the CEO of the now-defunct cryptocurrency mining company GAW Miners, has been sentenced to 21 months in prisonafter pleading guilty to a wire fraud charge. As part of the sentence, Garza was given 6 months home confinement and three years of supervised release overall. The court proceedings, which …

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Local Officials in Ohio Seek Proposals for Blockchain Identity Trial

The city of Dublin, Ohio, has been quietly pursuing a blockchain experiment focused on personal identity. Dublin, a suburb of Ohio’s state capital, Columbus, revealed its work through a request for proposal (RFP) document published last month. With the trial, Dublin becomes the latest municipal government to explore possible public-sector …

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SBI to Roll Out Ripple DLT-Based Payments App on iOS, Android

Japanese financial giant SBI Holdings is soon to launch a payments application for iOS and Android devices powered by Ripple’s distributed ledger technology. Takashi Okita, chief executive of SBI Ripple Asia – a joint venture between SBI Holdings and the San Francisco-based Ripple – revealed the website of the application, …

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