Ethereum 2.0 Eagerly Awaited as Huge Gas Fees a Significant Problem
This improvement may lower energy usage by at least 99.95 percent. Ethereum has outperformed Bitcoin in the crypto market in
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What is a cryptocurrency mixer and how does it work?
This guide will explain how cryptocurrency mixers and Bitcoin tumblers mix potentially traceable coins, making it harder to track transactions.
Can you trace a cryptocurrency tumbler or Bitcoin mixers?
Due to crypto mixing services, it is tough to track specific coins because all the coins are pooled together and then distributed at random intervals.
Cryptocurrency tumblers let retailers rewrite their crypto history by constructing a custom blockchain utilizing a variety of digital currencies. They route transactions through a complex semi-random network of other fictitious exchanges, making it difficult for users to link currencies to specific exchanges. Thus, coins cannot be traced if moved through a tumbling service.
Bitcoin tumblers and Bitcoin mixers are two alternative techniques to muddle the blockchain of traces of tranfered BTC. Despite the fact that they both accomplish the same thing, Bitcoin tumbler is for people who wish to trust a third party, while Bitcoin mixer is for people who don’t trust anyone.
BitMix is a Bitcoin tumbler and mixer application that provides anonymous transactions by routing all payments through its own system, taking advantage of BTC’s inherent anonymity capabilities and making it hard to track coins.
On the other hand, many tools follow the currency’s usages by combining public blockchain data with known addresses of threat actors. This information is evaluated to determine money laundering transactions and the use of currency swaps and mixers.
Are crypto mixers illegal?
Whether using coin mixing services is illegal or not is determined by the jurisdiction in which you reside. Also, are Bitcoin mixers necessary? Or, is tumbling crypto legitimate? It depends on your goals for using these services.
Using mixers to disguise crypto transactions is criminal conduct, according to former United States Assistant Attorney General Brian Benczkowski. For instance, Bitcoin’s key functionality is privacy instead of anonymity, which means your identity is not always revealed, but your transactions can be audited to investigate any misconduct. So, is Bitcoin mixing illegal?
Bitcoin mixers are classified as money transmitters by the Financial Crimes Enforcement Network (FinCEN). Therefore, they must register with FinCEN and apply for a state-by-state license to operate. An Ohio citizen was arrested in 2021 on allegations of money laundering conspiracy because he ran a Bitcoin mixing service on the dark web. The service operated as an unregistered money transmitting business and conducted money transmission without a license despite the FinCEN’s mandatory licensing requirements.
How do cryptocurrency mixers work?
The concept of crypto tumblers or mixers is to run a trade’s digital signatures via a “black box” that hides them.
Crypto mixers are programs that mash up a certain quantity of cryptocurrency in private pools before transferring it to its designated receivers. For instance, a Bitcoin explorer, which keeps track of all BTC deals, will show that person A transferred Bitcoin to a mixer and that person B received BTC from a mixer. In this way, no one knows who sent BTC and to whom. Therefore, dirty Bitcoin is laundered in the crypto mixing process.
Coin mixers function by taking your cryptocurrency and mixing it with a large pile of another cryptocurrency before returning you smaller units of crypto to an address of your choice, with the total amount you put in minus 1-3%. The coin mixing firm usually collects 1-3% profit, which is how they earn a living.
Coin mixing is comparable to money laundering in that it is criminal conduct. Just because someone engages in coin mixing, however, does not indicate they are committing a crime. Instead, it simply means that they want to increase the privacy of their cryptocurrency transactions.
What are the types of crypto coin mixing services?
Cryptocurrency mixing services are categorized into two types, custodial and noncustodial coin mixers.
Custodial mixing occurs when users submit their “tainted” currencies to a trusted third party, returning “clean” coins after a timeout. However, this technique is insufficient because the users lose possession of their money during the mixing process. As a result, the trusted mixing party may steal funds in the case of custodial mixers.
The use of publicly verifiable and transparent smart contracts or secure multi-party computation to replace the trusted mixing party is a frequent element in noncustodial mixers. The process for noncustodial mixing consists of two steps.
Users first deposit the same amount of Ether (ETH) or other tokens into a mixer contract from address A. Then, after a user-defined time interval, they can withdraw their deposited coins via a withdrawal transaction to a new address B.
Users can confirm to the mixer contract that they deposited without exposing the deposit transaction they issued by using one of several accessible cryptographic techniques such as ring signatures and zk-SNARKs in the withdrawal transaction.
What is a cryptocurrency mixer?
The rapid expansion of cryptocurrencies and the development of crypto infrastructure and vulnerabilities like crypto mixers or tumblers have been a source of concern for government agencies in charge of financial security.
Many people use crypto mixers to keep their cryptocurrency transactions private by mixing potentially identifiable cryptocurrency funds with vast sums of other funds. These services are often used to anonymize fund transfers between services and do not require Know Your Customer (KYC) checks.
As a result, the risk of employing crypto mixers to launder money or conceal earnings is pretty considerable. Mixers and online gambling sites have the most severe money laundering issues, as they process the vast majority of dirty currencies. Mixers, for example, have consistently processed about a quarter of all incoming illicit Bitcoin (BTC) each year, while the proportion laundered through exchanges and gambling has remained relatively steady (66 to 72%).
There are two types of Bitcoin mixers: namely centralized and decentralized mixers. Companies that receive Bitcoin and send back different BTC for a fee are known as centralized mixers, providing a simple solution for tumbling Bitcoin.
Decentralized mixers use protocols like CoinJoin to obfuscate transactions using either a completely coordinated or peer-to-peer (P2P) approach. Essentially, the protocol allows a big group of users to pool an amount of BTC and then redistribute it such that everyone receives one Bitcoin. Still, no one can know who received what or where it originated from.
Other types of coin mixers include obfuscation-based and zero-knowledge-based mixers. Obfuscation-based mixers, often called decoy-based mixers, employ ways to conceal a user’s transaction graph. An adversary with sufficient resources, on the other hand, can recreate the transaction graph using a variety of ways.
On the contrary, zero-knowledge-based mixers rely heavily on advanced cryptographic techniques like zero-knowledge proofs to fully erase the transaction graph. The most significant disadvantage of this strategy is that it necessitates extensive cryptography, which may limit scalability.
Top Israeli bank to accept BTC and ETH trading through Paxos’ collaboration
Pepper Invest users can now buy, sell, and hold Bitcoin and Ethereum subject to regulatory approval.
Leumi Bank, one of the largest lenders in Israel, reportedly started to accept Bitcoin (BTC) and Ether (ETH) trading.
According to a Thursday report by Reuters, Pepper Invest, Leumi’s digital platform, partnered with blockchain infrastructure provider Paxos to launch crypto trading. Pepper Invest clients can now buy, sell and hold cryptocurrencies using the new service.
The move will only support BTC and ETH before adding support for other crypto assets. In addition, the minimum transaction value for cryptocurrencies was set at around $15.50 (50 shekels), as per the report.
There is currently no start date announced, and the new move is pending regulatory approval. The report highlighted that:
“Pepper will collect tax according to the guidelines of the Israeli Tax Authority so that customers will not need to manage tax complexities.”
Banks in many countries were previously hesitant to accept BTC and other cryptocurrencies, but that situation has changed as demand from corporations and individual customers have increased. Regulators have also shifted their attention away from outright bans and toward the development of a regulatory framework.
Leumi Bank had previously prohibited crypto exchange Bits Of Gold’s account, citing regulatory concerns. However, a Supreme Court ruling back then, as reported by Cointelegraph, declared that Leumi Bank cannot block the crypto exchange’s account.
Cointelegraph reached out to Paxos for more information and the story will be updated with a response.
Related: US investment bank Cowen launches dedicated crypto division
The development is significant, as it represents a paradigm shift in the global financial sector’s attitude towards digital assets. DBS of Singapore is already supplying crypto trading services to businesses and will extend these offerings to retail clients by the end of the year.
Furthermore, KB Bank in South Korea is readying to provide crypto investment solutions to individual clients, and several other institutions are considering similar possibilities.
ETH price hits $3K as major crypto fund adds over $110M Ethereum to Lido’s staking pool
Later, the hedge fund manager reportedly purchased more than $22.50 million worth of ETH tokens from FTX and Deribit.
Ethereum’s native token Ether (ETH) rose above $3,000 on March 22 as fresh data suggests Three Arrows Capital staked at least $110 million worth of ETH into Lido’s liquidity pools.
The Singapore-based hedge fund manager provided liquidity worth 36,401 ETH to Lido’s “Curve stETH pool” using a third-party Ether wallet, data from Etherscan shows. As a result, it became eligible to receive at least 36,401 stacked Ether (stETH) tokens from Lido: To ensure low slippage when un-staking those tokens for real ETH plus staking reward.
Almost an hour later, another Ether address, marked with the word “fund,” sent 6,993 ETH (worth $21.12 million) to the Curve stETH pool, hinting that Three Arrows Capital was adding more liquidity to the Lido’s coffers. If correct, the fund may have already staked more than $130 million worth of Ether on March 22.
Participating in ETH 2.0?
The Three Arrows Capital’s massive Ether inflow into Lido staking pools came ahead of the launch of Ethereum’s new validation system in summer 2022.
Ethereum will switch its network protocol from energy-intensive proof-of-work to proof-of-stake, which lets users validate transactions and add blocks to the Ethereum blockchain by staking 32 ETH or its multiples for at least one year to earn annual yields.
But only 8% of the current ETH supply has been staked into ETH 2.0 contracts since its introduction in December 2020, underscoring that average Ether users are reluctant to lock 32 ETH — about $100,000 at today’s price — for a year. That has created opportunities for liquidity mining providers like Lido.
Notably, Lido allows users to lock any amount of Ether to participate in running the ETH 2.0 chain without lock-ups. As a result, it now represents more than 80% of the Ethereum liquid mining space, holding nearly $8.25 billion worth of ETH in its pools at today’s prices.
Hence, Three Arrows Capital’s looks intent to become a validator on the Ethereum network via a less risky alternative like a liquidity staking pool. Meanwhile, the fund appears to have also been accumulating more Ether.
Accumulation after staking
Three Arrows Capital’s address received about $22.50 million worth of Ethereum tokens from wallets associated with crypto exchanges FTX and Deribit on March 22, less than an hour after it staked 36,401 ETH into the Lido’s pool.
The Three Arrows Capital address (0x4862733B5FdDFd35f35ea8CCf08F5045e57388B3) has inflowed 7,500 ETH in the past seven hours, with a total value of about $22.43m; of which 5,500 ETH was withdrawn from FTX and 2,000 ETH was withdrawn from Deribit. https://t.co/27A1u6o4su
— Wu Blockchain (@WuBlockchain) March 22, 2022
Related: Ether bulls eye resistance at $3K as the network prepares to undergo ‘The Merge’
It wasn’t clear whether Three Arrows purchased the coins anew or merely withdrew them for holding or further staking. But in either case, the firm contributed to what appears like a constant depletion of Ether reserves across the crypto exchanges, considered by many ETH traders a bullish signal.
Nonetheless, PostyXBT, an independent market analyst, highlighted $3,000 as a key inflection zone for ETH price, noting that only flipping above it decisively could have Ether eye a move toward $3,500.
“I think we see a further +10% move towards key resistance,” he wrote.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
$5.8 Billion Burned: Second Largest Crypto Network Records 2 Million Ethereum Destroyed in 7 Months
This week, the Ethereum network’s burn rate reached a milestone by surpassing 2 million ethereum burned worth $5.81 billion since August 5, 2021. Metrics show the crypto network has a 24-hour burn rate of 1.74 ether per minute, which equates to roughly $5K worth of ether destroyed every 60 seconds. 2 Million Ethereum Burned, More […]Value Locked in Defi Climbs Back Above $200 Billion, ETH Dominates Defi TVL by 54%
As the crypto economy nears the $2 trillion mark, the total value locked (TVL) in decentralized finance (defi) has risen above the $200 billion zone after slipping below that range for most of the year. While the TVL in defi dropped 0.51% during the last 24 hours, statistics show the TVL today is hovering around […]
Ethereum balance on crypto exchanges falls to lowest levels since 2018
Nearly $1.61 billion worth of Ethereum tokens has left crypto exchanges year-to-date, ahead of its protocol’s potential full merge to proof-of-stake in summer.
The amount of Ethereum’s native token Ether (ETH) kept with crypto exchanges has fallen to its lowest levels since September 2018, signaling traders’ intention to hold the tokens in hopes of a price rally in 2022.
Notably, nearly 550,000 ETH tokens — worth around $1.61 billion — have left centralized trading platforms year-to-date, according to data provided by Glassnode. The massive outflow has reduced the exchanges’ net Ether balance to 21.72 million ETH, down from its record high of 31.68 million ETH in June 2020.
Biggest weekly ETH outflow since October 2021
Interestingly, over 30% of all Ether’s withdrawals from exchanges witnessed in 2022 appeared earlier this week, data from IntoTheBlock shows. In detail, over 180,000 ETH left crypto trading platforms on March 15, bringing the weekly outflow’s worth to a little over $500 million as of March 18.
Chainalysis data showed similar readings, revealing that Ether tokens could have left exchanges this week at an average of about 120,000 units per day, a bullish signal. Excerpts:
“Assets held on exchanges increase if more market participants want to sell than to buy and if buyers choose to store their assets on exchanges.”
IntoTheBlock provided a similar upside outlook while citing a fractal from October 2021 that saw the Ether’s price rising by 15% ten days after the Ethereum network detected massive ETH withdrawals from centralized crypto exchanges.
Ethereum supply crunch underway
The increase in Ether withdrawals from exchanges this week coincided with about 190,000 ETH moving into Lido’s “stETH liquid staking” pools, IntoTheBlock noted.
To recap, Lido is a non-custodial staking service that enables users to overcome challenges associated with staking on the Ethereum 2.0 Beacon Chain, including the requirement of staking a minimum of 32 ETH or its multiples. Furthermore, Lido proposes to solve the capital efficiency problem by issuing stETH, the tokenized version of staked ETH.
The last 30 days showed Ether holders adding over 1 million ETH into the Ethereum 2.0 contract. And as the protocol prepares to switch completely to proof-of-stake in summer — in the wake of its “Merge” earlier this week on the Kiln testnet — the probability of more Ether tokens going out of active supply has increased.
Lol. No one told anon that there’s going to be a liquidity squeeze in newly minted Ether in a few months. No newly minted Ether will enter circulation between the Merge (Juneish) and Shanghai (Decemberish). I’d text them but I don’t even have their number. You got it? Poor anon.
— superphiz.eth (@superphiz) March 16, 2022
ETH price rebound continues
The bullishness surrounding Ethereum’s switch to proof-of-stake has prompted Ether to enter a rebound mode this week.
Related: Vitalik Buterin talks crypto’s perils in Time Magazine interview
In detail, ETH’s price rallied by more than 17% week-to-date to nearly $3,000. Interestingly, the upside retracement originated at a technical level — rising trendline support with a recent history of limiting Ether’s bearish outlooks, as shown in the chart below.
Nonetheless, as Cointelegraph covered earlier, Ether could pare its gains owing to another technical level, this time a falling trendline resistance that has also been instrumental in capping its upside attempts since January 2022.
Together, these trendlines appear to have formed a continuation pattern called a symmetrical triangle, indicating that Ether will most likely go in the direction of its previous trend, i.e., down. For now, ETH could fall back toward the triangle’s support trendline on a pullback from its resistance one.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Ethereum Devs Implement Merge Testnet Kiln, Testing Ground Expected to Be the Last Before PoS Transition
After implementing the merge testnet Kiln, Ethereum is seemingly getting closer to transitioning to a full proof-of-stake (PoS) network. According to developers Kiln’s execution layer was initially launched leveraging proof-of-work (PoW) and since March 15, Kiln is running entirely under a proof-of-stake consensus algorithm. Ethereum’s Kiln Merge Testnet Goes Live Ethereum developers are making progress […]
3 reasons why Ethereum price can still retest $3K this month
A mix of technical, fundamental, and on-chain indicators show ETH price could boom higher as Q1 winds down.
Ethereum’s native token Ether (ETH) could reach back to $3,000 in March, backed by a mix of short-term technical, fundamental, and on-chain catalysts.
ETH price paints “symmetrical triangle”
The first interim bullish outlook for Ether ironically comes from a bearish continuation pattern
Notably, ETH’s 50%-plus decline from its all-time high of around $4,650 on Dec. 2, 2021, followed up with forming a consolidation channel called a symmetrical triangle. Hence, the Ethereum token has been fluctuating between a falling upper trendline and a rising lower trendline since the beginning of this year.
ETH/USD last retested the triangle’s lower trendline as support on March 14 near $2,500, following a sharp correction after finding sellers near the 20-day exponential moving average (20-day EMA; the green wave in the chart above). S
ince then, ETH’s price has rebounded by as much as 9.26%, closing above the 20-day EMA resistance on March 16 to reach almost $2,750.
A decisive rebound move, accompanied by a rise in trading volumes, could have Ether eye the triangle’s upper trendline as its next upside target near $3,000.
The Merge
On March 15, Ethereum developer Tim Beiko announced that they have successfully tested the “Merge” on the Kiln testnet, raising speculations that the protocol would completely switch from proof-of-work (PoW) to proof-of-stake (PoS) in Q2/2022.
And it seems to have worked Post-merge blocks are being produced by validators, and they contain transactions! https://t.co/xearnsuZFp
Just waiting on finalization now https://t.co/BEfJOI4qqj pic.twitter.com/c4p1UXB5vw
— Tim Beiko | timbeiko.eth (@TimBeiko) March 15, 2022
The euphoria around the Merge has acted as one of the main bullish prospects behind Ethereum’s growth since the introduction of its first consensus layer upgrades in December 2020.
Arcane Research noted in its latest weekly report that a total of 312,000 validators staked 10 million ETH on the Merge — also called Ethereum 2.0 — smart contacts.
That amounts to nearly $26 billion worth of Ether, more than 8% of its total circulating supply, now locked away. The prospects of more Ether going out of circulation, coupled with hopes of higher demand, have pushed its price up by nearly 360% from its December 2020 low of around $525 to date.
Lito Coen, the founder of Crypto Testers, a product comparison platform, anticipates Merge’s launch to have Ethereum’s daily emission rate slashed from 12,000 ETH a day to 1,280 a day, noting that the network’s “yearly inflation will go down from 4.3% to 0.43%” — equivalent of three Bitcoin halvings.
“And the 0.4% inflation figure is without taking into account the automated ETH burn introduced by EIP-1559 ($5b burnt since launch) taking ETH burn into account Ethereum will be deflationary,” Coen wrote.
Positive divergence between utility and prices
A bullish divergence between Ethereum’s daily active addresses (DAA) and ETH’s price is also emerging, according to data from analytics platform Santiment.
Notably, Ethereum’s DAA fell but not as much as the prices, which dropped about 35% in the past four months. That indicated that users continued to interact with the Ethereum network for reasons beyond speculation and trading.
Related: How professional Ethereum traders place bullish ETH price bets while limiting losses
ETH active addresses divergence remains in the area where prices historically rise,” noted Santiment, while citing the chart below.
“This is a vote of confidence in Ethereum and a statement that it’s here to stay (and grow),” said Michael Pearl, COO of dapp developer Kirobo, adding that its growth in the DeFi space would boost ETH’s price even beyond $3,000.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Hacker Siphons $3 Million Worth of DAI and ETH From Defi Protocol Deus Finance
Another decentralized finance (defi) protocol was breached this week after it was discovered that a hacker exploited the bilateral over-the-counter (OTC) derivatives platform Deus Finance. According to a post mortem Twitter thread published by the security firm Peckshield, Deus lost around $3 million worth of ethereum and the stablecoin DAI. Attacker Steals $3 Million From […]