FreeCryptoCurrency.Me

Set to go live in the coming hours, The Merge will be a significant moment for Ethereum. The event will swap Ethereum’s consensus approach from proof of work to proof of stake.

It will also lay the groundwork for future scaling upgrades on Ethereum. During the upgrade codenamed “Paris,” miners will stop producing blocks, and validators will take over this task.

Getting to The Merge has taken years of work as swapping consensus is a complicated task. For this reason, Ethereum developers spent years coding and later conducted a series of rehearsals in order to prepare.

Ethereum currently exists as two chains: the proof-of-work mainnet (execution layer), and the proof-of-stake Beacon Chain (consensus layer).

During The Merge, these two will become inextricably linked. When that happens, the first block after The Merge will be finalized using proof of stake consensus. The process is considered complex and could encounter unforeseen issues or minor technical glitches, Ethereum core members have previously stated. 

In fact, Ethereum researcher Justin Drake said in an interview with Time that he anticipated general technical glitches. Drake clarified that such glitches will not pose a systemic risk to the upgrade or the project. 

What could happen?

So what are these issues that Ethereum may potentially have to face during The Merge?

Isidoros Passadis, master of validators at Lido Finance, has classified them into multiple types. The first type, according to Passadis, can be general technical glitches common with software upgrades. 

“With any software upgrade, we have to anticipate possible bugs, technical glitches, or general hiccups. This is reasonable anticipation and one the community needs to make peace with,” Passadis said in a statement shared with The Block. 

Another possible issue relates to the ability of Ethereum nodes to actually execute the upgrade. Passadis said that the possibility that nodes may fail during the transition is not out of the question.

For the Merge to be successful, the majority of node operators would have to come to a consensus and be synced with each other. Every node runs a client to interact with the Ethereum network to broadcast and verify transactions. If this process is interrupted due to bugs in client software, The Merge could be potentially disrupted.

During previous dress rehearsals for The Merge, client teams uncovered bugs that caused some nodes to temporarily fail or skip blocks. 

To counter the effects of the failure of one client, Ethereum developers have adopted the strategy of “client diversity” where the chain relies on multiple types of client software used to run nodes. This reduces the chances of a complete failure of The Merge.

The clients on the execution layer include Geth, Erigon, Besu and Nethermind. Meanwhile, the Beacon Chain uses Teku, Prysm, Nimbus and Lighthouse as clients.

“Ethereum has undergone three testnet Merges, numerous shadow forks and there are multiple client teams working alongside each other to implement the code successfully,” Passadis clarified.

Anthony Sassano, the founder of ETHHub, explained in a YouTube video node issues may ultimately be a “nothingburger.” Sassano later clarified that as long as a majority of node operators participate, the Merge will be finalized.

The upgrade, according to Sassano, will require a minimum participation of 66% Ethereum node operators on both layers. So, even if there’s a bug affecting one client software, other clients can sustain the network against an outage.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Most bitcoin mining stocks tracked by The Block fell on Wednesday.

Bitcoin itself was trading at around $20,000 at market close, according to TradingView.

CleanSpark was down by 4.03%, followed by SAI.TECH (-2.52%), Mawson Infrastructure Group (-2.01%), Marathon (-1.72%) and Northern Data (-1.54%).

Here’s how crypto mining companies performed on Wednesday, Sept. 14:

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Representatives for creditors and customers trying to claw back money from bankrupt crypto lender confirmed that Celsius’s leadership has contacted them about a plan to revive business operations.  

But the representatives, known collectively in proceedings as the Committee of Unsecured Creditors (UCC), have not thrown support to the proposed revival plan from the firm’s executives, details of which leaked after they were discussed at an all-hands meeting. 

Gregory Pesce, a lawyer for the committee, addressed ambitions by Celsius executives to restart business operations for the company. 

“The debtors, as has been widely reported, met with the UCC,” said Pesce. “They presented a concept. UCC does not support that concept. We don’t support any end game here.”

A recording of a company all-hands meeting circulated yesterday in which the two executives detailed their plan for a comeback, saying they hoped to pivot the firm towards more custodial services and charge fees for certain types of transactions, a project code-named “Kelvin.” In that recording, Celsius executives Alex Mashinsky and Oren Blonstein said they had already met with UCC representatives to present the proposal and “got positive feedback.” The recording was originally obtained by the New York Times. 

Pesce told the court that Celsius, “have committed to running a process to market check what is out there and whatever the management team might ultimately produce,” he said. Pesce added that creditor representatives are talking to Celsius and want the company to file a full plan in court. 

In his leaked remarks, Blonstein indicated that the firm would propose the new business plan as a means of repaying customers who lost funds through the company. Celsius recently got approval to honor withdrawals for certain custody customers, but it’s unclear what remedy other types of users will see. In a recording posted online by Tiffany Fong, a Celsius customer and public commentator, Blonstein can be heard describing a proposal to restart staking and lending services.

Celsius’ CEL token saw a brief spike in the hours after the recording leaked. 

TradingView

Celsius entered Chapter 11 bankruptcy proceedings in July. Since the start of the process, multiple entities have demanded more clarity into the firm’s financial management in the lead up to its collapse, including securities regulators. Some contend that Celsius has continuously misled the public as it relates to its financial health. Today’s hearing is also ruling on the appointment of an outside examiner, which would create a third-party report on Celsius’ management and financials.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Coinbase users can evaluate lawmakers’ crypto bona fides, register to vote and discover political events on the exchange’s app, co-founder and CEO Brian Armstrong announced. 

The company added the new features as part of its mission of “increasing economic freedom,” Armstrong said in a Twitter thread. Washington lawmakers and regulators are eyeing new rules for the industry after this summer’s market crash, and Coinbase launched a voter registration and education initiative last month.

“Crypto advocacy is very important for our mission of increasing economic freedom in the world, and Coinbase will do its part to help,” Armstrong said. “But the crypto community is much bigger than Coinbase – hopefully we can all rally to engage elected leaders and drive sensible policies.”

Coinbase has 103 million verified users, according to Armstrong.

The move comes days after Crypto Action Network, a dark money group, released a scorecard sizing up the crypto records of members of Congress. Coinbase, which supports the nonprofit organization, will feature the scorecard on its app. The company also has plans to help pro-crypto candidates raise money, Armstrong said.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Ether derivatives soared over the past six weeks as The Merge became top of mind — and now, traders are focused on hedging their bets. 

Ethereum’s transition to proof of stake is expected to occur early Thursday. The Block canvassed the crypto market ecosystem to assess how traders are acting and reacting ahead of the event, which catapulted ether derivatives to new records in August. 

Vidiella noted that funding for ether perpetuals is negative, with lots of short-term hedging taking place. According to Vidiella, traders are willing to accept the negative funding rates over the next few days in order to profit from any potential ether crashes — having most likely covered themselves during the surge in trading during August. 

Vidiella also highlighted that macro factors will continue to affect the market in the short run, as evidenced by yesterday’s crash following the U.S. CPI release. 

The Merge push

In August, ether derivatives set new milestones.

Open interest in ether options initially surpassed bitcoin open interest, and then the volume of ether futures eclipsed bitcoin for the first time.

Most metrics continued to surge heading into  September and on Tuesday, ether open interest on the Chicago Mercantile Exchange (CME) hit its highest point since May.

The price of ether whipsawed throughout August, gaining as much as 18% one week before surrendering those advances a week later.

However, ether wasn’t alone as most major cryptocurrencies fluctuated throughout the month, broadly in line with wider financial markets. 

Follow The Block’s live coverage of The Merge here. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The final countdown to The Merge is here, with various watch parties set up to capture the event live.

Despite several delays and setbacks, The Merge marks the culmination of years of hard work for Ethereum’s core developers to ensure a smooth transition, drastically reducing its often criticized energy consumption. ConsenSys CEO Joseph Lubin even heralded The Merge as the third biggest event since the advent of Bitcoin and Ethereum. 

The event itself could be a very late night or early morning for many enthusiasts keen to join in on the celebrations from North America and Europe. Unless something changes soon, Ethereum is estimated to shift from proof of work to proof of stake at 1 am ET on Thursday.

The Merge watch party events

Those willing to stay up late or wake up early and catch the event live can hear from notable guests alongside the wider Ethereum community at the following Merge watch parties:

• Ethereum Foundation: Ethereum Mainnet Merge Viewing Party – from 10:30 pm ET on Sept. 14.
• Nethermind: Merge Watch – from 6 pm ET on Sept. 14.
• Bankless: The Eve of The Merge Livestream – from 5 pm ET on Sept. 14.

How to track The Merge

Here are a couple of good resources for tracking what will happen:

• Bordel.wtf lets users track the Terminal Total Difficulty to see when the upgrade will happen.
• Beaconcha.in shows the latest data on the proof-of-stake chain, which will show new slots as they are processed.

For the latest news and updates about The Merge, make sure to check out our live coverage.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Paolo Ardoino, CTO of Tether and Bitfinex, said today that Ethereum still doesn’t match Bitcoin because its narrative keeps shifting.

In a statement shared with The Block, Ardoino said “While Bitcoin is a form of money, Ethereum is stuck between claims of being a form of money and claims of being a platform, but ETH cannot compete with Bitcoin on the money front because there is no fixed supply, and it isn’t really a world computer yet because it has a shared global state and hence too slow to be scalable.”

The Merge — Ethereum’s highly anticipated transition from proof of work to proof of stake — is now just hours away, promising to reduce energy consumption by over 99% and clearing the roadmap for future scaling upgrades. 

However, Ardoino is more critical of the change, stating “The Merge will not fix transaction fees or make Ethereum any more decentralized. The Merge has put a huge focus on Ethereum, but what will we be left with?”

Ardoino added that The Merge won’t impact the ecosystem’s Layer 2 solutions either as it doesn’t directly solve Ethereum’s scalability issues.

“The real message here isn’t what the Merge will change but what asset already exists that provides the core themes of our industry, which includes true decentralization. The fact of the matter is that Bitcoin is the only asset out there that has a solid narrative, one that hasn’t changed. Ethereum still doesn’t match Bitcoin because its narrative keeps shifting,” Ardoino concluded.

After reading the Bitcoin whitepaper in 2012, Ardoino joined crypto exchange Bitfinex in 2014 and was promoted to chief technology officer after just two years. He also holds the same role at Tether, the company behind the stablecoin USDT.

Bitfinex, like many of the biggest crypto exchanges, plans to support The Merge, though it may temporarily suspend deposits and withdrawals for ETH and ERC-20 tokens. In the event of a fork — a split that produces another blockchain, such as the proposed ETHPoW (ETHW) fork — Bitfinex will decide whether to support the forked tokens and credit users’ balances. Regardless, the ticker for the proof of stake version will remain as ETH.

For the latest news and updates about The Merge, make sure to check out our live coverage.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Securities and Exchange Commission Chair Gary Gensler wants SEC staff to work with token projects on a “flexible” pathway to registering as securities. 

“I have asked staff, in working to register crypto security intermediaries, to recommend a pathway to allow both the crypto security and crypto non-security tokens to trade versus or alongside one another,” Gensler says in written testimony submitted to the Senate Banking Committee, where he will appear as part of a regular oversight hearing tomorrow. “Given the nature of crypto investments, I recognize that it may be appropriate to be flexible in applying existing disclosure requirements.”

Gensler reiterated the SEC’s longstanding position that “most crypto tokens are securities,” and that many intermediaries need to register with the SEC, “whether they call themselves centralized or decentralized,” Gensler continued, specifically referencing ‘decentralized finance.’  

Gensler’s latest remarks soften his tone on the topic of crypto from last week, when he dismissed crypto industry complaints about lacking clear guidance. “Through the past 5 years, the SEC has spoken with a pretty clear voice,” Gensler told a legal conference in Washington. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The US Treasury is targeting the Iranian military’s ransomware wing. 

In new sanctions announced on September 14, the Treasury’s Office of Foreign Asset Control took aim at 10 individuals and two companies that it associated with Iran’s ransomware activities.

OFAC alleges that this ransomware group targeted a municipality in New Jersey and a children’s hospital in 2021, among other exploits.  

“This IRGC-affiliated group is known to exploit software vulnerabilities in order to carry out their ransomware activities, as well as engage in unauthorized computer access, data exfiltration, and other malicious cyber activities,” Treasury’s announcement said. 

The new sanctions included 7 new Bitcoin addresses, adding to a growing list of crypto addresses that the Treasury has designated.

The past month has seen a storm of controversy surrounding sanctions on the smart contract addresses that run decentralized mixer Tornado Cash. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Two Sigma Ventures, a venture firm focused on early-stage companies, announced Wednesday that it raised $400 million across its two funds. 

Two Sigma Ventures will use the two funds to invest in companies that use data and technology for social advancement, according to a company release. The firm raised 85% of the $400 million from external investors like college endowments, non-profit foundations and pension funds. Senior employees and partners at Two Sigma provided the remaining 15%. 

In addition to crypto and DeFi, Two Sigma Ventures invests in early-stage firms in software-as-a-service and fintech, among other areas. 

Two Sigma Ventures is the venture arm of Two Sigma, a New York-based financial sciences firm. Two Sigma has over $60 billion worth of assets under management, according to the firm’s website.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.