Bitcoin Remains Above $4,000 for the Second Day Running, Ethereum to Support More Than 500 Transactions per Second
The price of Bitcoin crossed the $4,000 mark on Jan. 6 and the entire market has gained more than $10 billion since the beginning of the year. On the technical side of things, the Ethereum Foundation is working with a startup to scale transactions to 500 or more per second. Bitcoin’s median transaction fee has dropped to a three-year low figure. Ethereum Classic became a victim of a 51-percent network attack on Jan. 7.
The crypto market is a mix of gains and losses with the majority of the top 10 digital assets are in the red. Bitcoin continues to trade above the crucial $4,000 mark but lost less than 1 percent of its value in the last 24 hours. Ripple is up 0.21 percent and its market cap has risen to just over $15 billion. Stellar and Tron are the other two digital assets in the top 10 list to register gains. EOS and Bitcoin Cash are both down more than 3 percent.
Ethereum Foundation and Matt Inc. uses ZKSNARKS to significantly scale transactions
The adoption of cryptocurrencies as an everyday means of payment is threatened by the low number of transactions. Ethereum accommodates only 15 transactions per second (TPS) while Bitcoin does only 15. In contrast, VISA is capable of 2,000 TPS and can scale tens of thousands during peak times.
The Ethereum Foundation in partnership with Matter Inc. startup has launched on test net a Plasma scaling solution that relies on Zero-knowledge proof (ZSNARKS) to facilitate 500 TPS or more on the Ethereum network.
ZSNARKS stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge.” The idea of sidechains is taking off in the blockchain industry and Bitcoin has its own Lightning Network to scale its transactions.
Joseph Poon and Vitalik Buterin proposed the scaling solution in 2017 under the Plasma name.
“The main idea was to eliminate unnecessary data in smart contracts and only broadcast short cryptographic commitments to blocks on the public mainchain. Verification of correctness of the committed transactions and storing the transaction data was supposed to be happening [off chain]. Users noticing incorrect data being committed can challenge the operator in EVM and revert the block,” read part of a blog post published by Matter Inc.
Bitcoin transaction fee drops to three-year low
According to BitInfoCharts.com, the median transaction free for the Bitcoin network has just hit $0.029, signaling a new low in three years. Kevin Rooke, a crypto community researcher on Twitter pointed out that the transaction fee was last this low in October 2015 when Bitcoin was trading at $270.
Rooke tweeted that on Jan. 1, 2019, the median Bitcoin transaction fee was $0.02 for a total of 234,576 transactions and on Oct. 13, 2015, the median Bitcoin transaction fee was $0.02 and there were 134,741 transactions.
Rooke further pointed out that the Bitcoin network is processing 70 percent more transactions than it did three years ago.
BifInfoCharts.com data indicate that the BTC network process between 200,000 – 250,000 transactions per day. Bitcoin’s off-chain scaling solution Lightning Network has the potential to scale up the number of transactions on the Bitcoin network.
Ethereum Classic suffers 51 percent network attack
The Ethereum Classic blockchain has suffered a 51 percent network attack. Bitfly, the operator of Etherchain.org, Ethernodes.org, and Flypool.org mining pool confirmed the hack via a tweet.
“We can confirm that there was a successful 51% attack on the Ethereum Classic (#ETC) network with multiple 100+ block reorganization. We recommend all services to closely monitored the chain and significantly increase required confirmations,” tweeted Bitfly.
Bitfly further confirmed that the attack had affected its operations. “Because of the currently ongoing potential 51% attack on ETC, we have temporarily increased block confirmations on our ETC mining pool. We will notify you once the network has stabilized again.”
With more than 50 percent of the network’s power, the attacker is able to append their own longer chain on the network and rewrite the blockchain to meet their own needs. This could lead to double spend.
Ethereum Classic tweeted that “There have been rumors of a possible chain reorganization or double spend attack. From what we can tell the ETC network is operating normally.” More than 100 blocks were “reorganized” as a result of the hack.