Update on Hiring Plans. By L.J Brock, Chief People Officer | by Coinbase | Jun, 2022

Update on Hiring Plans. By L.J Brock, Chief People Officer | by Coinbase | Jun, 2022

By L.J Brock, Chief People Officer

I shared an update with our employees today that I want to also share publicly here.

TL;DR: In response to the current market conditions and ongoing business prioritization efforts, we will extend our hiring pause for both new and backfill roles for the foreseeable future and rescind a number of accepted offers.

Two weeks ago, we paused hiring while we took time to reprioritize our hiring needs against our highest-priority business goals. As these discussions have evolved, it’s become evident that we need to take more stringent measures to slow our headcount growth. Adapting quickly and acting now will help us to successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation.

How we’ll navigate this moment:

  1. We will extend our hiring pause for the foreseeable future.
  • After assessing our business priorities, current headcount, and open roles, we have decided to pause hiring for as long as this macro environment requires.
  • The extended hiring pause will include backfills, except for roles that are necessary to meet the high standards we set for security and compliance, or to support other mission-critical work. We will always prioritize the safety and security of our customers’ funds.

2. We will rescind a number of accepted offers.

  • We will also rescind a number of outstanding offers for people who have not started yet. This is not a decision we make lightly, but is necessary to ensure we are only growing in the highest-priority areas.
  • Limited exceptions apply and will be managed by the same criteria as backfills.
  • All incoming hires will be advised of their updated offer status today by email.

3. We acknowledge and take responsibility for the experience of those impacted.

  • This decision is not a reflection on the highly talented people we had extended job offers to.
  • We will apply our generous severance philosophy to offset the financial impact of this decision.
  • To further support impacted individuals, we are establishing a talent hub to allow them to opt-in to receive additional support services including job placement support, resume review, interview coaching and access to our strong industry connections.

We have prepared an FAQ — targeted to hiring managers and our talent teams — that contains additional information on how we’re managing this process.

As we manage through this downturn, we want to be transparent about the decisions we have to make in order to meaningfully manage expenses. For example, on our Q1 earnings call, we discussed that headcount and a variety of other expenses are the key ways for us to manage our costs. While we did not make this decision lightly, it is the prudent one given market conditions. We will continue to evaluate all of our options to responsibly navigate Coinbase through the current cycle.

We always knew crypto would be volatile, but that volatility alongside larger economic factors may test the company, and us personally, in new ways. If we’re flexible and resilient, and remain focused on the long term, Coinbase will come out stronger on the other side. These challenges can be career-defining, helping us learn and grow. And at the end of the day, I think you’ll be proud to have helped Coinbase navigate this next part of its journey.

L.J.

Forward-Looking Statements

This blog post contains forward looking statements. These forward looking statements are only predictions and may differ materially from actual results due to a variety of factors. The risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed in our filings with the Securities and Exchange Commission. Any forward looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this blog post. We undertake no obligation to update these statements as a result of new information or future events.



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Daily Pump & Dump | June 2, 2022 Crypto Market Report: BTC, ETH, ICP

Daily Pump & Dump | June 2, 2022 Crypto Market Report: BTC, ETH, ICP

The daily pump & dump is a weekday update on the crypto market providing you with an abbreviated breakdown of price action related to Bitcoin, Ethereum, and other trending altcoins. 

Today’s summary:

  • Bitcoin retests $30,000 after a rejection.
  • Why is Ethereum lagging behind the rest of crypto?
  • ICP posts insane intraday rally.

Bitcoin Retests $30,000, Can The Key Level Hold?

Bitcoin price was fiercely rejected from resistance at $32,000, sending the cryptocurrency back to retest support at $30,000.

The fall took BTCUSD daily to the middle-Bollinger Band – which is a 20-day simple moving average. Holding the line could lead to further upside, while losing it suggests continuation of downside. 

 

Bitcoin is trying to hold above the 20-day SMA | Source: BTCUSD on TradingView.com

A close above $32,000 is now the immediate hurdle for bulls to overcome, while bears remain within striking distance of new lows.

Related Reading | Hammer Time: The Bullish Signal That Could Save Bitcoin

Ethereum Losing Its Head (And Shoulders) Against BTC

Compared to Bitcoin, Ethereum isn’t performing as well. The top altcoin is not representative of the state of alts as a whole, which have in some cases seen strong recoveries today. 

ETHBTC_2022-06-02_16-18-41

Ethereum could head down further against BTC | Source: ETHUSD on TradingView.com

Upon closer inspection, ETHUSD is far below the same middle-Bollinger Band and 20-day SMA as Bitcoin on daily timeframes. The discrepancy is demonstrated in the ETHBTC pair, which is at risk of further breakdown if horizontal support is breached.

Internet Computer Boots Up 20% Rally

One outlier across the market today is Internet Computer. The Dfinity Foundation coin posted double digit gains on the day. Much like Bitcoin is visually more bullish than Ethereum considering price action and its location within the Bollinger Bands, ICP looks the most poised for aggressive expansion.

The Bollinger Bands are a volatility measuring tool. When the bands tighten, it indicates volatility will soon arrive. Closing outside of the upper band isn’t always a bullish signal and can result in reversal. If volume does arrive as price closes outside of the upper band, a strong move higher is possible.

ICPUSD_2022-06-02_16-20-54

ICP requires strong volume to keep the recovery going | Source: ICPUSD on TradingView.com

The 20% intraday climb is to be expected given a 98% fall since its crypto market debut. At launch, it bid at more than $500 per ICP putting the coin immediately in the top ten cryptocurrencies by market cap.

Related Reading | LUNA Aftermath: Total Crypto Market More Oversold Than Black Thursday

From a risk versus reward perspective, returning anywhere near close to debut prices from today’s price of $9 per ICP would represent nearly a 5,000% ROI or a 50x on the capital. This may be proving too enticing to pass up.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com



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CFTC sues Gemini claiming crypto exchange lied in futures contract evaluation

CFTC sues Gemini claiming crypto exchange lied in futures contract evaluation

The United States Commodity Futures Trading Commission (CFTC) filed suit against Gemini Trust Co. in the U.S. Southern District Court of New York on Thursday. The CFTC claimed in the civil suit that Gemini made false or misleading statements to the CFTC in 2017 during in-person meetings and in documents, violating the Commodity Exchange Act and other regulations. 

The agency was making an evaluation of the potential self-certification of a Bitcoin (BTC) futures contract to be based on the spot Bitcoin price determined by an auction held on Gemini’s digital asset trading platform.

The CFTC was considering whether the proposed Bitcoin futures contract would be susceptible to manipulation. The proposed Bitcoin futures contract would have been among the first digital asset futures contracts listed.

Gemini is the cryptocurrency trading platform founded by brothers Cameron and Tyler Winklevoss. It announced staff cuts Thursday and is preparing to lay off 10% of its workers due to the crypto market downturn. 

The CFTC said in a statement that it is seeking disgorgement of ill-gotten gains, monetary penalties and injunctions relating to registration and trading and against further violations of the Commodity Exchange Act. 

Related: Bipartisan bill to give CFTC authority over exchanges and stablecoins

“This enforcement action sends a strong message that the Commission will act to safeguard the integrity of the market oversight process,” CFTC acting director of enforcement Gretchen Lowe said in the statement.

Gemini told Cointelegraph in a statement: 

“Gemini has been a pioneer and proponent of thoughtful regulation since day one. We have an eight year track-record of asking for permission, not forgiveness, and always doing the right thing. We look forward to definitively proving this in court.”

Bitcoin futures began trading on the CBOE on December 10, 2017, based on the price of the cryptocurrency on the Gemini exchange.



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How to Buy Bitcoin on Cash App | Where, How and Why

How to Buy Bitcoin on Cash App | Where, How and Why

Bitcoin’s market capitalization has surpassed the $1 trillion mark during the recent bull market, because of the easy accessibility of cryptocurrencies in present times. When Bitcoin last experienced a parabolic bull run in 2018, investors had very fewer options for buying and selling digital currencies.

Bitcoin can now be purchased on exchanges such as Kraken, Coinbase, Gemini, etc. online brokers such as Webull, and Robinhood, and peer-to-peer transaction apps such as CashApp. Each platform offers various cryptocurrencies and charges different fees and commissions, but the availability of the largest assets such as Bitcoin and Ethereum is no longer an issue. The Cash App was one of the first peer-to-peer services to offer cryptocurrencies to customers, and today in this article, we’ll look at How to buy Bitcoin on Cash App.

Let’s get started!

About Cash App

Cash App is a mobile peer-to-peer transaction service developed by Square (listed on the Nasdaq under the name $SQ). The Cash App was first released in 2013 as Square Cash and works similarly to PayPal or Venmo, but with a few extra features. You can choose a username (called a $cashtag) and send cashless payments to other users with no costs, similar to Venmo. Cash App even allows users to send money to non Cash App users as long as they have a debit card.

Cash App can also be used as a bank and an investing account. Users can fund the app from an external bank account or debit card in order to invest in stocks and Bitcoin. While Cash App does not have the same stock choices as TD Ameritrade or Robinhood, it does allow clients with little sums to purchase fractional shares.

Buying Bitcoin On Cash App

One of the platform’s key goals is to simplify money for a user base that lacks strong financial literacy. Cash App doesn’t offer sophisticated charting tools or multilegged options trades to investors. However, it does offer a full platform for clients to send, save, and invest money in assets like stocks and cryptocurrency.

Cash App charges two distinct fees i.e service fee and an exchange fee on Bitcoin purchases, both of which are very reasonable and are applied to all transactions. The exchange fee fluctuates according to the volatility of the BTC price among US exchanges. Large Bitcoin purchases can be impacted more in turbulent markets, while smaller purchases will have costs equivalent to crypto exchanges like Coinbase or Gemini. 

Follow these 3 simple steps to buy Bitcoin using the Cash App.

Step #1: Download Or Open Cash App

Cash App is available on both the Apple App Store and Google Play Store. If you haven’t created an account yet, you’ll need a few pieces of information to get started. Your account application will require the following information:

Sign in on Cash app
Sign in on Cash app
  • Email address
  • Phone number
  • Bank account or debit card number
Add the debit card
Add the debit card

You’ll then need to provide your full name and select a unique $cashtag. This will be your username, which will be unique, and you will need it in order to receive payments. In addition, you will earn a referral code here. You can share the referral code with your friends or family members to gain a bonus when they sign up using it.

Enter your first and last name
Enter your first and last name
Choose a $Cashtag
Enter your ZIP code

Step #2: Fund Your Account

You must have funds in your Cash App account, or else you’ll be unable to purchase Bitcoin. So, go to the home screen and click on Add Cash, then enter the amount you wish to add. You must next verify your identity, social security number, birth date, and residential address. After you have loaded all of these data, you are ready to add funds to your balance. To confirm transactions, you’ll also need to generate a PIN, and create a PIN of your special number so you won’t easily forget (or write it down).

Step #3: Buy Bitcoin

Navigate to the “Investing” tab. This will allow you to select between equities and Bitcoin. Select Bitcoin, and the price chart with the most recent performance will appear. There will also be a BUY button. When you click on the “Buy,” button you will be able to pay for the bitcoins all at once or set up regular transactions. Choose how much Bitcoin you want to buy by picking a fixed USD value or setting a bespoke order.

After you’ve decided on an amount, press “Next”, and an order overview screen will appear Check thoroughly all the details and ensure that everything is in order, and hit on the “Confirm” button.

When it’s finished, click on “Done.” You can now check your Bitcoin balance by going to the Home tab. To deposit or withdraw Bitcoin, a user’s wallet address will be presented. You can avoid giving your Bitcoin to a third party by withdrawing the assets to a personal wallet. This ensures that you have complete ownership of your Bitcoin.

Auto-Investing In Bitcoin

Users of the Cash App who wish to invest in bitcoin should avoid fluctuating emotions and decision-making responsibilities. Cash App offers the Auto Invest feature to their users.

Auto-investing automates your bitcoin purchases. Purchases are made automatically, in the amount and on the schedule that the user specifies. A weekly purchase of $10 or $20 can grow an account by a significant proportion over time.

Here’s how to set up bitcoin auto-investment on Cash App:

  • Open the bitcoin window
  • Click on the “Buy” button
  • Select “Standard One-Time Order” from the drop-down menu
  • Select the frequency of your Auto Invest, whether you wish to buy daily, weekly, or bimonthly
  • Tap on “Done”
  • Select a regular investment amount from the drop-down menus or enter your own. Auto Invest requires a minimum purchase of $10
  • Click on “Next” and “Confirm”

How To Sell Bitcoin On Cash App

The secret to profiting from Bitcoin trading is to strike while the iron is hot. On Cash App, you can sell Bitcoin whenever you want or set up automatic sales when the price rises.

  • Tap the central “Sell” button on the Bitcoin tab.
  • The app defaults to a one-time sale, and you’ll be asked to enter a selling price in USD. As with the buying options, you can select a predetermined value or enter your own.
  • After you’ve decided on a price, you will be prompted to enter your PIN and confirm the transaction. And there you have it! Your Bitcoin has been transferred, and the transaction will be reflected in your Bitcoin and USD balances.
  • You can also set up sales to occur when the value of Bitcoin hits a certain threshold. Instead of selecting a one-time selling price when you first press “Sell,” select the “Change Order Type” option.
  • Tap “Custom Sell Order” on the following screen.
  • The following screen contains a graph that tracks the value of Bitcoin (you can look at it by day, week, month, or year). You can select a Bitcoin price that will cause a sale using the slider.
  • When you’ve decided on a value, press the “Set” button.
  • When that threshold is achieved, you will be asked how much you wish to sell for. Again, you have the option of selecting a preset sum or entering a custom quantity.
  • You will now be asked to choose an expiration date for this trigger from a choice of options. Setting up automated sales might be beneficial if you pay close attention to the market, but remember that what you set is what you get. Even if the value rises more, the transaction will be completed promptly once your target price is met.
  • Once you’ve selected an expiry date, Cash App will ask you to enter your PIN and confirm the data before proceeding with the automated sale.
  • You cannot change these rules after they have been set up, but you can cancel them and create new ones. Scroll down to the Bitcoin tab’s “Activity” section to see what automated sales you’ve set up.

Reasons To Buy Bitcoin Using Cash App

The main reason you should consider Cash App for purchasing Bitcoin is the same reason most people use Cash App for other things: It’s simple & easy.

It is a user-friendly financial app, and also one of the best apps for buying Bitcoin. To buy Bitcoin using your Cash App, go to the Bitcoin option on the main screen, click on “Buy BTC”, choose or enter the amount, and complete the transaction. It’s that simple.

Cash App also makes it simple to send Bitcoin to other individuals (or to another Bitcoin wallet you control) as well as to receive Bitcoin. Sending Bitcoin to other Cash App users is a quick and easy process, and sending it to external wallets by QR code or Bitcoin address is also very simple.

Is There A Fee For Buying Bitcoin On The Cash App

When buying or selling Bitcoin on Cash App, keep in mind that you will be charged a fee. This fee will be displayed on the trade confirmation screen before you complete the transaction. If you don’t agree with the charge, you can simply refuse to proceed. During Bitcoin transfers, Cash App will charge two types of fees: one is a service fee, and the other is an additional cost based on price fluctuations across US exchanges.

Risks Of Bitcoin 

Bitcoin isn’t without risks. It’s been around a little longer than Cash App and is accepted by a lot of large corporations. However, bitcoin has yet to establish itself as a popular method of buying and selling goods. Because the price of bitcoin fluctuates constantly, trading and investing in bitcoin remains risky.

Digital currencies may someday gain traction with banks, retailers, and private consumers. However, they can never really challenge the supremacy of the dollar, yen, euro, and other established currencies.

Final Thoughts

In recent years, Cash App has grown in popularity, and many users prefer to use it not only to send and receive money but also to conduct Bitcoin transactions.

Cash App is great for these sorts of transactions, and it is simple to set up and purchase Bitcoin. Simply download the app, register with your personal information, and buy bitcoin to start your own Bitcoin operations with Cash App. Just be aware that some fees will apply to the transactions, so be prepared to pay them before proceeding.

You can also visit our CoinStats blog to learn more about wallets, cryptocurrency exchanges, portfolio trackers, tokens, etc., and explore our in-depth buying guides on buying various cryptocurrencies, such as How to Buy ApeCoin,  What Is DeFi, How to Buy cryptocurrency, etc.

Investment Advice Disclaimer: The information contained on this website is provided to you solely for informational purposes and does not constitute a recommendation by CoinStats to buy, sell, or hold any securities, financial product, or instrument mentioned in the content, nor does it constitute investment advice, financial advice, trading advice, or any other type of advice. Our information is based on independent research and may differ from what you see from a financial institution or service provider.

Investments are subject to market risk, including the possible loss of principal. Cryptocurrency is a highly volatile market and sensitive to secondary activity, do your independent research, obtain your own advice, and be sure never to invest more money than you can afford to lose. There are significant risks involved in trading CFDs, stocks, and cryptocurrencies. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider your circumstances and obtain your advice before making any investment. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant regulators’ websites before making any decision.



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Anonymous Hacks Major Belarusian Government Websites – Bitcoin News

Anonymous Hacks Major Belarusian Government Websites – Bitcoin News

The websites of several ministries of Belarus have allegedly been taken down in a new attack, part of the cyberwar Anonymous is waging to help Ukraine. The hacking group declared it’s targeting the Belarusian government for its complicity in the Russian invasion of the neighboring country.

Several Government Sites in Belarus Taken Offline by Anonymous

The websites of the Belarusian ministries of economy, education, and justice, as well as the online platform of the country’s National Center for Legal Information, have been hit by Anonymous, a Twitter account associated with the decentralized hacktivist collective announced.

According to a post recently published by Anonymous TV (@YourAnonTV), the attack is in response to the involvement of Belarus in support of Russia’s ongoing military assault on Ukraine. A few days ago, the authors of the tweet stated that the biggest government websites of Belarus were down. Some of them have already been restored.

Belarus has not sent its own forces to Ukraine but has allowed its closest ally, Russia, to use its territory and infrastructure for what Moscow calls a “special military operation” against the government in Kyiv. While this is the first time Belarusian government websites have been targeted, Anonymous has so far carried out numerous attacks against Russian online resources.

Soon after the Russian army crossed the Ukrainian borders in late February, the hacking group declared a cyberwar on Russia, vowing to disrupt the country’s internet space. It has since hit the websites of the Kremlin, the State Duma, and the Ministry of Defense, attacked Russian TV channels, and released millions of leaked emails.

In March, the hacktivist collective announced it had published 28GB of documents belonging to the Central Bank of Russia, including some of its “secret agreements.” In early May, the Anonymous-affiliated hacking group Network Battalion 65 (NB65) said it had targeted the payment processor Qiwi. Later that month, Russia’s largest banking institution, Sberbank, also suffered a blow.

Tags in this story
Anonymous, Attack, Belarus, belarusian, cyberwar, Hack, Hackers, hacking group, hacktivist collective, hit, invasion, Russia, russian, Ukraine, ukrainian, War

Do you expect Anonymous to continue to hit Russian and Belarusian targets? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Institutional Investors Turn To Competitors As Ethereum Tumbles

Institutional Investors Turn To Competitors As Ethereum Tumbles

As the crypto market has taken a turn for the worse, institutional investors are phasing out their investments in Ethereum. The digital asset had been the victim of multiple outflows that had tanked its total AuM (Assets under management) and this trend has continued this week. Instead of moving to a larger competitor, Bitcoin, institutional investors are now moving to networks that are in direct competition with Ethereum.

Big Money Leaves Ethereum To Algorand

Algorand is one of the leading competitors of Ethereum which has been making waves in the decentralized finance (DeFi) space. Due to this, more institutional investors have been choosing to pitch their tent with the smart contract platform. What this has led to is the movement of institutional investors out of Ethereum and into competitors like Algorand.

Related Reading | Cardano TVL Jumps 30% In 24 Hours As It Recovers To $155 Million

Data from last week shows that while Ethereum continues to fall out of favor with big money, Algorand has been right behind it to soak up all of the inflows. This saw inflows into the DeFi protocol reach $20 million. It is a new high for the digital asset and is evidence of growing interest in other DeFi protocols besides Ethereum.

As for the leading smart contract platform, outflows continue to rock the asset. It saw a total of $11.6 million leaving last week. This has brought its year-to-date outflows to a staggering $250 million. Compared to other altcoins, Ethereum has had the worse luck among institutional investors.

ETH trading below $2,000 | Source: ETHUSD on TradingView.com

These other altcoins, which happen to be DeFi protocols, also recorded inflows for the year. Solana and Tron managed $1.8 million and $0.4 million in inflows respectively, indicating that big money remains bullish on these altcoins.

A Not Too Bad Week

For other coins in the market, last week proved to be not terrible. For example, inflows into bitcoin were $69 million. It may not be as high as other weeks of inflows have been but it speaks volumes about how institutional investors are viewing the market even through the present downtrend. Last week’s inflows brought bitcoin’s year-to-date inflows to $369 million, the opposite of Ethereum, which has been dominated by outflows.

One thing to note though is that BTC’s AuM has declined to the lowest point since July 2021. This is not a direct result of institutional investors not putting money in bitcoin. Rather, it is due to the decline in the value of the digital asset over the last couple of weeks.

Related Reading | Bitcoin Dominates Derivatives Market To End May On A High Note

Other vehicles also enjoyed inflows into them. Multi-asset has been a long-time favorite of institutional investors and this shines through even in a bear market as inflows totaled $4.8 million last week. Short bitcoin inflows also reached $1.8 million. 

Across the pond, the European market is starting to see a light at the end of the tunnel. After more than a month of consistent outflows, Europe’s inflows reached $15.5 million. However, North America continues to dominate with total inflows coming out to $72 million.

Featured image from CryptoSlate, chart from TradingView.com

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet… 



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Coinbase chief legal officer responds to SEC disclosure FUD

Coinbase chief legal officer responds to SEC disclosure FUD

As fears surrounding the Coinbase exchange run wild, Paul Grewal, the chief legal officer of Coinbase, assured customers that their funds are safe within the exchange. 

In an SEC disclosure made by Coinbase back in May, certain parts of the document mentioned that in the case of bankruptcy, crypto-assets held in custody on behalf of its customers may be “subject to bankruptcy proceedings” and that customers may become “unsecured creditors” in the process.

The disclosure was thrust into the limelight right after Coinbase reported its losses in the first quarter of 2022 amounting to $430 million and showed a decrease in revenue of 27% in comparison to the last year. To make matters worse, the news trended right when Coinbase’s junk bonds also began to go down in value.

As sentiments that the company may go bankrupt circulated on social media, Coinbase’s chief legal officer clarified and explained the situation in a blog post published Thursday.

According to Grewal, the exchange protects the funds of customers both “legally and physically.” The chief legal officer noted that the firm also updated its Retail User Agreement to extend the bankruptcy protections of institutional clients to retail investors as well.

Grewal also explained that the firm does not do any sort of action with its customers’ assets unless the users specifically give instructions to do so. This includes using the funds for lending or any other commercial activities performed by traditional banks .

In addition, the attorney highlighted in a tweet that the exchange is “financially strong” and has more than $6 billion in the bank, implying that it’s not going bankrupt anytime soon despite the “FUD.”

Related: Wealthy Coinbase clients are still ‘hodling’ Bitcoin since December 2020, data suggests

Back in May, Brian Armstrong, the co-founder and CEO of Coinbase, also commented on the issue. The CEO underscored that the firm has “no risk of bankruptcy” and simply added the clause due to a new SEC requirement. He noted that there are strong legal protections for its users in any event.



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What Are Blockchain Layers and How Do They Work

What Are Blockchain Layers and How Do They Work

Cryptocurrencies and blockchain technology have grown rapidly in recent years. However, this growth has brought to light several issues that need to be addressed before the whole world move to the blockchain.

One of the most important concerns confronting blockchain technology is scalability. Blockchain layers are proposed solutions to the scalability issue of blockchains. Scalability solutions are currently classified into two types: Layer 1 and Layer 2.

In this article, we’ll look into what blockchain layers are and how they work.

Let’s get started!

What Is Blockchain Scalability

Blockchain Scalability

The phrase “scaling” in blockchain technology refers to an increase in the system throughput rate, measured by the number of transactions processed per second. With the increasing usage of cryptocurrencies in everyday life, it is now required to build a blockchain layer for improved network security, recordkeeping, and other purposes. 

Blockchain is the first layer of the decentralized ecosystem. Layer 2 is a third-party integration used with Layer 1 to enhance the number of nodes and system throughput. Many Layer 2 blockchain technologies are currently being deployed. Smart contracts are used in these systems to automate transactions.

Why Is Blockchain Scalability Important

Different experts define the term “scalability” differently. However, at its core, blockchain scalability refers to the system’s ability to deliver a rich experience to every user, regardless of the total number of users at any given time.

Throughput refers to the number of transactions processed by the system per second. While Visa’s VisaNet electronic payment network can process more than 20,000 transactions per second, Bitcoin’s main chain can only process 3 to 7 transactions per second.

The capability difference is surprising, but it has a simple explanation. Bitcoin is a decentralized system, whereas VisaNet is a regulated system. To preserve its customers’ privacy, the former demands more processing power and time. Each data transaction must go through a number of steps, including node network acceptance, mining, dissemination, and validation.

With cryptocurrencies poised to overtake the business sector, blockchain developers are striving to widen the scope of blockchain administration. By creating blockchain layers and enhancing Layer 2 scalability they intend to reduce processing times and increase TPS.

What Are Blockchain Layers

Blockchain technology is a unique amalgamation of several technologies that operate in tandem to keep the system working smoothly. Mathematical computation, cryptography, game theory, peer-to-peer networks, and validation protocols all work together to support blockchain operations.

As blockchains do not have a centralized governing authority, all transactions are rigorously safeguarded, and data is securely stored on a distributed ledger. The distributed ledger technology (DLT) operates on a predefined protocol, with several computers (or nodes) throughout the network reaching a ‘consensus’ to validate transactional data. Each node adds, scrutinizes, and alters entries as they come.

Blockchains use a layered design to support this one-of-a-kind method of transaction authentication. There are five levels involved, each with its own set of functions. Let’s get started and learn about the architecture and what each layer does.

The layered structure of the blockchain architecture

Blockchain Layers
Blockchain Layers
1. The Hardware Infrastructure Layer

Blockchain data is securely stored on a data server. When we browse the web or use blockchain apps, our computers request access to this data from the server. The client-server architecture is the framework that enables this data exchange. 

Blockchains are peer-to-peer (P2P) networks that connect clients with “peer-clients” to accelerate and simplify data sharing. It is nothing more than a vast network of devices communicating and exchanging data. This is how a distributed ledger is born. A node is any device on the network that connects with another device. At random, each node examines transactional data.

2. The Data Layer

Blockchains are just a lengthy chain of ‘blocks’ that store transaction data. When a certain number of transactions are authenticated by nodes, the data is bundled into a ‘block,’ uploaded to the blockchain, and linked to the previous block of data. The ‘Genesis Block’ does not need to be linked to any previous blocks because it is the first block in the chain. Instead, the following block is linked to the Genesis block, and the process is repeated for each successive block.  This is how a blockchain emerges and expands over time.

Every transaction is ‘digitally signed’ with the private key from the sender’s wallet. This key is only accessible to the sender, ensuring that the data is not accessed or tampered with by anyone else. In blockchain terminology, this is called ‘finality’. The digital signature also protects the owner’s identity, which is encrypted for maximum security.

3. The Network Layer

The P2P architecture enables multiple nodes to transmit transaction data in order to achieve an agreement on a transaction’s legality. This means that in order to communicate fast, every node on the network must be able to discover other nodes on the network. The network layer facilitates this ‘inter-node communication.’ Because it controls node identification, block production, and block adding, this layer is also known as the ‘Propagation Layer.’

4. The Consensus Layer

The primary layer in blockchain operations. This layer is in charge of transaction validation, and if it fails, the entire system fails. This layer is in charge of the protocol, which necessitates a certain number of nodes to validate a single transaction. As a result, each transaction is processed by a large number of nodes, all of which must arrive at the same conclusion and agree on the transaction’s authenticity. This approach retains the blockchain’s decentralized nature since no node has sole control over any transactional data, and the role is distributed. This is known as the consensus mechanism.

Because there are so many nodes processing transactions, packing them up, and adding them to the blockchain, several blocks may be generated at the same time, resulting in a blockchain branch. However, at all times, a single chain block addition is needed, and the consensus layer ensures that this dispute is addressed.

5. The Application Layer

This layer hosts smart contracts and decentralized apps (dApps). Contract expiration dates, spot price achievement, and other factors influence smart contracts’ decisions. The activities that emerge from these decisions are carried out by dApps. All of this takes place at the application layer.

dApps also facilitate consumer device communication with the blockchain. As a result, the application acts as the user-facing front end, while the main blockchain acts as the backend, where the data is securely stored.

Blockchain Layers Explained

Layer 0

Blockchain layer zero is made up of components that help to bring blockchain to life. This is the technology that allows Bitcoin, Ethereum, and other blockchain networks to function. The internet, hardware, and connections that allow Layer 1 to work effectively are examples of Layer 0 components.

Layer One

The security of the foundation layer is based on its immutability. When people discuss Ethereum, they are referring to the Ethereum network, also known as layer one. This layer is responsible for consensus methods, programming languages, block time, dispute resolution, and the rules and parameters that assure a blockchain network’s core functionality. 

Problems with Layer One

When utilized in tandem, these scaling techniques increase network throughput. Layer one, on the other hand, appears to be falling short as the number of blockchain users expands. The obsolete and inefficient proof-of-work consensus process is still in use on the layer one blockchain.

This approach is slower than others, but it is more secure. To solve cryptographic algorithms, miners must employ computing power. As a result, more processing power and time are required in the long run. Furthermore, as the number of users increases, so does the workload on layer one blockchain. As a result, processing rates and capacities have dipped.

Possible Solutions

Proof-of-stake is an alternative consensus mechanism that Ethereum 2.0 will use. This consensus mechanism verifies new transaction data blocks based on network participants’ staking collateral, resulting in a more efficient operation.

Sharding is a technique for scaling the layer one blockchain burden problem. To put it simply, sharding divides the work of validating and authenticating transactions into smaller, more manageable chunks. As a result, the burden may be distributed over the network in order to make use of more nodes’ computing capability. Many transactions can be executed sequentially as well as simultaneously since the network processes these shards in parallel.

Layer Two

The L2 solution is an overlapping network above the base layer. Layer two is used by protocols to promote scalability by separating some interactions from the base layer. As a result, smart contracts on the main blockchain protocol only handle deposits and withdrawals, while ensuring that off-chain transactions adhere to rules. One such example of a layer two blockchain is Bitcoin’s Lightning Network.

So, what exactly is the difference between blockchain layers one and two? The first layer of the decentralized ecosystem is the blockchain. Layer two is a third-party integration that works with layer one to enhance the number of nodes and, as a result, system throughput. Many layer two blockchain solutions are currently being implemented.

Layer Two Scaling Solutions

In recent years, layer two protocols have grown in popularity, and they have shown to be the most effective method for addressing scalability issues in PoW networks in particular. The following sections discuss several layer two scaling strategies.

Nested Blockchain

A layer two blockchain is stacked on top of another. In essence, layer one sets the parameters, while layer two executes the operations. A single mainchain may have many blockchain layers. Consider it to be a standard business structure.

Instead of having one person (e.g., the manager) do everything, the manager delegated duties to subordinates, who then reported back to management when they were completed. As a result, the manager’s burden decreases, and scalability increases. For example, the OMG Plasma Project acts as a level two blockchain for Ethereum’s level one protocol, enabling cheaper and quicker transactions.

State Channels

A state channel increases overall transaction capacity and speed by allowing two-way communication between a blockchain and off-chain transactional channels via various methods. To validate a transaction via a state channel, the miner does not need to be directly engaged.

Instead, it is a network-adjacent resource that is safeguarded by a multi-signature or smart contract method. The eventual state of the channel and all its inherent transitions are broadcast to the underlying blockchain when a transaction or batch of transactions on a state channel is completed.

The Bitcoin Lightning and Ethereum’s Raiden Network are two examples of state channels. In the trilemma tradeoff, state channels provide some decentralization in exchange for increased scalability.

Sidechains

A sidechain is a transactional chain that runs alongside the blockchain and is used for large-scale bulk transactions. Sidechains have their own consensus algorithm that can be tuned for speed and scalability, and a utility token is frequently utilized as a part of the data transfer mechanism between side and main chains. The main function of the mainchain is to provide general security and dispute resolution.

Sidechains differ from state channels in various ways. To begin with, sidechain transactions are not private between participants; rather, they are fully recorded on the ledger. Furthermore, security breaches on the sidechain have no effect on the mainchain or other sidechains. Building a sidechain from the ground up requires a significant amount of time and effort.

Rollups

Rollups are layer two blockchain scaling methods that execute transactions outside of the layer one network and then upload the resulting data to the layer two blockchains. Layer one can keep rollups safe because the data is on the foundation layer.

Users profit from rollups because they increase transaction throughput, open participation, and reduce gas fees.

Layer Three

The application layer is sometimes known as layer three or L3. The L3 projects serve as a user interface while concealing the technical details of the communication channel. As mentioned in the blockchain architecture’s layered structure, L3 apps are what give blockchains their real-world applicability.

The Bottom Line

Scalability is one of the reasons why crypto mainstream acceptance is currently unattainable in the blockchain industry. The urge to develop blockchain protocols will increase as the demand for cryptocurrency rises. Because each blockchain level has its own set of constraints,  the final solution will be to develop a system capable of overcoming the scalability trilemma.

Layer one is critical because it serves as the basis for decentralized systems. The underlying blockchain’s scalability issues are addressed via layer two protocols. Unfortunately, the majority of layer three protocols (DApps) still function solely on layer one, skipping layer two. It’s hardly surprising that these systems aren’t working as well as they should.

Layer three apps are critical because they contribute to the development of real-world use cases for blockchains. In contrast to traditional networks, they will not capture nearly as much value as their core blockchain.

You can also visit our CoinStats blog to learn more about wallets, cryptocurrency exchanges, portfolio trackers, tokens, etc., and explore our in-depth buying guides on buying various cryptocurrencies, such as How to Buy Radix, What Is DeFi, How to Buy cryptocurrency, Why You Should Keep Your Crypto in Non-custodial Wallets, etc.

Investment Advice Disclaimer: 

The information contained on this website is provided to you solely for informational purposes and does not constitute a recommendation by CoinStats to buy, sell, or hold any securities, financial product, or instrument mentioned in the content, nor does it constitute investment advice, financial advice, trading advice, or any other type of advice. Our information is based on independent research and may differ from what you see from a financial institution or service provider.



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Bitcoin Block Data Shows Top 5 Pools Retained Over 71% of the Global Hashrate Last Month – Mining Bitcoin News

Bitcoin Block Data Shows Top 5 Pools Retained Over 71% of the Global Hashrate Last Month – Mining Bitcoin News

During the last 30 days, the price of bitcoin has lost more than 22% against the U.S. dollar but during that time, Bitcoin’s hashrate has remained above 200 exahash per second (EH/s). While 16 known mining pools mined the leading crypto asset during the last month, the top five mining pools retained 71.4% of the global hashrate.

Out of 16 Pools, the Top Five Acquired Most of the Bitcoin Blocks Found Last Month

The month of May is over and during the last 30 days 4,276 bitcoin (BTC) block rewards were found. Out of the 4,276 block rewards found, 26,725 freshly minted bitcoins were born into the system. While the network’s hashrate has been above the 200 EH/s zone, on May 2, 2022, Bitcoin’s hashrate hit an all-time high at block height 734,577. On that day it reached 275.01 EH/s, according to coinwarz.com data.

Bitcoin Block Data Shows Top 5 Pools Retained Over 71% of the Global Hashrate Last Month
One-month statistics according to btc.com pool distribution metrics.

Statistics show that 16 known bitcoin mining pools mined BTC during the past 30 days and stealth miners, otherwise known as “unknown,” captured roughly 1.03% of the hashrate during the last month. Unknown miners mined approximately 44 block rewards out of the 4,276 found, scoring 275 freshly minted bitcoin. Data further shows that the top five bitcoin (BTC) mining pools captured 71.4% of the global hashrate last month.

Bitcoin Block Data Shows Top 5 Pools Retained Over 71% of the Global Hashrate Last Month
One-month statistics according to btc.com pool distribution metrics.

Foundry USA scored the most block rewards last month, as the pool represented 21.02% of the global hashrate. Foundry obtained 899 BTC block rewards out of the 4,276 rewards and was able to acquire 5,618.75 newly minted bitcoins. Foundry is followed by Antpool (14.27%), F2pool (14.27%), Binance Pool (10.87%), and Poolin (10.85%) in terms of the top five bitcoin mining pools by hashrate size. All five of the aforementioned mining pools make up close to three-quarters of the global hashrate recorded last month.

A few factors are approaching that could change the hashrate distribution and one of them is BTC’s price. The market cycle seems to be in a bear mode and the value of BTC dropping lower could shake out smaller mining pools. In 700 days the halving is taking place as well, and that means mined blocks will pay out 3.125 coins per block instead of today’s 6.25 BTC per block rate.

Lastly, during the month of July, the bitcoin mining rig manufacturers Bitmain and Microbt will release two new models producing between 126 terahash per second (TH/s) and 140 TH/s. The two new models produce a higher hashrate per second than most of today’s machines, and pools with access to them will benefit.

Tags in this story
6.25 BTC, Antpool, ASIC miners, Bitcoin, Bitcoin mining, bitcoin security, Bitmain, block rewards, Blocks, BTC Mining, F2Pool, Foundry, Foundry USA, Global Hashrate, Halving, Hashpower, Hashrate, Hashrate Distribution, Microbt, Mining Distribution, mining rigs, pool distribution, Poolin, transactions

What do you think about Bitcoin’s current hashrate distribution? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




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All of DeFi’s Benefits in One Token

All of DeFi’s Benefits in One Token

Source Protocol – an up-and-coming smartchain and interoperable DeFi ecosystem – has set out to lower the barriers of entry to this new financial landscape through its suite of products and automated protocols that allows users from all walks of life to easily participate in DeFi. In this pursuit, Source is preparing to launch its first utility-based reward token, Source Token (SRCX); a smart contract token that enables users to passively participate in DeFi markets.

SRCX Yield Echoes and the Dynamic Compound Liquidity Pool (DCLP)

Launching on Binance Smart Chain, the world’s largest crypto network by volume, Source Token utilizes a built-in automation fee that sends a percentage of every transaction to Source’s Dynamic Compound Liquidity Pool (DCLP), a basket of stablecoin liquidity positions within Source’s decentralized money market, Source Marketplace, where users can lend, borrow, stake, and yield farm with their crypto assets. Rewards, called “Yield Echoes,” derived from these interest-bearing liquidity positions are then automatically redistributed to Source Token holders and network participants, enabling them to reap all of DeFi’s benefits without having to participate themselves.

SRCX Loyalty Echoes

In addition to Yield Echoes, SRCX holders and users also benefit from “Loyalty Echoes,” which are generated block-by-block, with every transaction that takes place on the Source Token network. Enabled by the same automation fee, a percentage of each transaction is redistributed directly to all SRCX holders and network participants with every buy, sell or transfer that takes place on the network. The higher the transactional volume, the more Loyalty Echoes are generated for all holders. Loyalty Echoes are designed to incentivize long term participation with SRCX and its Source ecosystem counterparts, and also help compensate the holder for the automation fee.

SRCX Burn Feature

To offset any inflationary measures caused by Loyalty Echoes and Yield Echoes, SRCX contains a large burn wallet that will be deployed at genesis. The burn wallet is a “black hole” wallet address with no private keys, and tokens sent to it are gone forever. Since this wallet is the largest holder on the network, it receives the largest portion of Loyalty Echoes and is blacklisted from receiving Yielding Echoes. Incentive programs will be launched where this wallet will occasionally be blacklisted during promotional periods, which will increase rewards for all SRCX holders and participants. As the network grows, it is also possible for the burn wallet to be blacklisted indefinitely. This creates a balanced network and promotes long term sustainability of the protocol, which benefits all.

Importantly, SRCX’s passive automation fee will be reduced as adoption and transaction volume increases over time. It’s also worth noting that all of the above is accomplished non-custodially and with peer-to-peer initiated smart contracts, so there are no middlemen involved, and users have full independence with their SRCX holdings.

Looking to the Future

With its upcoming launch of SRCX, Source Protocol will soon become a leader in the DeFi space by executing its vision of making blockchain and web3-based financial services more easily accessible, less complicated and more efficient, empowering Source users to have complete ownership and control over their finances.

Source Token – SRCX – will be one of the main factors driving this growth and development, helping users regardless of their experience with cryptocurrency gain access to all DeFi has to offer via one token. SRCX is going to assist in breaking through the barrier of entry to DeFi for retail and enterprise users alike, and will open the floodgates for anyone, regardless of technical know-how, to easily participate. With its dual-reward Echoes structure, SRCX is also an excellent alternative to PoW (proof-of-work) mining networks, without having to afford the necessary hardware and resources required to mine cryptocurrencies.

Launch dates of the Source Token SRCX will be announced soon. To stay up to date on Source Protocol and their plans, visit the website and follow the project on Twitter and Instagram. For a chance to be entered into the whitelist for the SRCX launch, please join Source’s Discord channel. For more detailed information about Source Token (SRCX), visit Source Protocol’s documentation.

 



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