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Home > Cryptocurrency > Achieving Equilibrium Between Blockchain Security and Decentralization (Op-Ed)

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Achieving Equilibrium Between Blockchain Security and Decentralization (Op-Ed)

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Published

9 months ago

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By Trevor Traina, Founder and CEO of Kresus

You are reading these words because our planet is orbiting the sun at just the right distance to neither fry nor freeze us. Our planet is perfectly balanced for life to thrive. And within that world, numerous other forces exist in a state of optimal balance: light and dark, tropical and polar, terrestrial and aquatic.

So it is when it comes to designing blockchain systems. Their most powerful forces must be balanced in such a way that one cannot usurp another. Security should be as high as possible, but this must be balanced with the need to maintain sufficient decentralization. Network fees should be low but not so low as to induce spam attacks.

Finding that Goldilocks zone, the place where conditions are just right, is as much an ideological challenge as it is a technological one. After all, blockchain systems are ultimately designed and used by people who are only as strong as their weakest link. Web3 systems must walk the line between being optimized for security and for decentralization. It’s a delicate balancing act that goes to the very heart of what makes blockchain valuable.

Too Much Decentralization Can Kill You

There’s such a thing as too much freedom, which is why societies have laws and moral codes to regulate the worst excesses of human behavior. When it comes to Web3, it’s similarly possible to have too much freedom (i.e., decentralization) in the form of systems that have no recourse for worst-case scenarios:

  • A team member loses their multisig key
  • A user loses access to their wallet
  • Tokens are sent to the wrong address
  • A coding error leaves funds locked into a smart contract
  • Assets are stolen using an exploit

All of these are “bad things” by Web3 standards, yet they occur every single day. As new users enter the space, the number of victims of phishing attacks, front-end injection, wallet poisoning, and other exploits will continue to rise. Attackers are getting more sophisticated, while each wave of Web3 users remains as vulnerable as the last.

Only recently, scammers used wallet drainers on Google and X ads to steal digital assets worth close to $60 million. Back in July, meanwhile, it was reported that four separate wallet drainers had stolen close to $65M since the start of 2023.

Give a society too much freedom, and a few of its members will rob, assault, and injure, driving at high speeds and engaging in other risky behaviors. Give Web3 users too much decentralization, and a portion will hack, be hacked, lose access to their wallets, and generally screw up.

Real-world freedom is dampened through security: police forces and CCTV. And blockchain freedom (decentralization) is also mitigated through security, which must be set at the right level to protect users from the most common mistakes while retaining the features that make blockchain so powerful:

  • Strong transaction finality
  • Lack of centralized control
  • Support for financial self-sovereignty

Some crypto users want full control over their assets while also maintaining an undo button if they screw up. Others shudder at the thought of non-custodial wallets being “weakened” through provisions such as social login, seedless design, and key shares held by the developer.

Too Much Centralization Can Kill You

Do you know that saying about pleasing some people some of the time but not all of the people all of the time? That. When it comes to securing decentralized systems, it’s hard to create a single product that satisfies every user type. Put in too many safeguards, and hardcore users will abandon you; force new users to record a lose-it-at-your-peril seed phrase, and sooner or later, they’ll come unstuck.

Add too many centralized levers into a supposedly decentralized protocol, and you risk weakening the very foundations that gave it strength. Consider an ERC20 token contract that is upgradable by its creator. On the one hand, this allows the token’s parameters to be updated to reflect a shift in direction. On the other hand, it allows unscrupulous token creators to rug their operators.

As a result of this dichotomy, DeFi developers must strike a delicate balance between providing users with autonomy over their digital assets and making sure they aren’t taken advantage of by scammers seeking their next mark. Crypto wallets need to be more secure, but developers fear overstepping the boundaries of the decentralized wallet they’ve created.

Go for the Low Hanging Fruit

So what’s the solution? Well, for one thing, developers need to implement security features that can solve real threats – not theoretical ones. Less “military-grade encryption,” in other words, and more practical measures to warn users when they’re connecting to a spoofing site or about to send funds to a known phisher.

A lot of this comes down to better UX and more common sense on behalf of developers. For instance, it would be easy to filter all address poisoning attacks in which a user receives a dust transaction from a “lookalike” wallet they’ve recently interacted with. So why’s no one doing it?

Let’s focus on thwarting the most common hacks and scams before we move on to tackling threats from quantum computing and theoretical MiTM attacks. Hackers don’t go for the toughest possible exploit conceivable; they go for the low-hanging fruit, chalking up easy wins where possible. DeFi developers need to follow suit, focusing on fixing the most common ways in which users get rekt.

Security and autonomy don’t have to operate in conflict with one another: with a little thought, it’s possible to have the best of both worlds, combining the power of non-custodial ownership with a web2-level UI that demystifies everything from transaction signing to wallet backup.

Our planet may be perfectly balanced for life to thrive, but the on-chain environment still has some way to go. Still, it took the earth millions of years to create a climate that was hospitable for intelligent life. At just 15 years of age, blockchain has time on its side.

Author bio

Trevor Traina is the Founder and CEO of Kresus, the go-to Web3 SuperApp that combines a crypto wallet and an NFT platform. He is an investor and seasoned entrepreneur who co-founded five companies that were acquired by the likes of Microsoft, MasterCard, and Intuit and served on multiple non-profit boards such as the Fine Arts Museum of San Francisco and the Venetian Heritage, among others. Trevor served as the U.S. Ambassador to Austria from 2018 to 2021.

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Cryptocurrency

Solana Whales Begin Accumulation Spree Amid Predictions of SOL at $600

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Published

6 hours ago

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December 5, 2024

TL:DR;

  • SOL’s price skyrocketed after Trump’s victory in the US elections to a new all-time high of $263 on November 23 but lost its momentum and is down by more than 11% since then.
  • However, whales seem unfazed as they keep buying portions of the asset while analyst envision a massive rally that could push it to as high as $600.

SOL Whales Push the Buy Button

As mentioned above, Solana’s native token was among the biggest beneficiaries of Trump’s victory as it found a place among the top four altcoins at one point when it was in front of XRP and surpassed BNB. However, the roles have reversed, with XRP surging to the third spot, while Binance Coin took back the fifth earlier today after a historic rally to a fresh peak.

Solana, alongside other assets like BTC and DOGE, has remained on the sidelines for the past few weeks. SOL has been consolidating and trading about 10-12% away from its November 23 peak.

It seems large Solana investors have used this correction as an opportunity to increase their stash. Data from Lookonchain showcased several whale wallets that have withdrawn sizeable portions of the asset out of Binance and to cold storage – moves traditionally regarded as bullish for the underlying cryptocurrency as they reduce the immediate sell pressure.

SOL Heading Toward $600?

Popular analyst IncomeSharks noted on December 2 that SOL’s price movements resemble the head and shoulders (H&S) pattern. They cautioned investors that there might be another retracement for SOL but indicated that the “good news is we are approaching Supertrend support,” which has held since October. SOL indeed bounced off from that level and now sits above $230.

Jelle was quite bullish on Solana, suggesting that its price could go as high as $600 during this cycle in case it manages to remain above the previous all-time high of around $225.

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Bitcoin Mining Company Slashes 27% of Workforce in Strategic Shift Amid DCG Restructuring: Report

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Published

6 hours ago

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December 5, 2024

Prominent Bitcoin mining pool Foundry Digital reportedly slashed 27% of its workforce this week. The layoffs, which affected 74 employees, reflect a strategic shift to prioritize core operations, including its Bitcoin mining pool and site operations. This decision follows an internal restructuring within the Digital Currency Group (DCG), Foundry’s parent company.

CEO Mike Coyler stated that the firm is focusing on its core business lines to strengthen its market position. As part of this shift, the platform has deprioritized its custom hardware initiatives while maintaining its ASIC repair services.

Foundry Cuts Jobs

According to the latest report by Blockspace, the layoffs were accompanied by the transfer of 20 Foundry employees to Yuma, a decentralized AI startup spun out of Foundry’s internal Bittensor project. Yuma now operates as an independent DCG entity under CEO Barry Silbert. Foundry’s management described the changes as part of a strategy to streamline operations and refocus on its core businesses, including its flagship Bitcoin mining pool and site operations.

Foundry currently accounts for 30% of the Bitcoin network’s total hash rate. Its self-mining business alone is on track to generate $80 million in revenue for 2024, as per DCG’s Q3 2024 shareholder letter. Meanwhile, other business lines, such as ASIC repairs and decentralized AI infrastructure, remain operational.

In a statement, the company claimed,

“We recently made the strategic decision to focus Foundry on our core business while supporting the development of DCG’s newest subsidiaries. As part of this realignment, we made the difficult decision to reduce Foundry’s workforce, resulting in layoffs across multiple teams.”.

Navigating Troubled Waters

The layoffs come amid broader challenges for DCG, which has worked to stabilize its operations following the bankruptcy of its lending subsidiary Genesis after being caught up in the FTX fallout.

Amidst financial challenges, Foundry moved from a free model to a paid service, marking a significant change in its business strategy in April last year.

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From RSS3 to Open: A Unified Movement to Rebuild the Open Web

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Published

6 hours ago

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December 5, 2024

[PRESS RELEASE – San Francisco, California, December 4th, 2024]

The internet was once a playground for open exchange, where ideas, innovation, and creativity flourished. However, centralized control and walled platforms have eroded those ideals. Open emerges as a new infrastructure dedicated to rebuilding the Open Web’s foundations in the age of Web3.

From RSS3 to Open: A Broader Vision

Open represents the next evolution of RSS3, a broader and more ambitious ecosystem designed to unify technologies, initiatives, and communities. This transformation recognizes that the vision for a decentralized internet extends beyond the original scope of RSS3.

Open now unites the forces of RSS3, RSSHub, OVM, OpenAgent, and the Open Information Initiative under a single banner. Together, they form a collective dedicated to reshaping the internet into a transparent, permissionless, and collaborative space.

“Open’s mission goes beyond technology,” said Joshua, the founder. “This is about building an ecosystem and a movement to create a web that works for everyone, not just a select few. Open exists to make that happen.”

Open: The Foundation for a New Web

Open serves as the foundation for a new internet era. It brings together infrastructure, real-world applications, and initiatives with a clear goal:

  • Building Infrastructure: Open is constructing a “Wormhole” that bridges data and computing on-chain in a transparent and verifiable manner. This facilitates truly immutable, reproducible, and open Artificial Intelligence (AI), Decentralized Finance (DeFi), Decentralized Science (DeSci), and more.
  • Empowering Builders: Open supports developers and creators dedicated to advancing the Open Web through grants, incubation programs, and dedicated studios.
  • Delivering Practical Solutions: Open focuses on real-world problem-solving by offering practical tools, ranging from AI-powered agents to DeSci platforms.

Thriving Projects within the Open Ecosystem

The Open ecosystem already boasts projects with proven technology and distribution:

  • OpenAgent: Launched in March 2024, OpenAgent quickly became the most advanced decentralized AI agent platform.
  • DeSci Database: This decentralized science initiative accelerates innovation by making open data accessible across thousands of nodes.
  • Follow App: With over 120,000 users and 50,000 daily on-chain participants in its first 40 days, Follow App demonstrates Open’s ability to drive large-scale adoption.
  • Exclusive Studios: Four studios are dedicated to building critical infrastructure and tools for the Open Web, ensuring scalability and robustness.
  • The AiSweatShop: A new standard for decentralized AI deployment, this OpenAgent initiative extends its capabilities. AiSweatShop offers scalable and customizable AI agent solutions that integrate with on-chain decentralized applications, bridging the gap between decentralized AI and real-world uses.

The Case for Open: A Better Internet

Centralized platforms have inhibited creativity, transparency, and innovation for far too long. Open aims to reverse this trend, restoring an Open Web where:

  • Creativity Flourishes: No longer will restrictions hinder how ideas are shared and developed.
  • Transparency Reigns: Decision-making will occur openly, not behind closed doors.
  • Innovation Accelerates: Open infrastructure will drive the next wave of digital breakthroughs.

The Movement Gathers Momentum

Open serves as an open invitation for developers, creators, and visionaries to join the mission of restoring the web’s original purpose. The ecosystem has already gained significant traction, bolstered by funding from the Open Initiative. The adoption of Follow App, the innovation of the AiSweatShop, and the expanding developer community all demonstrate the ecosystem’s steady growth and potential.

“Our focus is unwavering: to create real solutions for real users,” reiterated Joshua, Founder of Open. “We’re building a future where the internet belongs to everyone.”

Users interested in learning more and joining the movement can visit webisopen.com.

About Open

RSS3 is a decentralized network indexing and structuring data, delivering accessible and valuable Open Information to the next X (prev. Twitter), Google, OpenAI, and beyond.

RSS3 is an Open project. Open is a series of endeavors aimed at propelling the Open Web forward. Collectively, Open is the Data and Compute Wormhole for innovations like verifiable and transparent AI and DeSci. Users can find more details at https://open.network/ 

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