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

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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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Over $500M Ethereum (ETH) Left CEXs as Market Prepares for Impulsive Move: Data

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Data from IntoTheBlock revealed that investors withdrew approximately half a billion ETH from centralized exchanges last week, the highest the asset has seen since February.

$500M ETH Leaves CEXs

The withdrawal of large amounts of ETH from centralized exchanges signals investor confidence in the long-term price trajectory of the asset. Market participants usually withdraw their cryptocurrencies from centralized trading platforms to hold the assets in their private wallets or cold storage in anticipation of higher prices.

Such large withdrawals have been considered an indicator of bullish sentiment and holding attitude among investors. Most of the time, ETH has recorded substantial gains in the weeks following large withdrawals from exchanges.

Anticipation for higher ETH prices could be attributed to the approval of spot Ethereum exchange-traded funds (ETFs) in Hong Kong and the just-completed Bitcoin halving event, which has historically triggered bull rallies across the market.

With huge amounts of ETH leaving exchanges, supply could decline on such trading platforms and high demand from large entities like the spot ETF issuers could propel the digital asset’s price upwards, per the laws of economics.

Futures Market Poised for Impulsive Move

While investors reduce their ETH holdings on centralized exchanges, the Ethereum Futures market shows that it is on the brink of a resurgence of long or short positions. A CryptoQuant Quicktake by pseudonymous analyst Shayan disclosed that the Ethereum market may be on the verge of a fresh and impulsive move either northwards or southwards.

Shayan explained that futures market sentiment significantly impacts price movements because the intensity of long and short positions, as well as the possibility of large liquidations, acts as a catalyst for volatility. This sentiment can be determined by the state of open interest, which indicates the number of open perpetual futures contracts across several cryptocurrency exchanges.

Notably, open interest in Ethereum declined during ether’s recent plunge to $2,900 amid escalated tensions in the Middle East. The fall suggested a pipedown of activities in the futures market.

“Consequently, the market appears poised for the resurgence of either long or short positions, potentially initiating a fresh and decisive market movement in either direction,” Shayan said.

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ChatGPT Gives Post-Halving Bitcoin Price Outlook, What About 99Bitcoins Token?

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The Bitcoin halving event has come and gone, leaving investors wondering what’s next for the world’s largest cryptocurrency.

However, in an exciting twist, the AI model ChatGPT has weighed in with its analysis – and provided a post-halving price prediction for BTC.

Bitcoin Shows Signs of Life After Halving Event

Bitcoin is showing signs of life after a bearish period last week.

The coin is now trading at $65,860, up over 4% since the halving and 10% from Friday’s lows.

This price point marks Bitcoin’s highest value in over a week as it tests dynamic resistance at the 20-day exponential moving average (EMA) on the daily chart.

Some technical analysts are also eyeing the potential formation of a huge bull flag pattern that could lead to further upside.

Bitcoin’s upswing has been accompanied by a surge in trading activity, with spot volumes up around 14% over the past 24 hours.

The increase in activity has also resulted in over $51 million worth of short positions being liquidated.

All in all, with Bitcoin’s price action heating up following the halving, traders and investors are watching to see if this could be the start of the next bull run.

ChatGPT Paints Bullish Picture on Bitcoin’s Future

According to ChatGPT’s analysis, Bitcoin’s post-halving price prospects look decidedly bullish.

ChatGPT believes several key factors could come together to fuel significant upside for the flagship crypto in the weeks ahead.

Chief among them is the potential for even more institutional adoption as big-money players continue to embrace Bitcoin as a legitimate asset class.

The AI model also cited Bitcoin’s growing status as a hedge against economic uncertainty in traditional markets.

With heightened geopolitical tensions and inflation concerns, everyday investors may flock to decentralized assets like BTC throughout 2024.

Finally, ChatGPT pointed to the role that ongoing technological advancements within Bitcoin’s ecosystem could play.

Improvements to scalability, and even new ideas like Runes, could enhance the network’s utility going forward.

Considering this potential convergence of positive forces, ChatGPT sees Bitcoin hitting the $100,000 mark in the near to medium-term.

While just a hypothetical forecast, this bullish target does align with Bitcoin’s historical pattern of setting new all-time highs after previous halvings.

Which Other Coins Does ChatGPT Think Could Surge?

While ChatGPT appears optimistic about Bitcoin’s upside potential, the AI model also offered insights on under-the-radar cryptos that could surge.

One project that seems to have caught ChatGPT’s attention is 99Bitcoins Token (99BTC) – which has raised over $650,000 since its presale kicked off.

ChatGPT Believes “Learn-to-Earn” Premise Could Lead to Gains for 99BTC

99Bitcoins Token represents 99Bitcoins’ ambitious move to integrate crypto learning with blockchain-based rewards.

Through interactive modules, quizzes, and tutorials, users can earn 99BTC tokens simply by engaging with educational content.

According to 99Bitcoins Token’s whitepaper, it will also enable access to premium courses, expert trading signals, community channels, and more – creating an entire ecosystem focused on crypto education.

But what does ChatGPT think about 99Bitcoins Token’s prospects once it lists on exchanges?

According to ChatGPT’s analysis, 99BTC could be poised for significant price appreciation given its groundbreaking “Learn-to-Earn” premise and well-designed tokenomics.

ChatGPT highlighted the token’s unique value proposition of rewarding users for learning as a major bullish catalyst.

This novel concept could attract a “broad user base” eager to enhance their crypto knowledge.

The AI model was also optimistic about 99BTC’s integration with Bitcoin’s new BRC-20 token standard.

This standard unlocks new utility through NFTs and other digital assets built on the Bitcoin blockchain – and ChatGPT believes 99Bitcoins Token’s adoption of BRC-20 could further boost its price potential.

Considering these factors and the sustainable tokenomics setup, ChatGPT offered up some lofty price targets.

Visit 99Bitcoins Token Presale

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Bitcoin Layer 2 Tokens Outperform BTC Post-Halving

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Bitcoin layer 2 solution tokens have demonstrated superior performance to BTC following the highly anticipated halving of the mining reward on the blockchain.

Since the event, these tokens have surged by 5% to 20%, outpacing the top crypto by market cap.

Stacks (STX) Takes Center Stage

According to CoinGecko data, the market cap for Bitcoin layer 2 solutions is $4.3 billion, marking a 5.6% increase in the past 24 hours. Meanwhile, the trading volume is $184 million.

Stacks (STX), a Bitcoin layer 2 solution, has been among the top-performing cryptocurrencies in the past 24 hours, according to CoinGecko data. The STX token has surged almost 20% to $2.87 since the halving event.

Bitcoin, on the other hand, has not experienced significant growth. The token is up slightly over 4.5% to $66,046 since the halving event, 1.7% over the last 24 hours, and down 0.8% over the last 7 days.

Bitcoin’s price saw significant volatility last week, dropping from over $66,800 to below $60,000. However, it has since recovered.

Other layer 2 tokens, such as Elastos’ ELA token and SatoshiVM’s SAVM, have also experienced gains of 11% and 5%, respectively, since the halving.

Other altcoins have observed slight daily gains, except for TON, which has experienced a significant double-digit decline despite Tether’s announcement of expanding to the TON blockchain.

Notably, Bitcoin layer 2 solutions address blockchain scalability and transaction speed limitations. These projects operate on the Bitcoin blockchain, offering scalability by processing transactions off the main chain.

Bitcoin Fees Surge

On April 20, when the halving occurred and the Runes protocol launched, Bitcoin transaction fees reached an average of $128.45, according to ycharts data. This figure is over six times higher than the average fee rate the day prior and approximately double the previous record set three years ago.

The fee surge can be attributed to the launch of the Runes protocol, which enables users to “etch” and mint tokens on the Bitcoin blockchain. The introduction of Runes prompted speculators to rush into minting tokens and trading meme coins, leading to increased transaction activity and, subsequently, higher transaction costs.

Notably, the fees have since come down, and the transaction fees dropped to $34.8 on April 21. Meanwhile, according to data from, the total number of Runes inscriptions on the Bitcoin blockchain has already reached 3,700.

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