Many people are familiar with blockchain technology, but did you know that Ethereum has the largest and most active blockchain community in the world?

Unlike many other blockchain networks, Ethereum is programmable. This customizable feature has enabled developers to solve problems ranging from digital identification and privacy, to corporate ownership and data security.

When the blockchain community disagrees on what changes the network needs to function smoothly or when such changes should take place, developers plan for a fork (an offshoot) of the underlying code rules.

Todays graphic maps out the major Ethereum blockchain forks that have occurred to date, highlighting key events that surrounded each of these updates. It also includes details on the highly anticipated Istanbul hard fork, planned for December 2019.

Forks are common practice in the software industry, and happen for one of two reasons: split opinions within the community, and required changes to the blockchain code.

When either reason is discussed, four major types of forks can occur.

There are currently three types of hard forks:

Lets dive into the timeline of major Ethereum forks, and explore a few of their defining moments and characteristics.

Below are some of the most prominent and important forksboth hard and softon the Ethereum blockchain since its launch.

Vitalik Buterin, founder of Ethereum, and his team finished the 9th and final proof of concept known as Olympic in May 2015. The Ethereum blockchain, also known as Frontier, went live shortly after, on July 30, 2015.

Also known as Frontier Thawing, this was the first (unplanned) fork of the Ethereum blockchain, providing security and speed updates to the network.

Homestead is widely considered Phase 2 of Ethereums development evolution. This rollout included three critical updates to Ethereum: the removal of centralization on the network, enabling users to hold and transact with ETH, and to write and deploy smart contracts.

The Decentralized Autonomous Organization (DAO) event was the most contentious event in Ethereums short history. The DAO team raised US$150 million through a 2016 token salebut an unknown hacker stole US$50 million in ether (ETH), prompting the developer community to hard fork in order to recover the stolen funds.

Widely regarded as the only Ethereum fork of any significance, this hard fork was based on the controversial DAO event. The original chain became known as Ethereum Classic, and the new chain moved forward as the main Ethereum chain.

This September 2019 hard fork event required all software users to upgrade their clients in order to stay with the current network. Enhancements included better security, stability, and network performance for higher volumes of traffic.

Regarded as the third phase of Ethereums evolution, the Metropolis-Byzantium soft fork functioned more like an operating system upgrade, rather than a full split.

Constantinople is the current version of the Ethereum blockchain. This hard fork occurred concurrently with the St. Petersburg update. Important changes included closing a major security loophole that could have allowed hackers to easily access users funds.

Constantinoples most notable improvements include smart contracts being able to verify each other using only the unique string of computer code of another smart contract, and reduced gas feesnamely, the price users pay to process transactions more quickly.

The Ethereum community is preparing for the next hard fork event Istanbul, scheduled for release on December 4th, 2019.

Ethereums 4th and projected final stage of development is Serenity, which has yet to be scheduled. Community members have speculated what changes will come with Serenity, but many agree that the Ethereum blockchain will shift focus from Proof of Work to Proof of Stake.

Proof of Stake means that there is less competition for completing blocks of data, significantly reducing the energy required to process data. Currently, a single Bitcoin transaction consumes the same electricity as 1.75 American households do in a day.

Ethereum continues to be a leading blockchain platform, with the highest number of decentralized apps (dApps) and a massive, engaged community.

To date, cryptocurrencies have largely been the focus of news headlines. However, weve only begun to scratch the surface of what blockchain can offer, and the value it will create beyond the financial world.

[Blockchain] could be the foundation of a whole new era whereby our basic right to privacy is protected, because identity is the foundation of freedom and it needs to be managed responsibly.

Don Tapscott, Executive Chairman of the Blockchain Research Institute

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Cryptocurrency: Redefining the Future of Finance - Visual Capitalist

Launched soon after the 2008 financial crisis, the first ever cryptocurrency that took the world by storm was the bitcoin. Since then, over 3,000 cryptocurrencies have been mined and traded with a market capitalization of over $221 billion as per a report by Yahoo Finance. Fundamentally speaking, cryptocurrency is a digital or virtual currency designed to serve as a medium of exchange, which is aimed at decentralization and transparent financial transactions.

The ongoing COVID-19 crisis resulting in plummeting investment values in terms of equity, bonds and commodities have led to investors looking for assets that could withstand the slowdown triggered by lockdown and give them a run for their monies. While some hinge on the safety of government bonds, others are buying gold. Some investors in India have found Bitcoin attractive as a means to hedge the risks, diversify their portfolio and perhaps make a profit. Further, market experts believe that cryptocurrencies could remain untouched by the slowdown started by COVID-19 and may outperform other asset classes. One of the reasons is the non-correlated nature of cryptocurrency, which indicates that it is not directly impacted by the economic, geopolitical and pandemic like situations due to its decentralized nature.

Cryptocurrency Legislation in India

The Reserve Bank of India (RBI) took an over-protectionist stance and imposed a total ban in April 2018, which restrained cryptocurrency based activity in India in its entirety. This year, however, the Supreme Court quashed the RBIs ban on cryptocurrency transactions. Further, the court opined that in the absence of any legislative prohibition, the business of dealing in virtual currencies should be treated as a legitimate trade protected under Article 19(1)(g) of the Constitution, which affords a fundamental right to carry on any occupation, trade or business. However, as is often misconstrued by laymen, the Supreme Courts ruling should not be construed as one legalizing the trade of cryptocurrencies in India, as many laymen as have understood, rather the RBIs ban was smacked down due to its failure to pass the test of proportionality.

However, since the judgment, cryptocurrency-based activity on exchanges immediately shot up. In fact, Cashaa India, a crypto banking services platform, observed an increase of 800% in trading volumes in 2 days following the decision. Investment bankers at Goldman Sachs claim cryptocurrency as modern digital gold. Both gold and bitcoins are designed to be rare and difficult to acquire but the latters historical volatility makes it a risky investment option for many trader joes.

What other countries are doing?

At the outset, it is important to initiate a dialogue with Indian legislators and regulatory bodies and work towards creating a crypto-regulatory framework in India. In the recent past, the Greeks and Venezuelans were flocked to cryptocurrencies to protect their investment value from hyperinflation. Moreover, cryptocurrencies were recently legalized in South Korea and Japan., and many countries like Australia have a positive viewpoint. Moreso, countries like the UAE, Sweden, Ecuador also introduced state-backed cryptocurrencies to help them evade sanctions, ease accounting and reduce the cost for the nations.

Therefore, experts believe that taking a similar trajectory is likely to benefit India with a rise in blockchain-focused startups, more employment opportunities, and added avenues for tax collection. Having said that, price predictions have failed miserably and as much as it appears to be the ideal disaster asset, there isnt sufficient empirical evidence to reach a definite conclusion. The saying, "What goes up, must come down" as is applicable to stocks, bonds and commodities also applies to cryptocurrencies at large and regulation of this asset class will keep a check on underground trading in this regard.

In the current governments pursuit of a cashless economy backed by the Supreme Courts judgment setting aside RBIs ban on cryptocurrency trading implicitly supports innovation and is a major step in the right direction. Having said that, the industry is in its nascent stages and is wise for RBI to wait and watch how the crypto market handles its first financial crisis before incentivizing or disincentivizing cryptocurrency based activities, which could potentially impact financial advancement of the nation. Thus, meticulous implementation and regulation of the crypto market may be a boon to the India economy, but any oversight could have disastrous consequences on the economy starved for revenues in times of crisis.

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Cryptocurrency Regulations in times of COVID-19: A boon or bane to India? - Lexology

An anonymous user paid approximately $2.6 million in transaction fee to transact small amounts of money in the Ethereum (ETH) cryptocurrency two times over the last 24 hours at press time.

The first transaction of 0.55 ETH, or $136.26, according to ETH's price at press time, was made at 5:47 am on Wednesday, according to data from Etherscan.

To make this transaction, the user paid 10,668.73 ETH, or $2.6 million, in "gas," as the transaction fee at the Ethereum network is called. A similar transaction was repeated at 11:30 PM later in the day. This time 350 ETH, or $86,712.5, were transferred for the exact same fees.

Gas is charged by miners on the Ethereum blockchain network based on the amount of computing it takes to verify a transaction. If the users agree to pay a higher gas price, the transaction becomes more lucrative to minersand is completed rapidly.

ETH Gas Station recommends paying $0.155 for a standard transaction that can take up to five minutes and $0.2 for a fast transaction that will be expected to complete in less than two minutes.

Paying $2.6 million for a transaction is extremely unusual and doesn't make operational sense, giving rise to speculation of accidental error, money laundering, or a technical glitch.

Some cryptocurrency community members on Twitter suggested that the transaction was more likely to be a technical error since the ETH transaction fee in both cases was exactly the same, which would be extremely unlikely to be an accident.

The transactions on blockchain can't be reverted, but the mining pool which verified the transaction can choose to return the money to the original owner by creating a new transaction. The first transaction was approved by Chinese mining pool "Spark Pool," and the second by "Ethermine."

Sparkpool said in a statement that it "has had the experience of handling similar issues properly. There will be a solution in the end."

Ethereum traded 1.2% higher at $247.75 at press time on Thursday. The apex cryptocurrency Bitcoin (BTC) was up 1.1% at $9,873.64.

2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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A Cryptocurrency User Paid $2.6M In Transaction Fee To Send $136 Twice - Benzinga

Fifteen people entered guilty pleas for involvement in an international scam that posted fraudulent auctions online and laundered money through cryptocurrency exchanges, according to the Justice Department.

One expert says the case could serve as a template for nation-state actors using cryptocurrency exchanges to cover their tracks more in the future.

Todays modern cybercriminals rely on increasingly sophisticated techniques to defraud victims, often masquerading as legitimate businesses, said Assistant Attorney General Brian A. Benczkowski of the Justice Departments Criminal Division in a press release Thursday. These guilty pleas demonstrate that the United States will hold accountable foreign and domestic criminal enterprises and their enablers, including crooked bitcoin exchanges that swindle the American public.

Law enforcement officials have noted that increased use of cryptocurrencies like Bitcoin has made it especially challenging to nail down cybercriminals. But while cryptocurrency exchanges encode transactions hiding the identity of the parties, those codes are permanently and publicly recorded across a large number of computers. Its possible to study them and identify patterns in transactions that could eventually lead to the identity of a suspect, and law enforcement might be getting better at this.

Compared to 2016, in 2019 and 2020, were seeing more cases where its clear that law enforcement is following this stuff and is not totally dumbfounded because something involves a Bitcoin address, Yaya Fanusie, a former CIA analyst and current senior fellow at the Center for New American Security told Nextgov. It gives us the assurance that at least U.S. federal law enforcement is capable of doing an investigation that involves cryptocurrency.

In the case Justice highlighted Thursday, the defendantsindividuals in their 30s based both in Romania and the United Statesadmitted their involvement in a scheme where they established their own cryptocurrency exchange and used it as a passthrough for traditional payments they got from advertising non-existent high-value items such as cars on auction sites such as eBay and Craigslist.

According to court documents, members of the conspiracy created fictitious online accounts to post these advertisements and communicate with victims, often using the stolen identities of Americans to do so, the press release noted.

The defendants also used IP addresses anonymizing services, according to court documents. Fanusie said cryptocurrency exchanges are part of an ecosystem primed for cyber malfeasance.

Cyber services like domain names, [virtual private networks], servers, that infrastructure is ready-made to be leveraged through cryptocurrencies, he said. Its already an environment that invites anonymous use. Cryptocurrencies are the native money of the internet. So if we know that were going to have more cyber threats, it makes sense that cryptocurrencies are going to play a part.

So its good that law enforcement doesnt seem daunted by the changing landscape of criminal activity, he says, because this time [a cryptocurrency exchange] was being used by criminal fraudsters, but there are definitely parallels in what weve already seen from nation-state actors.

Fanusie has written about how cryptocurrency exchanges were used to launder and steal money and delay law enforcements identification of suspected hackers in high-profile cases involving persons affiliated with China and North Korea and Russia.

He said the 2018 indictment leading up to Thursdays guilty pleas is almost a blueprint for how nation-state actors could be thinking about running their operations, adding that the case confirms that the main thing to look out for is not so much fundraising, the biggest thing is that cryptocurrency is one part of a laundering process. Its to move the money to somewhere else so you lose the trace.

For now, law enforcement officials seem empowered by their success after an investigation that involved the U.S. Secret Service, Kentucky State Police, Lexington Police Department, IRS Criminal Investigation, and U.S. Postal Inspection Service, the Justice Departments Organized Crime Drug Enforcement Task Forces and International Organized Crime Intelligence and Operations Center, as well as the Romanian National Police Service for Combating Cybercrime and the Romanian Directorate for Investigating Organized Crime and Terrorism.

Through the use of digital currencies and trans-border organizational strategies, this criminal syndicate believed they were beyond the reach of law enforcement, said Assistant Director Michael DAmbrosio, U.S. Secret Service, Office of Investigations. However, as this successful investigation clearly illustrates, with sustained, international cooperation, we can effectively hold cybercriminals accountable for their actions, no matter where they reside. I commend the hard work and perseverance of all those who joined together in this investigation and prosecution. This includes our partners in Europe, as well as those closer to home.

It was also helpful that Romanian officials secured and coordinated the arrests and extraditions from that country of more than a dozen defendants, the release said.

The 15 defendants who have pleaded guilty in this case have yet to be sentenced, the release notes. Two other defendants in the case are scheduled for trial starting on Sept. 14, 2020, before the Honorable Robert E. Wier of the U.S. District Court for the Eastern District of Kentucky. Three others are fugitives. This case is being prosecuted by Senior Trial Attorney Timothy C. Flowers and Senior Counsel Frank H. Lin of the Criminal Divisions Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Kathryn M. Anderson and Kenneth R. Taylor of the U.S. Attorneys Office for the Eastern District of Kentucky.

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Justice Gets 15 Guilty Pleas for International Crime Ring that Laundered Money Through Cryptocurrency Exchanges - Nextgov

As the Ethereum 2.0 upgrade approaches, users have been showing an increasing interest in the staking process, which would allow them to make a passive income by validating the new network.

This is evidenced by the growing number of Ether (ETH) wallets and ETH deposits on cryptocurrency exchanges. According to a recent report published by analytical company Arcane Research, the number of Ethereum wallets containing 32 ETH or more the minimum amount of coins needed to run the staking node have increased by 13% over the year, and the number of Ethereum 2.0 Google search queries have grown by around six times since March.

While some users have already opted to run their own validator node, others are still choosing among becoming an independent validator, joining a staking pool or using staking provider services. But is there actually any difference?

The upgraded Ethereum network will switch from the proof-of-work to the proof-of-stake consensus algorithm, replacing miners with validators who will bet their coins to verify transactions. Once validators verify honest transactions, they will receive the rewards in the form of passive income this process is called staking.

At the moment, the exact size of an annual reward for Ethereum stakers is still unknown. However, according to the projects roadmap, this value will vary from 1.56% to 18.1% and will be inversely proportional to the total number of validators: When the network increases, rewards contract.

On the one hand, a staking model can be attractive to a wide range of crypto users because there is no need for expensive mining equipment or special technical skills and might look as simple as having a bank deposit. All that is needed to receive annual interest on staked funds is to store ETH on a hardware wallet.

However, an in-depth analysis of the requirements for becoming a validator on the Ethereum network has shown that not everything is as simple as it might seem at first glance. The minimum entry threshold of 32 ETH is just one of such requirements.

Related: Ethereum 2.0 Staking, Explained

For example, given the ETH exchange rate of $250, the user will need to invest $8,000 to become a validator on the Ethereum 2.0 blockchain. But what about the reward? Taking into account the cost of validation of $180 and an average reward of 5% suggested by Ethereum developer Justin Drake, the annual profit from staking 32 ETH can be around $190. So, given the possible risks of Ethers price experiencing volatility and users being unable to withdraw funds, this reward model is unlikely to allow an average staker to hit a big jackpot.

Another task users will have to deal with to be a full validator is running their own validator node. As evidenced by a survey published by Consensys, 33% of the ETH users are ready to perform this task. But thats not all. Additionally, validators would be required to ensure the uninterrupted functioning of the hardware wallet. If users disconnect, they lose all their daily income. Even worse, if at some point their stakes drop below 32 ETH, users will lose the right to be a validator.

The Ethereum staking entry threshold is not as high as the cost of running a master node on other blockchain networks, such as Dash, and for many users, high barriers to enter may be unaffordable. That same survey conducted by Consensys also showed that 33% of ETH owners do not intend to participate in network staking, and 71% of those who refused said that they do not hold enough Ether to become a validator.

The above-mentioned limitations can be circumvented if joining a so-called staking pool or staking-as-a-service providers. Such third-party services either decentralized or centralized offer staking on the users behalf and relieve them of the need to worry about launching special software or keeping the network online during the life of the staking deposit. And if launching ones own node can be compared to opening a deposit account at a bank, then staking providers act as brokers, taking on all the risks and maintenance expenses for a certain fee.

The biggest advantage of such solutions is the ability to earn on staking with any amount of ETH, which becomes a way out for many users who cannot afford to keep their own node. According to Consensys, at least 33% of Ethereum users plan to use third-party services and 20% of the respondents who previously revealed the intention to run their own validator nodes said they would consider using a staking service instead. This raises the question: Which is the better option a staking pool or a staking-as-a-service provider?

Today, many crypto exchanges offer staking services for PoS-based coin owners with daily income payments. For example, Poloniex does not impose any requirements on the terms of deposits the user can trade and withdraw funds at any time. For this, however, users are charged a 25% fee on their rewards, which is said to cover operating expenses and risks associated with the management of the service.

Bitfinex, another major crypto exchange, claims that it doesnt charge a fee for its current staking programs, holding a small portion of staking rewards instead. Additionally, asstated on Bitfinexs website, in some cases, its staking service provider can also take a portion of the rewards collected through the exchange. Meanwhile, staking services provided by Bitfinex are available for any category of users since its enough to have as little as $0.10 to start receiving rewards on the platform.

Paolo Ardoino, the chief technology officer at Bitfinex, revealed to Cointelegraph that the cryptocurrency exchange has the biggest Ethereum cold wallet and is planning to be a key part of Ethereum staking. According to him, Ethereum staking will be quite profitable for users who keep their funds on exchanges:

Exchanges like Bitfinex will charge a tiny fee to cover operation costs, but the large majority of rewards will go directly into the pockets of the users. Not all users want to go through the process of custodying their own assets and learning how to stake properly.

Changpeng Zhao, also known as CZ, the CEO of Binance crypto exchnage told Cointelegraph that users who actively stake via Binance will be able to earn higher interest rates than those who simply hold cryptocurrency in their accounts:

Binance will stake a fractional reserve of the Ethereum held by our users, as we still require some funds to be liquid for users to withdraw at any time, while automatically distributing proportionately the rewards to our users.

Another convenience of centralized platforms and custodial services is that they undertake the conversion of the users ETH to ETH2. Cryptocurrency services provider Bitcoin Suisse, for instance,claims that it doesnt charge any commissions for such a conversion, however, it will take 15% from rewards received by its customers. The platform also promises to monitor the timely update of its own software so that the staking process remains uninterrupted and beneficial for the user.

However, according to some users, staking programs offered by crypto exchanges can lead to the centralization of the Ethereum blockchain. In a conversation with Cointelegraph, Sergey Zhdanov, the CEO of cryptocurrency exchange EXMO, explained that although the exchanges will definitely become the biggest network validators, the influence will be inseparable:

Data from Arcane Research and Nansen AI shows that Ethereum wallets with at least 32 ETH, the amount required for ETH 2.0 staking, have grown by 13% this year. The amount of these wallets are more than 120K, so the exchange wallets are taking just 1% of them.

Alongside the crypto exchanges, custodian services provided by some institutional players also appear to be willing to offer such services. According to a PricewaterhouseCoopers report, 42% of crypto hedge funds are also involved in cryptocurrency staking.

Related: ETH Miners Will Have Little Choice Once Ethereum 2.0 Launches With PoS

Zhdanov also pointed out that many big players will likely be staking ETH by themselves as a tool to hedge the risks of their portfolio and that the popularity of ETH among other altcoins working on PoS will help reduce the centralization risk.

Speaking about the probability of centralization, Bitfinexs Ardoino told Cointelegraph that this threat can be possible only in the early phases of the upgrade, adding: Education on the importance of staking from own wallets will be a key factor in order to reduce centralization.

Besides, according to CZ, staking is particularly effective in helping stabilize cryptocurrency prices, as it encourages users to make market buys when purchasing tokens, as well as rewards limit sell orders rather than market sell orders, as users continue to earn staking rewards while their order hasnt filled yet. He added:

Thus, during panics, users are incentivized to set limit orders to sell rather than dump on market, and during bullish periods, users are incentivized to get in faster.

Staking pools or decentralized exchanges can be an alternative for those who are concerned about possible centralization and penalties incurred, for example, for going offline. As the decentralized nature implies, everything from rewards to risks is shared among the members of such pools.

For example, decentralized staking pool Rocket Pool claims that a user deposit cannot be assigned to a bad node since all the pool members share the risk of nodes being slashed and, therefore, the size of the penalty. Thus, if one node fails, each pool member will lose a small number of funds. However, in the case of running a node, its the user whos at risk of losing everything.

In addition to so-called socialized losses, Rocket Pool introduced its native token that represents a tokenized staking deposit and allows stakers to instantly receive a reward and withdraw it at any time. In addition, the pool does not charge fees for staking. However, in order to join the pool, users will need to have a minimum of 16 ETH half as much of the minimum amount needed to run an individual validator node, but a lot more than what crypto exchanges would require.

The entry threshold to become an Ethereum validator has become the most discussed issue among users interested in staking. Many of themargue that 32 ETH is too much and noted that if the required amount was smaller, there would be many more validators on the new network.

Others said that they wouldnt lock up 32 ETH just to secure the Ethereum network unless the staking rewards were higher than 10% per year, given that the possible profit could be negligible compared to losses in the event of a coin price drop. Although the exact staking reward size still remains unknown, many users who have revealed their plans to use third-party provider services already said they would choose the platform that offered at least 7.6% in revenue.

There are also those in the crypto community who appeared to be concerned about the threat of Ethereum centralization, rather than the cost of staking. They, however, appeared to be in the minority. Notably, a significant part of users spoke out in defense of the entry threshold of 32 ETH, comparing this amount to tens of thousands of dollars needed to own master nodes in blockchain networks, such as Dash.

While the launch date for Ethereum 2.0 is still open, users have time to decide whether they want to participate in the stake or not and how exactly they want to do it. As the examples discussed in this article show, almost any crypto user can become a validator of the new network and receive passive income regardless of their financial and technical capabilities.

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Ethereum 2.0: The Choice Between Ones Own Node and a Staking Service - Cointelegraph