Daily Crypto, Finance and Tech News Summary – May 17, 2023

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Welcome, and thank you for being part of the MyZucoins community! Dive into our daily crypto, finance and tech news summary to stay in the know.

Machine with oversized electronics components sparking and malfunctioning with little people stumped to solve problems

Ethereum’s growing pains show the blockchain has a long way to go

Ethereum, the world’s second-largest blockchain, weathered two significant disturbances last week as it temporarily ceased finalising blocks. The incidents, which spanned approximately 20 minutes and an hour, resulted in popular derivatives platform dYdX briefly suspending deposits until finalisation recommenced.

These disruptions, rooted in the two affected client-end systems, Prysm and Teku, put Ethereum’s proof-of-stake (PoS) consensus layer to the test, marking its first major incident since merging with the main network last September.

While patches were swiftly released, the exact cause remains elusive, underscoring the experimental nature of blockchain technology. “I’m not sure that any of us fully understand why,” Ben Edgington of the Ethereum Foundation said. “It’s still under analysis exactly what the root cause of the issue was and why the chain recovered.”

Sidenote: If the cause “remains elusive” as Ethereum reserachers say, how do they know what parts of the system to patch? Is this a knee-jerk reaction to calm fears of the network’s instability?

Even Ethereum, with a market cap of $225 billion and a $27 billion DeFi ecosystem, is not immune to unexpected challenges.

Throughout the incident, Ethereum users continued to transact on-chain, demonstrating the network’s ability to recover. Ethereum Foundation attributed the incidents to an “exceptional scenario” that exerted a high load on Teku and Prysm’s consensus layer end-clients. Patches from Teku and Prysm now include optimisations to limit resource usage during periods of network congestion. However, it’s yet to be determined if these changes will prevent other third-party clients from causing similar issues going forward. This potentially opens up the network to deliberate malicious attacks in the wrong hands.

Ben Edgington of the Ethereum Foundation offered further insights into the event, explaining that the disruption appeared as if about 60% of validators went offline simultaneously, impeding the network’s ability to reach finality. As Ethereum continues to mature and innovate, these hitches serve as strong reminders of the experimental nature of the technology and the paramount importance of consistent network optimisation.

Read more here and here.

This has been one of the reasons the Splitchain network, underpinning Zucoins, has been cautiously rolling out more and more capabilities and system expansion via it’s public, beta, soft launch over a year ago, in Feb 2022. Decentralised systems are very hard to get right. Splitchain’s approach has been to get as much right from the get-go, rather than have too many chefs in the kitchen making things more complex than they need to be. This advice has since been echoed by Ethereum’s co-founder, but that’s a story for a future newsletter.

Splitchain aims to analyse and eliminate frustrations experienced by users on blockchain networks. Ethereum’s a complicated beast and becoming more and more so. The people building Splitchain are working extremely hard to keep the system not only flexible, but vastly simpler to maintain and manage, with less moving parts. It’ll mean more people can use it for many more things. It’s a gigantic undertaking to get right as this story proves. The cautious steps taken towards a fully unshackled open-source alternative to these blockchain systems has been going smoothly, with the system operating normally throughout this period.

Grimes and Bitcoin: Lessons for the Music Industry in the Age of A.I.

The music industry is grappling with the rise of AI-generated songs, with legal battles erupting over ownership and rights. In the midst of this, musician Grimes has taken a different approach. She has announced an experimental project called “Elf.Tech” that allows users to generate Grimes-style music using A.I., with the condition of tasteful use and a 50% cut on any master recording royalties.

This move by Grimes highlights the changing landscape of music production and distribution. As advancements in AI have made high-quality music production more accessible, there is a race to design new distribution models. Grimes aims to leverage the power of A.I. and open-source technology to create a platform where users can generate their own music in her style. Some anticipate the use of blockchain and cryptocurrency might play a role in enforcing suggested royalty splits.

The parallels between the challenges faced by generative AI and the open-source software movement are striking. Just as open-source software revolutionised the technology industry by fostering collaboration and idea sharing, Grimes’s approach seeks to encourage experimentation and engagement in music creation. By embracing openness and transparency, artists can navigate the changing dynamics of the industry and find new ways to monetise their work.

As the music industry evolves, it can draw lessons from the success of open-source software and the decentralised nature of cryptocurrencies like Bitcoin. The coming years will witness a greater separation between designing and controlling music production via NFTs and similar tools, with Grimes’s experiment serving as a significant exploration of the potential of open-sourced talent in the multibillion-dollar music business. Read more here.

The age of personalised and unlimited content has been hitting new highs with the new wave of generative AI tools becoming more and more common. This means much more fake content, that looks like the real thing, will be everywhere—now more than ever. Luxury items, fashion and digital images have long battled with this issue and now it’s coming to all kinds of content, including music and even movies.

When Zucoins is ready, it can offer a handy solution for the music industry’s evolving landscape. By leveraging the scalability and efficiency of the Splitchain network, Zucoins can help make ownership transparent and identifiable to the artist’s work, providing them with a reliable means of not only receiving fair compensation for their work, but also to aid in the detection of fakes. The nature of the Splitchain network aligns with the principles of the music industry’s shift towards collaboration and experimentation. Together, Zucoins and Splitchain present an innovative approach to addressing the challenges of the music industry in the age of AI and fake content. See our similar coverage here.

Unleashing Crypto: A Game Changer for Traditional Payment Systems?

Cryptocurrencies, such as Bitcoin and Ethereum, are seen as potential disruptors of traditional payment systems due to their decentralised nature. Their decentralisation, without the influence of governments or financial institutions, allows for a more open and democratic payment system. Cryptocurrencies enable secure and transparent transactions through blockchain technology, eliminating the need for a central authority and addressing challenges related to transparency, accountability, and security in conventional systems.

The advantages of cryptocurrencies include lower transaction costs, making them more cost-effective compared to traditional payment systems that often involve multiple fees and charges. Read more of our coverage on rising Bitcoin transaction fees here.

In theory, this is particularly beneficial for overseas and multi-currency transactions, where traditional systems can be expensive. With advanced cryptography ensuring security and enhanced privacy levels, cryptocurrencies offer individuals and businesses an attractive option to reduce transaction costs while maintaining security and privacy.

However, scalability and volatility remain significant challenges for cryptocurrencies’ widespread adoption. As transaction volumes increase, processing them on the popular blockchains become more expensive and slower. The unpredictable price fluctuations of cryptocurrencies also hinder their use as a stable payment method, especially for businesses and individuals seeking price stability. Read more here.

Zucoins has taken a more practical solution to the scalability and volatility challenges faced by traditional cryptocurrencies, in areas where it can—on the fundamental infrastructure side of things. With a focus on user-friendliness, transparency and no base transaction costs, Zucoins provide a secure and efficient alternative to traditional payment systems. It’s designed to handle increasing volumes without compromising processing speed or incurring high fees.

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All the best,