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WhatsApp crash: Are decentralized blockchain messengers a real alternative?

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WhatsApp crash: Are decentralized blockchain messengers a real alternative?

Since the introduction of ICQ — the progenitor of online chat applications — the expectation from instant messaging (IM) services has never changed. Users simply want them to work, which apparently turned into a tall order, given the frequent downtimes most popular chat apps experience nowadays. 

Launched the same year as Bitcoin (BTC), WhatsApp is one of the most widely used chat apps on the planet. Owned by Meta (the stable of which also boasts Instagram and Facebook), WhatsApp stands as the epitome of centralized services. That’s why when the service goes down, it has a much broader impact than just leaving over two billion monthly users scratching their heads and complaining on Twitter.

WhatsApp embodies the qualities of a centralized mindset perfectly: It has mainstream reach, an industry giant backs it and despite nearly one-third of the planet using it, people have absolutely no say over the final product.

Why do centralized chat apps go down?

When a product is controlled and managed by a central entity, it tends to follow certain processes during its lifecycle. Someone has to shoulder full responsibility for the various aspects of the centralized product. 

The massive scale of the product turns even tiny updates into a chaos of human errors, database issues and not having enough time to test the version before pushing out the update to meet stakeholder expectations. Coupled with the numerous cyber attacks on the infrastructure itself, the more the service is centralized and managed by a single entity, the more the “usual suspects of failure” fill the room.

Can decentralized services fix downtimes?

Communication-focused decentralized apps (DApps), on the other hand, provide anti-fragile systems, co-founder and CEO of Web3 service provider Heirloom Nick Dazè told Cointelegraph. He said that decentralized messengers get stronger with every user onboarded because they essentially function as “nodes” that keep the system functioning properly. 

“The key difference is that there is not one single point of failure,” Dazè stated, likening it to a balloon that is compressed on one part, which becomes geometrically smaller while still containing the air from the compressed section: “All of the air still exists. It is just pushed to a different section of the balloon.”

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Of course, decentralized apps come with their own set of challenges, and one of them is scaling. DApps can’t compete with centralized services without being able to take on a billion-level user base, but Dazè believes DApps can overcome scaling issues by answering two questions: “Where does all of this data ‘live?’” and “How do we reduce network spam?”

Addressing the first issue, Dazè sees public key-based addressing as a decent solution, “As it serves as a limiting function on the amount of data necessary to handle.” Regarding the second issue, Dazè said that disincentives for spam must be created, accompanied by Captcha servers.

Redundancy is the name of the game

Cointelegraph also reached out to Chris McCabe, the co-founder of the Oxen Project — known for its decentralized IM app Session. When asked how decentralized IM apps handle crashes and downtimes, McCabe pointed to redundancy: 

“Decentralized networks have a lot of redundancy built in. If one server goes down, another one is there to take its place.” 

He said the Oxen Service Node Network, a set of incentivized nodes serving as the infrastructure of Oxen and its offerings, has over 1,600 nodes operated by hundreds of people worldwide.

“It would take a catastrophic event to take the network down,” McCabe claimed, adding that the network is equipped to continue as usual despite experiencing major events from time to time.

“In the past, we saw one-fifth of nodes go offline suddenly, but Session continued sending messages as normal. The network self-heals, and it hasn’t had a total freeze of communication as we have seen with centralized networks.”

Session can currently handle about five million users — a tiny portion of WhatsApp’s user base. However, McCabe said the team will continue to release updates for a more extensive decentralized storage network and higher network bandwidth.

The Oxen co-founder admitted that whether a decentralized network could handle the traffic that WhatsApp or Messenger face daily has yet to be proven. However, he is hopeful that Session could be the first app to test that theory.

“Session is gaining popularity not only because it hasn’t gone down,” he summarized, adding, “But also because people are sick and tired of having their data systematically collected, analyzed and weaponized against them.” 

Unmanipulated, unreadable and untraceable

The decentralized ecosystem offers a wide range of projects and apps with different priorities. One such is TransferChain, a peer-to-peer messaging app that focuses on privacy. Tuna Özen, the co-founder of TransferChain, told Cointelegraph that while the scalability aspect in decentralization is a gray area, being scalable or non-scalable is the result of design decisions. 

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“The main misconception that drives products to be non-scalable is assuming that any blockchain design can meet all needs,” Özen said. He suggested that multiple variables including block volume, block generation rate, consensus, selection algorithm, token integration, network cost and benefit structure and network participation structure should be taken into account:

“Just as it is reasonable to expect a track-proven race car built purely for speed to deliver the same performance in off-road conditions, it is just as reasonable to expect a blockchain approach that is not specifically designed for products and services to be scalable.”

Tuna Özen and his team describe TransferChain as a cloud platform powered by a decentralized decision-making mechanism on a distributed ledger. The app differs from its centralized counterparts with where and how the communication data is saved as well as the transparent storage of the process — which is unmanipulated, unreadable and untraceable according to Özen.

Although decentralized services offer more resilient infrastructures, they still have a long way to go to catch up with their centralized counterparts in terms of user base and mainstream adoption. Another thing to remember is that as DApps get more popular, they will probably need to face more regulatory scrutiny and governments worldwide would definitely have trouble with this new form of communication — given they only recently started to get a grasp of the new form of money.

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Whale Watching: The Top 5 Crypto Transactions of the Week

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Whale Watching: The Top 5 Crypto Transactions of the Week

Bitcoin takes the throne for this week’s 127,351 BTC ($2,062,504,721) whale transfer out of Binance into an unknown wallet on Nov. 28, 2022, while an Ethereum whale transferred about 231,782 ETH ($274 million) on Nov. 28, 2022.

Binance reportedly paid $0.42 in transaction fees to move the large volume of Bitcoin in a bid as part of an audit process with the goal of greater transparency following the collapse of FTX. It assured users of the exchange that all their funds were safe.

Three Major Whale Transactions Done by Binance, Admits CZ

Additionally, the crypto exchange made at least two other whale transactions of around 200,000,000 BUSD, its native stablecoin, on Nov. 30, 2022. Binance was responsible for 81% of the roughly $3.2 billion of all whale transfers in the past week, with these two similar transfers tied for the fifth position.

Binance CEO Changpeng ‘CZ’ Zhao took to Twitter to allay fears of malpractice at the exchange, stating that a third-party auditor requires Binance to transfer a certain amount of crypto to itself to prove that the company owns the wallet. The remainder goes to another address, called a “Change Address.”

This is part of the Proof-of-Reserve Audit. The auditor require us to send a specific amount to ourselves to show we control the wallet. And the rest goes to a Change Address, which is a new address. In this case, the Input tx is big, and so is the Change. Ignore FUD! https://t.co/36wUPphIZk pic.twitter.com/2NkH5L5J9j

— CZ 🔶 Binance (@cz_binance) November 28, 2022

Other cryptos coming in close behind Binance’s Bitcoin transfer is the second-largest cryptocurrency by market capitalization, Ethereum, with almost $560 million transferred in two transactions of 231,736 ETH ($272 million) and 231,782 ETH ($274 million). Validators were later rewarded with $1.32 and $2.51 in transaction fees.

In both cases, the source and destination addresses were unknown. Crypto Twitter has speculated that the first transaction could have involved Ethereum co-founder Vitalik Buterin. Earlier this year, he reportedly dumped 3,000 ETH to DeFi protocol Uniswap V3 shortly after news broke of the failure of FTX.

Fueling the speculation was the fact that Buterin had moved 30,000 ETH out of his self-custodial wallet in May 2022, prompting speculation that Ethereum would dump later. However, it turned out that the transferred funds were set aside for charitable donations.

Whale Transaction Unlocks XRP From Escrow

Rounding up the top five is the transfer of 500,000,000 XRP ($204 million) from an escrow wallet to an unknown address on Dec. 1, 2022. The escrow is essentially a smart contract on the XRP Ledger, written to dispense locked tokens once certain external conditions are met.

In 2018, Ripple launched an initiative to release 1,000,000,000 XRP at the start of each month through an escrow to create a predictable supply of its native coin. 

Accordingly, the transfer of 500,000,000 XRP was followed by transfers of 400 million and 100 million coins to unlock 1,000,000,000 XRP for Dec. 2022. In the past, Ripple has kept 800,000,000 coins, choosing to lock up the remaining 200,000,000 XRP for a new release.

Summary of the Top 5 Whale Transactions

The top five transactions for the week were:

5. 200,000,000 BUSD ($200,080,000) was transferred from Binance to an unknown wallet on Nov. 30, 2022, followed by a transfer of the same amount of BUSD from an unknown wallet to Binance.

Tx costs: $3.31 and $1.27

4 – 500,000,000 XRP ($204,402,898) was unlocked from escrow at an unknown wallet on Dec. 1, 2022.

Tx cost: Not available

3 – 231,736 ETH ($271,829,771) was transferred from an unknown wallet to another unknown wallet on Nov. 28, 2022.

Tx cost: $1.32 

2 – 231,782 ETH ($274,046,462) was transferred from one unknown wallet to another on Nov. 28, 2022.

Tx cost: $2.51

1 – 127,351 BTC ($2,062,504,721) was transferred from Binance to an unknown wallet, likely another new Binance address, on Nov. 28, 2022.

Tx cost: $0.42

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Bybit announces second round of layoffs in 2022 to survive bear market

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Bybit announces second round of layoffs in 2022 to survive bear market

Ben Zhou, the co-founder and CEO of Bybit, announced a reorganization plan amid a prolonged bear market, which involves a steep reduction in the workforce.

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Bybit announces second round of layoffs in 2022 to survive bear market

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Yes, the bear market weeds out the bad actor, but it also forces the existing players to rethink their business strategies to offset resultant losses. In this effort, crypto exchange Bybit announced mass layoffs for the second time in 2022.

Ben Zhou, the co-founder and CEO of Bybit, announced a reorganization plan amid a prolonged bear market, which involves a steep reduction in the workforce. The “planned downsizing” will affects employees across the board:

“We are all saddened by the fact this reorganization will impact many of our dear Bybuddies and some of our oldest friends.”

Independent reporter Colin Wu highlighted that the layoff ratio is 30%. On June 20, Bybit silently laid off employees, citing unsustainable growth, which was confirmed via leaked internal documents. Bybit’s employee headcount grew from a few hundred to over 2000 in 2 years.

1) Difficult decision made today, but tough times demand tough decisions. I have just announced plans to reduce our workforce as part of an ongoing re-organisation of the business as we move to refocus our efforts for the deepening bear market.

— Ben Zhou (@benbybit) December 4, 2022

While announcing the incoming downsizing, Zhou shared his intent to make the offboarding process as smooth as possible. Sufficing this need for restructuring, Zhou said:

“It’s important to ensure Bybit has the right structure and resources in place to navigate the market slowdown and is nimble enough to seize the many opportunities ahead.”

For affected Bybit employees, the revelation is a hard pill to swallow, but Wu reported that employees would receive three months of salary as compensation.

Related: Bybit releases reserve wallet addresses amid calls for transparency

On Nov. 24, Bybit launched a $100 million support fund to provide liquidity to institutional traders following the FTX collapse.

The fund was made available to eligible market makers and high-frequency trading institutions and distributed at a 0% interest rate.

The maximum amount distributed per applicant was $10 million under the condition that the funds would be used for spot and Tether (USDT) perpetual trading on Bybit.

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Elon Musk alleges SBF donated over $1B to Democrats: “Where did it go?”

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Elon Musk alleges SBF donated over $1B to Democrats: “Where did it go?”

SBF made the “highest ROI trade of all time” by donating $40 million to the right people for getting away with stealing over $10 billion, said Will Manidis, the CEO of ScienceIO.

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Elon Musk alleges SBF donated over B to Democrats: "Where did it go?"

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The attempts of mainstream media to water down the frauds committed by FTX CEO Sam Bankman-Fried (SBF) did not fare well in convincing the crypto community and entrepreneurs. Instead, the misinformation campaign collided with Tesla CEO Elon Musk’s drive to position Twitter as “the most accurate source of information.”

The world is yet to overcome the shock after witnessing the legal leniency awarded to SBF for misappropriating users’ funds and shady investment practices via trading firms Alameda Research and FTX. Will Manidis, the CEO of ScienceIO, a healthcare data platform, pointed out that SBF made the “highest ROI trade of all time” by donating $40 million to the right people for getting away with stealing over $10 billion.

That’s just the publicly disclosed number. His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?

— Elon Musk (@elonmusk) December 3, 2022

On the other hand, Musk alleged that SBF donated over $1 billion to Democratic candidates, which is way more than the publicly disclosed amount of $40 million. SBF previously admitted to making backdoor donations to the Democratic Party. Musk asked:

“His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?”

The United States House Financial Services Committee chair Maxine Waters, a Democrat, and ranking member Patrick McHenry, a Republican, have requested SBF to appear in an investigative hearing scheduled for Dec. 13.

.@SBF_FTX, we appreciate that you’ve been candid in your discussions about what happened at #FTX. Your willingness to talk to the public will help the company’s customers, investors, and others. To that end, we would welcome your participation in our hearing on the 13th.

— Maxine Waters (@RepMaxineWaters) December 2, 2022

To this request, prominent entrepreneurs, including Polygon CEO Ryan Wyatt, informed Waters that “he’s (SBF) a criminal” after being shocked at the leniency shown by the people in power to the fugitive.

Related: FTX collapse drives curiosity around Sam Bankman-Fried, Google data shows

The crypto community openly criticizes paid narratives that try to show SBF in good light. The latest backlash is related to SBF’s interviews in New York Times DealBook Summit and Good Morning America interviews.

Speaking to the news outlets during the ‘apology tour,’ SBF portrayed himself as a victim and got applauded at the end. “Watching SBF’s interview is kind of like watching Casey Anthony’s documentary. They’re so mechanical, they’re so inauthentic in their delivery. If you feel any emotion, at all, it slows people down. The way it is expressed is a separate subjective matter,” said Twitter user and developer Naom.

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