Stay in touch with the latest crypto news and trends
PROHASHING's Bonus Edition of the August 2023 Newsletter regarding our upcoming Referral Drive Competition and reminders about the 2023 Litecoin Halving and its impact on Scrypt mining at PROHASHING, our Trusted Mining Program Deactivation, and the upcoming addition of a PROHASHING Loyalty Program
# Continue Reading →Sarah did some GPU testing on PROHASHING supported algorithms to use the hashrate and wattage numbers on an RTX 3070 to get a sense of their profitability coming up on a year after the Ethereum merge to proof-of-stake. Keep reading to see how KAWPOW (RVN), Autolykos2 (ERG), Etchash (ETC), Ethash (ETHW), Octopus (CFX), Equihash 144-5 (BTG), and Neoscrypt (NYX) are fairing, and how KHeavyHash is holding up in terms of GPU mining Kaspa (KAS).
# Continue Reading →PROHASHING's August 2023 Newsletter regarding our Trusted Mining Program Deactivation and the upcoming addition of a PROHASHING Loyalty Program
# Continue Reading →PROHASHING website release notes for the week of 23-7-3
# Continue Reading →PROHASHING's June 2023 Newsletter regarding the beta release of KHeavyHash / Kaspa mining, addition of payout coins Aptos (APT), Kava (KAVA), Aribtrum (ARB), Flare (FLR), Sui (SUI), Magic (MAGIC), Fantom (FTM), and Iost (IOST), and the addition of cloud backups with regard to Google Authenticator 2fa application.
# Continue Reading →PROHASHING has previously only recommended 2fa apps like Authy, which allow the user to enter a backup code to restore 2fa codes in the case of a lost/damaged device. Now, a new version of Google Authenticator has been released, which allows for the association of a Google account with the user's backup codes so that they can be backed up/transferred to a new device, even after the original device has been lost, wiped or damaged, making it a suitable alternative to authy when enabling 2 factor authentication.
# Continue Reading →PROHASHING website release notes for the week of 23-5-15
# Continue Reading →PROHASHING website release notes for the week of 23-5-8
# Continue Reading →PROHASHING's May 2023 Newsletter regarding the addition of a server in Asia as the next step in our worldwide expansion plan, Bug fixes and tuning Profitability on Regional Servers, updates to our live status and account pages of our website, and our newly upgraded battery backup.
# Continue Reading →On Monday, April 24, 2022, PROHASHING has taken our next step forward in improving our services for customers worldwide by announcing the official release of our ASIA mining server.
# Continue Reading →PROHASHING website release notes for the week of 23-5-1
# Continue Reading →Since PROHASHING was founded on Monday, December 23, 2013, the company has made honesty, transparency, and regulatory compliance its top priorities. Every decision made at PROHASHING is made with these three principles in mind. This overview covers how PROHASHING follows strict guidelines to ensure that its customers, business partners, and employees are reputable, honest, and legally compliant. From a "source of funds" perspective, it is impossible for a mining pool to receive money from criminals. In fact, as you'll read below, when the inherent safety of mining is combined with the additional steps that PROHASHING takes to comply with US Internal Revenue Service (IRS) regulations, PROHASHING is safer to do business with than a toy store, as the toy store has no way to prevent itself from unintentionally doing business with undesirable people.
# Continue Reading →PROHASHING website release notes for the week of 23-2-20
# Continue Reading →PROHASHING website release notes for the week of 23-1-23
# Continue Reading →Written evidence shows that PROHASHING and its employees were provided false or misleading information by BlockFi and its CEO Zac Prince.
# Continue Reading →PROHASHING website release notes for the week of 23-1-16
# Continue Reading →PROHASHING website release notes for the week of 23-1-9
# Continue Reading →PROHASHING website release notes for the week of 23-1-2
# Continue Reading →PROHASHING website release notes for the week of 22-12-19
# Continue Reading →PROHASHING website release notes for the week of 22-12-12
# Continue Reading →PROHASHING website release notes for the week of 22-12-5
# Continue Reading →Last night, 2022-11-29, power failed where our servers are located for approximately 5 hours. This has happened only 3 times in about 15 years. PROHASHING does have a generator for situations like this one; however, it did not work as expected when Chris attempted to start it up at the beginning of the power outage. After 2 hours of troubleshooting, Chris was able to ascertain the source of the trouble and get the generator running. From that point, it took about an hour more to bring our services back online from a cold start. Once the power came back on, swapping back to the grid was quick and easy with no downtime.
# Continue Reading →On November 16, 2022, prime cryptocurrency broker Genesis announced that it was halting withdrawals. As a result, PROHASHING took $244,501 in additional losses, on top of the losses incurred from the failures of Celsius, BlockFi, and several exchanges. The total losses to PROHASHING in November due to exchange failures are currently estimated at $1,059,501.
# Continue Reading →If you don't read anything else in this post, the following sentence should tell you what you need to know. It's quite possible that there is now no major lender that has ever actually made a profit in the history of crypto lending, despite lenders having been around for five years.
# Continue Reading →Earlier today, cryptocurrency lender BlockFi announced a halt of withdrawals, which means that BlockFi will likely file for bankruptcy....No customer money was lost, PROHASHING remains solvent, and all operations continue as normal. The lost funds are PROHASHING's reserves, which is money available beyond that which is owed to customers.
# Continue Reading →PROHASHING website release notes for the week of 22-10-31
# Continue Reading →In light of the collapse of the crypto interest industry in November 2022, PROHASHING and author Steve Sokolowski are commencing litigation against multiple lenders and individuals discussed in these articles. These post
# Continue Reading →PROHASHING's November 2022 Newsletter regarding the addition of a Content Delivery Network (CDN) to the PROHASHING website, the start of a worldwide mining server expansion, changes to our two-factor authentication policy, notification of our yearly system maintenance, and a fond farewell to our director of mining operations, Vance Vu.
# Continue Reading →PROHASHING website release notes for the week of 22-10-24
# Continue Reading →For the past 5 years, PROHASHING has had the benefit of the ingenuity and talent of Mr. Vance Vu. He came on with the project early on in its development, and his efforts have been pivotal to the growth of PROHASHING as a company. It is bittersweet that, at the end of this week, we must announce that our amazing Mining Guru is moving on to new opportunities.
# Continue Reading →PROHASHING website release notes for the week of 22-10-17
# Continue Reading →On Monday, November 14, 2022, PROHASHING will be taking a dramatic step forward to improve our services for customers worldwide. The company's new architecture will provide faster load times for the website, better API data, fewer rejected shares, and increased profitability. However, significant changes to PROHASHING's configuration, and to the configuration of miners that connect to PROHASHING, will be necessary. This article explains the technical aspects of the upcoming changes in detail, why the changes are necessary, what benefits they will provide, and what you need to do to prepare for this upcoming release.
# Continue Reading →PROHASHING website release notes for the week of 22-10-10
# Continue Reading →PROHASHING website release notes for the week of 22-10-3
# Continue Reading →I thought I'd take some time today to write a bit about how our architecture works. I thought an overview might be interesting to non-miners who know little about the field, and would also be informative to knowledgeable users who have been reading about the bitcoin industry frequently. What happens in the real world is often quite different from what happens in theory, so I thought a description of actual real-world operations would be useful. This article will focus on the coin daemons; I may write about the mining server, trading algorithms, database, and website in future posts. Among other hardware, we own three servers that contribute to our mining operations. One is an enterprise-grade 24-core system that hosts multiple virtual machines, including the database. It has an Avago RAID card that operates four 1TB SSDs in a RAID 1+0 configuration. These SSDs can handle about 200,000 IOPS, but share insertions only stress them to about 3% of capacity because of concurrency issues. We plan to use the additional capacity to add new features like live updates to the website. This server also hosts the mining server, trading server, website, and a legacy daemon coin virtual machine for a few daemons that won't compile on Debian 8.
# Continue Reading →In light of the collapse of the crypto interest industry in November 2022, PROHASHING and author Steve Sokolowski are commencing litigation against multiple lenders and individuals discussed in these articles. These post
# Continue Reading →PROHASHING website release notes for the week of 22-09-19
# Continue Reading →PROHASHING website release notes for the week of 22-09-12
# Continue Reading →PROHASHING's September 2022 Newsletter regarding the release of Octopus / Conflux (CFX) mining following the Ethereum / Ether (ETH) merge to proof-of-stake (POS), the upcoming addition of Autolykos 2 / Ergo (ERG) mining, our latest blog post, "From Crypto Clueless to Crypto Coach", and the discontinuation of our archived PROHASHING website.
# Continue Reading →PROHASHING website release notes for the week of 22-08-29
# Continue Reading →PROHASHING website release notes for the week of 22-08-22
# Continue Reading →It’s been quite the experience for me taking on a position as a public facing member of a cryptocurrency mining pool’s team. First of all, I only vaguely knew of cryptocurrency’s existence a year ago. I knew it was some kind of money, but the extent of my awareness came from tv series that would feature a episodes about hospitals being taken hostage with ransom demands in crypto. I had no understanding of how it worked or how it was brought into existence or that there’s such an expansive, legitimate market. Growing into someone who could answer questions about cryptomining required quite a bit of training on the part of my coworkers and bosses, as well as asking some humbling questions of some awesomely knowledgeable miners in the PROHASHING community. It took some amount of “shaking it off” to get past the fact that I was seeking knowledge and support from the community I was brought on to eventually help educate and support. However, if there’s one thing I learned from 13 years in the education field, it’s to never be surprised or embarrassed to learn something from my students, and if there’s one thing that crypto taught me fairly early on, it’s that I’m pretty certain no one person can ever truly know everything there is to know about crypto.
# Continue Reading →PROHASHING website release notes for the week of 22-08-01
# Continue Reading →PROHASHING's August 2022 Newsletter regarding our updated blog page and our newest blog posts, such as "CryptoMining for Charity" and "'Backup Daemons' - a major step towards 100% mining uptime", the next set of Hero cards in our PROHASHING Heroes series, and our most recently added payout coins, TheSandbox (SAND) and Optimism (OP).
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Miguel Quezada, Stylesheet Sidekick.
# Continue Reading →One of the most common worries customers express in our mining pool's tickets is the future of GPU mining after Ethereum merges to proof-of-stake. Naive articles in mainstream media often portray the end of ETH proof-of-work mining as a cataclysmic event that will bankrupt everyone and destroy the value of GPUs for eternity. That couldn't be farther from the truth, because Ethereum Classic has been, and continues to be, ready to expand the ETH universe.
# Continue Reading →PROHASHING website release notes for the week of 22-7-25
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Adithya Ajith, Algorithm Apprentice.
# Continue Reading →PROHASHING is experiencing issues with Coinbase with increasing frequency. As I wrote, in my previous post, "Our Recent Issues with Coinbase", the exchange was placing 72 hour holds on many, if not all, PROHASHING payout transactions with no reasoning provided and little to no communication as to when, if ever, the issue would be resolved. The holds did eventually stop, and we hoped that would be the last of our Coinbase issues, but this was unfortunately not the case. Recently, the 72 hour holds started back up, again, with no explanation from Coinbase as to the cause or whether there would be a resolution soon. Now, the issue has become more severe. Our CEO, Chris Sokolowski, received an email from Coinbase stating that, for unnamed security reasons, our account had been locked.
# Continue Reading →Celsius Network's July 13 bankruptcy announcement provided few details into the operations of the company. The full filing that appeared on July 14, for the first time, finally provides additional insight into the problems at Celsius. Many media outlets have provided a very high-level summary of the filing itself, but I'm not aware of any that have looked at the numbers and tried to estimate how much money depositors might receive. I spent hours reading all 61 pages, so let's change that here.
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Stephanie Scott, AKA Finance Oracle.
# Continue Reading →PROHASHING website release notes for the week of 7/11/22
# Continue Reading →The most common type of support ticket we receive involves "Internet connectivity problems." For years, we performed investigations into these issues under the assumption that there was either a customer connectivity problem, or that a bug was present in the mining servers that only emerged with that customer's specific mining configuration. An example of the type of bug that might cause such problems would be the use of a new type of mining equipment, as occurred when the Antminer S17 was first introduced - the S17 didn't follow the stratum protocol as defined. We've also determined that some customers report standard mining server reboots for bugfixes or upgrades as "connectivity issues."
# Continue Reading →Everyone wants to change the world, right? How many of us feel that way but also feel discouraged when we hit adulthood and realize that each of us is only one person and can potentially do very little to effect change in the big, big world unless we're in positions of power? Well, take heart. Even if you're not in a position of power, you can quite literally use your power to make a difference. Before I cover the how, I want to explain the why by highlighting each of 10 charities who are working to effect that change that our 10-year-old selves dreamed of being responsible for.
# Continue Reading →PROHASHING website release notes for the week of 7/4/22
# Continue Reading →The trend in the cryptocurrency markets reversed on June 17 and we are now in a bull market. In this post, I'll review some thoughts about what we can look forward to over the coming years. In previous cycles, moved on from many lessons, like that the fear that cryptocurrency would go to zero was unwarranted. If there is any lesson to be learned from the most recent bear market, it should be that things will never be different. That lesson has huge implications for the future of coins, blockchains, and tokens.
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Sarah Manter, AKA Community Liaison.
# Continue Reading →It's important for people to finally recognize that what happened in June was not a case of people making "risky investments" and those investments failing to pan out. It was people depositing with lenders whose CEOs and managers misrepresented what they were actually doing with the money. That is criminal fraud. The fraud worked as long as there were an equal number of deposits and withdrawals, but the SEC's actions restricted deposits, setting the stage for what otherwise would have been an orderly drawdown.
# Continue Reading →PROHASHING's July 2022 Newsletter regarding the release of Ghostrider / Raptoreum (RTM) mining algorithm support for CPU miners, an update to the statistics available for viewing on the PROHASHING website for PPLNS miners, our latest blog posts, including "The Crypto Dictionary - Part 1" and "Celsius solvency survey results", and our first set of Hero cards in our PROHASHING Heroes series,
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Michael Steward, AKA Website Wizard.
# Continue Reading →PROHASHING website release notes for the week of 6/27/22
# Continue Reading →The results of the latest survey are in! In this post, I'll review what readers had to say about the trustworthiness of crypto lending platforms. I was curious to find out what impact, if any, the Securities and Exchange Commission had on the crypto lending marketplace when it announced its settlement with BlockFi in late 2021. As occurred while writing the Celsius solvency survey results post, I was surprised to find that much of the data did not match my expectations, but it nevertheless appears to have been borne out over the past week. For example, in that survey, the majority of respondents suspected major, or even criminal, wrongdoing at Celsius, which directly contradicted the mainstream media narrative. As time has gone on, the continued withdrawal freeze at Celsius and the news of just how bad the 3 Arrows collapse is are reinforcing those poll results. Without further delay, let's get to the results of this survey, which had 43 respondents.
# Continue Reading →I said in an earlier post that I would discuss the results of a survey on June 25. To obtain more responses, I decided to delay publication of those results for a few days; please consider answering the survey at https://s.surveyplanet.com/l18fwqrn so your opinions can be considered in that post. Meanwhile, events are moving at light speed now in the crypto lending markets, so I decided to instead write about what we now know about Celsius's financial state, the likely course of events during Celsius's insolvency proceedings, and how those events will affect other lending platforms.
# Continue Reading →PROHASHING website release notes for the week of 6/20/22
# Continue Reading →In light of the collapse of the crypto interest industry in November 2022, PROHASHING and author Steve Sokolowski are commencing litigation against multiple lenders and individuals discussed in these articles. These post
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Steven Godshall, AKA Coin Sage.
# Continue Reading →Rumors and speculation abound as to the fate of Celsius Network and its depositors' assets. To cut through the noise, on June 18, 2022, we posted a survey at several Celsius-focused discussion forums asking commenters what they thought about Celsius's financial state. Crowdsourcing has been shown to reveal interesting information in the past, as the success of prediction markets has shown. This survey did not disappoint. While we had expected that it might contain a lot of spam and garbage responses, only a few of the responses were obviously troll-worthy, and we were able to discard them easily. Additionally, respondents were required to sign up for an account and solve a captcha, so it's likely that someone who went through that trouble would also respond truthfully.
# Continue Reading →DeFi isn't real, and the entire industry is currently being drowned by a cascade of fake tokenized debt.
# Continue Reading →PROHASHING website release notes for the week of 6/13/22
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Vance Vu, AKA Mining Guru.
# Continue Reading →Crypto lending is at a crossroads right now, and its future is bleak. That's unfortunate, because I posted just five days ago that lending is what would be required to "close" the crypto ecosystem and allow more merchants to pay the entire supply chain in bitcoin. Of course, it all comes down to Celsius, but make no mistake - Gary Gensler and the SEC have a direct role in creating the current situation.
# Continue Reading →Today's crypto crash is all about Ethereum. Ethereum's price and the ETH/BTC ratio have been in a freefall, cratering far below the highs set in 2017. Other networks and coins built on Ethereum have been taken with it, and people who need money to cover margin calls are using bitcoin to cover them, fueling even more losses.
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Steve Sokolowski, AKA King of All Things.
# Continue Reading →Until we see widespread adoption, the market will continue to be ruled by traders, speculators, and people looking to make a quick buck, with ridiculous volatility, rather than people who are actually using cryptocurrencies to transfer money to each other. The lack of actual adoption seems odd to users, because anyone who's actually used both the legacy banking system and cryptocurrencies to transfer value will recognize immediately that cryptocurrencies are superior in almost every way.
# Continue Reading →Introducing the PROHASHING Heroes: a highlight of one PROHASHING team member per week. Meet Chris Sokolowski, AKA Head Honcho.
# Continue Reading →Insiders in the cryptocurrency industry love to communicate with the use of difficult-to-understand fluff and jargon. To help out newcomers, I decided to post a friendly resource to help everyone gain more knowledge. The more we learn about and use these terms, the more we can benefit from confusing everyone else so they never figure out what's actually happening.
# Continue Reading →PROHASHING's first Newsletter from May 2022, regarding our PROHASHING HiveOS Flight Sheet and Wallet Set-up Guide and Youtube Walkthrough, PROHASHING's latest blog posts, including "Bad applications are killing the cryptocurrency industry", and our most recently added payout coins, Kadena (KDA), ThetaNetwork (THETA), ThetaFuel (TFUEL), STEPN (GMT), OasisNetwork (ROSE), and Flow (FLOW).
# Continue Reading →In the past year, the correlation between the US stock market and the price of coins - bitcoin in particular - has strengthened to the point where any rise or fall in stocks is nearly always immediately reflected in the cryptocurrency markets. In this post, I'll examine this puzzling phenomenon, and will offer some thoughts as to when the correlation will finally break.
# Continue Reading →The world has spent the past two years dealing with the consequences of a world-wide pandemic, which has understandably had an impact on the cryptocurrency market. Now, we are seeing the rise of another potentially devastating disease. In this post, I will examine what the potential consequences may be for cryptocurrency if the Monkeypox virus outbreak worstens.
# Continue Reading →I would imagine that most people were shocked with the ferocity of the collapse of the cryptocurrency industry last week - I certainly was. I had erroneously believed that the smaller magnitude of bubbles that had been occurring since the 2019 bubble indicated that cryptocurrencies were finally developing into something that was moving toward becoming widely used by everyday people. Instead, the dramatic trend reversal that occurred last week shows that not much has changed. In this post, I'll provide a general overview of many of the negative trends that lead me to believe that we are still moving backwards, instead of toward wider adoption, and why these trends need to flush out.
# Continue Reading →Join me at the start of my journey.
# Continue Reading →Our last conflict with Coinbase took place in Fall of 2018 when their API, which PROHASHING had been successfully using to conduct business for 4 years, suddenly ceased to function as expected. Due to unresponsive customer service, that issue took about a month and a half to resolve. Now, we find ourselves in a similar situation. On March 16, 2022, Coinbase began placing a 72 hour hold on payments made from PROHASHING to PROHASHING miners. Chris contacted Coinbase’s customer support on March 19. The first responses were sent to Chris that day but in the form of automated replies.
# Continue Reading →On March 18th there was a concerning data breach involving HubSpot, a CRM (Customer Relationship management) system. This breach affected about 30 clients, not all of whom have been disclosed as of the time of writing this post, and is believed to have been directed at the cryptocurrency industry. In the wake of this breach, this post broaches the subject of the security of your personal identifiable information and touches on the steps PROHASHING takes to keep your information safe.
# Continue Reading →With a bitcoin hard fork being an inevitability, I spent some time examining the possible outcomes and how to best position a portfolio given those outcomes. In this post, I'll review some scenarios that could occur as a result of the fork, and how I would react to these situations. The hard fork isn't a simple event where there is either a fork or not. The circumstances surrounding the initial split will have a huge impact on the best investment strategies and the eventual outcome. Miners could reach the 75% Bitcoin Unlimited activation threshold and the fork could activate as coded. Alternatively, a group of users from one side of the other could announce that they will fork regardless of hashrate on a certain date and list the forks on an exchange. Finally, absolutely nothing at all could happen, leading to a slow demise. I was able to come up with a large number of different combinations of scenarios that could happen, but most are unlikely and reviewing them all would dilute the quality of this post. Therefore, I'll divide my focus into the three most likely categories of outcomes, and then will examine how to invest depending on which actually happens.
# Continue Reading →Crypto lending platforms appear to be under siege by the Securities and Exchange Commission, which has threatened legal action to stop them from offering interest-bearing accounts. In this post, I'll detail why much of the media reporting about what's going on is incomplete, show that the impact of the BlockFi settlement is likely to be limited, and offer that the SEC actions are likely to result in people choosing riskier platforms to generate interest, such as DeFi contracts.
# Continue Reading →With the cryptocurrency market - and particularly bitcoin - about to reach an inflection point where prices will break up or down, I thought it worthwhile to discuss some of the issues that will, and will not, affect which direction the trend breaks.
# Continue Reading →In previous posts, I reviewed how cryptocurrency lending, a relatively new product at the time, had the potential to completely change the markets. In this post, I'm going to review some causes for concern that have come up just this week.
# Continue Reading →Cryptocurrencies have been around for a decade, and everyone always predicts that "this time is different." Of course, the end result is still bubbles and crashes. There will still be a crash at the end of this bubble, too - it just won't be as bad due to the advent of lending.
# Continue Reading →Cryptocurrency prices recently have been rising at a far more astonishing pace than any time in their history. One of the reasons for the extreme price rise is that there is little liquidity on exchanges, particularly on the sell side. People want to buy, but there are no coins available for them to purchase, so their only choice is to offer more and more for what is available.
# Continue Reading →The final approach is to buy coins, which is why this mutation news is worth discussing here. The mutations make it far more likely that currencies will devalue. Everything is setting up for a perfect storm next summer. Coins are already in a bull market, and sooner or later the fact that the world with carefree in-person meetings and events is not returning any time soon will dawn on policymakers. Most importantly, coins are the most liquid asset on the planet. They require zero effort to own, can be unloaded at any time, have no risk by the CEO making poor decisions about the company, and if you don't want to do research, you can just buy bitcoins as a safe bet should the dollar start to crash.
# Continue Reading →While cryptocurrency's current bull market was arguably proved when the bitcoin price crossed $13,800 a few months ago, I thought that it's still not too late to offer some thoughts on the current cycle.
# Continue Reading →PROHASHING performs regular audits of its systems to detect bugs and theft, and has determined that cryptocurrency exchange Graviex is failing to credit deposits to its platform from what appear to be randomly selected transactions. Additionally, PROHASHING found that Graviex has listed some money as locked, with no ETA as to when the money will be able to be withdrawn or traded. When the errors were brought to the exchange's attention, Graviex's customer service representatives refused to correct the issue, causing PROHASHING to cease trading with Graviex, and leading to a recommendation that all customers immediately withdrawal all money from Graviex.
# Continue Reading →There's nothing special about me that others don't have, and I certainly am not the smartest or wealthiest person in the world. What I did do, and which many people do not, is to gain a full understanding of the topics that I'm writing about or taking action upon. One can only have a full understanding of the topic if if (s)he reads the original sources, not articles published in the mainstream media (or worse, on Facebook.) A further rule of thumb is to completely ignore anything on Wikipedia - they have a stated policy of "no original research" (https://en.wikipedia.org/wiki/Wikipedia:No_original_research), so what is published on Wikipedia is exactly the opposite of what we want to read.
# Continue Reading →Earlier this week, after writing the previous post disproving NiceHash's claims that it cannot prevent 51% attacks (https://prohashing.com/blog/prohashing-disproves-false-nicehash-statement), we decided to review whether NiceHash's refusal to guarantee that sellers submit blocks at a normal rate could be responsible for the auditing issues. We concluded that NiceHash miners, which made up 10% of the pool's hashrate, submitted 3% of the pool's blocks. This result conclusively ended our search for the low-luck bug, and will allow us to increase profitability for direct miners.
# Continue Reading →It's time to finally call it as it is - Nicehash is complicit in criminal activities. In this post, I'll describe a recent incident involving Ethereum Classic, will review a false press release issued by Nicehash, will show how Nicehash earned $9,900 from one attack alone, and will prove how Nicehash could entirely prevent these attacks with only a few months of coding effort. Finally, I'll reveal how PROHASHING has followed ETCLabs's recent legal action with a complaint to the United States Internal Revenue Service against Nicehash.
# Continue Reading →While there isn't that much that's safe to do on the weekends nowadays, I had hoped to spend at least some time over the weekend playing video games and biking. Instead, I'll be spending these two days and more re-implementing something that's been done hundreds of times before - an E-Mail marketing tool. This post will describe our recent experience with Constant Contact, an E-Mail marketing firm. In addition to the obvious conclusion that nobody should ever purchase services from Constant Contact, the experience should also serve as yet another example of why it is so important to rely on as few third-party companies as possible.
# Continue Reading →System upgrades done the week of May 17, 2020
# Continue Reading →I was surprised at the dramatic crash in coin and stock prices that occurred over the past week, particularly the 3000 point Dow loss that happened yesterday. As you may recall, in the previous post I mentioned that I believed that there was cause for optimism, and there is nothing that would lead me to believe otherwise right now - but the market reaction has been the opposite.
# Continue Reading →On February 29, I pointed out that the only event that matters right now for the cryptocurrency industry is the coronavirus. I projected in the previous post that the price of bitcoins would fall to a low of $7700, which is what happened earlier today. The initial drop from $10,500 started because of the halving, but everything since then has been almost solely caused by the virus. A year from now, when we look back at the charts for various coins, it will be necessary to "cut out" this month and a few months after this. There was no virus in the past that caused such a severe shock, and until the next pandemic arrives, it will be incorrect to consider these few months for any long-term predictions.
# Continue Reading →I predicted that each of the SHA-256 cryptocurrencies would reach a high a month or two before the halving, and then see a few months of stagnation until coins continued their traditional path of becoming more valuable over time. That's why Chris and I believed that the $10,200 mark on February 18 was the "second lower top" that is often seen after trends change in cryptocurrency markets. In the last week, of course, the virus outbreak has caused a freefall in the stock market. Despite everything in the news, a lot of the discussion websites and forums are trying to explain current price trends using technical analysis (TA) with lines on charts, or they are trying to use internal events (like the halving) as an explanation of bitcoin's (and other coins') price action. It is true that internal events started this fall, but the market has since been "overcome by events," as technical writers often say. Anyone who is buying or selling any asset needs to understand that the coronavirus is the only thing that matters right now.
# Continue Reading →Two Christmas Eves ago, I drew attention to several exchanges' business practices (How exchanges are saying "Merry Christmas".) C-Cex simply stopped processing withdrawals for a month, and Poloniex caused us to lose $200,000 due to their delays. C-Cex closed up shop shortly thereafter, and Poloniex is also effectively out of business (I'm not sure what else one can call abandoning the world's largest market.) The fate of these exchanges should have been a warning about what happens when a corporation provides poor customer service, but it seems that today's exchanges have yet to learn from their predecessors. This year, the first up is Bittrex, which owes us about $15,100. About ten days ago, Chris exchanged about 78 BCH to dollars to pay taxes, and initiated a wire transfer to the company's Wells Fargo account. While we have moved almost all of our operations to cryptocurrency payments, the government still only accepts tax payments through the legacy system. We had used Bittrex multiple times in the past to pay taxes with no problems. Not only had we used Bittrex for coin sales for a while, but we had made multiple transfers to the same account that had no issues and appeared the next day.
# Continue Reading →Those who have been following cryptocurrency for a while have probably noticed that the present industry situation is very different than it was in January. Price is the only metric that is positive compared to nine months ago; all of the other indicators are sharply negative. Something has changed, and there are warning signs everywhere. In this post, I'll explain why a turning point is about to be reached, where a decision will be made between continued expansion of the industry and a long-term contraction that will result in a radically different landscape when it ends.
# Continue Reading →Some pools offer absurdly low mining fees, and some of them go as low as zero. Today, I wanted to provide an example of why, although we can pay more by coin switching and strive to keep our fees as low as possible, we would never be able to compete with those pools on fees alone.
# Continue Reading →For half a decade, there has been endless debate on the appropriate block size for bitcoin. The debate has resulted in twitter wars, forks, and even legal challenges. The majority of the online discussion has not been about which solution is best but has focused on personal attacks against those involved. What's weird about it all is not the controversy, but that it's still going on five years later. On November 15, 2017, Bitcoin Cash finally forked from Bitcoin, and to reasonable people, that should have been the end of it. There are four major bitcoin forks with a price above $25, all of which have different development philosophies, and one or more of which satisfies the needs of almost everyone involved in the debate. So why is it that, two years after the issue was settled, some Bitcoin Core supporters are still carrying on an endless war? In particular, why are they still hiring trolls to spread false information and dominate discussion, when they arguably are the ones who won the war?
# Continue Reading →Recently, there have been quite a few comments about the 1099-MISC and W8-BEN forms that PROHASHING and other mining pools are required to distribute to the highest earning customers. In this thread, I'll address two issues related to this requirement and will respond to some of the well-considered replies to my previous post (Miners are centralizing into huge farms).
# Continue Reading →Given that this topic seems well above Trump's typical comprehension level, and that most of his tweets focus on his election, his investigations, or the media, it's likely that one of his subordinates was directed to compose these messages for a specific purpose. While it might at first seem that the tweets are just a rant about cryptocurrencies, a careful reading of these tweets suggests that the purpose of the tweets is to link Libra to criminals and negative perceptions about coins, so that legislators and regulators will be more likely to try to rein in facebook's ambitions.
# Continue Reading →Earlier in the weekend, I posted a review of the July 3-4 meeting that we held to discuss PROHASHING's path forward over the next few months. The purpose of the meeting was primarily to answer the following question: why, given that almost everything else is exactly the same, are there fewer customers now than there were a year and a half ago? After a lot of discussion, we realized that we had enough evidence to conclude the answer is that miners are centralizing into huge farms, owned by fewer people. This development should be alarming to community members and coin developers who are constantly pursuing decentralization of hashrate.
# Continue Reading →Several weeks ago, I commented on the July 3-4 project-wide meeting that we were calling everyone together to State College to attend. The purpose of the meeting, besides seeing one of the best fireworks shows in the world, was to answer the core question I proposed in that original thread: given that the system is much more stable than before, has more features than before, offers more algorithms, and the coin networks' difficulty have returned to their peaks, why are there fewer customers?
# Continue Reading →In the past few posts, I've discussed why stablecoins represent the greatest threat to cryptocurrency that has yet appeared. In One more bubble, I described why other assets will be a better bet after the next cryptocurrency bubble passes. In Curiosity/Motivation/Logic and why stablecoins are the future, I reviewed how the lack of motivation to learn new things, an unfortunate trait of most people, predisposes them to do whatever is easiest. Whatever is easiest will include accepting facebook's currency rather than searching to see whether better alternatives exist. Thus, I will conclude the trilogy by discussing the potential outcomes of Libra.
# Continue Reading →In my last post, I showed why my confidence in there being more than one more bubble is too low to justify remaining heavily invested in cryptocurrencies. In this article I want to expand upon that reasoning by talking a little bit about human factors that lead me to believe that stablecoins pose a great risk to traditional cryptocurrencies.
# Continue Reading →For something that has the potential to earn as much money as cryptocurrency investing, there are two critical facts that need to be considered as to when to finally sell. First, how many more bubbles will there be? Second, what will the world be like when those bubbles occur? Here, I present why I'll be significantly reducing my exposure to cryptocurrencies after the next bubble.
# Continue Reading →The HitBTC exchange is refusing to send $67,000 that is owed to PROHASHING despite repeated requests to withdraw the full balance for over eight days. HitBTC has stopped responding to tickets and we have notified them we will be reporting their actions as theft if we do not receive the funds by Friday. We recommend that all readers cease trading with HitBTC and attempt to withdrawal their account balances as a safety measure until more information is available.
# Continue Reading →On May 15, there were two consecutive orphaned blocks on the Bitcoin Cash network. Given that Bitcoin Cash has one of the longest target times between blocks of any coin, and that it has one of the highest difficulties of any coin, I repeatedly expressed concern that the probability of the orphans solely being a result of chance was astronomically low. I implored developers to investigate the issue, and it seems that more information has recently come to light. In this post, I'll review the latest theories, show why the pools' response likely had a result far different than what was intended, and will discuss how similar issues can be prevented in the future.
# Continue Reading →Whenever a bug has occurred over the past few years, it seems as if it always involves Nicehash rentals in some way or another. Until now, however, we never had any convincing evidence that Nicehash was negligent in any of these issues. Today, I'm finally able to detail a number of areas in which Nicehash is causing significant harm to the cryptocurrency industry. It is extremely likely that Nicehash miners were involved in a block withholding attack that occurred against Ethereum from March 2 to 3.
# Continue Reading →In Bitcoin Unlimited, on line 1185, in graphene.cpp, at https://github.com/BitcoinUnlimited/BitcoinUnlimited/pull/1511/files, there is a seemingly insignificant constant, nTimeToWait. On the morning of December 3, the value of this constant caused the Bitcoin Cash network to reorganize and discard a valid block - but upon further examination, the consequences could have been much worse.
# Continue Reading →The current downturn in the cryptocurrency markets itself isn't very surprising. There have been many bubbles before, and there will be at least one more bubble after this. What surprises me about this cycle is how quickly the market has collapsed. Whereas previous cycles fell slowly after the long middle period where prices stalled, this time the bottom fell out in the course of a week. This post will review the consequences of the new market reality.
# Continue Reading →Bitcoin Cash will fork into two new coins, BCHSV and BCHABC, around November 15. Currently, BCHABC is projected to be about four times as valuable as BCHSV, despite BCHSV projecting to start out with twice as much hashrate as BCHABC. The difference between these two is that BCHABC is being supported by most major exchanges and merchants, while more and more mining pools are claiming that they will mine BCHSV at a loss. This absurd starting situation, where there could be at an 8-16x profitability increase in SHA-256 mining for a period of time, is something that we will make sure to take advantage of. Unlike with previous forks, Chris will be awake regardless of the time that this fork occurs so that we can immediately begin mining to take advantage of this huge imbalance.
# Continue Reading →It's always amazing to me to see how much conversation, online and offline, is dominated by people who lack historical knowledge about the topics they are discussing. People talk about the latest Spider-Man movie as if the story is something new, forgetting that the last reboot of the series occurred just 15 years ago. Discussions about science fiction are dominated by people who think "Game of Thrones" has the most mysteries ever, while forgetting it was just 8 years ago that "Lost" was stupefying viewers with an even greater number of secrets. Those who think that the Kavanaugh hearings represent a new low for women in politics fail to recognize how the vote count actually represents progress from the Clarence Thomas confirmation battle. In cryptocurrency, people seem to have even shorter memories. Rather than forgetting things that happened years ago, they fail to remember events that take place in the preceding months. Thus, it's not surprising that we now see discussion dominated by the idea that the upcoming Bitcoin Cash split is going to be "won" by the group with more hashrate, or even won by anyone at all. At least half of the posts on uncensored forums seem to be engaged in a battle about which chain is going to survive, as if the other is going to disappear somehow.
# Continue Reading →As a major financial services firm with a money services business license, Coinbase has a duty to provide a basic level of customer support, but the company has repeatedly shown that it is unable to meet that standard.
# Continue Reading →Currently, Tether, which is supposed to be a coin pegged to the dollar, is trading for just 97 cents. Bitfinex, whose CEOs are intertwined with Tether's operations, has decoupled from the other markets. Given that there are billions of Tethers outstanding, many believe that Tether's collapse would be catastrophic to the cryptocurrency industry. They're right, because that would be exactly the sort of panic that is needed to take bitcoins down to the further capitulation that I've been talking about.
# Continue Reading →Every day, it seems that there is another security breach at an exchange or wallet service. Some estimates suggest that criminals have stolen over a billion dollars from exchanges, so it's easy to think that people will take whatever money they can. Thus, you might be surprised to learn that I've recently been working to solve the opposite problem: getting rid of money that we owe.
# Continue Reading →Yet another bank closed our accounts. This time, the bank is Janney Montgomery Scott, a brokerage in New Jersey. While it's nothing new that banks continue to discriminate against cryptocurrency businesses, this particular action surprises me for a number of reasons. I wanted to document this closure not just to tell people to avoid Janney for their trading needs, but also to analyze some of the underlying factors. I think that they reveal a lot about the state of the industry right now.
# Continue Reading →ast week, we posted a poll to obtain some data about what attributes customers find important in mining pools. The results have come in, and I thought that it was worth discussing them with everyone to review how we intend to respond to them. You can view the results of this poll by logging into your account, visiting the "Earnings" page, and clicking "previous poll result." First, I want to thank the customers who responded to the poll. The response rate was about 1/7 votes, or about the same turnout as that of a typical primary election. There were enough votes that I believe the results are statistically significant and action can be taken upon them. Upon looking at the results, I was pleased to find that they were in line with our priorities with very few surprises. The one particular feature that stood out was "high payout frequency." As someone who places orders at Purse weeks in advance and doesn't care when they arrive, it surprised me how being paid more frequently turned out to be the fourth most important feature. Let's review some of the key takeaways from the poll, moving in order of the listed options, and what we are doing about them.
# Continue Reading →fter the latest crash I spent some time reading news articles trying to find out if there was a specific reason for the panic. Cryptocurrency market movements, of course, are rarely the result of news. In 2014, every time China said they would ban bitcoins, the market crashed spectacularly. In 2017, when they actually did shut down exchanges, prices rose. This time was no different. But the tenor of comments in forums and in news article comment sections did seem different. One type of comment is the appearance of a large number of people claiming "I sold my coins when they were worth XXX and I told you so!" The other common type is "This time is different than in the past! There's no adoption and cryptocurrency will fade into obscurity!" It's striking to me how many people seem to forget market conditions during the last bubble, or two bubbles before that.
# Continue Reading →There are two constant market forces unrelated to traders and purchasers that act in opposition to each other, and understanding them explains a lot about why markets act the way they do. I'll show that they can explain the existence and behavior of the bubble cycles that are especially pronounced in cryptocurrencies.
# Continue Reading →Today, instead of talking about features or prices of coins, I wanted to share a look inside the process of trying to operate a legal cryptocurrency business in today's world. Ever wondered why so many mining pools operate anonymously, or why Mark Karpeles used his personal bank account to store millions of dollars of Mt Gox's customer funds? By the time I'm finished, I believe that you'll be able to understand some of what initially appear to be head-scratching decisions by companies in this industry. It all comes down to one issue: being able to pay taxes.
# Continue Reading →Two days ago, I wrote a forum post about the Lightning Network at The ridiculous complexity of the Lightning Network. I didn't think the post was particularly poignant or that it stated something that wasn't already obvious. Apparently, Michael Marquadt (theymos) did, because it seems a pretty strange coincidence my E-Mail inbox received a lot of "Deleted Post" messages from his bitcointalk.org forums the next day. The posts got me to thinking about how he and many Core members seem to be waging a one-sided war, continuing a battle that ended a long time ago. Their sole goal seems to be spending their days curating the Internet to make sure that no remotely sensible discussion about the bitcoin network's limitations occurs, and being as rude and vindictive as possible towards anyone who disagrees with them. They are so laser-focused that they take actions that are obviously against their own interests. Meanwhile, the people they see as opponents have largely moved on, caring little about a subject they see as settled.
# Continue Reading →A few customers submitted support tickets about the use of the Lightning Network to pay out bitcoins, which led me to spend some time researching the subject. While I've disagreed with the idea of the network for a long time, I had expected to discover that it was a well-designed alternative to the increased blocksize approach from people who had an earnest belief that most transactions should be off-chain. I figured that, now that the Lightning Network had been released, we would start to see businesses using both competing implementations, and eventually one approach would prove itself superior to the other. I did not expect to come to the conclusion that the network is almost ridiculously complex.
# Continue Reading →Good morning! Hopefully things are going well for everyone. One thing we aren't having is a merry Christmas. I wanted to write a post to call out several exchanges, whose behavior can be described as unethical in the best-case scenario. We ceased business with these exchanges, and after reading this, hopefully you'll understand why we urge customers not to send money to these exchanges until we see some policy changes.
# Continue Reading →This is an awful business deal. The investors could have waited until Nicehash declared bankruptcy, and then purchased their source code and hired some of the developers who worked on it. Their source code is the company's only asset that has any value, so any reasonable investor would have bought it, made some cosmetic changes, and relaunched the system with a different brand. That would have cost 1/10 or 1/20 of the $60m required to resurrect the site as-is, and eliminates the existing owners who now have a checkered past while getting rid of the poisoned brand name.
# Continue Reading →First, a few days ago I mentioned that the prediction markets for "Segwit2x futures" were rigged to show a lower probability of the chain becoming dominant than actually existed, and that the Core was using the prices as propaganda. If you weren't aware of the issue, it was that the paper Segwit2x coins being traded in these markets would only have value if both the fork occurred and it became the dominant chain. In the real world, of course, holders of bitcoins would also get "Segwit2x value" if the fork didn't occur, because they would still own their original bitcoins.
# Continue Reading →It's been a long time since I've been able to contribute a post here. Now that the system is relatively stable, I thought that it was worth a few paragraphs to point out the idiocy of what's going on with bitcoin. The bottom line is that right now, there are at least four different forks fighting a losing battle over a cryptocurrency that is overvalued and obsolete. I'll review a little bit about all the sides in this latest debate, starting from the incompetent and ending with the vile. I don't think anyone has actually taken the opportunity to step back and point out exactly how ludicrous the current situation is, so let's do that here.
# Continue Reading →But the main point of this post is to implore people to begin referring to Bitcoin Cash as "BCH," a ticker symbol that was previously unused. While the exact symbol is unimportant, this seems as good as any because it has the most widespread usage so far. I urge community members to drop other symbols like "BCC." For one, the multiple symbols needlessly complicates software. Chris has wasted over a day now rewriting code to deal with this inconsistency. There are no other major coins that have inconsistent ticker symbols across exchanges.
# Continue Reading →For some time, I've been preparing an argument as to why the Segwit2x proposal for Bitcoin is a poor choice, and over those weeks, I've become more and more convinced that we have an opportunity to resolve the blocksize debate once and for all this week by abandoning pools that are supporting the proposal. In addition to taking the longest, this is probably the most important post I have written. In this lengthy article, I'll attempt to present a comprehensive case as to why miners should oppose Segwit2x by switching to pools that will not signal for Segwit2x.
# Continue Reading →I just wanted to point out that Litecoin is at the top of an enormous cup-and-handle formation that spans back for about three years. When ETH's chart looked like this, it was worth $18; now it is worth $280. When bitcoins looked like this, they were worth $1137; now they are worth $2500.
# Continue Reading →The cryptocurrency industry is collapsing under the recent media attention. As people flood trading sites, join mining pools, and start new projects, the infrastructure has grown more fragile than many people believe. In this post, I'll propose an explanation that the bubble cycle stems, in part, from rational decisions made by businesses informed by market forces.
# Continue Reading →Last weekend, just after we had expanded from another round of performance constraints, Prohashing was targeted by denial-of-service (DoS) attacks. This post will focus on two areas: how we eliminated the attacks, and how the success or failure of a business often comes down to customer service. In the past, I wrote that DoS attacks, particularly distributed DoS attacks (DDoS), are one of the critical problems that will face society in the next decade. Currently, attacks mostly cause websites to go down. In a decade, attacks will probably cause your augmented reality goggles to cut out while you are in the middle of a party with people across the globe, or cause you to think more slowly when your neural interface can't obtain the data it needs. In 20 years, the attacks will cut off the communications between your nanobots while they are in the process of repairing your heart attack, causing you to die. The major issue with DDoS attacks is that the cost of mitigating the attacks is greater than that of executing them. Businesses can afford to mitigate attacks, but the common person will have little defense when life without the Internet becomes unimaginable. The attacks on our system began on Thursday, June 16, when a huge amount of traffic was directed at Verizon's network. Some sort of automatic protection must have kicked in after 10 minutes, allowing no traffic to reach the system. Chris called Verizon's support line, and during the interactive voice response (IVR) system's checks, he noticed that the system was accessible again. Everything returned to normal, and at the time, it was not clear that an attack had occurred. The connectivity issues continued for several hours, and because Chris didn't know that an attack was occurring, he spent time investigating other potential problems with the system. Every time the connection cut out, he found that the Verizon system's automated checks would resolve the problem without his needing to talk to a customer service representative. On Friday night at the same time, the same condition recurred, but this time Verizon's routers at the edge of their network blocked traffic to the system and did not restore access when Chris called customer service. It was at this point he was able to determine that an attack might have occurred, when Chris came up with the theory that a large amount of traffic had caused the networking equipment at Verizon to fail. He was able to get a customer service representative on the line, but the representative was surprisingly incompetent about the primary service they provide (i.e. Internet networking.) Chris found, however, that the other IP addresses had not been deactivated, so he switched one of the servers and its DNS record to that IP address and the system returned to normal. On Saturday night, the attacks occurred again, and this time they took out another IP address. Chris ran out of energy and fell asleep, simply being unable to continue working due to exhaustion. When he woke up, he called Verizon and was able to talk to an agent who actually got in contact with a technician. They troubleshot the blocked IP addresses for two hours and could not identify the cause of the problem. Chris was told that they would have to escalate the case to their highest level of support and that it would take two days to resolve. Chris then asked whether he could simply purchase additional IP addresses so that he could figure out a mitigation technique, and ignore this problem for now. Verizon said that the department that handled sales could only take requests on Mondays through Fridays from 8:30 to 5:00. It was at this point that a third address failed due to whatever flaw was in Verizon's equipment, and Chris took the system offline because it could not function without at least three of the five IP addresses we possessed being available. Chris then contacted Cloudflare, an attack protection provider. Their website was extremely confusing and written in "business speak," with few technical details about how what services they actually provide. He called them to try to get someone on the phone to actually learn about what they did, and they took two days to return his call. While he gave up with Cloudflare long before then, he eventually found out that Cloudflare is only able to protect websites because its limited number of IP addresses relies on HTTP request hostnames to forward the requests. Later that Sunday he settled upon Javapipe, a provider that actually detailed what services they provided on their site. Our first thought was that we needed their standard DDoS protection server, which simply retransmits good packets it receives with the same source and destination IP addresses. We would directly reply as if the packets coming from us actually originated from them. However, we found after modifying our servers that some router upstream was blocking the packets we rewrote to appear to be coming from the Javapipe server. A support ticket to Javapipe suggested that we set up a virtual private network (VPN), which would send traffic in both directions through their servers so that the packets coming from us weren't blocked by the upstream router. Having talked with Javapipe, Chris ordered a virtual private server (VPS) and configured it with OpenVPN to route all traffic to our servers and back out again. When Verizon's business office returned on Monday, he was finally able to get their sales department to allocate new IP addresses (they never did determine why those other IPs still don't work.) But when he started the system and as miners started to connect, he found that OpenVPN was singlethreaded and the system's core was overloaded. The core were overloaded because Javapipe's "latest processors" were actually 1st generation Core machines, and hardware encryption didn't become available until the 2nd generation machines were released. Therefore, he had to order three more cores and set up three more OpenVPN tunnels, and then balance the load through all of them on Tuesday. Once he accomplished that, CPU load on each core dropped to just 25%, eliminating the random dropouts that had occurred as packets were unable to be processed. Next, we found that the WAMP server that provides live profitability data was overloading the now CPU-limited connection because a small number of customers were making many connections. Additionally, we discovered that the messages being sent were inefficient, with it being possible to reduce their size by 95% through sending differences since the last message, rather than the entire message again. I began work on a "difference engine" to only send the differences between the last piece of data and the current piece, but in the meantime Chris discovered that Crossbar has an option for websocket compression. When he enabled it, traffic coming out of the Crossbar WAMP server was reduced from 60Mbps to 2Mbps, a 30x decrease. I scrapped the "difference engine" because it was believed that the risk of introducing new bugs would outweigh a further reduction in bandwidth. The attacks have continued over the past few nights, but they are now ineffective. After about 2s of downtime, Javapipe's services begin to filter the traffic and everything returns to normal. As with the x11 mining release, we found that when one goes looking for bugs, one tends to find them. The bugs that one finds are often issues that have been around for a while that nobody had known about. The WAMP server bandwidth overload explained many issues that previously made little sense. In the end, it took about one week to get the system back to normal operation. The downtime was about 4 days in total. The opportunity cost in lost revenue from money not earned during the downtime, customers who will take a long time to return, customers who will never return, the cost of all the protection services, the errors and bugs introduced by hasty introduction of untested code into a production system, the delay of SHA-256 mining by two weeks to deal with the attacks, thefts due to the delay in implementing E-Mail notification on payout address changes on the website, and the increased number of orphaned blocks caused by the VPN latency is estimated to be about half a million dollars. The attacks are easy to execute because the attackers likely spent a trivial amount in comparison, perhaps a thousand dollars. The problems could have been worse, however: the attacks happened at night on a weekend, when we were available to respond for as long as necessary to solve the problem. Even though Verizon business would have been open if the attacks had occurred at, say, 10:00am on a Monday when Chris was sleeping and I was unavailable, they might have been missed and we would still be thinking that the only problem was an upstream router issue. While Chris learned a lot about how to prevent and respond to attacks, the most interesting lessons are those relating to business. First, DDoS attacks are particularly troubling to cryptocurrency businesses, because they can't host their services on high-bandwidth shared servers. We have 370 coin wallets with a hundred thousand dollars in them at times, and there are too many horror stories of insider jobs to take any risk of someone at a hosting facility pulling a drive and copying keys, or even looking into the memory of a virtual machine. Additionally, social engineering is ineffective when you are the only person who has access to the computer. Our only choice is to have every physical server in our possession, where nobody else can modify configurations or trick someone else into modifying configurations. But because our systems are on our own servers, and the only thing on our servers is our systems, they need to be hosted nearby. Not only do we need to be able to make sure they are still there, we need to be able to go to the location so that they can be upgraded when necessary. Last-mile bandwidth is expensive. Thus, a VPN is necessary to connect from a high-bandwidth "DDoS protected" location to a low-bandwidth one. While the arrangement drives up orphan rates (a loss of about $80 per day at current estimates), every pool should suffer from this same problem, leaving an equal playing field. If your pool is using a shared server in Romania to store its data, then the increased profits from the reduced orphan rates are being paid for in the expected value of your money being lost due to poor security. A additional lesson is that companies that try to hide what they do behind nice pictures and simple catchphrases on their websites lose business. Chris and I have taken a simple approach to our dealings lately: if we can't understand exactly how what somebody does works, then we aren't going to buy it from them. We shouldn't have to look through hidden pages of simple text to find basic numbers and metrics. Cloudflare and Coinbase's GDAX are examples of companies that do this. Never require a customer to click "view demo" to see what services are actually offered! More importantly, Chris and I are more convinced than ever that the quality of customer service is the most important factor in a business's success or failure. We specifically avoided Cloudflare because we figured that if their customer service representatives know nothing more than what they read from a script, then their hiring practices are likely to be to pay just enough to get a minimally qualified person in every position. We knew that it would be impossible to contact someone knowledgeable when an attack actually occurs. Furthermore, a company in their field should know that attacks need to be mitigated quickly, not by a sales agent returning a Saturday evening call on Monday night. Verizon's support was also unacceptable for a company that wants to retain customers. Telecommunications is a field where Sprint will buy out an AT&T phone contract just to get a customer to switch at a loss, because they know that customers are likely to remain with a provider for years. In our case, Verizon dug up the ground to the office where the servers are located and paid technicians to run equipment through a concrete wall. This investment will be lost when we cancel our service with them, as Chris has already called Comcast Enterprise Solutions, who promised him that they actually have people available on the weekends who will respond within 15 minutes. Comcast has scheduled a conference call on the afternoon of June 26 to negotiate a price. We figure that if we can avoid just one day of downtime over the next year, it will be worth paying a thousand dollars per month more. If you want to put a number to performing 5 minutes of maintenance on a Sunday, it's worth $12,000 per year. The amount of money these companies are losing is what strikes me most. If a large customer that was willing to pay thousands of dollars to get back online immediately called me, I would be doing whatever is necessary to help him. But when Chris called a nearby datacenter knowing that they charged that much and asking what services they provided, he never received a call back. Javapipe's customer service is unbelievable, and the fact that it is always possible to contact them within 15 minutes through their ticket system means that the only reason we would ever consider switching from them would be if their services are insufficient for potential larger attacks in the future. At one point, Chris said that his business was going to go offline if they did not get to his ticket within the hour, and they actually escalated the ticket and activated the new services he requested. I believe we are still in a better position than many of the companies in the cryptocurrency industry. Besides the obvious benefits of having resolved yet another reliability issue with our system, we discovered how easy it is to gain customers in general. Even if Prohashing becomes too unprofitable to continue when the current cryptocurrency bubble crashes, all you have to do in any business is to answer the phone, know what you're talking about, and be honest. The number of companies who can't do these basic things is astounding. If you can respond to tickets quickly, your product can be inferior to what the competition provides and you will get a lot of customers. Javapipe provides less bandwidth than Cloudflare, but we would never consider Cloudflare because of our experience with them. Looking around the cryptocurrency industry, one can see businesses and industries that are succeeding, and those that aren't, and it's obvious why. Ethereum is succeeding because its founder treats people respectfully, is knowledgeable about what he's doing, and tells the truth. Bitcoin is failing because most Core members lie and attack people who would otherwise contribute. Likewise, Novaexchange is growing exponentially and we are their largest customer. Meanwhile, I closed my Coinbase account because Coinbase doesn't reply to support tickets - plain and simple. Clevermining never listed their names or contact information their website, and even threatened us if we didn't pay 42 bitcoins to acquire them, and they ended up folding because people respect those who are willing to show their faces and stand behind their actions. In conclusion, we successfully mitigated a number of denial of service attacks. In the process, we learned that companies live and die not only by the quality of their products, but also by the quality of their customer service. We plan to set up a ticketing system to better track customer service requests, and will be hiring somebody to respond to tickets more quickly during the Monday-Friday, 8-4 timeframe. If you get hit with attacks, we highly recommend Javapipe. If you prefer to use a different provider, then whether you can get in touch with someone when something goes wrong is more important than the raw numbers. Finally, if you're buying into ICOs or investing in companies, pay close attention to how the owners treat people, as organizations that ignore or belittle their customers fail quickly. In the past, I wrote that DoS attacks, particularly distributed DoS attacks (DDoS), are one of the critical problems that will face society in the next decade. Currently, attacks mostly cause websites to go down. In a decade, attacks will probably cause your augmented reality goggles to cut out while you are in the middle of a party with people across the globe, or cause you to think more slowly when your neural interface can't obtain the data it needs. In 20 years, the attacks will cut off the communications between your nanobots while they are in the process of repairing your heart attack, causing you to die. The major issue with DDoS attacks is that the cost of mitigating the attacks is greater than that of executing them. Businesses can afford to mitigate attacks, but the common person will have little defense when life without the Internet becomes unimaginable.
# Continue Reading →I've been warning for years that bitcoin's future was in jeopardy due to the 1MB transaction limit. I pointed out that ETH would rise to $100, that LTC was undervalued at $4, and that bitcoin transaction fees would likely be at $50 by the end of the year. Today, I'm sorry to announce that the last of those warnings is likely to come true this week: we paid $37.32 for a single transaction this morning. As a result, we increased our bitcoin payout threshold to $250, at a time when the threshold for all other coins remains at $1. These payout transactions cost less than 50 cents at the beginning of the year.
# Continue Reading →A few weeks ago, I stopped reading articles about Bitcoin. The level of ignorance and incompetency in the press and in blogs is staggering, and I became fed up with the same uninformed arguments being presented over and over.
# Continue Reading →While everyone was paying attention to the bitcoin ETF decision, my focus (and money) was on Ethereum. The rationale was simple. In the event of ETF success, every altcoin would have been pulled along with Bitcoin. In the event of ETF failure, ETH would be seen as a safe haven, or at least a coin where bitcoins can be dumped into on exchanges that don't support dollars, like Poloniex. However, the real story here isn't whether Ethereum was a stable choice while the bitcoin markets had extreme volatility yesterday. I believe that the ETF decision represents a major shift in the industry's future, and that we will ultimately see that a trend reversal occurred for bitcoin yesterday. The current bear market will last until the blocksize debate is resolved.
# Continue Reading →Recently, Ethereum Classic (ETC) increased significantly in value. Though ETC is declining now and I don't believe that Ethereum Classic is likely to retain much value, the success of the Ethereum main fork is in cryptocurrency's best interest. The purpose of this article is to explain why the Ethereum Foundation should announce a plan to draw down its Ethereum Classic holdings, which it inherited from the initial Ethereum pre-sale. Doing so would accomplish a number of objectives that would further the development of the cryptocurrency industry, while also setting a precedent for the future and providing the Foundation with more financial resources for continued development.
# Continue Reading →At https://prohashing.com/blog/a-look-at-our-daemon-servers, I provided an inside look at our daemon servers and how our architecture manages the 160 or so coins that we mine. Today, I will write another installment in this series that focuses on our trading infrastructure. Prohashing allows mining of any scrypt coin and provides miners the choice to be paid in any coin, including coins that are not available for mining like Dash and Ethereum. Miners choose the proportions of coins that they want to be paid, and every share submission triggers an assignment of payout coins based on the current prices at the best available markets. As mining progresses, debts in coins requested for payout grow, while balances in coins being mined rise. The imbalance widens between the coins people are owed but we don't have, and the coins we mined but nobody wants. To avoid being a money transmitter, users are not permitted to deposit coins and they may not change their mind about the coins they are owed after a share is submitted.
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