Mediaboss Marketing

Censorship is on the rise in Ethereum as key players block transactions tied to US sanctions, undermining its decentralized ethos. Image by Kerem Goktug Kaya, DALL-E 3.

A pillar of Ethereums original vision was decentralizationthe idea that its blockchain would operate outside constraints from centralized entities like governments and corporations. Recent data indicates this ideology is being tested, however, as key Ethereum players increasingly censor transactions linked to US sanctions.

A major turning point came last year whenthe US Treasury Departments Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, an Ethereum mixing service that enabled private transactions. OFAC claimed the tool was utilized by terrorists and other illicit actors.

In response, Tornado Cashs code was added to the same US blacklist containing bad actors like North Korea and Hamas. Supporters decried the targeting of Tornado Cash as government overreach and censorship. Ethereum has not proven immune, however.

In recent months, censorship of transactions tied to US sanctions has markedly increased on Ethereum, according to new research from Ethereum Foundation researcher Toni Wahrsttter. A metric measuring censored blocks on Ethereum surged from around 25% in November 2022 to approximately 72% currently.

This spike stems largely from block builders, who assemble transactions into blocks and provide them to validators to add to Ethereums blockchain. Five major block builders now contribute over 90% of Ethereum blocks. Of those, only one major builder, Titan Builder, claims it does not filter transactions in this manner.

The lone block builder still processing all transactions claims over 20% of blocks. If Titan began engaging in censorship as well, per Wahrsttters analysis, overall Ethereum censorship could immediately jump to over 90%. Such reliance on a few builders contradicts the decentralized ethos blockchain promised.

For many in the Ethereum community, such censorship represents a betrayal of the networks founding principles. The technologys decentralized appeal rests on it being uncontrolled and unfettered by real-world biases. Yet block builders now hold immense power over which transactions end up on Ethereum, granting them the power to selectively exclude addresses flagged by OFAC.

Some builders defend this censorship as merely prudent compliance with US regulations. However, critics argue it sets a dangerous precedent of centralized entities overriding Ethereums core coding to meet external rules. It also limits full access to the blockchain for individuals sanctioned by the US government.

Beyond censorship, the centralization of key transaction functions into a few dominant block builders could pose security risks, according to experts. Further, these players gain privileged access to pending transaction data, potentially allowing them to maximize profits through trading strategies before transactions are added to the blockchain. This raises additional questions about fairness and transparency.

Ethereum was designed as a decentralized network not beholden to external constraints. Block builders processing transactions increasingly censor addresses tied to US sanctions, however, calling Ethereums decentralization into question. While some view this censorship as prudent legal compliance, critics see it as contradicting Ethereums core values.

In response to these concerns, Ethereums leadership is exploring ways to curb censorship trends. Vitalik Buterin has proposed updates that inhibit transaction blocking by validators and builders.

This challenge to Ethereums decentralized ethos may prove to be a defining one, forcing the community to confront difficult questions about the limits and future direction of the technology. The answers could shape Ethereums ability to evolve while retaining the core principles on which it was founded.

Enter your email for our Free Daily Newsletter

A quick 3min read about today's crypto news!

Go here to see the original:

Censorship Climbs on Ethereum as Block Builders Bar US-Sanctioned Transactions - Cryptonews

Microsoft, Tencent and 16 other Web2 giants have partnered with Consensys on its mission to decentralize the Infura network the key point of access to Ethereum for much of the decentralized finance (DeFi) sector.

The partnerships aim to increase decentralization on the Infura network key to preventing outages of the Web3 services that leverage it, including the wallet service MetaMask.

Speaking to Cointelegraph, Consensys senior product manager Andrew Breslin said the significance of the partnerships was less about who they were and more about the big-name firms aligning with Infura in wanting to decentralize every layer of the blockchain infrastructure stack.

Scheduled for a Q4 launch, the Decentralized Infura Network (DIN) stands as a solution to the problem of centralization for Infrua, with the network currently controlled by Consensys, meaning there remains a single point of failure.

The cost and complexity involved with running a service like Infura was kind of limiting in terms of who we could partner with to serve this traffic, said Breslin. Now theres this huge flourishing ecosystem of Web3 infrastructure providers that can provide a service thats complimentary to Infura.

Breslin said one of the first major features offered in the DIN is failover support for the Ethereum and Polygon networks. Failover support means that traffic can be re-routed to one or multiple DIN partners in an outage, guaranteeing higher uptime rates in the long run.

Upon launch, the DIN will allow for more reliable and censorship-resistant access to Ethereum as decentralized applications (DApps) wont need to rely on a single service provider located in just one place, Breslin said.

Developed by the blockchain software giant Consensys, Infura offers a development suite that provides API access to the Ethereum and IPFS networks. At present, Infura is the access point for most DApps to access real-time on-chain data from the Ethereum blockchain.

In November 2020, the centralization issue came to light when the MetaMask wallet stopped working due to Infura suffering a temporary outage. Several centralized exchanges and DeFi projects were also affected by the downtime.

Decentralizing blockchain data providers on the Infura network is critical for censorship resistance in the long term because, at present, centralized data providers can be shut down with a single well-planned attack or sufficient legal action.

Related: End of an era Consensys sunsets Truffle, Ganache amid shift to MetaMask Snaps

Speaking to the roster of newly announced partners, Breslin said the current lineup was not a closed set and that Infura wanted to let other highly reliable internet infrastructure providers know that Infura is open to them joining the DIN as well.

The cohort of new companies is working with Infura in what Breslin called the federated phase of the DIN a temporary trial period where the network remains centralized.

Infura and these 18 partners are now participating in this federated phase of DIN, which means that we work as equal partners, said Breslin.

In the future, Breslin said the DIN would ideally be governed as a decentralized autonomous organization or some other type of governance structure that ensures each partner has a democratically weighted say in the direction of the network.

Magazine: Beyond crypto Zero-knowledge proofs show potential from voting to finance

Visit link:

Microsoft, Tencent and other tech giants join Decentralized Infura ... - Cointelegraph

Source: Pixabay

Microsoft, Tencent, and 16 other Web2 companies have partnered with blockchain software company Consensys, with the goal of decentralizing the Infura network.

The Infura network is currently the key point of access to Ethereum for much of the DeFi industry. With this collaboration, the companies seek to increase decentralization on Infura to prevent outages of the Web3 services that use it, such as the wallet service MetaMask.

In a press release issued today, Infura announced that the introduction of its Decentralized Infura Network (DIN) alongside the initial group of 19 partners marks a significant milestone in the ongoing process of progressive decentralization for one of the most widely used web3 API services in the ecosystem.

We are immensely grateful to all our partners who have been part of the journey to build the Decentralized Infrastructure Network with us over the past year, said E.G. Galano, co-founder of Infura and the project and technical lead for DIN. Together, we have achieved remarkable progress and eagerly anticipate the continuation of this journey as we bring the power of DIN to Web3 developers and users.

Consensys senior product manager Andrew Breslin told Cointelegraph that the significance of the partnerships was more about the goals of big-name firms aligning with Infura rather than who they were.

The cost and complexity involved with running a service like Infura was kind of limiting in terms of who we could partner with to serve this traffic, Breslin said. Now theres this huge flourishing ecosystem of Web3 infrastructure providers that can provide a service thats complimentary to Infura.

The DIN is positioned as a remedy to the centralization challenge faced by Infura. Presently, Infura is controlled by Consensys, meaning there is a single point of failure. DIN aims to address this concern by decentralizing the network, starting with a Q4 launch.

The DIN will debut with two initial features: failover protection on Polygon and Ethereum. This functionality enables users to redirect RPC (Remote Procedure Call) traffic from one DIN partner to another, ensuring continuous service in the event of an outage.

In the upcoming weeks, Infura users will have the option to opt-in to DINs failover protection, contributing to reduced centralization and increased uptime for decentralized apps and developers.

In its statement, Infura also announced that the first version of DIN would be federated around the original group of partners announced today. The company expects to welcome more members in the future and will also look to unveil a roadmap for the progressive decentralization of DIN.

By contributing to DIN, were not just helping to stand up an open protocol, were architecting a revolution for developers where permissionless innovation becomes the norm, said Austin Roberts, founder and CEO of Rivet, one of the Web2 firms collaborating with Infura.

Enter your email for our Free Daily Newsletter

A quick 3min read about today's crypto news!

Go here to read the rest:

Web3 Firm Infura Recruits Microsoft, Tencent, and Others To Build ... - Cryptonews

Ethereum layer-2 scaling network Starknet has outlined plans to improve the decentralization of three core components of its zero-knowledge(ZK) proof rollup solution.

Speaking exclusively to Cointelegraph, Starknet product manager and blockchain researcher Ilia Volokh outlined the firms intent to address certain centralized elements of its protocol aimed at defending against censorship and making its system more robust.

Starknet operates as a validity rollup using ZK-proof technology to bundle transactions, with cryptographic proofs submitted to Ethereum to achieve security and finality for layer-2 transactions.

According to Volokh, Starknets protocol remains dependent on StarkWare for creating L2 blocks, computing proofs and initiating layer-1 state updates to the Ethereum blockchain.

In this sense, the operation of the network is centralized. This temporary situation, until full decentralisation, is not necessarily a bad thing. Although Starkware operates the network, it cannot steal money and cant do any invalid state transitions because they require executing the verifier on Ethereum, Volokh explained.

While Starkware remains a centralized gateway to enter Starknet,Volokh added that the protocol is 100% honest and cannot falsify transactions or information, as Ethereums layer-1 blockchain acts as a filter.

The only tangible way in which Starknet can misbehave is either by being idle in not relaying proofs to Ethereum or by specifically censoring certain parties from including transactions or proofs.

For Starknet, the latter consideration is part of the main reason to decentralize parts of its protocol in an effort to combat two main causes of censorship in consensus-based systems.

Intentional censorship is one consideration, while non-robust systems that have a single point of failure present another threat to decentralization, given that all network participants would be censored if this central point caused a network or system outage.

Decentralizing these different components of Starknets system entails varying degrees of difficulty. This includes decentralizing block production through its consensus protocol, decentralizing the proving layer, which is in charge of computing proofs for blocks and decentralizing the process of L1 state updates.

I want to emphasize that its crucial to decentralize each of them because as long as even one of them is centralized, you havent achieved much, Volokh added before unpacking the relevant challenges of each component.

Decentralizing block production has been fairly straightforward given that all blockchains rely on a consensus protocol and sybil-resistance mechanism. Meanwhile, decentralizing Starknets prover has required a more novel approach.

As far as I know, were the first rollup that has come out with a fairly complete and concrete solution, Volokh said. He also went on to unpack how competing ZK-rollups all essentially aggregate transactions into proofs and post them on Ethereum, which by extension transfers its own decentralization to rollup solutions.

However, these systems all rely on respective central entities to create and prove blocks, which means these layer 2s are equally centralized. Whether end users are concerned about the philosophical implications of the centralized components of L2s is another conversation altogether for Volokh:

Volokh added that Starknet is still in the process of outlining the process of testing and implementing these decentralized mechanics in its network. This is likely to be carried out through a series of interconnected testnets to test the simultaneous functionality of the different components.

Magazine: Heres how Ethereums ZK-rollups can become interoperable

Go here to see the original:

Ethereum L2 Starknet aims to decentralize core components of its ... - Cointelegraph

Digital identity is having its moment. Close to 60 percent of consumers in the UK and the U.S. use some form of digital wallet, while more than a third of organizations are planning to include digital IDs in their organization, according to a survey from software maker Curity. This is why digital IDs were once again the hottest topic in London this week during the Future Identity Festival 2023.

The first day of the two-day conference welcomed speakers from organizations ranging from Decathlon, Vodafone and Booking.com to Mitek, IDVerse and Open Identity Exchange (OIX). The panelists discussed business models, risks such as fraud and hacks, as well as solutions such as decentralized identities.

The question of digital identity wallets is a very, very timely one, says Hannah Jeffreys, senior product owner for digital identity at Lloyds Banking Group. The company has recently launched a digital identity app called Lloyds Bank Smart ID in collaboration with Yoti.

The key aspect of digital identity is its reusability, Jeffreys said during a panel covering digital identity strategies for businesses. Users can re-share their identity or attributes across different transactions in multiple industries, from drivers licenses to bank account history and healthcare identifiers. It also allows users to control which data they share through data minimization.

Companies benefit too, according to Boris Montin, global head of risk and identity strategy and analytics at food delivery platform Glovo. Digital identity informs them about customer preferences and helps them personalize their experience while increasing security. But companies will face challenges in offering digital identity solutions.

You all understand the kind of chicken and egg nature of the reusable digital identity market, says Jeffreys. Users dont want a reusable app until there are lots of places that accept it and places dont want to accept it until lots of users are using it.

Companies have been facing different challenges across geographies: While using biometrics may be a good way to achieve inclusivity in a country like the UK, it may not be an option in countries where many people own cheaper phones such as Nigeria.

Another issue in some countries is a lack of access to government data, says Duncan McIntosh, lead product owner for strategic identity services at NatWest Group.

The interoperability of digital wallets across different geographies was also one of the most commonly mentioned concepts during the day. The team behind the UK Digital Identity and Attributes Trust Framework, for instance, has been closely watching what is happening across the channel with the European eIDAS, panelists said.

A more pressing concern, however, may be cybersecurity, fraud and the looming dangers of artificial intelligence.

In the old days, criminals used to send letters to banks in attempts to defraud them, says Sally Felton, director for Fraud Risk Management at auditing and assurance company BDO. Thanks to digitalization, they can now spam thousands of people from the comfort of their homes.

These criminals have no governance committees, they have no sign-off processes. They can react much quicker to weaknesses in systems, Felton said during a panel on the shifting landscape of fraud and risk regulation.

Organizations have been shy about sharing data because of privacy rules such as the GDPR, even though more data sharing would help prevent fraud, the panelists agreed.

At the same time, organizations need to pay attention to how they are handling customer data. Organizations should be thinking about deleting data, sharding it into segments, or decentralizing it in a way that it cannot be replicated.

Are we as a society moving away from the honeypot to the world towards something that is more focused on decentralized and/or data minimization? asked Christopher Briggs, SVP of Identity at Mitek during a panel on privacy.

The Future Identity Festival did not just lay out challenges to digital identity, it also offered solutions.

Identity management has seen different approaches, says Jason Boud, co-founder and CEO at RegTech Associates. Some identities are verified and issued by a single authority like the government. Other identities are federated and issued by third parties such as those from private actors like Lloyds or the UK Post Office. The third way is decentralized identities.

The basic building blocks of decentralized identity have been standardized for a couple of years now, says Damian Glover, senior director of communications at the Decentralized Identity Foundation.

What were now working on is going up the stack, he adds. Theres only so far you can go into those basic building blocks you need. You need functionalities that can then sort of exploit those basic capabilities.

The benefits of decentralization are better resistance to hacks that have been plaguing centralized identity repositories. So-called self-sovereign identities should also give more user control over data. But the concept is still fresh and is currently fighting with skepticism and a bad reputation generated by headlines about blockchain and web3 failures.

I think that our current legal system and the regulation dont fit at the moment at all with the idea of decentralization. I think its one of those things where youre always going to be probably behind the technology for quite some time, says Jacqueline Watts, head of commercial law at the A City Law Firm.

Decentralized identities have yet to find a way towards commercialization. But as privacy becomes more important to consumers and even larger parts of our society move towards the digital realm, decentralized identities will also find their place in the world, panelists concluded.

Shaping digital identities for the finance sector: Future Identity Festival day 2

biometrics | decentralized ID | digital identity | digital wallets | Future Identity | interoperability | reusable identity

View post:

Business models, fraud and decentralized digital IDs: Future Identity ... - Biometric Update