Рубрика: bitcoin blog

Bitcoin Gold: What you should know about the latest Bitcoin spin-off

At the end of October, a Hardfork Bitcoin Gold is created. Bitcoin customers.de will get the Bitcoin Gold Coins (BTG) credited to their accounts. We explain what Bitcoin gold is all about.

Bitcoin Gold was announced by Jack Liao on BitcoinTalk. Liao is CEO from Lightning Asic, a manufacturer of mining asics from Hong Kong. This is not entirely irone because the great strength of Bitcoin gold is to be ASIC resistant. Therefore, the code runs under the Github Repository BTCGPU.

Bitcoin Cash has demonstrated that a Bitcoin fork can create a new coin that is officially considered an altcoin, but the wishes of some can be reflected on what you could have done better at Bitcoin. In order to fork such a coin from Bitcoin, you only have to change a rule from a certain block, so that the blockchain is no longer compatible with the original blockchain. Anyone who had a credit on the old Chain at this point also has it on the new one.

Back to the GPU mining

Bitcoin Cash has initiated the increase in blocksize, which has long been discussed. Bitcoin Gold has another plan: it wants to decentralize mining again by making Bitcoin ASIC-resistant. To do this, it changes the mining algorithm from SHA 256 to Equihash. This algorithm is also used by ZCash.

So far, no ASIC manufacturer has managed to produce an ASIC for Equihash. Like ZCash, Bitcoin Gold should therefore mainly be done by graphics cards or. GPUs are drowned. Such as by the GPU miner, which Lightning ASIC conveniently produces and sells itself. In order to avoid damage caused by the competition with ZCASH miners, Bitcoin Gold has implemented a more flexible mechanism to adapt the difficulty.

The vision of a bitcoin, which is broken down by graphics cards, of course has its charm. Also as far as the old dispute topic is concerned, Bitcoin Gold seems to take a pragmatic stand. You can’t just see it as a contrast to Bitcoin Cash. According to the announcement on BitcoinTalk, the block size will be increased when the blocks are full, and then continue when they are full again.

Not everything that glitters is .. ?

The Bitcoin Gold Fork finds at Block 491.407 instead. This should be about the 25. Be in October. However, Bitcoin Gold will not be created at this time.

At that time, the Bitcoin Gold Blockchain will only stop following Bitcoin Blockchain. Bitcoin gold blockchain also exist on the Bitcoin Blockchain; On the other hand, transactions that then happen on the Bitcoin Blockchain are not processed on Bitcoin Gold Blockchain.

However, Bitcoin Gold will not start at this point. It is not yet clear when this will be so. The developers are still working on details — such as a Replay Protection — and test the Chain on the testnet. The project may go live in early November. However, there are still a few points on the developer’s to-do list that you want to do beforehand.

At the same time, the developers have programmed a «premine» phase according to the fork. For 16.000 blocks the difficulty is placed on a minimum. According to the developers, the premine phase helps to control the volatility of block generation after the fork. At the same time, it will of course also be a nice bonus for the developers, 200.000 Bitcoin gold (if I didn’t misunderstand anything here).

How do you get Bitcoin gold?

If you want to reserve Bitcoin Gold, you don’t have to do much. You just have to remember which address you on 25. Have bitcoins October and save the private key to it. As soon as Bitcoin Gold starts, you will surely get your Bitcoin gold with a wallet. You may already be able to compile the client directly from the Github repository to have Bitcoin gold directly, even if there are no new blocks at first.

Probably the easiest way to reserve Bitcoin gold is to Bitcoin bitcoin.de to keep. The marketplace will automatically credit the customer to a credit in Bitcoin Gold and work on making it available. But when exactly a payment of Bitcoin gold is possible and whether and when a trade in the new bitcoins begins, but cannot currently be said.

You can find more detailed information and a reservation in the official statement of Bitcoin.de.

Yawning emptiness and a piece of populism
This is what the German federal eagle may look like in real life. Image of Joris Comen via Flickr.com. License: Creative Commons

Bitcoin in the programs for the Bundestag election 2025: Unfortunately, most parties miss the chance to take up the topic. The best we can expect will be the opposition protest against a bad cryptopolitis.

Since the republic will soon be called to the ballot boxes, we look into the programs of the most important parties. Bitcoin and cryptocurrencies are of course only one of many topics that are relevant, but we, as Bitcoinblog.de, concentrate on it.

How do the future possible representatives of the people stand by Bitcoin? Make it mention? Or at least cryptocurrencies? Or, we don’t want much, blockchain, digital ledger technology or «cryptoassets»? And if so, in a positive or negative sense?

So we read through the programs of the parties and also wrote emails to the press representatives. We searched the program for terms such as «Bitcoin», «Cryptocurrencies», «Blockchain», «Kryptoassets», «Digital Ledger». When we find it, we quote from it, if not, what the parties answer or have announced in the past. A summary of the election programs from 2021 can be found here.

The order in which we present the parties is not based on personal preferences, but the last surveys for voting rights.de.

CDU/CSU

The Union will very likely provide the next chancellor. Unfortunately, there is no word about Bitcoin, cryptocurrencies, blockchain or ledger in the election program. The demand by email also brought no further information, unfortunately top candidate Friedrich Merz did not make it available for an interview.

There are therefore only the past positions of the CDU. In the 2021 election program, the Union wanted to supervise cryptocurrencies on the one hand to prevent money laundering, but on the other hand promote blockchain technologies. In January 2024, the party noticed uncomfortably when it brought an application for a particularly strict control and monitoring of cryptocurrencies, which went well beyond the rules of Mica and Fatf. After all, the CDU MEP Stefan Berger represents a relatively crypto-friendly position and currently confirms that the Union Mining does not want to ban.

AfD

According to surveys, the AfD is the second strongest party and is therefore presented at this point. The election program for the Bundestag election is not yet official, but was decided last weekend. The guideline is available as a PDF.

There is a chapter in it «Bitcoin: Starting Freedom and Staring». We have already reported on the decision. The AfD welcomes Bitcoin as a «candidate in the competition of currencies». It criticizes the mica regulation and calls for «the extensive deregulation of the bitcoin as well as the Bitcoin wall and trading spots». It is committed to maintaining the 1-year period. In contrast, the AfD has no position on cryptocurrencies and blockchain.

That sounds good. However, according to ex-AFD politician Joana Cotar, the party really has a few politicians who really understand Bitcoin, including not expressly Peter Boehringer, who, as a spokesman for money and monetary policy. The idea that Bitcoin or Bitcoin Wallets can or must «deregulate» to «deregap». Therefore, the passage should essentially be due to the populist desire to learn from Trumps.

In any case, the AfD has no view of taking over government responsibility, since no other party wants to coalize it with it. What is right from a variety of reasons that are not our topic. In the opposition, however, the AfD could sharply protest against another (over) regulation of Bitcoin.

SPD

According to current surveys. In your election program, as with the CDU, there is not a syllable for Bitcoin, crypto, blockchain, etc. After all, the press office explained to me why:

“In view of the very shortened time runs in this Bundestag election campaign, the general secretaries of the parties SPD/Bündnis 90/Die Grünen/FDP/CDU/CSU/DIE LINKE have agreed to answer the entire width of the social spectrum of social spectrum and organizations in advance.»

First of all, agreements that will be used to make the election campaign have a bit strange. In any case, this shows how little meaning the SPD Bitcoin and Co. assigned.

Already the 2021 election program said little about cryptocurrencies, and if so only the worst. Above all, it emphasized the rejection of private currencies, which at that time mainly meant stable coins. This corresponds to the sharp rejection of Libra by Olaf Scholz in his time as finance minister.

The Greens

Just after the SPD, the surveys after the Greens follow. After all, the election program includes a mention of cryptocurrencies. However, this means «for a clear edge against money laundering and organized tax fraud»: «With a nationwide service point, we want to bundle the expertise about the abuse of cryptocurrencies and make usable for the federal states.»

More competence would be to be welcomed in the supervision. But whether a fourth authority is really needed alongside BaFin, customs and Bundesbank is questionable. It would also have been nice if the Greens had promised to check Bitcoin mining’s potential for the energy transition. But this would probably have been too much required.

On the other hand, it is very unsightly that the Greens apparently want to hold on to their project to collect the last location advantage for cryptocurrencies with the 1-year period for tax-free sale. This corresponds to Habeck’s announcement to also request social contributions for capital income.

BSW

The Alliance Sahra Wagenknecht unfortunately has a chance to move into the Bundestag. The strange organization has nothing to say about Bitcoin, cryptocurrencies or blockchains. If it is after one of the more prominent members, Fabio de Masi, the anti -Western squad party Bitcoin should be extremely negative.

FDP

In addition to the AfD, the FDP is the only party that Bitcoin mentioned in the election program. The following can be read:

“We welcome the development of cryptocurrencies and digital ledger technology and are committed to the approval of crypto ETFs. We are open to the fact that the European Central Bank and the German Bundesbank use cryptocurrencies such as Bitcoin as currency reserves. This can strengthen the resilience of the European currency system.»

Apart from the fact that Bitcoin-ETN has been able to act in Germany for almost a decade, the openness to a Bitcoin reserve is of course delightful. Better to say: it would be if FDP boss Christian Lindner did not allow finance minister to be dismissed in three and a half years in three and a half years to drive a pro-bitcoin policy. So the suspicion arises that this passage was only scattered to capture voices.

Even if the FDP makes it through the 5 percent hurdle, it has little prospects for a government participation. After all, one can hope that from the opposition, it will vigorously protest against further regulation or abolition of the 1-year period.

left

The left threatens to fall under the 5 percent hurdle in this election. In her program there is no word about Bitcoin, cryptocurrencies and so on. In the last election, the party advocated greater surveillance of cryptocurrencies and a ban on the (hardly existent in this country anyway) mining. But since a government participation of the left is not up for debate anyway, it is not so relevant either.

The best we can expect ..

All in all, the prospects are cloudy to dark. In the best case, the parties that have a prospect of government responsibility — CDU, SPD, Greens — ignore Bitcoin and cryptocurrencies, but tend to reject them and to regulate them more strictly and to tax them higher. The only two parties that are more positive about the topic — the FDP and AfD — seem above all from campaign tactical or. to do populist reasons. You have no or hardly any prospect of being part of the next government. So the best thing we can expect will be a sharp protest from the opposition to a cryptofo -one policy.

How would you choose?
Sunday question for bitcoiners

Who do you want to choose in the Bundestag election?

CDU/CSU
AfD
SPD
Greens
BSW
FDP
left

Monero: Fees drop by 97 percent thanks to Bullet Proofs
Bullets. Image by Madison Scott-Clary via Flickr.com. License: Creative Commons

Privacy cryptocurrency Monero has introduced a hard fork «Bullet Proofs». This first implementation of a new crypto technology enables Monero to better scale its anonymous transactions.

On 18. October, the Monero cryptocurrency carried out another regular hardfork to update the software. The upgrade to version 0.13.0.0., Called «Beryllium Bullet», was a milestone for the privacy currency that is demonstrated by which power can be in a hardfork.

In addition to several other changes, the upgrade bulletproofs introduced. This cryptographic technology is an important step to scale private cryptocurrencies. It is about the following: To protect users’ privacy, Monero uses so -called «Confidential Transactions». This is a crypto technology that veils the amount sent in a transaction, but nevertheless enables the node of the network to check whether the transaction is correct. Monero implemented this technology some time ago, and together with the ring signatures, Monero achieves a very high, if not complete degree of anonymity.

But the problem is: Confidential transactions need a form of proof that a transaction does not manipulate the money supply by sending negative amounts. Logical: If you do not know the amount of a transaction, this is difficult to know this. So far, so -called «Range Proofs» have been used here. With the help of the Range Proofs you can check whether the content of a transaction is in a certain mathematical area. However, you have the disadvantage that you are quite large and scale linearly with the number of outputs and bits in the area.

The Range Proofs make about 13.2 kilobytes of a simple Monero transaction. This does not allow the cryptocurrency to scale even in the beginning. A Bitcoin transaction is only 130-200 bytes; With the current capacity of Bitcoin, you could hardly process more than 85 Monero transactions in ten minutes. More than a very small niche cannot be operated with it.

The solution to this problem is the so -called «Bullet Proofs». This technology was developed by two cryptographers from the University of Stanford together with block stream. The Bullet Proof-Algorithm succeeds in reducing the size of a simple Monero transaction on 2.5 kilobytes or 80 percent. According to the expectation, this should reduce the now depressing fees by 80 percent.

After the Monero developers were the first to implement Bullet Proofs and test them from external examiners, Monero has now introduced the new Proofs via Hardfork-and thus significantly reduced an essential obstacle for further spreading anonymous crypto transactions. Success even exceeds expectations. The average transaction size fell from 18.5 to 3.7 kilobytes, which actually corresponds to a relief of 80 percent. However, the fees fell even further — namely from 60 to 2 cents, at least one tweet from Coinmetrics.io.

For Monero this is a fantastic message. Although the currency is not yet really good with Bullet Proofs, but after all, 405 transactions would fit into an average Bitcoin block of 1.5 megabytes instead of about 85. With this, Monero has the amount of his special offer — anonymous transactions — more than quadrupled.

So far, however, the price has hardly reacted. As if this milestone hardfork had never existed, the Monero Prize continues to move in step with the other coins. This may show once again how speculative the cryptoma markets are still.

Federal Ministry of Finance: Cryptocurrencies play a minimal role in money laundering
«Money Laundering» by Images Money from Flickr.com. License according to Creative Commons 2.0

The Federal Ministry of Finance publishes a national risk analysis for money laundering. This shows that Bitcoin and other cryptocurrencies are almost irrelevant for the money laundering of organized crime. So many sectors are involved — but crypto not really. It is noteworthy, however, how serious the Ministry apparently takes Monero.

In the first national risk analysis for money laundering and terrorist financing, the Federal Ministry.

According to an estimate, a good 100 billion euros are washed in Germany every year. As a country with a strong and international economy, Germany is an attractive target country for international organized crime to transform its criminal money into clean money. This is favored by the fact that cash is widespread in Germany, which is “basically suitable for money laundering, since it avoids traces due to its anonymity.“In addition to cash,“ certain crypto values ​​and prepaid cards ”are also well suited anonymous means of payment.

The origin of the washed funds often comes from «fraud, drug crime and human trafficking», but also from «corruption, smuggling crime, illegal employment, tax offenses, violations of the war weapons control law and product piracy». Foreign criminal groups are often involved, such as Russian, but also Italian and others. In the case of money laundering, it is not only important to anonymize transactions — but rather to “transfer the money into cashless payment transactions”, as legal, legally acquired and taxable income. In order to disguise their identity, the criminals use «coat companies, trustee companies or complicated company wages».

Bitcoin hardly plays a role in all of this. The report has devoted cryptocurrencies to its own chapter, but this is relatively short and disallering.

No real danger from cryptocurrencies

«In recent years, crypto values ​​have become very important in public importance and attracted a lot of attention,» the report notes. But “with a view to the many different crypto values, it must be noted that there are currently no large -scale money laundering activities.“Therefore, the Ministry of Finance evaluates the threat of money laundering by cryptocurrencies as medium-low.

However, it calls an «important exception»: crypto values ​​that are already «incriminated» because they were «generated in the Darknet through cryptic actions and by cryptotrojans.“The report on these crimes is called the report a“ fully digital or media -free crypto money laundering ”, which may be a new category of money laundering. In some cases, cryptocurrencies are already used in fraud models, in which innocent third parties do the money laundering for criminals via their bank account.

In addition, cryptocurrencies and values ​​can also be used to take the second and more important step in the money laundering: The return to the legal economic cycle: “It is conceivable that perpetrators are performing their own mining and declare their illegal crypto values ​​as the product of this mining in order to obscure their illegal origin.“However, the report does not indicate any evidence that this is done and to what extent.

With regard to terrorist financing, the cryptocurrencies report gives the lowest risk assessment. There are indications of use in right -wing extremism and Islamism, but there are “no secure insights that crypto values ​​have been used to a larger scale for terrorism financing.“The use of cash continues to dominate here. This leaves “no trackable traces and is easy to handle.»The Ministry of Finance therefore assumes that terrorist financing» in addition to Hawala and money transfer service providers is still mainly based on cash couriers «.

The report then speculates why cryptocurrencies in money laundering and terrorist financing are so little in demand. On the one hand, it is technically complex and demanding to anonymize the transactions. Cash is the simpler and anonymous methods here. In addition, crypto values ​​are “still fewer means of payment (or means of transport) than a speculation object, since they fluctuate strongly in their value.“The Ministry of Finance believes that“ this can change with the advent of so-called stable coins … If there is a strong distribution, this could lead to an increase in money laundering and terrorist financing risks.“We find the same statement here again as in the paper of the G7 and the biz: Bitcoin makes volatility harmless, while a widespread stable coin can be dangerous. May it be that the volartility of Bitcoin is a kind of protection against being fought strongly by the governments?

Monero in the upswing

One of the most surprising aspects of the report is how often it calls Monero. While the Ministry of Finance considers Bitcoin to be controllable, it seems to see a greater danger potential in Monero.

The report differentiates between pseudonyms and anonymous crypto values. Pseudonymous coins such as Bitcoin or Ethereum «allow the analysis of transaction patterns in public blockchains and allow the evaluation of suspicious movements». Transactions are attributed to public keys and publicly evaluable. The possibility of «giving up any number of public keys and thus pseudonyms, the possibility of evaluating a history for a person or organization» makes it more difficult. However, Germany is already very well positioned and has developed an “an effective legal and technical instruments” for “ensuring and utilization of incriminated crypto values”.

The situation is different with anonymous cryptocurrencies. The report is particularly mentions here Monero. These are «particularly susceptible to money laundering» because they offer the «users full -compatible anonymity and whose transactions are not understandable.“It makes it easy to obscure transactions and“ the tracking of Geldern impossible.“Therefore, the report recommends that“ special attention to the development of anonymous crypto values ​​”. Because of the «increasing spread of Monero in the Darknet», the report suggests that this coins are more intensively dealing with the practices of this coin, such as custody and utilization of confiscated coins.

So if the organized crime is not washed money with cryptocurrencies — which makes it doing it? The entire rest of the report, which has nothing to do with cryptocurrencies, is devoted to this topic. We look a bit outside the box of cryptocurrencies.

Banks still at the top

Banks are still the largest source of danger for money laundering and terrorist financing. With 65.The banking system provides 132 suspicion reports more than 80 percent of all suspected reports. Therefore, the report classifies the risk as a medium-high.

The large, internationally operating banks are a particular risk because money laundering grows more often from international payments. Therefore, the threat from the domestic means, which, on the other hand, is high from abroad. Correspondence banks are often used to disguise payments in offshore areas. After relationships with correspondence banks have already been monitored sharper, German banks have been setting them down since 2014. On the one hand, this has led «to a risk reduction in the correspondence bank business» — on the other hand, to a relocation «towards the financial transfer business or. Also to the unauthorized financial transfer business, the so-called Hawala banking ”, which makes“ traceability of incriminated funds difficult.»

The money laundering running via banks often related to cash transactions, which are therefore also «regularly subject to suspected reports and investigations». For example, if someone pays or lifts large sums of cash or lifts. At the same time, there are several challenges in digitization, such as faster payment processing or new, anonymous payment methods.

Many industries

Almost every industry that is about money is abused for money laundering and terrorist financing. The report is determined by a “medium” risk of insurance. However, he praises that insurance companies now hardly accept cash, and in the individual cases in which this happens, the transaction can be monitored particularly strictly.

The threat of capital managers in the security area is stronger: it can be classified as a means of high. Particularly complex transactions of special funds with high volumes are risky here. The risk is also high in financial transfer transactions, in which a amount of money is transferred «without a payment account in the name of the payer or the receiver», because «payments are usually made in cash and often outside of an existing business» «. Especially in Hawala-Banking, the report notes a high number of unreported cases, despite the ban in Germany and continuous investigations by BaFin.

A «lifted risk» is based on the real estate sector. The market is large, globally significant and includes national and international sellers. There are many «legal design options for real estate transactions for domestic and foreign legal entities, but also for private individuals» who make it possible to disguise the middle origin and the ownership. The risk of auctions becomes even higher, since cash is often paid here. This was shown by a «case study on organized criula minality in the so-called clan-milieu».

«The trade in high -quality goods (especially luxury goods, motor vehicle, antiques)» is also suitable for money laundering, since large volume amounts are exchanged and the values ​​are led back to the legal economic cycle. Of particular note here is the car trade here. Experience has shown that the cross -border car trade is often used as a reason and pretext to bring cash across borders or to introduce Germany. The art trade is also susceptible to money laundering.

After all, gambling is extremely important: here “two components meet, which make this sector particularly susceptible to integration, covering and structuring of incriminated assets. On the one hand, these are the often high transaction amounts, which are often paid in cash in terrestrial game, as well as the high circulation and transaction speed, with which funds can be changed and shifted.“Even more than locally, this is true on the Internet. Therefore, the report classifies the risk through this area as «high». Gambling not only allow the criminal -acquired cash to be disguised, but also to convert it into legal money.

Everything ahead Bitcoin

Banks, insurance companies, securities, used sweats, gaming houses, real estate, real estate — all of this plays a major role in the money laundering of organized crime. Bitcoin and cryptocurrencies, on the other hand, are only significant, if at all. Apparently all those who think that Bitcoins are only useful for criminals have meant. The Ministry of Finance reports shows that it is time to stop using crime, to stop bitcoin and cryptocurrencies.

The blog is on vacation — and wants to know something about you!
Image by allie_caulfield via flickr.com. License: Creative Commons

The Bitcoinblog.de goes on vacation. We take the opportunity for a survey to learn more about you- about the German Bitcoin and crypto scene. If you give us a few minutes of your time, you will help all of us know more. 

If you have been reading our blog for some time, you know the tradition of initiating your vacation with a survey. If I don’t tell you anything — then you tell me something about yourself. Thanks to your lively participation in the past, we now have an encorporary data set for the demography of the German Bitcoin and crypto scene.

In this survey we record some key questions about you and Bitcoin, but then copy a set of questions from another social science study. I do not yet reveal which study it is about. But I’m extremely excited to see what comes out of it.

We use crowdsignal for the survey. This is a powerful tool. But it can happen that you don’t see it with every browser on this blog page. If no survey appears right now, please follow this link on the direct survey page. If you see a survey here — start!

Take part in our survey

Thank you very much and have a good time!

The orange pills in Innsbruck

Quite nice: Innsbruck. Image by Neil Williamson via Flickr.com. License: Creative Commons

EU plans to punish staking-Mev as market abuse
Ibox building in Paris, seat of the Esma. Image by Gecina via Wikimedia. License: Creative Commons BY-SA 4.0 deed

After the regulation, it is before regulation: In the course of Mica, the European financial market regulator EMSA now wants to sanction an important element of the Ethereum staking and other cryptocurrencies.

The EU once again does justice to its claim to be the international champion of regulation.

In a new input, the ESMA lists its requirements for the specification of technical standards according to Mica, which means that we are drowned into abbreviations and regulatory slang — but the affair is too important to avoid it: it is more or less about whether, how and under what circumstances the staking of cryptocurrencies, such as Ethereum, is allowed in Europe.

Mica, store, ppaet, esma, etc

The starting point is that — now please do not start to — Mica asks the ESMA to develop a series of RTS. Let’s start at the point to disguise the ball:

Mica is the «Regulation on Markets in Crypto-Assets», more or less the heart of European crypto regulation. The ESMA, on the other hand, is the «European Securities and Markets Authority», i.e. the European financial supervision. RTS finally means «Regulatory Technical Standards», i.e. regulation technical standards.

However, it continues: an article in the Mica Ordinance expected to introduce and prevent market abuse from PPAETS, effective methods and procedures in order to recognize and prevent market abuse. PPAETs are «Personals Professional Arranging or Executing Transactions» with crypto-assets, ie «people who professionally form or carry out crypto transactions», which is an interesting but also delicate new name, which may already take you into liability if you only «arrange».

These PPAETs must fill out a store and submit to a responsible authority. Stor means a «Suspicious Transaction and Order Report» — a report on suspicious transactions or trade offers.

Yes, it is complicated, it stares off abbreviations. But actually it is, you have dissolved the technocratic slang, pretty simple: crypto companies have to report transactions if they have suspected that they manipulate the market.

So far, so understandable. But the devil is in detail. One could also say: The lazy egg is in the RTS how the Esma formulates it.

Like Staker with MEV, drive in a bonus

The Esma, as ordered by Mica, has published a document in which it suggests regulatory technical standards. In it she gives various scenarios and circumstances of market manipulation with crypto-assets, including-and we have reached the problem-the «well-known maximum extractable value (MEV). With this, a miner or validator draws an advantage from its ability to reorganize transactions and benefits from the front-running specific transactions.»

MEV is a well-known plague in Ethereum and all EVM-based blockchains. It means the maximum value that can be pulled out of block production, and beyond the pure reward and the fees through transactions. Validators or. Block producers have the advantage that you have a small time window in which you can sort transactions in your favor, which is an advantage with a blockchain on which not only transferred, but also acted, borrowed, borrowed and liquidated.

The Ethereum Foundation mentions various varieties of the MEV: You can earn through arbitrage by using the price differences of different decentralized stock exchanges. You can push yourself into auctions with which lending protocols liquidate collateral. And you can quickly buy the corresponding assets with the «sandwiching» before a big purchase on decentralized stock exchanges and then resell the buyer with a profit (by the slipping).

It is not necessary to go into detail here. It is important: The stakers sort transactions into blocks and add their own to get a small bonus to the block reply. As the ESMA determines, this is a type of market abuse that is almost inevitable in defined blockchains.

But how big is the damage through MEV?

There are several overview sites for MEV and some dashboards on Dune Analytics. You do not match exactly in detail, but on the whole, a consistent picture of the size of the MEV.

Overall, the miners on Ethereum have taken around $ 700 million through MEV, with Arbitrage and Sandwich Trading clearly outweighed. On most days in the last two to three months, the MEV revenues have made a low five to medium six-figure sum, rarely were below 30.000 and rarely over 300.$ $. Over the past year, there were occasional days on which the MEV rose to a small amount of millions, which was the order of the day in times of feverish, restless activity, for example during the Defi summer 2021.

But the stakers take around 13 even without MEV even without MEV.000 ETH, which corresponds to almost $ 40 million, 500 ETH alone due to the transaction fees and even 20 ETH by the Uncle Rewards, an esoteric concept of Ethereum. Compared to the other income, MEV is largely irrelevant under normal circumstances.

The problem with the ESMA

Despite the moderate scope, staking pool cannot do without MEV. Not only because it makes them minimally more lucrative, but also because the stakers are reluctant to take the chance, as in a lottery with a pointed MEV profits with you. A staking pool that does not offer a MEV is probably not competitive.

If the ESMA now calls MEV a market abuse, it is not wrong. What else should it be if a staker pushes its own transactions and changes the order arbitrarily to make profits?

The problem, however, is that the effect in the matter is manageable, the damage that potentially increases from the ESMA specification is gigantic, on the other hand.

On the one hand, a common practice in Web3 is brought close to criminalization. Is it still legal to put your ether in a staking pool that MEV uses-in any stacking pool? And what if you send this ETH to a stock exchange in the eurozone? Do not wear the traces of MEV as a matter of course? And can still offer stock exchanges in the EU, as is common, staking as a service? Can you act «Liquid Staking Token»?

Patrick Hansen, as a lobbyist of Circle (USDC), one of the most competent crypto and web3 votes in Brussels, explains: “Almost every regulated crypto company in the EU (stock exchanges, brokers etc.) must track down incidents from MEV and report through complex stores. The presentation of the Esma for Stor alone is six pages long.»

Then Patrick Hansen continues: “How should it be feasible in practice if each individual incident must be reported by MEV? In addition, the ESMA suggests that authorities should even cooperate with those outside the EU to sanction market abuse. This enables actors who are involved in MEV, the goal of investigations and lawsuits.“So it will always be more colorful.

Another liver hook against the industry

For companies within the EU, another act in the regulatory nightmare that is a reality for them is a reality for companies within the EU. It would be another liver hook against an industry that already whistles out of the last holes.

The market within the EU is already dominated by providers from outside, such as Binance, Coinbase and so on. The EU simply no longer has access to regulate the global market. With the procedure against MEV, not only would another competitive disadvantage arise, rather an entire industry-the staking pools of all MEV-capable blockchains-would also disappear more or less from the EU.

Of course, so far it is only a draft, explains Patrick Hansen, who will be finalized in the next few months. The ESMA calls up stakeholders, a feedback up to 25. June to submit. Under certain circumstances there is still a chance that the project will be tilted.

Volatility of Bitcoin sacks down to a new low point