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Marathon Digital unveils Bitcoin ‘block art’

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Marathon Digital unveils Bitcoin ‘block art’

Marathon Digital has delved into the innovative concept of “block art” by manipulating the order of transactions within a Bitcoin block, using its mining pool’s capabilities. A Bitcoin Core contributor, known as Portland.HODL, utilized Marathon’s tools to embed the company’s logo into a block’s data visualization, which can be viewed on Bitcoin indexing sites. These sites represent transactions as colored squares, with the hues reflecting transaction sizes and fees, allowing for a visual representation of the block’s contents.

The company highlighted its recent mining of block 836361, referred to as the “M block,” to showcase its technology stack and the creative possibilities of template building. Although Marathon does not offer block art as a service, it suggests that owning a mining pool enables the creation of such art, hinting at untapped creative potential within the Bitcoin ecosystem. The firm also recommended that blocks like these should be excluded from full pay-per-share calculations to maintain accurate fee estimates on the network.

The creation of block art involves a meticulous process of arranging OP_RETURN transactions, which can carry arbitrary data, in a specific order to form an image when visualized. This requires modifying mining software to select transactions that will produce the intended pattern, rather than those with the highest fees. Despite the technical and network challenges, including the need for substantial hashing power, Marathon managed to pay $122,524 in fees to itself to achieve the desired “M block” art, showcasing a novel use of the Bitcoin blockchain’s capabilities.

Coinbase shifts USDC to Base layer-2

Coinbase has announced plans to transfer its customer and corporate USD Coin balances to Base, its proprietary Ethereum layer-2 solution. The move, according to Coinbase Vice President Max Branzburg, is set to enhance the efficiency of managing customer funds by reducing fees and speeding up transaction settlement times. This shift will affect accounts, with the company emphasizing that it maintains customer assets on a 1:1 basis and does not engage in lending without explicit user direction.

David Hoffman, co-host of the Bankless podcast, views this transition as a significant step towards an on-chain financial ecosystem, with potential implications for the broader financial system. Ryan Sean Adams, another co-host, suggests that this could establish a model for other exchanges and financial institutions, encapsulating a future where all assets are tokenized and every bank operates on a blockchain.

Despite the optimism, some users have expressed concerns about the centralization of Base, with Coinbase currently being the sole sequencer. However, Coinbase has expressed a commitment to gradually decentralize the platform. Since its launch in August 2023, Base has become the fourth largest Ethereum layer-2 by total value locked, and it continues to see growth in daily transactions and new users, signaling a positive trend for the platform’s adoption.

BlackRock’s Bitcoin ETF surges past $17B

BlackRock CEO Larry Fink has expressed his optimism about Bitcoin, particularly in light of the success of the firm’s spot Bitcoin ETF, which has seen unprecedented growth. The iShares Bitcoin Trust has attracted significant retail interest, amassing over $17 billion in Bitcoin and averaging substantial daily inflows since its launch. Fink acknowledged the ETF’s performance exceeded his expectations and affirmed his bullish stance on Bitcoin’s future.

The rapid accumulation of assets by IBIT has set a record in the ETF industry, reaching the $10 billion mark in just two months – a feat that took the first gold ETF two years to achieve. This growth positions IBIT as a major player in the market, second only to the Grayscale Bitcoin Trust in terms of Bitcoin holdings. The success of IBIT reflects a growing trend of liquidity and transparency in the cryptocurrency market, driven by retail demand.

Despite the success of some, the spot Bitcoin ETF market is becoming increasingly competitive, with several issuers struggling to achieve profitability. Industry experts suggest that many may not break even due to high costs and insufficient assets under management. In response, some ETF issuers have reduced fees to compete, but this strategy presents financial challenges. The recent approval of Hashdex’s spot Bitcoin ETF adds to the competition, marking the 11th entrant in the crowded U.S. market.

Buterin proposes decentralization boost for Ethereum staking

Ethereum’s co-founder, Vitalik Buterin, has put forward a new proposal aimed at enhancing the decentralization of Ethereum staking by introducing penalties for correlated failures among validators. Shared on the Ethereum Research forum, Buterin’s idea focuses on imposing higher penalties on validators that fail simultaneously, particularly if they are controlled by the same entity. This concept is based on the likelihood that a single large staker’s errors would affect all associated identities.

Buterin’s proposal includes a penalty system that adjusts based on the average failure rate, meaning validators would incur greater penalties during times of widespread failure. This method is designed to discourage the formation of large staking pools, which are prone to simultaneous failures due to shared infrastructure, and to level the playing field for smaller stakers.

The proposed changes aim to make solo staking more economically viable compared to joining staking pools, which currently dominate due to lower entry thresholds. For instance, Lido, a popular liquid staking service, holds about 30% of the total ETH staked. Buterin’s suggestions are part of ongoing discussions on how to maintain Ethereum’s decentralization and prevent the potential risks associated with the concentration of staking power.

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March 28, 2024

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