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Phase 0 of Ethereum 2.0 has begun

The genesis block of the Eth2 beacon chain has been mined on December 1 with the embedded message: “Mr F was here”. Prior to that, more than $500 million worth of ETH has been locked in the Eth2 staking deposit contract. Locked deposits can’t be withdrawn until Phase 1.5 goes live sometime in 2022.

Thousands of new nodes joined the network ahead of the Eth2 launch, while Ethereum’s mining hashrate approached its all time high levels of almost 300 terahashes per second reached in August 2018.

Crypto exchanges such as Kraken, Coinbase, and Binance announced that they will support Eth2 staking rewards using various custodial solutions. Binance already allowed its customers to lock up funds for staking, promising that users will be able to receive earned rewards and redeem staked ETH for BETH tokens, which will be distributed in January 2021. Coinbase plans to roll out the Eth2 staking rewards feature in early 2021, after which its customers will be able to trade between ETH and ETH2 tokens, and receive staking rewards.

Proponents of non-custodial solutions who don’t have the mandatory 32 ETH to stake their funds on-chain will be able to use decentralized staking services such as Rocket Pool. While the launch date of such services is still unclear due to withdrawal complications, a new proposal was submitted that would allow for simple withdrawal contracts to be written before Phase 1.5.

Eth2 is a long-awaited transition from the current proof-of-work to a proof-of-stake consensus algorithm. The upgrade should help with network congestion, reduce on-chain transaction fees, and bring ETH staking rewards on the mainnet. However, the first phase — also known as “Serenity Phase 0” — is just the beginning of a long transition that will take a few years.


Bitcoin (almost) hits a new ATH

For the past few weeks, Bitcoin has been on a rally towards breaking its 2017 All-Time High (ATH), which is just a little above USD $20,000, at least as per general consensus. On December 1st, the world’s largest cryptocurrency by market cap made another attempt on achieving the goal by briefly reaching to USD $19,816 — just $200 away from it. At press time, it trades at a price of USD $19,077, according to data from CoinMarketCap.

There is expectation among the crypto community regarding Bitcoin’s chances of jumping above the 20K bar before end of the year, mainly due to the fact that its price hasn’t been this close of the mark since 2017 when, almost right after hitting the milestone, it began rolling down a tortuous bearish path that got its price waving around the $6K levels (mostly) for almost three years, with occasional bullish and bearish spikes along the way (the lowest of them dragging it to as low as $3K levels).

Now, the possibility of breaking the barrier for the first time in these years has many on the edge of their seats, as December 17 — the day of the ATH three years ago — gets near. Because of this, and the importance of this day for the crypto community, several people consider it a very strong psychological barrier.

Following the news about Bitcoin’s price record, the CEO of the world’s largest asset manager BlackRock admitted that Bitcoin could possible evolve into a global market asset.

And while gold continue losing its value and market share to Bitcoin, the leading cryptocurrency asset manager Grayscale dusted off its “Drop Gold” TV ad to be shown on major U.S. networks across the country.

In other news

  • Borrowers on DeFi protocol Compound got liquidated for more than $100 million due to an oracle exploit, which made many loans under-collateralized. One of the largest liquidity miners (also known as yield farmers) was liquidated for a massive $46 million.

  • Chinese police seized more than $4 billion worth of cryptocurrencies from operators of PlusToken Ponzi scheme, which reached over 2 million investors in just one year of its existence.

  • PayPal banned an account of its customer, who was day trading cryptos using company’s recent feature to buy, sell, and hold cryptocurrencies. PayPal’s support didn’t restore his account, so the user took his story to Reddit. After a lot of bad press and numerous articles in crypto news outlets, the user’s account has been completely recovered.

  • Some US-based customers of leading cryptocurrency exchange Binance received emails giving them 14 days to withdraw all the assets from the platform, otherwise their accounts will be locked. The move came just a week after Binance filed a lawsuit against Forbes for defamation over allegations of regulatory evasion tactics.

  • Decentralized finance project Pickle Finance got exploited for almost $20 million worth of DAI, after which the price of protocol’s native token PICKLE dropped over 60%. Following the attack, DeFi insurance protocol Cover paid out $280,000 in compensations to victims of the exploit.

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