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Stellar (XLM): Casting a Shadow over Ethereum Smart Contract Operations

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As of last Monday, the entire crypto community along with Stellar holders could take a breath and enjoy seeing some of their favorite currencies bouncing off and recovering from the latest market dip. But not all news was in the spirit of redemption as it was discovered by the researchers from the National University of Singapore that Ethereum is vulnerable when it comes to operating with smart contracts. The fact that Stellar was immediately brought in to the story as a safer substitute, made us analyze the way Stellar ecosystem is operating with smart contracts. What happened to ETH smart contracts and is Stellar able to take over with its own smart contract technology?

Ethereum’s Vulnerability and Stellar Jumping In?

Discovering flaws and high-level vulnerability in ETH smart contracts was quite a shocker as well as what seemed to be a never-ending market dip that fortunately ended with last Monday when the majority of currencies started to rise back up.

A team of researchers from the National University of Singapore found out that Ethereum’s smart contracts are more than sensitive and vulnerable to hacker attacks, and the vulnerability issues they discovered on this occasion could be marked as anything but utterly safe and reliable. The thing that probably shocked them the most was the fact that one of the users was able to lock over 200$ in ETH on the Parity Project blockchain by manipulating smart contracts.

The mentioned individual who decided to manipulate the contract publically published his discovery in Github community, stating that anyone can kill your contract. He even named the conversation “Anyone Can Kill Your Contract”, which was more than intimidating.

He pointed out that he was able to adopt a contract that wasn’t even his own and then terminates it easily by manipulating with the flaws he had found while examining the way smart contracts are operating on Ethereum.

There were some suspicions among other community members that got involved in the conversation, but he was soon able to prove his point and confirm that anyone can indeed kill your contract due to the present vulnerability in form of a flaw.

The fact is that ETH smart contracts are pretty flexible, but unfortunately, flexibility, in this case, doesn’t guarantee safety. This was a massive blow for Ethereum, as this currency is one of the most appreciated digital assets in the world of blockchain technology.

The researchers from the National University of Singapore along with the researchers from UCL decided to test ETH smart contracts for vulnerability.

Testing Smart Contracts: Ethereum vs. Stellar

The researchers from the National University of Singapore and UCL then decided to download all live smart contracts that actively existed on Ethereum’s platform at the moment of testing. There were nearly a million of active live smart contracts and as they started with their testing, they have discovered that more than 34000 smart contracts showed vulnerability with over 2000 smart contracts showing high-risk vulnerability, which meant that these contracts could be manipulated “easily” by a third party that would in majority of cases represent hackers who want to take advantage of unintended issues in ETH smart contracts.

For further testing, the team has gone on by choosing 3759 different smart contracts so they would be able to check the results again. And, the results were devastating as the team was able to find major vulnerabilities and flaws within only 10 seconds of testing for positivity.

That being said, they have confirmed that they managed to prove the fact that Ethereum smart contracts could be manipulated just like with Parity Project blockchain system where smart contracts can be terminated even by individuals who don’t have ownership over certain smart contracts. It was also confirmed that smart contracts on Ethereum can be manipulated into sending funds to anonymous addresses that would most certainly belong to hackers.

That is exactly how a new opportunity arose for Stellar and its smart contracts.

Stellar Smart Contracts

Thanks to the various technological concepts implemented in Stellar’s smart contracts, these contracts are made more expressive but less flexible at the same time. Decreased flexibility, in this case, means that there is less room left for hacker attacks, which makes operating with Stellar smart contracts safe and secure.

To assure all operations with smart contracts are safe and immune to any type of vulnerability issue, Stellar is using various authentication constraints created in form of codes and encryptions.

One of the authentication processes is Multisignature verification. In case Ethereum smart contracts had this option, the bad case of vulnerability within the Parity Project could definitely be avoided. Multisignature is actually a concept that requires confirmation from a unique second party individual who has to verify the action before any action is made reality, that way avoiding hacker attacks.

To back up the initial concept in form of Multisignature, Stellar has also implemented Batching/Atomicity. Batching is a concept that allows any user to schedule multiple operations within a single smart contract. If any of these operations would fail to be delivered, all other operations would fail. To back up this process as a completely safe concept, none other operations can be added to the smart contract after the request for execution, so hackers are not able to intercept a certain smart contract and add more operations to the original smart contract.

To assure that none other transactions can be additionally added to any smart contract, Stellar has found a solution in form of Sequencing protocol. Thanks to sequencing, smart contracts would not be qualified for execution if another transaction would be added to the original existing number of transactions during the execution of smart contracts.

Finally, thanks to the time bounds, any contract that has not been executed and completed in a timely manner and within the given time frame would be marked as nonvalid.

How is Stellar doing at the Current Moment?

It seems that Stellar XLM is doing a pretty solid job with recovering from the latest market crash.

After the latest change in its price in the course of 24 hours, XLM managed to rise back to trading in the green by having a rise of 2.88% against the dollar. Due to the latest positive change in XLM’s price, one XLM can now be bought at 0.23$ per one unit.

In case Stellar, now ranked as 8th best currency on the global coin ranking list, manages to replace Ethereum with smart contract operations and drive new ICOs to Stellar network, Stellar could potentially grow to the price of around 21$ the next year around this time.

Is Stellar able to take over the spotlight over ETH smart contracts and how far could XLM go?

We will be updating our subscribers as soon as we know more. For the latest on XLM, sign up below!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Hamza Butt via Flickr

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Understanding the Uses of Different Types Of Cryptocurrencies

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Cryptocurrencies – a term which has become incredibly prominent in the mainstream media during recent years due to the proliferation of Bitcoin millionaires. As a result, the new form of currency has earned an almost infamous status. However, as with any major step forward, there is still much confusion regarding the use of cryptocurrencies, what different types of innovative electronic cash exist and what they might mean for the future.

We’re putting all of this to rest as we explain what each of the leading cryptocurrencies can do.

Bitcoin

The most popular form of cryptocurrency, Bitcoin was first thought up in 2008 by the elusive and still unknown creator, Satoshi Nakamoto, who published the whitepaper online.

It took almost a decade for the cryptocurrency to reach its peak, but in December 2017 a single Bitcoin roughly exchanged for the price of $17,000, meaning anyone who held a substantial amount of the electronic cash became significantly wealthy.

In its early years, the cryptocurrency was strictly used as an alternative for cash transactions, and predominantly for trading goods and services. However as it has increased in popularity, its range of uses has also widened, now deployed for a variety of purposes including acting as collateral for investments at merchant banks, a direct debit for subscriptions services and most notably for sports betting.

Ripple

Bitcoin’s closest source of competition, Ripple was founded…

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New DoJ Ruling May Cripple Gambling dApps

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A new decision made by the US Justice Department has expanded restrictions regarding online gambling in the US affecting gambling dApps. While the Federal Wire Act of 1961 prohibited online gambling regarding sports since 2011, the new decision expanded on this, and it now includes all forms of internet gambling. Unfortunately for many, this now also includes cryptocurrencies.

The new decision came due to considerable difficulties when it comes to guaranteeing that only interstate betting will take place and that payments will not be routed via different states.

The new announcement was explained in a 23-page-long opinion issued by the Department of Justice’s legal team, which pointed out that the 2011 decision misinterpreted the law. According to that decision, transferring funds was to be considered a violation, but data transfers were not included. By exploiting this oversight, it was possible for gamblers to turn to internet gambling. Unsurprisingly, many have realized this early on, including startups, as well as large, established firms. This, of course, also included cryptocurrency companies as well.

The new decision changes what is allowed online

The decision to include all forms of internet gambling is a massive hit in the…

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7 Steps to Recovery from a Crypto Trading Loss

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Whether you are a newcomer to the crypto market who mistakenly invested a large amount into the wrong coin, or a professional that made a well-researched decision and something still went wrong, the result it the same — you lost your money to the crypto market. This is a big problem, but also a problem that every crypto trader faces at some point.

The reason may be anything, from simple bad luck to the lack of research. Add to that the fact that the crypto market continues to be extremely volatile, and it is clear that not all of your trades are going to end up successfully.

Whatever the reason is, the fact remains that you experienced a loss and that this is a problem which can affect more than your funds. It can also affect your mind and feelings. Since every successful trade that you have the potential to make in the future depends on you, you have to recover first, and only then should you worry about the funds.

The road to recovery is different for everyone, and it will take a different amount of time and effort. However, there are a few general steps that you can take to recover from a crypto trading loss.

Step 1: Stop and calm down

You have just suffered a major loss. It may have been your mistake, or…

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