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How to differentiate between a utility token and a security token?



ethereum token

Blockchain has emerged as a liberating technology which gives the power in hands of the people who use it. It cuts off the mediators, gives a transparent outlook, promotes decentralization, tokenization, smart contracts etc. Such technologies are very important for the sake of the progress of the world economies. Blockchain technology is one such technology which is aiming to disrupt the customary methods of every sector in the economy. It is due to its flexibility, adaptability along with various cool features that it can be molded into various utilization. Lets see the difference between a security token and a utility token.


Blockchain comes with the power of tokens:

Revamping organizations and their methodologies are always essential for the progress. Tokens are some power packed feature which enables to draft mechanism for the company’s workflow, designed for certain use cases. In general, tokens are stores of value which can be used to store specific functionalities which can be used for that specific reason, systems or condition. Categorized into various types, tokens are mostly Security tokens and the other one are Utility tokens.


What is a security token?

Standing between the organization and the blockchain network, security tokens helps both of them. The major difference between them is that of regulations. Utility tokens lack regulations. Moreover, they are more complex than the utility tokens. They are mostly used and beneficial to the contract while investments. They are considered in the hope of profits in the future.


What is a utility token?

Utility tokens act as an access to a service for the future. This is similar to a gift card.


Which one is better?

It is very simple and inexpensive to issue security tokens under frameworks such as Regulation D, Regulation S and Regulation A+. They can decrease the risks as compared to utility tokens and IPO. In case, a certain company accepts a security token, it is similar to an investment which will provide the investors few advantages such as profit sharing. When talking about the utility tokens, when are used in ICOs they are mainly used for the progress of projects with the help of the contributions gained during the ICOs. They are different from the security token since they are not utilized for investment purpose. The prices of utility tokens may fluctuate greatly. Each token has its own purpose, it’s time that some precise use of each token should be specified more accurately.

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    June 28, 2018 at 3:42 pm

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Cryptopia cryptocurrency exchange hacked: Millions Stolen




Cryptopia, the New Zealand based cryptocurrency exchange was allegedly hacked on 14th January. The hackers were able to steal cryptocurrencies worth millions of dollars. According to the exchange, the local police authorities and New Zealand’s unit of high tech crimes are looking into the matter.


Cryptopia Hacked!

Cryptopia informed its users about the incident in a tweet yesterday explaining that the exchange had suffered a security breach which led to the loss of funds due to hacking. Cryptopia exchange was later put into maintenance while the team was trying to assess the damage. The exchange shall remain in maintenance mode and trading will be suspended until the issue has been resolved. The website of the exchange itself is offline.

On 13th January 19,391 ETH (Ethereum) worth around $2.5 million and 48,029,306 CENNZ tokens (Centrality) worth around $1.18 million were transferred from Cryptopia exchange to unknown wallets. However, the owner of the wallet is not yet confirmed. It could be the exchange itself or the hackers.


Here are the details of the transactions:

Transaction 1: 19,391 ETH

Transaction 2: 48,029,306 CENNZ


Crypto Reputation:

The increasing number of exchange hackings has led to spreading of negative reputation of cryptocurrencies. People are starting to lose hopes in crypto exchanges. Last year, CoinCheck, a Japenese cryptocurrency exchange was hacked which led to around $500 million of funds being stolen. If such incidences continue to occur, the newcomers in the crypto space will lose confidence over cryptocurrencies and hence the whole cryptocurrency market will have to suffer.
Prominent people in the crypto industry are calling out for people to opt for decentralized exchanges which are much more safer in comparison to the Centralized ones.

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Ethereum hard fork vulnerability: Constantinople delayed yet again.



Ethereum Constantinople hard fork after ChainSecurity, smart contract auditing firm has found a major vulnerability in one of the objectives of the upgrade.

Ethereum’s Constantinople hard fork after ChainSecurity, a smart contract auditing firm has found a major vulnerability in one of the objectives of the upgrade.

ChainSecurity said yesterday that EIP 1283, which was one of the planned changes is vulnerable to attacks as it can provide hackers a loophole in the smart contract code to take over the user’s funds. As a result, the ethereum developers, the client developers as well as all other projects have agreed to delay the Constantinople hard fork for the time being till the issue is evaluated and resolved.

The next date for the Constantinople hard fork shall be decided on 18th of January during the Ethereum dev call which would include people such as Vitalik Buterin, Nick Johnson, Hudson Jameson, Evan Van Ness, Afri Schoedon and others.

The ethereum developers have decided to delay the Constantinople hard fork for now as according to them the issue might take longer to be resolved. The Constantinople hard fork was earlier planned to be executed on 17th January at around 04:00 UTC.


Constantinople Vulnerability:

According to Joanes Espanol, the CTO of Amberdata, the vulnerability found in the EIP 1283 is known as Reentrancy Attack. The following attack allows the hacker or attacker to reenter the identical function multiple times in the absence of the user knowing about the state of affairs. Under the Reentrancy attack, the hacker or the attack could withdraw the user’s funds forever.

According to ChainSecurity, the storage operations on the ethereum network is currently costing 5000 gas which exceeds the 2300 gas which is sent while calling a contract using ‘send’ or ‘transfer’ function. After Constantinople is implemented dirty storage operations will start to cost 200 gas and the attacker contract can then use 2300 gas stipend to control the endangered contract’s variable.

This is the second time that the Ethereum hard fork Constantinople is being delayed. Previously, it was scheduled to be launched last year but was delayed due to issues with the Ropsten testnet.

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Ethereum is centralized: 2 mining pools control more than 50% hashrate



Ethereum is turning centralized with just two of the Ethereum mining pools: Ethermine and SparkPool controlling more than 52% of the total network hashrate.

Ethereum, the 2nd top cryptocurrency by market capitalization is turning centralized with just two of the Ethereum mining pools: Ethermine and SparkPool controlling more than 52% of the total network hashrate.


Source: Ethereum Pool’s Distribution

Ethermine controls around 28% of the total network hash rate while SparkPool controls more than 24% of the total hash rate. Apart from these NanoPool, F2Pool and MiningPoolHub control around 13.5%, 11% and 6% of the network hash rate simultaneously. Apart from the major mining pools just around 17% of the Ethereum network hash rate is controlled by others.

Bitcoin is way more decentralized In comparison to Bitcoin Cash and Ethereum as the top two mining pools of bitcoin: and Antpool control just around 29% of the total network hashrate.

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