The adoption of the concept of “account abstraction” by Visa has the potential to greatly improve the user experience of Ethereum wallets.
One of the drawbacks of cryptocurrency is the high cost of mistakes.
For example, if a user loses their account keys, they may permanently lose access to their funds. This and other potential problems make it easier to lose money in cryptocurrency than in traditional banking. To address this, blockchain developers are working on solutions such as “Account Abstraction” to make it safer and easier to use crypto.
Account Abstraction (AA) uses smart contracts to execute transactions by implementing certain validation rules. With AA, users won’t need to sign each transaction with their private keys. The goal of AA is to make using Ethereum as easy as using a traditional bank account, allowing for easy transactions, automatic bill payments, and more.
It is important to note that AA can change the way people use crypto. That’s why it is important to understand how Ethereum transactions work today.
Types of accounts on Ethereum
On Ethereum, there are two types of accounts. These are the External Owned Accounts (EOA) and Contract Accounts (CA). EOAs, commonly used by Ethereum users, are accessed through wallet providers such as MetaMask and Coinbase Wallet. They have a pair of keys: a public key, through which anyone can send funds, and a private key, used to initiate transactions by the account owner. CAs, also known as “smart contracts,” are code-controlled accounts that live on the Ethereum network. These accounts cannot initiate transactions on their own, they need an EOA to send a transaction to them.
Losing access to an EOA (Externally Owned Account) on the Ethereum blockchain can be a serious problem as it is linked to a private key that has complete control over the account. If the private key is lost, then there is no way to regain access to the funds, as there is no key recovery process or help desk to assist.
This vulnerability is primarily caused by human error, which can be the biggest security flaw in Ethereum account management. According to a report by Chainalysis, it is estimated that up to 23% of all bitcoins in circulation (around 3.79 million BTC), could be lost forever due to forgotten keys.
Additionally, if a private key falls into the hands of hackers, they would have complete control over the corresponding funds.
How does Account Abstraction work?
Account Abstraction (AA) considers the limitations of Externally Owned Accounts (EOAs) by combining them with Contract Accounts (CAs). This allows for the creation of user accounts with built-in fail-safe mechanisms. Accounts could also have some other special features for verifying transactions. Ethereum co-founder Vitalik Buterin explains in a 2021 blog post that under AA, smart contract code would not only be used to implement the logic of applications but also the verification logic (nonces or signatures) of individual user wallets.
By utilizing AA, user accounts could be programmed to include social recovery systems where multiple individuals with their own keys have the ability to return an account to its owner if the owner loses access to the private key. It also allows for the creation of “multisig wallets” that transfer account ownership to a group. These wallets require multiple different parties to sign off on transactions as an additional security measure.
Moreover, accounts under AA could avoid hard-coded limitations of EOAs, such as gas fee payment in a single cryptocurrency like Ether (ETH). They could choose to use a different cryptocurrency (like DOGE) or assign someone else (like a friend) to pay gas fees.
Currently, it is possible to implement these systems using CAs, but it would require a significant degree of complexity and high gas costs as all transactions need to be initiated by an EOA.
Can Account Abstraction be implemented on Ethereum?
There are several proposals for adding Account Abstraction (AA) to Ethereum, with the most notable being EIP-4337. According to Gazso, the co-author of the EIP, this proposal is the first one that can achieve AA without requiring a hard fork.
The main advantage of EIP-4337 is that it does not necessitate any modifications to Ethereum’s core protocol. Instead, it would introduce a new account abstraction layer on top of the core protocol, allowing wallet providers to create user-owned accounts that utilize smart contracts to establish the rules for initiating transactions.
Despite the availability of these tools, AA is not yet widely adopted. The main reason is the lack of momentum in creating and distributing new wallets. Convincing users to try new technology and wallets is a difficult task, said Gazso.
As a result, many users opt for more established and well-tested options such as MetaMask. However, it seems that this trend is changing, and there is an increasing interest in implementing these new technologies.
Is Account Abstraction happening already?
Some layer-2 solutions on Ethereum are exploring the integration of Account Abstraction (AA) as a feature. StarkWare, the company behind the StarkNet blockchain, has already implemented AA.
The Co-founder and president of StarkWare, Eli Ben-Sasson, has stated that AA could be used in the future to authorize payments using facial recognition or biometrics, similar to how FaceID is used to authorize credit card payments for iPhone users. He also said that infrastructure for this is already present on StarkNet.
In recent times, Visa also announced its proposal to utilize Account Abstraction to deploy automatic payments using StarkNet infrastructure, which would be similar to automatic payments in a bank account, but on the blockchain.
Other companies, such as Gnosis Chain, are also exploring the integration of AA in their infrastructure. Gnosis Chain co-founder Stefan George stated that interest in AA is increasing as more developers and users become aware of its potential. Gazso also stated that 2023 would be the “year of Account Abstraction” and the topic widely discussed s in the crypto and blockchain space.
The Ethereum Merge was completed one month ago. Since then, Ethereum centralization has been on the rise. More and more Ethereum nodes have been censoring the network. As of October 2022, 51% of Ethereum blocks were compliant with OFAC standards, which are meant to censor Ethereum’s blockchain.
What is OFAC?
OFAC, or Office of Foreign Assets Control, is a U.S. Treasury Department financial intelligence and enforcement agency. It enforces trade and economic sanctions to support U.S. foreign policy and national security objectives.
In August 2022, the crypto community was first acquainted with this agency when they issued a statement to sanction blockchain activities. It effectively sanctioned Tornado Cash as well as several Ethereum addresses that were associated with it.
Today, the number of nodes that are validating OFAC-compliant blocks is on the rise, and this represents a significant step towards censorship as more blocks are being monitored.
We reached another sad milestone in censorship: 51% This means if the censoring validators would now stop attesting to non-censoring blocks they would eventually form the canonical, 100% censoring chain. pic.twitter.com/JrYUjowLpt
The current state of compliant MEV-boost relays can be verified on mevwatch.info, a free tool built by Labrys.
MEV-Boost relays are centralized entities that act as trusted mediators between block builders and block producers. This allows all Ethereum proof of stake (PoS) validators to outsource their block productions to other builders.
This metric shows how many blocks have been built since the Merge by OFAC-compliant MEVBoost relays. MEV-Boost was able to provide a more representative distribution for block proposers than a small number of miners who are proof-of-work (PoW) after Ethereum upgraded to a PoS consensus.
Ethereum blocks went from 9% OFAC compliant to 51% OFAC compliant in the past month, as mev boost (block outsourcing) takes market share. https://t.co/SYiVHPlTf4
How is the OFAC involved with the Ethereum blockchain?
After “The Merge” upgrade was completed, the Ethereum blockchain started using the proof-of-stake (PoS) consensus mechanism. This made the blockchain more secure and energy efficient. Mining data shows that Ethereum heavily relies on Flashbots, a single server, to build blocks. This raises concerns about a single point of failure for the blockchain.
What is Flashbots? Flashbots is a network that connects mining pools and searchers. It’s not a closed system that uses private contracts or arrangements. Instead, anyone can join. Because it allows for competition, this open system is thought to be more beneficial than having a few dominant private entities. It acts as a relay to deliver Ethereum blocks. Data from mevboost.org indicates there are seven active relays currently delivering at most one block in Ethereum. These include Flashbots, BloXroute Max Profit, BloXroute Ethical, Blocknative, Manifold, Eden and BloXroute Regulated. 80% of MEV-Boost blocks are relayed by Flashbots.
What is Ethereum centralization? How can ETH transactions be censored?
Hard censorship would mean that no matter how long or how expensive you pay, sanctioned transactions will never be included in the blockchain. In a strict censorship scenario, compliant nodes would be required by regulation to discard all blocks with any of these transactions.
However, even with soft censorship, when approved transactions are eventually validated, it would likely lead to long waits, high-priority charges, and a substandard user experience.
Out of the seven major MEV-boost relays currently in operation (Flashbots, BloXroute Max Profit, BloXroute Ethical, Blocknative, Manifold, Eden, BloXroute Regulated), only three do not censor in accordance with OFAC compliance requirements. For instance, OFAC-compliant relays won’t include transactions that interacted with Tornado Cash smart contracts or other sanctioned wallet addresses, as defined by OFAC.
Validators that wish to include all network transactions can do so by not including any censoring relays in their MEV-boost configuration. Current major MEV-boost relays that don’t censor include – BloXroute Max Profit, BloxRoute Ethical, and Manifold.
On October 6, a glitch was discovered on the BNB Chain that allowed someone to create $570 million worth of BNB tokens. The BNB Chain was halted for a few hours while a software patch was created. The good news is that the hacker retrieved a smaller amount.
BNB Chain had to stop on Thursday, October 6, as the blockchain that has ties to the largest crypto exchange in the world suffered what it called a ‘potential exploit.’ On-chain evidence indicated that the potential exploit could have been used to target hundreds of millions of crypto dollars.
BNB Chain is made up of BNB Beacon Chain (BSC) and BNB Smart Chain.
“Due to irregular activity we’re temporarily pausing BSC,” BNB Chain tweeted. Later, it confirmed that the activity was a potential exploit that it described as contained.
Due to irregular activity we're temporarily pausing BSC. We apologize for the inconvenience and will provide further updates here.
Initial token movements indicated that 2 million BSC tokens worth approximately $570 million were being targeted by an attacker on Thursday. However, in a tweet, Binance CEO Changpeng Zhao stated that the attacker could only get away with $100 million. BNB Chain also tweeted to say that $7 million was already frozen.
An exploit on a cross-chain bridge, BSC Token Hub, resulted in extra BNB. We have asked all validators to temporarily suspend BSC. The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly.
The fact that such a small amount of assets was stolen underlines the benefits of BNB’s choice to stop the chain and not risk any more assets fleeing. Blockchains are supposedly decentralized entities that can operate independently from single entities. It is impossible to flip a switch to turn it on or off.
On a Reddit thread, BSC confirmed it coordinated the shutdown of the chain following issues with the BSC Token Hub protocol. This protocol is the clearing house for crypto transactions between the Binance-linked Blockchain’s interlocking components. The BSC team thanked the validators for their speedy action.
After confirming that the chain was halted, the team thanked the validators for their cooperation.
We want to thank all node service providers for their quick and attentive response.
Since then, the chain has been back online, and BNB Chain stated that it would hold a series of on-chain governance votes to decide whether or not the hacker funds should be frozen. A vote will be held on a bug bounty system that will reward those who prevent future hacks.
BSC’s native BNB token was rocked by the threat of an attack. It dropped to $278 from $293.10, according to CoinMarketCap, which Binance owns.
On-chain data shows two large withdrawals of 1,000,000 BSC tokens by an attacker who seized crypto assets with cross-chains bridges, swaps, and loans. BNB’s Twitter account assured that all funds were safe and promised to “help freeze any transfer.”
Twitter detectives have discovered that Tether, the largest stablecoin provider, has blacklisted the address in question. This suggests that Tether suspects that the tokens were moved as a result of an attack.
BNB Smart Chain has resumed
The official Twitter account of BNB chain has tweeted that the chain is back in business after a software update was issued to prevent hackers from accessing accounts.
📢BNB Smart Chain (BSC) is running ok from 20+ mins ago.
The validators are confirming their status and the community infrastructure are upgrading as well.
Paraguay’s untouched rainforest can cost as little as $300 for one hectare. Buying it will protect it from being bulldozed, cut down, and used for cattle ranching. With today’s technology, this land can become available to anyone, regardless of where you live.
GainForest, a decentralised fund that uses artificial intelligence, has partnered up with Paraguay’s Ministery for Environment to protect thousands of hectares of forest within Paraguay’s Gran Chaco Americano. This area is one of the main carbon sinks and most at risk from climate change.
Blockchain saves the planet
Many voices blamed blockchain for its negative environmental effects. However, not all blockchains are created equal. The blockchain and cryptocurrency industries can be a major player in renewable energy, and help drive sustainable, objective change. It has inherent technological advantages that can outperform traditional companies in their efforts to combat climate change.
For instance, GainForest’s goal is to raise cryptocurrency donations in order to buy the forest from landowners, expand national parks, and thus prevent deforestation. GainForest combines blockchain-based smart contract technology with satellite imagery, drone photography, and data science. It has grown steadily since winning the Hack4Climate contest at United Nations COP 23 in 2017.
According to David Dao, GainForest’s co-founder, GainForest is now the first government-backed green cryptocurrency project. He said that the initial results would be presented at UN COP27 Egypt.
How to use crypto for good causes
The alarming rate at which deforestation is occurring around the world is well-known to most people. The annual loss of rainforests absorbs nearly the same amount of carbon as the annual emissions from large industrialized nations like the U.S. and China.
Dao said that the cost of stopping deforestation is still “insanely low”, especially in Paraguay, where land was purchased for as low as $20 per hectare in the 1980s.
According to GainForest’s co-founder, David Dao, a hectare of virgin forest land costs between $300 and $500. The upfront cost for landowners to construct infrastructure is $1,000 per hectare. The goal is to try to reach them before they make the decision to build a cattle ranch. Hopefully, the landowners will understand that this $1,000 investment is not worth it and that Paraguay can do more.
Dao and his associates, who have backgrounds in artificial intelligence, use the Solana blockchain for crypto donations. The Solana blockchain is a proof-of-stake network and it was chosen because of its low-carbon footprint.
These crypto donations are tied to high-accuracy drone and satellite data that charts areas of forest. The Filecoin Green project allows for decentralized data storage. Donors receive data drops and wildlife camera photos. They can also be connected to native tribes using non-fungible tokens (NFTs), which in this case are referred to as Solana NFTrees.
The algorithmic mapping of each forest project’s activities removes any uncertainty that comes with traditional carbon offset. This involves planting trees, but leaves those who give only guessing about the impact of their green investment.
Money can solve the issue of deforestation
GainForest cannot buy land. However, there can be found some workarounds. For instance, David Dao suggested that GainForest could create a legal contract so the landowner gets paid periodically provided they don’t deforest. He pointed out that there are several studies that estimate that a global deforestation stoppage could be achieved by paying out between $1 to $2 billion annually.
According to GainForest, deforestation could be stopped in two years, if there is enough money. People need financial sustainability opportunities to make forest conservation economically viable. This could reduce the global temperature by up to 0.2 Celsius degrees. It would also allow our society to find the right way to decarbonize the planet. That could be a valuable time for our mother Earth.
Convergence is becoming a very common term in the technology sphere. It means merging technologies into a new form that combines their media and applications. Embedding your devices with technology improves their functionality.
Even though the article only covers the two, VR and Blockchain are not the only technologies that have been combined to improve our lives the list is endless and the applications are numerous.
Understanding VR and Blockchain
VR stands for Virtual Reality, and it is a technology that simulates an experience that is similar or different from the real world. some of the common applications of VR include entertainment, communication, and education.
While Blockchain is a digital ledger technology that enables the permanent storage of transactions online within a decentralized atmosphere. Blockchain also has several applications which include smart contracts, securities, record keeping, cryptocurrency, and gaming.
VR and Blockchain in online retailing
As we have it, VR and AR are already enabling in-store virtual tours, with a little innovation we will be able to conduct virtual shopping.
Just imagine, sitting on your sofa and wearing your VR goggles and then the next thing you know you are walking into a store and browsing through the virtual representations of the merchandise.
Imagine being able to even try out the outfits in the fashion section because you have already uploaded a full body scan of yourself, and the avatar is your virtual replica.
Blockchain, on the other hand, enables cryptocurrency payments which are borderless thus making it very compatible with the global VR retail environment. Cryptocurrencies will enable small ventures to take products directly to their customers thus reducing the costs involved.
Developers are currently working on an application that merges these two technologies. their convergence will make it possible for small businesses to trade globally. Not to mention the participants will be able to enjoy some interesting benefits which include lower costs, disintermediating of banks. Traders will no longer need to use credit cards which charge transaction fees and create waiting periods for merchants to receive their money.
VR applications are unlimited and once converged with Blockchain they could spider out across the globe.
Australia is serious about implementing blockchain into its daily operations. The Blockchain Roadmap has been published to guide Australia’s productivity in all industries.
Australia is keen to use blockchain in its future developments
Australia’s government announced the development of a National Blockchain Roadmap over one year ago, and spent over 100,000 AUD on it. Today, the roadmap is ready and will be utilized to help develop the usage of blockchain in all its industries.
According to Karen Andrews, the Miniter of Industry, Science and Technology, the government worked with various researchers to complete the blockchain roadmap.
The minister is a strong believer of the beneficial results of incorporating blockchain in bost public and private sectors, which will lead to a significant increase in jobs:
“Blockchain technology offers great potential to save money, initiate new business and export opportunities, boost economic growth, and create new jobs. Governments and private industries all stand to benefit from embracing this technology.
Employment opportunities in blockchain are growing substantially, with rapid growth in job advertisements since 2016.”
The blockchain roadmap includes all the essential sectors, not just the financial industry. The roadmap mentions education, transportation and the agricultural sectors.
The minister believes that Australia can become a leader in the new digital era after it will combine the blockchain’s roadmap with the already published one for Artificial Intelligence.
The potential risks of adopting the blockchain technology for mass usage
The government is also paying attention to the potential threats of implementing blockchain on a mass scale. For the blockchain roadmap to successfully work, it needs to be mentioned in a regulatory framework.
A major challenge of such massive use of blockchain is to maintain trust, the data integrity and security. Balancing privacy and transparency is a challenge.
The Australian government decided to spend 350,000 AUD more and work with Standards Australia, which will develop a regulatory framework which will guarantee the blockchain’s integrity, using the International Organization for Standardization (ISO).
Australia is recognizing the efforts other countries are making to develop the blockchain technology and is willing to cooperate with the UK, China and Singapore to remain a leading country in this blockchain era.