Hi everyone! First of all, thank you for taking the effort to read this. We know it’s been a hell of ride ever since the February crypto dip and we appreciate anyone who stays involved in our community. This update will contain 3 major topics which are closely related. The first topic is the temporary market pause on Cryptopia, followed the AdCoin blockchain algorithm and finally business development and next steps.
“Perseverance is the hard work you do after you get tired of doing the hard work you already did. ”
– Newt Gingrich
Since August 4th Cryptopia has paused the AdCoin markets. We did everything we could to establish some sort of communication with Cryptopia but unfortunately it wasn’t until August 22nd that we received a reply.
Cryptopia confirmed our suspicion and confirmed that there have been multiple 51% attacks that lead to a double spend attack on Cryptopia. There are several things that need to be explained with regards to what happened and how it happened. Let’s start with ‘what’.
The best way to explain it is to compare it with a physical example. Say that you give $100 to a friend and he puts it in his wallet (Cryptopia deposit wallet). Because you are going to use that $100 to buy and sell different things your friend has (for instance ACC and BTC) it makes no sense to keep changing the money, so instead of physically using the money to buy and sell, he writes down your balance on a notepad. No problems there right? It’s a lot easier to see and it improves transaction speed. The problem is that, due to the hack, the real wallet is actually empty, while your notepad states that there should be $100.
Back to the technicals: The way this is done is that someone buys mining power to erase the transaction from the blockchain by replacing it with another block(chain) with becomes the dominant version. When everything would be done on the blockchain this wouldn’t cause a big problem, but since exchanges want to instantly transfer one crypto to another it is done in a database (the notepad).
So how did this happen?
Long story short is that miners are seeing a very small return due to the bear-market. This resulted in two things that contributed to the weakness of the blockchain. The first one is that AdCoin was not profitably enough for a lot of miners, so the total amount of mining power decreased. Second, due to the low prices of cryptos, renting mining power is becoming very cheap. This both led to the point that doing a 51% attack became (very) profitable for hackers.
What is the impact?
Cryptopia is still completing their investigation and won’t open up the market until it is done. So far it seems that there were about 8 attacks, resulting in 499k AdCoin being ‘duplicated’ (so Cryptopia is 499k short). We already assumed this was happening since we saw some very big dumps on very weird times. This (partly) explains why AdCoin has had trouble breaking out of the 5 cents price.
How we will proceed!
The problem is bigger than Cryptopia, but there are measures we can take both short- and long term. Short term we are doing the following:
- Increasing the number of confirmations to 50 blocks (instead of 20);
- Incentivize mining (keep an eye out to win AdCoin mining power contracts!);
- Reimburse Cryptopia for their ‘losses’ so no one it affected by the double spend.
This is not a lasting solution so we are forced to take different measures. We considered all options, and switching from Proof of Work to Proof of Stake seems like the best solution. A more in-depth explanation can be read in the next paragraph.
After thorough consideration we are going to do another AdCoin hardfork. This time the change will be to Proof of Stake. The big difference between Proof of Work (PoW) and Proof of Stake (PoS) is that with PoW you rely on miners and mining power, while with PoS you rely on a number of ‘staked’ AdCoin.
There are multiple reasons for switching, but the biggest one is the instability of mining power. The biggest benefit for the AdCoin community (as well as another selling point for publishers!) is that the ‘mined’ AdCoin reward (25 AdCoin per block) will be going to the people who already have AdCoin! Holding AdCoin will be rewarded 🙂
We have been looking into this for a couple of weeks and still have quite some time to go before we have an estimate fork date. However we felt like sharing this in an early stage as it is something that will require a lot of focus from the team.
An overview of the pro’s and cons between PoW and PoS:
Business development and next steps
The AdCoin.Click platform is performing really well since the launch. We are averaging about 1,3 million views per day, mostly depending on the amount of advertisers on the platform. Since a lot of ICO’s and crypto projects are waiting for a bull-market the business is a bit slow in the crypto niche, however we are still onboarding clients weekly. We are also preparing to branche out into other niches and have successfully started a collaboration with an adult publisher platform.
We are currently working on the following:
- Better integration with the AdCoin webwallet;
- Adding different categories to create super-focused targeting for advertisers;
- Improving the performance of advertisers;
- Preparing to branch out into different niches.
With regards to adoption of AdCoin we have been listed on Crex24 and keep contacting existing and new exchanges. Since we were a first round CryptalDash listing winner we are planned to be listed within the next two weeks!
In the upcoming month we will continue to work on our roadmap and aim for real world applications of AdCoin, while simultaneously improve our blockchain.
Do you have questions?
If you still have any questions, please contact us via Telegram or E-mail! Most of the time there is a Moderator or Developer present there. You can also look up in our whitepaper who the Admins are.
Want to get ahead of the information? Please join our Telegram group @ https://t.me/adcoinacc
Patrick – The AdCoin Team