rewards

What is a coinbase transaction?

A coinbase transaction is the first transaction created in each new block, and it has key features that differentiate it from other transactions.

How coinbase transactions are structured

Coinbase transactions are structured as the first transaction in a block, where the miner includes a newly minted amount of BTC as a reward for their effort in solving a complex mathematical problem to validate transactions and create a new block on the blockchain.

Coinbase transactions have a special format. Compared to a regular transaction input, a coinbase transaction has a different set of values that do not represent unspent transaction output (UTXO). 

As such, in place of a transaction hash, a coinbase transaction will have 32 bytes, all set to zero. The output index is also filled with 4 bytes, all set to 0xFF (255 decimal places).

What is a transaction value and customizable text property in a coinbase transaction

The coinbase transaction’s value is based on factors such as each individual transaction’s value, block height, and halving. Miners can add any customizable text to the blocks they have created.

The value of a coinbase transaction is determined by several factors. These include the value of every transaction validated by the block, the height of the block (number of transactions) and the halving relative to the block. Once the block has reached 100 confirmations, the miner can use the BTC.

When a block is created, it holds approximately 100 bytes of data. There is also an allocation for miners to include any text they prefer. Nakamoto, for instance, wrote the following message when they mined Bitcoin’s genesis block: 

This message is a reference to a headline in the British newspaper The Times from Jan. 3, 2009, and is often seen as a commentary on the state of the global financial system at the time of Bitcoin’s creation. 

Nakamoto chose to embed this message in the genesis block to emphasize the need for a decentralized and trustless system of transactions, free from the influence of central authorities and intermediaries.

Moreover, miners can add any information they choose to personalize the block, sending an unalterable message in perpetuity.

What is fork-prevention in a coinbase transaction

Coinbase transactions help to prevent forks by including special rules for their creation and validation.

Blockchains like Bitcoin are open-source and rely on communities to maintain and develop their code. As such, an event like a fork will cause the chain to split and produce a second blockchain. This blockchain will contain all of its history while heading off in a new direction.

In such a circumstance, a miner can create as much BTC as they want if the new blockchain does not have the rule of maturity in place, thereby working against Bitcoin’s halving algorithm that seeks to preserve the cryptocurrency’s scarcity.

What is a coinbase maturity rule

The coinbase maturity rule governs when the block reward from a coinbase transaction can be spent. 

The BTC involved in the coinbase transaction cannot be spent until the block has received at least 100 block confirmations on the blockchain. Unlike regular Bitcoin transactions that contain data showing the movement of BTC from one wallet to another, coinbase transactions contain data concerning the generation of a new currency that has not yet been spent.

For this reason, the input in these transactions remains blank. Structurally, therefore, coinbase transactions can also be thought of as single blank inputs. The maturity rule was put in place to protect the blockchain from forks, which are events that happen when a community decides to implement changes to the blockchain’s protocol or set of rules.

What are block rewards and Bitcoin halving

Block rewards are the rewards received by miners for mining new blocks and adding them to the blockchain. The Bitcoin halving reduces the block reward by 50% approximately every four years. 

Miners are responsible for creating blocks on proof-of-work (PoW) blockchains like Bitcoin. In return, they are rewarded with BTC after the successful creation of each block. The block reward depends on two things: the number of fees included in the transactions of each block and the number of blocks from the genesis block.

During the early days of Bitcoin, the block reward was 50 BTC per block, and this reward is included in the coinbase transaction. Due to the Bitcoin halving, however, the block reward is reduced by half after every 210,000 blocks mined. Bitcoin’s halving occurs approximately every four years.

The block subsidy that is distributed by the coinbase transaction is 6.25 BTC per block (per the latest halving). And because coinbase transactions create new coins, it is valid without any inputs, as the BTC it contains is newly created and not previously spent.

For example, the Blockstream coinbase transaction in block 650,000 has no inputs, and the single output is the amount of 6.25 BTC in addition to the miner’s 0.244131 BTC of fees collected.

How does a coinbase transaction work

Coinbase transactions have unique features, including maturity, fork prevention and customizable texts. They also have a different structure than other transactions.

On the Bitcoin blockchain, all transactions executed on-chain are combined to form one block. When a block is formed, it will immediately be added to the blockchain. These blocks are immutable and tamper-proof owing to the Bitcoin blockchain’s near-perfect code. Each block should contain one or more transactions, the first of which is always called a coinbase transaction.

Here’s how a coinbase transaction works:

  • Block creation: To earn the block reward after creating a new block, a miner must first create a coinbase transaction.
  • Inputs: A coinbase transaction has no inputs, in contrast to a typical transaction, which makes use of inputs from earlier transactions. A coinbase transaction instead generates brand-new coins out of thin air.
  • Outputs: The coinbase transaction has one or more outputs that list the addresses to which the block reward will be sent. Miners have the option to distribute the block reward to other addresses.
  • Block reward: The block reward is currently BTC, and it is halved approximately every 210,000 blocks. This reward is paid to the miner who verifies and adds the transactions to the blockchain.
  • Mining fee: Miners can also include a mining fee in the coinbase transaction, which is paid by the transaction creators to incentivize miners to include their transactions in the next block.

A miner can include a coinbase transaction, along with other transactions, in the block they have mined and broadcast that block to the network after creating it. The block is then examined by other miners, and if approved, it is uploaded to the blockchain and paid for by the block reward plus any associated mining fees.

Some key features of coinbase transactions are discussed below.

What are coinbase transactions

Not to be confused with the cryptocurrency exchange Coinbase, the term “coinbase transaction” refers to a particular type of transaction that occurs in every new block of a blockchain. 

Coinbase transactions are a key part of the system that blockchains utilize to introduce new currencies that have never been sent into circulation. The first coinbase transaction was generated by Bitcoin’s (BTC) pseudonymous creator, Satoshi Nakamoto, while mining the first genesis block. The coinbase was reportedly paid to the Bitcoin address “1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa” with a value of 50 BTC.

One of the biggest curiosities of the Bitcoin blockchain is that the said block was never confirmed on the blockchain — something that has puzzled many blockchain scientists and developers.

One theory is that this occurred because the first-ever coinbase transaction was encoded in the genesis block’s source code. And because the entire blockchain is built on this genesis block, the concept of confirmation was not applied to it.

Another theory suggests that Nakamoto designed it this way since, if the genesis block were to get unconfirmed for any reason, it would cause a new blockchain to be built, making the original blockchain obsolete.

The coinbase transaction is also used to reward miners for maintaining the blockchain. They are paid a certain amount of coins for each block they mine. This rewards system creates an incentive for miners and helps keep the blockchain secure by deterring malicious behaviors that could destabilize the network.

What is Bitcoin hash rate and why does it matter?

Cryptocurrency’s hash rate measures a blockchain network’s processing power to process transactions.

How does the hash rate affect Bitcoin price?

The main drivers of Bitcoin’s price include computational power, mining profitability and network difficulty. Since miners are compensated in Bitcoin while incurring costs in local currencies, the hash rate follows the price.

That said, the more computational power the Bitcoin network employs, the higher its value is. Moreover, rational miners are only willing to mine BTC if it is profitable, which implicitly means that any other cryptocurrency with no demand for it would have zero value and miners would redirect its resources elsewhere.

Additionally, the network difficulty can be used as a stand-in for total mining power. This premise is explicitly backed by the algorithm governing the Bitcoin network, meaning that difficulty readjusts to make up for declining or in the opposite scenario, mitigate the impact of growing mining power.

Fluctuations in the price of Bitcoin are significant not only for purely speculative reasons but also for how it affects the energy consumption of the Bitcoin network and how miners that power the Bitcoin infrastructure will behave in the future. In addition, there has long been a belief that the hash rate, or the total number of computations performed by Bitcoin miners, and the price of BTC are related.

Nonetheless, this notion might seem incorrect as a manufacturer’s level of effort in producing a good or service has no bearing on the price consumers pay since producers are price-takers in competitive marketplaces. On the contrary, this might not be true for the Bitcoin market, though, because there are only a few mining pool operators to coordinate their operations to control the market price. Furthermore, the inelastic nature of the Bitcoin supply and the intense competition in the mining industry might drive miners to act differently.

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How does Bitcoin’s hash rate work?

The SHA-256 cryptographic hashing function, which converts any input data into a 256-bit string (the hash), is one of the technologies using which Bitcoin measures its hash rate. Due to the one-way nature of this function, it is simple to determine the hash from an input but not the other way around.

A hash rate, which can be expressed in billions, trillions, quadrillions and quintillions, is a measurement of how many calculations can be carried out each second. For instance, a hash rate of 1BH/s indicates that one billion estimates can be made each second. But, how is Bitcoin’s hash rate measured? Exahashes per second (EH/s) that are equivalent to one quintillion hashes are used to express the hash rate of BTC. By comparing the average time between mined blocks with the network difficulty at a particular time, the overall network hash rate may be roughly calculated.

So, what is mining difficulty? The mining challenge refers to how tough it is for miners to generate a hash lower than the desired hash, which is accomplished by lowering the hashed block header’s numerical value. On average, a new block (Bitcoin) is found every ten minutes. However, if BTC is discovered less frequently than the average time, the difficulty decreases or vice-versa.

Furthermore, it is essential to note that the Bitcoin network’s mining difficulty is automatically changed after 2,016 blocks have been mined. Therefore, depending on the number of miners and their total hashing power in the mining network, the difficulty can be adjusted either higher or downwards. So, what is Bitcoin’s current hash rate?

Although the precise hashing power of Bitcoin is unknown, it can be inferred from the number of blocks currently being mined and the level of block difficulty. So, how to monitor Bitcoin’s hash rate? Blockhain.com offers estimates about Bitcoin’s current hash rate, which is 224.383m TH/s as of September 25, 2022.

Why is hash rate important?

A crucial indicator of a blockchain network’s strength, specifically its security, is its hash rate.

So, what happens if Bitcoin’s hash rate increases? The hash rate rises as more machines are devoted by legitimate miners to finding the next block, signifying that the network’s total computational power is high and it is difficult for malicious actors to interfere with the network. Nonetheless, the majority hash rate controller could reverse his payments by reorganizing payments, leading to double-spending issues due to a fall in the network’s hash rate.

Now, what happens if Bitcoin’s hash rate decreases? A decrease in hash rate exposes the network to cyber criminals and crypto heists due to the low cost of executing a 51% attack. In addition, a lower hash rate makes cryptocurrency less decentralized, posing a considerable risk to crypto investors. To safeguard its users against losing funds, crypto platforms could stop trading or delist a currency if the hash rate suddenly drops. So, Is a high hash rate a good measure of a network’s security?

Similar to the majority of PoW crypto, a more significant hash rate is thought to be better for the overall security and stability of the blockchain network as it means more energy costs, more miners and more time is needed to take over the network.

What is Bitcoin’s hash rate?

The amount of processing and computing power being given to the network through mining is referred to as Bitcoin’s hash rate. A fixed-length alphanumeric code representing any length of words, messages, or data is called a “hash.”

Blockchain technology is the foundation of Bitcoin (BTC) and many other cryptocurrencies. The Bitcoin network is formed by blocks that form a chain dependent on one another. Blocks are akin to files containing information about the most recent transactions made throughout the network. 

Smaller blocks require fewer processing resources to validate (or vice-versa) since they behave like data files. Hashing comes into play in this situation. Confirming the integrity of the network transactions is known as “hashing” a block and BTC is given to network or hashing participants as a reward. So, what does hash rate mean for miners and crypto investors?

Calculating a hash rate might assist individual miners in forecasting their profitability. However, as cryptocurrencies are mined with various types of mining equipment, the hash rate of each machine differs. Since varying levels of processing speed, memory and power are needed for mining, the network hash rate increases when mining equipment is upgraded or vice-versa. 

Because the network is designed to release a specific quantity of Bitcoin at a time, however, a more robust network does not necessarily lead to BTC being mined more quickly.

The number of miners in the network, mining difficulty and, ultimately, miner profitability are all impacted by changes in hashing power. In addition, the mining challenge rises when more miners join the network because it takes more guesses per second to solve the complex mathematical equation and get the block reward. As a result, the hash rate rises as the difficulty of the Bitcoin network does. Similarly, the hash rate is a crucial indicator for cryptocurrency investors of how secure a cryptocurrency’s proof-of-work (PoW) network may be against hackers. That said, network attacks become more expensive and challenging as the hash rate increases.

Congress demands crypto payments notification from State Department when helping Ukraine

The bill amendment demands the Secretary of State submit reports to congressional committees explaining why the State Department made the determination to pay out rewards in cryptocurrency.

A new bill demanding a congressional notification prior to payments of United States Department of State rewards using cryptocurrencies has surfaced as Congress raises concerns about the evasion of sanctions.

The Rewards for Justice Program, a counterterrorism rewards program run by the Secretary of State, offers rewards for information that prevents international terrorism. Citing examples of Russia and Belarus as previously sanctioned regimes that have used cryptocurrencies to circumvent sanctions, the bill H. R. 7338 demands that:

“The Secretary of State shall notify the appropriate congressional committees not later than 15 days before paying out a reward in cryptocurrency.”

Congress highlighted the United Nations’ findings that 12 million Ukrainian residents would need humanitarian assistance and that cryptocurrencies have “been used as an effective cross-border payment tool to send millions to the Ukrainian Government, Ukrainian army, and Ukrainian refugees with limited access to financial services.”

The bill amendment demands the Secretary of State submit reports to congressional committees explaining why the State Department made the decision to pay out rewards in cryptocurrency.

If signed into law, the bill will require the State Department to list each crypto payments that were previously provided. Moreover, the federal department will also need to provide evidence as to why cryptocurrency payments would encourage whistleblowers to share intel when compared to rewarding with U.S. dollars or other prizes.

In doing so, the State Department must showcase an analysis of how crypto rewards could undermine the dollar’s dominance as the global reserve currency.

Related: White House OSTP department analyzes 18 CBDC design choices for the US

Following U.S. President Joe Biden’s executive order on Ensuring Responsible Development of Digital Assets, federal agencies joined hands in publishing a fact sheet to articulate a clear framework for responsible digital asset development.

The “first-ever” fact sheet published by the White House consisted of seven sections, namely: (1) Protecting Consumers, Investors, and Businesses; (2) Promoting Access to Safe, Affordable Financial Services; (3) Fostering Financial Stability; (4) Advancing Responsible Innovation; (5) Reinforcing Our Global Financial Leadership and Competitiveness; (6) Fighting Illicit Finance and (7) Exploring a U.S. Central Bank Digital Currency (CBDC).

While some of the sections don’t contain any particularly new information, federal agencies recommend the creation of a federal framework for nonbank payment providers in addition to encouraging the adoption of instant payment systems like FedNow, which is expected to launch in 2023.

Staking on Polkadot, explained

There’s a big buzz around staking right now — but when it comes to Polkadot, there’s a big difference between exchanges.

Are there any other limitations to consider?

Yes — as your funds may need to be locked up in order for rewards to be generated.

With some non-custodial staking providers, you need to delegate a minimum of 120 DOT in order to stake — that’s worth about $840 at the time of writing. Worse still, failing to withdraw rewards regularly can mean they vanish after just 12 weeks.

In some cases, you can lose your rewards and end up paying punishing fees if you try to redeem your DOT early, too.

XGo does things differently and says it offers staking rewards for DOT balances of up to $10,000 through its Superfluid rewards mechanism.

The project’s founders say they want to offer exciting products as they make a foray into centralized finance — and give retail crypto users the options they deserve.

Learn more about XGo

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

Doesn’t staking impact liquidity?

It can do — and in some cases, you may have to lock up your DOT for 120 days.

A lot can happen in 120 days — case in point, DOT fell from an all-time high of $55 to lows of $17 over this timeframe… down 69%. This painfully shows why it’s important to assess your options, and consider staking providers where you can earn yield without enduring long lock-up periods and helplessly watching your crypto plunge in value.

In some cases, it can take 28 days to unbond from a validator node — while in others, you can choose between fixed periods of 30, 60, 90 or 120 days.

But XGo is completely rethinking this approach. This platform offers no lock-ups on withdrawals and no unbonding period, meaning you’re fully in control. Better still, rewards are paid out daily — and you can transfer your assets at any time.

Given how there’s heightened fear in the crypto markets, and a lot of uncertainty driven by the Federal Reserve’s mission to increase interest rates and tackle red-hot inflation, this much-needed flexibility helps keep HODLers in the driving seat.

What type of yield is on offer for stakers?

This can vary from one platform to another — but it’s crucial to check that the yield is sustainable.

Before the recent crypto contagion set in, many investors were wooed by sky-high returns that ultimately proved unsustainable. As a result, thousands of customers at multiple platforms now remain locked out of their accounts — with withdrawals frozen. While it is possible to get interest rates that beat what’s on offer at mainstream banks, it’s important to tread carefully and go with a trading platform you can trust.

Across mainstream brands, the yield for Polkadot staking varies between 9% and 16.5%. That’s quite a large spread — and as you would expect, each proposition comes with a distinctive range of pros and cons. In order to secure greater gains, some investors use staked $DOT derivatives — or lock it into liquidity pools. While growing your savings in this way may seem tempting at first, it’s important to remember it isn’t without risk.

The old adage in investing circles is that you should only invest what you’re prepared to lose. In crypto circles, what really matters is understanding the nuts and bolts of how things work, and whether it’s sustainable. You should also consider the lock-up periods that are associated with different staking propositions.

And what’s the difference between validators and nominators?

It’s quite expensive to become a validator on Polkadot — but this doesn’t mean you can’t get involved in the staking process.

The latest figures suggest that node operators need to have 2 million DOT staked by delegators in order to operate — and at the time of writing, that’s worth $14 million.

Each delegator also needs to stake a minimum of 120 DOT in order to win the right to participate in the block validation process.

It’s important to note that Polkadot does things slightly differently because it implements a Nominated Proof-of-Stake mechanism.

This encourages DOT holders to become nominators, and they’ll be tasked with picking up to 16 others as validator candidates. Everyone then locks up their tokens to get rewards.

As Polkadot’s website concerns, fairness is a key consideration: “The staking system pays out rewards essentially equally to all validators regardless of stake. Having more stake on a validator does not influence the amount of block rewards it receives.”

Of course, for crypto enthusiasts with limited technical knowledge — or those with little time — staking through exchanges instead can be a tantalizing proposition.

What makes Polkadot different from other Proof-of-Stake networks?

This is a platform that focuses on inter-blockchain communication — ensuring that different networks can talk to one another.

Polkadot was established by Gavin Wood — and if that name sounds familiar, there’s a good reason why. He co-founded Ethereum and created the Solidity smart contract language.

A key difference with Polkadot lies in how highly customizable Layer 1 blockchains can be established using this infrastructure… and they won’t be siloed from the ecosystem.

At the beating heart of this network are validators responsible for governance and security, as well as ensuring that “parachains” remain in constant communication.

When Polkadot was formed, key decision choices were made that have helped make the ecosystem what it is today. A crucial difference concerns the wide variation of pooling options that are available to users — eliminating the high barriers to entry that often stop validator nodes from receiving staking rewards.

Reddit partners with FTX to enable ETH gas fees for community points

With the new integration, Reddit users will be able to purchase Ether from supported Reddit apps via FTX’s payment and exchange infrastructure platform FTX Pay.

After moving away from Bitcoin (BTC) payments years ago, online forum Reddit now seems to be inching closer to embracing cryptocurrency payments via a new partnership with the FTX exchange.

Sam Bankman-Fried’s crypto exchange FTX and Reddit announced in a joint statement on Tuesday that the platform intends to integrate Reddit’s Community Points in the United States, the European Union, Australia and other markets.

The partnership features the integration of FTX Pay as a payment and crypto exchange solution to unlock new crypto-enabled perks for Reddit Community Points. Introduced in May 2020, Reddit Community Points are a measure of reputation in communities or subreddits, allowing users to own a piece of their favorite communities.

“As a unit of ownership, points capture some of the value of their community. They can be spent on premium features and are used as a measure of reputation in the community,” Reddit said when launching the Community Points two years ago. Reddit Community Points are based on Arbitrum, one of the most Ethereum scaling solutions.

With the new integration, users will be able to purchase Ether (ETH) from supported Reddit apps via FTX’s payment and exchange infrastructure platform FTX Pay. The cryptocurrency can be used to pay blockchain gas fees, or network fees for their Community Points transactions on-chain.

“We’re always working to empower communities and introduce new ways to use Reddit, and decentralized, self-sustaining blockchain technology allows us to do that. By working with FTX, we’re able to do this at scale,” Reddit staff software engineer Niraj Sheth said.

Bankman-Fried noted that the partnership with Reddit marks FTX s commitment to empower online communities to harness the power of blockchain. “FTX Pay’s payment and exchange infrastructure integrates with Reddit Community Points, making the customer experience a more seamless process,” he added.

The news comes amid Arbitrum developer Offchain Labs launching the Arbitrum Nova chain on Tuesday. Arbitrum Nova, the second chain launched in the Arbitrum ecosystem, is designed to serve as the premier solution for Web3 gaming and social applications. Apart from Reddit and FTX, other firms like Google Cloud, Consensys, P2P and QuickNode participated in the launch by becoming inaugural members of Nova’s “Data Availability Committee.”

Related: Reddit announces new blockchain-backed ‘Collectible Avatars’

One of the most popular websites in the United States, Reddit has been largely involved in the crypto and blockchain industry for many years. The discussion platform is known for once allowing users to pay for their premium membership in Bitcoin but removing the opportunity in 2018.

Reddit co-founder Alexis Ohanian has been widely involved in crypto, launching a $100 million Web3 investment fund last year. Ohanian subsequently launched another $200 million Web3 and social media fund in collaboration with the Ethereum scaling solution Polygon.

Bitcoin network difficulty drops to 27.693T as hash rate eyes recovery

The reduced difficulty allows Bitcoin miners to confirm transactions using lower resources, enabling smaller miners a fighting chance to earn the mining rewards.

The difficulty in mining a block of Bitcoin (BTC) was reduced further by 5% to 27.693 trillion as network difficulty maintains its three-month-long downward streak ever since reaching an all-time high of 31.251 trillion back in May 2022. 

Network difficulty is a means devised by Bitcoin creator Satoshi Nakamoto to ensure the legitimacy of all transactions using raw computing power. The reduced difficulty allows Bitcoin miners to confirm transactions using lower resources, enabling smaller miners a fighting chance to earn the mining rewards.

Despite the minor setback, zooming out on blockchain.com’s data reveals that Bitcoin continues to operate as the most resilient and immutable blockchain network. While the difficulty adjustment is directly proportional to the hashing power of miners, the total hash rate (TH/s) recovered 3.2% along similar timelines, as shown below.

At its peak, the Bitcoin hash rate reached an all-time high of 231.428 exahashes per second (EH/s) when BTC prices fell to $25,000 last month in June — raising momentary concerns around extensive power usage. 

Ever since China banned all crypto trading and mining operations in June 2021, the United States picked up slack in becoming the highest contributor to the global Bitcoin hash rate. However, Chinese miners resumed operations in September 2021. According to Statista data, the U.S. represents 37.84% of the global hash rate, followed by China at 21.11% and Kazakhstan at 13.22%.

Previously, Cointelegraph reported that the meteoric drop in GPU prices has opened up a small window of opportunity for small-time miners to procure a piece of more powerful and efficient mining equipment. That being said, miners see falling GPU prices as a means to offset their operational costs amid an ongoing bear market.

Related: Sustainable Bitcoin mining power mix hits 59.5%: BTC Mining Council

Easing up concerns related to exorbitant power usage, a report released by the Bitcoin Mining Council uncovered that nearly 60% of the electricity used for BTC mining comes from sustainable sources.

The study also found that BTC mining accounted for just 0.09% of the 34.8 billion metric tons of carbon emissions estimated to be produced globally and consumed just 0.15% of the global energy supply.

Blockchain-based move-to-earn app STEPN under DDoS attacks after upgrade

Apart from trying to get rid of cheating and bots, STEPN is also working to limit its platform’s availability for users in mainland China.

Solana (SOL)-based move-to-earn application STEPN has reported multiple denial-of-service (DDoS) attacks in the aftermath of the platform proceeding with a major anti-cheating upgrade.

STEPN took to Twitter on June 5 to report that the platform had suffered a number of DDoS attacks that havecaused recovery maintenance and associated improper performance.

According to the statement, STEPN was expecting to secure and recover the servers in up to 12 hours but has not posted an update for 20 hours by the time of writing.

“Our engineers are working hard to fix the problems. We will announce here once recovery is complete. Thank you so much for everyone’s patience,” STEPN wrote.

The attacks came shortly after STEPN introduced its anti-cheating system referred to as “STEPN’s Model for Anti-Cheating,” or SMAC, on Friday. The system aims to eliminate fake users from the platform as well as to prevent fraudulent motion data on the STEPN app in an attempt to gain unfair profit from the platform.

“SMAC system specifically targets the movement simulation by amending real walking/running data, thanks to our machine learning algorithm,” the anti-cheating system’s description reads.

STEPN reported on major platform issues soon after proceeding with the upgrade, with SMAC mistakenly identifying some genuine users as bots. Other problems included network issues caused by a “25 million DDOS attack” as well as the temporary inability to track any bots on the platform.

“We are deeply sorry for the inconvenience caused to users. The anti-cheating update may seem small, but it is actually an important cornerstone of STEPN’s long-term development,” ST said.

Despite the platform’s DDoS issues, STEPN’s native token, the Green Satoshi Token (GST), has not seen any critical decline over the past several days. On the contrary, the GST is up around 10% over the past 24 hours, trading at $1.04 at the time of writing. The token’s market capitalization amounts to $624 million, according to data from CoinGecko.

Green Satoshi Token seven-day price chart. Source: CoinGecko

Related: People want to be paid crypto to exercise in the Metaverse: Survey

Launched in December 2021, STEP is a major move-to-earn mobile nonfungible token (NFT) game allowing users to earn tokens by walking, jogging or running outdoors with an NFT sneaker. The game has a dual token system, comprised of the GST token and the Governance Token (GMT).

The news comes as STEPN prepares to limit its platform’s availability for users in mainland China by mid-July.