Sluggish Crypto Q2 2024 Saved By Memecoins and Airdrops

Introduction

Despite the much-anticipated fourth Bitcoin Halving in April, which traditionally marks the beginning of a new era in the crypto cycle, the cryptocurrency market’s response in Q2 2024 was surprisingly muted, according to the latest CoinGecko report.

Q1 was a period of exuberance, driven by the approval of the USA’s spot Bitcoin ETFs and the run-up to April’s Halving event. 

Q2 2024 was characterized by choppy trading conditions for Bitcoin and the broader crypto market, where major positive events like the Ethereum spot ETF approval didn’t trigger immediate price surges. The summer holidays – traditionally a bearish time – didn’t help. 

What is ahead in the second half of 2024? The crypto industry faces a mix of challenges and opportunities. The looming distribution of Mt. Gox’s Bitcoin holdings and several large token supply unlocks will impact the market in uncertain ways. 

However, positive developments such as the impending launch of spot Ethereum ETFs in the USA, an improving macroeconomic environment, and continued innovation from development teams offer reasons for optimism. 

Let’s explore the key developments that shaped the crypto landscape from April to June 2024.

Market Capitalization: Weathering the Storm

Despite a decline in total cryptocurrency market capitalization, closing at $2.43 trillion in June, the crypto market exhibited remarkable fortitude. Throughout Q2, the market fluctuated within a defined range, unable to surpass previous all-time highs but maintaining a strong foundation.

This performance contrasted with traditional markets such as the S&P 500’s steady climb during the same period. The divergence between crypto and traditional markets highlights the unique dynamics at play in the digital asset space, and caused some concern. However, Trump’s surprising championing of Bitcoin and Ethereum spot ETF approval have led to a late Q2 surge in crypto prices and market sentiment, as electioneering efforts to capture the important crypto vote began to ramp up. 

Bitcoin: Navigating Post-Halving Waters

Bitcoin, the flagship cryptocurrency, experienced a modest decline in Q2, ending the quarter at $62,734. The much-anticipated fourth Bitcoin halving occurred during this period. Historically, these halvings marked the beginning of new market cycles. However, the immediate market response to this halving was subdued.

The quarter concluded with some market uncertainty as news broke that significant Bitcoin sell pressure was to come: in the form of Mt. Gox repayments and the German government’s seized BTC sales. FUD levels were amplified as usual by the media and key influencers, causing a dump in all crypto prices before it rebounded with Trump’s endorsement. 

Credit: Tesfu Assefa

Mining Landscape: Adapting to New Realities

The Bitcoin mining sector faced some big challenges in Q2. Hash rate reached an all-time high in April in the runup to the Bitcoin Halving, followed by a foreseeable decline. Since the halving, a lot of smaller miners have been flushed out due to the increased difficulty and cost. Despite this setback, the mining industry saw notable developments, including:

1. Major players are expanding into AI applications

2. Significant investments in the mining sector

3. Advancements in mining chip technology

These developments suggest that mining companies are diversifying their operations and investing in technological advancements like artificial intelligence to maintain competitiveness in a post-halving environment.

Airdrop Farming Yields Too Little

One of the defining features of Q2 was the proliferation of token airdrops, as many projects sought to capitalize on the bullish sentiment from Q1. However, these airdrops became a source of controversy within the crypto community, who were vocally aggrieved by the paltry amounts given to them by the likes of Layer-Zero and ZkSync after supporting these projects for months and even years. 

Projects struggled to balance rewarding genuine users while filtering out opportunistic ‘airdrop farmers’. Meanwhile, many airdropped tokens experienced significant price drops post-launch, leading to complaints that the financial benefits were primarily accruing to project insiders and private investors who were looking to establish high-FDV low-float tokenomics. Creating fair and sustainable token distribution models in the crypto ecosystem remains an ongoing challenge, and retail investors are becoming increasingly jaded.

Memecoin Mania Peaks

As airdrop season flamed out, memecoins earned their new status as a dominant force in Q2 2024, capturing a significant portion of market attention and billions in trading volume. Alongside Real World Assets (RWA) and Artificial Intelligence (AI) projects, these categories accounted for a substantial share of market interest. 

2024 Q2 Crypto Industry Report (Credit: CoinGecko)

While new bluechip projects lined the pockets of venture capital funds, memecoin launches were considered fair and transparent by retail investors, who understood for the most part that they were devoid of any real utility other than being a fun lottery ticket. New memecoin launch platform Pump.fun enabled nearly 450,000 new Solana memes to be issued in May alone.

The return of GameStop legend RoaringKitty created pandemonium, resulting in a plethora of low-quality memecoins getting churned out, inevitably draining the wallets of their buyers when they went to zero.

As minor celebrities like Iggy Azalea, Caitlyn Jenner and Andrew Tate piled in, so did some memecoin fatigue, and the market began to dip at the end of Q2 as pump and dump scams and rugpulls became the norm.

Blockchain ecosystems also played a significant role, with platforms like Solana and Base leading in popularity. New Telegram-backed entrant Toncoin ended the quarter strongly, attracting millions of new users through TapFi games like Notcoin and Hamster Kombat.

Ethereum: Supply Dynamics Shift
Ethereum experienced an inflationary quarter, adding to its circulating supply, despite the deflationary EIP-1559 mechanism. This shift resulted from changes in the balance between burned and emitted ETH. The burn rate fell compared to Q1, indicating reduced network activity and lower gas fees. A worrying 120,000 ETH was added to its supply in Q2.

Credit: Ultra Sound

Centralized vs. Decentralized Exchanges: A Tale of Two Trends

Centralized exchanges (CEXs) saw a further decline in trading volume of 15% during Q2 for a total of $3.4 trillion, with Binance maintaining its position as the market leader despite the overall downturn. However, some exchanges bucked this trend, with platforms like Gate.io, Bitget, and HTX seeing increases in trading volume as they ramped up marketing efforts.

In contrast, decentralized exchanges (DEXs) experienced growth of 15%, with a total trading volume of $370 billion driven by a surge in meme coin trading and new layer-1 and layer-2 chains offering supposedly lucrative DeFi airdrops which grabbed the bulk of crypto’s mindshare and capital. 

Uniswap maintained 48% dominance in the DEX space, and Top Ten newcomers like Thruster and Aerodrome made significant gains, due to Blast airdrop farming and Base trading respectively.

Conclusion

The crypto industry’s performance in Q2 2024 paints a picture of a market poised for further growth, but also nervous about macroeconomic issues.

As we move into the second half of 2024, investors and enthusiasts should keep a close eye on emerging narratives and regulatory changes ushered in by events such as the US Presidential Election, the mainstream adoption of crypto spot ETFs, a long-awaited reduction in Fed interest rates as well as the inevitable effects of Bitcoin’s post-halving supply shock coming into play. 

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Quantum Bitcoin Mining: The Future of Cryptocurrency?

Spoiler Introduction

Ah, the apocalyptic headlines: “Quantum computers will break the blockchain and destroy Bitcoin!” But fear not, dear readers, for we’re not quite there yet. In fact, we’re still a ways off from having the necessary 4 million qubits to pose a real threat to the blockchain. So, let’s take a deep breath and explore a more exciting application of quantum computers: Quantum Bitcoin mining.

What’s Bitcoin Mining, Anyway?

Before we dive into the quantum stuff, let’s cover the basics. Bitcoin is a digital currency that uses classical cryptographic technologies to secure transactions. The blockchain is a public ledger that stores all these transactions, divided into blocks. Miners compete to solve complex mathematical problems to validate these blocks and add them to the chain. It’s a bit like solving a giant puzzle, but with more computers and less actual puzzle pieces.

The Blockchain: A Chain of Blocks

Think of a blockchain as a chain of blocks, each one connected to and affecting the others, sharing the weight. Each block contains a list of transactions. When a new transaction occurs, it’s broadcast to the entire network. Miners collect these transactions into a block and add this block to the blockchain. Each block references the previous one, creating a secure and chronological order of transactions. This setup ensures that once a block is added, it’s incredibly difficult to alter the information without changing all subsequent blocks, providing the security and immutability that blockchain technology is known for.

Nonces and Hash Functions: The Key to Mining

The key aspects of Bitcoin mining are nonces and hash functions.

  • Nonces: These are arbitrary numbers that miners tweak to find a hash value that meets the target difficulty. Imagine nonces as the secret ingredient in your grandma’s cookie recipe that you keep adjusting until the cookies come out perfect.
  • Hash Function (SHA-256): This function takes an input and generates a 256-bit output. No matter how many times you input the same data, the output will always be the same. However, even a tiny change in the input will produce a vastly different output. It’s a bit like a magical blender where putting in different fruits always gives you a unique smoothie, but you can’t reverse-engineer the smoothie to get back the original fruits.

The Goal: Finding the Right Nonce

Miners aim to find a nonce that, when combined with the data in the block and passed through the hash function, produces a hash that meets a certain target – usually a hash with a specific number of leading zeros (PoW). This process is like playing a massive game of slot machines, where you pull the lever (change the nonce) over and over, hoping to hit the jackpot (the correct hash value).

Classical Mining: A Computational Nightmare

In classical mining, miners iterate through a massive search space to find the right combination of nonce values that satisfy the proof-of-work conditions. This is a computationally costly problem, which is why miners use high-powered machines specifically designed for this task. The total complexity of this operation is a whopping O(2^256/t), where t is the time it takes to perform the calculation. Imagine trying to find a needle in a haystack, where each strand of hay represents a possible nonce. Now imagine that haystack is the size of the sun – that’s the scale miners are working with!

Credit: Tesfu Assefa

Enter Quantum Algorithms

This is where quantum computers come in. Quantum algorithms like Grover’s algorithm can search this vast space much faster, thanks to the power of superposition and parallel processing.

Quantum Superposition and Parallelism

Quantum computers leverage superposition, where qubits can exist in multiple states simultaneously. This is unlike classical bits, which are strictly either 0 or 1. It’s as if you could be in multiple places at once, doing multiple tasks. This allows quantum computers to process a vast number of possibilities simultaneously, rather than sequentially as classical computers do.

Grover’s Algorithm

Grover’s algorithm is a quantum algorithm that provides a quadratic speedup for unstructured search problems. In the context of Bitcoin mining, it can theoretically reduce the time needed to find the right nonce significantly. Instead of searching through all possible nonces one by one, Grover’s algorithm allows us to find the correct one in roughly the square root of the number of possibilities.

The Reward: New Bitcoin

Assuming we find the right nonce, what happens next? When a miner successfully solves the puzzle, they broadcast the block to the network, and other miners verify the solution. The winning miner is rewarded with new Bitcoin (currently 3.125BTC per block as of April, 2024), plus transaction fees from the transactions included in the block. This reward system incentivizes miners to keep participating and securing the network.

The Current State of Quantum Bitcoin Mining

So, where are we now? The short-term impact of quantum computers on Bitcoin is likely to be minimal. For quantum mining, we need extremely fast quantum hash rates, which are still a ways off.

Quantum Hardware Limitations

Quantum computers are still in their infancy. Current quantum computers, like those developed by Google and IBM, have achieved around 100 qubits. However, to outperform classical miners and pose any significant impact on Bitcoin mining, we would need millions of qubits, operating with low error rates. This level of quantum hardware is still many years, if not decades, away.

Potential Vulnerabilities

There is a vulnerability in pending transactions due to elliptical curve cryptography, which is used in Bitcoin’s public key infrastructure. Quantum computers could theoretically break this cryptography, allowing them to alter transactions before they are confirmed. However, the Bitcoin community is already aware of this and is researching quantum-resistant cryptographic algorithms to mitigate this risk.

Stability and Adoption

The mere possibility of quantum computers existing could potentially destabilize Bitcoin. Investors might be wary of the security implications, and this uncertainty could affect Bitcoin’s value. However, until quantum computers are practically feasible and scalable, this remains a theoretical concern rather than an immediate threat.

Conclusion

In conclusion, Quantum Bitcoin mining is an exciting development that could revolutionize the way we mine cryptocurrency. While we’re not quite there yet, the potential benefits are undeniable. With the right quantum algorithms and hardware, we could see a significant increase in mining efficiency. So, let’s keep an eye on this space and see where it takes us. Who knows? Maybe one day we’ll be mining Bitcoin with the power of quantum computers.

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DeFi Summer: Will We See a 2024 Revival?

The decentralized finance (DeFi) landscape finds itself at a critical juncture: will the second half of 2024 be like the first? In the summer of 2020, Compound kickstarted DeFi Summer. But the TradFi challenger has since experienced a long period of underperformance. Enthusiasm for DeFi has waned, accelerated by the dramatic 2022 collapse of Luna and the loss of value from most governance tokens. Users moved from DeFi to more sustainable ‘real yield’ solutions.

However, beneath the surface, fundamental shifts are occurring that could herald a revival of this revolutionary financial paradigm. Let’s take a look at the current state of DeFi, its historical performance, challenges, and the potential catalysts that could drive its resurgence.

Current State and Historical Performance

Credit: DefiLlama

The DeFi sector has struggled to regain the glory of 2020-2021. The DeFi Pulse Index (DPI), which includes major tokens like UNI, MKR, LDO, AAVE, and SNX, has been on a three-year decline against Ethereum, while Ethereum has underperformed Bitcoin in the current cycle. This long-lived low performance has many people questioning has DeFi’s moment passed.

However, it’s crucial to note that DeFi’s total value locked (TVL) has been resilient. As of July 2024, the total stablecoin market cap is $160 billion and TVL stands at around $85 billion, representing a significant recovery from the lows of late 2022, and about 70% of the all-time high of late 2021. This suggests that while token prices have struggled, the underlying infrastructure of DeFi protocols remain robust. Of the total TVL, 60% is attributed to Ethereum.

Credit: DefiLlama

Daily DeFi trading volumes have also shown signs of recovery, averaging $6.9 billion since March 2024. This is about 70% of the peak volumes seen in November 2021, indicating that user engagement remains strong despite the price declines. Furthermore, the stablecoin market cap has rebounded to $168 billion, over 90% of its 2022 highs, suggesting ongoing demand for decentralized dollar-pegged assets.

Pain Points and Obstacles

Several factors have contributed to DeFi’s recent struggles. 

Many DeFi tokens, particularly from the first generation of protocols, have struggled to show clear utility beyond governance and staking rewards. This has made them less attractive to investors seeking tangible value. Additionally, some protocols issue tokens continually, diluting existing holdings.

The unclear regulatory landscape has hampered institutional adoption – and it’s made retail investors hesitant. The threat of potential regulatory crackdowns looms, limiting growth potential. DeFi interfaces and processes remain complex for the average user, limiting mainstream adoption. New users have to learn to understand concepts like gas fees, slippage, and impermanent loss – and this can be a barrier to entry.

The hype wave has rolled on to memecoins, Layer 2 solutions, and airdrop farming, leaving established DeFi protocols high and dry. These newer, often more speculative opportunities have captured the imagination of retail investors, leaving DeFi seeming boring in comparison. The proliferation of new DeFi protocols has led to a fragmentation of liquidity and user attention, making it harder for any single protocol to achieve significant network effects.

High-profile hacks and exploits have eroded trust in the DeFi ecosystem, creating additional barriers to widespread adoption. The DeFi summer of 2020, and subsequent bull run, set unrealistic expectations for token price performance, leading to disappointment and disillusionment among many investors.

DeFi’s Keys to Success and Potential Catalysts

Despite these challenges, several signs hint at a DeFi revival. As regulators get their frameworks in place, institutional capital can flow more freely into DeFi, potentially triggering a new growth phase. The recent approval of Bitcoin ETFs and the potential for Ethereum ETFs could pave the way for this regulatory acceptance of DeFi.

Protocols like Uniswap are exploring fee-sharing mechanisms, which could set a precedent for other DeFi tokens to offer more tangible value to holders. This shift towards revenue sharing could transform DeFi tokens from purely speculative assets to productive financial instruments, attracting a new class of investors.

Traditional assets like real estate and bonds are getting tokenized: a move that could bring trillions of dollars of liquidity into DeFi protocols. This DeFi plus real-world assets (RWAs) combo could have new use cases, and attract institutional capital. Major players like BlackRock have already begun tokenizing traditional funds, signaling growing interest from mainstream finance.

Recent improvements like Ethereum’s Dencun upgrade have significantly reduced gas fees on Layer 2 networks, making DeFi more accessible. This scalability enhancement could drive increased adoption and enable more complex DeFi applications. Unlike newer narratives, DeFi has proven its resilience through multiple market cycles and has a robust, battle-tested infrastructure.

As the market matures, we may see increased mergers and acquisitions, leading to stronger, more efficient protocols. This consolidation could help address the issue of fragmented liquidity and create more sustainable business models. New ways to sustainably generate yield – such as real yield and productive assets – could reignite interest in DeFi yield farming, attracting both retail and institutional investors. 

Credit: Tesfu Assefa

The Case for a DeFi Renaissance

The factors above suggest that DeFi might be poised for a significant comeback. As the hype around memecoins and airdrop farming inevitably fades, capital may rotate back into established DeFi protocols with proven business models. This return to fundamentals could benefit DeFi protocols that have continued to innovate and improve during the downturn.

Many DeFi tokens are trading at massive discounts relative to their total value locked and revenue generation potential, presenting attractive investment opportunities. Investors could notice they’re undervalued now, and begin an upward price-correction acrossDeFi assets.

Major financial institutions are increasingly exploring DeFi, with some already launching tokenized funds on Ethereum. This institutional interest could bring legitimacy and significant capital inflows to the sector. The potential for DeFi to disintermediate traditional financial services remains a powerful long-term driver of growth and innovation.

Innovations like restaking and improvements in Layer 2 scaling are opening up new possibilities for DeFi applications, enhancing both scalability and functionality. These technological advancements could enable new use cases, and improve the overall user experience, addressing one of DeFi’s key pain points.

Traditional finance is beleaguered by problems such as inflation and low yields – and DeFi’s promise of open, permissionless finance starts to look better and better. Global economic factors could drive more users and investors towards DeFi solutions, particularly in regions with unstable currencies or limited access to traditional financial services.

Conclusion

DeFi has undoubtedly faced headwinds in recent years, yet the underlying technology and value proposition is stronger than ever. The sector has shown remarkable resilience, continuing to innovate and grow despite market pressures. As we look ahead, the convergence of regulatory clarity, technological advancements, and potential market rotations could set the stage for a DeFi renaissance.

The integration of real-world assets, improvements in user experience, and the growing ecosystem may finally bridge the gap between DeFi’s potential and its real-world impact. However, challenges remain. DeFi protocols must continue to innovate, focusing on security, scalability, and user experience. They must also find ways to offer compelling value propositions for token holders, beyond mere speculation.

Ultimately, the future of DeFi will depend on one question: can it actually deliver a more open, efficient, and inclusive financial system? If it can overcome its current challenges and capitalize on emerging opportunities, DeFi may not only revive but eclipse its former glory, reshaping the future of finance in the process.

As with all things in the crypto world, the only certainty is change. For investors and enthusiasts alike, keeping a close eye on DeFi’s evolution in the coming months will be crucial. The seeds of the next major crypto narrative may already be germinating in the fertile soil of decentralized finance.

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Exploring Geometry-Informed Neural Networks: A Data-Free Approach to Shape Generation

In the ever-evolving landscape of machine learning and computer graphics, the introduction of Geometry-Informed Neural Networks (GINNs) marks a significant milestone. Developed by Arturs Berzins, Andreas Radler, Sebastian Sanokowski, Sepp Hochreiter, and Johannes Brandstetter, GINNs offer a novel approach to training shape generative models without relying on extensive datasets. This article delves into the core concepts and implications of GINNs, shedding light on their potential to transform various domains where data scarcity has been a persistent challenge.

The Challenge of Data Scarcity

The traditional approach to training neural networks, particularly in the realm of shape generation, heavily relies on large, annotated datasets. These datasets provide the necessary examples for the network to learn and generalize patterns. However, in fields like computer graphics, design, and engineering, acquiring such extensive datasets is often impractical. The lack of available data hampers the application of state-of-the-art supervised learning methods, necessitating alternative strategies.

Introducing Geometry-Informed Neural Networks

Geometry-Informed Neural Networks (GINNs) present a paradigm shift by enabling the training of shape generative models without any data. The core idea behind GINNs involves three key components:

  1. Learning Under Constraints: GINNs leverage geometric constraints inherent to the shapes being modeled. These constraints guide the learning process, ensuring that the generated shapes adhere to the desired geometric properties.
  2. Neural Fields as a Representation: Instead of relying on discrete data points, GINNs utilize neural fields. Neural fields offer a continuous representation of shapes, making them well-suited for capturing intricate geometric details.
  3. Generating Diverse Solutions: One of the standout features of GINNs is their ability to generate multiple solutions for under-determined problems. This capability is crucial in scenarios where a single correct solution does not exist, allowing for a broader exploration of the solution space.

Credit: Tesfu Assefa

Applications and Results

The researchers applied GINNs to a variety of two and three-dimensional problems, each with increasing levels of complexity. The results were promising, demonstrating the feasibility of training shape generative models in a data-free setting. This breakthrough has significant implications for several fields:

  • Computer Graphics: Artists and designers can leverage GINNs to create complex shapes and models without needing extensive datasets. This could streamline the creative process and reduce the dependency on pre-existing data.
  • Engineering: Engineers can utilize GINNs to design and optimize structures where obtaining a comprehensive dataset is challenging. The ability to generate diverse solutions allows for innovative approaches to problem-solving.
  • Medical Imaging: In medical fields where annotated datasets are scarce, GINNs can assist in generating accurate models of anatomical structures, aiding in diagnosis and treatment planning.

Future Directions

The introduction of GINNs opens several exciting research directions. The potential to expand the application of generative models into domains with sparse data is particularly noteworthy. Future research could focus on refining the techniques used in GINNs, exploring new applications, and integrating GINNs with other machine learning paradigms to further enhance their capabilities.

Conclusion

Geometry-Informed Neural Networks represent a groundbreaking advancement in the field of shape generation. By enabling the training of generative models without relying on extensive datasets, GINNs address a critical limitation in current machine learning methodologies. The work of Berzins, Radler, Sanokowski, Hochreiter, and Brandstetter paves the way for innovative applications across various domains, highlighting the transformative potential of this new paradigm.

For those interested in exploring the detailed mechanics and applications of GINNs, the original research paper is available here. This pioneering work is poised to inspire further research and development in the exciting intersection of geometry and neural networks.

Reference

Berzins, A., Radler, A., Sanokowski, S., Hochreiter, S., & Brandstetter, J. (2024, February 21). Geometry-Informed neural networks. arXiv.org. https://arxiv.org/abs/2402.14009

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Flying cars: Faster, Higher, Stronger

In a video released in April 2022, German startup Volocopter stated their goal was to get their flying car zipping around the skies over the 2024 Summer Olympics.

Volocopter is one of hundreds of start-ups pursuing advanced air mobility – essentially flying cars – and their vehicle is called the Volocity. Publicly announcing timelines in technology is usually considered a bad idea, and as late as February 2024, Politico rubbished their bold claim.

Volocopter can now gloat at the doubters. Last week they announced Olympic success. The technology and legal permissions will be ready for the Paris Olympics, the opening ceremony of which is today, 26 July. People will indeed be able to use flying taxis to hop around Paris during the upcoming Olympics, and President Macron is invited to go for a spin.

It is an interesting moment for electric aviation. Battery technology is boldly tearing forward with sodium-ion, solid-state, silicon anode, and other improvements. Cars, boats, and trains are switching to electric motors. “The electrification of aircraft is leading to many opportunities to develop fundamentally new configurations and to take advantage of distributed and mechanically disconnected propulsion”, one paper says. At the same time: drones have established themselves as a major industry, thanks largely to improvements in computer technology that can control many rotors at once. Most consumer and military drones are electric but unmanned, but it’s time to revisit the question of 1950s futurists: When can I get my flying car?

Credit: Conor O’Higgins using Stable Diffusion

eVTOL and eSTOL

There are two approaches to building flying cars: eVTOL and eSTOL. These stand for ‘electric vertical takeoff and landing’ and ‘electric short takeoff and landing’.

Look at a map of a city and you’ll see that in most cities, airports are the largest plots of land dedicated to any single purpose. There are two reasons for this: space and noise. Planes need long takeoff and landing distances (1.5km or 2km), and they are noisy, so they have to be set apart from homes and schools and stuff. These limitations often force airports outside of cities, and that adds an hour to your trip to Spain.

Dublin-airport-Mindplex
Dublin airport (outlined in orange) compared to Dublin. Note that the airport is huge, maybe 5% the size of the city herself, and is set apart from the city. (Credit: OpenStreetMap)

eVTOLs promise a quieter flying machine that can take off and land vertically (say on a roof). eSTOLs also aiming to run with quiet electric motors, and to take off and land a very short runway. Whereas commercial planes need 1.5-2km runways, eSTOLs aim to need “between 45 and 90 meters of runway” according to the COO of Electra.aero.

This video from Electra beautifully illustrates what an eSTOL should be: it’s simply a plane, but a battery-powered one optimised for urban deployment:

Flying with rotors, flying with wings, a bit of both

Why would anyone build eSTOLs for short runways when eVTOLs with zero runway are an option? It’s because the engineering is significantly simpler: an eSTOL uses familiar airplane technology: it drives forward to create lift under its wings and take to the sky. It is an adapted plane. This allows engineers to use well-understood principles and try to win the race-to-market.

eVTOLs are a little more complex. Most of them (Volocopter’s Volocity is one of the exceptions) require engineers to think about two phases: one where rotors or ducts pick it up and set it down for the vertical takeoff/landing, and another fixed-wing mode for cruising around. This second plane-like flight is quieter and more energy-efficient than the drone-like one.

Little planes or big drones?

Therefore eSTOLs should theoretically be simpler and cheaper than eVTOLs, but in this bubbling, surging industry, design philosophies abound. The Volocity by Volocopter that will share the skies with the Olympic polevaulters is an eVTOL with a single propulsion-type. It takes off and lands vertically like a drone, and then – unlike its competitors Joby, Beta Technologies, Lilium etc. – it continues to fly around in the manner of a drone. The simplicity of this design philosophy got the Volocopter Volocity to market before their competitors. Whereas eSTOLs are small planes, Volocopter’s machines are big drones.

A good Forbes article said, “It’s been estimated that around 300 different companies are trying to build new “flying car” electric VTOL aircraft for the anticipated revolution, and there are almost as many different design philosophies. Most are opting for hybrid designs that feature rotors for vertical takeoff and landing, but regular fixed wings for horizontal flight. There’s a good reason for that — fixed wing flight is much more efficient, and for electric aircraft, battery weight is the key issue, and that makes efficiency really important. In spite of this, one of the companies furthest along in actual deployment is using a much more basic electric multirotor design with no fixed wings. It’s effectively a human sized drone”.

So Volocopter’s approach appears to have won on simplicity and quick deployment. The tradeoffs? Range and noise. Flying with rotors is less energy-efficient than fixed-wing flight, so you drain your battery quicker. The Volocity has a range of 35km.

Is Volocity’s 35km range a problem? Not really. You only need your vehicle’s range to be as long as your trip. Hundreds of kilometers is for city-to-city. A range of 35km is grand for hopping around one city.

For comparison, a video released by Joby, another of a many eVTOL startups, in 2021, says they flew 154.6 miles (248.8km) in a test. That was their battery-powered version; for longer ranges, they feel hydrogen is the way to go, and last month (June 2024) flew their hydrogen eVTOL for 523 miles.

An invaluable resource for tracking and comparing these projects is the Advanced Air Mobility Reality Index. Tech news is so full of hype and self-awarded “breakthroughs” that it’s handy to have someone independent keeping track of the projects and their technology readiness levels. It provides a league table (Volocopter is currently winning) that usefully lists the intended use-cases (flying taxi being the most common) and whether the bird is piloted or autonomous.

The Volocity aircraft, made by Volocopter, flying at the Paris Air Show in 2023. (Credit: Photo by user Ibex73 from Wikimedia Commons)

Noise

I used to write about breaking tech that would change the world. Now I write about breaking tech that won’t make such a racket. I must be getting old.

The noise made by helicopters is a major nuisance and has limited them to very infrequent flying. And if you’ve ever been near a drone, you know that their noise is not a detail.

Noise is the hardest engineering problem in eVTOL/eSTOL, and, in my opinion, the biggest shortcoming of Volocopter’s Olympic success. Electric cars run much quieter than combustion ones, but no such luck with aircraft. The noise from helicopters, drones, and airplanes doesn’t mostly come from the engine, but mostly from the interaction of the craft and the air (Likewise, electric cars are actually just as noisy as combustion cars at high speed, because wheel-noise is more important than engine-noise).

A valuable paper on low-noise electric aircraft puts it this way: “Although these aircraft use quiet electric motors instead of noisier combustion engines, this is not likely to have a significant effect on the overall noise radiation of the vehicle, because the noise of rotor and propeller driven aircraft is generally dominated by the aerodynamically-generated noise of the rotating blades. Instead, the main acoustic impacts of electrification are a result of the new freedoms of electric propulsion, especially distributed electric propulsion, offered to the aircraft designer”.

The fluid dynamics of why flying machines are noisy is extremely complex. eVTOLs spin their rotors at slower speeds than helicopters do to avoid the loud thwap-thwap noise that helicopters make. Yet turbulent flows bumping the body of the bird cannot be fully avoided, and complex multirotor designs send vortexes all over the place, including into collusion with their neighbouring rotors, creating noise.

Progress is being made on these problems (for example, a March 2023 paper found that using six blades instead of four lowered noise by 5 to 8 decibels, losing only a 3.5% thrust in the process. Volocopter say they are using “the lowest disc loading currently on the market… and a low RPM (revolutions per minute) rate” to reduce noise (‘Disc loading’ is the ratio of the bird’s weight to the area of its rotors; Volocopter positively bristles with rotors.)

This detailed fluid dynamics work can chip away at the noise problem – sensible work for centibel gains – but the reality of the engineering says don’t expect a masterstroke that will suddenly make eVTOLs 100× quieter. The only technology that may be an exception is the Lilium Jet. Instead of rotors, it uses 36 small ducted fans (so that the ducts trap sound), and is an undeniably beautiful-looking product:

Lilium sits at a mediocre 11th on the ‘Reality Index’, and until independent tests have certified the noise-levels of each experimental eVTOL, we have to be cautious.

A loud note of caution

I agree with the need for electric urban mobility. But let me question the need for flight.

‘Energy-efficient flight’ is, to some extent, a contradiction in terms. Under 0.25% of international freight is transported by plane (most goes on ships), and there’s a reason for that: energy costs. When you have to expend energy to do move a load from A to B, why also expend energy fighting gravity? You need a justification. Traffic might be a justification, but there are simpler ways to solve that (such as bicycle lanes). Emergency vehicles such as ambulances should fly: they have an excellent justification.

The noise issue is the hardest engineering problem around flying cars. Safety can be solved. Autonomy can be solved. eVTOL companies are quick to make impressive claims about their quiet birds, so we need an independent agency inspecting them for sound and publishing data. As this data is missing, and as I haven’t had the chance to get up close, we have to use some guesswork to figure out how loud they are.

I lean towards skepticism, and suspect that Volocopter have not made much progress on the sound problem. The approval from the City of Paris means they have achieved good safety standards, but it comes with limitations: they aren’t just allowed zip anywhere at any time. The authorities want them flying a limited number of flights at constrained times of the day. Volocopter’s website says they will “map out routes inside the city that ensure the Volocopter aircraft do not generate a cacophony that exceeds the city’s permitted noise levels. Part of its approach will involve flying at specific times of day.” This strongly implies there is quite a lot of noise. The most skeptical interpretation is to say they’ve simply built a small helicopter: those are also approved to fly low flight volumes at major events like the Olympics.

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From Farm to Fork: The Blockchain Revolution in Agriculture and Food Supply

Blockchain technology, initially conceptualized for digital currencies, has rapidly expanded into various sectors, including agriculture and food supply chains. This innovation offers a new level of transparency and efficiency, addressing long-standing issues in these sectors. This article explores the transformative impact of blockchain on agriculture and food supply chains, highlighting ongoing projects, challenges, and future potential.

The Need for Blockchain in Agriculture and Food Supply Chains

The traditional agriculture and food supply chains are often plagued by inefficiencies, lack of transparency, and trust issues among stakeholders. Complex and paper-heavy processes, risks of fraud, and high operational costs are common challenges. Blockchain technology offers a solution by providing a decentralized, immutable ledger that enhances transparency, traceability, and trust across the supply chain.

Blockchain Applications in Agriculture

Blockchain technology is being used to track the journey of food products from farm to table, ensuring each step is transparent and verifiable. Here are some key applications:

Food Traceability: Blockchain enables detailed tracking of food products through the supply chain. For instance, Walmart and IBM have used blockchain to trace the origin of mangoes, reducing the time needed to track the fruit from six days to a few seconds. This capability is crucial for food safety, enabling quick identification and removal of contaminated products from the market.

Supporting Small Farmers: Blockchain can help small farmers by providing them with better access to markets and financial services. Platforms like AgriLedger and FarmShare use blockchain to increase trust among small farmer cooperatives, facilitate fair pricing, and improve market access.

Food Safety and Quality Assurance: Blockchain, combined with IoT devices, can monitor and record conditions throughout the supply chain, ensuring products are stored and transported under optimal conditions. This integration helps in maintaining food quality and safety, preventing losses due to spoilage.

Reducing Food Waste: Blockchain can optimize supply chain operations, reducing waste and improving efficiency. By providing real-time data on inventory and demand, blockchain helps in better planning and resource allocation.

Challenges and Barriers

Despite its potential, blockchain adoption in agriculture and food supply chains faces several challenges:

Technical Barriers: Implementing blockchain requires significant technical infrastructure and expertise, which can be a barrier for small and medium-sized enterprises (SMEs) and farmers in developing countries.

Regulatory and Policy Issues: The lack of standardized regulations and policies for blockchain technology can hinder its adoption. Governments and regulatory bodies need to create a supportive framework to facilitate blockchain integration.

Scalability and Interoperability: Blockchain systems must handle large volumes of transactions efficiently. Scalability and interoperability with existing systems are critical for widespread adoption.

Cost and Accessibility: The cost of implementing blockchain technology and the required digital literacy can be prohibitive for some stakeholders, particularly in developing regions.

Case Studies and Success Stories

Several successful blockchain projects in agriculture and food supply chains demonstrate the technology’s potential:

AgriDigital: This platform executed the world’s first sale of 23.46 tons of grain on a blockchain in 2016. Since then, it has transacted over 1.6 million tons of grain, involving $360 million in grower payments. AgriDigital aims to build trusted and efficient agricultural supply chains using blockchain.

Louis Dreyfus Company (LDC): LDC conducted the first blockchain-based agricultural commodity trade, involving a shipment of soybeans from the US to China. The use of blockchain reduced document processing time to a fifth of the usual time, demonstrating its efficiency.

Carrefour: The European grocer uses blockchain to verify standards and trace food origins for various products, including meat, fish, fruits, vegetables, and dairy. This initiative ensures transparency and boosts consumer trust.

Credit: Tesfu Assefa

Future Prospects

The future of blockchain in agriculture and food supply chains looks promising. As technology matures, it will likely overcome current challenges, leading to broader adoption. Key areas for future development include:

Enhanced Integration with IoT: Combining blockchain with IoT devices can provide real-time monitoring and data collection, further improving supply chain transparency and efficiency.

Smart Contracts: The use of smart contracts can automate transactions and enforce agreements, reducing the need for intermediaries and enhancing trust among stakeholders.

Global Standards and Regulations: Establishing global standards and regulations will be crucial for blockchain’s widespread adoption in agriculture and food supply chains.

Education and Training: Increasing awareness and providing training on blockchain technology will help farmers and SMEs leverage its benefits effectively.

Conclusion

Blockchain technology holds significant potential to revolutionize agriculture and food supply chains by enhancing transparency, traceability, and efficiency. While challenges remain, ongoing projects and future developments indicate a bright future for blockchain in these sectors. By addressing current barriers and fostering innovation, blockchain can create more sustainable, trustworthy, and efficient food supply chains.

Reference

Anwar, Hasib. “Blockchain in Agriculture: Use Cases and Examples.” 101 Blockchains, July 11, 2023. https://101blockchains.com/blockchain-in-agriculture/.

Crypto Business Review. “Be Inspired: AgriDigital – Blockchain for Agri-supply Chains,” March 24, 2021. https://cryptobusinessreview.com/be-inspired-agridigital-blockchain-for-agri-supply-chains/.

Kamilaris, Andreas, Agusti Fonts, and Francesc X. Prenafeta-Boldύ. “The Rise of Blockchain Technology in Agriculture and Food Supply Chains.” Trends in Food Science & Technology 91 (September 1, 2019): 640–52. https://doi.org/10.1016/j.tifs.2019.07.034.

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$570 Million Stolen: Crypto Hacks Surge in Q2 2024

Introduction

The cryptocurrency industry faced significant security challenges in Q2 2024 – and it failed some. Let’s look at the latest reports from the two leading crypto security firms: Immunefi and Hacken. The analyses paint a concerning picture of the current landscape, highlighting both familiar vulnerabilities and emerging trends. Data reveals a substantial increase in successful attacks which raises alarm bells about the need for improved security measures across the crypto ecosystem.

Overview of Q2 2024 Losses

Credit: TradingView

According to Immunefi, Q2 2024 saw a staggering $572.7 million lost to hacks and frauds across 72 incidents, representing a dramatic 112% increase compared to Q2 2023. Hacks continued to be the predominant cause of losses in the crypto space, with the vast majority of funds stolen through direct exploits rather than frauds or scams. This can be attributed to less awareness when markets trend upwards, which make it easier for bad actors to exploit newer users and stretched protocols.

Major Incidents

Two major incidents stood out in Q2, accounting for over 60% of total losses. The largest hack targeted DMM Bitcoin, a Japanese crypto exchange, resulting in a massive $305 million theft. This was followed by an attack on BtcTurk, Turkey’s largest cryptocurrency exchange, which suffered a $55 million loss in a cyberattack. These high-profile incidents highlight the potential vulnerabilities in even well-established exchanges and the devastating impact of successful attacks.

Shift in Attack Focus: CeFi vs. DeFi

Q2 2024 saw a significant shift in attacker focus, with Centralized Finance (CeFi) platforms bearing the brunt of attacks. CeFi losses totaled $401.4 million, accounting for 71% of all funds lost. This marks a massive 984% increase compared to Q2 2023. In contrast, Decentralized Finance (DeFi) platforms saw a 25% decrease in losses compared to the same period last year. This shift suggests that attackers may be finding centralized platforms to be more lucrative targets, possibly due to larger pools of concentrated funds.

Most Targeted Chains

Ethereum and BNB Chain remained the primary targets for attackers, with Ethereum suffering 34 incidents and BNB Chain experiencing 18.

Arbitrum, a layer-2 scaling solution for Ethereum, came in third with four incidents. 

Ethereum’s dominance as the most targeted chain highlights the ongoing need for heightened security measures in its ecosystem, especially as its total value locked (TVL) has grown significantly over the past year.

CeFi Accountable for the Biggest Losses (Credit: Hacken)

The types of attacks employed by malicious actors varied, but access control issues caused the highest losses at $397.2 million. Price oracle issues and flash loan attacks also contributed significantly to the overall losses. This breakdown helps identify areas where security measures need to be strengthened across the industry, providing valuable insights for both developers and security professionals.

Comparison to Previous Periods

The big increase in losses from Q2 2023 to Q2 2024 is worrying, especially considering the growth in total value locked across the crypto ecosystem. While the overall DeFi TVL tripled from about $50 billion to $150 billion by June 1, losses grew even faster. 

It’s worth noting that despite fewer individual hacks compared to Q1 2024, the severity and financial impact of Q2’s attacks were significantly higher, indicating a trend towards more sophisticated and damaging exploits.

Implications for the Industry

The major hacks targeting CeFi platforms highlight the need for enhanced security measures in centralized systems. As the crypto ecosystem grows, maintaining security becomes increasingly challenging, and it will get worse if and when the 2024/2025 bull market returns. Projects must balance the desire for rapid growth with the need for robust security measures. 

The industry may need to develop more comprehensive insurance solutions and standardized recovery protocols to soften the blows dealt by large-scale hacks. Additionally, these high-profile incidents may lead to increased regulatory scrutiny, potentially resulting in stricter oversight of crypto platforms, especially centralized exchanges.

Security Measures and Best Practices

Given the persistent threat of hacks and exploits, individual users and investors should take proactive steps to secure their assets. Some essential measures include:

  • Using hardware wallets for long-term storage
  • diversifying holdings across multiple platforms, 
  • enabling two-factor authentication
  • staying informed about the latest security best practices

By adopting these proactive steps, users can significantly reduce their risk exposure in the face of evolving security threats.

Positive Developments

Despite the concerning trends, there’s some good news in crypto security. The industry is showing an improved ability to recover stolen funds, with about 5% of the total losses in Q2 2024 being recovered. 

This represents a slight improvement from previous quarters and demonstrates the growing capability of the ecosystem to respond to and mitigate the impact of attacks. Additionally, despite Ethereum’s TVL growing by nearly 400% year-on-year, it only suffered $8 million in losses this quarter, indicating some improvement in DeFi defenses. This resilience in the face of rapid growth is an encouraging sign for the industry.

Credit: Tesfu Assefa

The Importance of Audits

The reports reveal a critical gap in security practices among many projects. Out of 41 hacked projects analyzed, only seven had undergone the relevant audits. This alarming statistic underscores the vital importance of thorough security measures in preventing large-scale exploits, including regular audits and robust bug bounty programs. 

History has shown that projects that prioritize these security measures are less likely to fall victim to attacks, signposting a clear path to better security.

Conclusion

As we move forward, a collaborative effort between developers, security researchers, and users will be crucial in building a more resilient and secure crypto ecosystem. The industry must prioritize security measures to protect users and maintain trust. By learning from these incidents, implementing stronger security protocols, and fostering a culture of vigilance, the crypto ecosystem can work towards a more secure future for all participants.

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