Algorand Rolls Out Insane New Scaling Techniques

Algorand is rolling out their own novel scaling techniques, starting with stake proofs, which were implemented last Wednesday. 

The introduction of stake proofs increased Algorand’s Transactions-Per-Second from around 1,100 to over 6,000. More importantly, stake proofs introduced “post-quantum security” to the Algorand blockchain. 

This means that transactions on Algorand cannot be manipulated by quantum computers. Now although the actual threat of manipulation like this is a long way away, Algorand is one of the first to be prepared. 

I’ll also quickly note that post-quantum security is something that the US government said it would be testing this year for its upcoming digital dollar. The Fed has partnered with MIT for this research, and MIT is where Algorand founder Silvio Micali is based. 

Algorand’s next scaling upgrade will be block pipelining. This will increase Algorand’s TPS from 6,000 to roughly 46,000 – making it about as fast as Solana, which is one of the fastest blockchains. 

Interestingly, it seems that Cardano used pipelining as part of its own scalability in the Vassal upgrade. In any case, the harsh reality is that neither ADA nor ALGO will probably perform too well in the short to medium term. 

This is simply because their macro factors are keeping investors away from “speculative” assets like cryptocurrencies. 

That said, the significance of these upgrades for the next crypto bull run cannot be understated. 

Both Cardano and Algorand are laying the foundations they need for their ecosystems to flourish, and it’s easy to imagine many of the next 1000x altcoins during the next bull run will be found on the Cardano and Algorand blockchains. So keep an eye on both!

IRS Wins Order for SFOX Customer Data in Crypto Tax Push

The U.S. Internal Revenue Service (IRS) has been given the authority to summon M.Y. Safra Bank via a so-called “John Doe” summons, which claims there are unknown people who haven’t reported crypto gains on their taxes within the ecosystem. The summons enables the tax authority to gather information on customers of the bank’s partner SFOX, a crypto prime dealer. 

This is the latest in a series of such summons issued to crypto companies like Kraken, Circle and Coinbase. 

IRS Commissioner Charles Rettig stated, 

“The government’s ability to obtain third-party information on those failing to report their gains from digital assets remains a critical tool in catching tax cheats.” 

In its petition in support of the summons, the IRS pointed to “significant tax compliance deficiencies” related to cryptocurrency transactions made through the SFOX platform. 

“Taxpayers who transact with cryptocurrency should understand that income and gains from cryptocurrency transactions are taxable,” U.S. Attorney Damian Williams said in a statement, adding that the information sought by the summons “will help to ensure that cryptocurrency owners are following the tax laws.” 

SFOX has over 175,000 registered users who have collectively undertaken more than $12 billion in transactions since 2015, connecting crypto exchanges, over-the-counter virtual currency brokers, and liquidity providers. 

M.Y. Safra Bank partnered with SFOX in 2019 to offer its customers cash deposit accounts backed by the Federal Deposit Insurance Corporation, with users being able to use those accounts to buy and sell digital assets. 

According to IRS Commissioner Charles Rettig, the court decision to grant the summons “reinforces our ongoing, significant efforts to ensure that everyone pays their fair share.” 
“Taxpayers earning income from digital asset transactions need to come into compliance with their filing and reporting responsibilities,” he added.