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Updated: 5 min 43 sec ago

Litecoin In Beast Mode Surges 60% in 4 Days

3 hours 11 min ago

Litecoin prices have surged over the last week, rising more than 60% since hitting a low over the weekend.

The altcoin rallied hard as it benefited from several different factors, including anticipation surrounding a pending hard fork and steadily improving market sentiment.

The digital currency, which has frequently been described as the silver to Bitcoin’s gold, rose to as much as $237.88 on February 14, a 66.8% increase over the weekly low, CoinMarketCap figures show.

At this level, Litecoin was up more than 65% over the recent low of $142.61 it hit on February 11.

Litecoin Cash Hard Fork

When explaining Litecoin’s recent gains, market observers have repeatedly pointed to the upcoming hard fork that will result in a new digital currency called Litecoin Cash.

When the fork takes place, investors who hold Litecoin will receive Litecoin Cash, a development that has been credited with fueling demand.

Charles Thorngren, CEO of Noble Alternative Investments, also spoke to this development, emphasizing that while all cryptocurrencies have been benefiting from a broader improvement in the market, Litecoin has had an additional tailwind in the form of this hard fork.

Thorngren said:

“The hard fork is a great sign for Litecoin. Seeing Litecoin build its own momentum is very encouraging.”

Another factor that has helped push Litecoin higher is fear of missing out (FOMO), according to Mati Greenspan, senior market analyst for social trading platform eToro.

Greenspan wrote yesterday.:

“Crypto investors have been sitting on their hands for weeks waiting for a rally, so as soon as they saw one starting they jumped on and are currently riding it for all it’s worth,”

While Litecoin has frequently lived in the shadow of its digital sibling Bitcoin, the tide may be turning, at least according to one analyst. Oliver Isaacs, blockchain investor, advisor and influencer said:

“At the moment, I think Litecoin is the gold standard for cryptocurrency transactions, and is driving the industry forward both in terms of valuation and commerce-based integration,”

He emphasized that while speculation has helped drive the digital currency’s recent price movements,

“More people are nonetheless starting to realize Litecoin is faster, cheaper, and offers all of the technological benefits and advantages of BTC like segwit and the lightning network.”

Marouane Garcon, managing director of Amulet, a crypto-to-crypto derivatives platform that focuses on customer success and usability, also spoke to Litecoin’s future success and viability. he said.

Garcon said:

“Litecoin could become king of the micro payments, and if that happens the price will rise with its adoption,”

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Trader BTFD and Scoops Up $400 Million in Bitcoin

9 hours 17 min ago

One trader has taken a huge bet on Bitcoin, buying close to $400 million of the premier digital currency, bitcoin. This comes as the price has bullishly pushed and stayed above $10,000. The price of bitcoin BTCUSD, +7.89%  has increased more than 60% since trading under $6,000 on February 6, helped by signs of growing recognition of digital currencies from officials in Washington.

After the big drop of early 2018, most cryptocurrencies are surging higher in value. Major digital currencies lost as much as 50% to start the year as growing regulation and security fears crippled the market, seeing traders bail on their positions.

Alex Sunnarborg, Founding Partner of Tetras Capital said:

“Not sure who that big buyer was but many have bought this dip and have added since the rebound and additional regulatory clarity in the U.S. and Asia,”

The transaction, which was blasted all over social media and online chat forums emboldened bulls who had argued that $6,000 was a bottom.

Bitcoin address 3Cbq7aT1tY8kMxWLbitaG7yT6bPbKChq64 purchased $344 million worth at an average of $8,400 from 2/09/18 through 02/12/18 – then, doubled down adding nearly 41,000 coins for a new total of 96,000 coins worth around $900,000,000 at today’s price ($9,400).

— Andy Hoffman (#HODLBTC) (@Andy_Hoffman_CG) February 15, 2018

The unknown trader with the bitcoin address 3Cbq7aT1tY8kMxWLbitaG7yT6bPbKChq64 purchased the coins between Feb. 9 and Feb. 12, taking his bitcoin balance from 55,000 coins to more than 96,000.

Jeff Koyen, president of 360 Blockchain USA said:

“However, I am willing to believe that, seeing bitcoin bottom around $6,000, Wall Street smelled blood and jumped back in,”

With bitcoin back above $10,000, the owner of the address is closing is on the crypto billionaires club.

 

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Visa Admits Responsibility for the Overcharging Coinbase Customers

11 hours 4 min ago

Payments processors Worldpay and Visa said Friday they are reversing duplicate transactions that recently caused unauthorized withdrawals for some users of cryptocurrency exchange Coinbase.

The two payments processors said in a joint statement published Friday evening New York time on Coinbase’s Medium blog:

“Worldpay and Coinbase have been working with Visa and Visa issuing banks to ensure that duplicate transactions have been reversed and appropriate credits have been posted to cardholder accounts. This issue was not caused by Coinbase.”

After duplicating charges and draining users’ accounts, Visa has accepted responsibility for the gross error — after initially claiming Coinbase was to blame.

Joint Statement from Visa and Worldpay for Coinbase customershttps://t.co/Izgnl70I8S pic.twitter.com/DQLSs1PrU7

— Coinbase (@coinbase) February 17, 2018

Coinbase users have been experiencing severe problems over the course last week. Numerous users reported erroneous duplicate charges on their credit and debit cards, effectively draining users’ bank accounts and leaving many individuals in potentially dangerous situations.

After initially confirming the reports, Coinbase passed the blame for the situation on to Visa, stating the “erroneous credit and debit charges are the result of Visa reversing and recharging transactions. This was not done by Coinbase.” Many customers, however, were not convinced.

A spokesperson for Visa initially told the Financial Times that Coinbase was actually at fault, stating that the financial institution:

“has not made any systems changes that would result in the duplicate transactions cardholders are reporting […] we are also not aware of any other merchants who are experiencing this issue”

Yesterday, in a surprise move, Visa accepted responsibility for the erroneous mistake. In a joint statement from Visa and Worldpay published on Coinbase’s official blog, the companies explain:

“Over the last two days, some customers who used a credit or debit card at Coinbase may have seen duplicate transactions posted to their cardholder accounts. This issue was not caused by Coinbase. Worldpay and Coinbase have been working with Visa and Visa issuing banks to ensure that the duplicate transactions have been reversed and appropriate credits have been posted to cardholder accounts.”

The joint statement continues:

“All reversal transactions have now been issued, and should appear on customers’ credit card and debit card accounts within the next few days. We believe the majority of these reversals have already posted to accounts. If you continue to have problems with your credit or debit card account after this reversal period, including issues relating to card fees or charges, we encourage you to contact your card issuing bank. We deeply regret any inconvenience this may have caused customers.”

Visa’s and Worldpay’s joint statement is surprising many, as neither company exactly has a history of duplicating purchases and draining customers’ bank accounts on such a large scale. There is a some suspicion amongst crypto commentators that Coinbase, one of the most popular gateways to the crypto ownership, should be the first ever case of such large scale errors.

Rather bizarrely the WSJ has seen fit to blame Bitcoin for the problem.

https://twitter.com/WSJ/status/964687100510720000

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1 Whole Bitcoin Up For Grabs In New Video Game

Fri, 02/16/2018 - 06:51

A new video game, Montecrypto: The Bitcoin Enigma, released on Steam Feb. 20th is going to give players the chance to win a bitcoin. If you are the first player to solve all 24 puzzles you will win a whole Bitcoin, currently valued at $9,800. There’s also a 40% discount if you buy it on the release date, bringing the price down to just $1.19.

The game will retail for $1.99, and it contains 24 puzzles for players to solve. At this retail price 5,000 downloads would be enough for the developers to break even, though that doesn’t factor in the same-day discount or the volatile price of Bitcoin.

Each puzzle unlocks a word in the 24 word key for the wallet containing the Bitcoin. You can view the actual wallet for the Bitcoin-themed video game here. The first person to solve all 24 puzzles will gain access to the wallet and can snag the crypto for their very own.

MonteCrypto’s FAQ page links to to a bit of code on GitHub designed to help people crack their Bitcoin wallet password if they only remember some of it. The developers also suggest checking the FAQ page’s source code for more clues while you wait for the game to be released.

The development team behind Montecrypto: The Bitcoin Enigma is a secret. They currently go by “Gem Rose Accent” but say that they will say who they are after the game has been solved.

The developers said in a press release:

We are trying to keep our identities secret for now. But we can say we are a group of game developers and that we had a crazy idea for a game. As huge fans of treasure hunts we took inspiration from riddles like la chorette d’or (the golden owl), a statue of the owl was buried in 1993 at the same time a series of clues was published, and still nobody has solved the clues to find the owl and claim the 15kg (33lb) statue made of gold and silver.

Montecrypto: The Bitcoin Enigma follows in the footsteps of other games that have offered up financial rewards to players, such as the golden owl treasure hunt listed above. There was the North to Alaska board game, released in 1984, that offered a $20,000 gold nugget contest. (There’s no word if the contest was ever completed as only about 5,000 of the games were originally made.)

There was also Masquerade a picture book, written and illustrated by Kit Williams, published in August 1979, that sparked a treasure hunt by concealing clues to the location of a jewelled golden hare, hidden somewhere in Britain by Williams. The book became the inspiration for a genre of books known today as armchair treasure hunts. In March 1982, Kit Williams received a sketch which he recognized as the first correct solution mailed to him. Williams immediately phoned the sender, “Ken Thomas”, a pseudonym of Dugald Thompson, and instructed him to dig for the hare. He realized that Thompson had not solved the puzzle in the intended manner, but appeared at the time to have blundered into a lucky guess. Shortly after Thompson was formally awarded the prize, Williams received a correct solution sent by two physics teachers, Mike Barker of William Hulme’s Grammar School and John Rousseau of Rossall School. Barker and Rousseau had seemingly unearthed the prize themselves when digging at Ampthill, but had not noticed it inside its clay box; Thompson discovered it in the dirt piles they left behind.

Then there was Treasure of the Golden Unicorn, a supplement for The Fantasy Trip pen-and-paper rpg from 1980. This supplement gave clues within the adventure to the real world location of a small golden unicorn figurine that had been buried. To this day, the figurine has not been discovered.

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Coinbase Exchange Overcharges Customers – Refunds Promised

Fri, 02/16/2018 - 05:40

Crypto exchange and wallet Coinbase has admitted that some customers were erroneously overcharged for credit and debit purchases of crypto, and promises to reimburse all affected customers in full, the Coinbase blog reports Thursday, Feb. 15.

Coinbase said it has fixed the problem which saw customers charged multiple times for transactions, while it has promised refunds to those affected.

4/ If you have been affected by any erroneous charges associated with purchases of digital currency with credit and debit cards, we are encouraging customers to contact their bank or card issuer and ask about the charges. In addition, please contact Coinbase support.

— Coinbase (@coinbase) February 16, 2018

Multiple customers complained on user forums that the app, which allows people to buy and sell cryptocurrencies like Bitcoin and Ethereum, had been charging them multiple times for transactions.

Coinbase put the error down to changes in MMC code, the code used by Visa to identify credit and debit card transactions. The Visa changes came as multiple banks said they would no longer allow users to buy cryptocurrencies using credit cards.

The company said:

“Coinbase will ensure that each affected customer will be refunded in full for any erroneous charge. We deeply apologize for any frustration this may cause. We are actively working with banks, processors and networks to improve the digital currency purchasing experience.”

On Coinbase’s Reddit forum, one user complained of a $67,000 charge, another of a $17,000 hit. A Coinbase spokesperson responded to both comments offering a refund and advising users to contact its support line.

Coinbase is one of the most popular online cryptocurrency exchanges, with around 10m users. It was the top app in Apple’s App Store over the Christmas period as interest in cryptocurrency surged.

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Ellen DeGeneres Shows Bitcoin Some Love

Fri, 02/16/2018 - 02:54

Bitcoin introduced to mainstream spotlight again this week, with a segment on the Ellen DeGeneres talk show. She made a few jokes about the cryptocurrency,  telling her audience that it’s like “a plot twist in a confusing movie.”

DeGeneres went on to say:

“Everybody is talking about bitcoin. Nobody understands it.”

https://twitter.com/TheEllenShow/status/964287117466640389

She told her audience and viewers – which averages several million viewers per episode – to think of cryptocurrencies as a picture of a goat on the internet.

She said:

“Now it’s adorable…and you want to pick it up and pet it. But you can’t because it’s not there, it doesn’t exist except for on that internet right there, just like bitcoin is digital currency,”

DeGeneres added that she’d opt for the goat over bitcoin if given the choice, and said of investors:

“You’ll either be a millionaire or you’ll be totally broke.”

The comedian also poked fun at digital wallets, zeroing in on their vulnerabilities, while noting that they sounded like a Jimmy Kimmel stunt.

She said:

“The digital wallet can either be apps on your phone, or tiny hard drives – which is a really good idea because who wouldn’t feel safe with their life savings on a piece of plastic that could go into the washing machine,”

DeGeneres’ segment is reflective of how bitcoin and other cryptocurrencies are gradually taking on greater importance in the mainstream consciousness, although it show there is a long way to go in terms of educating people on how they work.

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Your Old Men Shall Dream Dreams

Thu, 02/15/2018 - 13:29

Constructive criticism is always welcome, yet the arguments we often hear from ‘esteemed’ economists and investors generally appear to be weak and clueless with very little understanding of the fundamental technology behind Bitcoin. In this article we will take a look at three major figures in investment and economic world to appraise their negative take on Bitcoin.

Charlie Munger

The latest institutional doyen to vent their vitriol on Bitcoin is non-other then Charlie Munger, Warren Buffett’s long-trusted deputy. Charlie Munger, the 94-year-old billionaire investor, is convinced that bitcoin is “noxious poison”.

“I regard the bitcoin craze as totally asinine,” he told a packed hotel ballroom in downtown Los Angeles, where hundreds of what he called “groupies” gathered to listen to their idol.

With the prolific and seemingly unstoppable sentiment driven rise of Bitcoin and cryptocurrency, it seems Munger has well and truly had his feathers ruffled. Speaking about bitcoin in Los Angeles he displayed all the hallmarks of classic cognitive bias, saying:

“I detested it the minute it had been raised. The more popular it got, the more I hated it.”

Yet despite a lack of understanding Munger is quick to definitively state that someone out there is “capable of somehow creating more bitcoin.” He also rehashes the old criticism that bitcoin is full of “crooks, crazies, egomaniacs, people full of resentment, people full of self-pity…..avoid [Bitcoin] like the plague”.

Unfortunately Munger’s bias frames his perspective, as he told the audience that if that is the case them “all of these things [like bitcoin] are beneath you”. Bitcoin people, he continued, are “not my kind of people.”

According to Munger, however, regulators should “let up” on Wells Fargo despite multiple instances of fraud. In defending the bank it is important to note the use of euphemisms that serve to dilute, distract and soften the tone in regards to criminality. Munger says Wells, like many other banks, had misaligned “incentive systems” and they will be “better off” because “they’ve learned”.

But to specifically dissect Munger’s personal bias we need to examine his qualifying remarks. “I expect the world to do silly things from time to time, because everyone wants easy money without much insight or work” he commented, “it’s just disgusting that people have been taken in by this.”

What this shows is that Munger missed one of the investments of any century simply because his bias dictated that making “easy money” from something he doesn’t understand is not valid, if he deems that you didn’t work especially hard or display much insight.

But what of the people who recognized that public sentiment against government, financial institutions and payment processors has been markedly shifting since the financial crisis? Is that not displaying insight?

Bitcoin has also rarely been easy work — ask any individual or business who survived through its 2014-15 downturn: “Bearwhale”, China bans, Mt. Gox, GAW. As the price plumbed the depths of an almost full retrace, those who bought the “blood in the streets” — a concept made famous by Munger’s boss — have now profited enormously. Does Munger considers people profiting from an asset in the midst of a pronounced bull run as somehow undeserving? Is this not exactly the same as Berkshire Hathaway buying Goldman Sachs during the financial crisis of 2008?

The shares in the banking giant had collapsed when Berkshire and Buffett publicly stepped in and struck a deal that he referred to as a “bet on brains” where he would purchase $5 billion USD worth of stock and be offered “warrants to buy 43.5 million shares of the bank’s common stock for $115 anytime before October 2013.” This deal eventually saw Goldman buy back the preferred stock for over $5.6 billion (the difference between the price and Buffett’s ‘strike’ price).

Buffett negotiated the deal on September 24th and a bank bailout deal was approved on October 3rd, 2008, a week later. It’s possible Buffett was able to negotiate this deal because of his financial clout. The very fact that such a famous name was backing Goldman calmed the markets; good for Buffett, good for the bank and good for the government that needed some positive PR. The question remains as to whether Buffett would have invested $5 billion without some kind of inkling that a bailout deal was in the works.

Yet perhaps the gesture would have been received differently had the public known that Goldman itself had implicitly threatened to collapse the financial system if Hank Paulson refused to bailout the banks; an infusion of money that Matt Taibbi described as “one of the biggest and most elaborate falsehoods ever sold”. Goldman Sachs, already teetering on the verge of collapse, stood to lose $20 billion due to their loans to the dumpster fire of risk management that was the insurer AIG, an insurmountable loss.

To assess the position of Charlie Munger, you must understand the system under which Berkshire Hathaway has thrived. For the past 100 or so years the U.S. Federal Reserve has run the book of the financial markets in much the same manner as a market maker does with any altcoin.

Buffett and Munger have adapted a value investing methodology to succeed in this system where the government acts as a backstop to the markets, regulating some industries and deregulating others. Traditionally Berkshire has invested in companies that retain some kind of advantage in this regard.

As such Berkshire Hathaway advocates for government intervention and control where assets are tangible, insured and able to be depreciated. It is not surprising to note then, that Munger is calling for the government to react to bitcoin and “step on it hard. That’s the government’s job.”

Paul Krugman

Paul Krugman’s complete disdain for Bitcoin goes back a long way. In late 2013, he wrote a piece entitled “Bitcoin Is Evil” for his column in The New York Times. Krugman does not see much utility in the cryptoasset at all. Like many of the other establishment ‘haters’ of Bitcoin he has been able to express his hatred quite clearly, but his technical criticisms of this new type of asset and store of value are woefully inadequate.

In a series of tweets on Sunday, January 21, 2018, Krugman illustrated his ignorance on the usefulness and utility of bitcoin around the world.

The opening tweets were probably some of the nicest things the Nobel Laureate has ever said about bitcoin.

Krugman tweeted:

“As I see it, cryptocurrencies like Bitcoin are in effect like digital gold coins, in the sense that they can’t be counterfeited … Cryptocurrencies use cryptographic techniques plus distributed storage to create non-material entities that are nonetheless impossible to fake,”

As I see it, cryptocurrencies like Bitcoin are in effect like digital gold coins, in the sense that they can't be counterfeited. A gold coin is worth its weight in gold, no more, no less; if you're suspicious, you can bite it to make sure 2/

— Paul Krugman (@paulkrugman) January 21, 2018

Digital gold is still the best analogy to sum up the digital asset’s value proposition, and the utility of bitcoin should become more apparent as the world moves deeper into a cashless society. In a cashless society, bitcoin would become the last financial bastion of freedom in a world where the global financial system is under complete control of governments.

Later on Krugman loses the plot somewhat with the claim that online payments that don’t involve a trusted third party aren’t that important. However, as Nick Szabo is fond of saying, trusted third parties are security holes.

Krugman tweeted:

“Cryptocurrency lets you make electronic transactions; but so do bank accounts, debit cards, Paypal, Venmo etc. All these other methods involve trusting a third party; but unless you’re buying drugs, assassinations, etc. that’s not a big deal,”

The moral question is one of the most oft touted arguments against Bticoin, but do people say the same about cash and ATM’s and how many drug deals and other crimes are conducted using cash? Either people will use it or they won’t. Whether you like what they’re doing is a different matter. Bitcoin’s use in darknet markets, ransomware, online gambling and other fringe areas cannot be ignored. Utility is utility.

Secondly, not everyone has access to PayPal, Venmo, and other online payment platforms. They are highly regulated, which means plenty of people fall through the cracks and cannot gain access to them.

Krugman goes on to point out the clunkiness of Bitcoin as it exists today, and in that aspect he’s more or less correct. But what he fails to realise is that the problem is the depth and breadth of all possible uses has made the system difficult to scale, but scaling solutions are coming. All he has to do is look at the progress being made with SegWit and Lightning Network.

Krugman then turned to the often-used argument that bitcoin lacks any sort of underlying value. This should come as a surprise, since he just laid out how it is useful for illicit digital payments.

Krugman tweeted:

“Meanwhile, what backstops a cryptocurrency’s value? Paper money is ultimately backed by governments that will take it in payment of taxes (and central banks that will reduce the monetary base in case of inflation). Gold is actually useful for some things, like filling teeth and making pretty jewelry; that’s not most of its value, but it does provide a tether to reality, along with a 5000-year history,”

Krugman continued.

“Cryptocurrencies have none of that. If people come to believe that Bitcoin is worthless, well, it’s worthless. Its price rise has been driven purely by speculation — by what Robert Shiller calls a natural Ponzi scheme, in which early entrants make money only [because] others buy in.”

If bitcoin is useful for permissionless digital payments, then it has the same sort of underlying utility that the U.S. dollar has in the form of tax payments.

Additionally, the U.S. dollar would also become worthless if people woke up one morning and came to believe that it was worthless.

Of course, all of this misses the point anyway. How much of the value of all the U.S. dollars in the world comes from its use in tax payments? How much of the value of all the gold in the world comes from its use in electronics? Not much.

Krugman misses that storage of value is also a form of utility, and bitcoin is the most uncensorable, unseizable store of value the world has ever seen. You can walk around with a passphrase in your head that can unlock access to thousands of bitcoins, and no one would be the wiser. Not to mention there is no centralized party that can inflate the supply like the Fed or ECB is doing with the dollar and the euro.

Krugman also touched on the high potential for manipulation in the bitcoin market, pointing to a paper regarding the manipulation of the bitcoin price by now-defunct bitcoin exchange Mt. Gox, as an example.

This is another claim with some basis in reality, but it ignores the massive amounts of manipulation and lack of transparency in the traditional financial system, which is what led to the creation of bitcoin in the first place.

Through the use of cryptographic proofs, bitcoin has the potential to become much more transparent and trustless than the traditional financial system. Bitcoin’s monetary policy is already much more transparent than what goes on at the Federal Reserve. There’s a reason someone put up a “Buy Bitcoin” sign while Federal Reserve Chairwoman Janet Yellen spoke against the need for further audits of the central bank.

Bitcoin exchanges are highly centralized institutions, which opens the door for manipulation. However, these exchanges have also become much more regulated over time. Today, it’s far more difficult to run an exchange at the level of incompetence that was found at Mt. Gox.

The potential for market manipulation should decline as the technology around bitcoin improves. Eventually, more trades may take place on decentralized exchanges, where it’s impossible to fudge the numbers.

In his last tweet from his thread on Sunday, Krugman said it’s unclear if the Bitcoin blockchain — or any blockchain for that matter — is useful.

Around $3 billion worth of bitcoin has been transacted on the Bitcoin network per day this year, according to Blockchain; $75 million worth of bitcoin per day was the norm the day Krugman first published an article on the subject.

Krugman’s arguments, as well as arguments from other well-known economists, have not changed much since 2013, but the Bitcoin network has continued to grow. It’s possible that Krugman and his colleagues are unable to comprehend the usefulness of bitcoin as an asset because it does not fit into the regulated, controlled environment they’ve built their economic and political worldviews around.

Nouriel Roubini ( AKA Dr. Doom)

Nouriel Roubini is a New York City University professor of economics, who is also known for his collaborations with the World Bank, the International Monetary Fund and the US Federal Reserve, has predicted the financial crisis. After this successful estimation of his, many economists have looked up to him and listened to his financial advice.

Perhaps that it was also inevitable for him to move on and criticize the digital response that came to the financial crisis he correctly predicted. As a banker who collaborated with three of the biggest financial institutions of the world, it makes sense that he defends fiat currencies and advocates for his own vision in regards to the monetary policies.

And under these considerations, back in 2014 he boldly called Bitcoin a Ponzi scheme and an instrument for criminals and illegal traffickers to undergo their activities. The most recent event at the time was the collapse of the Mt. Gox exchange, and the subsequent volatility led the elite economist to erroneously think that the move was part of a grand centralised scheme which sought to enrich a bunch of computer nerds.

He didn’t seem to understand how Bitcoin works and his statements were not backed by any kind of research on the underlying blockchain technology and nodes.

This Time It’s Personal

The growth of the Bitcoin displeases him personally for the damage it does to his reputation as an economist, and it’s very likely that the institutions that pay him for various services regarding his field of expertise aren’t happy either. Why would anyone from the World Bank or International Monetary Fund be happy, anyway?

However, it seems like the last 3 years and a half have given him enough time to do a little research on the matter. This time he tackled the comparison that people usually make with the Internet (or the “Dot com bubble”, depending on the side you’re on) and argued that the comparison with the blockchain technology is wrong. He must have never heard about smart contracts or applications that are built on the blockchain, and believes that cryptocurrencies are the only application and a failing one at that.

He tries to look knowledgeable of the subject by mentioning that Bitcoin has “forked off” in three branches: Bitcoin Gold, Litecoin, and Bitcoin Cash and uses this to call the deflationary aspect of Bitcoin ‘fraudulent’.

He does not seem to realise that all cryptocurrencies do have an equivalent in Bitcoin and that ultimately believing in Bitcoin does not mean that you have to embrace all Altcoins and every ICO. There are many in the crypto community who would like to see less of both.

Conclusion

With some of the most respected minds in the financial world calling for government action there can be no doubt that many in the halls of government are doing the same.

The bias shown by the likes of Munger and Roubini may be the least of Bitcoin’s worries, for the wrath of a U.S. government clampdown may be the ‘final boss’. However, as it shrugs off each serious challenge thrown at it, Bitcoin may just be strong enough to win out despite the mountain of entrenched opposition it faces.

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Bitcoin Usage Surges in Sacramento

Thu, 02/15/2018 - 05:47

People in Sacramento are increasingly turning to bitcoin exchanging dollars for the cryptocurrency and they are using Bitcoin ATMs to do so. There are currently 10 Bitcoin ATMs in Sacramento. and Mario Fantoni owns four of them.

Fantoni said:

“For Sacramento, Bitcoin is becoming our thing,”

Before you can get Bitcoin, you need a wallet to keep it in. A wallet, in this context, is a tool for storing the electronic ledger of your Bitcoin. It can be either hardware or an application that can be on your mobile phone, or your laptop or desktop computer.

However, it should be noted that buying Bitcoin from an ATM is more expensive then using an online exchange like Coinbase, or Kraken.

Fantoni said:

“Why do you pay 10 to 15 percent in a bitcoin ATM? Because we have to pay the miners,”

A miner is someone who creates new Bitcoin by solving complex equations generated by the Bitcoin apparatus.

Rick Plant is a Bitcoin miner. He set up his operations in his mother’s kitchen.

Rick said:

“She’s OK with it. She’s a great mom.”

Plant networks his computer with a group of other miners. Every 10 minutes, the Bitcoin apparatus generates a fantastically-hard equation. The prize for solving it is Bitcoin.

Plant added:

“No one’s going to figure it out except the computer, and it takes a really long time to get the number right,”

China mines a vast majority 70 to 80 percent of Bitcoin, according to Fantoni:

“These are not people sitting at home on their computer,” he said. “These are large warehouses. People live in there. They have thousands of computers.”

The computers work so hard and generate an enormous amount of heat. They have to be cooled constantly.

But what Plant thinks is cool is the idea of money that’s by the people and for the people.

Plant said:

“I guess it’s just, anti-bank. And nothing to do with… it’s decentralized so there’s no central authority over it,”

California State Treasurer John Chiang said:

“We have to be very smart about that. It’s where the world is moving to. Some have talked about, ‘You can’t breach it,’ but we have had instances where it’s been breached,”

Fantoni says he doesn’t really know yet what that future will look like, but he says that’s part of the fun.

He said:

“You just expect because you are big, and you are powerful, you will survive. Well, we don’t have dinosaurs for a reason — because the climate changed. So imagine a technological climate change. It’s happening in the financial world and with taxes, with power. And the government and the banks and the people that don’t adjust to that change will follow the fate of the dinosaurs.”

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Spanish Government Eyeing Crypto Regulation

Wed, 02/14/2018 - 20:49

Spain’s ruling political party is reportedly drafting legislation that it hopes will help woo cryptocurrency and blockchain companies to the country.

Bloomberg reported, the People’s Party of Spain is eyeing the move as part of a package that would be focused on firms working with new technologies like 3-D printers.

According to lawmaker Teodoro Garcia Egea, who spoke to the news service, the bill could ultimately include provisions that aim to attract companies that are looking to sell tokens via initial coin offerings. The bill may also specify a threshold below which cryptocurrency investments would not have to be reported for tax purposes.

Garcia Ega said:

“We hope to get the legislation ready this year,”

The People’s Party is also encouraging lawmakers to hear testimony from blockchain experts on the matter, and it intends to review regulatory measures that other countries such as Switzerland are developing or have already implemented. Egea told Bloomberg Politics that the technology is good for Spain because it spurs work in other sectors like education, finance and health.

Garcia Egea was quoted as saying:

“We want to set up Europe’s safest framework to invest in ICOs,”

Spain is far from alone in drafting blockchain-related legislation. Gibraltar, a U.K. overseas territory, intends to solidify its position on ICOs this month.

On the macro scale the whole European Union has been actively trying to establish a regulatory framework for Cryptocurrencies and now Spain is becoming more proactive. The latest notice, issued by the National Directorate of Taxes, requires Bitcoin and Alt-coin mining companies, as well as individuals to register themselves in the tax system.

On the downside there are rumors of 10-47% Tax for individuals who mine Digital Currencies. This does mean that only those who engage in mining are required to file for taxes, and if that doesn’t kill mining in Spain, then the high electricity prices of 0.24 euro cents per kWh, will.

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Worlds First Tokenized Car is a Classic 1956 Porsche Speedster

Wed, 02/14/2018 - 12:27

TEND, an ethereum-powered market, is to put a luxury sports car on a blockchain. Not just any sports car, either. For the app’s first ever tokenized car, TEND and Porsche Zentrum Zug will be offering a 1956 Porsche Speedster 356A.

A Porsche dealer in Switzerland has teamed up with TEND, an ethereum-powered marketplace for sharing “tokenized” luxury goods. The Porsche dealer is based in Switzerland’s “Crypto Valley” and in a world first it has put a classic sports car on a blockchain. The car in question is a 1956 Porsche Speedster 356A offered by Porsche Zentrum Zug.

The 1956 Porsche Speedster will be divided into token-based shares that will be both traded and registered on the ethereum-powered automated marketplace. According to Marco Abele, founder of TEND, the app helps to fulfill the “modern generations” yearning for luxury assets. Abele also stated that the app is going to help to expand the generation’s access to these luxury assets.

As for Porsche Zentrum Zug, the Switzerland dealer will act as the “physical platform” for the app. The dealership will handle everything from handing over the keys to share-owners to the maintenance of the car, the management of which is executed using smart contracts.

Yves Becker-Fahr, Porsche Zentrum Zug’s general manager said:

“We try to be a physical platform for an app, or a community around an app that’s otherwise going to be rather anonymous,”

To top it off, if all goes as planned, both the startup and the Porsche dealer have announced that they plan to bring more cars onto the blockchain platform. In fact, TEND has apparently already had a number of discussions with other brands.

Becker-Fahr explained that TEND’s emphasis on experience is also one reason that it initiated a relationship with an individual dealership and not the whole Porsche corporation.

Becker-Fahr said:

“What the people at TEND wanted was a very personalized and individualized link to us here at the Porsche center. It’s really important that we start with a particular car, a particular Porsche center that stands behind it and takes care of it and knows the history and specifics of the car.”

As exciting as this news is, the general manager of Porsche Zentrum did state that it is “too soon to say that we’re on the cryptocurrency train.” However, Becker-Fahr did state that working with TEND is the start for the dealer, even though they “don’t know where it will lead.”

Even if the dealer decides to not pursue any more blockchain applications, this does show the unlimited potential for tokenizing physical goods and services.

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Ripple CEO Warns Cryptocurrency Values Could Drop to $0.00

Wed, 02/14/2018 - 09:57

Ripple boss Brad Garlinghouse has said he does not think all cryptocurrencies will survive. If he’s talking about his own cryptocurrency then some would agree wholeheartedly.

His warning comes after Bitcoin has seen its value plunge throughout 2018 from a record high of nearly $20,000 in December 2017 to now just over $9,000. However, the value has been surging upwards this morning and many crypto observers believe it could hit over $10,000 later today.

Speaking at the Goldman Sachs’ Technology and Internet Conference yesterday, Mr Garlinghouse said he believes “most” digital currencies will eventually lose all their value.

He said:

“It’s not clear what the use case is. It’s not clear the what value proposition is. Long term value will be dictated by the utility of that asset.”

He warned cryptocurrencies are too unpredictable to be widely used due to largely being unregulated and with very volatile price markets. The lack of regulation means the value of Bitcoin can be quite volatile.

In 2018 a number of countries have introduced new rules for using the original cryptocurrency which is believed to have affected its market performance. South Korea recently introduced a raft of measures aimed at regulating Bitcoin. A ban on anonymous trading was implemented by the Asian power in a bid to crack down on all possible criminal activities and market manipulation tactics such as wash trading.

Meanwhile, India’s Government has said it does not consider cryptocurrencies to be legal tender and will try to phase out payments using the online money.

Bitcoin is not the only cryptocurrency to suffer a drop in value after a period of success. Mr Garlinghouse’s own cryptocurrency Ripple has seen its value plummet in 2018. In January Ripple hit it’s ATH and was worth over $3.70 but is now worth just over $1.00.

However, Ripple’s XRP gives the company more control over its value than the original cryptocurrency. With a large amount of currency kept in company reserves, Ripple can limit fluctuations in the price of its online money.

Despite Mr Garlinghouse’s fears that most cryptocurrencies will drop to zero, he does still believe Bitcoin will end a success. Instead of acting like currency the crypto boss believes it could be used to store value – similar to how gold is currently used – rather than for making payments. However, this view is seen as being rather outdated with the advent of SegWit and Lighting Network again making Bitcoin payments both cheap and fast.

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Canadian Bank Launches Digital Vault for Crypto

Wed, 02/14/2018 - 04:53

A cryptocurrency vault aimed at protecting online currencies such as Bitcoin from hacking is about to be launched by a digital Canadian bank, it has been reported. It comes after last month Japanese cryptocurrency exchange Coincheck announced it would have to pay back more than £300million to customers after their system was hacked, affecting 260,000 customers.

Canadian bank VersaBank has announced they are setting up a “Blockchain-based digital safety deposit box” for digital currencies to protect investors from such attacks.

Announcing their brand new vault, VersaBank said:

“Your digital assets are just as valuable as any family jewellery, property deed or stock certificate, but protecting them isn’t nearly as simple. No storage device or commercial cloud service is completely safe, and most blockchain-based secure storage is only for crypto-currency and offered by companies you’ve never heard of, in places you don’t know. Like a safety deposit box, only you have access to what’s inside, and like a safety deposit box, it’s been built by an institution you can trust to be there for the long run.”

President and CEO of the bank, David Taylor, has said he hopes his company’s latest offering to customers will help cement Canada as a cryptocurrency world leader. There is currently a tussle between countries around the world as they all try to present themselves as the Bitcoin capital of the world.

Mr Taylor said:

“We’re using what banks are all about — safety and security — only what we’re doing now is saying that physical box in the basement is getting obsolete. Most people’s really valuable assets are contained in some sort of digital format, whether it be a deed or a contract or a cryptocurrency.”

There have been a number of high profile cases of hacking online money over the past few years. The digital nature of cryptocurrencies means that many traders are often vulnerable to being hit by an online attack.

Mr Taylor added:

“Our differentiator in this market is to be secure and super private. The bank wouldn’t have any kind of back door to open up the vault, we’re just providing the facility that folks could put their digital keys in.”

Banks and governments are currently trying to get to grips with how to deal with cryptocurrencies in society.

While Canada and Japan are competing to improve their attractiveness for crypto investors, countries such as South Korea and India are introducing strict regulations on their use. Equally, as VersaBank look to open the first online currency safe, other banks are wary of crypto. In particular many banks have stopped allowing their customers to use credit cards to purchase crypto.

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Litecoin Cash Fork – Be Careful Out There

Wed, 02/14/2018 - 04:29

Litecoin has an upcoming fork called Litecoin Cash, “sold” as a faster version of Litecoin when it comes to transaction times. However, there is no official endorsement of this fork, in fact the founder of Litecoin, Charlie Lee, sees it as a potential scam.

PSA: The Litecoin team and I are not forking Litecoin. Any forks that you hear about is a scam trying to confuse you to think it's related to Litecoin. Don't fall for it and definitely don't enter your private keys or seed into their website or client. Be careful out there! https://t.co/qXbiIxp5Al

— Charlie Lee [LTC] (@SatoshiLite) February 4, 2018

Forking Hell

One of the main benefits and potential problems with cryptocurrencies is that anybody is free to release their own code and build new, or build upon the code of existing coins. This also means that they can launch their own coin and scam people out of money by claiming it is something else. This is part of the reason why governments are moving towards putting some regulation in place to prevent people from being scammed.

The claim of this new altcoin is to increase the block speed at which the network can process transactions. The creators claim that Litecoin Cash will have faster and  90% cheaper, transaction fees.

The fork will occur at block 1371111, around February 19th, but Lee and the Litecoin team reiterate that it is nothing to do with them.

Load Up Load Up

One of the big draws to crypto forks is free coins when the split occurs. This is exactly how Litecoin Cash founders are generating support; they claim to be offering 10 free LCC tokens for every Litecoin users hold. This is enough to entice those wanting a quick buck to jump into Litecoin, which is up 16% in the past 24 hours following a month of downtrending.

There is a catch, however. In order to receive your free LCC altcoins, a private key from your Litecoin wallet needs to be imported into the new Litecoin Cash wallet. This is inherently risky and should not be attempted. There are some workarounds, but at the time of writing, things do not appear as they seem. Also, the LCC team have not provided a safe option for receiving coins or elaborated on which exchanges will support it.

This has been posted on the website to explain the name choice:

We’re using the Litecoin Cash name simply because it has become customary in recent months for a coin which forks a blockchain to prefix its name with the name of the coin being forked. This practice has become a widely understood convention. We’re not associated or affiliated with Charlie Lee or any of the Litecoin team in any way; we are big fans though.

As we’ve seen previously in the Bitcoin community, a fork is not just the split in the chain; the founders and fans are also divided. Coin loyalties run deep and scams are widespread. Practice safe forking. That means the user must never paste private keys that hold live funds into any website or wallet in order to claim forked coins — including the Litecoin Cash website.

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United Bitcoin – The Most Controversial Hard Fork

Tue, 02/13/2018 - 12:30

Last year, on December 12 Jeff Garzik launched a Bitcoin Core (BTC) based fork called United Bitcoin (UBTC) after Segwit2x failed. At block height 498,777 the snapshot took place, and the UBTC network began just like the rest of the forks in existence, but claiming the tokens is far more complicated then with previous hard forks.

The United Bitcoin Value Proposition

The UBTC project was created by Jeff Garzik, his partner at the blockchain company, Bloq, chairman Matthew Roszak, and Bitbank Group’s Songxiu Hua. The team says it plans to create a credit currency system pegged against various fiat currencies alongside a native smart contract feature. The entire network is modeled after the bitcoin core blockchain prior to December 12, and all active wallet holders are able to receive UBTC at a 1:1 rate. The surprising aspect of this particular hard fork is inactive wallets will go towards the UB Foundation to support innovative blockchain development.

Over the past few weeks, the UBTC team have made some videos detailing their project’s goals to be serious cryptocurrency contender. One particular documentary shows Garzik describing why he thinks UBTC can be a digital asset that engages and unites with the entire cryptocurrency ecosystem. “If I could start with a clean slate what technologies would I include?” Garzik asks an audience during the video. Matthew Roszak says that United Bitcoin will encompass three really important pieces technology, community, and tokenomics by relying on cross-industry innovation.

Only Two Miners and One Controls 70% of the Hashrate

So far the network has minimal infrastructure and community support. At the time of publication, there are only two miners who are processing UBTC blocks; an unknown entity and the mining pool BW.com. The mining pool BW.com has more than 70 percent of the network’s hashrate. The network’s total hashrate is only 50,811.47 TH/s and block intervals can range from an hour and a half, to occasional sporadic 20-40 minute blocks. The network has an extremely low amount of users as there are only 20 pending transactions right now. Blocks are averaging roughly 20-100 transactions, and most block sizes are well below 1MB even though UBTC has the capacity for 8MB blocks.

UBTC has its own full node wallet client for Linux, Windows, and Macintosh operating systems and the source code is available for review. According to the distribution repository, there will also be a lightweight client release soon. There are three other wallets that support the UBTC protocol. As far as exchanges most of them are based in Asia, and a great majority of them are unknown and exchange very little trade volume besides the exchange Okex. At the moment, according to Coinmarketcap statistics, one UBTC is worth $82 USD.

The Most Controversial Fork to Date

The most controversial part of the project is the opt-in airdrop feature which basically means a bitcoin holder must give up some form of identification to obtain UBTC. In order to even get started with UBTC, a user must supply a valid email address and a mobile phone number. After this process, the registrant has to have a valid bitcoin address as well to receive the 1:1 distribution.

Another contentious issue with UBTC is the Foundation’s claiming of “unused addresses” which means after a period of time inactive addresses will be used for future development. At the moment the team has added a “grace period” which has extended the timeframe so bitcoin holders can claim their UBTC.

This requirement to divulge personal information and the fact that the development team will claim Satoshi Nakamoto’s and the inactive addresses of many whales, makes UBTC one of the most contentious bitcoin forks to date. Either of these two issues plus the fact that the network has very little mining infrastructure means that it seems very unlikely that this fork will gain any traction in the wider crypto-community.

Satoshi Roundtable – No Leaders. No Rulers. In Code We Trust.

Tue, 02/13/2018 - 07:44

The Satoshi Roundtable, is an invite-only event that included a number of key players in the crypto industry and the fourth one took place in early February. Many of the attendees are long-time believers in blockchain technology’s ability to solve important human problems. The moto of the event sums it up pretty well;  No leaders. No rulers. In code we trust. This article is a recap of the recap of two of this years attendees:

Caitlin Long

Can’t wait to hear @queentatiana @tatianacoin perform live tomorrow at @SatoshiRoundtbl! pic.twitter.com/Gd4XloiwpL

— Caitlin Long (@CaitlinLong_) February 6, 2018

Observations from this year’s Satoshi Roundtable — a small event attended by the top developers & executives in the the #bitcoin and #crypto community. I’ve tailored the summary for a general audience.

(1) HEDGE FUNDS have invaded the crypto market. No question a lot of hedge fund money is already in it, and family offices are buying now too.

(2) The PACE OF CHANGE remains dizzying and the recent price correction isn’t slowing it down at all.

(3) Lots of DEBATE about both the tech and the process of distributing tokens. I heard almost no “bitcoin vs. bitcoin cash” debate though, which was a relief. Old news, pretty much.

(4) Discussion about forming a FINRA-like SELF-REGULATORY ORGANIZATION for the sector.

(5) REGULATION is coming — lots of debate about how to respond to it and how much it will drive the sector out of the US. Biggest uncertainty remains around how to define custody, especially due to multi-sig and other technologies that don’t fit into an existing box.

(6) AUDITORS. There are a number of crypto unicorns now, and they’re maturing so starting to look for auditors. Consensus was that every audit firm is flailing because they don’t understand the tech. One audit firm will figure it out, break out and dominate the audit field for the sector. On a related point, there was a “show trial” of Bitfinex/Tether, as Tether had an issue due to auditor resignation. It was so clear to me that ALL AUDITORS are struggling with the sector, not just Tether’s auditor. Takeaway: auditors, up your game, and projects, make sure your blockchain can be audited.  Unauditable coins will wither and die if they cause exchanges and investors to struggle to get an audit opinion. They will drop your coin. When asked if the Tether show-trial made the audience feel better about Tether, more than half of hands went up. Not a single hand went up when asked if the show-trial made anyone feel worse about Tether.

(Addendum: auditability means the owner of the coin, such as an exchange or investment fund, is able to prove to its auditor that it owned the coin at a particular time picked by the auditor during an audit. Not all coins meet this standard. Auditability does NOT mean the coin is not private — means the coin is replayable so an auditor can verify that its client owned the coin at that moment in time.)

(7) HUGE CONTRAST between 2 household-name financial institutions, one of which is embracing bitcoin for customers and the other just did a compliance review of its wealth management customers and fired everyone connected to the industry. What a contrast. One of them is smart. The other is not.

(8) PUERTO RICO is the place to move if you’ve got big crypto gains.

(9) WYOMING: I spent a lot of time with crypto miners, who are already starting to set up shop in Wyoming where power is cheap enough to attract them — potentially en masse. The community is watching Wyoming’s proposed blockchain bills to see if Wyoming becomes a crypto haven — and the community is showing up in Cheyenne next week to show support. Thank you!! (Wyoming’s filings bill, incidentally, is HB 0101…a nice coincidence with the Roundtable’s poster pictured above!)

(10) SECURITIES: surprisingly little discussion, but consensus is that these will end up on public blockchains as SEC-compliant tokens do an end-run around the securities industry’s clearing and settlement infrastructure. The tech definitely needs more maturity so that won’t happen en masse this year.

Thanks to Bruce Fenton and team for organizing a terrific event!!

Jameson Lopp

It was my pleasure to once again attend the Satoshi Roundtable; this year it was scaled up immensely and I didn’t even have a chance to talk to all of the attendees. We also had a ton of breakout sessions since it was an unconference format, so what I’ll be covering here is only a small slice of what was actually discussed.

Ron Paul

It was an honor to meet one of the few politicians I respect. Ron has been a champion for liberty and limited government since well before I was born. He gave an impassioned speech about his quest to limit the military-industrial complex, limit the prison-industrial complex, and audit the Federal Reserve. After spending decades in Washington DC, his perspective is that there isn’t a two party system — the parties are two sides of the same coin. He offered a glimmer of hope: so long as it’s legal to be educated outside of the system run by the government, citizens have the opportunity to learn other perspectives and flex their creativity to further the cause of liberty.

"The primary goal of the federal government should not be to keep citizens safe and secure. It should be to preserve our liberty." – @RonPaul pic.twitter.com/LhHvZcjncZ

— Jameson Lopp (@lopp) February 6, 2018

Tribalism & Toxicity

You could argue that tribalism began the moment Bitcoin was created, as it was “us” versus “them” (banks and governments.) But the tribalism within the crypto ecosystem began once developers starting forking the code and creating competing networks. These crypto assets were dubbed “altcoins” because they were alternatives to the king of crypto, Bitcoin. Even this term is tribalistic and carries a negative connotation.

However, certain types of tribalism can be good. For example, look at the NFL. Their tribalism fosters competition between different teams and encourages fans to participate, which brings in greater revenue for the teams and the NFL. But there’s an understanding that the teams all need to cooperate in order to foster competition. This spirit of coopetition makes the NFL strong. I think coopetition is an important concept.

There can be downsides to tribalism that result in weaknesses. For example, there has been a lot of energy expended in the scaling debate which has now turned into a battle for branding and mindshare over the “true Bitcoin” now that the chain has been forked. This can result in us putting on blinders and failing to see external threats. Some folks are rightly concerned that Bitcoin users have been too focused on our internal strife to work on facing developments in the regulatory space and the like.

Developer Education

Demand for developers with blockchain experience is extremely high. A senior developer in this space can easily command a $200,000 per year salary for full time work — even higher for consulting work, to the tune of $200+ an hour.

There are several reasons for the developer crunch:

  1. It’s hard to find good developers, period.
  2. It’s even harder to find devs with experience in a niche space like crypto.
  3. Devs who have been in crypto long enough to be highly experienced are likely also financially independent at this point. They don’t need a salary. As such, in order to get these devs you have to capture their interest with a compelling concept as opposed to compensation.
  4. We’re just starting to see formal training programs pop up

I'm told that there are 14 open blockchain developer jobs for every currently employed blockchain developer. The salary premium on this skill set is at all-time highs.

— Jameson Lopp (@lopp) February 7, 2018

Personal Physical Security

This one is near and dear to my heart after my swatting incident last year. Crypto celebrities are becoming red hot targets as criminals begin to realize that they’re more likely to score a huge payday by extorting someone with crypto assets than they are someone with more traditional assets that are illiquid. For example, if a criminal targeted a billionaire whose wealth was tied up in real estate and the ownership of a professional sports team, it would be mighty difficult to forcibly take those assets. Crypto, on the other hand, can be transferred in a matter of minutes.

What should the crypto wealthy do? Discretion is a pretty good start.

As far as I know, each of these people gave permission to have their name added to this t̶a̶r̶g̶e̶t̶ rich list. May the OPSEC gods have mercy on your souls. https://t.co/CS6afKDJAn

— Jameson Lopp (@lopp) February 7, 2018

We’ve been hearing more and more reports of crypto holders being targeted with varying degrees of success. Death threats and extortion are becoming commonplace. Thankfully many of the extortion threats are bogus and are just folks trying to scare a victim into sending crypto assets. We even had an attendee who received a threat while at Satoshi Roundtable.

The onus is on all of us to sufficiently secure our crypto assets so that thugs are not successful. If we want to stop this trend, everyone needs to take measures to protect their cold storage so that they can’t be coerced into handing it over to an attacker. This means setting up your cold storage in a way that is incredibly difficult for even you to access. One method would be to use multi signature technology to spread the keys across several physical locations and/or key holders.

If you’re already well-known / vocal about being a crypto holder, you may wish to employ techniques to hide your physical location.

Disable geolocation tagging on any social media posts
Don’t post photos / mention a location until after you have left
Move to an undisclosed location and ensure that your name is not on any property / tax records. This can be done by creating a trust or corporation that owns the property.
Use a PO Box / mail collection service so that you don’t give your home address to anyone that would store it in a database.
Hiding is a good first layer of defense, but it’s not foolproof. If an attacker does find you, you’ll want to have multiple layers of physical defenses. The hard question is how much security is overkill.

  1. Hardened doors and windows
  2. House alarms
  3. Dogs
  4. CCTV
  5. Safe Room
  6. Armored vehicles
  7. Weapons with which you are proficient

Featured image by Michelle S. Royal – https://michellesroyal.com/

The Perfect Bitcoin Auction Storm: the $860MM in BTC Seized from Infraud and the $1.8 Billion in BTC Seized in Bulgaria

Tue, 02/13/2018 - 06:16

Guest writer tap21x

Last week Sergey Medvedev was arrested in Bangkok. This was part of a coordinated international raid that netted the arrest of 13 people across the globe associated with darkweb site “Infraud” as reported widely in the press:

https://www.washingtontimes.com/news/2018/feb/9/sergey-medvedev-russian-cybercrime-suspect-arreste/ https://www.cbsnews.com/news/us-russia-cybercrime-dark-web-market-suspect-sergey-medvedev-thailand/

Apparently, Medvedev was the administrator of the escrow service that Infraud ran to prevent members from ripping each other off in their transactions that seem to have been centered largely on stolen credit card information and devices to steal such info. (See https://krebsonsecurity.com/2018/02/u-s-arrests-13-charges-36-in-infraud-cybercrime-forum-bust/)

Sergey Medvedev arrested in Thailand

Transactions were (of course) conducted using bitcoin, and reports immediately came in that Thai police seized 100k BTC from Medvedev (worth $860MM USD at the moment). How Thai police could have gotten his private keys is a matter that has been debated on Reddit since the arrest. While one commenter humorously suggested that skillfully applied $2 pliers could circumvent any digital security measures, it is obvious that many nefarious forms of “advanced interrogation” would have been capable of producing the private keys. What isn’t clear, is what will happen to the reported BTC worth nearly $1 Billion. Will the Thai police keep it? Will the US Government end up with it? Will they split it? Most importantly, will it be sold off?

The US Marshal’s Service obviously has a track record of selling off BTC with the most notable example being the Silk Road Auction in 2014 after the arrest of Ross Ulbricht where Tim Draper and others bought huge chunks of the seizure at auction.

Obviously, an $860 million USD BTC auction would make a lot of headlines and could have a significant impact on BTC markets regardless of what the eventual auction winners planned to do with the coins. But, a lingering question remains: What if Medvedev coins weren’t the only ones seized?

The Thai police apparently elected to announce their BTC seizure. But, the coordinated international dragnet also involved law enforcement in the U.S., Britain, Australia, France, Italy, Kosovo, and Serbia. Chances are good that there was additional BTC seized from the other 12 arrested individuals. Luckily, the Department of Justice’s grand jury indictment of those people might give us a clue how much the DOJ thought those individuals MIGHT have.

Here is the grand jury indictment of 36 people that led to that arrest. (https://www.justice.gov/opa/press-release/file/1032021/download) As the US gov’t is eager to seize any and all ill-gotten gain in such arrests, the document contains a bullet list of how much money the government would like to seize from each of the indicted defendants. The forfeiture list starts on page 46.

In the case of Medvedev, and certain other ringleaders and others, the list just shows “to be calculated”. This makes sense since Medvedev was apparently running Infraud’s escrow service and the Feds didn’t know how much Infraud BTC would be under Medvedev’s control. But, for 21 of the other defendants, the indictment does list actual dollar amounts. My quick back-of-the-napkin addition is showing that these amounts add up to something like $566,047,662.74. Obviously, it’s possible the arrested individuals didn’t have these amounts, these amounts were no longer in BTC, the other 12 individuals actually arrested were not the ones on the list that correspond to the higher dollar amounts, or the arresting authorities were unable to recover these amounts. But, these are the amounts the DOJ would have been very happy to seize from these individuals.

In any case, it wouldn’t be at all surprising if at least another $200 Million in BTC was seized from the other 12 arrested individuals. So, if we add this amount to Medvedev’s $860 million, we could easily be talking about $1 Billion USD in BTC.

Photo: Bloomberg, Bulgaria is the most corrupt country in Europe: former Prime Minister Sergey Stanishev shows the country on a gingerbread map next to former EU Commission President Jose Manuel Barroso

On top of this $1 Billion in Infraud BTC, we also have yet to account for the 213,519 BTC reportedly seized by Bulgarian authorities last May. (See https://www.coindesk.com/bulgarian-government-sitting-3-billion-bitcoin/ and http://www.selec.org/p667/29+May+2017) Apparently, Bulgarian officials have been refusing to comment on what has or will happen to those coins with one report quoting a Bulgarian Prosecutor as claiming that no such BTC exist. Common sense would dictate that the first step in making a large fortune in confiscated cryptocurrency disappear would be to deny it ever existed. So these denials cannot be taken at face value. What we do know is that those coins would be worth something like $1.8 Billion USD today.

So, between these two raids, we could have $2.8 Billion in seized BTC. Here’s the nightmare scenario: some combination of the US/Thailand/Others in the Coalition decide to auction off the Infraud coins, then Bulgaria doesn’t want to get beat to the punch and they decide to auction off their seized coins. All of the sudden, we are staring down the barrel of a $2.8 billion USD BTC auction season. Some will call it far-fetched and impossible. But, the timing is perfect. The BTC market has basically just been steadily falling since the peak.The Bulgarian authorities reportedly seized their coins in May and watched the price skyrocket until December. Why sell since the market was just rising and rising? Now, they have seen the BTC market fall and fall for two months.

Last week, the Bulgarians get the news that the US and the other arresting countries may suddenly have their own treasure trove of $1 billion USD in seized BTC. Now there may be two or more players in the mega cap bulk BTC sales game…plus prices are falling. The Bulgarians may just decide to unleash those coins. We already know that the US Marshals are more than happy to auction off huge amounts of coins at a whim. We also know that the press would LOVE to report on billion dollar bitcoin auctions, and that the resulting headlines could very likely affect the behavior of casual investors and newbs: “They’re going to sell a BILLION dollars of them….yeah, hard pass on buying for now.” That could be the case even if it turns out that Bulgaria has already stealthily and slowly sold off their coins. Whatever the chance may be of any of this occurring, only one question remains: what would the impact be on the market if some version of this DOES HAPPEN involving any substantial portion of the Infraud and/or Bulgarian coins?

tl;dr We could have a hell of a bulk BTC auction season coming up!

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Without a Hint of Irony JP Morgan Releases Positive Crypto Report

Tue, 02/13/2018 - 05:01

According to a recent article by CoinDesk – JPMorgan Chase wrote in a new, 71-page research report Cryptocurrencies could one day help investors diversify their equity and bond portfolios. The report, entitled “Decrypting Cryptocurrencies: Technology, Applications and Challenges” and dated Feb. 9, was drafted by the bank’s Global Research unit.

The report explores a range of subjects related to cryptocurrency and blockchain, exploring the implications for investors, financial firms and central banks, among others. After the comments from the bank’s chairman, president and CEO, Jamie Dimon, who last year issued his now-infamous remark that bitcoin is a “fraud” it is quite a surprise that the bank now predicts that cryptocurrencies might one day play a role in the diversification of global bond and equity portfolios.

The report states:

“If [cryptocurrencies] survive the next few years and remain part of the global market, then they will likely have exited their current speculative phase and would then have more normal returns, volatilities (both much lower) and correlations (more like that of other zero-return assets such as gold and JPY),”

The analysts continue:

“[Cryptocurrencies] are unlikely to disappear completely and could easily survive in varying forms and shapes among players who desire greater decentralization, peer-to-peer networks and anonymity, even as the latter is under threat,”

Looking past the investment picture, the bank’s report looks at the wider question of blockchain use, particularly by private firms who would maintain their own gated or “permissioned” blockchains.

The report authors state that blockchain is a “superior database,” and that despite concerns from regulators, the tech itself is potentially “regulation friendly.”

They explain:

“In our view, the biggest appeal of blockchain will be in the ability to deliver efficiency gains across the value chain. The proposed uses a distributed ledger in the financial sector are likely to be based on known participants defined in advance, with appropriate KYC/AML documentation with tightly authorized access. Consequently, we believe that distributed ledger technology has the potential to offer regulators greater degrees of transparency, higher levels of resiliency and shorter settlement times, reducing counterparty and market risk.”

Likewise, the authors argued that blockchain has the potential to disrupt “cross-border payments, settlement/clearing/collateral management as well as the broader world of TMT, transportation and healthcare.” That said, the report cautions that any benefits would be seen “only where any cost efficiencies offset regulatory, technical and security hurdles” to implementing the technology.

Central Bank Cryptocurrencies

The report explores the possibility of the kind of cryptocurrency (or digital currency) created by a central bank, the sol called ‘Fedcoin’. While Fed officials themselves have largely said “no time soon” to the idea (in contrast with other central banks who are actively investigating applications), JPMorgan’s report digs into the possible implications – and ramifications – of such an issuance.

The report’s authors make the case that, in one sense, a Fedcoin would be supportive of a “central bank-provided payment services” within a cashless system, and that this could help banks implement negative interest rates, which some economists endorse.

However, they also point out that the issuance of such a currency:

“would give non-banks access to the Fed balance sheet. [Which could] endanger the economically and socially important financial intermediation function of commercial banks.”

The authors claimed that a state-issued cryptocurrency could impact the extension of credit to the private sector because it would undermine fractional reserve banking, writing:

“If cryptocurrencies were seen as superior to bank deposits, prompting a wholesale shift into cryptocurrencies, then a much larger share of savings would go to the central bank’s assets (government debt) and less to commercial banks loans, thus potentially dramatically increasing private credit risk premia and reducing the flow of credit to the private sector”

The report also grapples with the problem of anonymity for a state-issued cryptocurrency:

“On the one hand, privacy has come to be seen as an implicit constitutional right, and that may extend to monetary transactions. On the other hand, there are several laws on the books intended to prevent the financial system from being used to launder money or finance terrorism and other activities.”

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EOSfinex Worlds First Decentralised Exchange On the EOS Platform

Mon, 02/12/2018 - 21:06

In a post on Medium yesterday, Bitfinex, the worlds fifth biggest crypto exchange, announced it is planning to create a decentralized exchange utilising EOS.IO technology. The partnership aims to leverage EOS.IO’s platform for horizontal scaling of decentralised apps.

Bitfinex explains that its goal has been to research and sandbox the capabilities of various protocol-level technologies that meet the strict requirements of a high volume, blockchain-based trading platform. The search for a reliable solution led to EOS.IO, which aims at processing tens of thousands of transactions per seconds, with minimal fees and confirmation times.

Decentralised Exchange

The company has said that its new product, EOSfinex, will combine the speed and scalability of EOS with its own leading industry expertise. The result will be an on-chain exchange providing fast, transparent, and trustless transfers of digital currencies. EOS.IO, with the ability to handle thousands of transfers per second, was a good fit with the goals of Bitfinex to continue pushing the boundaries of the high volume trading platform.

J.L. van der Velde, Bitfinex CEO stated:

“We are excited to leverage EOS.io to further advance the field of high performance and trustless on-chain exchange. Block.one continues to display an unwavering dedication to improving blockchain scalability through the EOS.IO platform and it is our hope that this collaboration will allow significant advancement for all decentralised exchange. Our experience indicates that these advancements represent fundamentally transformative capabilities for the blockchain industry, and Bitfinex remains dedicated to leveraging the latest innovations to continue offering the world’s leading trading experience.”

We are excited to announce EOSfinex – a high-performance, decentralized exchange to be built on https://t.co/nGdT3NbVSE.https://t.co/j8ouxX0FiD

— Bitfinex (@bitfinex) February 12, 2018

 

EOS is a blockchain protocol which enables horizontal scaling of decentralized applications (dApps). This effectively allows developers to create high performance distributed applications that do not operate on the same chain. Ethereum developers are working on a similar technology called sharding which will facilitate the same thing when the update is rolled out.

Currently ninth in the market capacity charts, EOS is trading at the time of writing at approximately $9. It has risen steadily over the past week by 50% but is still down from its all-time high of $18 on January 11 as are most altcoins. The total market cap is just under $6 billion and it is traded predominantly on South Korean exchange Bithumb which has 40% of the total. The news of the partnership is likely to boost the trading figures for EOS.

Expect more announcements as progress is made developing the decentralised exchange.

Jay Z Invests in Robinhood Crypto Trading Platform

Mon, 02/12/2018 - 06:58

 

Jay Z’s entertainment company Roc Nation, founded in 2008, has invested in Robinhood’s cryptocurrency trading platform. Arrive, a subsidiary of Roc Nation, stated in an official announcement that it has invested in Robinhood because of its vision to improve the accessibility of financial markets.

Arrive’s statement emphasized the importance of Robinhood’s cryptocurrency venture, adding:

“Robinhood Crypto (…) will bring commission-free trading of Bitcoin and Ether to the Robinhood platform.”

The investment is the latest instance of a celebrity rapper plowing cash into Robinhood’s free-to-trade investment platform. The company also has Snoop Dogg, Jared Lehto and Nasir Jones (also known as Nas) among its celebrity backers.

Launched last year, Arrive was created to partner with early-stage startups and provide them with brand services, business development, advisory and capital services to increase growth (it’s unclear that this would be all that useful for Robinhood since the company raised $176 million).

According to Robinhood, over a million users have applied to join the waiting list of Robinhood Crypto, a platform that enables anyone to trade stocks, exchange-traded funds (ETFs), and major cryptocurrencies such as Bitcoin and Ethereum simultaneously, using the same application.

The entrance of Robinhood into the cryptocurrency market is highly anticipated by the global cryptocurrency community because the majority of Robinhood’s customer base is from the traditional financial markets and trade stocks, ETFs, and commodities on a daily basis. The launch of Robinhood Crypto is expected to introduce many millions of existing users of the Robinhood platform to a relatively new asset class in cryptocurrencies.

A large portion of the crypto community is also interested in Robinhood’s potential to evolve into the first real competitor to Coinbase, which has become one of the largest companies in the sector along with Bitmain and Binance.

Although the launch of Robinhood Crypto is highly anticipated, Arrive’s statement revealed that Robinhood has only “over three million” users and is valued at US$1.3 billion. Existing companies in the cryptocurrency sector such as Coinbase and Binance (over 6 million users) have much larger user numbers and market valuations. Coinbase has well over 10 million users, and it surpassed the 10 million user mark in November 2017. In just six months, Binance has acquired over 6 million users, adding 1 million users per month. This had led some crypto commentators to speculate that Robinhoods impact on the crypto trading market might be overblown.

It is also quite likely that many of the 1 million users on Robinhoods waiting list, are existing customers of Coinbase and Binance and have applied to Robinhood Crypto to have a choice of cryptocurrency trading platforms.

It is still an optimistic sign that billion dollar companies outside of the financial and cryptocurrency industries are investing in cryptocurrency products and exchanges. Evidently, the cryptocurrency markets and most businesses within the sector are still in an early stage in terms of user activity, market valuation, and scalability.

Multi-million dollar investments in the cryptocurrency world by high-profile investors are beneficial for every party in the sector, including businesses and customers, because businesses can have more capital to maintain their operations and customers can benefit from competition in the sector.

Has 4NEW Solved Blockchains Energy Problem?

Mon, 02/12/2018 - 05:32

Currently, blockchain protocols run on Proof of Work algorithms, the means by which transactions are processed on the network. A proof-of-work (PoW) system is meant to deter denial of service attacks and other abuses on the network. To insulate against these attacks, the network encourages competition among its miners, the individuals responsible for processing transactions.

But all that activity comes at a price, and it’s not the usual price that comes to mind when we observe such booms. It’s energy costs.

On September 30, 2017, a single Bitcoin transaction could power 7.5 homes in the US for a day.

At the end of 2017, this figure grew to 10.5 US homes per day.

This huge and growing trend in power consumption is a cause for concern and is something that is often used as a criticism against blockchain tech. As the space continues to grow in both users and ICOs, the electricity consumption needed to process all these transactions will only increase.

However, one ICO that is ongoing right now claims to have a solution. 4NEW Limited, a UK-based Waste to Energy treatment plant, launched its presale in the fall of 2017. The presale successfully raised US$30.5 million from US private equity funds in a conventional round of funding, reaching the sale’s soft cap. With this funding secured, 4NEW has also introduced its own cryptocurrency, KWATT. 4NEW’s renewable energy plant is capable of generating 300 million kilowatts per annum, and each of the 300 million KWATT coins will be backed by 1 kilowatt of electricity.

The first law of Thermodynamics states “Energy is neither created nor destroyed. It simply transforms itself from one form to another.” No where is this law better applied than in the case of 4NEW, the world’s first waste to energy power plant entirely integrated on the blockchain.

According to the founder, Mr. Varun Datta, the architecture of the 4NEW is that of building an ecosystem, where you have the ability to use numerous services all powered and sustained by the 4NEW power plant entirely dedicated to its blockchain. This approach to sustaining the blockchain was exactly why the blockchain came into existence in the first place. Armed with the ability to provide free energy though its Waste to Energy power plant, 4NEW is equipped not only with the first mover advantage but also a competitive edge that the company hopes will make it a dominant players within the crypto-community.

That electricity generated will be used for bitcoin and cryptocurrency mining. So even as blockchain networks become more energy efficient, this new token can provide a sustainable mechanism through which cryptocurrencies can be transacted in an environmentally responsible fashion.

The companies waste to energy power plant will be installed and in operational use by summer 2018.

4NEW has created a utility company solely dedicated to providing energy to blockchain networks, the first of its kind. Thanks to the companies governing structure, coin holders will be able to vote on how energy is allocated. The company has taken a successful first step in tokenizing our civilization’s most sought-after commodity, electricity. This innovation has the potential to change not just the cryptocurrency landscape, but how we manage energy on a global, everyday scale.

4NEW Explanation Video

However, 4NEW are not the only company starting in this growing niche within the crypto ecosystem. Envion is another company looking to get people into mining by focusing on niche markets of finding cheap oversupplied sometimes renewable energy to do the work for investors.

Envion is now one of the top 6 largest Initial Coin Offerings in history as it’s ICO raised over $100 million from more than 23,000 investors.

They have a patent pending Mobile Mining Unit (MMU) which seems to focus on Ethereum and Bitcoin mining via ASIC and GPUs. Where Envion is unique is they plan to bring the mining to where someone is willing to contract or where they can acquire cheap power. One of these MMUs is currently working away in a testbed undisclosed location described as a factory providing both heat and mining power in anticipation of future launch.

This is an early project. Crypto mining is not easy and is quite expensive. With MMUs expected to be all over the map, management and overhead can consume a large portion of any investment. The large influx of funds now needs to be deployed into operational MMUs and get those MMUs onto location and hashing. This should be taken into consideration with any investment. Get updates from Envion on Twitter or at the ICO page which closes in two days or when the hardcap hits. Check out the whitepaper and even the Bitcointalk forum for the tech side and latest updates and rumors.

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