Zář 18

New Samourai Wallet Feature Makes Bitcoin Transactions Private

A 2-wallet Samourai Stowaway offers to make transactions private by masking user identity while keeping funds safe.


Bitcoin Transactions Are Pseudo-Anonymous

Bitcoin (BTC) 00 transactions are often described as anonymous because users can exchange the cryptocurrency without providing any personally identifying information.

However, Bitcoin transactions are pseudo-anonymous. The history of each Bitcoin transaction is permanently stored on the blockchain. And, anyone can track and view this information.

The abstract of BIP0069 describes the issue of the leak of private information, as follows,

Currently there is no standard for Bitcoin wallet clients when ordering transaction inputs and outputs. As a result, wallet clients often have a discernible blockchain fingerprint, and can leak private information about their users.

Now, the 2-wallet Samourai Stowaway promises to protect user privacy with a mechanism which is based on the trusted cooperation established between two wallets.

In a separate tweet, user @SamouraiDev said,

We will err on the side of caution and privacy. Only two (or more) wallets that have engaged in a ‘trusted’ relationship will be permitted to collaborate in a cahoots spend.

Wallet Users Can Establish Private Transaction Channels

Currently, each time users perform a payment transaction, they must exchange the Bitcoin address. This handicap impedes Bitcoin from becoming a mainstream currency. For some experts, the implementation of Reusable Payment Codes might help to solve this issue.

BIP47, “Reusable Payment Codes for Hierarchical Deterministic Wallets,” proposes a technique that can help to simplify the payment process while enhancing the user’s level of privacy.

BIP47 allows for the establishment of an invisible channel between two users. As defined by Justus Ranvier, the BIP’s author:

This BIP defines a technique for creating a payment code which can be publicly advertised and associated with a real-life identity without creating the loss of security or privacy inherent to P2PKH address reuse.

The 2-wallet Samourai Stowaway can allow users to establish private payment channels with each other, without revealing their Bitcoin addresses.

In this regard, SamouraiDev indicates that they have taken “an undefined byte in the BIP47 payload and are using it as a ‘feature’ byte so other wallets can detect functionality.”

Do you think that concealing the Bitcoin address will improve the privacy of Bitcoin transactions? Let us know in the comments below.


Images courtesy of Pexels, Samourai, Shutterstock, Twitter/@SamouraiDev.

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Srp 25

Over $6 Billion in Daily Trading Volume Faked Across Top 100 Exchanges

A new report found that over 70% of the top 100 exchanges on CoinMarketCap are engaging in excessive wash trading from three to thousands of times their stated volume.

[Note: This is a guest article submitted by researcher Marco Paez] 


Two-Thirds of 24 Hour Trade Volume May Be Fake

It’s been a month since CoinMarketCap (CMC) made changes to the way they post exchange volume stats after being called out by multiple sources for supporting bloated volume numbers. An adjusted volume metric was added to the site which changed up the rankings substantially, however, the new adjusted rankings still seemed to be suspect by many in the industry.

Released this week, research compiled by the Blockchain Transparency Institute (BTI) gives clearer insight into how massively overstated the daily volume numbers actually are. Tallying up the volume numbers of the top 130 exchanges, the report found that over $6 billion in daily trade volume is being faked, comprising over two-thirds of the total 24-hour trade volume.

Released this week, research compiled by the Blockchain Transparency Institute (BTI) gives clearer insight into how massively overstated the daily volume numbers actually are.

The largest offenders in the top 10 include Bibox, which appears to be wash trading their volume over 85x, Bit-Z to over 469x, ZB over 391x, LBank 4400x. The worst of the bunch is BCEX at over 22,000x.  All of these exchanges trail Binance in the daily unique visitor’s statistic between 50 and 600x.

The top exchange in the USA is Coinbase, which climbs the ranks up to #3. Another big mover into the top 10 is Bithumb at #4 which overtakes Upbit as the largest exchange in South Korea. Upbit is currently under investigation for fraud, money laundering, and wash trading which correlates with data showing an over-reporting of their volume by 11x.

Binance sits at the top of the chart at #1 with a massive amount of unique daily visitors to back them up.  Bitfinex slides into the number 2 spot behind their high dollar clientele and $10,000 minimum deposit for entry.

KuCoin, Cryptopia See Big Gains

A large chunk of the top 25 exchanges have dropped all the way out of the top 100. According to the data, these exchanges typically have less than 1,000 site visitors per day. The majority of these exchanges also seem to be mass produced, as they all appear to be using the same UI and trading engine.

Coinex, which was left out of CMC’s adjusted volume rankings due to transaction mining, finds itself inside the top 25 using this data. Other transaction mining exchanges such as Coinbene and Bit-Z dropped well outside of the top 25 exchanges from their previous rankings.

Kucoin and Cryptopia are the biggest movers-up the charts landing in at #19 and #24, and moving up from #58 and #90 respectively, after watching all the fake volume ahead of them disappear. Both of these sites have unique daily visitor counts in the top 10 of all exchanges. The BTI report notes that many of their customers are trading on low volume and low market cap coins, which keep them outside of the top 10.

The research team states they used data obtained from SimilarWeb on website traffic coupled with order book research conducted by Sylvain Ribes. His report detailed excessive slippage rates of top 15 exchanges including Okex, Huobi, Lbank, and Bit-Z. The combination of these data sets was plugged into a new formula which produced a vastly different top 25 than what is being reported. A rundown of their methodology for the rankings can be found here.

Data collected from SimilarWeb also reports many of these offender exchanges getting up to 90% of their referral volume from rankings pages, overwhelmingly from CMC. This naturally incentivizes wash trading by any exchange looking to move up the ranks.

When compared, the slippage data of the known respected exchanges and monthly traffic data appears to be in correlation. Binance, Coinbase, Bittrex, Bitfinex, Kraken, Poloniex, and Kucoin all have monthly visitor counts well above the rest of the top 100 exchanges as well as very low slippage when their order books were checked.

The report notes that although their data is reported with an accuracy of 1:1 this does not mean there is no wash trading going on, just that none could be proven using their current model.

The report notes that although their data is reported with an accuracy of 1:1 this does not mean there is no wash trading going on, just that none could be proven using their current model.

Lending credibility to these top exchanges, it was recently reported that Coinbase is building a new system to monitor suspicious trading activity known as the Coinbase Trade Surveillance Program. The system in place is one of the ways Coinbase says it is using to prepare for the $10 billion of institutional money waiting to move into the space.

Gemini also started a similar program in April when it partnered with Nasdaq to monitor its marketplace. Nasdaq’s SMARTS Market Surveillance technology is currently monitoring activity across all of Gemini’s trading pairs. Gemini moved up from #26 to #14 in the BTI rankings.

These types of initiatives continue to be implemented as the space matures in preparing the market for institutional investors. With more important ETF decisions looming this year, these exchanges seek to prove to the SEC that they’re doing due diligence in securing their platforms from manipulation.

BTI’s full rankings list of the top 130 exchanges can be found here.

What are your thoughts on misrepresented and overstated value among major exchanges? Let us know in the comments below!


Images courtesy of Shutterstock

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Srp 07

United States is Number One in Cryptocurrency Crime, Data Shows

With the increasing popularity of digital assets, more sophisticated means are being developed to obtain ownership of these highly sought-after coins illegally. A recent study has put the United States at the heart of global cryptocurrency crime. The study also reports that cybercriminals have attacked all top cryptocurrency exchange platforms.


More than Half of all Cryptocurrency Crime Originates in the U.S.

Group-IB recently conducted a study on the global cryptocurrency market with a focus on hacking and cybersecurity. According to the study, the United States accounts for more than half of the cryptocurrency crime in the world.

Of the 50 botnets continually scouring for weaknesses on cryptocurrency exchange platforms, half of their malicious traffic comes from the country. The Netherlands accounts for a further 21.5 percent.

Of the 50 botnets continually scouring for weaknesses on cryptocurrency exchange platforms, half of their malicious traffic comes from the country.

No Safe Haven

Cryptocurrency exchange hacks continue to be a clear and present danger in the industry. According to Group-IB, no member of the top 19 platforms has escaped any illegal incursion from cybercriminals.

Details of the study show that about 720 accounts across all the major platforms have been compromised. This figure is an almost 100 percent increase from the 369 compromised accounts of 2017. More than a third of this number are based in the United States. Russia and China make up the top three affected countries.

Details of the study show that about 720 accounts across all the major platforms have been compromised.

2018 has seen a spate of attacks against virtual currency trading platforms beginning with the devastating Coincheck hack at the start of the year. More than a billion dollars in cryptocurrency was stolen in the attack. In June, two South Korea-based platforms, Coinrail and Bithumb, were also hacked.

Poor Internet Security Culture

Poor internet security culture continues to be at the heart of the problem. Commenting on the issue, the Group-IB Director of Special Projects, Ruslan Yusufov said:

Increased fraudulent activity and attention of hacker groups to the crypto-industry, additional functions of malicious software related to cryptocurrencies, as well as the significant amounts of already stolen funds signals that the industry is not ready to defend itself and protect its users.

Of the 720 compromised accounts, Group-IB reported that more than 20 percent of them used passwords shorter than eight characters in length.

According to the study, users and platforms alike seem ignorant of the need for two-factor authentication (2FA) and the use of complicated passwords. Of the 720 compromised accounts, Group-IB reported that more than 20 percent of them used passwords shorter than eight characters in length.

Do you have 2FA set up on your cryptocurrency wallet? Keep the conversation going in the comment section below.


Image courtesy of The Next Web, Shutterstock.

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Čvn 13

Factors That Will Push Bitcoin’s Price Higher Are Gathering Steam

· June 12, 2018 · 10:30 pm

The hacking of exchanges and relentless attacks from financial powers have, in the short run, adversely affected the price of Bitcoin. However, once the news about these adverse effects fades, investors will be able to turn their focus to several bright ongoing developments.


What Doesn’t Kill Bitcoin Makes It Stronger

The recent spate of crypto exchange hacks, ongoing regulatory issues, and reports of an investigation into possible price manipulation have sent the price of Bitcoin – and nearly every other cryptocurrency – tumbling. Despite these setbacks, the growing consensus is that, given Bitcoin’s inherent resiliency, developments taking place in both technical and financial arenas will enable Bitcoin’s value to retake its ascending trajectory with even greater intensity.

For example, frequent exposure to hacking will eventually make Bitcoin and other cryptocurrencies immune to such attacks. As Forbes put it, hacking may be adversely affecting Bitcoin in the short term, but in the future, the cryptocurrency will rise stronger as a result. In this regard, Christian Ferri, President and CEO of BlockStar, declared:

As in every technology, hacking will be painful for some in the short term; but it will be a major driver in strengthening the crypto ecosystem, making it more secure, which is key for mass adoption.

Moreover, giant financial actors, including exchanges and big banks, are investing heavily and hiring talent to build Bitcoin trading capabilities.

For example, NASDAQ is planning to launch a futures market for cryptocurrencies. In fact, the stock exchange has already joined forces with Gemini, a digital asset exchange, to improve market surveillance to detect market manipulation and fraudulent trades. Additionally, a NASDAQ-powered cryptocurrency exchange platform – DX.Exchange – will be launched sometime this month.

In parallel, The New York Times reports that ICE, the parent company of the New York Stock Exchange (NYSE), is working on its own online trading platform that will allow large Wall Street investors to trade cryptocurrencies.

Goldman Sachs is already ahead of the curve, having begun offering clients the ability to trade Bitcoin futures via one of its New York desks last month. According to The New York Times:

Goldman will begin using its own money to trade Bitcoin futures contracts on behalf of clients. It will also create its own, more flexible version of a future, known as a non-deliverable forward, which it will offer to clients.

Bitcoin Transactions Becoming Cheaper and Faster

Bitcoin Transactions Becoming Cheaper and Faster

On the technical side, Bitcoin has already advanced significantly in solving a key issue – scalability. Technological improvements that include SegWit, Lightning Network, and Atomic Multi-Path Payments over Lightning, and now Bitcoin Core 0.16.0, are already solving the issue of scalability and transaction fees costs.

Recently, Bitcoin enthusiasts celebrated the launch of Bitcoin Core 0.16.0, which among novel features, introduced full support for SegWit. Prominent Bitcoin exchanges, such as Coinbase and Bitfinex immediately started to implement SegWit and, as a result, transaction fees are now lower and faster, thus facilitating near-instantaneous low-value Bitcoin payments. At the present time, nearly 40% of all Bitcoin transactions are processed using SegWit.

In addition to SegWit, many exchanges are using a new technique to increase efficiency – batching transactions. Batching further increases the efficiency of Bitcoin transactions by over 75 percent by clustering multiple outputs into a single transaction.

For a digital currency that has “died” 300 times and counting, Bitcoin’s future is looking pretty bright, indeed. Innovative techniques are making Bitcoin transactions more efficient, and its exposure to hacking attempts will make it stronger. Lastly, major financial institutions are becoming increasingly interested in trading Bitcoin. These are crucial factors that are amalgamating to drive Bitcoin’s value to new highs.

What do you think are the main factors that will eventually drive Bitcoin’s value higher? Let us know in the comments below.


Images courtesy of Shutterstock

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Dub 29

Dubai Police Catch 10-Man Gang Responsible for Bitcoin Robbery

· April 29, 2018 · 4:00 pm

The Dubai police have arrested a 10-man gang that stole AED7 million (about $1.9 million USD) from a prospective bitcoin buyer. The arrest comes less than 48 hours after the police received a report of the robbery incident. Police authorities say recently integrated artificial intelligence (AI) technology in the police force helped with the timely arrest of the gang.


How the Alleged Bitcoin Robbery Occurred

According to the details released by the police, the gang lured two brothers looking to buy bitcoin. The 10-man gang was led by a GCC national and other members are of Asian origins. The two brothers had apparently been trying to find bitcoin sellers when they came across the gang.

The alleged thieves convinced the brothers that they had bitcoin to sell and set up a meeting. In the interim, the gang reportedly tricked a shop owner into obtaining his shop on the pretext of inspecting it in lieu of purchase. As it turns out, the shop owner was looking to sell the shop.

the bitcoin robbers

The alleged 10-man gang

Having obtained the shop for the evening, the gang laid an ambush for the brothers. Some members of the gang were in the shop while the others stood sentry outside. As soon as the brothers entered the shop, they were waylaid by the gang members.

According to Lt. Colonel Al Joker, the director of the Dubai Police Criminal Investigation Department (CID), the gang was armed with guns and sharp objects. They managed to subdue the brothers and steal the money before subsequently fleeing the scene. The robbery occurred in the Al Muraqabbat area on April 25.

A Word of Caution for Prospective Bitcoin Buyers

Commenting on the swift arrest of the gang, Major General Abdullah Khalifa Al Merri, the Commander-In-Chief of Dubai Police, praised the efforts of his men. He also commended the fact that they were able to track down the criminals despite the lack of physical evidence at the crime scene. The police chief also reserved praise for the Analysis Center and its use of AI in tracking down the gang.

Major General Abdullah also sounded a note of warning to prospective bitcoin buyers. He urged them to patronize official channels when buying cryptocurrency to avoid falling prey to robbers. The money has since been returned to the brothers.

The recovered money

The money recovered by Police

Cryptocurrency related theft isn’t only limited to the cyberspace. Being valuable assets, people have been targeted by robbers on account of their crypto holdings. In February 2018, news broke out of a robbery that resulted in the theft of 18 bitcoins in Taiwan.

What are your thoughts on bitcoin robberies? Do you think they are as serious as cyber-based cryptocurrency hacks? Please share your views in the comment section below.


Image courtesy of the Gulf News, the Dubai Police, Shutterstock

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Pro 19

Youbit Exchange Files For Bankruptcy As Hackers Wipe 17% Of Assets

· December 19, 2017 · 4:30 am

South Korean exchange Youbit has announced it is filing for bankruptcy after hackers stole 17% of its net assets.


‘Very Sorry (Again)’

In an announcement on its homepage since reported by various news outlets, the relatively unknown exchange, which is not to be confused with the similarly-named Yobit.net, said it had made “every effort” to stay afloat.

A previous hack in April saw 4000 BTC covertly leave Youbit’s books, an episode from which the exchange never fully recovered.

“I am very sorry to inform you again with the sad news,” the announcement reads.

After the accident in April, we made every effort to strengthen security, recruit personnel, and reduce hot wallet storage… In the meantime, due to the hacking of our company at 4:35 in the morning, funds have been lost from your wallet.

A Wild West Of North-South Korean Hackings

The news comes amid increasing reports of malicious activity involving South Korean Bitcoin exchanges perpetrated by North Korean entities.

Claims hackers have stolen millions of dollars in cryptocurrency over an extended period are circulating in the mainstream press, while even the South’s biggest exchange Bithumb has been left shaken by losses this year.

Youbit has said it will go through a formal bankruptcy procedure to minimize customer fallout, but that balances would still auto-adjust to a fraction of their former worth, with the aim to refund once formal proceedings are over.

“Through various measures such as the sale of cyber comprehensive insurance (3 billion [won]) and the operating rights of the company, the loss to members is expected to be lower than 17%… I will make every effort to minimize this,” the announcement continues.

Only a day earlier, Blockchain CEO Peter Smith warned CNBC viewers that the time was ripe for another major hack in the Bitcoin space.

“We see attacks and breaches about every six months – major breaches – so we’re probably due for one in the next month or two,” he told the network.

What do you think about Youbit’s filing for bankruptcy? Let us know in the comments below!


Images courtesy of Shutterstock

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