Kvě 25

The Sweet Smell of Success: Unilever-Owned Schmidt’s Naturals Adds Bitcoin as Payment Option

· May 24, 2018 · 7:00 pm

There are a lot of odd things you can buy with Bitcoin – spy gear, lasers, alpaca socks, and now, high-end deodorant.


‘Scent or Payment Method’

Deodorant maker Schmidt’s Naturals is the latest company to let online shoppers buy its products with Bitcoin. Co-founder and CEO Michael Cammarata claims Bitcoin has accounted for 5 to 10 percent of online sales since they started accepting the cryptocurrency on May 14.

“It’s starting to be a percent of sales more than we expected,” he said in an interview with Cheddar.

The all-natural deodorant comes in scents like lavender, tea tree, bergamot, and cedar and will set you back about $9, or 0.0011 BTC, a stick. Schmidt’s is the first company owned by hygiene giant Unilever to accept cryptocurrency as a payment method.

Cammarata said:

It kind of was actually a last minute surprise. We got a lot of consumers that are like, ‘Can we pay with Bitcoin’? We were playing around with the idea a little bit and our tech team was like, ‘Should we do this should not do it?’

But he admitted they “weren’t that shocked” when the company’s social media savvy consumers asked to pay with Bitcoin.

“We have a lot of millennials and highly socially active consumers,” he said.

Schmidt's Naturals Deodorant Bitcoin

Shopping with Bitcoin

You can make purchases on Schmidt’s Natural’s site using Bitpay, a widely available Bitcoin payments provider found on Shopify and in popular mobile games by Zynga. When it comes to e-commerce and online shopping, Bitpay is the most ubiquitous.

But the service has had its fair share of controversy. Newegg is a Canada-based online computer and electronics seller that uses Bitpay. The payment provider came under fire last month when a Newegg shopper accused Bitpay of taking more than their share when it comes to network costs.

Regardless, Bitcoin is becoming more widespread as a way to shop online. And as Schmidt’s Naturals co-founder said, it will take consumers demanding more payment options to see it more commonly accepted.

“Whether it be a scent or a payment method, we are very highly engaged with our consumer,” Cammarata said.

What do you think about paying for goods like deodorant with Bitcoin? Let us know in the comments!


Images courtesy of Schmidt’s Naturals

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Kvě 14

Nvidia Expects 2/3 Decrease in Sales to Crypto Miners in The Next Quarter

· May 13, 2018 · 7:00 pm

Nvidia announced that they had a successful 1st quarter in terms of sales, in part due to the fact that cryptocurrency-related sales boosted their revenues by 10%. Despite the good news, Nvidia expects that the sales generated by cryptocurrency enthusiasts will decrease by over ⅔ over the 2nd quarter, which ends in 2 months.


Nvidia’s Growing Business: Did Crypto Sales Help?

Nvidia’s Thursday release of their Q1 financial reports has shown that their revenues have gone up from $1.9 billion in Q1 of last year to a staggering $3.2 billion during this year’s first quarter. The latter figure is a ~$300 million dollar increase in revenue compared to the figures reported in Q4 of last year.

The other statements and figures given by Nvidia in their earnings call were also positive but did not meet all analysts’ expectations, as the price tumbled over 2.5% during after-hours trading. Jim Cramer, a popular financial analyst and personality, quickly jumped on analysts’ statements, calling them “total joker chowderhead analysts,” in an attempt to call off their allegedly unrealistically high expectations of the company.

The 10% in revenue growth since Q4 was quickly attributed to cryptocurrency mining sales which became so prevalent in the latter half of 2017 and the start of 2018. Hardware sold by Nvidia to miners over Q1 was revealed to have generated $289 million for the market leader in the computer hardware industry.

Taking a tally of the company’s profits overall, the $289 million generated by cryptocurrency sales have accounted for just around 9% of Nvidia’s total sales during the first fiscal quarter of the year. Considering the worldwide impact which Nvidia has, a 9% portion of the company’s revenues is quite substantial.

Nvidia’s Q1 cryptocurrency miner sales were actually above the expected amount, with a quantitative financial investment firm, Susquehanna, and its analysts expecting that sales brought in by the cryptocurrency industry would amount to a relatively small $200 million in a best-case scenario. This means that the figure revealed by Nvidia execs was over 44% higher than the anticipated figure. A welcome surprise, that’s for sure.

Is The GPU Mining Market Slowing?

Despite this good news, Nvidia expects for the $289 million made by sales to miners to drop by over ⅔ by the end of Q2 of this year.

Jensen Huang, Nvidia’s CEO, acknowledged the help cryptocurrencies had on Nvidia’s profits in a statement made during the earnings call with CNBC. Huang stated:

Crypto miners bought a lot of our GPUs in the quarter and it drove prices up,

For those who are unaware, the demand for GPUs over the course of the past year for mining purposes has caused the PC enthusiast community to go into an outrage over the current high prices, not to mention the lack of supply.

Cryptocurrency mining rigs

It is now clear that 2017 and early 2018 saw a multitude of cryptocurrency mining operations, individuals and corporations alike, buying as many GPUs as they could get their hands on. Although retailers did their best to prevent GPU shortages, by implementing restrictions on buyers, in the end, many mining companies still got their hands on the equipment.

Despite the rush of last year’s market, the GPU mining market has been slowing down as mining costs have gone up while profits have been decreasing, not a combination you want to see as a miner. As hype for GPU mining begins to subside, prices and supply for graphics cards will begin to return to numbers which resemble the MSRP prices.

This is not the only bad news for GPU miners worldwide. Bitmain’s announcement of 3 brand new ASIC miners which run on the Equihash, ETHhash, and Cryptonite algorithms have threatened the existence of the GPU mining industry. These ASICs provide an exponentially higher hashrate per dollar and watt of energy compared to traditional GPU processes.  However, ASICs have been rejected by a large majority of the cryptocurrency community as many see ASICs as a threat to the decentralized nature of cryptocurrencies.

The GPU mining community has been quick to jump on the announcements of the ASICs, calling for developers of GPU-mineable coins to fork away from ASICs. Despite the cries of the community,  Ethereum and ZCash’s developers have chosen to abstain or delay a fork away from ASIC miners.

With the threat of ASIC miners looming not too far in the distance, it is understandable to see Nvidia’s expectations that its cryptocurrency profits will take a beating. But the future could still be bright for Nvidia as they move into an era where technology use will become increasingly prevalent. In fact, Jim Cramer even called Jensen Huang, Nvidia’s CEO, the “Einstein of our era.”

Will BitMain shutdown the GPU mining industry? Do you think that Nvidia has a future as a mainstay in the cryptocurrency GPU mining industry? Please let us know in the comments below.


Images Courtesy of Wikimedia Commons/@Nvidia Corporation, Shutterstock, and Twitter/@business.

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Dub 13

Yahoo! Japan Enters the Crypto Field: Acquires Minority Stake in Tokyo Crypto Exchange

· April 13, 2018 · 5:00 pm

Yahoo! Japan Corp announced on Friday its intentions to purchase a minority stake in BitARG Exchange Tokyo. The deal builds on the increasing mainstream acceptance of cryptocurrencies in the country on behalf of business in the face of some of the most prominent Japanese companies.


Getting Involved in the Crypto Field

As reported by Reuters, Yahoo! Japan Corp is set to buy a minority stake in a Tokyo-based, FSA-approved crypto exchange. The hope of Japan’s number #2 most popular and visited website is to completely dismiss concerns associated with security as well as to get involved in the cryptocurrency field. It’s safe to say that the move has its merit, as the company has had its fair share of security breaches in recent years.

Yahoo! is set to buy out a 40% stake off BitARG Exchange through one of its subsidiaries. The official launch of the services is scheduled to start sometime this autumn.

Even though official financial terms of the deal have yet to be disclosed, a person close to the matter said that the purchase amount is likely to be close to two or three billion yen, which is the rough equivalent of $18.6 to $27.9 million.

Serious Mainstream Business Adoption

Serious Mainstream Business Adoption

It seems that the Country of Eight Islands is becoming a hot spot for the crypto field – not only for individuals but also for businesses.

The Yahoo! deals follow recent moves of other major Japanese companies. Earlier last week, a leading local financial services firm confirmed the purchase of Coincheck – a Japanese cryptocurrency exchange which had suffered a hacker attack earlier in the year, setting it back with upwards of $430 million in compensation to its users.

Going further, back in January, the country’s largest messaging service, Line Corp, has also attested its interest in the field, applying for cryptocurrency exchange license.

Do you think Yahoo!’s deal will attribute to the development of the cryptocurrency field in the country? Will other big players follow? Please let us know in the comments below!


Images Courtesy of DepositPhotos

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Dub 12

Mike Novogratz Hires Goldman Sachs Exec for Crypto Merchant Bank

· April 12, 2018 · 3:30 pm

Famous cryptocurrency investor and trader Mike Novogratz has hired a Goldman Sachs executive for his cryptocurrency merchant bank.


 $40K Bitcoin by End of 2018?

Last November, Mike Novogratz made headlines when he predicted that Ethereum would hit $500 by the end of 2017 and Bitcoin could reach $40K by the end of 2018. Novogratz’s prediction for Ethereum proved true as the cryptocurrency actually surpassed $500 and even almost hit $1400.

Mike Novogratz

Since then, the whole cryptocurrency market experienced a major “shakedown” and dropped from a total market capitalization of over $8oo billion to $260 billion. The big correction may have caused uncertainty for retail traders, but many institutional investors are confident that a correction to the market was due and will soon stabilize. Some analysts predict that the total market cap for cryptocurrency could far surpass its old all-time high.

From Wall Street to Cryptocurrencies

This optimism for the cryptocurrency space is leading quite a few people from Wall Street to make the jump into the crypto world. One of the more notable of these individuals is Mike Novogratz, who was one of the first institutional investors to start seeing a future for cryptocurrencies.

Novogratz didn’t only bring millions of dollars to the cryptocurrency space, but he also brought years of trading and investing experience that he gained from Wall Street. Last December, the legendary investor announced that he would launch one of the world’s largest cryptocurrency hedge funds. The fund was supposed to launch on December 15th but, due to uncertainty in the market situation, was put on ice. He then turned his attention to creating a merchant bank, Galaxy Digital, that would serve the blockchain and cryptocurrency space back in January.

merchant bank

But Novogratz won’t be investing alone. According to CNBC, Novogratz has hired Goldman Sachs executive Richard Kim for the position of the chief operating officer for Galaxy Digital. Even though Novogratz’s fund launch is still paused, he stated the following to CNBC:

We are still feverishly building out a full merchant bank for crypto, i.e., I am still very bullish on the space.

The new hire is part of an ongoing trend and shows that, in the future, more Wall Street executives may switch from traditional trading instruments like stocks and bonds to a market with a brighter future, such as cryptocurrency and digital assets.

What are your thoughts on Novogratz’s decision to hire a Goldman Sachs executive for his COO? Do you think that the fund will eventually be launched and receive interest from non-cryptocurrency investors? Let us know in the comments below!


Images courtesy of  Pixabay and Bitcoinist archives.

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Dub 10

Bank of America: History’s Greatest Bubble Has Popped, But For Real This Time

· April 10, 2018 · 4:30 pm

Ignoring pretty much every piece of information outside of Bitcoin’s chart, Bank of America has officially announced that the greatest bubble in history is popping, but for real this time. 


The Greatest Bubble in History

For at least the 279th time, Bitcoin is dead.

As noted by Bloomberg, Bank of America’s Chief Investment Strategist Michael Harnett made the claim that the gold standard of cryptocurrency’s bubble has popped in a Sunday note. “The cryptocurrency is tracking the downfalls of the other massive asset-price bubbles in history less than one year out from its record,” claims the media company’s report.

Additional explanations from the North Carolina-based multinational financial services company, however, are not provided.

price bubbbles

Conveniently Ignoring the Facts

Bank of America’s FUD (Fear, Uncertainty, and Doubt) comes at a time when Bitcoin is struggling to maintain price action above $7000. It also, conveniently, fails to take into account the dominant cryptocurrency by market capitalization’s past parabolic runs and subsequent falls, which illustrate that the current situation is — more or less — par for the course.

Bank of America also apparently glosses over the cryptocurrency’s major developments, including the exciting Lightning Network — a second layer payment protocol which enables instant transactions between participating nodes and solves the scalability problem plaguing Bitcoin’s recent history.

Furthermore, Bank of America seems to care less about the increased interest in Bitcoin trading from ultra-rich insitutional investors like George Soros and the Rockefeller family — both of which have officially signaled their intentions to trade cryptocurrency.

The bank also fails to mention the New York Stock Exchange’s interest in listing Bitcoin futures contracts and the SEC’s potential allowance of Bitcoin ETFs (Exchange Traded Funds) — both of which signal increased legitimacy.

Bank of America

America’s second largest bank has, however, expressed its fear of Bitcoin in the past. In February, Bank of America wrote in a Securities and Exchange Commission report:

The widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

The major bank has also contributed to the alleged popping of the Bitcoin bubble, having banned credit card purchases in the beginning of February — conveniently when the cryptocurrency market had just started to really roll downhill.

How much credence do you give Bank of America’s FUD-filled statements? Do you think Bitcoin is a bubble? Let us know in the comments below!


Images courtesy of Bloomberg, Reuters, and Bitcoinist archives.

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Dub 03

Healthcare Insurers Looking to Blockchain to Track Provider Information

· April 3, 2018 · 4:00 pm

The United States’ health insurance industry is a bonafide mess. Two major healthcare insurers, however, are looking to blockchain technology to help clean up inaccurate provider lists.


An Emergency Situation

American for-profit healthcare companies UnitedHealth Group and Humana are initiating a pilot program to examine whether or not blockchain technology — the underlying technology behind Bitcoin — can help track provider information.

Healthcare insurers look to blockchain

As noted by CNBC, the ability to find an in-network doctor approved by one’s health plan is crucial, as such a feat can significantly cut down on medical bills. However, provider lists are rarely kept up to date, adding additional costs not only to the patient but also to insurers and contracted doctors. Explained Mike Jacobs of UnitedHealth Group’s Optum Division:

From the perspective of the provider organizations … [they] can work with up to dozens of insurance plans, and each of the plans are individually requesting or verifying the provider information.

CNBC also notes that “the administrative costs of updating and tracking down that information are estimated to be more than $2 billion dollars a year for the health-care industry.”

Healthcare insurers look to blockchain

Nevertheless, inaccurate provider contact information was found on almost one-half of all provider listings for Medicare Advantage plans — an issue that is arguably inexcusable. Claims Jacobs:

That’s such a large issue that it’s really affecting access to care for many patients.

Blockchain to the Rescue

UnitedHealth Group and Humana – rivals in the Medicare space – are looking to potentially cure inaccurate provider lists with some proverbial blockchain medicine.

The two major health insurers are initiating a pilot program to study the positive potential of applying blockchain technology’s decentralized ledgers to what is currently an unorganized mess of incorrect information. (Spoiler alert: blockchain technology will probably be beneficial.)

Both companies will also include Quest Diagnostics and Multiplan in their pilot program.

It’s worth mentioning that the companies’ pilot program is not necessarily one aimed at providing a solution for patients. As noted by CNBC, the insurers are most likely looking to prevent potential fines from the Centers for Medicare and Medicaid Services (CMS), which is considering penalizing insurers upwards of $25,000 per day for featuring provider lists with incorrect information.

Do you think the blockchain can help clean up provider lists? Are there any other aspects of the United States’ messy health insurance system which could be cleaned up with Bitcoin’s underlying technology? Let us know in the comments below!


Images courtesy of Shutterstock and Pixabay.

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Bře 21

Altcoin Bear Market ‘Over’, Bitcoin ‘Less Miserable,’ Tom Lee Declares

· March 21, 2018 · 1:30 pm

Fundstrat Global Advisors’ Tom Lee has declared the altcoin bear market “is over” and urged investors to buy Bitcoin.


Tom Lee: Investors ‘More Comfortable’ With Bitcoin

In a note to investors which he followed up live on CNBC’s Fast Money segment, the firm’s head of research said investors were becoming “more comfortable” with Bitcoin as an asset.

Cryptocurrencies began rallying this week after the ongoing G20 Summit produced positive regulatory noises from the outset.

Tom Lee

“I think the headlines were less draconian than many people were worried about, but that’s really been the case every time there’s been a regulatory event,” Lee told CNBC.

The reality is I think Bitcoin is starting sit away from the line[…] I think investors are comfortable that Bitcoin is likely to viewed as a commodity; whether regulations change around security tokens and registration, Bitcoin sits in its own sphere.

Bitcoin Misery Index Perks Up At $9k

Altcoins had felt the pressure from Bitcoin’s downward trend, showing a delayed response after BTC/USD began falling late December but with many assets subsequently falling more steeply.

According to observations from Lee and his team, this trend bottomed out around March 20, and could now point to new upside, subject to a similar delay to the initial descent.

“The altcoins don’t really rally until mid-August, mid-September,” he forecast, adding that ‘altcoin’ for Fundstrat meant cryptocurrencies outside the top 50 by market cap.

In terms of buying Bitcoin, however, Lee hinted now was the time. Using his Bitcoin Misery Index, which Bitcoinist previously reported on earlier this month, he told viewers that Bitcoin’s score was still within the ‘buy zone’ below 27 out of 100.

At the time Lee issued the index, that score was just 18. “It’s still in the zone of misery, but of course it’s less miserable,” he added.

Lightning Network Is Happening! First Physical Item Purchased on LN

Technical upgrades such as a Lightning Network production beta last week have contributed to broader positive sentiment on Bitcoin meanwhile, with Weiss upgrading its rating for the cryptocurrency from C+ to B-.

BTC/USD was holding support around $9000 on major exchanges as of press time March 21.

What do you think about Tom Lee’s altcoin forecast? Let us know in the comments below!


Images courtesy of Shutterstock, CNBC.com

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Bře 04

SEC Subpoenas TechCrunch Founder’s Crypto Fund — And Everyone Else, Too

· March 4, 2018 · 12:30 pm

While the U.S. Securities and Exchange Commission dishes out subpoenas to cryptocurrency projects like a generous house doles out candy on Halloween, TechCrunch founder Michael Arrington’s $100 million cryptofund has also come under investigation.


‘They Just Have to Figure out What They Want.’

TechCrunch founder Michael Arrington’s $100 million cryptofund has been subpoenaed by the U.S. Securities and Exchange Commission — which is no skin off Arrington’s back. He told CNBC on Thursday:

We received a subpoena. Every [crypto]fund I’ve talked to has received one. That’s fine. They just have to figure out what they want. They need to set up rules so we can all follow them, and the market is begging them for that.

SEC

Too Much Confusion

Indeed, the SEC apparently has no idea exactly what it wants, having already indicated that regulations in regards to securities laws do not apply to digital coins. The confusion created by the SEC has even caused many cryptocurrency firms to ban U.S. investors from getting involved in the projects.

Meanwhile, the SEC’s New York, Boston, and San Francisco offices have been issuing subpoenas like it’s their job, in an attempt to learn as much as possible about the burgeoning billion-dollar industry. Said Jason Gottlieb, partner at Morrison Cohen, who is defending PlexCorps against charges of fraud:

Clearly it’s a coordinated, grand investigation. I would expect it’s going to continue throughout this year.

Goodbye, USA

According to Arrington, the negativity and confusion created by the SEC is driving innovation away from the United States. He told CNBC:

That’s a shame, The U.S. has just frozen itself. The stuff coming out of Asia is uniformly high quality.

US flag

The US is not the only country struggling with regulation, of course. South Korea has ping-ponged back and forth while China has outright banned Initial Coin Offerings. Japan has somewhat successfully implemented a licensing system for cryptocurrency exchanges, while European financial authorities in Germany and France are calling for a global crackdown.

Still, the US remains in the spotlight and risks driving out innovation while the SEC dithers. Says William Mougayar, author of The Business Blockchain:

I hope they don’t go [down] the slippery slope of trying to classify tokens because it’s a grey zone throughout. Rather, focus on requiring disclosures that are well-defined, while not being too restrictive yet.

For now, we’ll just have to wait and see.

What do you think about the SEC’s subpoena-issuing spree? Do you think effective, innovation-supporting regulation will come from its investigation? Let us know in the comments below!


Images courtesy of Reuters, Wikipedia Commons, Flickr.

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Úno 28

So Why Did Goldman Sachs-Backed Circle Really Buy Poloniex?

· February 28, 2018 · 10:00 am

Goldman Sachs-backed startup Circle made waves earlier this week when it acquired cryptocurrency exchange Poloniex. A couple of experts share their thoughts on the implications for the soon-to-be first compliant US crypto exchange and its customers.


Most Crypto Exchanges ‘Over-Regulate Themselves’

As the dust settles on Circle’s acquisition of Poloniex, U.S. regulators are keeping a close eye on KYC/AML compliance of cryptocurrency exchanges.

Joseph Weinberg

Joseph Weinberg, OECD Think Tank Special Advisor and Chairman of Shyft, a blockchain protocol that will create a new standard for the KYC/AML mandates, shared his comments with Bitcoinist. He states:

Most crypto exchanges that are processing fiat to crypto transactions are very compliant and, in some cases, even more so than banks. It all really depends on jurisdictions and the compliance policies given by countries to crypto exchanges.

He continued:

For crypto exchanges, the challenge lies in how little formal guidelines there are from regulators. As a result, most of the industry has been doing self-compliance in absence of clear procedures. To err on the safe side, crypto exchanges over-regulate themselves. For example, most exchanges ask for passport verification in order to confirm users’ identities, whereas most banks only require government-issued IDs, such as drivers licenses.

Interestingly, Circle acquired the crypto exchange over a year after announcing it was shifting focus from Bitcoin to blockchain-based services. At the time, the company informed its Bitcoin customers that they can can cash out or transfer their balances to Coinbase, if they wished to continue to use the cryptocurrency.

So why did Circle decide to jump back into the crypto game?

It appears that Poloniex was struggling to keep up with the unexpected surge in new users as prices skyrocketed in the second half of 2017. Additionally, being based in the United States, the company also had to keep up with rising compliance costs as it rolled out its new KYC policies late last year.

Weinberg explains:

In the past, Poloniex had a lot of issues with onboarding new users and properly building out its KYC process, mainly due to the large amounts of time it takes to verify users. Given the level of KYC that exchanges force themselves to go through, scaling compliance is almost a separate product that the exchange has to build out.

According to him, this is where Circle comes in with their KYC/AML expertise. He says:

Through this acquisition, Circle will deploy more people to help handle compliance—more employees to build and process KYC due diligence faster. This is the same type of issue traditional banks have when it comes to scaling. Compliance costs keep multiplying, and yet, they aren’t always found to be effective.

The SEC Is Watching

Meanwhile, another takeaway has been put forth by Nathaniel Popper, author of Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money.

Popper noted on Twitter that the SEC informally suggested to Circle that no enforcement action will occur if the Boston-based startup “cleans up Poloniex and turns it into a regulated exchange.” He adds:

The SEC seems to be saying here that it’s okay if you broke the rules, as long as you get acquired by a legitimate player before we crack down on you.

The question now seems to be whether the SEC will apply this same thinking to other virtual currency exchanges if they are acquired by large players.

In addition to facilitating compliance, Circle also announced that it will add fiat bridges and expand operation to other markets. Namely, the company promised to explore “USD, EUR, and GBP connectivity that Circle already brings to its compliant Pay, Trade, and Invest products.”

This would imply that the exchange must also become compliant and answer to regulators from across the pond, who are currently scratching their heads on how to approach cryptocurrencies without stifling innovation in the process.

Therefore, regulators in the U.S. and abroad could be playing the carrot and stick strategy by providing an incentive for crypto exchanges to get acquired by the large players, such as Goldman Sachs, before a potential crackdown. Admittedly, this could also be a clever way for traditional finance to not only appear innovative through association but also assimilate would-be future competitors.

If true, the strategy may be futile and usher in the Streisand effect to boot. As technology advances, so do new methods of exchanging cryptocurrency. Therefore, assimilating centralized exchanges like Poloniex could force users to migrate en masse to decentralized exchanges and further bolster their development.

Why do you believe Circle acquired Poloniex? Share your comments below!


Images courtesy of Shutterstock, Twitter/@nathanielpopper.

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Úno 21

Tesla’s Amazon Cloud Account Hacked to Mine Cryptocurrency

· February 21, 2018 · 10:30 am

Tesla, the automotive company, was the victim of a cryptojacking attack as their Amazon cloud account was compromised and used to mine cryptocurrency.


Even the largest and most technologically advanced companies can be vulnerable to being hacked. Case in point is the pioneering electric car company, Tesla, owned by tech billionaire Elon Musk. They were recently the target of a cryptojacking attack that saw their Amazon cloud account compromised and used to mine cryptocurrency.

Tesla car

Security Not up to Snuff

A hacker, or group of hackers, hijacked an IT administrative console belonging to Tesla that had no password protection. The cybercriminals then used sophisticated scripts to begin mining for cryptocurrency.

The hack was discovered by RedLock, a cybersecurity firm. Apparently, researchers for RedLock were tracking down which groups had left their Amazon Web Services credentials openly exposed on the internet. One of the groups that RedLock found was Tesla.

Of the hack, a Tesla spokesman says:

We maintain a bug bounty program to encourage this type of research, and we addressed this vulnerability within hours of learning about it..

The impact seems to be limited to internally used engineering test cars only, and our initial investigation found no indication that customer privacy or vehicle safety or security was compromised in any way.

Crafty Hackers

RedLock notes that the hackers exposed an Amazon “simple storage service” (S3) bucket that held telemetry, mapping, and vehicle servicing data for Tesla. It appears that individual information was not accessed, but the CEO of RedLock, Varun Badhwar, says that they “didn’t try to dig in too much” and instead alerted the car company.

Elon Musk

Elon Musk

Badhwar says that the hackers were pretty crafty in hiding their tracks. They made sure to lower the CPU usage demanded by the Stratum software they were using for cryptocurrency mining. This allowed the mining to be virtually undetected. The hackers also kept their internet addresses secret by hiding behind the services of a content delivery service, CloudFlare.

Overall, it is unknown what cryptocurrency the hackers mined for. The current popular choice is Monero. The amount of cryptocurrency mined by the hackers is also unknown.

For their efforts, RedLock were given $3,133.70 by Tesla as part of the company’s bounty program to reward outside hackers who find flaws in their system. The amount is a reference to 1337, which is old hacker slang for elite.

Tesla is not alone in being the victim of cryptojacking. RedLock estimates that 58% of businesses that use public cloud services have exposed “at least one cloud storage device” to the public. Of that amount, the cybersecurity firm says a full 8% have had cryptojacking incidents.

Do you think companies like Tesla can do more to protect themselves from cryptojacking attacks? Let us know in the comments below.


Images courtesy of Flickr/@Maurizio Pesce, Pixabay, and Flickr/@JD Lasica.

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