Zář 23

Handling of Recent Bitcoin Bug Ruffles Feathers

Bitcoin Core developers urged all nodes to implement a patch on Friday, September 21, in order to prevent the exploitation of a recently discovered bug in the Bitcoin protocol. The bug, called CVE-2018-17144, was originally reported to the Bitcoin Core team by Bitcoin Cash developer Awemany on September 17.


A Bug in the System

The discovery of the bug and the Core developers attempts to address it have caused ruffled feathers in the crypto community. Allegations of incompetence and bad-faith have been leveled by members of both the Bitcoin (BTC) 00 and Bitcoin Cash community as developers attempt to patch the bug.

CVE-2018-17144 was initially reported as a potential denial of service bug, but developers on the Core team discovered the root issue impacted both denials of service and inflation vulnerability. The Bitcoin Core team has released a timeline in its announcement about the bug, showing the steps undertaken as the team went from being made aware of the bug’s existence to releasing a patch.

The CVE-2018-17144 bug originated in Bitcoin Core .15, originating as part of a change which was designed to help simplify the tracking of unspent transaction output. This change left Bitcoin versions .15X through .16.2 vulnerable to the bug — as well as any altcoins or forked versions of Bitcoin that were still using code containing the bug.

Crucially, the implantation of the code which caused the bug was led by the same developer who was integral in implementing the fix. This has added to suspicions that the release of the patch was not handled correctly.

Bitcoin bug

Lying in Wait

Worryingly for many, the bug had been sitting undiscovered in the code for two years, raising concerns about what other issues may be lurking in Bitcoin just waiting to be exploited. In a post from Medium contributor Awemany, it’s noted that it would have been just as easy for him to short BTC — and exploit the bug — as it was for him to report the bug the Core team.

The Bitcoin Core team has been heavily criticized for the manner in which they rolled out the announcement about both the bug and the patch. For Bitcoin and many of the altcoins which rely on the same code, the decision to announce the bug and patch without consulting members of the altcoin networks that would have been impacted by a successful exploit was seen by some as political and mean-spirited.   

Despite the promise of decentralization and transparency promised by crypto advocates, the CVE-2018-17144 episode illustrates just how dependent many projects are on the decisions made by a relatively small number of members of the community. If the actors in this saga had made a handful of decisions differently, billions of dollars of value could have been wiped out. Hopefully, this episode leads to clearer standards around bug discovery and patching, and a more harmonious culture between various developer teams.

What are your thoughts on Bitcoin bugs? Let us know in the comments below!


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Zář 22

Tilray & Marijuana Stocks Smoke Cryptocurrency, Then Go Poof

The financial markets were ablaze this week with high volatility in cannabis shares unseating cryptocurrency as the trade of choice. References to cannabis in news articles were almost double that of cryptocurrency. But big falls on Friday, coupled with almost unilateral gains across crypto, showed how schizophrenic the weed market can be.


Tilray. When Lambo?

Tilray was the name on everyone’s lips this week. On Tuesday the Canadian company announced DEA approval to export a cannabinoid study drug into the US for clinical tests. TLRY stock jumped from around $120 to almost $300, as it saw $15 billion in volume from Monday to Thursday.

The price spurt intensified because the market cap for the company was just $16.4 billion at end of trading. On top of this, a single private equity fund controls over 70% of the shares, further reducing the available stock. The entire market cap of cannabis shares is around $35 billion, so investors were chasing each other around a very small market.

Live Fast, Die Young… in a Nice Pair of Shorts

Celebrated Bitcoin bull, Mike Novogratz, wanted a piece of that action, so managed to “get a borrow, short it for a day trade, make some money”. He believes that longer term, the marijuana industry has a promising future, but for now, it is all about short-selling.

He explained:

Listen, the weed business has a great underlying story, a lot like cryptocurrency. In five or six years, we will have a monster weed business.

Sure enough, price drops across Thursday and Friday saw Tilray close the week at around the same point it started it.

More Than a Ripple in the Crypto waters

The second half of the week saw a rally across virtually the entire crypto market, with Ripple a stand-out performer. At one point it unseated Ethereum 00 as the second largest currency by market cap, although that position has since reversed.

There are some who question Ripple’s surge 00, including Yahoo Sports, who compare its position to that of Tilray, midweek. Sadly, the hosted video doesn’t seem to match the headline, so we are left in the dark as to why Yahoo make that comparison.

Guess we will just have to wait and see.

Are cannabis stocks behaving similarly to the cryptocurrency market right now? Share your thoughts below!


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Zář 20

There’s a ‘Concerted Effort to Suppress Litecoin Price,’ Says Charlie Lee

Litecoin creator, Charlie Lee, took to Twitter, complaining about recent efforts to “suppress Litecoin price” with FUD spreading by those “shorting LTC and… that see Litecoin as a threat.”


Big Up Da Litecoin

Lee had a lot to say regarding accusations that Litecoin 00 had lost its edge in an increasingly oversaturated market.

Illustrating the high level of security in the network, he highlighted the miners’ lack of incentive to attack it, as this would devalue $150 million of hardware investment. He also mentioned Litecoin’s domination of Scrypt mining.

Regarding liquidity, Lee pointed out that Litecoin trades on virtually every exchange. Nine major payment processors support it, and the network processes $200 million of transactions every day.

Charlie Lee: LN Doesn’t Make Litecoin Obsolete

Rather than making LTC redundant technology, Lightning Network actually plays nice together with both Bitcoin and Litecoin, according to Lee. Many LN clients/apps support Litecoin, allowing atomic swaps, and even submarine swaps, using LTC to pay lightning BTC invoices. He adds:

Litecoin will always be the cheapest and fastest on ramp to Lightning Network.

Even if Litecoin’s only value were as a bitcoin test-net, Lee argues that its value is greater than the 3 percent of bitcoin’s market cap it currently represents.

Litecoin’s practical proof of SegWit utility enabled its adoption and activation on the Bitcoin network. This kind of testing is not possible on the real Bitcoin testnet, as valueless coins create no incentive for malicious actors to hack it.

Litecoin (LTC)

Charlie DOES Care and Litecoin IS Still Being Developed

Lee caused a scandal last year when, faced with accusations that he was acting for ‘personal benefit,’ he sold and donated all his LTC holdings. He has since stated that he will never buy back in, backing up his claims of “conflict of interest.” However, he also recently appeared to favor Bitcoin over Litecoin as an initial crypto investment.

Despite this, his tweets confirm that he is still working on Litecoin full-time and promoting Litecoin adoption. Countering suggestions that Litecoin has had no development in the past 6 months, he highlights two updates in the past 2 weeks. He also points out that it is good practice not to do development work “on the master branch, where people are looking.”

As would be expected, responses to the tweets vary from the “Litecoin rulez! Charlie is my hero!” school of thought to “Well why did you sell yours then?”

You can please some of the people, some of the time, eh?

Are there concerted actions being taken to suppress Litecoin price? Share your thoughts below!


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Srp 26

Charlie Lee’s Litecoin ‘Ponzi Scheme’ Called Out by Silverbug YouTuber

Popular silverbug and Golden State Mint head TruthNeverTold recently took to his YouTube channel to once again call out the cryptocurrency market as little more than a Ponzi scheme. Specifically, he claims that Litecoin and its founder, Charlie Lee, are prime examples of duping unsuspecting investors. 


As Bitcoinist reported on December 20, 2017, Litecoin founder Charlie Lee “sold or donated” his entire Litecoin wealth to avoid “conflicts of interest” arising from its growth. Interestingly, Lee sold the very top of Litecoin’s unprecedented pump — something which TruthNeverTold views as an obvious profit-taking exit from a nothing-for-something Ponzi scheme.

States TruthNeverTold:

He sold out everything at the top. Good on Charlie Lee! Great job! But you just proved the fact that, as I’ve been saying since 2011, early adopters take something that has no intrinsic value, they set about building the perceived value to an unsuspecting public, only to sell that illusion for something that has real value.

The YouTuber also takes issue with Lee’s reasoning. The Litecoin founder explained, at the time:

Litecoin has been very good for me financially, so I am well off enough that I no longer need to tie my financial success to Litecoin’s success. […] For the first time in 6+ years, I no longer own a single LTC that’s not stored in a physical Litecoin.

For TruthNeverTold, Lee all but admitted that he cashed out at the top of the bubble, selling cryptocurrency for fiat and ensuring his long-term financial success.

Charlie Lee has since defended his actions as benign and well-intentioned. Despite the fact that the Litecoin 00 market crashed substantially and never recovered since the point of Lee’s sale/donation, Lee claims his actions has no effect on the market, stating:

I didn’t actually have that many litecoins. My selling litecoins didn’t actually affect the market itself but the fact that I had litecoins and people were thinking that I might dump it on the market actually was an issue.

Lee also believes Litecoin will eventually bounce back, explaining:

I still think it was the right move but I question whether — I think in the long run it was the right move but in the short term while the price is down, below the all-time high, it just feels like it’s not the right decision. But I think like, moving forward, five years down the road, when the price is back to the all-time high, I feel like it will be the right move.

What do you think about Charlie Lee selling his entire stake in Litecoin at the top? Do you think Litecoin and other cryptocurrencies are Ponzi schemes, or is TruthNeverTold simply overreacting to a market bubble? Let us know your thoughts in the comments below!


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Srp 20

Three Chinese Men In Custody Over $87M Cryptocurrency Theft

Police in China has detained three men suspected of pulling the country’s biggest ever cryptocurrency heist — worth 600 million yuan ($87 million). 


Theft is China’s Biggest: Reports

As multiple outlets report quoting local news publication Huashang News on August 19, authorities concluded an investigation spanning almost six months into three men who allegedly hacked a computer for Bitcoin and Ether.

“Our bureau has not dealt with this kind of case before,” South China Morning Post quotes a police officer as telling Huashang“It’s the first virtual currency-related case in Shaanxi.”

According to Huashang, the investigation behind the arrest of the men — known as Zhang, Cui and Zhou — began in March, when the victim came forward to report a hacking of his computer. At the time, losses were thought to total 100 million yuan.

Having analyzed “30,000 pieces of information” related to the event and the alleged perpetrators, the arrests were made on Wednesday last week. Legal proceedings remain ongoing.

China Leads World in Blockchain Patent Applications

Disrupting The Bitcoin Criminal Narrative

The size of the theft is reminiscent of an increasing cryptocurrency criminal trend largely playing out in nearby Vietnam.

As Bitcoinist previously reported, a giant altcoin scam which afflicted 32,000 investors earlier this year saw organizers make off with funds worth a reported $660 million at the time. More recently in July, the CEO of a local cryptocurrency mining company suddenly disappeared and shuttered operations — leaving $35 million unaccounted for.

While Chinese police added that the use of cryptocurrency made their job more difficult, on a global level, law enforcement agencies are beginning to change the narrative that crypto assets aid and abet the success of criminals.

In an interview with Bloomberg earlier this month, Lilia Infante, an agent with the Cyber Investigative Task Force at the US Drug Enforcement Administration, said she actually hopes malicious actors will “keep using” Bitcoin and even privacy-focused altcoins such as Monero. “The blockchain actually gives us a lot of tools to be able to identify people,” she revealed. 

What do you think about China’s latest cryptocurrency theft? Let us know in the comments below! 


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Srp 17

Japan’s Biggest Social Network LINE Launches $10M Blockchain Investment Fund

Yet another blockchain investment fund is set to launch in South Korea. Messaging giant Line furthers its foray into the field of cryptocurrencies and is dedicated to streamlining early-stage startup investments with a $10 million fund. Additionally, the company announced the successful listing of TRON to its cryptocurrency exchange.


South Korea Sees Serious Investments in Blockchain

Line, the Japanese messaging company harboring over 200 million users announced August 15, that is set to launch a $10 million investment fund through its Korea-based blockchain subsidiary Unblock Corporation.

Silicon Valley Philanthropists Dig Deep into their Crypto Wallets during Fundraising Event

With this initiative, LINE will become one of the very first publicly traded companies to formalize investments in tokens through a dedicated corporate fund. The fund aims to “boost the development and adoption of cryptocurrencies and blockchain technology.” Furthermore, the announcement also made it clear that the fund is “expected to expand in the future.”

Just yesterday Bitcoinist reported that the government of South Korea has budgeted upwards of 1 trillion won with a “focus on promoting big data and AI, developing blockchain technology to ensure data management security and boosting the share economy.”

TRON Listed on BitBox

Earlier in June, Line announced that it will launch a cryptocurrency exchange through its Singapore-based subsidiary. The venue dubbed BITBOX is already live and has listed TRON to its lists of available cryptocurrencies.

TRON (TRX) has become the very first coin project which has managed to pass BITBOX’s review process carried out by their open-listing committee.

As a celebration for TRX’s listing on the cryptocurrency exchange, a total of 9 million TRX coins will be airdropped to BITBOX’s users in an event which runs until August 22nd.

Speaking on the matter, Youngsy Ko, CEO of LINE’s subsidiary in Singapore, which operates the cryptocurrency exchange said:

Integrating TRON (TRX) with BITBOX will enable us to connect with the world’s fastest-growing blockchain project. […] TRON has a solid tech platform, especially know it has joined forces with BitTorrent.

Tron’s Justin Sun acquired BitTorrent on June 11.

What do you think of Line’s increased interest in the field of cryptocurrencies? Don’t hesitate to let us know in the comments below!


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Srp 16

CoinHive In-Browser Software is ‘Mining’ $250K Per Month, Research Finds

New academic research released by RWTH Aachen University has discovered that cryptocurrency miner CoinHive is very profitable. In fact, it’s generating over $250,000 worth of Monero profit every month by hi-jacking internet users’ CPUs. One of the users could have easily been you. 


The research itself provides a broad overview of browser-mining activity across the Web. It reveals that Monero accounts for 75 percent of all browser-based cryptocurrency mining. The organization CoinHive is behind most of it. Thus, it is no wonder that security and investigation reporter Brain Krebs warns readers by claiming:

Multiple security firms recently identified cryptocurrency mining service Coinhive as the top malicious threat to Web users.

What is CoinHive?

CoinHive offers an in-browser, JavaScript-based miner for the Monero Blockchain. People can embed the mining script into a website. Then, when a user visits the website, the script will run the miner from the user’s browser. It will then mine XMR. Whoever embeds the code receives the mining profit.

CoinHive also offers a ‘shortlink solution’. This works much like a regular link — except that, to reach the destination, the user’s machine must perform some hashes (the number of which is set by its creator).

CoinHive argues that these services create the possibility for “an ad-free experience.” In actuality, it has created a new cyber-threat. Users are now paying other people through their CPU power — and they can be completely unaware.

CoinHive Set to Make $1,000,000 in Annual Revenue

The university researchers found that CoinHive is very profitable. Its ad-hoc browser-mining botnet is responsible for 1.18 percent of the entire Monero network. Moreover, the analysis suggests it is generating over 300 XMR (approximately $24,000) per week.

In the research, they note:

If we sum up the block rewards of the actually mined blocks over the observation period of [four] weeks, we find that Coinhive [sic] earned 1,271 XMR. Similar to other cryptocurrencies, Monero’s exchange-rate fluctuates heavily, at time of writing one XMR is worth 200 USD, having peaked at 400 USD at the beginning of the year. Thus, given the current exchange-rate, Coinhive [sic] mines Moneros worth around $250,000 per month […]

CoinHive keeps 30 percent of all mined XMR for itself. That’s $75,000 a month, or almost a million dollars in annual income.

Only 10 Users Dominate CoinHive’s Short Link Service

By scraping through CoinHive’s link database, the research found that there are almost two million active short links. Essentially, they force users to undertake Monero mining. Most of these links lead to video streams or filesharing sites. Yet, what’s more alarming is that most of the profit goes to only 10 users:

Coinhive’s [sic] link forwarding service is dominated by links from only 10 users. They mostly redirect to streaming videos and filesharing sites. We find that most short links can be resolved within minutes, however, some links require millions of hashes to be computed which is infeasible.

That some links are never set to resolve is significant — it highlights how malicious this new service can become.

Bitcoinist has already reported on 200,000 routers in Brazil being injected with modified CoinHive code. Because the code was injected into the router, users were mining Monero in the background of literally every page they visited.

It’s becoming clear that alongside rapid innovation, the blockchain industry is also bringing new threats. Unsuspecting in-browser mining is a pertinent threat that is worrisome. Fortunately, there are some attempts to solve this problem already. For example, security researcher Troy Mursche recommends the browser extension minerBlock. It uses JavaScript detection and a blacklist to limit the possibility of users mining cryptocurrency unexpectedly.

It seems like we are now at war with a new cyber-threat, and it’s turning out to be very profitable.

How will the war on in-browser cryptocurrency mining play-out? Let us know in the comments below!


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Srp 13

Soaring ICO Failure Rate Sees Investors Flock to ‘Bigger Players’

ICO failure rates are increasing. However, there seems to be a trend of fewer projects receiving bigger sums. Due to regulatory pressure, ICO bans, and a bear market, investors seem to be taking a new strategy to funding blockchain projects.


ICO Failure Rates Surge

There is new evidence to suggest that one in two Initial Coin Offerings (ICOs) failed in Q2 of 2018, while those that succeeded suffered huge loses. This is according to the agency, ICORating, whose data suggests 55% of ICO’s failed to complete in Q2 of 2018.
Last Call for 3 Must Buy ICO’s in 2018

The difference in returns between Q1 and Q2 is significant. In Q1, ICOs enjoyed an average return of almost 50%. In Q2, returns equaled -55%.

According to Michael Spencer, Editor of Future Sin, this as a sign of blockchain projects deteriorating in quality. But, he believes there is more than meets the eye. Other factors are at play. In particular, regulatory pressure from the SEC, ICO bans, and the Bitcoin price slump.

“While ICOs exploded from almost nothing to be a multibillion-dollar market in 2017, however in 2018 they appear even more speculative, risky and dangerous to the layperson investor,” Spencer writes

Less Projects, More Money

But while the failure rate is increasing, investment is not. In fact, the amount of money pouring into ICO tokens is rising. In fact, Business Insider notes that out of a total 827 ICO projects, investment totaled $8.3 billion in Q2 and $3.3 billion in Q1.

At the same time, fewer projects are attracting bigger sums, suggesting that bigger players are entering the market. Spencer also interprets this is a pivot towards private blockchain projects. He explains:

It spells a movement towards bigger players that we are seeing in the larger space; where private instead of public blockchains might be more the order of the day as bigger players enter the space: e.g. Bakkt. Bakkt’s focus on digital assets was wildly acclaimed by crypto insiders and the media as being potentially disruptive.

ICO Investment Dependent on Project Location

As the blockchain market continues its rapid development, investors are adapting as the country of registration is becoming an important factor. In other words, the country in which the company’s legal entity is registered at the time of the ICO.

North American startups attracted the bulk of funding, according to the ICO Rating report, with 64.6% of the total raised in the quarter. But smaller countries are increasingly hosting projects that are attracting larger sums.

The total amount of ICO funding per country presents an interesting picture:

  • Malta: 8 projects raised $113M
  • Cyprus: 8 projects raised $124.7M
  • Isle of Man: 2 projects raised $37M

This is compared to $393.7M and $301M raised in the US and UK, respectively. Put simply, projects within countries that have less red tape and friendlier regulatory frameworks tend to raise more capital per ICO.

In any case, as blockchain technology develops and regulations play catch up, ICOs appear to also be adapting to this borderless new industry.

Is the ICO space experiencing a cool-down? Or is it only getting started? 


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Srp 08

First U.S. Congress Member Reveals Owning Bitcoin, Ethereum

Congressman Bob Goodlatte, Chairman of the Judiciary Committee in the US House of Representatives, recently disclosed his personal cryptocurrency holdings. The revelation comes amidst rule changes mandating disclosure for members of the House.


Cryptocurrencies Stepping In Congress

Cryptocurrencies have made their way up in the high ranks of US politics. Congressman Bob Goodlatte filed his annual Financial Disclosure Statement on May 10, disclosing that he owns between $17,000 and $80,000 in digital currencies.

The statement was filed just before the House Ethics Committee passed new rules which required the members of the House to officially disclose in their annual reports whether or not they own cryptocurrencies. They also have to report on the holdings of their spouse’s if they amount to more than $1,000. Members of the House also have to report transactions involving more than $1,000 of crypto within 45 days of the event.

According to the statement, Goodlatte has invested in Bitcoin00, Bitcoin Cash, and Ethereum. The Sludge reports that his son, Bobby Goodlatte Jr., is an angel investor in Coinbase. His financial involvement in the company, though, is not disclosed.

Congressman Bob Goodlatte, who is the Chairman of the Judiciary Committee in the US House of Representatives, may become the first member of Congress to disclose that he owns cryptocurrencies.

Things Are Getting Serious

The last few months have marked interesting developments involving cryptocurrencies and politics. In May, fellow Democrats Dave Min and Brian Forde clashed over accepting cryptocurrencies as donations for the 45th Congressional race.

Earlier in January, former Republican Ron Paul said he’s in favor of legalizing alternative currencies so long as they are not used for fraudulent purposes.

Just a few days ago, Bitcoinist reported that a 2020 U.S. Presidential Candidate Andrew Yang will be accepting cryptocurrencies as official forms of donations for his campaign.

While the US Government remains uncertain on its position towards cryptocurrencies and the way they are treated, all of the above signals that they are beginning to have an impact on the American political landscape.

What do you think of Bob Goodlatte’s cryptocurrency holdings? Don’t hesitate to let us know in the comments below!


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Srp 04

‘We Don’t Want to Compete with Coinbase’ – Says Binance CEO

Changpeng “CZ” Zhao, shared some of his big ideas on the future of blockchain and cryptocurrency with Fortune magazine this week. And it’s probably worth listening to the man running the biggest crypto-exchange in the world.


The future is not now, but is decentralised

Binance acquired Trust Wallet this week, and here at Bitcoinist, we focussed on the benefits of adding a mobile wallet to its services. What was perhaps underplayed was that Trust Wallet also acts as a browser for decentralized apps (dApps).

Whilst dApps have currently come to the fore, take-up has been slow, partly due to limited functionality and substandard user-experience. This is something that CZ believes will start to change before too long.

He predicts a move into messaging and social media within the next two years, followed by fully-fledged blockchain-based e-commerce. Let’s not forget that Binance is currently partnering with Malta to create a decentralized banking system.

Specialist blockchains will conquer all

A blockchain like Ethereum is great for hosting dApps, although its throne is constantly under attack from newer, faster rivals. But CZ believes that all blockchains designed for general smart contracts, will ultimately be too slow.

His vision is of a future consisting of many custom ledgers designed for specific purposes. He mentions tools like Komodo and Tendermint, which can create just such custom blockchains.

There is enough in the pot for everyone

Considering Binance’s meteoric rise to prominence, you may expect some form of rivalry between it and previous top crypto-company, Coinbase. But according to CZ, the relationship is more like a mutual love-in.

He says that Binance doesn’t want to compete with Coinbase and Gemini in places like the United States, due to the lawyers and lobbying. It is more than happy working in places like Malta, where it can have a more direct relationship with the administration.

“In developed markets, there’s more money to be made but more regulation and it’s saturated with competition,” he said. “We don’t want to compete with Coinbase and Gemini. The strategy there requires lots of lawyers and lobbying.”

In actual fact, he says that both Binance and Coinbase appreciate the groundwork being down by the other in their various jurisdictions.

Thin on the ground

Of course, predictions aren’t exactly thin on the ground in the cryptocurrency world. And only time will tell what the future will actually bring.

But based on past results (which are not an indicator of future performance), you would have to suggest that CZ has a certain industry insight.

What do you think about CZ’s comments? Share your thoughts below!


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