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.


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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Úno 17

Chicago Trader Steals Over $2 Million in Bitcoin and Litecoin Cryptocurrency

· February 17, 2018 · 10:30 am

A Chicago trader is facing up to 20 years in prison for stealing over $2 million in Bitcoin and Litecoin cryptocurrency from his employer.

Most 24-year-olds would be quite happy to be attached to a new cryptocurrency unit for a major financial entity. That’s not a bad career path for someone who previously worked as a cryptocurrency trader in South Korea before joining Consolidated Trading LLC to become an assistant bond trader in July 2016. A new department looking to dive into the burgeoning crypto world is a great stepping stone for moving up. That is unless that person is a degenerate gambler. Such is the case of Joseph Kim, who stole over $2 million in Litecoin and Bitcoin cryptocurrency from his employer.


Stealing Begins Almost Immediately

The cryptocurrency group was created by Consolidated in September 2017, and Joseph Kim joined the unit sometime during that month. He had his own personal cryptocurrency accounts, which he informed his employer of, and he was told to cease all personal trading to avoid a conflict of interest.

However, Kim transferred 980 litecoins (worth $48,000) on a weekend shortly after joining the new unit. When a supervisor found out, Kim said he transferred the coins to a “personal digital wallet for safety reasons” due to issues he was having with Bitfinex, the cryptocurrency exchange in Hong Kong. He then said that the coins had been transferred to a Consolidated wallet (which was untrue).

In November, the trader then sent 55 bitcoins (value of $433,000) from Consolidated into an unknown account. When confronted on this transfer, Kim said that the transfer had been blocked and that he was taking steps to unblock it. He later sent back 27 bitcoins into the corporate account, leaving 28 in his possession.

The Sizes Get Bigger

Eventually, Kim transferred 284 bitcoins (worth $2.8 million) from the company’s account into a personal wallet. He later sent back 102 of those coins into the Consolidated account, after which he then transferred the remaining 182 coins into a different account. Of that last amount, Kim lost a portion of it by personally trading.

Cryptocurrency gambling

When eventually confronted over all the transfers, Kim admitted to investing in short future positions using 55 bitcoins. He continued stealing cryptocurrency from the company to cover his margin calls, losses, and personal investments. After being arrested, Kim said that he was a degenerate gambler and admitted to converting the stolen Litecoin into Bitcoin for investment purposes.

Eventually, Consolidated managed to recover roughly 144 bitcoins from Kim’s various personal wallets. The financial company lost about $603,000 overall from the rogue trader’s gambling addiction.

In an email to his superiors at Consolidated, Kim said:

It was not my intention to steal for myself. I was perversely trying to fix what I had already done. I can’t believe I did not stop.

Investment gambling is real, and cryptocurrency is just a new avenue for some to indulge in the practice. The US Attorney has charged Joseph Kim with wire fraud, which could net him up to 20 years in prison. Kim has also made history, of a sort. He’s the first person in Chicago to be charged with wire fraud in regards to cryptocurrency.

Do you think that we’ll see more cases of traders pilfering cryptocurrency to fuel their gambling addiction in the future? Let us know in the comments below.

Images courtesy of Pixabay and Bitcoinist archives.

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Úno 16

Optioment Bitcoin Scam Triggers Europe-Wide Manhunt

· February 16, 2018 · 10:30 am

After possibly thousands of investors got burned by arbitrage-trading company Optioment last year, Austrian authorities have asked Interpol to help track down the fraudsters responsible for the Bitcoin scam.

Another Bitcoin Scam Burns Buyers

European authorities are on the hunt for criminals involved in defrauding thousands of individuals and losing over $100 million worth of investors’ Bitcoin.

According to reports, Optioment ran a now-defunct website while holding large-scale events in Austria — in which the company advertised itself as a “private Costa Rica-based Bitcoin fund” promising unrealistic returns. Law firm Lansky, Ganzger & Partner claims Optioment promised weekly interest payments upwards of 4 percent on long-term Bitcoin deposits, with the added incentivization of inviting new users.

Optioment apparently paid out returns on a timely basis at the beginning of its operation, which boosted investor confidence and encouraged users to reinvest in the scheme. Sometime around the massive bull run in November and December of last year, however, the returns stopped coming, and the fraudulent scheme collapsed.

Spokeswoman Christina Ratz told Bloomberg that prosecutors in Vienna are consolidating “hundreds of complaints” against the fraudulent company, and Die Presse originally reported that upwards of 10,000 individuals have been victimized, resulting in roughly 12,000 lost bitcoins — currently worth an estimated $118.5 million at the time of this writing.


According to Bloomberg, no arrests have yet been made, but Interpol has been asked to investigate individuals in Denmark, Latvia, and Germany.

Reinforcing European Rhetoric

The hunt for Optioment’s operators comes at a time when some European countries are calling for a crackdown on cryptocurrency.

French Finance Minister Bruno le Maire and interim German Finance Minister Peter Altmaier have gone on record to state that cryptocurrencies are risky for investors and threaten long-term global financial stability.

British Prime Minister Theresa May has also expressed concerns over cryptocurrency’s criminal usage, stating that she is looking “very seriously” at cryptocurrencies “because of the way they are used, particularly by criminals.”


Additionally, European Central Bank board member Yves Mersch has recently stated that cryptocurrencies are “not money, nor will they be for the foreseeable future.”

Most recently, the European Supervisory Authorities (ESAs) have also recently issued a press release warning consumers of the dangers associated with buying cryptocurrency.

Do you think scams like Optioment are permanently damaging the reputation of cryptocurrency in Europe and around the world? Let us know in the comments below!

Images courtesy of Wikimedia Commons/@Plani and Bitcoinist archives.

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Úno 11

New Jersey Cracks Down on Fraudulent Bitstrade

· February 11, 2018 · 7:00 am

Following the fallout from fraudulent Ponzi-scheme Bitconnect’s demise, New Jersey has officially ordered cryptocurrency investment entity Bitstrade to stop offering unregistered and fraudulent securities in the state.

New Jersey regulators have uncovered yet another fraudulent cryptocurrency investment company.

The announcement comes by way of Attorney General Gurbir S. Grewal and the Division of Consumer Affairs and has been ordered by the Bureau of Securities after an investigation found Bitstrade to be in violation of New Jersey’s Uniform Securities Law.

ponzi scheme

Bitstrade was found to have sold unregistered securities while guaranteeing upwards of 10 percent daily returns, despite lacking a proper registration to sell securities in New Jersey.

Bitstrade also failed to disclose what have been deemed “key material facts” to prospective investors, including an official address, the names of its executive officers, the company’s financial status, potential risks to investors, and how investors’ money is used. Attorney General Grewal stated:

The Bureau’s action today reinforces our commitment to protecting investors as they navigate the uncharted and largely unregulated domain of cryptocurrency-related investments. We want to make sure that investors tempted to cash in on the cryptocurrency rage aren’t being lured into sending funds to an anonymous internet entity without knowing where the funds are going or how they’ll be used.

A visit to Bitstrade’s official website indicates that all signs indeed lead to a Ponzi scheme.

The company claims to be registered in the United States and purports to guarantee “outstanding returns” by “working as an investment pool, collecting multiple lower value investments and grouping them into one single HUGE investment, using those funds to trade on the stock market”—without any actual information as to how they use investors money.

BitConnect Sued By 6 Investors Who Lost Over $700K

If it sounds too good to be true, it probably is. According to Sharon M. Joyce, Acting Director of the Division of Consumer Affairs:

What makes Bitstrade’s fraudulent offer potentially more harmful for unsophisticated investors is that cryptocurrency is virtually anonymous, so there is no recourse for investors to recoup their losses. We’re reminding investors to be extra vigilant about fully vetting what is being sold before investing with cryptocurrency.

The Bureau additionally found Bitstrade’s Redland, California and Scottsdale, Arizona addresses to be falsified.

According to Christopher W. Gerold, Chief of the Bureau of Securities, “Bitstrade is a prime example of a company seeking to capitalize on the cryptocurrency craze. Regulators, including the Bureau, are actively responding to fraudulent crypto-cloaked securities offerings.”

Bitstrade requires purchases be made with Bitcoin.

Do you think Bitstrade is a Ponzi scheme? Do you agree that state regulators should actively try to prevent individuals from investing in fraudulent companies? Let us know in the comments below!

Images courtesy of Bitcoinist archives.

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Úno 04

Reinventing ICO Research and Reviews with Revain

· February 4, 2018 · 9:00 am

The crypto space is going to get very crowded in the next year or two so finding the right token or ICO to invest in will become more of a challenge.

Big social media platforms do not help much as content is unregulated, unedited, and they are largely populated by trolls and shills. Scams and fake news are rife and the companies that own the platforms even profit from advertising fraudulent websites. What is needed is an unbiased authentic blockchain based feedback platform and Revain could be the answer.

Promoting a blockchain project is going to become increasingly difficult as the crypto space exponentially fills with new tokens and ICOs. Most companies currently thrive on client reviews in promoting their products and some have even taken a step further in offering managed reviews and reputations for other companies. This can lead to bias and fake reviews as the providers need to show positive results to their clients to protect their revenue streams.

Reviews on the Blockchain

By using a blockchain to record reviews removes any possibility of tampering and filtering, it becomes an immutable source of genuine information. If both positive and negative reviews are open for discussion and can be contested more accurate picture of a product or service can be formed. Revain is providing this ecosystem by providing a blockchain based reviews platform powered by the RVN token.

The ICO market is booming but one major drawback it currently suffers is the lack of honest reviews and regulation. There needs to be a reliable mechanism to review a company’s concepts, technology, and token value. Companies need to be able to promote their blockchain products in an unbiased environment away from social media spam, shills and review manipulation.

ICO Dashboard

One method to source solid projects would be to employ an ICO dashboard that can provide potential investors with an overview of the project, an evaluation of the token price, an update on work in progress and milestones achieved on the roadmap. Feedback from team members would also reassure investors that the project is on schedule and developments are being made. Such a system would be hard to find but Revain is currently working on something that will do just that.

The product aims to give investors a more informed decision whether to enter into an ICO or not. From the company’s point of view, it can be a platform to facilitate higher levels of transparency and inspire confidence from potential investors. Revain has been coming along leaps and bounds releasing the first version of the product in November, followed by v0.2 in mid-December then just two weeks later v0.3 was released. And now, just days ago, the release of v0.4 was announced. The platform allows anyone to write a review and there are ‘like’ or ‘dislike’ buttons that, unlike some popular social media platforms, cannot be refuted as they’re on the blockchain.

With version 0.2 of the ICO dashboard came the ability to buy and sell tokens on various exchanges and version 0.3 took things even further, with the addition of new data widgets, charts, price dynamics, and token price movement analytics. The fourth iteration of the dashboard brings a new and more intuitive user interface along with the ability for users to share token statistics and performance data via social media channels.

Revain Dashboard v0.4

Tools to help the investor monitor token dynamics are also being incorporated into the platform such as daily/weekly price and volume which compare prices with the previous day/week. ICO investment date and token price tracking are also available. The dashboard is evolving fast with new functionality being added on a weekly basis, the Revain team is working overtime.

The ability to find and invest in reliable ICOs and blockchain projects is going to be more important than ever this year with so many of them coming online. An incontrovertible blockchain platform of reviews negates any possible partiality within the system and provides both investors and crypto companies with greater opportunity. In the increasingly crowded and often foggy crypto industry, it pays to stand out from the rest with clarity and honesty for both clients and companies.

For more information about Revan please visit revain.org and test drive the new dashboard.

Do you think Revain can help remove a lot of the fraudulent ICOs from the market? How likely are you to use the platform to leave reviews? Let us know in the comments below.

Images courtesy of Revain, Shutterstock

Bitcoinist does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. Readers should do their own research before taking any actions related to the company.

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Led 21

Oil Giant Shell Buys into Blockchain

· January 21, 2018 · 6:00 am

Blockchain technology is no longer limited to innovative startups with grand intentions of changing the world. Massive multinationals are also looking to use the technology to improve their operations and boost productivity. The latest in the lineup to get on board the blockchain train is petro corporation Shell.

According to industry portal OilPrice, the energy giant has bought up a minority share in Gartner-listed startup Applied Blockchain. Details of the deal have yet to be disclosed, but the move will enable the London startup to help Shell explore how the technology might be applied to its business.

oil rig

Blockchain into Business

Operating for around three years now, Applied Blockchain has clients from the banking, telecoms, carmaking, manufacturing, and aerospace industries. This its first foray into energy. The technology is slowly entering into the energy sector with, according to Reuters, a consortium involving Shell, BP, and Statoil already working on the development of a blockchain-based energy commodity trading platform.

Shell chief technology officer Johan Krebbers highlighted the huge potential blockchain tech has for business:

Blockchain applications have huge potential to shake up how we do things in the energy industry from streamlining process, to simplifying how we work with our suppliers and serve our customers. Investing in Applied Blockchain is part of our commitment to use digitalisation to create value in our core business and develop new business models.

blockchain tech

Energy and Blockchains

Shell is not the only energy company with eyes on blockchain technology.  Last year, it was reported that trading house Mercuria started working with banks ING and Societe Generale on the first large oil trade based on blockchain technology. According to analysts, the marriage of blockchain and the oil and gas industry presents a number of opportunities for streamlining and improvements in cross-border payments, record management, supply chain management, and smart contracts as potential applications.

Specialists at multinational professional services network Deloitte stated:

A secure system that mitigates risk, increases transparency, provides an audit trail, and speeds up transactions at a significantly reduced cost may be appealing to oil and gas companies.

As the crypto space expands and more companies develop blockchain solutions, the entire industry will benefit from a technology which is revolutionizing the way the world does business.

Will more blockchain adoption help cryptocurrency markets? Share your thoughts in the comments below.

Images courtesy of Pixabay and Bitcoinist archives.

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Led 12

New Data Shows Coinbase May Be Spamming the Bitcoin Network

· January 12, 2018 · 7:30 am

US exchange and wallet provider Coinbase is facing fresh criticism from both users and Bitcoin industry figures over its delayed SegWit adoption.

‘You Alone Are Spamming The Network’

As the company continues to suffer technical outages due to high demand, its effect on the Bitcoin mempool has become the source of renewed calls for SegWit as a priority.

“You need to batch your outgoing transactions,” Twitter user Civ Ekonom wrote in response to Coinbase’s latest reported system breakdown.

You are ALONE spamming the network. If you would use segwit and batch all outgoing transactions the mempool would be EMPTY.

Citing analysis of the mempool as “clear evidence,” the mempool size appears to drop significantly when Coinbase recently suspended sending Bitcoin. This has added fuel to existing community anger that the exchange has failed to implement SegWit, which would significantly reduce the cost of Bitcoin transactions it handles.

New GM: Performance ‘Totally Unacceptable’

CEO Brian Armstrong has also borne the brunt of accusations regarding his exchange’s performance and roadmap. Last year, he claimed SegWit was not a high priority on Coinbase customers’ wishlists.

In a different response to the outage, Blockchain real estate personality Ragnar Lifthrasir went as far as to suggest firing Armstrong would serve to improve Coinbase’s reliability.

New Evidence Emerges, Points to Possible Insider Trading at Coinbase

Earlier this week, Bitcoinist reported on a user-filed petition on Change.org to force a SegWit upgrade as a priority. That petition has now accrued over 8000 signatures.

In its latest official correspondence Thursday, Coinbase focused on “improving customer experience” via its new general manager Dan Romero.

Romero had previously announced SegWit as engineering priority number three in 2018.

“Dan’s first priority as GM will be improving the Coinbase customer experience,” Armstrong explained.

…Dan will provide an update on what we are doing to improve the experience and I will continue to post about all of the major activities at the company.

Romero meanwhile called the past technical performance throughout 2017 “totally unacceptable.”

What do you think about Coinbase’s SegWit situation? Let us know in the comments below!

Images courtesy of Twitter, Shutterstock

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Led 10

Bitcoin Fees Near-Zero as Company Launches Mainnet Lightning Payments

· January 10, 2018 · 6:00 am

Anonymous VPN service TorGuard has become one of the first consumer businesses to accept Lightning Network (LN) payments for Bitcoin.

‘Testnet Is So Boring’

In messages on Twitter staff since appeared to back up privately, TorGuard confirmed users can now pay for its services in Bitcoin using Lightning, significantly reducing transaction times and fees.

The news makes the company a pioneer of Bitcoin mainnet LN payments after the technology debuted as a testnet interface last month.

“Disclaimer: c-lightning is not production ready. TorGuard will cover loss of funds when sending us LN payments. Testnet is so boring,” tweets added.

One Transaction = One Satoshi?

Excited community members reacted broadly positively to a customer service representative similarly offering LN payments, seemingly unaware TorGuard had already publicly announced the new feature.

“Do you have (an) LN (mainnet) node up and running? If so, I can invoice you for 1 month of our service for only 1 satoshi,” the representative offered.

This last point appeared to cause contention, responses arguing the actual cost of a Lightning transaction would be significantly higher than the $0.‎00014167 quoted due to the need to open and close a channel before and after.

Bitcoin advocates have long championed Lightning as the crucial solution to the ongoing high transaction fees and slow confirmation times which have plagued the network since its mass uptake which began around one year ago.

While altcoins such as Bitcoin Cash and most recently Ripple have jumped on the problem as proof their offerings are more valuable than Bitcoin, early adopters remain confident that so-called Layer 2 updates such as LN payments will make such arguments null and void.

Late last month, Bitcoin-based cellphone top-up service Bitrefill also began using Lightning mainnet payments to fulfil customer orders as part of successful “limited testing”.

What do you think about the launch of mainnet Lightning Network payments? Let us know in the comments below!

Images courtesy of Twitter, Shutterstock

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