Srp 30

Cryptojacking Campaigns Rose 29% in Q1, McAfee Says

In the first quarter of 2019, cryptojacking campaigns aimed at victims’ PCs to mine cryptocurrencies rose 29%, according to a recent report by security software provider McAfee.


Hackers Target Windows PCs to Mine Monero

The antivirus maker founded by crypto fan John McAfee discovered that both Windows and Apple ecosystems are equally vulnerable to cryptojacking campaigns.

Most of the mining attacks on Windows computers use PowerShell for propagation and execution. The latter is a task automation engine and interactive Command-Line Interface (CLI) created by Microsoft for system administration and configuration management.

In the first quarter, one of the most significant crypto malware campaigns discovered by McAfee was PsMiner. Hackers have been using a Trojan to distribute the mining worm. The malware is designed to mine Monero by exploiting the vulnerabilities in servers running Hadoop, ElasticSearch, Weblogic, Redis, SqlServer, Spring, and ThinkPHP.

Monero (XMR) is a cryptocurrency that allows users to make peer-to-peer transactions anonymously without being traced even by their addresses. The coin is among 15 largest cryptocurrencies by market cap. As of August 30, it boasts a capitalization of $1.15 billion. Monero is attractive for miners thanks to its generous reward potential. Also, XMR miners don’t have to use expensive GPUs and ASIC systems as in the case of Bitcoin.

Back to PsMiner, it reaches the victim’s computer by a PowerShell command that downloads the WindowsUpdate.ps1 payload, the McAfee report says.

McAfee Report Says Apple Devices Are Vulnerable Too

Besides PsMiner, another malware family, called CookieMiner, has been attacking macOS devices and sharing code with a past campaign to steal digital wallets and credentials. The malware used EmPyre backdoor to automate the stealing process.

McAfee found that CookieMiner stole data from popular crypto exchanges, including Binance, Coinbase, Bitstamp, Poloniex, Bittrex, and MyEtherWallet. The malware got access to data like passwords to access the crypto exchanges’ sites. However, the main goal was to infect computers to mine Koto.

In general, ransomware attacks rose 118% over the first quarter, the report says. There are new ransomware families, while hackers use innovative techniques. Even so, hackers still need victims’ involuntary cooperation. McAfee concluded:

“Even with all the sophisticated attack techniques being developed, attackers are still highly dependent on human interaction and social engineering.”

Do you think hacking attacks represent one of the most significant problems for the crypto space? Share your thoughts below!


Images via Shutterstock

The Rundown

Share
Srp 03

Bitmain Loses $625 Million In Two Months, But Pins Hopes On New Tech

Bitcoin mining rig manufacturer, Bitmain, reportedly made losses of $625 million in the first two months of 2019. However, it has high hopes for a turnaround based on demand for new 7nm mining machines.


A Bad Start to the Year

According to a report from a Chinese news outlet, Bitmain’s total operating income for Q1 was $1.082 billion dollars, with revenues split over the three months as $253 million, $253 million, and $579 million (respectively).

January and February saw losses of $345 million and $280 million, although in March the company posted a profit of $315 million. Still, a $310 million loss over Q1 is not a good look.

Reportedly, the loss was down to the offloading of outdated 16nm mining rig inventory at low prices.

New Tech To Change Bitmain Fortunes

Despite Q1 losses, Bitmain expects a strong performance in H2, once its old stock has been cleared and the company starts selling its new 7nm machines. Bitmain has allegedly placed a large order for 7nm chips from Taiwan Semiconductor Manufacturing Company (TSMC), with a lead time of 3 to 4 months.

It expects cash flow to steadily increase in Q3 as advanced orders for the new machines come in, and then see explosive growth in earnings after the first 7nm rigs start to ship.

It also anticipates a growth in profits on its artificial intelligence (AI) line of products.

Better Results To Boost IPO

Bitmain will need to post some better results if it is to attract investors to its beleaguered IPO. The company has allegedly revived its IPO plans in the US, after the original filing in Hong Kong lapsed.

Bitmain had a somewhat disastrous year in 2018 as prices fell across cryptocurrency markets, and it took an ill-advised gamble on Bitcoin Cash. This was considered by many to be good news for Bitcoin as mining became more decentralised and Bitmain’s mining dominance dropped.

The upturn in the fortunes of Bitcoin have also helped Bitmain in its recovery, with some sources claiming that staff options have been already been completed, ahead of the revived IPO, which is now imminent.

Do you think 2019 will be the year for Bitmain? Let us know your thoughts in the comment section below!


Images via Shutterstock.

The Rundown

Share
Čvn 04

What Happens When All the Bitcoins Have Been Mined?

Over 83 percent of all bitcoins that will ever exist have already been minted. Over 99 percent will be mined by 2040. So, what happens when all the bitcoins have been mined?


Bitcoin Has a Finite Supply of 21 Million Bitcoins

One of the key features of Bitcoin is its hard-capped finite supply at 21 million bitcoins. This means it is entirely impossible to print out of thin air like fiat currency which makes it a deflationary currency by nature.

Bitcoin’s scarcity also drives its value. Yet, since Bitcoin is sustained by a network of miners who are compensated in block rewards, many people wonder what happens when all the bitcoins have been mined?

What will miners do once the 21 million hard-cap has been reached? How will they make their living and what will incentivize them to keep the network secure? The short answer is transaction fees.

What Happens When All the Bitcoins Have Been Mined?

Currently, when a new block is created, miners receive a block reward, which contains both newly minted bitcoins and transaction fees. This reward incentivizes miners to behave correctly and protect the network.

Once all the bitcoins have been mined, and miners have to rely on transaction fees alone, will that be enough to remain financially operational? If not, could that lead to a contraction of miners that would centralize and potentially collapse the network? Not according to research by Interchange and Awe and Wonder.

Looking at the below chart, you can see that by the year 2030, transaction fees start to represent a much higher part of the block reward. Once the fees make up over 50 percent of the block reward, miners transition to surviving on TX fees more than BTC.

crossover point, what happens when all the bitcoins have been mined

Will Transaction Fees Be Enough to Incentivize Miners?

The answer to that question is that no one is entirely sure how things will play out. However, there is sufficient evidence to suggest that yes, transaction fees will be enough to sustain miners and thus the Bitcoin network.

After all, as the value of Bitcoin rises, so do the fees. There are some concerns about whether rising fees will deter people from using Bitcoin. However, fees will still remain significantly lower than transferring fiat around the world. Just consider how much a fiat wire costs now, or the commission on purchasing a home for example. As Interchange points out:

Average closing costs on a home are 2% of the value, or $8,000. I’m sure individuals will be fine paying $50 in the future to send an immutable payment with an asset that can’t be easily taken away from them (unlike real estate which could be seized in a geopolitical quarrel at the snap of a finger).

Transaction Fees Also Gain Value Over Time

Since Bitcoin miners will be earning transaction fees over time, and BTC will gain value over time, so will the fees. This will make it economically viable for them to continue securing the network.

Interestingly, Alex Sunnarborg pointed out that only the Bitcoin and Ethereum blockchains have sufficient transaction fees in place to compensate miners in a non-inflationary environment. 

The change from relying on transaction fees for income over mined bitcoins is not going to happen overnight. There are also plenty of factors that may change between now and then, giving miners plenty of time to adjust to the new model and for the Bitcoin network to remain secure.

What do you think will have when all the bitcoins have been mined? Share your thoughts below!


Images via Shutterstock

The Rundown

Share
Kvě 02

Square Cash Bitcoin Sales Will Overtake Mining Rate After 2020

Square’s Cash app reported record Bitcoin revenue once again, in its Q1 2019 earnings report. If growth continues at this rate, there could soon be 2 BTC bought on Square Cash for each one mined.


Record Quarterly Bitcoin Sales On Cash App

Jack Dorsey’s financial services provider, Square, posted another quarter of record BTC sales through its Cash app. In its Q1 2019 earnings report, it announced $65.5 million in bitcoin revenue for the quarter; up almost 25% on the previous quarter’s record sales at the time of $52.4 million.

Bitcoin profit for the quarter was at roughly $832,000; a 70% gain over the $490,000 profit in the prior 3 month period.

Maintaining Current Growth Rate Will Outstrip Supply

Crypto-analyst, Yassine Elmandjra, extrapolated data at the current growth rate to give projected figures for the next eighteen months.

She discovered that, should growth continue at the current rate, after next May’s reward halving sales will be twice the amount of BTC being mined.

In fact, Square Cash bitcoin sales would likely reach parity with the mining reward just before the halving. That would lead to the 200% figure immediately following the halving, and a potential tripling the following quarter.

And When There’s More Demand Than Supply

Which would mean only positive things for price; and this is only considering BTC sold through Cash app. This level of growth is likely to be mirrored in increased Bitcoin adoption across other platforms, pushing prices ever higher.

This is all, of course, on the caveat that the current growth rate mustn’t run out of steam.

But who is to say it needs to? Jack Dorsey seems keen to champion Bitcoin, and certainly has the kind of reach which could make a real difference to uptake. Furthermore, he has already put his seal of approval on Lightning Network, with a view to incorporating LN payments into Cash app.

On top of this, he recently revealed his plans to pay Bitcoin developers to build out an open source ecosystem for the currency.

Will Cash app continue to grow its Bitcoin users? Share your thoughts below!


Images via Shutterstock

The Rundown

Share
Dub 23

Why Moving to Texas Could Give Bitcoin Miners Maximum Profit

Flaring, a common practice of burning off natural gas that can’t be efficiently captured and stored has reportedly reached record levels in the state of Texas. Let’s look at why Bitcoin mining would be the perfect solution to capture this energy ‘waste’ and transform it into sound money. 


Texas ‘Energy Waste’ Rises 85%

According to a recent Bloomberg report, America’s Permian Basin, a large sedimentary basin located in the southwestern part of the country, is producing so much natural gas that at some point producers had to burn some of it off.

This process is referred to as “flaring” and it’s carried out when it makes more sense to burn the gas than to efficiently capture and store it. As oil production in the region surge, so does flaring.

The report also outlines that at the end of 2018, producers were burning off more than enough fuel to meet the entire residential demand of the whole state of Texas. Compared to last year, the amount of gas flared in the Permian has increased by about 85 percent.

A Problem in Need of a Solution…

Speaking on the matter was Scott Sheffield, Chief Executive Officer at Pioneer Natural Resources, who said:

It’s a black eye for the Permian Basin. […] The state, the pipeline companies and the producers — we all need to come together to figure out a way to stop the flaring.

The main challenge in front of the industry is that there are not enough pipelines to get the gas to the consumers. This is also why, at some point, producers were actually paying their customers to take the gas.

Besides pure financial issues, however, flaring is also undoubtedly causing a lot of environmental damage. The process is also producing serious amounts of carbon dioxide, which has reportedly contributed more than any other driver to climate change between 1750 and 2011.

texas oil gas bitcoin mining

…Which Already Exists

As Bitcoinist reported earlier in March, the solution that the state of Texas is desperately looking for might already be here: mining bitcoin.

A project, headed by oilman and bitcoin entrepreneur Stephen Barbour, has embarked on tackling the issues of excessive oil and gas production and the consequential flaring.

Barbour has installed a generator to a shipping container full of mining rigs and placed it at a remote oil field in Canada. Its sole purpose is to convert natural gas into electricity and to power the rigs. In order for the machines to operate 24/7, the unit is using about 400 cubic meters of natural gas per day.

Of course, the investment needed to buy and convert a regular shipping container into a facility of the kind can round up at $130,000 before factoring in the price of mining rigs.

Cryptocurrency Mining

However, apart from tackling the excessive waste of natural gas (which will save money), it would also result in highly profitable mining of bitcoin since the energy would not only be free, but producers may even pay miners to utilize it.

Barbour says bitcoin mining enables transforming energy that would otherwise go to waste into “financial freedom.”

What’s more, the mined bitcoin can then be used toward environmental conservation efforts, improve local infrastructure, or just about anything else.

Given that there are no other foreseeable solutions apart from the constant structuring of additional pipelines, this does sound like the perfect idea for Texas and bitcoin mining investors to look into.

Can Bitcoin mining help Texas capitalize on its ‘energy waste’? Let us know in the comments below!


Images courtesy of Shutterstock, Bloomberg

The Rundown

Share
Dub 20

Chinese Company Lost $23 Million Allegedly Mining Cryptocurrency in Secret

A subsidiary of Chinese firm Huatie has been sold off at 10 percent of its initial value following losses from suspected secret cryptocurrency mining activities amounting to about $23 million.


90 Percent Value Plunged Probably Due to 2018 Bear Market

According to Chinese crypto media outlet 8BTC, Huatie HengAn, a subsidiary of Huatie has been sold for $2 million. Reports indicate that the company’s value plunged by about 90 percent from an initial valuation of $25 million, all in the space of one year.

Huatie HengAn originally a construction company reportedly purchased 36,500 units of hardware listed as “servers” from Canaan and Ebang in 2018.

Given that both companies don’t sell servers but instead sell crypto mining hardware, the suspicion is that Huatie HengAn pivoted from construction to cryptocurrency mining.

Back in December 2018, Huatie’s end-of-year financial report showed losses of about $14 million for its subsidiary firm. By February 2018, the total net loss had risen to $23 million.

With the total loss just $2 million off from its initial $25 million investment into the business, it appears the parent company decided to count its losses and sell the business.

If Huatie HengAn was indeed engaging in cryptocurrency mining, it would be the latest in a growing list of businesses affected by the 2018 bear market.

During the year-long bear period, the entire cryptocurrency market fell by an average of more than 80 percent across the board.

2018 – A Dreadful Year for Mining Companies

For the first half of 2018, it appeared as though mining companies were immune to the hemorrhaging prices in the cryptocurrency market. However, by Q3 2018 reports of difficult financial situations began to emerge.

Cloud mining services like Hashflare were the first to shut down citing lack of profitability. Then reports began to emerge of massive losses for mining giant Bitmain – a situation further worsened by a bet on Bitcoin Cash that ultimately backfired.

The fallout from the suspected losses has seen the company downsize its workforce, firing entire departments. Bitmain has also appointed a new CEO.

Ebang, Bitmain, and Canaan abandoned plans for massive initial public offerings (IPO). GMO also incurred losses of $12 million forcing the company to shut down its mining hardware enterprise.

Even companies like Nvidia that sold hardware for miners weren’t left out as the company is reportedly trying to offload unsold inventory as demand shrunk in 2018.

Do you think Huatie HengAn was secretly mining cryptocurrencies under the guise of could computing? Let us know your thoughts in the comments below.


Images via 8BTC and Twitter (@btcinchina), Shutterstock

The Rundown

Share
Pro 24

Bitmain Fires Entire Bitcoin Cash Development Team: Report

Things appear to be far from well with Bitcoin Mining firm Bitmain as several reports indicate another round of employee layoffs at the firm. This news follows reports that the company’s IPO is also dead in the water after rumors of Q3 losses running into over $700 million.


Bitmain on Firing Spree

According to Blockstream CSO, Samson Mow, there are rumors swirling that the mining giant laid off its entire Copernicus team. Mow cited posts from Chinese LinkedIn published by company employees. The Copernicus team was responsible for developing the Bitcoin Cash GO client for Bitmain.

In another report, other messages indicate a far more extensive labor cutback, which could target up to half of Bitmain’s entire workforce. Earlier in the month, Bitcoinist reported that the company closed down its research division in Israel. More than 20 employees lost their jobs after the move.

BCH Blues

Bitmain bet on Bitcoin Cash 00, a move that now appears to have backfired leading to severe losses for the company. Rumors of massive Q3 2018 losses are also casting huge doubts over the company financials and will likely stonewall its IPO plans.

The second half of 2018 has turned out to be a challenging one for the company. From the massive fall in BCH prices to the Bitcoin Cash hash wars, Bitmain’s bitcoin mining industry monopoly could be in jeopardy.

Recently, US IT firm UnitedCorp sued Bitmain along with Kraken, Bitcoin.com, and Roger Ver for allegedly manipulating the BCH network.

Tis the Season of Layoffs

Bitmain is only the latest in a series of mass layoffs in the cryptocurrency and blockchain technology industry. Earlier this month, Consensys fired 100 of its employees (about 10 percent of its entire staff strength) as Ethereum price 00 plummeted from an all-time high of $1,400 in January to as low as $83 in early December. Reports even indicate that the company isn’t through with its downsizing.

Others like Steemit and Ethereum mobile dApp maker Status have also significantly reduced their workforce in the past months. For many of these startups, the reason for their downsizing is directly tied to the dramatic fall in cryptocurrency prices with many experiencing drop of over 90 percent.

Oddly enough, despite the increasing layoffs, the latest figures show that talent is still very much in demand in the space. A recent Glassdoor survey found that job openings in the cryptocurrency industry are at an 18-month high.

What do you think the situation at Bitmain reveals about the state of similar companies in the cryptocurrency scene at the moment? Please share your thoughts with us in the comments below.


Image courtesy of Twitter (@DoveyWan and @Excellion), Shutterstock

Share
Pro 23

Bitcoin Price to $17K in 2020, Says ‘Unorthodox’ Mining Difficulty Prediction

An ‘unorthodox prediction’ of mining difficulty increases puts the bitcoin price somewhere around $17,000 in 2020 — due to the possible power law relationship between the two.


Bitcoin price and difficulty ‘power law relationship’

Twitter user @100trillionUSD is back again with another intriguing chart — this time plotting the relationship between BTC price 00 and expected bitcoin mining difficulty in the coming years.

The previous graph visualized the relationship between the bitcoin mining reward halving and its impact on price over time, plotting the months before the halving event took place. This time the focus was on mining difficulty and price, since many analysts consider it to be inextricably linked to network hash rate.

 “Price follows hashrate,” said Max Keiser earlier this year. Adding that it’s been his “mantra” since bitcoin was at $3.

Mining is undoubtedly profitable when the hash rate is rising. It also means miners are confident in the future of Bitcoin if they are adding hardware to scale up their operations. However, a high hash rate also causes the Bitcoin mining difficulty to increase. This makes the mining process more resource-intensive as more hash power is needed to achieve the same results as at lower difficulty levels.

If the hash rate is too high relative to the price at which miners can sell their mined bitcoin (as we’ve seen this year), the most unprofitable miners will likely drop out. They may sell their equipment or simply turn off their rigs until the price recovers or it becomes easier to mine as difficulty adjusts. 

“Based on the poll results on bitcoin difficulty and the possible power law relationship between bitcoin price and difficulty (see formula below), an unorthodox prediction of the 2020 bitcoin price would be: $17,317,” explains 100trillionUSD.

Overall, 85 percent of respondents believe the difficulty will increase 10-100 times in the next two years. Meanwhile, only 10 percent think this is the beginning of the end for Bitcoin mining frequently referred to as the ‘death spiral’ (more about this later).

The biggest share of respondents (59 percent) expects the difficulty to rise 10x between today and the end of 2020. A smaller group (27 percent), however, believe the increase could be as high as 100X, which would translate into a price above $28,000.

Granted, the poll sample size was rather small with just over 250 votes. Nevertheless, mining difficulty is an important factor to consider for not only predicting BTC price but also evaluating the state of the network as a whole.

Difficulty Drops But No ‘Death Spiral’

Bitcoinist recently reported that the Bitcoin network mining difficulty just had another downward adjustment to lower price. The biggest in seven years, in fact, amid a year-long bear market that saw an 85 percent drop in market capitalization from its all-time high in late 2017.

But contrary to many ‘experts’ equating a break in the trend to the start of a mining ‘death spiral,’ the difficulty adjustment is an important counterbalance for the Bitcoin network. In other words, the adjusting difficulty (every 2016 blocks) relative to hash rate is a feature that enables the Bitcoin network to find the equilibrium for mining profitability.

What’s more, this is similar to what central banks do by raising and lowering interest rates with changing market conditions. However, in Bitcoin’s case, the adjustment is entirely baked into the code and thus, entirely predictable. 

Is mining difficulty a good metric to consider when predicting price? Share your thoughts below! 


Images courtesy of Shutterstock, blockchain.info, @100trillionUSD.

Share
Lis 25

Bitcoin Pioneer Files For Bankruptcy

Washington State bitcoin mining pioneer GigaWatt filed for bankruptcy this week in a suspected bid to sell the company. The move follows the departure, in August, of the company’s co-founder, David Carlson.


From Bedroom to World’s Biggest Bitcoin Mine

Carlson started mining bitcoin as a hobby back in 2012 and saw the potential of cheap hydro-electric power in the state. A former Microsoft engineer, Carlson built the world’s largest bitcoin mine in an old furniture store in Wenatchee in 2013.

The benefit of the reduced energy costs quickly became felt and the company expanded to offer hosting services to other miners. In central Washington, electricity sells for less than a quarter of the national average.

Bitcoin Boomtown

In 2017, as the bitcoin price exploded, GigaWatt planned a multi-million dollar expansion on a nine-acre plot in Douglas County. Local authorities supported the scheme to create 24 prefabricated ‘pods’ where miners could set up their operations.

The company raised $22.6 million dollars in an ICO, issuing tokens redeemable for discount hosting services. Carlson and the other three owners also invested $25 million to back the project. Everything was looking rosy for GigaWatt and Wenatchee.

bitcoin mining

Small-town Slowdown

If falling bitcoin prices made it hard to attract investors and clients, construction delays and budget overruns threw a real spanner in the works. The hosting pods remain incomplete and GigaWatt has faced several lawsuits from investors.

According to the bankruptcy filing, GigaWatt holds less than $50,000 in assets and has creditor claims of $7 million. It faces eviction proceedings from the Port of Douglas County, although these are ‘on hold’ pending the latest filing.

Climate Change

The climate has somewhat changed for miners across Washington State recently. Towns are pushing back against the previously welcomed miners and Grant County has introduced higher energy tariffs for ‘evolving industries.’

Despite this, the Port Executive Director hopes that the project will still be completed, either by GigaWatt or another operator. She said:

The goal would be to have the project in some way shape or form completed so that it is a productive use for both the port district, in terms of lease revenue, but also providing jobs and economic growth for the community at large.

What do you think of GigaWatt filing for bankruptcy? Let us know in the comments below! 


Images courtesy of Shutterstock.

Share
Lis 21

Bitcoin Hashrate Drop Sparks Rumors of $3.8K Miner ‘Turn-Off Price’

The drop in Bitcoin hashrate has sparked rumors China has turned off huge numbers of mining rigs as the process is no longer profitable.


‘More Economic To Turn Them Off’

Video and photo content which allegedly came from F2Pool owner BitFish hit western social media November 20, being uploaded by local news feed cnLedger and Primitive partner Dovey Wan.

“…Many miners are mining at loss at the current price point, now it’s more economic to turn it off and take it off from the rack to reduce cost on electricity and opex,” Wan explained.

Bitcoin price 00 continues to suffer after a week of price losses which saw its value against the dollar drop around 30 percent. At press time Tuesday, BTC/USD hovered at $4400.

According to Wan, the “turn off price” for mining in China with a Bitmain Antminer S9 rig is approximately $3800, but will adjust down if difficulty and competition also drop.

Factors such as China’s dry season forcing up hydroelectricity costs exacerbated the problem, she said, adding that “some top mining pool owners” had admitted operating at a loss for several months.

F2Pool subsequently released its own list of mining price cut-offs, urging miners to check to ensure they were “running in profit.”

Fake News Allegations Abound

Due to much of the source material originating from Chinese social media, western Twitter commentators were quick to pour scrutiny on the claims, many calling out Wan and cnLedger for allegedly spreading “fake news.”

The material showing miners lying in piles outside was from the Sichuan Province floods, which knocked out many rigs in June, they claimed, nonetheless failing to reproduce the video or photograph from other sources.

Data from Blockchain meanwhile confirms the hashrate drop in Bitcoin, which has reversed to levels last seen in August.

Bitcoin hashrate

The turnaround marks a rare occurrence for the network, which has gotten used to the gradual increase in hashing power, particularly over the past year.

Ongoing attempts to divert miners to Bitcoin Cash in an effort to shore up one of its chains post-hard fork continue.

What do you think about the drop in Bitcoin hashrate? Let us know in the comments below!


Images courtesy of Shutterstock, blockchain.info

Share