Cryptocurrencies

bitcoin

business

Bitcoin

audience

capital

cash

catalysts

coins

crypto

crypto hedge

crypto hedge fund

Adriana Hamacher

RIGA, Latvia—Bitcoin whales are holding on to their coins, crypto hedge fund manager Murad Mahmudov told the audience this weekend at Baltic Honeybadger, a Bitcoin conference.

Azerbaijan-based Mahmudov, a former analyst at Goldman Sachs and one of the most respected crypto researchers in the industry, referred to analytics by crypto hedge fund, Adaptive Capital, where he is head of investment.

“We have noticed that large bitcoin holders aren’t selling or aren’t moving their coins in the last couple of months,” said Mahmudov. ‘“Yes, price may go higher or lower, in the short term, but we remain very bullish in the medium term as well,” he added.

The research was just one of more than 50 “positive catalysts” for bitcoin’s advancement that Mahmudov claimed to have identified, and which he shared with the audience. 

They included: a steady reduction in bitcoin volatility; deteriorating trust in institutions such as government and banks; attempts to ban the use of cash; increasing global debt and wealth inequality; the growing strength and development of the Bitcoin network and infrastructure; increasing Internet and smartphone penetration, and even the growth in bitcoin memes. 

_Decrypt_ caught up with Mahmudov after his talk and asked which of the catalysts he considered to be most important.

  

“The elimination of cash and, probably, a push for deeper and deeper negative rates are likely to be the two strongest forces out of the 50 I mentioned,” he replied. 

“Just speaking from a price perspective, it will really be large capital holders that determine Bitcoin’s future, to a greater extent,” he explained. “I think they’ll be looking for alternative assets very, very soon, and bitcoin is very likely to fill the void.”

 


Large BTC holders haven’t been selling or moving their coins lately, says a report. That’s a good thing.

Now hodling: Bitcoin whales

The projects, currencies, and events shaping crypto today.

Ethereum co-founder discusses privacy and DeFi

Business

consensys

ethereal

Ethereum

vitalik buterin

buterin

decentralized finance

ethereum

ethereum 2.0

interest

interest generated

interest rate

maintain a public

maintain a public network

network

Tim Copeland

TEL AVIV—Ethereum co-founder Vitalik Buterin discussed developments across the wider Ethereum ecosystem in a Q&A today at the Ethereal conference.

Talking with Ejaaz Ahamadeen, lead token architect at Digital Assets, a part of the Brooklyn incubator ConsenSys (which also funds _Decrypt_),  Buterin discussed the big gains made by privacy tools in recent weeks, the potential of decentralized finance (DeFi) and the roadmap of Ethereum 2.0.

Focusing on phase zero, Ethereum 2.0's first stage of development, he said everything was "finalized except for things that come up during the security audits. The clients are now talking to each other. The next step is to make sure they can maintain a public network at scale."

The process he was referring to, dubbed Eth2Beaucoup, involves seven Ethereum 2.0 clients (versions of the upcoming blockchain platform upgrade) linking up and running in sync with each other. It's regarded as a significant milestone in this phase of Ethereum's development.

"The next step is to make sure they can maintain a public network at scale. We’re talking about potentially hundreds of thousands of validators aggregating a huge number of transactions," Buterin said.

The conversation also touched upon the rewards given to validators—those who are willing to have a large amount of Ethereum locked up in smart contracts) to help validate transactions on the network. Critics have said the rewards on Ethereum 2.0 will be too low to incentivize validators to keep the network running.

Vitalik Buterin: “Very confident” about phase zero of Ethereum 2.0
"There have been a lot of misconceptions there. There are people throwing around the 1 percent statistic. In reality, the maximum reward is 1.7 percent per year, only in the case where literally everyone is staking. In the case that a smaller number of validators are staking, the rewards go up a bit," Buterin said.

Buterin was referring to the interest validators earn on their staked ether. The interest rate is linked to how many validators there are on the network. If everyone becomes a validator, each person will receive 1.7 percent interest on their holdings. But if only one percent of the network are validators, the interest rate for those validators goes up to 17 percent. But Buterin added that the specific numbers are still under discussion.

BETTER PRIVACY ON THE BLOCKCHAIN

When asked about recent developments on privacy technology (specifically zero-knowledge proofs, used by privacy coin Zcash, and others), he said, "Zk-SNARKs in general have really made a huge leap of progress over the last three weeks, in a way a lot of people aren’t realizing."

He pointed to Plonk, a new way to create zero-knowledge proofs, set to be rolled out by Aztec Protocol—a ConsenSys-backed project focused on bringing privacy to Ethereum—in October. The concept reduces the complexity of creating a zero-knowledge proof, making it more accessible to more people. "This means it's really easy for thousands of people to participate," he said.

THE PROMISE OF DEFI

Unsurprisingly, Buterin was enthusiastic about the emerging world of decentralized finance, largely being built on Ethereum.

"I’m very excited about the potential DeFi offers in principle. The idea that just anyone, anywhere in the world, can have access to a system that lets them pay each other, and choose their own financial exposure, is a really powerful thing. It's something that a lot of people don't have access to," he said.

He went on to suggest that DeFi could offer a way of preventing blockchain founders from raising a ton of money and disappearing. "Public interest projects" where users stake a portion of their coins, use the interest generated of the staked coins to raise funds that could be used to build projects. It's like a DeF-ICO.

The crucial difference here is that the projects receive a smaller, constant flow of money (from the interest generated) that is dependent on the project's continuing success–as opposed to a huge sum of money upfront. If a project starts to look a bit scammy, investors can withdraw their money, and funding slows to a trickle.

"It’s not about maximizing returns for yourself. It's about taking the returns and pumping the returns into a project that you support," he said, adding, "This could really mitigate a lot of concerns of fraud we’ve had in the ICO space."

But Buterin was quick to point out DeFi's growing pains: Explicit centralized backdoors and oracles.

Centralized back doors are when a centralized party has complete control over everything happening on a decentralized application—as was recently found with Compound. Oracles, meanwhile, are the way in which blockchains access real-world data.

"The decentralization isn’t going to do much if the oracle is being set by one guy, who can set the price what he wants, liquidate and front run everyone, and steal a bunch of money that way," he said.

But he added that good progress is happening on finding decentralized oracles. (Many projects are integrating Chainlink while Compound is building its own decentralized oracle, too.

END CREDITS

Ahamadeen closed out proceedings by asking Buterin about his love of World of Warcraft. On Buterin's own webpage, he speaks about his love of the game, before Blizzard Entertainment—the game's developers—changed some of the settings of one of his characters. "I cried myself to sleep and on that day I realized what horrors centralized services can bring."

Last month, developers released an original version of the game, World of Warcraft Classic, that rolled back 15 years of updates–a bit like Ethereum Classic. Ahamadeen asked whether Buterin would go back to his first love now that things had gone back to how they were.

Buterin replied, "If World of Warcraft moves onto Ethereum, I’ll consider it."


The co-founder of Ethereum said that strong progress is being made on Ethereum and across the wider ecosystem.

Vitalik Buterin speaks out on privacy, DeFi and Ethereum 2.0

The people and companies shaping the crypto industry.

The co-founder of Ethereum said that strong progress is being made on Ethereum and across the wider ecosystem, in a Q&A at Ethereal, today.

US sanctions North Korea for crypto hacking

crypto hacking

North Korea

scam

bluenoroff

cryptocurrency

exchanges

groups

hacking

hacking groups

korea

korean

north

north korea

John Galt

The Trump administration announced sanctions against three North Korean hacking groups, dubbed “Lazarus Group,” “Bluenoroff,” and ”Andarie,” which they allege are controlled by the North Korean government and responsible for a litany of malicious cyber attacks in recent years.

According to the US Treasury’s Office of Foreign Assets Control, one of the groups, Bluenoroff, has successfully tapped cryptocurrency exchanges for more than $500 million in crypto over the last two years. 

But that’s actually far less than the $2 billion a United Nations report accused the Hermit Kingdom of filching. The North Koreans had dismissed that report as “ill-hearted rumors” in a statement last Sunday:

“Such a fabrication by the hostile forces is nothing but a sort of a nasty game aimed at tarnishing the image of our Republic and finding justification for sanctions and pressure campaign against the DPRK,” the North Korean statement said, presaging the sanctions this week.

The Treasury Department’s statement speculated that the alleged thefts “possibly assist in obfuscating revenue streams and cyber-enabled thefts that also potentially fund North Korea’s WMD and ballistic missile programs.”

Citing industry and press reporting, the government’s statement said the “state-sponsored hacking groups likely stole around $571 million in cryptocurrency alone, from five exchanges in Asia between January 2017 and September 2018.”

North Korea is no stranger to sanctions. Since 1950, the US has sanctioned various trade-related activities and travel to the country. 

So the question is, why now?

On Tuesday, President Trump fired Secretary of State John Bolton and said that it was due in part to Bolton’s hardline stance against North Korea. So, optics, maybe? Just a wild guess.


US sanctions N. Korea for crypto hacks

firearms

Jameson Lopp

security

2017

ar-15

assets

call

create

decrypt

dollars

RIGA—Keeping one’s bitcoin physically secure was a topic of debate at Latvia’s Baltic Honeybadger, a major Bitcoin conference taking place this weekend.

And, seemingly, no one is better armed against potential thieves, kidnappers and others determined to steal his bitcoin than Jameson Lopp, cypherpunk and CTO at key-security company, Casa. 

The long-term hodler, who said he owns over 40 firearms, took part in a panel about bitcoin physical security, and is now planning to help others beef up theirs.

“How do you, these days, create something that’s as close as possible to a medieval castle?” Lopp rhetorically said later, to _Decrypt_. 

“How do you create moats and walls and portcullises—multiple layers of security—some of which use physical things, others using new technologies, surveillance systems, alarms…” 

Bitcoin holders are, he said, particularly vulnerable because crypto assets’ liquidity means that thieves think they can get a better payoff attacking someone who might have a million dollars in a crypto wallet, versus someone with a billion dollars locked up in hard to move traditional assets. 

Worse, someone with a million dollars worth of crypto is unlikely to be able to afford 24-hour security, making them especially vulnerable, Lopp said, adding that people who trade person-to-person, are most vulnerable: “They’re known to be carrying a lot of money around with them, but well-known entrepreneurs and people on social media are also getting attacked.” 

Lopp is already famous for a twitter post, back in 2017 which shows him firing his AR-15 rifle.  

> Bitcoin security pro tip: protect your software with hardware. pic.twitter.com/R4KeRGRcTP
> 
> — Jameson Lopp (@lopp) October 26, 2017

He explained at the time that the measure was in response to a prank call to the police in October 2017 about an incident at his home in North Carolina. The caller claimed a shooter had killed someone and had taken a hostage, and a SWAT team was dispatched to the house. After the police left, Lopp received a call threatening more of the same if he did not pay a large ransom payment in Bitcoin. 

“The AR-15 is a really popular platform in America, because it’s simple, it’s modular, you can customise a lot of things about it and it’s not that expensive,” he said. 

But not everyone on the panel agreed that firearms were necessary, and they batted around a variety of measures people could employ, such as a so-called “duress wallet,”  and “honeypots” to lure thieves to smaller amounts of bitcoin. 

The most common mistake, everyone agreed, was creating “a single point of failure,” rather than looking at security holistically. 

“I’m never going to own a gun, but a lot of people need to be considering hardware wallets, multisigs, running a node—things that can be complicated, “ Peter McCormack, who hosted the panel, told _Decrypt l_ater. He said that education is key to taking people through a “journey of improving their physical security.”  

The panel also warned about being “too creative:” locking yourself out of your Bitcoin wallet is almost as bad as letting thieves in—and far more common.

 


Protecting bitcoin with a gun barrel 

blockchain platforms

Facebook

finance

libra

payment networks

A wrap up of news covering the announcement of Facebook's cryptocurrency, Libra.

The latest news on Facebook's Libra

Facebook's Libra

2020

barel

blockchain

calibra

controlled by a single

controlled by a single entity

facebook

financial

TEL AVIV—Facebook has drawn a lot of heat over its plans to create a cryptocurrency called Libra, set to launch in late 2020. Many argue that it could simply use traditional payment networks instead, and avoid all the fuss. But, Tomer Barel, COO at Calibra (which is running the Libra project), explained why it was going to all the trouble  during a Q&A at Ethereal.

Why does Facebook need a new cryptocurrency when it could have used traditional payment networks? asked interviewer Ouriel Ohayon, CEO of ZenGo, a crypto wallet that is building on Libra. Barel said that fiat money is broken and  "that for a currency to be successful, it cannot be controlled by a single entity. This is what blockchain brings us.”

He added that it also needs to be transparent and, crucially, secure—which, he said, are features of a blockchain.

Libra plans to launch in the second half of 2020
When asked who Libra’s biggest competitor was, Barel replied: “Cash.” Bringing the dialogue back to Libra’s all-too-familiar promise of “banking the unbanked,” he said that cash is often still used because it fills holes in our current financial system, typically where alternatives to using cash are simply too expensive.

“When people use cash, it demonstrates the limitations of modern financial services,” he said, adding, “When we see the use of cash diminish, that means we will have been successful in providing more access to financial services.”

And the trick to its success against cash’s dominance, he repeated, is that Libra’s open-source and not controlled by a single entity. “[This] will make Libra a utility rather than private money,” said Barel.

Though Calibra aims to keep Libra at arm’s length from Facebook, he admitted it has been challenging keeping the two distinct in the public’s eye: “The confusion is natural. It’s a combination of confusion and mistrust. [Libra] is a project that was initiated and developed within Facebook,” he said.

Barel acknowledged that—while it has outside developers contributing to Libra’s code, which was released on testnet three months ago—90 percent of the code was developed by Facebook. On top of that, Facebook initiated the whole project. But despite Facebook's early involvement, he maintained that, by the time of launch, it will be owned by many different parties, meaning it will become more and more separated from the social media giant.

And to back that assertion up, Barel said he was willing to eat his own dog food: Noting that Facebook’s blockchain lead David Marcus told Congress he would be happy to be paid in Libra, Barel echoed the sentiment. “Absolutely," he said. "I would welcome being compensated with Libra.” That said, he acknowledged that that Facebook has no plans of him or anyone else on Calibra, in the company's crypto.


Calibra COO, Tomer Barel, explained that Libra will compete with cash effectively because it's not owned by a single entity.

Calibra executive: Why Facebook's Libra needs a blockchain

Speaking in a Q&A at Ethereal, Tel Aviv, Tomer Barel, COO at Calibra (which is running the project), explained why it was going to all this effort.

Technology

13,000

13,000 downloads

abril

agrawal

button

dorsey

downloads

lightning

Lightning Network service Tippin hits 13,000 downloads

Ben Munster

A browser extension built on the Lightning Network that lets Twitter users “tip” other users’ tweets has received around 13,000 downloads, according to the developer behind the app, marking an apparent shift toward adoption for the budding network. 

Sergio Abril wrote to _Decrypt _that Tippin—which adds a QR-code generating Lightning button next to the “retweet’ button—had gained serious traction since Twitter chief Jack Dorsey endorsed it last week.
Tippin appears as a lightning symbol to the right of the retweet button.
“The truth is I'm incredibly busy,” he wrote. 

Though 13,000 downloads pales by comparison to the standards set by typical Silicon Valley titans—and even some so-called “dApps” like the social network Steemit, which CEO Ned Scott said had 1.2 million accounts—it’s a win for the Lightning Network, which is still in its infancy. (As it stands, the Lightning Network—run by around 3,500 nodes—is able to handle some $3 million worth of Bitcoin transactions. That’s 0.0044 percent of the total $67.7 billion Bitcoin market cap. )

Tippin made headlines last week when a throng of crypto luminaries joined Twitter’s Dorsey in praising the app, with several pundits even reporting a profit. Neeraj K. Agrawal, our man on the inside, raked in a tidy $5 at the time from users’ tips. 

Currently, Abril is working to improve Tippin: he wants it to comply with local regulations, is “setting up a business plan,” and is mending various software bugs. Busy as he is, he’s unable to elaborate.

But when he’s done, Tippees like Agrawal could soon be billionaires. Possibly. 


Lightning Network service Tippin hits 13,000 downloads - Decrypt

13,000 people have supposedly downloaded tipping app “Tippin,” a positive sign for the much-hyped but little-used Lightning Network that underpins it.

The new tools, protocols and infrastructure shaping crypto today.