Thursday, December 20, 2018

#112: Vitalik Buterin has apparently been feeling generous lately

The US should take the lead on digital currency, says Coinbase exec. The US can put itself "at the heart of an open and more equitable financial system," argues Brian Brooks, Coinbase's chief legal officer, in the New York Times this week. It just needs to do for digital currencies what it did for the internet, he says. The government played a primary role in funding developing the internet as a research project in the 1970s and 1980s, and that support "unleashed huge economic impact on America," Brooks writes. He thinks the current digital financial revolution has similar potential. The US should lead the development of "transnational currency" and the window of opportunity to do so is closing, he argues, since so many other nations are already pursuing their own digital currencies. This risks supplanting the dollar's status as the global reserve currency.

Vitalik, ~~non~~-giver of Ether. Perhaps Ethereum creator Vitalik Buterin was just feeling really festive. Or maybe he'd just like development of Ethereum 2.0 to move a little faster. Whatever his motives, on Tuesday evening Buterin doled out $100,000 worth of Ether each to three separate projects working on technologies for the network's big planned upgrade. And he appeared to give the gifts in response to a semi-tense Twitter thread in which members of the Ethereum community were discussing what's holding up technical progress.

Preston Van Loon, a team lead for Prysmatic Labs, which is developing an Ethereum 2.0 software client, tweeted that his team's biggest impediment is that most of them still have to work other jobs; there isn't enough money for full-time positions. Buterin then responded: "Just sent 1000 eth. Yolo." He also included a link to an Ethereum blockchain explorer showing the transaction. Buterin went on to do the same thing for Chainsafe and Sigma Prime, which are also building 2.0 clients.

Maybe this will help move things along. But Ethereum's community has been criticized for relying too heavily on Buterin. He has claimed that he's been trying to reduce his influence, but episodes like this actually reinforce the perception that he is the only one who can make things happen.

Not surprisingly, reactions in the Ethereum community were mixed. Some saw it as an altruistic move. But developer Péter Szilágyi seemed particularly upset, tweeting that the handout was "insanely reckless toward the entire ecosystem." He added: "What this just proved is you need to make something @VitalikButerin likes and he'll bring the lambos." For those who don't get the reference, "Lambos" (Lamborghinis) are used as an ironic reference to crypto-wealth. Ouch.

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Loose Change

Fill your pockets with these newsy tidbits.

Hong Kong's financial regulators have signaled a reluctance to approve an IPO for Chinese crypto-mining chip maker Bitmain, since the country is still drafting a regulatory framework for crypto-assets. (South China Morning Post)
Blythe Masters, the earliest and most high-profile Wall Street banker to move into cryptocurrency, has unexpectedly stepped down as CEO of the startup Digital Asset Holdings. (Fortune)
Civil, the startup aiming to use the Ethereum blockchain to change the economics of journalism, is planning another token sale for February after its last one failed to reach its goal. (CoinDesk)

Coinbase has added four more coins, including Ethereum-based stablecoin Dai, to its professional trading platform. (Coinbase)
New academic research has revealed thousands of pump-and-dump crypto-token price manipulation schemes on the messaging app Telegram. (Finance Magnates)

The Money Quote

"The miners who started early enough that they are well capitalized are [OK]. [But those] who started mining more recently might not have the rainy day fund to weather the depression that we have now."

—Alex Kern, a research analyst at Fundstrat, a market research firm. According to the firm, the fact that the Bitcoin network's total mining power, or hash rate, is down 40 percent since August means that about 1.5 million bitcoin mining rigs have been shut off since September. (Financial Times $)

Artificial intelligence is here. Own what happens next.

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Malware Mania 😈

December 20, 2018

The Crypto Malware Boom is Wreaking Havoc in 2018

Malware mania

It's an epidemic. According to McAfee's threat report - a publication that rounds up cybersecurity statistics from the year - crypto-related malware has boomed in 2018.

Specifically, malware that mines cryptocurrencies in the background of victim devices, called cryptojacking, has seen an increase of over 4,000%.

It's more than computers

In part, the coin mining malware boom is because hackers need to reach scale for substantial profits.

While 2018 brought in more than enough bad actors, it also brought education and awareness of the issue and now, new software on computers is able to track and shut down coin mining malware.

However, it's more than computers that can be affected. Now, hackers are targeting devices such as WiFi routers and IP cameras because they lack necessary security. Although these devices don't have as much power to mine crypto alone, with volume, a network of these is more than enough for hacker's pockets.

Protect yourself

The current threat of coin mining malware is clear and it is only expected to increase in 2018.

Here are the symptoms you should watch out for:

High processor usage on your device
Sluggish or unusually slow response times
Overheating of your device

If one or more of these is happening to you, it's possible you are a victim to coin mining malware and should take the necessary steps to secure your device.

EXCHANGE

Coincheck Set to Get Full Licensing from the Japanese Government

Biggest victim in crypto

In January of this year, the Japanese cryptocurrency exchange Coincheck fell victim to the biggest hacking in crypto history. The hackers stole more than $500 million in NEM, which was worth over a dollar at the time of the attack.

The infiltration of Coincheck shook the crypto space due to the sheer size of the amount of funds lost. Most distraught was the Japanese government.

In response to the attack, the Japanese Financial Services Agency (FSA) set out to regulate the industry to prevent further attacks from happening.

Recovering from the attack

Coincheck eventually refunded all users who lost NEM in the attack.

The exchange was sold and implemented operational changes at the behest of the government. One of the changes included delisting three privacy coins: Monero, Zcash, and Dash.

Coincheck started registering new users just last month but exchange volumes have been way down since the attack.

All the way back

According to Nikkei, Coincheck is set to get its license from the FSA, almost a year after the attack. Licenses are only given out to institutions that prove their compliance with the strict new FSA regulations.

The report states that there are nearly 200 companies seeking a license from the FSA, but only 50 have "concrete" plans.

REPORT

Vitalik Gifts 1,000 ETH to Three Startups

It's the giving season

In a Twitter thread where users complained about all of the current issues surrounding Ethereum, Vitalik Buterin, the co-founder of the network, popped in to hand out some gifts.

Some Twitter users complained about the scalability problem and others complained about the lack of funds to pay developers.

This is where Vitalik stepped in. In response to a tweet from a startup founder complaining that he doesn't have the funds to pay his team, Vitalik responded:

Not just one

Vitalik's donations didn't stop at 1,000 ETH. The same Twitter thread attracted other startups worrying about their funding.

Vitalik ended up sending two more 1,000 ETH donations for a total of 3,000 ETH (~$300,000) donated.

EXCHANGE

Coinbase Recently Moved $5 Billion in Crypto

Money moves only

Coinbase has started to add many new assets to its exchange platform. The new assets have forced Coinbase to rethink how it stores its customers' funds.

The firm recently upgraded its storage model and just moved $5 billion worth of cryptocurrencies to the new solution. The $5 billion included: 5% of all Bitcoin, 8% of all Ethereum, and 25% of all Litecoin in circulation.

Taking all measures

We all know just how scary it is to transfer any amount of cryptocurrency... imagine moving $5 billion.

Coinbase's head of security, Phillip Martin, reported that the migration process took four hours to plan.

Martin explained:

"Regulators and auditors were involved at every stage… One of the biggest things we were worried about is that we don't move the market with this event, which is why we went to such lengths to coordinate with regulators and manage media speculation around the movements."

BITS

But wait, there's more...

🚀 Popular crypto exchange OKEx has launched a new crypto derivative product to let users speculate on the future value of BTC/USD.
💸 Peter Thiel joins $2.1 million seed round for blockchain startup Layer1.
⛏ Over 90% of Monero's block reward has been mined.

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