Friday, December 28, 2018

25 Stories that Shaped Cryptocurrency in 2018


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Happy Holidays! This end of year recap is presented in partnership with Owl Labs, makers of the Meeting Owl smart 360° conferencing camera. A great way to support the work we do on this newsletter is to check out the Meeting Owl. (Also, you can use code INSIDE for $100 off a Meeting Owl Pro Kit)

Dear HODLers, lambo owners, and all those that hate FUD,

I've really enjoyed curating Inside Bitcoin news for you this year despite the sometimes (ok, mostly) negative news about prices. As we head into 2019, I pulled together my 25 favorite stories of the year, and I have two questions:

What do you think was the most under-covered story or trend in cryptocurrencies this year?
How can we make this newsletter even more valuable to you in 2019?

Just hit reply and let me know what you think!

Here is to a more profitable 2019,
David

1. The price of top cryptocurrencies dropped throughout the year. Bitcoin led the nearly yearlong plunge as it lost more than 80 percent of its value from the end of 2017. The question now for investors is will 2018 be nearly part of the larger growth of cryptocurrencies (the market has seen three major crashes in the past eight years, only to come back stronger) or the beginning of the end?

2. While bitcoin led the fall, altcoins took the brunt of the damage. The price of altcoins tended to mirror that of bitcoin, they did not recover at the same rate following larger price falls. As a result, bitcoin's market dominance grew stronger throughout the year. –CRYPTOVEST

3. A civil war split the bitcoin cash community in half, culminating in a hard fork in November. Bitcoin cash developers argued over the future of the coin, some feeling that it had begun to veer too far from its original goal of mirroring the vision laid out by Satoshi Nakamoto. As a result, Bitcoin Cash SV broke away from the original Bitcoin Cash blockchain (now known as Bitcoin Cash ABC). –MARKET WATCH

4. The bitcoin cash hardfork coincided with a substantial drop in cryptocurrency prices. In the month before the split, bitcoin enjoyed rare stability. Experts believe the hard fork, though, triggered fear in short term investors who believed the split muddied the future of cryptocurrencies. As a result, investors largely pulled out of the market and bitcoin, and other major altcoins, saw a nearly 50 percent loss in value in less than a month. –COINDESK

5. While Litecoin founder Charlie Lee sold his stake in litecoin at the end of 2017, the story continued into this year. Lee's decision came as litecoin traded at more than $375 a coin. With prices now less than one-tenth of that, there are continued questions as to Lee's motives at the time and the larger impact it has had at the coin's overall direction. –CNBC

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6. Venezuela President Nicolas Maduro announced the Petro, a national cryptocurrency, in February. The coin is supposedly tied to Venezuela's oil and mineral deposits. However, because of Venezuela's ongoing financial crisis and a general distrust of the government among the country's citizens, there is little confidence in the petro's viability. It first went on sale in November. –COIN TELEGRAPH

7. The Square Cash app launched bitcoin trading in January. The application, which has since surpassed Coinbase as the most popular iOS app for crypto trading, offered another avenue for interested parties to invest in bitcoin. It is also seen as a major step forward to bitcoin's larger mainstream adoption. –CNBC

8. Coinbase updated its listing process for new coins. The new system allows for the operators of different assets to become listed on Coinbase if they follow a set of mandates. The new listing process has been expected to greatly increase the number of coins that can be purchased on the Coinbase platform. –COIN TELEGRAPH

9. Comedian John Oliver profiled cryptocurrencies on his popular "Last Week Tonight" show on HBO. Oliver poked fun at some of the culture of crytpocurrencies – like Long Island Iced Tea changing from a drink company to a blockchain firm – but also declared the future of cryptos is still yet to be decided. –TECH CRUNCH

10. CNBC aired a documentary on bitcoin in August. The piece, titled "Bitcoin: Boom or Bust" highlighted those that had made it big investing in cryptocurrencies, while highlighting what some find so intriguing about the cryptocurrency movement. However, the documentary did face criticism for showing only the speculative nature around cryptocurrency and was not a completely accurate representation of the community. –CNBC

11. Overstock.com plans to transfer completely to a blockchain company. The online retailer, which was one of the first sellers to accept bitcoin, has tied its future to Medici Ventures, its blockchain investment arm. Medici currently has 19 companies in its portfolio. –CCN

12. Kodak appeared to return from the dead with the announcement of its own cryptocurrency, KodakCoin, in January. News of the project sent Kodak's stock soaring and reminded investors of the once prominent photography company. It would end up being short lived. A few months later, KodakCoin was exposed as a product that simply licensed the Kodak name and failed to deliver on promises to early investors, never getting off the ground. –THE WASHINGTON POST

13. Scammers took control of the Twitter accounts of a number of high profile brands to promote a cryptocurrency scam. The fraudsters hacked accounts such as Target and Google in an effort to give legitimacy to their scheme. The accounts pledged the chance to win a large sum of cryptocurrency in exchange for sending a small entry fee. –USA TODAY

14. Famed investor Warren Buffett called bitcoin "rat poison squared" as the Oracle of Omaha continued to be critical of cryptocurrency. Buffett explained that bitcoin will never amount of anything of real value, primarily because he struggles to find a practical use for it. Buffett is not alone among traditional investors who largely continued to be critical of the cryptocurrency market in 2018. –CNN

15. Mt. Gox victims will finally see repayment. Those that saw their bitcoin stolen during the famed 2014 theft can apply for repayment early following elongated court proceedings that drug into 2018. This is good news for those that believed they would never see their stolen funds returned. –COINDESK

16. Dogecoin continued its path to legitimacy. Started as a joke, the meme-inspired coin now has the 20th largest market cap of all cryptocurrencies. Dogecoin has gained traction because of its simplicity. It is easy to acquire and easy to use, making it the perfect coin for newbies looking to get involved in cryptocurrency. –CAPTAIN ALTCOIN

17. Coinbase was valued at more than $8 billion. The exchange closed a $300 million round of funding that pushed its valuation to become one of the most valuable privately owned companies in the country. Coinbase plans to use the funding, which closed in October, to expand its portfolio to cater to more institutional investors and to offer more products. –TECH CRUNCH

18. A study released in June claimed that Tether was used to manipulate the price of bitcoin during its historic run in 2017. The report prompted a Justice Department investigation later in the year. The study showed that Tether was used to both stabilize and manipulate bitcoin prices during pivotal points of the year. –BLOOMBERG

19. Facebook has continued to work on a mysterious cryptocurrency project. The company has created a small blockchain team and recently announced a number of open positions for the squad. There is little detail now to as what the social giant's ultimate goal, but because of Facebook's size it will be a major story to watch heading into 2019. –NEWS BTC

20. Bitcoin miners showed they would go wherever cheap power exists. With crypto prices dropping, miners continued to look for the best deal – no matter where it came from. For some, that was moving to Washington State or Wyoming. For others, it meant Quebec and upstate New York. Some even got really creative, using ice water from fjords in Norway to set up shop to using cheap electricity in Iran. –COINDESK

21. The Intercontinental Exchange announced the coming launch of Bakkt. The platform, which is expected to go live early next year, will be an ecosystem for digital assets. It will include a physical bitcoin futures contract and warehouse. More notable, though, is some of the companies behind the project: Microsoft, Starbucks, BCG and others make it a project worth watching. –BUSINESS WIRE

22. Elon Musk has become a favorite of online scammers. Twitter accounts pretending to be the Tesla creator were rampant throughout the year. Musk himself even acknowledged the level of specificity the account holders were willing to go to try their scam. –FORTUNE

23. Ah, the good old days. It is worth remembering that on January 7, bitcoin traded at $17,144.85 per coin. That marked the high price for 2018. By the end of January, the coin was threatening to drop below $10,000. It has been a fast and hard fall from the all-time record. –INFO MEDIANG

24. IBM and Alibaba have battled to secure the most blockchain patents. The two technology companies have taken the global lead in blockchain innovation, both securing more than 90 patents. Microsoft has also been aggressive with more than 80 patents. No matter how these big companies may see cryptocurrency, there is a growing business case for blockchain-related products. –COINDESK

25. Ethereum developers continued work on the Constantinople upgrade. When completed in January, the upgrade is expected to increase the capacity and speed of the network. It has been a long road to this point, but the upgrade will usher in a new era for the cryptocurrency. –COIN TELEGRAPH

Written and curated by David Stegon. He has been a reporter for 15 years, the past 10 focused on technology. Follow him @davidstegon.

Editing team: Lon Harris (editor-in-chief at Inside.com, game-master at Screen Junkies), Krystle Vermes (Breaking news editor at Inside, B2B marketing news reporter, host of the "All Day Paranormal" podcast), and Susmita Baral (editor at Inside, recent bylines in NatGeo, Teen Vogue, and Quartz. Runs the biggest mac and cheese account on Instagram).

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Questionable whitepapers❓

December 28, 2018

The WSJ Found 16% of Crypto Projects to be Questionable

Examining whitepapers

In a new report, the Wall Street Journal investigated more than 3,300 different cryptocurrency whitepapers in an attempt to uncover some truth within the industry.

Following the analysis, WSJ reported a disturbing result. Apparently, 16% of cryptocurrency whitepapers included one of three fraudulent practices:

Plagiarism
Identity Theft
Promise of Improbable Returns

Now, WSJ has left an open, searchable database on its website so users can scan through the 513 projects that produced red flags.

Are we really surprised?

Probably not. The cryptocurrency space has been largely unregulated for most of its existence and scams aren't a stranger to the market.

In 2017, Statis Group marked over 80% of initial coin offerings (ICO) as scams, however, thankfully, 70% of all funding actually went to higher quality projects.

Still, 30% of funding to low quality projects is nothing to be proud of.

New year, new start

With 2019 right around the corner, the crypto industry has a clean slate to start anew.

What can we expect? In short:

More ICO crackdowns
Better exchange security standards
More dead projects

Those are just a few predictions for the upcoming year, however, fingers crossed 2019 ends with less scams.

NEWS

Former Mt Gox CEO Claims Innocence during Closing Arguments of Trial

Quick history of Mt Gox

Defunct Japanese Bitcoin exchange Mt. Gox was once the largest bitcoin exchange in the world, until in 2014 the exchange became insolvent after it was brought to light that the exchange had lost 744k Bitcoins over the span of a few years.

Even after Mt Gox went insolvent in 2014, the exchange has still been prominent in the news of the cryptocurrency world.

Earlier this year, Mt Gox was forced to dump a portion of its remaining Bitcoin to repay creditors and was blamed by cryptocurrency investors for crashing the price of Bitcoin.

Prosecutors seeking 10 years

Prosecutors in the Mt. Gox case are seeking a 10-year sentence for former CEO Mark Karpeles.

Part of the sentence stems from an accusation that Karpeles embezzled more than $3 million in customer money from the exchange he ran back in 2013. Allegedly, he used the money to invest in a "software development business for personal interest."

Maintains innocence

Since the collapse of the exchange he once ran, Karpeles has maintained the stance that he is innocent of any criminal wrongdoings.

Karpeles trial has been ongoing in Japan since July 2017 and just recently, the court heard the closing arguments. The former CEO maintained his long-held stance that he is innocent.

The verdict for his trial is expected on March 15 of next year (2019).

HACK

Electrum Lost Almost 250 Bitcoins in a Matter of Hours

Gone phishing

Hacked yesterday, many users of the popular Bitcoin wallet Electrum fell victim to phishing scheme that netted close to $1 million for the hacker.

Allegedly, the hacker set up a network of malicious servers and if a users connected to one of those servers, they would be asked to update their Electrum wallet information.

This "update" actually turned out to be a faulty link that collected user data. Then, unknowingly, users wallets were emptied.

Not Electrum's fault

Though the phishing hack happened to Electrum users, this isn't the wallet's fault.

Following the incident, Electrum released a statement that directed users to always make sure they are logging in to the correct web address.

And the same goes for almost all crypto activity online. Another large target for phishing attempts is exchanges.

To avoid these types of scams, always:

Double check for correct website address
Double check for fake emails
Only follow links directly from projects

CRIME

Taiwanese Man Uses Stolen Electricity to Mine $3 Million in Crypto

Turning power into coins

A Taiwanese man was recently arrested for allegedly mining approximately $3.25 million in Bitcoin and Ether using stolen electricity.

The man had an intricate plan to power his mining operations. He reportedly rented 17 retail locations, then hired electricians to redesign the buildings' wiring so that the electricity would not be metered.

He was eventually caught when the Taiwan Power Company noticed an unstable power supply and investigated the situation further.

No information has been disclosed about the extent of punishment for the electricity thief or how much of the crypto will have to be forfeited.

BITS

But wait, there's more...

📈 Venezuela saw a massive spike in LocalBitcoins activity to the highest recorded volume ever.
🐳 A mysterious Bitcoin "8 Whale" moved 5% of supply within the last month.
🇮🇹Italy has revealed 30 new experts to lead the nations blockchain strategy.

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CryptoWeekly #89

CRYPTO WEEKLY
December 28, 2018 | #89

THE MARKETS

BTC: $3,621.53 | -$202.66 (-537%) since last week
ETH: $117.53 | +$10.45 (+9.79%) since last week

GOOD READS

The comprehensive guide to public key cryptography
This is an insightful deep-dive on the origins of public key cryptography, how it really works from a technical standpoint, and why it has so many interesting applications in the blockchain space.

Users report losing Bitcoin in a clever hack of Electrum wallets
Last week, an injection of dozens of malicious servers into the Electrum network resulted in users losing nearly $750K in Bitcoin, and according to Electrum executives, more attacks are likely on the way.

Here's how Grid+ is using crypto to transform the way people pay for everything
Grid+ is an Austin-based startup that spun off from ConsenSys and is now building a platform that allows users to pay for nearly anything (even their utility bills) through crypto - all without using a middleman.

A flood of questionable cryptocurrency offerings
This in-depth piece highlights hundreds of potentially fraudulent crypto projects, and it's a great way to cross-check one's own investments and ensure you're not falling prey to identity theft (or worse).

Don't trust, verify: a Bitcoin Private case study
Bitcoin Private (BTCP) is a fork-merge of Bitcoin and ZClassic, and this case study outlines why the fork-merge was executed - and why a secret premine happened in the process as well.

As Bitcoin sinks, industry startups are being forced to cut back
As the crypto bear market seems set to last through the end of the year, even the largest startups in the industry are feeling the heat - even Bitmain, the largest crypto miner in the world, is reportedly set to lay off 50% of its staff in the near future.

A Coinbase exec has just revealed what's behind the company's new listing strategy
For a long time, Coinbase only listed three tokens - but that's all changing, as the company is now pursuing a new customer-driven strategy that will see it list more coins than ever moving forward.

How to handle your Bitcoin and crypto losses for tax purposes this year
The bright side of the volatility in the crypto markets this year is that crypto losses can actually be used to offset some types of capital gains for tax purposes - here's how to do exactly that.

Inside South Korea's booming blockchain industry
After a massive crackdown on cryptocurrencies last year, South Korea's crypto craze turned into a blockchain boom. The country is now home to dozens of startups, many of which are partnering directly with the government on innovative use cases in the public sector.

COMMUNITY NEWS

Check out this year's Cloudflare Christmas cryptography challenge. Link
Japanese internet giant GMO has announced that it will no longer develop, manufacture, and sell cryptocurrency mining machines. Link
Wallet.fail is about to demonstrate how to crack hardware wallets on a grand scale. Link
Here's a handy list of media sites and blogs covering crypto news. Link
Binance adds TRX/XRP and XZC/XRP trading pairs. Link
This is a great interview with Coinbase CEO Brian Armstrong. Link
Dutch crypto startup Libereum has just acquired a Spanish football club. Link
Two crypto software platforms are merging to create tools for institutional investors. Link
A crypto miner has just been arrested for using $3M in public electricity to mine $14M in crypto. Link
KuCoin is delisting 10 tokens as crypto market liquidity declines. Link
Binance is hiring a Global Marketing Specialist in Singapore. Link
Join the Israel Bitcoin Summit from Jan 8-9, 2019. Link

Edited by Chris Osborne in Bangkok (in town? reach out to get a coffee). Feel free to reply to this email with any feedback and/or suggestions.

Nothing shared or published by CryptoWeekly constitutes an investment recommendation, nor should any data or content published by CryptoWeekly be relied upon for any investment activities. CryptoWeekly strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Copyright © 2018 CryptoWeekly. All rights reserved. No longer want to receive CryptoWeekly? Unsubscribe.

Thursday, December 27, 2018

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⚡️ Lighting the way

December 27, 2018

The Lightning Network Passed 500 BTC Capacity

After a significant jump in November, Bitcoin's master scaling solution has now passed over 500 BTC capacity - an estimated $2 million for the young project.

Where's the growth coming from? Well, most of the growth stemmed from large nodes that were expanding already existing channels, however, smaller nodes also almost tripled capacity in the same timeframe.

⚡️What is the lightning network? The lightning network was developed to sit on top of the Bitcoin blockchain as a second layer. Specifically, it was made to help Bitcoin scale by making micropayments possible once again.

Sprouting use cases

But all of this growth doesn't mean anything if there isn't a use case. For now, the lightning network's users are dominated mostly by gamblers, however, there are a few diamonds in the rough.

Sitting next to Lightning Roulette and Lightning Casino on Mainnet Lightning Network Stores is a bike parts shop, a Japanese clothing store, and a vinyl shop - with all of them desiring to help spread adoption of the lightning network.

Most recently, artist @cryptograffiti showcased the lightning network's ability to make micropayments by selling an art piece to the auction's lowest bidder. And it was sold low too. Dubbed Black Swan, the artist's now-famous work netted $0.000000037 or one-thousandth of a Satoshi.

Making it easier

In addition to the new use cases, startups are making it easier to join the project.

For example, Casa, a startup focusing on crypto security, has created a new plug and play device that connects to the lightning network with ease. For non-technical enthusiasts, this is a big step towards adoption.

REGULATION

India May Legalize Crypto, But Regulations Would be Strict

India's odd relationship with crypto

The issue of cryptocurrencies has been a polarizing topic between India's government branches. The Reserve Bank of India has continually shunned the use of cryptocurrencies but has also said that it is not they do not have jurisdiction over crypto. The central bank still refuses to do business with crypto companies.

Because of the Reserve Bank of India's handling of crypto, the Indian Supreme Court has received numerous petitions from exchanges and other industry groups challenging the bank's decision not to support crypto.

Overall, there is great ambiguity about the legality of crypto in India. To create clarity, the Supreme Court is insisting that the central government establish an official stance.

Clarity in sight

An interdisciplinary committee established by the Indian government reportedly is against an outright ban on cryptocurrencies.

Deliberations within the committee seem to be ongoing but sources suggest that cryptocurrencies will be legalized with strong regulations in place.

After many delays to an official ruling, the committee is expected to report to the country's finance ministry sometime in February.

ADOPTION

Litecoin Secures UFC Sponsorship to Boost Awareness

In a new deal inked by the Litecoin Foundation, a group that oversees the cryptocurrency's development and adoption, the mixed martial arts organization UFC is going to promote Litecoin in its upcoming event.

Allegedly, the deal lets Litecoin display its logo in the fighting octagon during the fight between UFC light heavyweight champion Jon Jones and light heavyweight Alexander Gustafsson on December 29th.

Speaking highly of the deal, the Litecoin Foundation told its community that the event will have "millions of viewers" and that the deal "is yet another signal of this technology moving closer towards the mainstream."