QuadrigaCX Mishap / Mt. Gox Problems / MakerDAO / Ethereum Mining

Subscribe | View in browser $BTC (12:31 p.m. EST): $3,630.85 (-0.32%) // 90-day high: $6,286.41 // 90-day low: $3,286.14 / / More… $BCH ABC (12:31 p.m. EST): $122.81 (0.49%) // 90-day high: $432.88// 90-day low: $80.95 // More… $ETH (12:31 p.m. EST): $122.33 (0.99%) // 90-day high: $201.35 // 90-day low: $86.08 // More… $LTC (12:32 p.m. EST): $41.85 (-3.20%) // 90-day high: $49.19 // 90-day low: $22.09 // More… $XRP (12:32 p.m. EST): $0.30 (0.43%) // 90-day high: $0.52 // 90-day low: $0.28 // More… Here are the 10 most important stories about bitcoin and cryptocurrencies today       1. QuadrigaCX accidentally moved 103 bitcoins into a cold storage wallet it cannot access, according to Ernst and Young, the exchange's court-appointed monitor said. The exchange has been unable to access its cold wallet storage for nearly two months following the death of CEO Gerald Cotton, who allegedly was the only person with the necessary passwords. QuadrigaCX has already filed for bankruptcy protection as Cotton's widow tries to recover the more than $135 million in inaccessible coins. In this latest mistake, the company put nearly $400,000 of coins into an inaccessible wallet. –COINDESK       2. Nobuaki Kobayashi, the trustee in charge of the remaining assets from Mt. Gox, liquidated around $312 million in bitcoin between February and June of last year. The sale went against the advice of experts, who believed that by reintroducing that much currency into the market caused the price of bitcoin to drop. GoxDox, an organization established to assist Mt. Gox creditors, released a photograph of a bank statement last week that showed the alleged transactions. The sale is notable as Kobayashi allegedly went against the suggestion of Kraken CEO Jesse Powell, who explicitly told him not to sell Mt. Gox's holdings for fear of a large price drop. –COIN TELEGRAPH       Ad Intelligence is creating stronger connections. Today's world generates 2.5 quintillion bytes of data every day. Sifting through that much available information is hard. Micron is helping analyze that data to create stronger connections between AI, organizations, and most importantly, people.​​ Learn More. 3. An astounding $234 million in ethereum is being held as collateral on the MakerDAO smart contract, according to crypto analyst Kevin Rooke. MakerDAO is a decentralized autonomous organization, which has a stable coin called DAI that is tied to the US dollar. Investors can leverage their ethereum tokens to generate DAI, which can be used for other purposes and are seen as a more stable form of currency. The platform holds their tokens until the investors pays back the DAI tokens they had taken. MakerDAO, though, has seen the amount of ethereum it holds as collateral rise 28 percent month over the last three months. At this rate, the platform would have nearly half the ethereum in circulation in one year. –AMB CRYPTO       4. The total amount of etherem being generated has reached its lowest rate in history. Etherscan, a firm that collects data on the ethereum blockchain, showed that 13,370 coins were created on Sunday. This is down from more than 20,000 per day just this past December, and a far cry from the more than 39,000 per day created in July of 2015. The recent decrease, though, comes as little surprise as developers have made it more difficult to mine ethereum. –COIN TELEGRAPH       Ad Engineers Build Business with GitPrime Ship faster because you know more, not because you're rushing. GitPrime aggregates historical git data into easy to understand insights and reports, to help make engineering teams more successful. Debug your development process with objective data. Get started today. 5. Turns out that Bitcoin Cash developer Amaury Sechet is not Satoshi Nakamoto after all. Sechet made the claim last week on Twitter, which was apparently a stunt to show how easy it is to manipulate old signatures on the blockchain to create "proof." –CCN 6. Craig Wright, a person who has previously claimed to be Satoshi Nakamoto, has entered into an online spat with Wikileaks over … something. –BITCOINIST 7. Bitcoin Exchange Guide provides an in-depth look at the Constantinople hard fork, and the steps developers have taken to improve the security bugs that have twice delayed the project. –BITCOIN EXCHANGE GUIDE 8. Ric Edelman, founder of Edelman Financial Engines, said a bitcoin ETF is "virtually certain - the only question is when." –CNBC 9. Twitter and Square CEO Jack Dorsey has become a celebrated champion for bitcoin during his recent media tour, in part because he is explaining how the currency can help people right now instead of selling a pie-in-the-sky dream. –THE NEXT WEB 10. Chainalysis, a company that tracks cryptocurrency transactions, has raised $30 million in their second financing round. –CCN       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) and Susmita Baral (editor at Inside, recent bylines in NatGeo, Teen Vogue, and Quartz. Runs the biggest mac and cheese account on Instagram).       Ad Owl Labs is the creator of the Meeting Owl, the first 360-degree smart conference camera. Learn more.

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February 13, 2019 103 BITCOINS: Beleaguered Canadian crypto exchange QuadrigaCX accidentally lost 103 bitcoins – worth nearly $500,000 CAD or $378,000 USD – when it transferred the coins to a cold storage wallet it cannot access. According to Ernst and Young, a court-appointed monitor for the exchange, the mishap occurred last week. “On February 6, 2019, Quadriga inadvertently transferred 103 bitcoins valued at approximately $468,675 to Quadriga cold wallets which the Company is currently unable to access. The Monitor is working with Management to retrieve this cryptocurrency from the various cold wallets, if possible,” the monitor wrote in an initial report. The mistake is only the latest issue for the exchange, whose CEO and founder, Gerald Cotten, died in India late last year. According to a previous court filing by Quadriga, Cotten was the only member of the team to know how to access its cold storage wallets, meaning the majority of its crypto holdings were frozen. While the exchange did not break down how much of its holdings were in hot wallets compared to cold storage in its initial filing, Tuesday’s report indicates that less than $1 million CAD ($682,000 USD) were in the hot wallets, meaning $179 million CAD (about $136 million USD) are frozen. Full Story PAYMENTS PLAY: Mitsubishi UFJ Financial Group (MUFG) – Japan’s largest financial group and the world’s fifth largest bank by assets – is launching a blockchain-based payments network next year. The firm said Tuesday that it has formed a joint venture with U.S.-based fintech firm Akamai Technologies to develop the platform “by the first half of 2020.” Called the Global Open Network, the system will be capable of processing over a million transactions per second, MUFG claimed. The firms are also looking to integrate internet of things and Akamai’s cloud platform into the network. The new venture launches with capital of 250 million yen ($2.26 million), with MUFG having an 80 percent stake and Akamai the remaining 20 percent. The platform was initially announced back in May. At the time, Akamai said it would provide a number of services, including current payment processing, pay-per-use, micropayments and “other developing IoT-enabled payment transactions.” Full Story SETTING STANDARDS: The Enterprise Ethereum Alliance (EEA) is boarding the tokenization train. The 385-member standards body plans to form a “token task force” this year, executive director Ron Resnick told CoinDesk. The group will work on a specification for tokens that run on top of ethereum and private blockchains based on it, with business uses in mind. Notably, the task force will do this not only for assets whose units are interchangeable with one another (such as shares in a corporation, or blockchain representations of fiat currency), but also for individual tokens with unique properties (with CryptoKitties being the most famous example, although a more plausible business application would be digital certificates for diamonds). "We are creating a token task force; we will do that first half of this year," Resnick said. "It's going to be focused on support for fungible ERC-20 and non-fungible ERC-721 tokens." Crafting a business-grade spec for tokenization could ease corporate adoption of the technology, whose main use case to date has been fundraising by startups, often in a legally dubious manner. “We want to create a token specification standard for enterprise tokenization so basically [assets] can be managed in a much better way with more assurance than what's happening today,” Resnick said. Full story Every quarter, CoinDesk Research takes stock of the key data, trends and events with its State of Blockchains reports. As our research efforts evolve and expand, we hope to provide amplification to a variety of perspectives within the crypto community. We reached out to analysts, builders, and lawyers to understand the industry from their unique vantage point. Check out the full article, but here's a sample insight: “Q4 2018 was quietly one of the most interesting times to be in Bitcoin. As the price dropped, so did its importance in the conversation. We started to see more philosophical questions on Bitcoin emerge. Discussions regarding POW vs POS, Big Blocks vs Small Blocks, On-chain vs Off-chain Governance became mainstream… The average crypto user will be more comfortable with hardforks & network upgrades as we can assume all forks that can exist, will exist. Bitcoin will be defined as the sum of all forks. I believe the most exciting future developments are in Bitcoin-As-A-Computer. As more developers enter the space and actively build applications that store, manage, and run data on-chain, we will see exponential progress in what I believe is the first true “World Computer”. The implications of this are incredibly far reaching. Regardless of what happens in the near term, this is one of the most exciting times to be building in the space. I look forward to a Bitcoin future.” — Elon Moist (@coinyeezy), adviser at Honeyminer. We want to hear your perspective too! Do you have thoughts on the crypto industry? Do you want to add to the conversation? Do you want to help shape the direction the ecosystem moves in? If the answer is yes, please fill out our survey. We will be releasing the results in the coming weeks with tons of insights that you can help provide. For an in-depth view of crypto data, you can also check out the CoinDesk Crypto-Economic Explorer here. TOUGH HURDLE: Bitcoin's repeated failure to beat the 50-day MA resistance has weakened the bullish case. As a result, the bears may hit the market with fresh offers if the hurdle remains intact for another 24 hours or so. However, a move above $3,730 would confirm an inverse head-and-shoulders breakout on the 4-hour chart and open up upside towards $4,000. Full Story   BEST OF THE BEST   MARKETWATCH: Overstock founder and CEO Patrick Byrne has argued that government services need a revamp and blockchain provides the means to do that.   Byrne told MarketWatch that he’s looking at building government-as-a-service – “a set of applications and companies that, between them, can bring blockchain to different services that governments provide.” That would potentially make governments more efficient, less costly to run and “incapable of being bribed,” he added. “We could step into Venezuela with six laptops and create not only a functioning society but arguably one with the most advanced government systems in the world,” Byrne said.   Overstock subsidiary Medici’s land-governance service has already titled almost 50,000 properties using blockchain tech in Zambia, he continued, and the government has authorized a further 300,000 homes. “We anticipate doing the whole country,” he said. THE REST   CONSULTANCY.UK: A new study from marketing consultancy Simon-Kucher & Partners suggests that blockchain could create a global market for added services in the auto industry of over £90 billion in the next 10 years, as reported by Consultancy.uk. Drivers, it found, would be willing to pay more for services such as traffic congestion management and automated payments. In the survey, participants said they were particularly interested in services that can save them time. Solutions that reward good driving, such as with lower insurance costs, were also popular, with 11.7 percent supporting the option. Just over 10 percent were interested in financial rewards for eco-friendly driving.   Making life easier behind the wheel was also popular. 27 percent said they would pay around $11 every month for traffic congestion management services. While 12 percent would fork out $8 for remote control of the vehicle, with features such as locking and unlocking. Automated payments that take the hassle out of tolls and paid parking were of appeal to 17 percent of the study group, who said they’d pay over $6 for the service. Seven percent also said they would pay around $5 for an immutable record of an auto’s history; for example, when buying a used car.   BLOOMBERG: Galaxy Digital founder and former hedge fund manager Michael Novogratz believes the crypto space will see a large influx of cash from major institutions over the next year, Bloomberg reports.   In an interview with Bloomberg Television, Novogratz explained that "all the architecture that institutions need to feel comfortable with this is being put in place," and he expects custody services to come online over the next month and a half.  Fidelity is one such example. The trillion-dollar asset manager plans to launch its digital asset custody service, and Novogratz thinks there are as many as 300 potential customers interested in using the platform.  “Over the next six to 12 months you are going to see institutions put a small amount of their assets … [and] a small amount of institutional assets is a lot of money,” he said. WHO WON #CRYPTOTWITTER Copyright © 2019 CoinDesk. All rights reserved. Our mailing address is: 250 Park Avenue South New York, NY, 10003, US Want to change how you receive these emails? You can update your preferences or unsubscribe from this list

An uncommon lifeline 😳

February 13, 2019

ARCHIVE

QUOTE OF THE DAY

"It's bigger than the Iron Age, the Renaissance. It's bigger than the Industrial Revolution."

- Tim Draper

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MARKET

COIN	PRICE	24H
BTC	$3,627.56	- 0.21%
ETH	$122.18	+ 1.22%
XRP	$0.303111	+ 0.34%
EOS	$2.85	+ 1.16%
LTC	$41.59	- 3.39%

*Information as of 10:00 AM EST

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REVIEW

Selling Crypto Derivatives Could Help Keep the Lights On

Cash is tight for many businesses in the space that had majority of their liquid assets tied in cryptocurrencies.

As the value of the tokens fell, so did their runways, and operations are slimming down to accommodate the problem.

But now some businesses are getting creative and actually betting against their own assets to generate cash in the short term.

Here's the trade

Companies bet the price of Bitcoin (or another digital asset) will stay below a certain price level after a certain time period.

If it is below that price level, the company is paid in cash and gets to keep its digital assets. Meanwhile if the price goes above, the company is forced to sell its digital assets to compensate the trade.

In short, it's like a covered call option.

A very special covered call…

While Bloomberg reports the trades are happening with Wall Street pros, there is no public solution for this type of trade in crypto yet.

Actually, companies are negotiating their own terms with financial firms to take these trades and hopefully, find some short term cash.

QCP Capital, a firm facilitating the trade, worked with an ICO project last month to create a three-month contract. Anything Bitcoin price above $4,200 at expiry, the ICO liquidates its 250 Bitcoin to pay, anything below $4,200, the ICO gets $66,250 in its bank account.

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EXCHANGE

Cryptopia is Getting the Green Light from Regulators but Stays Offline

Following a hack that resulted in up to $23 million worth of cryptocurrencies lost, New Zealand-based exchange Cryptopia is getting the green light from regulators to continue operations, but it continues to stay offline.

According to a report from The New Zealand Herald, local authorities are no longer preventing the exchange from relaunching as the exchange now has full control of their systems and facilities.

Still, however, the company's website remains offline and social media accounts have remained dead since January 28th.

Looking forward

It's unclear whether or not the exchange has plans to reopen as Cryptopia founders didn't respond to the Herald for comment.

That seems to be a recurring theme during this time since the exchange has released relatively little details about the hack and whether or not they will refund users.

For now, victims of the hack are anxiously waiting for their assets to be returned with a possible joint lawsuit of more than 40 traders already brewing.

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ANALYSIS

Ethereum Daily Mining Rewards are Dipping to Lowest Levels Ever Reported

According to Etherscan, new Ether (ETH) is being mined at its lowest level ever reported.

The chart shows only 13,370 new ETH being created on February 10th while previous levels hovered around 19,000 ETH at the beginning of 2019.

The reason? A spontaneous spike in mining difficultly that propelled the metric 19% in one day.

Difficulty bomb delay

Still, the difficulty is nowhere near the so-called "difficulty bomb" that is looming over the network as developers work to delay it.

The feature was put in place to deter miners from continuing on the network even after the Proof of Stake algorithm takes place.

But this algorithm change won't come so soon. Already the difficulty bomb has been delayed and will be delayed again later this month as Ethereum's hard fork Constantinople gets activated.

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BITS

But wait, there's more...

• 🇰🇷 South Korea's largest foreign exchange bank has filed up to 46 blockchain-related patents.
• 💰 Mike Novogratz claims Bitcoin will replace Gold since "Sovereignty costs a lot."
• 💳 Binance adds credit card purchasing for XRP tokens.

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