Tuesday, January 22, 2019

The $5m goof

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OVERSTOCK REVAMP: Digital retailer Overstock has shuffled its leadership to prepare for the upcoming launch of its security token trading platform, tZERO. Steve Hopkins, former chief operating officer at Overstock's blockchain venture fund Medici, resigned to head up tZERO. He will be replaced by Medici's former chief technology officer, Joel Wright.

Medici president Jonathan Johnson explained that the move indicates the importance of technical expertise within Medici’s leadership, telling CoinDesk that “because Joel is so deep in there [understanding the tech], we can have a double level of depth in technology, and that’s going to be useful for us.”

Overstock general counsel Stanton Huntington is also shifting, moving to Medici to fill the same role there. The trading platform is expected to launch by the end of this week. Full Story

ACCIDENTAL AIRDROP: South Korean crypto exchange Coinzest accidentally sent over $5 million in bitcoin to clients in an airdrop – and now it wants the crypto back.

The exchange announced last week that some 6 billion Korean won (around $5.3 million) in bitcoin and other cryptocurrencies were sent to customers due to a computer error, according to CoinDesk Korea. The exchange was trying to airdrop We Game Tokens (WGT) when the incident occurred.

Further, due to the server issue, some customers also received Korean won from the exchange. The exchange has no plans to compensate users for any losses suffered through its server issues.

Coinzest’s server issues were resolved by Jan. 19, and the company plans to roll back transactions to restore its assets. It has also asked customers to return funds they received by mistake.

As of Jan. 19, about half of the won was returned.

Some traders who received bitcoin instead of WGT reportedly sold their new holdings immediately, causing bitcoin's price to flash-crash on the exchange to just $50. Full Story

BROKEN BEAM: Newly released privacy-oriented cryptocurrency Beam reported Monday morning that its blockchain was experiencing technical difficulties.

The team announced the issue on its official Twitter account, saying that its network had “stopped at block 25709” and that it was investigating the matter.

Several hours later, the project tweeted an update saying, the issue had been identified and a fix was due within the hour. "Funds are safe," it added.

Finally, the fix was committed on GitHub, with Beam saying in a post-mortem: “The root cause of the issue was that two cloned wallets (most likely created by copying the same wallet.db file) both sent the same cloned UTXO to the blockchain, which resulted in incorrect cut-through processing and ultimately to an invalid block.”

At its January launch, Beam became the first live cryptocurrency to be based on Mimblewimble – a protocol that makes transactions confidential and virtually untraceable. Since then, though, the crypto has faced some technical issues. On Jan. 9, the team discovered a “critical vulnerability” in its wallet software that could have put users’ funds at risk by allowing attackers to modify transactions. Full Story

CoinDesk’s Crypto-Economics Explorer aggregates data points across the industry to measure the size and opportunity of crypto markets. In addition to price and market cap, CoinDesk’s explorer provides users with a comprehensive way to view the crypto-economic forces that shape an asset’s market maturity, growth and potential.

Network interest is important in determining the activity occurring within a blockchain’s internal ecosystem. Today, Jan. 22, we observed one metric within network interest: mining revenue. This is the total global revenue earned by miners from transaction fees and block rewards per day.

The top five coins by mining revenue are:

BTC draws by far the most revenue, earning nearly 4x of 2nd place ETH and 15x of 3rd place LTC.

Note: Mining most concerns Proof-of-Work (PoW) cryptocurrencies that use that consensus system rather than other newer forms that don’t rely as heavily on it. Also the totals are converted to USD on the day mined, so they don’t fully illustrate the mine-and-hold strategy of some miners.

Check out the CoinDesk Crypto-Economic Explorer to learn more.

PARTNER

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STABLE (FOR NOW): Bitcoin's price has stayed between $3,500 and $3,700 since Jan. 11 – the longest stretch in such a narrow range since the end of October. At the time, bitcoin's price stayed between $6,350 and $6,500 before falling after nearly two weeks. The current period, too, may also end with a downside move, the charts suggest. Full Story

BEST OF THE BEST

ZDNET: The perpetrator of Iceland's "Big Bitcoin Heist" has been sentenced to four and a half years in prison after being convicted of stealing nearly 600 crypto mining computers and staging a jailbreak after his initial arrest, ZDNet reported.

Sindri Thor Stefansson was arrested last year for stealing nearly $2 million in mining equipment in late 2017, alongside nearly a dozen other individuals. Six others have been similarly convicted, though they face shorter jail terms.

After his arrest, Stefansson booked a flight from his phone while in jail after his initial arrest, jumped out a window, took a taxi to the airport, and flew to Stockholm on the same aircraft that also transported the nation’s prime minister. He was later re-arrested in Amsterdam and extradited back to Iceland.

THE REST

SWISSINFO܁CH: The Tezos blockchain project got off to a bumpy start with internal disputes and resulting lawsuits. But now that things have calmed, the chief of the foundation that oversees Tezos hopes that the platform can move forward to do good.

According to a piece from Swissinfo.ch, Tezos Foundation president Ryan Jesperson dreams that the project can help to lift people out of poverty. “Tezos could be leveraged to improve the plight of the poor in developing countries,” Jesperson said. “It can empower people in areas where there is government obfuscation, no transparency or infrastructure.”

While that particular use case has its skeptics, he feels that payment systems or micro-insurance projects that “operate out of the reach of corrupt officials or profit-driven banks are the way forward.”

If that is to happen, though, it will have to be driven by the community surrounding Tezos, not the foundation itself. Further, there are regulatory compliance issues and lawsuits from disgruntled investors to take into account. If they can be overcome, Tezos’ ‘proof-of-stake’ mechanism and on-chain governance give it an edge, Jesperson believes.

COMPUTER WORLD: MIT, Stanford and five other universities are working together to develop a blockchain network with its own cryptocurrency, Unit-e, that can rival Visa for transactional throughput, says Computer World.

The proof-of-stake-based blockchain system is being built to get around the traditional Achilles’ heel of blockchains to date – scalability – and is said to enable up to 10,000 transactions per second.

A Switzerland-based non-profit is funding the effort, according to the piece – doing so to promote open blockchain technology. “Advancements in distributed technologies will enable open networks, avoiding the need for centralized authorities,” a representative said. The project was formed “with the goal of enabling and supporting this revolution.”

Unit-e, which already has backing from Pantera Capital, is slated to go live later this year.

WHO WON #CRYPTOTWITTER

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Invitation: World Cryptonomic Forum in Vaduz, Liechtenstein

Dear community,

You are cordially invited to join us in kick-starting an annual series of events dedicated to the socioeconomic impact of blockchain technology.

The World Cryptonomic Forum aims to provide a stage to innovators, tech pioneers, economists and decision-makers interested in a new fundament for our digital economy based on scalable, efficient and transparent cryptographic data structures.

Join the discussion on how open-source blockchain technology will empower individuals by creating opportunities and unleashing value creation on a global scale.

DATE: 26.01.2019
LOCATION: Vaduz, Liechtenstein
WEBSITE: https://www.worldcryptonomic.com/
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Your identity could be for sale 😳

January 22, 2019

Hacked Customer Exchange Data is Allegedly Selling on the Darknet

The darknet has always been the go-to corner of the web to buy and sell illicit things. From drugs to stolen credit card information, its marketplaces are lined with items and services that would certainly catch jail time.

Now, an anonymous vendor with the name "ExploitDOT" is allegedly selling over 100,000 personal documents that were used to pass know-your-customer (KYC) policies at prominent cryptocurrency exchanges including Bittrex, Poloniex, Bitfinex, and Binance.

Dumped in July

This vendor isn't new either. Apparently ExploitDOT has had an ad running for the stolen documents on a forum since last July when an unnamed third party KYC solution provider suffered a breach.

The ad offers documents including proof of address scans and even selfies that show users holding up their driver's licenses.

In addition, ExploitDOT offers bulk discounts for buyers looking to grab large chunks of the stolen information.

Real or scam?

While ExploitDOT seems to be profiting off of the documents, it's still unclear whether or not they are real or just part of an elaborate scam.

Crypto news website CCN reported that a cybersecurity expert purchased a small sample of the documents and found them to be real customers from Binance.

Since then, however, Binance has pushed back claiming that the documents are photoshopped and carry no signs of a possible platform security breach.

He'll delete them but...

If the documents are real, it's a massive data breach that would violate the privacy of thousands of cryptocurrency investors.

That's why ExploitDOT is now asking to start a crowdfunding campaign to "delete all the hacked documents" and in exchange, he will get the amount of money he needs to pursue a "legit business with ideas that could change the world."

LAYOFFS

ConsenSys 2.0 Has Caused Layoffs of Less Than 10% Despite Previous Reports

Late last year, blockchain software company ConsenSys announced that it was going to undergo a transformation that could cut up to 13% of its 1,200 employee army.

The announcement was followed by "insider" rumors that claimed layoffs could even reach as high as 60% if it started spinning out startups that operate under its wings.

That doomsday scenario never happened though.

Less than 10%

According to Vanessa Grellet, an executive at ConsenSys, less than 10% of the staff was cut and the decisions were made as part of a "natural movement."

The move also mainly only affected support staff, while developers and technical employees remained untouched.

For now, it seems the layoffs have faded. A prolonged crypto winter, however, may incite more "natural movements" than ConsenSys previously expected.

EXCHANGE

A Computer Error Sent $5.3 Million in Bitcoin to Exchange Customers

South Korean exchange Coinnest had some lucky users last week when $5.3 million in Bitcoin accidentally ended up in user accounts due to a computer error.

But the problem didn't stop there. Those who received the gift quickly sold their new holdings immediately and it actually caused Bitcoin's price to flash-crash to $50.

The cleanup

After admitting its mistake and fixing the server that caused the issue, Coinnest is now asking for customers to return the Bitcoin. Additionally, it will also be rolling back transactions to recover its assets from inactive users.

At the time, about half of the assets lost have been returned.

STABLECOIN

Huobi Plans to Launch its Own Stablecoin Soon

Another day, another stablecoin. This time, it's crypto exchange Huobi that is planning to launch its very own stablecoin in the first half of 2019 despite already offering customers four different stablecoins on its platform.

It's unclear if the stablecoin will be pegged to a fiat currency or algorithmically to fight against volatility. Adding to the mystery, it's also still unknown what Huobi thinks customers will use this stablecoin for since there are already many choices on the market.

Regardless, Huobi sees stablecoins playing a big part in 2019. CFO Chris Lee commented:

"This year will be huge for stablecoins and we will be a part of that. Likely Huobi Group will launch its own stablecoin in 2019 in the first half of the year."

BITS

But wait, there's more...

🚔 An Icelandic man is going to jail for four and a half years after stealing Bitcoin mining equipment.
🔮 Nasdaq CEO Adena Friedman believes that cryptocurrency "deserves an opportunity to find a sustainable futuer in our economy."
🚀 A new report reveals Ethereum on-chain transactions hit an all-time high in December 2018.

MEME

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Monday, January 21, 2019

TZERO's takeoff

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BANK BILL: The U.S. state of Wyoming is looking to more clearly define cryptocurrencies and provide banking permissions for digital assets with a new bill. SF0125, introduced Friday by a bipartisan group of state legislators, would classify digital assets within existing laws and establish custody rules.

Caitlin Long, co-founder of the Wyoming Blockchain Coalition, told CoinDesk that the bill would clarify the legal status of digital assets and improve upon work from other states, such as New York’s Trust license.

"It truly gives the blockchain industry something I think it needs which is legal clarity to bring it to the next level and even the bitcoin purists who would be opposed to intermediate [entities] being in [charge] would take comfort in knowing they now have legal status for their assets," Long explained.

The bill is supported by leadership in both the Wyoming House and Senate, though Long noted that simply having the bill introduced is only a first step. Full Story

TRADING LAUNCH: Overstock.com CEO Patrick Byrne announced Friday that the company's long-awaited security token trading platform, tZERO, would be launching by the end of this week. The system is ready to go live, but the company is still processing a large number of initial signups, he told CoinDesk.

“But by the end of the next week we will be turning the trading system live,” Byrne said, adding, “it’s a big moment for us — four years in the making.”

The news comes on the heels of tZERO granting investors access to security tokens bought last year during an initial coin offering. The tokens were locked up during a three-month period which expired earlier this month. Full Story

STILL SPENDING: The team behind the Tron project are looking to spur adoption of the cryptocurrency with its BitTorrent acquisition, founder Justin Sun told CoinDesk at his company's niTROn conference last week.

“BitTorrent is different, because we already have 100 million active users. I think that is the huge challenge for other companies," he explained.

To that end, BitTorrent's "Project Atlas" is tasked – at least in part – with finding ways to improve the platform. One such improvement would utilize tokens to incentivize the storage or sharing of less popoular files. Full Story

CoinDesk’s Crypto-Economics Explorer aggregates data points across the industry to measure the size and opportunity of crypto markets. In addition to price and market cap, CoinDesk’s explorer provides users with a comprehensive way to view the crypto-economic forces that shape an asset’s market maturity, growth and potential.

Social interest is important in determining the engagement of various coin communities. We observed Reddit post volume on each cryptocurrency's unique subpage for Friday, Jan. 18.

The top five cryptocurrencies by Reddit post volume are:

Check out the CoinDesk Crypto-Economic Explorer to learn more.

PARTNER

DROP POSSIBLE: Bitcoin's pullback from the 21-day MA not only established that technical line as the level to beat for the bulls, but also poured cold water over optimism generated by the repeated defense of $3,500 last week. As a result, a deeper drop below $3,500 is back on the table. The bearish case would weaken if prices climb the 21-day MA – currently at $3,732. Full Story

BEST OF THE BEST

HACKERNOON: Former Venezuela resident Eduardo Prospero says bitcoin proved useful when he escaped from the country, he wrote in a piece for Hackernoon.

While “hodl” memes are ubiquitous, Prospero noted that he did not purchase bitcoin to invest or store it, but to use as a form of currency. The cryptocurrency helped him utilize financial services, accept remote jobs and fund an escape from Venezuela in a way that fiat currencies could not, he wrote.

“Cryptocurrencies are at their infancy and all of the processes were a little awkward, but the technology fueled my against-all-odds escape from Venezuela. And that’s worth gold,” he concluded.

THE REST

NIKKEI ASIAN REVIEW: The ongoing crypto bear market is taking its toll on Chinese miners, reports Nikkei Asian Review. The site reported that even low-cost electricity in locations such as the Qinghai province of China are unable to sustain bitcoin mining in the current environment.

It’s not just cryptocurrency miners themselves that are impacted either. Computer chip manufacturers whose products supported crypto networks are losing revenue due to a sudden lack of demand.

Local miner Lu Qing previously ran a cryptocurrency mining business, which had 7,000 miners at its peak with plans to expand to 12,000 units. However, the price decline saw the business collapse, and the computers themselves are selling for nearly 1/100 their original price.

FORBES: Blockchain platforms may be able to facilitate crowdfunding to improve public infrastructure in the U.S., as well as improve accountability for different projects, says Forbes contributor Adam Millsap.

Blockchain has the ability to open investment opportunities to individuals who might otherwise not want to fund a project. In Millsap’s example, a group could crowd-fund a bridge, then receive some proportionate level of tolls from that bridge.

Further, the fact that a distributed ledger would clearly indicate which party is responsible for which parts and what aspect of a construction means it would be easier to hold such parties accountable for delays or issues.

COIN	PRICE	24H

BTC	$3,596.14	+ 0.43%

XRP	$0.319640	- 0.30%

ETH	$118.46	+ 0.73%

EOS	$2.40	+ 1.98%

BCH	123.69	+ 0.62%