Day: April 5, 2018

Bitcoin has taken a small tumble since yesterday’s figure of $6,800. At press time, the price has fallen by about $100 and bitcoin sits at just over $6,700.

The fall may have occurred for several reasons, one being the recent hack of privacy-oriented cryptocurrency Verge. The attack was noticed by a bitcointalk.org user, who claimed that “several bugs” were used to infiltrate Verge’s code. The hacker than rewarded himself (or herself) with anywhere between $15,000 and $1 million worth of coins.

Verge later tried to downplay the attack on Twitter, reporting that the problem had been removed and all was resolved, but several experts claim the problem is bigger than the post makes it out to be, calling it a “51 percent attack.” This is particularly disturbing considering this kind of attack is potentially possible on other “blockchains which rely on a proof-of-work (POW) validation mechanism.” Unfortunately, this includes both Bitcoin and Ethereum.

In addition, the Reserve Bank of India – the nation’s central bank – has hinted that it is in the process of banning bitcoin, and may be looking to create its own digital currency.

In a statement, executives explained:

“It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time. A circular in this regard is being issued separately… Internationally, while the regulatory response to these tokens are not uniform, it is universally felt that they can seriously undermine the AML (anti-money laundering) and FATF (Financial Action Task Force) framework, adversely impact market integrity and capital control. If they grow beyond a critical size, they can endanger financial stability as well.”

Naturally, this led to some concern. Many believe that panic is sure to spread amongst the country’s central bitcoin users, and that if the bank wants to create its own digital currency, it doesn’t need to ban others. Presently, India accounts for roughly 10 percent of the world’s cryptocurrency transactions.

And amidst all the hoopla, analysts seem to be split right down the middle (isn’t that surprising). Capital Economics in London, for example, feels that the coin is “essentially worthless,” and will continue to plunge along with stocks in the coming months. The organization feels that the coin has largely been correlated to the S&P 500 considering its price has been plummeting since December of last year.

On the other hand, BRD CMO and co-founder Aaron Lasher feels that the current volatility bitcoin and other cryptocurrencies exhibit is part of a process in which the technologies are fixing themselves and adapting to ongoing change. He stated that we’re in “the initial stages of a multi-decade trend towards the tokenization of assets.”

Eventually, regulation will not be an idea simply floating in the wind, but a set of policies set in stone. Sure, the steps taken to get there might be a little painful, but in the end, bitcoin will be a mainstream currency, and the swings we now witness in the crypto arena could ultimately come to an end.

Skycoin is set to showcase Skycoin Fiber, a development released by Skycoin that will look in depth at the fundamental issues with blockchain. In the past, distributed ledgers have been very difficult to maintain and operate, yet due to the innovations of blockchain technology they are quickly gaining traction, with widespread usage and utilities.

Operators, referred to as miners, run complex algorithms to solve a verify demanding mathematical equations (transactions) across a distributed network. Blockchains rely on one of several consensus protocols to validate “blocks” of information. There are several types of consensus protocols, including PBFT, PoW, PoS, and DPoS, among others.

Each method of establishing consensus comes with their own benefits and drawbacks.

Decentralized Future

Back in 2013, Co-founder of Ethereum Vitalik Buterin, along with a few other forward thinking blockchain developers, set out to create a new kind of platform, one which was not set back by the detriment of Bitcoins technology. Their team aimed to build decentralized applications on the blockchain platform. This was Ethereum, also known as “Blockchain 2.0”, Ethereum implemented a slightly better mining protocol, but more importantly added “smart contracts” to the picture. Smart contracts enable complex variables to be processed with logic and pression, then executed to the value of the contract. Rather than just basic transactions. Ethereum is the first platform for distributed applications, and hosts a long list of over 1,000 sub-chains ranging from supply chain solutions to fintech to games.

Ethereum consistently made improvements in the amount of power need to verify the transaction, one big shortcoming still exists: network congestion during increased transaction volume. Congestion is very important to consider. If the main Ethereum blockchain is congested, leading to a scalability issue, so too are the Ethereum subchains. When the network is slowed to a crawl by ERC20 tokens and dApps like CryptoKitties, certain transactions are prioritized based on the amount of Gas the user is willing to pay for the transaction verification. Participants compete to determine whose transaction will be verified soonest, based on how much they are willing to spend.

Blockchain 3.0

One of the biggest problems with innovation is the lack of creative thinking, and without it we would not have had the technical innovations we see today. A group of early blockchain developers from Bitcoin, Ethereum, and other well known projects had the imagination and foresight to realize that there were still glaring flaws in distributed networking and consensus present, so they created Skycoin Fiber.

Skycoin Fiber

The Skycoin fiber network was built with precision from the ground up to be a solid, customizable and infinitely scalable platform. The advantages of Fiber is in its protocol allows it to easily overcome the challenges not solved by Bitcoin and Ethereum. In order to eliminate the slow speed and high cost of transactions, with the Fiber network, Skycoin’s team created a whole new world of possibilities with their protocol Obelisk. The Obelisk protocol is based on a “web of trust” which relies on certificate authority, thus reducing the amount of work (cost) required for consensus.

Skycoin’s transactions are take split seconds and each ICO/dApp receives its very own blockchain, eliminating the problematic parent-chain/child relationship. Fiber created a fully integratable symbiotic selection of peer chains. Fiber is built for complete cross-chain interoperability, by atomic swaps and much more, without an impact to overall network performance.

The post Skycoin A Blockchain Ecosystem for Everyone appeared first on BitcoinNews.com.

A group of Cambridge researchers have come up with a decidedly flawed way of “tracking” Bitcoin that has been involved in crimes – even when a “mixing” service has been used. Their solution relies on a precedent borrowed from nineteenth century English law. However, rather than actually track specific Bitcoin, the group instead have attempted to redefine what constitutes a “tainted” Bitcoin.

Problematic Research

For the first five years of Bitcoin’s existence, countless articles appeared claiming that this new digital monetary system was entirely anonymous. Fortunately, that false narrative has largely been replaced by a more realistic one – that Bitcoin can be used with a reasonable degree of anonymity if various precautions and tools are used. These include peer-to-peer exchanges, VPNs, and above all, coin mixing platforms.

The Cambridge cybersecurity researchers now believe that even coins that have been through mixers can be tracked – providing legislators use different parameters to define a tainted coin. Mixers work by jumbling many users’ coins together and sending them back at random to those who sent them. This way it would be impossible for any coins that have been involved in a crime to be tracked as any of the receivers involved could now possess them.

The Cambridge team have dug through the history books and found an example that would conveniently (although arguably unfairly) define a tainted coin. The precedent, known as Clayton’s Case, comes from an 1816 court decision on a case dealing with bankrupt companies. It states that when a financial firm declares bankruptcy, the first customer to be paid back from whatever funds the company still has should be the one that put money in first.

The team argue that this same principle could be applied to Bitcoin mixing services – if the third transaction in the group of coins to be mixed contains a coin that was involved in a crime then the third person to be paid out would then be in possession of the “tainted”coin. According to Ross Anderson, the lead researcher in the group, if there was a risk of facing charges or having coins that were involved in crimes by using such a mixer, innocent people would stop using them.

However, such thinking is hugely reductionist. Firstly, it relies on legal bodies following this idea for defining what is and what isn’t a “tainted” coin. Secondly, if governments do use this methodology, it completely strips away a person’s ability to use Bitcoin with any degree of anonymity. Sarah Meiklejohn, a professor of cryptography at University College London told Wired:

“It basically destroys all privacy solutions for Bitcoin… The default level of anonymity in Bitcoin is not very high, and there are legitimate reasons for people to want to make it higher. It’s not a good thing for everyone to have no anonymity.”

Despite the glaring flaws in the Cambridge group’s proposal for “tracking” Bitcoin, they are planning to publish software later this year that uses the methodology. Anderson commented:

“The software we’re going to publish will let you know whether your favourite bitcoin was ever owned by Ross Ulbricht or Mt. Gox.”

In reality, the software will simply tell you that one of your Bitcoin was mixed with potentially hundreds of others at the same time as one involved in a crime. It would then be up to legislators to decide whether to punish an individual based on this information. We don’t need to tell you how unjust it would be to end up having it confiscated or facing charges based on such spurious reasoning.

Image Courtesy of Shutterstock

The post Research Team Devises Spurious Way to Track “Tainted” Bitcoin appeared first on NewsBTC.

#BLOCKCHAIN

In a bold move that looks to further legitimize cryptocurrencies and related technology, Japan has unveiled guidelines for the legalization of the sometimes controversial fundraising method, initial coin offerings (ICOs).

A government-funded research group, the Center for Rule-making Strategies (CRS), has put forth a report that proposes “rules needed to establish ICO as a sustainable financing method.” As many of us know, an ICO is a means of raising capital by issuing and selling newly minted coins in exchange for other cryptocurrencies like Bitcoin and Ethereum. The report intends for the guidelines to help ICOs “obtain public trust and to expand as a sound and reliable financing method.”

Because ICOs are unregulated in most countries, investors don’t have the protections that come with other regulated assets like stocks. In a space that often makes headlines due to bad actors and scams, the country’s step towards regulation can only mean good things moving forward.

Proposed guidelines include identifying investors to prevent money laundering, protecting existing shareholders and debt holders, restricting unfair trade practices like insider trading, and ramping up cybersecurity efforts.

Initial Coin Offerings

The ICO-friendly guidelines are in contrast to positions taken by China and South Korea, which last year banned the practice amongst concerns of fraudulent fundraising and excess speculation. Also of note is that the report avoids identifying ICOs as financial securities, a point which the U.S. Securities and Exchange Commission, SEC, has argued makes some ICOs fall under strict securities laws.

“ICOs are groundbreaking technology, so if we can implement good principles and rules, they have the potential to become a new way to raise funding,” said Kenji Harashima, a researcher at Mizuho Research Institute.

The research group’s general adviser is Takuya Hirai, a member of the ruling Liberal Democratic Party and an architect of last year’s law that legalized cryptocurrency exchanges in Japan. The group also included Yuzo Kano, head of the nation’s largest Bitcoin exchange, bitFlyer, as well as members of the nation’s largest banks. It was led by Toshifumi Kokubun, a professor at Tama University in Tokyo.

Specifically, the report describes three variants of ICOs, the first being a “Venture Company Type,” which is defined as a “fund-raising by venture companies through high-risk, high return investments.” Second up is the “Ecosystem Type,” which is for “fund-raising for collaborative efforts in which multiple corporations such as companies and local governments are engaged.” The third ICO type defined is the “Large Company Type,” which is for “fund-raising by companies for certain in-house projects with high risk.”

The report closes with looks toward the future, explaining that the rules set forth are just the start — “the minimum principles that should be satisfied at this time” — and that more regulation may be necessary:

“To enable ICO to be used safely by a wide range of issuers and investors and to be accepted well in the society, more detailed rules may be required.”

Considering the numerous ICOs and new tokens popping up all the time, determining which ones might bring steady returns is not easy. Japan’s move to regulate is, hopefully, going to make this process clearer. The key is to perform due diligence, studying white papers and knowing about an ICO’s country rules and regulations. The more investors know about a new business’s mission and vision, as well as the overall environment, the better chance they have to differentiate ICOs with wealth potential from scams.

The post Japanese Authorities Legitimize ICO Market Through Increased Regulation appeared first on NewsBTC.

A new company wants to tackle the “outrageous fees” LinkedIn charges businesses, while paying professionals for their data. #SPONSORED

Criminals and scammers have become all too common in crypto. Over the past few years, we have seen numerous methods of attack, with varying degrees of success. One new scam making the rounds is rather threatening in nature, even though not much effort has been put into it.

Threatening Cryptocurrency users Won’t Work

According to information shared on Reddit, scammers are getting more desperate when it comes to obtaining cryptocurrencies. More specifically, this latest scam indicates people are just sending out random emails with some harsh language in the hopes of getting recipients to send them a vast amount of Bitcoin in return. From a neutral point of view, it’s obvious that very little effort has been put into these emails.

The message itself leaves much to be desired. The sender identifies himself as a “member of a group of web criminals from Iraq”. While one has to give him kudos for the somewhat unique angle, it quickly becomes evident that messages like these are nothing more than spam. He states that the recipient’s email address was selected because it “will be checked”. That’s not exactly inspiring, to say the least.

Later in the email, the sender claims to have recorded the victim’s screen and to have evidence of the victim “self-abusing”. Supposedly, the hacker also managed to infiltrate the victim’s work network to turn it into a dedicated server for keylogging purposes, among other things. It doesn’t make any sense, but that is not even the best part.

The scammer goes on to ask the victim to pay a sum of $460 in Bitcoin. An address to which to send this money is also contained in the email, even though it is possible different addresses are used in different emails. No effort has been made to mask this address or even use a Tor-based page allowing would-be victims to make payments. It’s a rather unprofessional approach, to be honest.

What is even more surprising is that the email clearly tells users where they should buy Bitcoin. Unsurprisingly, the self-professed criminal has seemingly taken a liking to the Coinbase exchange. This should not tarnish the company’s reputation by any means, though. Should the recipient be unable to buy crypto from Coinbase, he or she is invited to look up a Bitcoin ATM using CoinATMRadar.

This is by far the lowest-effort scam attempt in the history of cryptocurrency. There is nothing even remotely worrying about emails like these, even though it is possible some novice users may be scared and pay the money regardless. If this is the new way to scam cryptocurrency users, the future looks a lot brighter. Low-effort attempts will become less of an annoyance at this rate.

Sounds counterintuitive, but the ban from big tech can help ICO’s to get credibility #FOLLOW_UP

This article originally appeared on Bitcoin Magazine.

India’s central bank is reportedly considering the introduction of a ‘central bank digital currency’ as it bans regulated entities such as banks from dealing in cryptocurrencies with individuals or businesses.

In a statement released today, BP Kanungo, the Deputy Governor for the Reserve Bank of India (RBI), said at a media conference that evolving changes within the payments industry has meant that central banks are now exploring the idea of implementing ‘fiat digital currencies,’ adding:

While many central banks are still engaged in the debate, an interdepartmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency. The report will be submitted by end-June 2018.

News of RBI’s consideration of a central bank digital currency comes as Kanungo also announced that the bank had directed regulated entities to cease their operations with companies and individuals related to digital currencies. Such a move means it’s no longer possible for people to purchase cryptocurrency through their banks or e-wallets through an organisation that is regulated by the central bank.

“In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs [virtual currencies.] Regulated entities which already provide such services shall exit the relationship within a specified time,” Kanungo added.

India’s central bank has repeatedly issued warnings to the public – one in 2013, followed by a second in 2017 – regarding the use of digital currencies and the risks that come with them. However, while it has cautioned users against the use of cryptocurrencies, remaining wary of them, its announcement regarding the introduction of a central bank digital currency shows that it’s not yet ready to give up on the notion of a digital currency.

The RBI joins a growing list of global central banks that are considering their own plans to create a digital currency token or have already done so. Even though China has taken a firm stand against cryptocurrencies, banning ICOs and the operation of crypto exchanges in the country last September, it is reportedly developing its own sovereign cryptocurrency. However, last month it was reported that The Republic of the Marshall Islands had become the first sovereign nation to issue a cryptocurrency that will be legal tender alongside that of the US dollar.

The post RBI Considers Central Bank Digital Currency But Bans Regulated Entities from Dealing in Cryptocurrencies appeared first on NewsBTC.

Technology giants have made it perfectly clear that they want nothing to do with cryptocurrencies. Google, Twitter, and a few other companies ban cryptocurrency-related advertisements as of right now. Google is taking things one step further by officially banning cryptocurrency mining extensions altogether.

Another Strong Signal from Google

Mining has always played a critical role in the world of cryptocurrency. Without mining, it would be very difficult to protect and secure cryptocurrency networks. For Bitcoin, for example, mining is the proverbial lifeblood of the network right now. Miners help process network transactions as well as protect the entire ecosystem from outside attack.

Unfortunately, the mining aspect of cryptocurrency has also attracted a fair bit of negative attention. We have seen various attempts to maliciously mine cryptocurrency in the past. Whether that’s done by embedding code on a website or using Google Chrome plugins to do the dirty work, it is evident something will need to change sooner rather than later. As such, Google is taking matters into their own hands.

More specifically, the company has made it crystal clear that they are getting rid of all Chrome extensions which run malicious cryptocurrency miners. That is a positive development for the industry as a whole, even though most people may see it as a direct way of countering cryptocurrency once again. With the number of malicious Chrome mining extensions growing over the years, something had to give.

Google acknowledges the current dangers associated with nefarious cryptocurrency mining. With these miners using up a ton of CPU resources, system performance can be affected in many ways. Although Google has maintained a hands-off approach regarding cryptocurrency mining plugins for some time now, the situation simply forced the company to take action.

To be clear, the company will still allow cryptocurrency mining extensions to exist, but only if those plugins inform users about the mining activity. Unfortunately, close to 90% of all current Chrome mining extensions do not adhere to these guidelines, which prompted Google to put an end to these shenanigans.

It is evident Google wants to protect Chrome users from all kinds of harm. Getting rid of malicious cryptocurrency mining extensions is a good way of doing that, even though there are still a lot of other concerns to take into account as well. Whether or not the company will take similar action against other extensions violating its terms of service remains to be seen.

The past day for Verge (XVG) represents yet another fiasco for the highly controversial Dogecoin fork. Hackers have managed to mine an XVG block every second through a timestamp exploitation coupled with a 51% attack. To make matters worse, hasty developer responses have actually rendered the network even more incapable through an ineffective hard fork.

Since yesterday, hackers have mined over 17,000 XVG blocks. This translates to over 20 million XVG, a bag worth over US$1 million. The developer has already asserted that these coins will not be reverted, blacklisted, or burnt, making the hack absolutely successful. The hack took place through two intervals, one on April 4, and another today, April 5.

To make matters worse, the initial response from the April 4 mining hack was an accidental hard fork of the network. The XVG team erroneously forked their entire network to “undo” the exploited blocks, but this resulted in the entire network being unable to sync. When the team was made aware of their mistake, they were able to re-sync the network, but still have not completely defeated the issue. OCMiner of the Super Nova pool catalogued the details of the hack, and after receiving flak from the Verge team, has announced his decisions to discontinue support for XVG mining permanently.

How did the hack work?

There were two components to this hack: exploiting timestamps and controlling the algorithms. Like several other currencies, XVG mining protocol utilizes a multi-algorithm process. That is, with each block mined, the next block will require another, random algorithm out of a handful of possible alternatives. The attackers executed a method to ensure that each following block would stay on Scrypt algorithm. Additionally, they spoofed timestamps so the network accelerated beyond the regular speed in which new blocks were mined.  As a result, Scrypt blocks were mined as quickly as possible- every second. However, the attacker required consensus to ensure network verification of each hacked block. They were able to ascertain 51% of the entire network’s hash rate to execute the attack.

Current implementations to stop the hack nullify the process utilized by the miner, but does not eliminate the capabilities entire. While the team claimed everything had been solved after the first exploitation, today’s interval proves that this was not the case. Additionally, IDCToken, a Bitcointalk member who claims to be part of the hack, claims that the hackers have found two more exploits to further attack the network.

This is not the first attack of its kind. Digibyte, which also utilizes multi-algorithm mining, faced a similar exploit in 2014. However, the team solved the issue by changing the method in which the algorithm of the next block is determined. Verge developers have suggested they will not be utilizing the same solution.

Surprisingly enough, Verge has seen very little price movement in response to this meltdown. After yesterday’s initial hacks, prices dipped about 20% to US$0.051. XVG recovered fairly well since, and is currently trading around $0.057. It’s no secret that Verge holders are very passionate about their coin. Despite a long history of failure and disappointment, there is a very strong community around the coin. Either due to willful ignorance or legitimate lack of understanding, supporters carry on. The coin is still up heavily in the past week.

When asked for comment on recent events on the official Verge Telegram Channel, two admins shared their two cents.

our mining was exploited, and blocks were submitted in a way that was overlooked. we made a patch that will work, and we are rewriting our block verification process. the exploit we patched is still alive in hundreds of other coins =] -verge dev