BTCMANAGER https://btcmanager.com Bitcoin, Blockchain & Cryptocurrency News Thu, 21 Jun 2018 09:00:26 +0000 en-US hourly 1 https://btcmanager.com/wp-content/uploads/2017/09/cropped-btcmanagerlogo-800x800-32x32.png BTCMANAGER https://btcmanager.com 32 32 Blockchain Visionary Earns Millions With “BlockBox” https://btcmanager.com/blockchain-visionary-earns-millions-with-blockbox/ https://btcmanager.com/blockchain-visionary-earns-millions-with-blockbox/#respond Thu, 21 Jun 2018 09:00:26 +0000 https://btcmanager.com/?p=32325 All over the world, the so-called BlockBoxes used in bitcoin mining, are appearing in the countryside as FinTech companies and individuals are getting on the bandwagon to get the best out of the newly-emerged industry. Creation of BitFury These large mysterious structures are the work of BitFury Group Ltd. CEO and Co-Founder Valery Vavilov and CTO Valery Nebesny. Latvian-born Vavilov...

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All over the world, the so-called BlockBoxes used in bitcoin mining, are appearing in the countryside as FinTech companies and individuals are getting on the bandwagon to get the best out of the newly-emerged industry.

Creation of BitFury

These large mysterious structures are the work of BitFury Group Ltd. CEO and Co-Founder Valery Vavilov and CTO Valery Nebesny.

Latvian-born Vavilov established the company in 2011 in Amsterdam, and Nebesny, a self-taught microchip engineer, joined him after inventing an energy-saving chip.

The company, which currently has offices in the US, Europe, and Asia, along with its partners has so far mined over 1 million bitcoins, worth over $6 billion at the current bitcoin price.

What is a BlockBox?

Vavilov and Nebesny’s company has sold over 100 BlockBoxes in the past year and a half. But what exactly are those?

Unlike fiat money, virtual currencies have no central authority and instead are “mined.” Crypto miners use specialized software and hardware to solve mathematical problems which allows them to earn cryptocurrency tokens if successful.

(Source: Bloomberg)

As the mining process becomes increasingly more demanding for simpler desktop rigs, the regular computers won’t do anymore. Enter BlockBoxes.

BlockBoxes are large mining datacenters which allow industrial grade mining. They are faster, more powerful, more resilient, and have more storage space. Bitfury’s BlockBoxes offer mobility and can be set up anywhere. The BlockBox Shipping Container Bitcoin Mining Datacenter contains as many as 176 air-cooled mining servers stored in a 500 square foot (around 45 square meters) container. A BlockBox offers a total hashrate of 8 PH/s and multiple units can be deployed together for large mining farms.

(Source: Bitfury)

BitFury’s boxes extract about 15 bitcoins a month on average and thanks to them, the company has quintupled their income for its latest 12-month period, to staggering $450 million in cash and cryptocurrency.

Vavilov hopes to double this amount at least and is very enthusiastic about the future of blockchain technology, as he expressed in his interview with Bloomberg:

“Imagine – some $300 billion of crypto wealth has already made its way into the hands of totally different, non-establishment people. Most of these people, like me, aren’t interested in private jets or yachts, they truly want to change the world. Given how much wealth is in their hands now, I expect to see a lot of good new things in the next few years—in finance, health care, education—everywhere.”

The BlockBox can be bought through a profit-sharing model where the buyer earns 50 percent of the proceeds after the initial investment of $1 million is recovered.

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Square Becomes the Seventh Cryptocurrency Business to Receive BitLicense https://btcmanager.com/square-becomes-the-seventh-cryptocurrency-business-to-receive-bitlicense/ https://btcmanager.com/square-becomes-the-seventh-cryptocurrency-business-to-receive-bitlicense/#respond Thu, 21 Jun 2018 08:00:18 +0000 https://btcmanager.com/?p=32292 While many have criticized the New York authorities over the draconian nature of their BitLicense regulation, it appears the NYDFS has seen reasons to soften its requirements a bit to make it easier for more companies to receive the permit. Now, creators of the Square bitcoin app have been granted BitLicense  – making it the seventh company to receive the...

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While many have criticized the New York authorities over the draconian nature of their BitLicense regulation, it appears the NYDFS has seen reasons to soften its requirements a bit to make it easier for more companies to receive the permit. Now, creators of the Square bitcoin app have been granted BitLicense  – making it the seventh company to receive the license in three years.

Squaring Up with Crypto Elites

The New York Department of Financial Services has announced its approval of Square’s BitLicense application.

Established in 2009 by Jack Dorsey and Jim McKelvey, Square has been operating in New York with only a money-transmitter license, a permit that makes firms offering payments services such as check issuance, drafts, money orders and more, to operate legally in the state.

Financial Services Superintendent, Maria T. Vullo announced:

“DFS is pleased to approve Square’s application and welcome them to New York’s expanding and well-regulated virtual currency market. DFS continues to work in support of a vibrant and competitive virtual currency market that connects and empowers New Yorkers in a global marketplace while ensuring strong state-regulatory oversight is in place.”

With this latest development, New York residents will now be able to use Square’s rapidly growing cash app that allows users to buy or sell bitcoin seamlessly.

Brian Grassadonia, Head of Cash App, expressed excitement over the excellent feat achieved by the firm, saying:

“We are thrilled to now provide New Yorkers with Cash App’s quick and simple way to buy and sell bitcoin. Square and the New York State DFS share a vision of empowering people with greater access to the financial system and today’s news is an important step in realizing that goal.”

Square’s Shares Hits the Moon

While the integration  of bitcoin into its operations since late 2017 has had a super bullish effect on the company’s shares, obtaining the somewhat elusive DFS BitLicense approval have fueled another rally for Square’s share price.

According to CNBC,  Square has seen an 88 percent surge in its stock price since the beginning of 2018, and it hit an all-time high of $65 following the firm’s success with the DFS.

“That was one of the missing pieces in their puzzle. They had approval in most states, but New York was by far the biggest one where you couldn’t trade bitcoin,” said Dan Dolev, an analyst at Nomura Instinet.

Nine in, Hundreds Still Out

For the first time since the regulation came into effect in 2015, the New York Department of Financial Services has approved two cryptocurrency businesses within one week.

Notably, on June 14, 2018, reports  surfaced that the NYDFS had approved Xapo’s application for a virtual currency license after conducting a comprehensive review of the firm’s anti-money laundering, anti-fraud, Cybersecurity and other policies.

“We are very pleased with the approval of Xapo’s BitLicense application. It is the end result of much hard work, not just by Xapo personnel but by the DFS and its staff,” Xapo President, Ted Rogers declared.

Founded in 2013 by the highly reputable Argentine entrepreneur, Wences Casares, Xapo offers retail and institutional bitcoin investors a secure way to store their coins.

On May 27, 2018, BTCManager reported that Xapo had successfully added support for Segregated Witness (SegWit) to its bitcoin wallet, making it easy for users to send and receive the flagship cryptocurrency speedily, with meager transaction fees. So far, a total of 9 firms have been licensed to trade crypto in New York State including Gemini Trust and Paxos that were granted charters.

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Things Get Interesting when Conceptual Art Meets Cryptocurrency https://btcmanager.com/things-get-interesting-when-conceptual-art-meets-cryptocurrency/ https://btcmanager.com/things-get-interesting-when-conceptual-art-meets-cryptocurrency/#respond Thu, 21 Jun 2018 06:40:58 +0000 https://btcmanager.com/?p=32322 Kevin Abosch, a conceptual artist, and photographer living in New York is currently implementing blockchain technology and cryptocurrencies in his conceptual artworks. Art Blends with Cryptocurrencies Abosch is however not the first artist to test this idea. The exciting blend of cultures between cryptocurrencies and art is resulting in works that according to The Independent, “explore value, decentralization, and the...

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Kevin Abosch, a conceptual artist, and photographer living in New York is currently implementing blockchain technology and cryptocurrencies in his conceptual artworks.

Art Blends with Cryptocurrencies

Abosch is however not the first artist to test this idea. The exciting blend of cultures between cryptocurrencies and art is resulting in works that according to The Independent, “explore value, decentralization, and the buzz around digital money.”

An example of an artwork that bridges both industries is Potato#345. It is an artwork by Abosch that was purchased by a European businessman for 1 million Euros in 2015.

While the attention Abosch gained from the sale was quite exciting, he mentioned that “on the other hand, the focus shifts from the artistic value to the monetary value of the work, and for most artists, the art is an extension of the artist, so you start to feel commodified. To control that, I began to think of myself as a coin.”

The conceptual artist looked to the blockchain and created 10 million tokens in January. “But I didn’t want to just make these 10 million pieces of virtual art,” said Abosch. “I wanted them to be connected to my body.” Abosch, therefore, created a project called IAMA Coin.

For IAMA Coin, he had six vials of blood drawn. He stamped the contract address onto 100 pieces of paper in blood, believing that he “successfully connected my physical body to the virtual works,” where the virtual works are “as pieces of me.”

“Blockchain seems like it has potential to offer a different economic logic that structures society, and so a lot of artists are interested in the social implications of blockchain and crypto,” said Michael Connor, the artistic director of Rhizome. Connor added he had seen an increase of cryptocurrency-related artworks in emerge in 2017.

Capturing the Decentralized Ethos

Abosch’s works in regards to how they are created, purchased and sold also capture the zeitgeist, especially the cryptocurrency movement. An example is the purchase of a neon sculpture Abosche created from a blockchain address that represented Lamborghinis.

The artwork is known as YELLOW LAMBO (2018), purchased by a former tech executive who paid more than the price of an actual Lamborghini for the sculpture made headlines like the Potato#345. The artwork has also been referenced as a joke in the cryptocurrency community concerning the use of cryptocurrency profits to buy Lamborghinis.

Abosch had also created a token called YLAMBO and created its address into a yellow neon physical sculpture. It sold for $400,000 to Michael Jackson, the former chief operating officer of Skype at a San Francisco art fair.

“You meet people in the crypto world who throw millions into coins backed by nothing, but don’t understand how a piece of art has any value,” said Abosch. “Then you meet people in the art world who don’t understand why you would invest money in the art that has no physical manifestation. That’s where it gets exciting for me.”

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Lightning Network-Powered Pokemon Game Displays Ease of Processing Bitcoin Payments https://btcmanager.com/lightning-network-powered-pokemon-game-displays-ease-of-processing-bitcoin-payments/ https://btcmanager.com/lightning-network-powered-pokemon-game-displays-ease-of-processing-bitcoin-payments/#respond Thu, 21 Jun 2018 05:00:08 +0000 https://btcmanager.com/?p=32282 A blockchain developer has created a Pokemon-themed game running on the Lighting Network (LN) to prove its technical capability. Move over Kitties As per a TNW report on June 19, 2018, software engineer, João Almeida has created Poketoshi, a Lightning Network-based game merging Nintendo’s classic game with blockchain technology. While blockchains are touted as a disruptive advancement to take the...

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A blockchain developer has created a Pokemon-themed game running on the Lighting Network (LN) to prove its technical capability.

Move over Kitties

As per a TNW report on June 19, 2018, software engineer, João Almeida has created Poketoshi, a Lightning Network-based game merging Nintendo’s classic game with blockchain technology.

While blockchains are touted as a disruptive advancement to take the world by storm, the real-world applications have thus far been sporadically observed. But, the gaming industry is experimenting with the decentralized ledger network, as it usually does with newer technologies.

All commands cost ten Satoshis, the lowest denomination of bitcoin, which are processed via the LN. Furthermore, the application uses the Lightning-enabled OpenNode, a bitcoin payment processor, to process payments.

Notably, the LN does not result in a significantly better user-experience or provide an edge over traditional gaming software. However, the game is devised by Almeida to show the network’s capabilities to naysayers, in addition to Lighting’s fast payment processing.

Community Takes Dig

The LN is rivaled by cryptocurrencies like Bitcoin Cash, which promise similar results, and the cryptocurrency community is divided over their benefits. Poketoshi users, in this instance, took digs at the Bitcoin hard fork on Twitter:

The game is yet another real-world test for the LN. In May 2018, the network was used to process payments on a fully-functional candy dispenser, christened “sweetbit.” To operate, the machine tracks incoming bitcoin transactions and dispenses an equivalent amount of candies. Creator David Knezić stated the dispenser was an effort to display the ease of integrating bitcoin payments into everyday appliances.

In June 2018, an anonymous developer built the Satoshi’s Place, as advertisement board described as “innovative, dirty, and wacky” and utilizing the LN for its upkeep.

For the uninitiated, the LN is a second layer protocol mainly used by Bitcoin which helps make exchanging value more efficient via off-chain channels between two or more parties. The technology is still in late stages of testing, but results are highly promising. In April 2018, the network processed over $150,000 worth of cryptocurrency without any stoppages.

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Cryptocurrency Desktop Client Victim of Trojan Attack https://btcmanager.com/cryptocurrency-desktop-client-victim-of-trojan-attack/ https://btcmanager.com/cryptocurrency-desktop-client-victim-of-trojan-attack/#respond Thu, 21 Jun 2018 02:00:17 +0000 https://btcmanager.com/?p=32287 Syscoin announced on official Github page the project’s official client had faced a malicious trojan attack. The post urged users who downloaded the software via GitHub between June 09, 2018 10:14 PM UTC & June 13, 2018 10:23 PM UTC to take immediate action. GitHub Compromised The initial attack vector of the malicious software was a compromised GitHub account belonging...

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Syscoin announced on official Github page the project’s official client had faced a malicious trojan attack. The post urged users who downloaded the software via GitHub between June 09, 2018 10:14 PM UTC & June 13, 2018 10:23 PM UTC to take immediate action.

GitHub Compromised

The initial attack vector of the malicious software was a compromised GitHub account belonging to one of the team members, which allowed the perpetrators to gain admin level access and replace the official Windows client with a spiked version.

The altered client introduced by the hacker contained a relatively well-known piece of malicious software called Arkei Stealer, which targets users password and private keys of wallets stored on the local device. Fortunately, a scan from VirusTotal, an automatic virus database and aggregate cataloging service, shows that 44/67 of the major antivirus software vendors have already blacklisted the offending software, severely limiting its ability to spread any further.

Syscoin recommends that all windows users identify the installation date of their desktop cryptocurrency client and ensure that it does not fall between June 9 and June 13, 2018. Affected users are advised to backup their data to a clean storage medium, scan their system with an antivirus, change all passwords related to that machine using an uninfected device and migrate their funds to a newly generated encrypted wallet on a clean machine.

Syscoin Tightens Up Security in Response

The Syscoin team has taken steps to ensure that this kind of attack does not happen again by requiring all Block Foundry Staff and Syscoin Developers to enable two-factor authentication for accessing accounts, perform routine verification of signature hashing and work with Github to ensure users will be able to detect altered binaries.

While many people may be familiar with 2FA from their experience logging in with major cryptocurrency exchanges. Syscoins implementation of signature hashes, through the use of the open source tool Gitian, requires some exploration.

Multifactor Checksum Validation

When developers publish software, they often accompany their release with a checksum — using MD5 or SHA using a hashing algorithm — creating a unique string that acts a signature for that version of the program. This allows users to download the ‘published’ software, run the same hashing algorithm and cross-reference their results with developers while ensuring the data they downloaded is identical to the software publisher.

Gitian, developed by the pseudonymous Dev Random alongside other members of the Bitcoin core community, takes this concept of verifiably secure and trusted code to a new level.

Due to the complexities of compiling human-readable code into binary, it is often the case that two developers compiling identical code will create slightly different binary, resulting in dramatically different checksums.

Gitian creates a replicable working environment across multiple machines by running a Virtual Machine inside of another Virtual Machine, allowing multiple developers to cross-reference each others code and compile binary with the relative certainty that it will be identical across all devices. In the circumstance someone introduces malicious code — intentionally or otherwise — another team member will be able to identify who created it and diagnose the issue quickly.

The scale of those affected by the Syscoin hack has yet to be determined, however, the team’s rapid reaction in notifying the broader security community and their steps taking in locking down the project’s production pipeline are hopeful signs of an impenetrable future to come.

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Betting on the World Cup with Bitcoin on Betcoin.com https://btcmanager.com/betting-on-the-world-cup-with-bitcoin-on-betcoin-com/ https://btcmanager.com/betting-on-the-world-cup-with-bitcoin-on-betcoin-com/#respond Thu, 21 Jun 2018 00:00:23 +0000 https://btcmanager.com/?p=32277 The FIFA World Cup 2018 in Russia is most likely the World Cup during which more bets have been placed using bitcoin (BTC) than at any major sporting event ever before. Bitcoin acceptance by online gambling companies dates back to the early years of bitcoin but, in the last 12 to 18 months, the bitcoin gambling market has exploded as...

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The FIFA World Cup 2018 in Russia is most likely the World Cup during which more bets have been placed using bitcoin (BTC) than at any major sporting event ever before. Bitcoin acceptance by online gambling companies dates back to the early years of bitcoin but, in the last 12 to 18 months, the bitcoin gambling market has exploded as an increasing number of gambling platforms are looking to benefit from growing cryptocurrency adoption and the increased security that decentralized digital currencies can provide.

One of the newest cryptocurrency-embracing online gambling providers is Betcoin.com, which offers its customers the ability to bet on the World Cup 2018 using bitcoin.

Betting with Bitcoin on Betcoin.com

Betcoin is a Malta-based gambling provider that enables bitcoin users to bet on a wide range of sporting events, partake in poker tournaments, try their luck in its live online casino and play a wide range of digital slot machines.

The betting company was co-founded by Ali Bagheri and Amir Ghamsary in 2017 with the aim to build a cryptocurrency-friendly gaming platform that offers users the same experience they would get in a fiat-only online casino in terms of user experience, game content, and sportsbooks. Furthermore, the two founders wanted to ensure their players’ trust by operating from a jurisdiction where a license is required.

Betcoin.com differs from the majority of other bitcoin gambling platforms in that it offers a wide array of sports betting options, which makes it particularly appealing for sports betting enthusiasts.

For football fans, the platform’s World Cup bets are currently the most interesting and relevant. The platform provides all the popular World Cup bets, such as who will win their group or lift the trophy at the end of the competition, as well as specialist bets such as whether a team will be given more or less than 7.5 goal kicks in a specific game.

Betcoin User Interface (1)

To place World Cup bets on betcoin.com, users simply sign up with a username and password. After confirming their email address, users then need to deposit funds into their account before placing their first bet.

Depositing funds using bitcoin is straightforward and involves nothing more than accessing the deposit section, adding the amount of money you want to deposit (in fiat currency denomination) and clicking “Deposit” to then send BTC to the given address for your account.

Betcoin User Interface (2)

Initially, the Betcoin user interface takes some time to get used to – mainly due to the sheer amount of betting options available – but once you have gotten accustomed, you will quickly recognize that the platform suits most sports gambling needs.

Betcoin accepts bitcoin (BTC) through the payments provider Cubits. Currently, the platform only supports the pioneer cryptocurrency, but they are also looking into accepting other digital currencies in the future. Betcoin’s Ali Bagheri told BTCManager:

“We will gradually add other major cryptocurrencies, such as Bitcoin Cash, Ethereum, and Litecoin to the platform. To be able to do this, we have discussions with payment solutions companies such as Cubits, to try to push for more reliable and trusted companies to expand in the crypto-world.”

Next to bitcoin, the platform also accepts traditional fiat currency payments options, such as credits cards, Skrill, and Neteller, among others. To withdraw your winnings, you will have to go through a standard KYC process.

Why Online Gambling Companies Are Adopting Bitcoin

If you follow blockchain media, you will have noticed that in the last few years more and more online betting companies have started to offer bitcoin as a payment method.

Gambling companies are not only adopting bitcoin to promote their platforms in the growing cryptocurrency community but also because there are several benefits for betting companies that accept bitcoin.

Firstly, bitcoin transactions incur lower costs than traditional payment methods such as credit cards and Skrill, which enables gambling platforms to save money on transactions costs.

Secondly, by enabling bitcoin as a payment method, gambling companies can reach a broader potential customer base as not everyone has access to a credit card or a Skrill account. This is especially valuable as it allows gambling providers to attract new customers from emerging markets.

Thirdly, the potential for chargeback fraud is eliminated as bitcoin transactions cannot be reversed without both parties agreeing on the transaction. Since chargeback fraud is a significant issue for the online gambling industry, bitcoin is a welcomed sight for companies in this sector. On the benefits of accepting bitcoin as an online betting operator, Ghamsary told BTCManager:

“Thanks to bitcoin we can accept clients from developing markets where fiat payment methods/credit cards are not widely used. Another benefit is the low transaction costs which everyone benefits from. Now that bitcoin is more mainstream, we can also offer a reliable platform that is working under a license that takes responsibility, something we know is lacking with other companies in the crypto-world.”

While facilitating online gambling may not be quite what bitcoin creator Satoshi Nakatomo had in mind when he developed the world’s first decentralized digital currency that empowers users to “be their own bank,” he did manage to create a global payment system that a wide range of industries are benefiting from, with the online gambling sector being one of the primary benefactors.

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SkyCoin Sees Overnight Price Drop Following Crypto Embezzlement Scandal https://btcmanager.com/skycoin-sees-overnight-price-drop-following-crypto-embezzlement-scandal/ https://btcmanager.com/skycoin-sees-overnight-price-drop-following-crypto-embezzlement-scandal/#respond Wed, 20 Jun 2018 23:00:44 +0000 https://btcmanager.com/?p=32301 Skycoin, a community-owned, peer-to-peer internet was robbed by the firm’s marketing arm EVOLAB of 100,000 Skycoins. The discovery was a critical point for Skycoin as it led to a major sell-off, causing Skycoin tokens to cave in price. Status Update Skycoin was developed by many early contributors to the Bitcoin and Ethereum network. According to China Money Network, it is...

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Skycoin, a community-owned, peer-to-peer internet was robbed by the firm’s marketing arm EVOLAB of 100,000 Skycoins. The discovery was a critical point for Skycoin as it led to a major sell-off, causing Skycoin tokens to cave in price.

Status Update

Skycoin was developed by many early contributors to the Bitcoin and Ethereum network. According to China Money Network, it is “backed by bandwidth, storage, and computational power, it is built to fulfill Satoshi’s original vision of decentralizing the Internet at the hardware level.”

As seen on CoinMarketCap, due to recent events, Skycoins are trading at $6.79 as of June 20, 2018. The price has fallen approximately 50 percent in the past seven days.

Unfortunately, this is not the first time a member of the cryptocurrency community has embezzled funds. Reuters reported that in April 2018, four executives from a South Korean cryptocurrency exchange were accused of embezzling billions of their customers’ funds.

According to the Skycoin Team Status Update, the team acknowledged that multiple factors led to the mass sell-off. They, however, noted that the Chinese marketing team’s actions directly contributed to the token’s decline in value due to the uncertainty of the events. The Skycoin Team have taken active steps to rectify the situation and detail the actual impact on the Skycoin project.

They mentioned in their update that the initial trigger was the discovery that the marketing team had been embezzling the 100,000 Skycoin tokens over the past half year. The Skycoin Team terminated the relationship when the tokens were not returned.

Following the event, nine people, some of whom were apart of the marketing team including, Sam Sing Fong, Mary Li, Xiangdong Yan, and Jesse Sun Fei entered the home of Skycoin’s CEO on June 13, 2018.

The CEO and his wife were held captive for over six hours during which time they were beaten and threatened. The individuals managed to extract 18.88 Bitcoin and 6,466 Skycoins. Skycoins security measures managed to prevent any more tokens from being stolen. The nine individuals also attempted to steal intellectual property from the company like the design framework for the Skycoin network.

Skycoin Ripple Effects Minimized

Skycoin is currently assessing the number of Skycoin tokens stolen by the gang, as the address with the stolen coins is currently being investigated.

Cryptocurrency exchanges that offer the Skycoin token were notified. The team requested the trades temporarily freeze accounts of the suspects. Once the investigation has finished, the team will then deal with any frozen assets. Skycoin has assured their users that they will supply an additional update from the legal team on the aftermath of the robbery.

According to the exchanges, any accounts with access to stolen Skycoin tokens are frozen. Following this security measure, any additional impact should be quite limited. The team has acknowledged that while “panic selling seems to be continuing,” it appears to have recovered 30 percent.

Anyone a part of Skycoin’s online community via their social media accounts or Telegram groups were also advised that the EVOLAB team created these accounts. As such, Skycoin recommends subscribing to the group on the website to remain updated.

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#MetaHash Unveils Lightning-Fast Protocol; Processes 60,000 – 80,000 Transactions per Second https://btcmanager.com/metahash-unveils-lightning-fast-protocol-processes-60000-80000-transactions-per-second/ https://btcmanager.com/metahash-unveils-lightning-fast-protocol-processes-60000-80000-transactions-per-second/#respond Wed, 20 Jun 2018 22:00:32 +0000 https://btcmanager.com/?p=32272 Public Invited to Try New Blockchain 4.0 Network. #MetaHash, a leading blockchain-based digital asset exchange network and decentralized real-time application platform, today announced the public debut of its #TraceChain protocol and #MetaGate browser. The #MetaHash network is designed to solve many of the issues currently plaguing the industry, including partial centralization, high fees and slow transaction speeds. Interested parties can...

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Public Invited to Try New Blockchain 4.0 Network.

#MetaHash, a leading blockchain-based digital asset exchange network and decentralized real-time application platform, today announced the public debut of its #TraceChain protocol and #MetaGate browser. The #MetaHash network is designed to solve many of the issues currently plaguing the industry, including partial centralization, high fees and slow transaction speeds. Interested parties can now download the free browser to experience the first geographically distributed network capable of processing over 50,000 transactions per second, at no more than three seconds for approval. The network is available for trial on Windows, OS X and Unix, with iOS and Android to follow shortly.

Advertising technology trailblazer Gleb Nikitin joined forces with Anton Agranovsky, an entrepreneurial business and product development leader, to form #MetaHash’s founding team. With a common vision of blockchain interoperability as the future of the distributed web, the team developed #MetaHash, a pioneering next-generation solution based on Blockchain 4.0, which allows networks to interact and integrate with each other. The #MetaHash system is comprised of four components that form a single, synergistic entity:

  • #TraceChain

An automatic self-learning signal routing protocol, #TraceChain can process more than 50,000 transactions per second. It grows as more nodes with higher bandwidth are added to the network, forming its core and improving the reliability of additional #DataChains needed for running applications.

  • #MetaHashCoin (#MHC)

#MHC is a digital asset that acts as means of payment in the network. #MHC provides consensus and regulates self-financing of network development. Digital assets in the form of tokens in the #MetaHash network can be exchanged within the network, and also converted into tokens of other networks, including Bitcoin and Ethereum, and back.

  • #MetaApps

The core code of #MetaApps optimizes the location of application copies based on required resources and financial motivation of the owners of nodes connected to the network. Any developer can create and publish an application in #MetaApps, while  #MetaHashCoin holders decide via open vote whether or not to approve updates or changes, reflecting the universal values of all network members.

  • #MetaGate

#MetaGate is a browser for decentralized applications that includes a multi-currency wallet. Via its open source interface, third-party developers can use #MetaGate code to embed #MetaApps and #TraceChain/blockchain features into various applications and browsers.

Contrary to comparable networks, #MetaHash is expertly designed to process record volumes of transactions with relatively inexpensive hardware, resulting in some of the industry’s lowest per transaction commission rates. The trial period, expected to run through Q2 2018, leverages more than 200 temporary servers throughout the world, that will be replaced by token owner nodes once the network is fully functional.

For more information and to experience the trial, please visit metahash.org.

About #MetaHash

#MetaHash is a blockchain-based digital asset exchange network and decentralized real-time application platform. The versatile network utilizes artificial intelligence (AI) to synchronize cross-continental nodes to create an optimal map of the network, based on latency rates. The technology then redistributes the data accordingly, harnessing the full power of the entire network, enabling unprecedented processing speeds capable of five billion transactions per day, at no more than three seconds for approval of each transaction.

The platform, based on its unique #TraceChain protocol, offers unparalleled speed, security and decentralization at the lowest price per transaction in the history of blockchain. Signaling the future of the distributed web, #MetaHash is among the pioneers of blockchain interoperability, allowing networks to interact and integrate with each other.

To learn more, please visit metahash.org or follow #MetaHash on Medium. You can also join the official chat on Telegram.

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Initial Coin Offerings: Here to Stay or Alternatives to Come? https://btcmanager.com/initial-coin-offerings-here-to-stay-or-alternatives-to-come/ https://btcmanager.com/initial-coin-offerings-here-to-stay-or-alternatives-to-come/#respond Wed, 20 Jun 2018 20:30:18 +0000 https://btcmanager.com/?p=32266 As it is said, all good things must come to an end. So, has the run of the initial coin offering (ICO) coming to a close? This relatively new fundraising method has been around for several years but has garnered significant mainstream attention in the last 18 months. The ICO has helped many new blockchain projects get off the ground...

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As it is said, all good things must come to an end. So, has the run of the initial coin offering (ICO) coming to a close? This relatively new fundraising method has been around for several years but has garnered significant mainstream attention in the last 18 months.

The ICO has helped many new blockchain projects get off the ground quickly, but it has also brought with it controversy, fraud, and questions about its longevity as a fundraising scheme, bringing about a host of new fundraising methods that are poised to take its place.

The Rise of the ICO

The ethos of the decentralization economy has always been one of togetherness and inclusivity. In this way, traditional venture capital and private equity funding did not ideologically align with the blockchain and cryptocurrency industry from the start.

Bitcoin and other first-generation cryptocurrencies never conducted fundraising rounds, instead opting for various methods of mining and distributing tokens as widely as possible to gain adoption.

It was not until 2013 that MasterCoin decided to raise capital via a new fundraising method that came to be known as an ICO. Individuals looking to obtain MasterCoin tokens sent bitcoin to a verified address and, in return, received MasterCoin tokens.

All told, over 5,120 bitcoin was raised as part of the MasterCoin fundraising. At the time, no one knew this round of fundraising was going to set the stage for a revolution of startup investing for the retail investor.

For the next few years, besides a few high-profile ICOs – such as Ethereum, which raised $18 million – there was not a large market for this fundraising tool, and most cryptocurrencies opted to raise funds through traditional methods. Then, in 2017 everything changed, as, according to ICOBazaar, over 3,000 ICOs raised billions of dollars from cryptocurrency investors, with $945 million raised from U.S., U.K., and Russia alone.

The graph below shows the rising rate of ICO fundraising:

ICO Bazaar

(Source: ICOBazaar)

With this extreme influx of capital, the ICO took center stage in the decentralized world, bringing with it more investors and entrepreneurs, along with questions surrounding the legal status of these new assets.

ICOs and the SEC

It should come as no shock that the largely unregulated method of fundraising via ICOs has brought with it countless cases of fraud and manipulation. In May 2018, BTCManager reported on red flags found in 271 out of 1,450 ICO white papers, including plagiarized documents, fake executive teams, and promises of guaranteed returns among the findings, which directly points to the need for at least some regulation in the industry.

This attention has put the U.S. Securities and Exchange Commission (SEC) in a precarious situation. On the one hand, increased regulation would create more barriers to entry in the process of conducting an ICO and reduce fraud significantly, but, on the other hand, regulation has the potential to stifle innovation and send many would-be blockchain projects out of the United States.

Recently, the SEC marketed a spoof ICO to show retail investors how easy it is to be duped by fancy graphics and an in-depth white paper. Upon clicking a link to the SEC’s “HoweyCoins,” users are redirected to a page on the agency’s website informing investors about what to look for in an ICO.

This is on top of prosecution against fraudulent ICOs that began in late 2017 with the notable shutdown of the Munchee ICO, which raised $15 million in December 2017.

Although SEC Chairman Jay Clayton has gone on the record stating that “every ICO I have seen is a security,” he has also cooled his rhetoric in recent months, leaving room for interpretation on the status of cryptocurrencies.

In a letter written in December 2017, the Chairman warned investors about claims made by ICOs relating to regulation:

“Investors should understand that to date no initial coin offerings have been registered with the SEC. The SEC also has not to date approved for listing and trading any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies.”

This statement is difficult for the industry to accept since the agency has not given ICOs a pathway to registration and legal status, leaving them stuck in no man’s land, waiting for the SEC to make hard choices about the classification and legality of ICOs.

What is Wrong with the ICO

Ethereum co-founder Vitalik Buterin is no stranger to the ICO, having conducted an $18 million fundraiser himself and seeing hundreds, if not thousands, of ICOs launch on the Ethereum network. Yet, Buterin does see many issues with the fundraising method that will make it harder to raise funds in the future.

As Buterin explained:

“Even though the ICOs are happening on a decentralized platform, the ICOs themselves are hardly centralized; they inherently involve many people trusting a single development team with potentially over $200 [million] of funding. There are also not very good incentives for people to produce information to help people determine which projects are worth participating in.”

Buterin is hitting on a fundamental flaw of the ICO process, which hands over millions of dollars instantly to a centralized team of developers who often have nothing more than an idea, website, and white paper. Even in projects where founders’ intentions are for the good, there is no way to enforce accountability or transparency for the founding team.

New Methods of Fundraising

As investors and startups alike recognize the limitations and pitfalls of raising funds through an ICO, new funding methods have emerged. One of the most notable new fundraising methods comes in the form of a Securities Token Offering (STO). STOs are merely tokenized securities and are digital forms of everything from stocks to commodities to digital tokens. These tokens come with similar voting and investor rights as stocks and are set to follow all Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

Platforms designed explicitly for securities tokens, such as Polymath, are now jumping on the scene to provide an outlet to trade new securities tokens as well as selling digitized security tokens tied to existing assets, like stocks and commodities.

Vitalik Buterin has touted a new fundraising method of his own, one which would combine the best of the ICO and decentralized autonomous organizations (DAOs).

In this model, funds would be raised over a set period, after which time, the development team is afforded the ability to take a certain amount of coins per second out of the sale contract as voted by token holders. This prevents scam artists from stealing tokens immediately while also giving token holders voting power which effects the fundraising process.

There are even more fundraising methods around including initial loan procurement (ILP) by Estonia-based Blockhive. ILP uses smart contracts to set up digital loan agreements, allowing capital to be raised with token-holders acting as creditors.

A Continuous Evolution

While the ICO has provided a launchpad for many early cryptocurrency projects, it’s likely it will not be the final iteration of capital raising performed by blockchain-based companies. As long as token economics play a central role in securing distributed ledger systems, there will be a need to raise funds via token sales outside of traditional equity routes.

The ideology of many cryptocurrency innovators lends itself to a democratized system of raising capital, where everyone has equal opportunity. Entrepreneurs in the blockchain space have an affinity for being inclusive and allowing the average retail investor to secure tokens alongside the venture capitalists of the world. While the ICO may be fading, there will undoubtedly be new modalities used to keep this train rolling for the future.

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3 Bitcoin Improvement Proposals That Aim to Increase Privacy for Bitcoin Users https://btcmanager.com/3-bitcoin-improvement-proposals-that-aim-to-increase-privacy-for-bitcoin-users/ https://btcmanager.com/3-bitcoin-improvement-proposals-that-aim-to-increase-privacy-for-bitcoin-users/#respond Wed, 20 Jun 2018 19:00:33 +0000 https://btcmanager.com/?p=32261 While bitcoin is the most popular and valuable decentralized digital currency in the market today, it is not without its issues. One of the main challenges that the Bitcoin network faces is a lack of transaction privacy. To address this, a number of altcoins with a focus on privacy have been introduced into the market. The largely positive market response...

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While bitcoin is the most popular and valuable decentralized digital currency in the market today, it is not without its issues. One of the main challenges that the Bitcoin network faces is a lack of transaction privacy.

To address this, a number of altcoins with a focus on privacy have been introduced into the market. The largely positive market response to privacy-centric coins such as Monero (XMR) and Zcash (ZEC) reiterates the gap that exists in the cryptocurrency space in this regard. Additionally, hard forks such as Bitcoin Private (BTCP) are aiming to provide transactional privacy to users while still capitalizing on the brand recognition held by bitcoin.

While privacy coins are a great addition to the crypto universe, many in the bitcoin community believe it would be best if the Bitcoin network was able to facilitate a greater amount of privacy.

To this end, there are a number of Bitcoin Improvement Proposals (BIPs) that seek to improve the ability of the Bitcoin network to preserve user privacy. BIPs are suggested amendments to the software upon which the network is built.

In this article, you will be introduced to the proposed changes that are designed to better privacy in the Bitcoin network.

Confidential Transactions

The idea of Confidential Transactions was first proposed by Adam Back on the Bitcointalk forum. The computer scientist initiated this discussion in 2013. In his proposal, Back suggested adding “homomorphic commitments instead of explicit amounts in place of values in transactions.” This would facilitate greater privacy levels as the values would be obscured from public view.

While the suggestion was received positively by members of the bitcoin community, the idea lay dormant for some time until bitcoin developer Gregory Maxwell turned his focus on it. Building on Back’s suggestions, Maxwell named this approach “Confidential Transactions” (CT).

Maxwell employs a cryptographic tool called a Pedersen Commitment to make it possible to hide the values in a transaction:

“The basic tool that CT is based on is a Pedersen commitment. A commitment scheme lets you keep a piece of data secret but commit to it so that you cannot change it later. A simple commitment scheme can be constructed using a cryptographic hash: commitment = SHA256( blinding_factor || data ) If you tell someone only the commitment then they cannot determine what data you are committing to (given certain assumptions about the properties of the hash), but you can later reveal both the data and the blinding factor, and they can run the hash and verify that the data you committed to matches. The blinding factor is present because, without one, someone could try guessing at the data; if your data is small and simple, it might be easy to just guess it and compare the guess to the commitment.”

Additionally, CT utilizes two additional cryptographic techniques. These are Elliptic Curve (EC) signatures and ring signatures. They enable the Pedersen Commitment to work effectively to promote confidential values.

In the initial stages of research, CT was deemed unworkable and ineffective because the transactions were too large and would have clogged the network needlessly. They were four times larger than regular transactions. However, with continued research, developers have been able to continuously reduce the transaction sizes. The latest research has succeeded in reducing the size to only a third of regular transaction. “The exciting recent update is that Benedikt Bünz at Stanford was able to apply and optimize the inner product argument of Jonathan Bootle to achieve an aggregate range proof for CT with size 64. [This] cuts the bloat factor down to ~3x for today’s traffic patterns.”

While there have not been further announcements made since November 2017 on the Confidential Transactions front, Maxwell indicated that testing is an advanced stage. The BIP would come into effect through a soft fork. The Blockstream scientists involved with the project published a paper with all technical details on the subject matter here.

Dandelion

The Dandelion project is the brainchild of Andrew Miller who has previously worked on the privacy-centric coin Zcash. In collaboration with three research scientists from the University of Illinois, Miller believes this project will help redefine the anonymity parameters within the Bitcoin network.

In a paper titled “Dandelion: Redesigning the Bitcoin Network for Anonymity,” the researchers explain their goals stating: “We aim to address the Bitcoin P2P network’s poor anonymity properties through a ground-up redesign of the networking stack. We seek a network management policy that exhibits two properties: (a) strong anonymity against an adversarial group of colluding nodes (which are a fraction p of the total network size), and (b) low broadcasting latency.”

This project aims to reduce the vulnerability witnessed within the Bitcoin network when it comes to uncovering the identities behind transactions. There are a number of companies that have managed to successfully compromise the pseudo-anonymity of bitcoin users, such as Chainalysis and Bitfury.

The Dandelion project explains: “There have been several attacks on the anonymity of Bitcoin, most of which harness the public nature of the blockchain [40, 35, 42]. Transaction patterns can be used to link user transactions over time, and in some cases identify the human owner of a public key. More recently, authors have demonstrated deanonymization attacks on Bitcoin’s networking stack. These attacks typically use the first-spy estimator, and achieve surprisingly high accuracies. The Bitcoin community has responded to these attacks with ad hoc changes to its networking stack for improved anonymity.”

While it is true that many changes have been implemented within the Bitcoin software to reduce the threat of these attacks, many are of the opinion that there needs to be a rework of Bitcoin’s underlying protocols. Dandelion is taking this approach.

Dandelion is simply a tool through which it becomes more difficult to ascertain the origin of a transaction:

“Dandelion is a new transaction broadcasting mechanism that reduces the risk of eavesdroppers linking transactions to the source IP. Dandelion transaction propagation proceeds in two phases: first the “stem” phase, and then “fluff” phase. During the stem phase, each node relays the transaction to a *single* peer. After a random number of hops along the stem, the transaction enters the fluff phase, which behaves just like ordinary flooding/diffusion. Even when an attacker can identify the location of the fluff phase, it is much more difficult to identify the source of the stem.”

The stem phase of a transaction is the one that holds the user’s private data while the fluff phase refers to the processes through which the network tries to obscure these details. By sharing this information with only one user, it becomes more difficult to ascertain its origins. This results in a greater degree of privacy for users.

The Dandelion project submitted its proposals on Github in May 2018, a year after it was first announced. While this BIP has yet to be assigned a number, it is likely to better the privacy on the Bitcoin network, if it is implemented.

Numerifides Trust Consensus Protocol

Numerifides is a proposal set forth by developer Tyler Hawkins. Disseminated through the bitcoin developers mailing list, his proposal details a system through which it is possible to include secure, decentralized, and human-readable names, as well as other data, on the Bitcoin network. These three variables are referred to as Zooko’s triangle. Hawkins explains the following: “I have been working on a proposal called Numerifides which would provide a general method to register human-readable names and arbitrary data (such as username->GPG key, domain->IP address, Lightning node Alias-> URI, etc.).”

Further explaining the motivations behind the pull request on Github, Hawkins states:

“Rather than deriving justice and authority from a system that’s not supposed to look but too often does, I propose a DECENTRALIZED CONSENSUS PROTOCOL that enables a system of decentralized authority, whereby a user or actor can assert identity, existence, and authority on a public piece of data, on an open blockchain and any independent, skeptical user or actor operating the consensus protocol can verify any other actor’s statement of authority in a decentralized, fair and privacy-protective manner.”

This proposal has privacy implications as it allows users to create aliases through which they can transact on the network. The creation of secure data through the Numerifides proposal involves two actions. First, a user must lock up a certain amount of bitcoin. Also, they must provide proof of work (PoW) confirmation. The larger the time-locked bitcoin and PoW, the more secure the data.

This is an interesting approach to providing secure and private data on Bitcoin’s blockchain. The proposal was uploaded onto Github only a month ago and is still in the early stages. However, it may have promising implications if it goes through the necessary steps before it is implemented into the network.

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