Tag Archives: bitcoin

The Sun Never Sets On Bitcoin Mining: Decentralization Continues As China Flounders

The Sun Never Sets On Bitcoin Mining: Decentralization Continues As China Flounders

With some of its highest hash rates ever, the Bitcoin mining industry has weathered a harsh 2020 and increasingly moved away from China.
Bitcoin miners have successfully survived the 2020 Halving and COVID-19, and the network is now seeing some of its highest hash rates ever as these operations power up new equipment and reach new levels of decentralization going into the second decade of bitcoin mining.

Bitcoin Mining Is Decentralizing

China still dominates the bitcoin mining space, although the percentage of the hash rate coming from the country has dropped recently, from around 65 percent in early 2020 to about 50 percent more recently as Chinese mining farms are weathering a particularly difficult monsoon season and the government is sending mixed signals that Bitcoin may be under attack as part of a campaign to promote the new digital yuan.

Meanwhile, the U.S., Russia, Iceland, Central Asia and South America, among other regions, are all seeing continued growth in mining as miners benefit from plentiful, cheap, stranded energy in these regions — principally hydroelectric power, wind power or oil and gas, depending on the location. In addition, Kazakhstan has been in the news lately as its government partnered with miners through a $715 million investment fund. The following graph from a report prepared by BitOoda for Fidelity Digital shows an estimated breakdown of hash power around the world, indicating that China contributes 50 percent of the world’s hash power, while the U.S. is in second place with 14 percent.  It should be noted though that other analyses have placed China’s share as high as 65 percent of the total hash rate, with the U.S. at 7.2 percent and Russia at 6.9 percent.

Chinese Operations Are Looking Westward

The U.S. and Canada make up 21 percent of the global hash rate, at least in BitOoda’s analysis, second only to China. And that share is expected to go up by many in the industry. In a recent live stream hosted by Bitcoin Magazine, Elsa Zhao, the marketing manager for Chinese mining giant Whatsminer, confirmed that her company is focusing its expansion plans outside of China. In an announcement officially coming soon, the company, second only to Bitmain in its singular ability to influence bitcoin mining, will offer details about its new mining equipment manufacturing plant planned for the U.S..Bitmain, a Chinese operation that is still the largest mining equipment manufacturer in the world, is weathering its own storm: a company feud between co-founders Micree Zhan and Jihan Wu that may split the company in half. Bitmain has two manufacturing locations — one in China for the Chinese market and one in Malaysia for international sales. As far as it’s mining operations, Bitmain seems poised to continue its expansion into the U.S.

In a recent interview with Bitcoin Magazine’s John Riggins, Bitmain’s head of operations for North America, Raymond Walintukan, said that he sees more decentralization out of China in Bitmain’s future, with the company building on its current operations in North America. Walintukan works from a mining farm in interior Washington State, where stranded hydroelectric power is plentiful and cheap. Bitmain also has mining farms in Texas and Tennessee. He stressed that Bitmain is now an international company, as much as it is a Chinese company. Ryan Porter, head of business development for mining consultants BitOoda, told Bitcoin Magazine in an interview that more investors, including some from China, are inquiring about new mining opportunities in North America.

“We certainly see a reason to believe that a significant portion of hash power will migrate to North America,” said Porter. “The existing infrastructure, cost of power and regulatory stability here is competitive globally.” And the decentralization of hardware manufacturing could become a major factor for continued migration in the near future. “China has been a real industry innovator in producing the leading ASIC manufacturers,” Porter added. “However, with TSMC (Taiwan Semiconductor Manufacturing Company) planning to build a plant in Arizona, there could be domestic hardware manufacturers that emerge, which would also be a catalyst for hash to migrate outside of China.”So, despite more expensive power pricing — averaging from 3.5 to 4 cents per kWh, which is higher than in places like Central Asia and South America — North America is still considered a desirable hub for bitcoin mining because of the relative stability of the political environment and the ability to lock in multi-year power contracts (China averages just under 1 cent per kWh).

The Importance (And Ongoing Challenge) Of Bitcoin Mining Decentralization

In a recently released Coinmetrics report, researchers noted that the distribution of mining and hash rate is the most important factor in “sustaining a secure, censorship-resistant payments and savings system.”It noted that mining is the anchor and the “effective decentralization” that provides security for the Bitcoin network. The report uses a metric it called the “Nakamoto coefficient,” which measures the number of pools that would need to collaborate to launch a 51 percent attack on the network. For instance, iIn 2014, mining pool GHash.io controlled over half of the network’s hash power for about a day, giving Bitcoin a Nakamoto coefficient of 1.

The researchers concluded that bitcoin mining has become increasingly decentralized, with a Nakamoto coefficient of four. Like most profitable enterprises within the legacy financial system, the natural pull of bitcoin mining is toward more control and organization by one or a relatively small number of controlling bodies. At this point in the early history of Bitcoin, it is inevitable that a small and informed group of early adopters, like Bitcoin Core developers, will move the system forward in an organized fashion. But, as Coinmetrics’ researchers argue, it’s important to have significant bitcoin mining take place in different parts of the world.

And even though there are some signs that Bitcoin mining is becoming more decentralized, especially with Chinese operations moving some of their has power to North America, there is still a long way to go before this industry can be considered truly international. Coinmetrics noted that, even as hash power migrates from China, Bitcoin mining is still at risk of centralization through possible state level coercion and vertical and horizontal integration. “While Bitcoin mining is distributed, it’s still at risk of centralization through state-level coercion and vertical and horizontal integration. Several exchanges, including Binance, OKEx, and Huobi, operate mining pools. BitMAIN, a hardware manufacturer, owns both BTC.com and AntPool, and is the only investor in ViaBTC,” noted the report.

And, in China, mining pools continue to grow despite a particularly difficult year. As long as there is cheap power, the incentive to build economies of scale in China will grow. New China-based mining pool Lubion, which has China and Iran as its principal sources of hash power, only came onto the scene in March 2020 but is already in the top-ten of pools by hash, rivalling longer-standing pools like F2Pool (also based in China).

Still, there is reason for mining decentralization advocates to remain optimistic.Samson Mow, CSO for Blockstream, which has mining farms in Quebec, Canada and Adel, Georgia, sees continuing growth and sophistication as hash derivatives come on the market, making ownership more diverse and therefore more decentralized. Noting that Kazakhstan could be on track to become one of the world’s largest Bitcoin mining hubs as the country sets up a $715 million development fund, Mow said: “Bitcoin mining will become a strategic investment sector for many nation states. Slowly at first, and then all at once.”

Article Produced By
Jessie Willms

Jessie Willms is a planet earth based former government and political researcher and communications officer helping to document the FinTech revolution and its impact on traditional institutions and governments.

https://bitcoinmagazine.com/articles/the-sun-never-sets-on-bitcoin-mining-decentralization-continues-as-china-flounders

TP

Bitcoin’s Moment to Shine… Again?

Bitcoin's Moment to Shine… Again?

Bitcoins Researgence...Again?

 

A lot of folks still treat Bitcoin as a curiosity. It's been available to common investors longer than Tesla (TSLA) has. And yet, for more than a decade, Bitcoin has been dismissed again and again as "the new kid on the block." In that time, we've seen its value explode… deflate… then explode again.

Today it's in the middle of a bull run that puts many top stocks to shame. Since March, the OG crypto's price has shot up some 55%, beating both the S&P 500 (45%) and gold (20%).

 
Bitcoin Gold and the S&P
 

And mind you… that chart only shows the period since the start of the COVID-19 lockdown. If we look at the full year, the S&P and gold are actually flipped, with gold beating stocks 20-to-1. But Bitcoin holds on to the top spot. It's not even close.

Digital Diversification?

Now, you could chalk Bitcoin's resurgence up to investors treating it the same way they treat gold… as a hedge in uncertain times. That's part of it. But it's not all of it. As with gold, the truth has more to do with what those money meddlers in Washington are up to.

To illustrate the point, we merged two key graphs: the federal funds rate… and the price of Bitcoin over the past five years.

 
Federal Funds Rate Chart
 

As you can see, higher interest rates correspond with a massive drop in Bitcoin's value.

When the cryptomania of 2017 hit its peak, rates were closing in on 2% – the highest they'd been since before the Great Recession. Less volatile stores of cash like savings accounts and CDs were beginning to look as if they might start offering a decent yield again. And if you can get a solid return from the local credit union… who needs Bitcoin? But you know what happened next… The Fed did a sudden about-face, taking rates back down near zero. And Bitcoin? Well, the chart says it all.

Stay Positive

Of course, yield-starved investors aren't the only ones pouring into Bitcoin. In May, Tudor Investment Corporation – a hedge fund run by Paul Tudor Jones – disclosed that it had taken positions in Bitcoin.
Legendary investor Bill Miller told CNBC late last year that, in addition to adding Bitcoin to his fund, he's kept 1% of his net worth in bitcoin since 2014. And in August, billion-dollar firm MicroStrategy Inc. (MSTR) made headlines when it moved $500 million in cash from short-term government securities to Bitcoin. CEO Michael Saylor explains the move:

 
Corporate treasurers need to keep a reasonably liquid, elastic asset on the balance sheet to ensure the company can meet its obligations to employees, customers, vendors, creditors, etc. Bitcoin is the only asset that meets those requirements that also has a positive real yield.
 

It's a bet that's likely to pay off, especially now that Jay Powell has pledged to keep interest rates near zero for the next several years… at least. With yields from traditional sources drying up, businesses, institutions and investors will have no choice but to warm up to Bitcoin and its digital brethren. If your portfolio doesn't have any exposure to crypto, then it's time to rethink your strategy.

By Alex Moschina, Associate Publisher, The Manward Bulletin

How To Earn Over $1,000 On GramFree

Gene Aasen Markethive Blog Banner ID Entrepreneur 1

TP

Europe’s central bank is concerned about possible runs on stablecoins

Europe's central bank is concerned about possible runs on stablecoins

Why is stablecoin so important for the financial market?

It’s a new class of cryptocurrency that offers the price which doesn’t change while the market is changing all the time. Stablecoins have gained the best things from immediate processing and assurance of privacy of payments, and volatility-free solid costs of fiat currencies. Stablecoins are the currencies that are like the US dollar. Stablecoin’s price is connected with backing. It is the most popular cryptocurrency in the market. What makes other cryptocurrencies less attractive? Well, they are unstable. Ideally, a crypto coin should keep its buying value and should own the lowest reasonable inflation rate.

Price stability of the USDT

The price stability is mostly coming from the controlling authorities like central banks. Even when the fiat currencies are moving dramatically, the stablecoin manages to maintain price stability. For example, the person won’t choose Bitcoin in order to make a simple purchase is they know that the price might get twice as big in one month. Stablecoins are used mostly for everyday transactions, and that is why they are so popular. Currently, most cryptocurrencies are pegged to bitcoin. As most Forex and cryptocurrency traders know, bitcoin is prone to major value fluctuations. This affects the prices of other cryptocurrencies too. This is the most popular reason why people criticize bitcoin trading. On the other hand, there are stablecoins which promise us to solve this problem. Tether (USDT) is an example of a stablecoin. Most of the time, one stablecoin is equivalent to the $1. That is why stablecoin is entering the mainstream of the market.

The truth is that price stability is needed in the financial market, that is why any cryptocurrency is having an ambition for a mass utility. For anyone who is fearing to trade with bitcoins, there is another way to try themselves in the currency trading industry. Trading is the most common way to get involved with cryptocurrencies. Stablecoins are the currencies that are as stable as gold and oil. Compared to it, bitcoin and other altcoins are the risks for traders. The good side of trading with stablecoins is that one can save themselves from the large price swings and losses. The reward is also attractive there, that is why this is a great way for the traders to start trading from the beginning. One of the most popular social media websites, Facebook, has also joined stablecoin games with its coin Libra. There are also ways to start trade without money of your own or even making a deposit. In an attempt to prevail over the risk of losing money and to stay safe, it is undoubtedly better to start trading with a free account and then already think about trading with currencies or money.

Blockchain smart contracts

Most of the cryptocurrencies are using blockchain technology. It is a decentralized public ledger managed by a peer-to-peer network. So every transaction is safe and secure. In blockchain technology, there are also “smart contracts”, which means that they use blockchain in order to process the small transactions. They are kind of middlemen before the complex transactions. They also have the ability to support the deals automatically. They are gaining attention from financial institutions since these institutions are embracing certain currencies.

What traders should know

The qualities that stablecoins are having are very appealing for the leading investors. Transparency – the fact that anyone can view the history of the transactions made since the data is stored on public ledgers. Volatility – The fact that the entire foundation of the idea is built on providing the owner with financial stability. Affordability – Lower transaction fees with no need of paying a cut in the bank. Efficiency – No holding periods. There are things that are very important for investors and traders. Digital securities and everything stablecoins can ensure the investor or a trader are making these cryptocurrencies outstanding.

Uses and limitations

If you are still wondering what is the point of having them if you can just own a dollar, well, the fact that financial regulations across the world are putting stablecoins under the microscope is giving some clue about how important they are. It can be a store of value, it can work as a borderless payment system, you are your own boss, it is working outside of the banking system, you can transfer without having to have a third party. In other words, there are main gains one can have if they own stablecoins. People are in need to have some familiar, comfortable, and safe portion of the wealth in their life. It has some potential to displace the retail banking industry and have some impact on the global financial system. The only thing that the regulators are worried about is what if the stablecoin will be adopted by a significant scale. It will cause problems like hacks of private passwords, the collapse of the trust in these currencies, lack of compliance, organized crimes, and money laundering. And surely some of these fears are certainly legit.

Article Produced By
Giorgi Mikhelidze

Giorgi is a Georgian-born financial enthusiast that has been following the development of the Blockchain industry for 3 years now. His experience in trading cryptocurrencies on various platforms give him the insight to analyze various news and events happening in Crypto sphere.

https://cryptodaily.co.uk/2020/09/europes-bank-runs-stablecoins

TP

Bitcoin Addresses Moving BTC to Exchanges Doubled so Far This Year

Bitcoin Addresses Moving BTC to Exchanges Doubled so Far This Year


The number of bitcoin addresses moving BTC to cryptocurrency exchanges has doubled so far this year,

as users are seemingly moving their funds off of the blockchain and into centralized platforms. According to on-chain analytics firm Glassnode, there are currently around 100,00 unique bitcoin addresses sending BTC to cryptocurrency exchanges on a daily basis. The last time these levels were seen was at the peak of the 2017 bull market, which saw bitcoin’s price hit a new all-time high near $20,000.

The number of #Bitcoin addresses depositing funds to exchanges has doubled since the beginning of the year.
Currently, around 100k unique addresses send $BTC to exchanges each day.
Last time we saw these levels was during the peak bull market of 2017.https://t.co/twjt4mQtFn pic.twitter.com/x19mnDMluM — glassnode (@glassnode) September 22, 2020

After the bull run, bitcoin entered a year-long bear market that saw it hit $3,000 in December 2018. At the time the increasing number of addresses sending BTC to exchanges was associated with investors moving their funds to sell them while prices were high.The total number of addresses sending bitcoin to exchanges compared to 2017 doesn’t paint the full picture. CryptoCompare data shows that at the peak of the 2017 bull market there were nearly 350 million unique bitcoin addresses, while now there are over 700 million unique addresses. Glassnode’s CTO then shared which percentage of addresses are sending BTC to exchanges. The figure is still close to 2017 highs, after seeing an increase from 10% to 15% so far this year. While then there was a sell-off, this time things may be different, however.

Cryptocurrency exchanges have been adding numerous services allowing users to earn interest on their cryptocurrency holdings. From savings products to access to DeFi protocols to farm yield directly from the centralized exchanges’ platform, there are now numerous options. This could mean BTC holders are simply moving their funds to exchanges to earn interest or gain exposure to the DeFi space.

Article Produced By
Francisco Memoria –News Reporter

Francisco is a cryptocurrency writer who's in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies

https://www.cryptoglobe.com/latest/2020/09/bitcoin-addresses-moving-btc-to-exchanges-doubled-so-far-this-year/

TP

Bitcoin Bounces Back Once Again, This Time From the $9,900 Level

Bitcoin Bounces Back Once Again, This Time From the $9,900 Level


According to data from CryptoCompare, around 18:50 UTC on Saturday (September 5), the average Bitcoin price (across crypto exchanges) went below $10K for the first time since July 27, but it didn’t stay there very long.

 

Here’s how the day has gone so far for Bitcoin.

Bitcoin started the day (i.e. 00:00 UTC on September 5) around $10,467. Then, between 06:35 UTC and 06:55 UTC, the Bitcoin price managed to stay mostly above $10,500. Then at 18:50 UTC, the Bitcoin price fell below the $10,000 level for the first time since July 27, and kept falling until it reached $9,915. Five minutes later, the BTC price went below the $9,900 and reached $9,892. Two hours later, Bitcoin has nicely bounced above the $10K level. Currently (as of 20:58 UTC on September 5), Bitcoin is trading around $10,100, up 2.1% in the past two-hour period.As for the rest of the cryptocurrency market, with the exception of the fiat-backed stablecoins, it is currently impossible to find any top 50 (by market cap) cryptoasset in the green among, with several high quality popular coins/tokens suffering double-digit percentage losses against the dollar.

Here are a few examples:

  • Ether (ETH): $328.29 (-15.42%)
  • Polkadot (DOT): $4.13 (-22.46%)
  • Cardano (ADA): $0.0889 (-13.36%)
  • Aave (LEND): $0.505 (-20.55%)
  • Yearn.Finance (YFI): $21,510.10 (-21.45%)
  • UMA: $11.26 (-40.06%)

So, what are some of the most popular and respected crypto analysts, investors, and traders saying about the fire sale in the cryptocurrency market that we are currently witnessing?

Michaël van de Poppe:

Some tips on the current momentum;

▫️ Don't panic sell. Heavy green you don't buy, heavy red you don't sell.
▫️ Buy the coins that have the most hype, they'll bounce the strongest.
▫️ Don't check the charts every 5 minutes.
▫️ Use some liquidity to DCA.

And relax.$BTC

— Crypto Michaël (@CryptoMichNL) September 5, 2020

Qiao Wang:

Yes the market was a little euphoric and people were dumb to put hundreds millions in vegetables. But if you laugh at DeFi right now, you will sound exactly like those who laughed at #Bitcoin when Gox went down.

— Qiao Wang (@QwQiao) September 5, 2020

Cameron Winklevoss, Co-Founder and President of digital asset exchange Gemini:

#Bitcoin has made significant ground on gold — going from white paper to over $200 billion in market capitalization in under a decade. It will continue to cannibalize gold dramatically over the next decade.

— Cameron Winklevoss (@winklevoss) September 4, 2020

It is, of course, impossible to predict in the short-term where the Bitcoin price is headed and potentially the price of any cryptoasset could go to zero, but it is worth pointing out that on-chain market intelligence startup Glassnode said in the 31 August 2020 issue of its “The Week On-Chain” newsletter that Bitcoin’s Network Health, Network Growth, and Network Activity remain “strong”. The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

Article Produced By
Siamak Masnavi – News Reporter

Siamak received his PhD in Computer Science from University of London in 1992. He has worked part-time as a freelance journalist since 1986.

https://www.cryptoglobe.com/latest/2020/09/bitcoin-bounces-back-once-again-this-time-from-the-9900-level/

TP

Better Bitcoin Invoicing is Beneficial to all Industries

Better Bitcoin Invoicing is Beneficial to all Industries


Cryptocurrencies are growing in popularity all over the world.

For merchants, it introduces a new payment option with far fewer headaches. Invoicing clients has also become a lot simpler with the help of solutions such as DAOWallet. 

Bitcoin Spending Among Merchants is Increasing

Earlier this way, Coinbase released some crucial information. This popular exchange platform provides invoicing and payment processing solutions for store owners all over the world. Accepting Bitcoin payments can be done regardless of whether one has an offline or online store. More specifically, Coinbase Commerce processed $135 million in crypto payments in 2019. A respectable number for an industry that is still often overlooked. Moreover, this is a 600% increase in merchant volume compared to 2018. Not only does this confirm the potential of Coinbase Commercie, but it shows that merchants are actively seeking for solutions. These statistics are further reinforced by a Chainalysis report. The blockchain analysis firm claims that over $4 billion in Bitcoin flowed through payment processors in 2019. There is a lot of competition in this segment, and store owners are eager to explore the different options. According to Statista, digital and mobile wallets accounted for 51.8% of global ecommerce transactions. This highlights the potential of cryptocurrency in this segment. It is a convenient payment method to send across borders, As far as digital payments are concerned, Bitcoin is a catalyst for future ecommerce growth. 

The Story in 2020 so Far

A newer report by Chainalysis indicates this trend is not slowing down. In fact, the COVID-19 pandemic has proven rather beneficial to merchants handling Bitcoin transactions. Even though the value of Bitcoin has dipped sharply in March of 2020, the overall figures remain relatively positive. Merchant services and gambling providers continue to see a healthy influx of funds overall. What is even more intriguing is how the Bitcoin price remains closely correlated to spending behavior.  Services tend to receive more Bitcoin payments if the price rises. Albeit this correlation decreased between February and March, the overall figure remains healthy. 

Invoicing Becomes Easier

None of this would be possible without the proper invoicing tools. On paper, it sounds inconvenient to shuffle between fiat currency value and the corresponding Bticoin amount. Figuring out these ratios on a manual basis is impossible when handling vast amounts of volume. Thankfully, there are plenty of invoicing solutions capable of handling these aspects. Over the years, the growth of Bitcoin invoicing and merchant solutions has been exponential. Relying on payment processors such as Coinbase, BitPay, and CoinPayments is still a popular option. More merchant-oriented solutions have become available over the years, which is another sign of how this industry has matured. 

With so many solutions on the market today, it becomes a bit more difficult to stand. Companies such as DAOWallet pride themselves on streamlining the entire invoicing process. Not only will this help to onboard more merchants and service providers to the cryptocurrency space, but it is also beneficial to customers. Under the hood, DAOWallet ensures invoices can be created in any domestic fiat currency. The client can pick from a wide range of cryptocurrencies to complete the payment, and have their account credited in fiat currency as a result. This method also removes any volatility concerns for the company handling the payment. Recipients will receive their exact amount of funds, removing any remaining barrier to accepting crypto transactions. For those who want to create Bitcoin invoices in a physical environment, several applications exist. A growing number of mobile solutions have come to market. By embracing this method, it becomes easier to accept and complete Bitcoin payments in real life. 

Its Not About Just Bitcoin

Whereas the first merchant and invoicing solutions all focused on just Bitcoin, that narrative has come to change. Numerous altcoins are vying for traction to be used as viable payment methods. Accepting these different currencies can be done through DAOWallet and other solutions. This is great news for store owners, but also the millions of freelancers around the world. Receiving payments is often a hassle, especially when dealing with foreign clients and currency conversion rates. Bitcoin and other crypto assets can be used globally, and converted to local currencies with relative ease. 

Going Beyond eCommerce

Another benefit to innovative invoicing solutions is how they can transform other businesses too. Online gambling and iGaming, for example, is another industry that would benefit significantly from new payment methods. More and more people are turning to these newer forms of gaming and gambling. Online gambling revenue has already risen to $537 billion in 2019. It is expected that this figure will keep growing by nearly 10% year over year. Now is the time to embrace new payment methods and their associated invoicing solutions. It is time to shift into a much higher gear to ensure future industry growth. 

Article Produced By
James Woods

Cryptophile, Tech Geek, and an avid developer.

 

https://nulltx.com/better-bitcoin-invoicing-is-beneficial-to-all-industries/

TP

New DeFi Platform Allows Traders to Earn Yield on Bitcoin, XRP and Five Additional Assets

New DeFi Platform Allows Traders to Earn Yield on Bitcoin, XRP and Five Additional Assets


Harvest, a new decentralized finance (DeFi) platform built on the Kava blockchain,

plans to launch services that will allow users to earn more on Bitcoin, XRP and three other cryptocurrencies. Harvest is Kava Labs’ first application. It will offer users opportunities to supply digital assets for lending and earn interest on them, as well as use their crypto as collateral for borrowing, according to Brian Kerr, Kava’s co-founder and chief executive. Both borrowers and lenders earn HARD, Harvest’s governance token. In addition to BTC and XRP, Harvest will also support Binance Coin (BNB), the Binance USD stablecoin (BUSD), Chainlink (LINK), and Kava’s digital assets – KAVA and USDX. The platform will utilize Kava’s HARD governance token, which is to give users a voice in guiding the decentralized platform.

Kerr

Harvest, a new decentralized finance (DeFi) platform built on the Kava blockchain, plans to launch services that will allow users to earn more on Bitcoin, XRP and three other cryptocurrencies. Harvest is Kava Labs’ first application. It will offer users opportunities to supply digital assets for lending and earn interest on them, as well as use their crypto as collateral for borrowing, according to Brian Kerr, Kava’s co-founder and chief executive. Both borrowers and lenders earn HARD, Harvest’s governance token. In addition to BTC and XRP, Harvest will also support Binance Coin (BNB), the Binance USD stablecoin (BUSD), Chainlink (LINK), and Kava’s digital assets – KAVA and USDX. The platform will utilize Kava’s HARD governance token, which is to give users a voice in guiding the decentralized platform.

Kerr notes,

“Collectively, HARD holders are responsible for managing key parameters of Harvest such as what assets are to be offered, how rewards are distributed amongst assets, as well as set any platform fees, etc. HARD tokens will also be used to incentivize early participants giving them a voice in the ongoing evolution and management of Harvest.” Kerr says Kava Labs expects full supply and borrow services to be available on Harvest by the end of the year.

notes,

“Collectively, HARD holders are responsible for managing key parameters of Harvest such as what assets are to be offered, how rewards are distributed amongst assets, as well as set any platform fees, etc. HARD tokens will also be used to incentivize early participants giving them a voice in the ongoing evolution and management of Harvest.” Kerr says Kava Labs expects full supply and borrow services to be available on Harvest by the end of the year.

Article Produced By
The Daily Hodl Staff

https://dailyhodl.com/2020/09/23/new-defi-platform-allows-traders-to-earn-yield-on-bitcoin-xrp-and-five-additional-assets/

TP

The History of the Mt Gox Hack: Bitcoin’s Biggest Heist Read our in-depth History of the Mt Gox Hack: Bitcoin’s Biggest Heist. What was stolen ? How did they do it and where did the money go ?

The History of the Mt Gox Hack: Bitcoin’s Biggest Heist Read our in-depth History of the Mt Gox Hack: Bitcoin's Biggest Heist. What was stolen ?

How did they do it and where did the money go ?

The Rise of the Mt Gox Exchange
Contents [Show]Launched in 2010 by US programmer Jed McCaleb (who later went on to found Ripple), Mt Gox expanded rapidly to become by far the most popular bitcoin exchange in the world after being purchased by French developer and bitcoin enthusiast Mark Karpelés in March 2011. Rather bizarrely the name Mt Gox stood for  “Magic: The Gathering Online eXchange”.In June 2011 the Mt. Gox exchange was hacked, most likely as a result of a compromised computer belonging to an auditor of the company. On that occasion, the hacker used their access to the exchange to artificially alter the nominal value of bitcoin to one cent and then transfer an estimated 2,000 bitcoins from customer accounts on the exchange, which were then sold.In addition, an estimated 650 bitcoins were purchased from the exchange at the artificially low price by Mt. Gox customers, none of which were ever returned.  As a result of this hack Mt. Gox took a number of security measures, including arranging for a substantial amount of its bitcoin to be taken offline and held in cold storage. In spite of the June 2011 hack, by 2013 Mt. Gox had established itself as the largest bitcoin exchange in the world, in part as a result of increased interest in bitcoin as the price of the coins increased rapidly (jumping from $13 dollars in January 2013 to a peak of more than $1,200). However, behind the scenes all was not well.

The Struggles behind the scenes

Although Mt. Gox had quickly expanded to become the largest bitcoin exchange in the world by 2013, behind the scenes it was struggling. Since its collapse, a number of Mt. Gox employees have spoken about how Mt. Gox was operating, with a picture being painted of a disorganized and discordant organization, with poor security procedures, serious issues relating to the source code of the website and a number of serious issues arising in relation to the operation of the business. In May 2013, a former business partner of Mt. Gox called Coinlab sued the company for $75 million, claiming breach of contract. The two companies had signed an agreement under which Coinlab would take over Mt. Gox’s American customers but, according to Coinlab’s lawsuit, the deal failed to materialize due to Mt. Gox breaching a clause of the contract.

In addition, the US Department of Homeland Security was investigating claims that a subsidiary of Mt. Gox operating in the US was not licensed and was therefore operating as an unregistered money transmitter. As a result of this investigation, more than $5 million was seized by the US government from the company’s bank accounts. As a result of the US investigation, Mt. Gox had announced a temporarily suspension of withdrawals in US dollars. Although this suspension only nominally lasted for one month, many customers were experiencing delays of up to 3 months in withdrawing cash from their accounts and few US dollar withdrawals were being successfully completed. All these delays resulted in Mt. Gox losing its place as the largest bitcoin exchange in the world by the end of 2013, falling to third. However, as it turned out, these issues were the tip of the iceberg. Underneath the hood, Mt. Gox had much bigger problems than it realized. It had been the victim of an ongoing hacking for over two years.

The Mt. Gox hack

  • On 7 February 2014, Mt. Gox stopped all bitcoin withdrawals, claiming that it was merely pausing withdrawal requests “to obtain a clear technical view of the currency process.”
  • After a number of weeks of uncertainty, on 24 February 2014, the exchange suspended all trading and the website went offline.
  • That same week, a leaked corporate document claimed that hackers had raided that Mt. Gox exchange and stole 744,408 bitcoins belonging to Mt. Gox customers, as well as an additional 100,000  bitcoins belonging to the company, resulting in the exchange being declared to be insolvent.
  • On 28 February Mt. Gox filed for bankruptcy protection in Japan, and in the US two weeks later.
  • Subsequent investigations have shown that the massive hack of Mt. Gox had begun as early as September 2011.

As a result of all this, Mt. Gox was operating while technically insolvent for almost two years and had practically lost all of its bitcoins by mid-2013. Additional evidence has suggested that Mt. Gox was already missing up to 80,000 bitcoins from its exchange even before Mark Karpelés purchased the exchange in 2011. Although it remains an ongoing investigation and the facts remain unclear at this time, it is presumed that most of the bitcoins that were stolen from Mt. Gox were taken from its online (or hot) wallets, including all of the currency being held in cold storage, due to a “leak” in the hot wallet.

An online cryptocurrency wallet is a web-based wallet used to store secure digital codes, known as private keys that show ownership of a public digital code, known as a public key, that can be used to access the currency addresses and it is this information that is stored in a wallet. Prior to September 2011, the Mt. Gox private key was unencrypted and it would appear that it was stolen via a copied wallet.dat file, either by hacking or perhaps through an insider. Once the file was hacked, the hacker(s) were able to access and cipher bitcoins gradually from the wallets associated with Mt. Gox’s private keys without the hack being detected. The shared keypool of the copied file led to address re-use, which meant that the company appeared to be oblivious to the theft, with the Mt. Gox systems interpreting the transfers as deposits apparently being moved to more secure addresses.Whenever the wallets emptied, the Mt Gox system’s interpretation of the theft as deposits resulted in an additional 40,000 extra bitcoins being credited to multiple user accounts.

The Aftermath

In March 2014, Mt. Gox reported on its website that it had found 200,000 bitcoins in old-format digital wallets that had been used by the exchange prior to June 2011.  These bitcoins remain held on trust for creditors while the company remains under bankruptcy protection. Mark Karpelés was arrested in Japan in August 2015 and charged with fraud and embezzlement, although none of these charges directly relate to the theft. He was imprisoned until July 2016, when he was released on bail. He has pleaded not guilty to the charges and his trial is ongoing. Mt. Gox remains under bankruptcy protection, with the case still being under investigation. In addition, the litigation with CoinLab remains outstanding and distribution to creditors cannot occur until that lawsuit is settled.

Where did the money go?

650,000 bitcoins remain unaccounted for as a result of the Mt. Gox hack. A number of online theories have been developed as to where the missing coins are.Some have suggested that Mt. Gox never had the amount of coins that it claimed, and that Karpelés had manipulated the numbers to make it appear that Mt. Gox held more bitcoin than it in fact held.In respect of how the hacker was able to access the bitcoins that Mt. Gox held in cold storage, the theories range from suggestions that the storage may have been compromised by an individual with on-site access to suggestions that the cold storage coins were gradually deposited into the Mt. Gox exchange system when a hot wallet ran low, and that a lack of accountability among staff simply meant that there was no awareness that the wallets were being drained by hackers. In July 2017, a Russian national named Alexander Vinnik was arrested by US authorities in Greece and charged with playing a key role in the laundering of bitcoins stolen from Mt. Gox. In additional Vinnick was charged by Greek authorities for laundering of approximately $4 billion in bitcoin.

Vinnick is alleged to be associated with BTC-e, a well-established bitcoin exchange, which was raided by the FBI as part of the investigation. The BTC-e site has been shut down and the domain & web hosting accounts seized by the FBI, the first time the US government has seized a foreign exchange on foreign soil. Investigations by Wizsec, a group of bitcoin security specialists, had identified Vinnik as the owner of the wallets into which the stolen bitcoins had been transferred, many of which were sold on BTC-e. With the trial of Mark Karpelés ongoing in Japan and the indictment against Vinnik, it would appear that the separate strands of the investigation into the Mt. Gox hack are finally coming together. Whether any of this will result in the recovery of all or any of the stolen bitcoins remains to be seen, but it does appear that we will have at least some clarity into the Mt. Gox hack in the near future.

“GoxRising”-A New Path Forward

In February of 2019, TechCrunch reported that a movement called GoxRising was working to pursue an alternative to bankruptcy for Mt. Gox. The idea behind GoxRising is simple: instead of use the bankruptcy courts to hand over Mt. Gox’s assets to the owners of the company, it is using civil rehabilitation law to return the most it can to the creditors of the company. It would appear that GoxRising has been successful in its efforts, as Tokyo lawyer Nobuaki Kobayashi has been appointed by Japanese courts to handle the civil rehabilitation process. This is good news for anyone who lost their assets in the Mt. Gox failure, as they will likely gain much more as a result of civil rehabilitation. There is also another potential upside for Mark Karpeles, the embattled CEO of Mt. Gox. If the bankruptcy process had continued to move forward, it is likely that Karpeles would’ve ended up with a lot of Mt. Gox’s assets. He owned around 80% of the company when it went bust, putting him in pole position for a massive payout under Japanese bankruptcy law.

Karpeles knows that if he ended up with most of the Mt. Gox stash, his life would be in limbo. First, he would face a barrage of civil suits from Mt. Gox creditors who had lost everything to him. Bitcoin prices are much higher today than they were in 2014, which would just add insult to injury. Also, jilted investors may not be satisfied with simply suing Karpeles. People have been killed for far, far less than what Karpeles would have done, if he ended up walking away with a massive pile of Bitcoins after everyone who trusted him got burned. Needless to say, the civil rehabilitation process seems like a winning idea for everyone involved, and it looks like it is moving forward. Kobayashi was put into his position earlier this year, and the  civil rehabilitation is expected to take 3-5 years, according to reports in the media. Civil rehabilitation is still a time-consuming process, but it does look a lot better than bankruptcy!

Lessons Learned

The pivot to civil rehabilitation is emblematic of how much different the crypto world is from the established financial system. Bankruptcy law was a terrible framework to address the failure of Mt. Gox, and would’ve created an unjust situation that may have led to massive amounts if litigation, and potentially illegal acts. It is highly unlikely that Karpeles was actually planning to defraud people who were using Mt. Gox, and his life has been rough since the exchange went belly-up. He has faced multiple lawsuits already, can’t leave Japan, and also did some jail time before getting released into the land of the rising sun on a limited basis. Not a lot of fun for anyone! Now, it looks like there is a way forward that would get Karpeles out of his unenviable situation, and make sure anyone whose assets assets were frozen in 2014 got them back. The clear lesson to the crypto community is that there need to be better structures in place for when the worst happens, as it is absurd that people are still waiting to gain access to their property.

The Centralized Crypto Exchange Dilemma

Crypto assets lend themselves to decentralized networks. Despite that, the exchanges that offer the best prices and deepest liquidity are almost universally centralized. While the centralized nature of the exchanges isn’t inherently an issue, the fact they they act as custodians isn’t ideal. Once an entity takes ownership over an asset, the potential for a Mt. Gox-esque scenario exists. Given the kind of laws that govern bankruptcy in the established financial system, the way cryptos are traded does appear to be less-than-perfect. There are decentralized exchanges that offer a wide range of trading services, but they are unlikely to be able to match centralized crypto exchanges, especially when it comes to inter-exchange interface. The ability to trade directly with other centralized crypto exchanges is a big advantage, and it is difficult to see how that could happen without custodianship.

A Horror Story for Institutional Investors

Custodial issues are one of the biggest issues for institutional investors when it comes to cryptos. Far from being paranoid speculation, the Mt. Gox situation gives any money manager who is being pressured to invest in cryptos a terrible example that could scare anyone out of the sector. The idea that a hack could turn an entire exchange illiquid and keep any of the traders from accessing their assets isn’t going to win cryptos many proponents in the investment banking community. If cryptos are going to grow, the ‘Custodial Question’ has to be addressed. Unfortunately, the crypt world grew out of boot-strapped platforms and business structures that were never intended to appeal to the world of high-finance. Now that more people are interested in cryptos, these sub-par systems are holding back the industry in a big way. It doesn’t matter how professional a trading interface looks, the back office is what really matters when it comes to attracting the big money. If chain-of-custody and ownership can’t be established quickly, and by an outside auditor, nothing else really matters.

Could it happen again?

The short answer is that yes, it could. There are many bitcoin exchanges operating at present, some of which are more reputable than others. Popular exchanges such as Coinbase and Binance are relatively transparent about their operations, as well as offering insured deposits, and are backed by reputable venture capitalists. However, they are also going to be the targets of the best hackers, who will be only too happy to exploit any security gaps. Decentralized exchanges generally don’t act as a custodian for you assets, which means Mt. Gox couldn’t happen to you.

In addition, there are many smaller exchanges currently trading that aren’t as clear about how they operate. That does not mean that such exchanges are operating a hack or disreputable in any way. When it comes to cryptocurrency trading, it is recommended that you use the more reputable exchanges, if only for your own peace of mind, unless you have the means to absolutely guarantee the legitimacy of any smaller exchange that you are dealing with. And if the above isn’t enough to scare you, my one last word of advice would be to make sure that you don’t store your bitcoins on any exchange. See our post on cryptocurrency wallets for more details on how to store your bitcoins.

Article Produced By
Andrew Norry

https://blockonomi.com/mt-gox-hack/

TP

Beginner’s Guide to Bitcoin & Crypto Trading Bots

 

Beginner’s Guide to Bitcoin & Crypto Trading Bots


Share ArtArticle Produced Byicle Produced ByUnlike the stock markets, the cryptocurrency market never closes and never sleeps,

which can be a highly stressful scenario for traders and even casual investors in the industry. Users familiar with crypto investment will also be familiar with the (joyful or sinking) feeling of waking up in the morning to be greeted by a pleasant or unpleasant surprise when they check their portfolio and see large gains or losses.As a result of the volatility of the market, trading bots have become increasingly popular among traders by allowing them to remain in control of their trading at all times, with the bot not sleeping even while the trader is. In addition, a correctly specified bot allows trades to be executed faster and more efficiently than the trader would be able to do manually.

The explosion of popularity in cryptocurrency has also resulted in a big increase in the number of crypto trading bots available, either for free from open-source platforms or licensed to users in exchange for flat fees. However, it is difficult to ascertain which of them work as intended and which of them are an absolute waste of time. This post will consider the background to what exactly trading bots are and whether they work for Bitcoin & Crypto trading (and more importantly, for your Bitcoin trading). We have rigorously tested each bot on this list, you can click through to each one to view our detailed reports and findings and this post is constantly updated with any new options that come on the market.

Article Produced By
Andrew Norry

https://blockonomi.com/bitcoin-trading-bots/

TP

DLCs Are On Bitcoin, Bringing New Functionality And Major Potential

DLCs Are On Bitcoin, Bringing New Functionality And Major Potential


Bitcoin has been critiqued by those in the altcoin community for the past few years over its inability to host smart contracts.

But recent work from developers at Suredbits, Crypto Garage and Atomic Loans — along with efforts from some independent contributors — on Discreet Log Contracts (DLCs) is bringing smart contracting to Bitcoin and will quell some of these critics. DLCs are uniquely positioned to bring smart contracting to Bitcoin using oracle contracts that are much more private and scalable than previously thought possible.

What Are DLCs?

DLCs are Bitcoin-based contracts that use one or many oracle signatures for enforcement. The original proposal for DLCs was made by Tadge Dryja in 2017 and later redesigned to make them more scalable and private by using something called adaptor signatures. DLC oracle contracts allow for users to make a Bitcoin transaction contingent on an oracle’s signature. Using DLCs, Bitcoiners can make bets based on events to which the oracle is attesting. Last week, we saw one of the first of these done by Suredbits Founder Chris Stewart and creator of BTCPay Server Nicolas Dorier, betting on the result of the U.S. election.

After a recent DLC redesign, they were changed to use a 2-of-2 multisig that pays out directly to a user’s wallet instead of paying to a tweaked public key. This old design required a penalty mechanism similar to that of the Lightning Network, which made it take more block space and be less private. This redesign is made possible by using adaptor signatures and making the adaptor point based on the oracle’s expected signature. What this basically means is that each party gives each other invalid transaction signatures that can only be made valid in conjunction with the oracle signature.To make this recent bet between Stewart and Dorier possible, a lot of progress has been made in developing a standard for DLCs as well as building software according to these standards. DLC developers have been working on this standard heavily since the beginning of this year. Along with this specification, they have been building compatible software; so far there are four major implementations being worked on: Bitcoin-S, NDLC, Rust-DLC and CFD-DLC.

The Future Of DLCs

The teams working on DLCs have lots of plans for the future of the technology. Today, DLCs have only been implemented for onchain transactions. One of the most obvious improvements for DLCs would be to put them on the Lightning Network! There are two planned ways to put DLCs on Lightning. One is by making them only usable between parties who already have Lightning channels open between one another, which could be done today but would require a lot of work done by the different Lightning implementations to add support for DLCs. And this could be obsoleted by the second way to do Lightning DLCs, however there are some caveats. This second way to do Lightning DLCs likely won’t be possible until after Taproot is activated, but it would allow these DLCs to be routed across a network and would remove the requirement to have a channel with a user’s counterparty, however this setup requires barrier escrows which have no known major implementations.

There are other general improvements to DLCs that can be made possible in the future as well. One major idea is to give the user the ability to use multiple oracles for a given contract instead of just one. This would allow users to distribute trust between multiple oracles, instead of having a single point of failure for their contracts. And other small improvements can be made come Taproot! With Taproot, we can make multisig transactions look like everyday, single sig transactions. Applying this to DLCs, we can make them have a smaller on-chain footprint and make them look like any other standard single sig transaction, thus saving users on fees and privacy! DLCs are a pivotal new way to bring smart contracting to Bitcoin and we are extremely excited to see continued development with them. If you are interested in knowing more about DLCs, check out Suredbits’s blog and if you want it come contribute checkout the DLC specification repo! This is a guest post by Ben Carman, a developer with Suredbits. Opinions expressed are entirely his own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Article Produced By
Ben Carman

Developer at Suredbits, working on all things Bitcoin, Lightning and DLCs. a guest post by Ben Carman, a developer with Suredbits. Opinions expressed are entirely his own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

https://bitcoinmagazine.com/articles/dlcs-are-on-bitcoin-bringing-new-functionality-and-major-potential

TP

When you have 100 customers per Distributor