Few new technologies have raised as much discussion as blockchain. One reason is the controversy, concern, and perceived opportunity around blockchain-based cryptocurrencies (such as bitcoin and ether) and crowdfunding via initial coin offerings (ICOs). But what is blockchain’s role in the enterprise?
This article gives some ideas to think about. Take those trends with grain of salt. There will be a crash ans bubble burst on blockchains in few years.
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Tomi Engdahl says:
Four Days Trapped at Sea With Crypto’s Nouveau Riche
https://breakermag.com/trapped-at-sea-with-cryptos-nouveau-riche/
n 10 years of political reporting I’ve met a lot of intense, oddly dressed people with very specific ideas about what the perfect world would look like, some of them in elected office—but none quite so strange as the ideological soup of starry-eyed techno-utopians and sketchy-ass crypto-grifters on the 2018 CoinsBank Blockchain Cruise.
Tomi Engdahl says:
NVIDIA has reached the highest highs and the lowest lows, all in the span of a couple of weeks
After losing half its value, Nvidia faces reckoning
https://techcrunch.com/2018/12/12/nvidia-perfect-storm/?sr_share=facebook&utm_source=tcfbpage
Over the past two months, Nvidia’s stock has dropped from a closing price of $289.36 on October 1 to today’s opening of $148.42, a decline of 48.8 percent.
It takes a lot for a company to lose nearly half its value in such a short period of time, but Nvidia is proving that an otherwise strong technology business can disappear in the blink of an eye. The company faces an almost perfect barrage of headwinds to its core products that is stalling its plans for long-term chip domination.
Tomi Engdahl says:
Elon Musk bitcoin scam on Twitter sees hundreds of people lose thousands of dollars
https://www.independent.co.uk/life-style/gadgets-and-tech/news/elon-musk-bitcoin-scam-twitter-hackers-cryptocurrency-a8620436.html
Cryptocurrency addresses analysed by The Independent reveal that some people sent more then $6,000 to the scammers
Hackers have raised hundreds of thousands of dollars by posing as Elon Musk on Twitter in order to trick people into sending them bitcoin.
Several verified Twitter accounts, including those belonging to UK retailer Matalan and US publisher Pantheon Books, were taken over and used to impersonate the high-profile entrepreneur. Once hijacked, the hackers changed the accounts’ names and profile pictures to those of Mr Musk, before sharing a tweet calling for people to send him cryptocurrency.
“I’m giving 10 000 Bitcoin (BTC) to all community!” I left the post of director of Tesla, thank you all for your support,” the hacked account of Pantheon Books stated.
“I decided to make the biggest crypto-giveaway in the world, for all my readers who use Bitcoin… To verify your [bitcoin] address, send from 0.1 to 2 BTC to the address below and get from 1 to 20 BTC back.”
More than 400 people sent bitcoin to one address associated with the scam
Twitter rules state that impersonating another individual for the purpose of deceiving its users is a violation of its terms of service, which will result in an account being suspended.
The firm claims to have cracked down on cryptocurrency scams in recent weeks
Tomi Engdahl says:
Tom Arnold / Reuters:
Payments and foreign exchange company UAE Exchange says it is partnering with Ripple to launch cross-border remittances to Asia via blockchain by Q1 2019
Finablr’s UAE Exchange, Ripple to begin blockchain payments by first quarter
https://www.reuters.com/article/us-finablr-ripple-payments/finablrs-uae-exchange-ripple-to-begin-blockchain-payments-by-first-quarter-idUSKBN1OC0IR
United Arab Emirates-based UAE Exchange and U.S. startup Ripple plan to launch cross-border remittances to Asia via blockchain by the first quarter of 2019, UAE Exchange’s group CEO said in an interview.
Tomi Engdahl says:
Daniel Palmer / CoinDesk:
Opera releases its Android browser with a built-in Ethereum wallet, support for crypto collectibles such as CryptoKitties and ethereum-based decentralized apps
A Built-In Ethereum Wallet Just Got Added to Opera’s Browser
https://www.coindesk.com/opera-browser-with-built-in-ethereum-wallet-sees-public-release
Opera has announced the public release of its “Web 3-ready” Android web browser, which notably sports a built-in cryptocurrency wallet.
Previously available in beta, Opera for Android supports ethereum’s ether and other tokens using the network’s ERC-20 standard. The app also provides support for crypto collectibles (ERC-721 standard) such as CryptoKitties, as well as ethereum-based decentralized apps, or dapps, that can be accessed from the wallet.
“Until now using cryptocurrencies online and accessing Web 3 required special apps or extensions, making it difficult for people to even try it out. Our new browser removes that friction,” Charles Hamel, the product manager of Opera Crypto, said in a statement.
Tomi Engdahl says:
Michael del Castillo / Forbes:
Stablecoin project Basis, backed by Bain Capital, GV, and a16z, confirms it is closing due to regulatory issues and will return the $133M capital raised
Crypto’s Top Funded Startup Shutters Operations Following SEC Concerns
https://www.forbes.com/sites/michaeldelcastillo/2018/12/13/sec-rules-kill-cryptos-top-funded-startup/#3d5155482918
Not even three Princeton honors students and $133 million could save the Basis cryptocurrency from the scrap bin of SEC rejects.
After raising capital from the likes of Google Ventures, Andreessen Horowitz, Bain Capital and others, the company behind the cryptocurrency, Intangible Labs, today announced the project was being killed and all the funds returned.
For a startup that captured widespread attention for its promise to launch a new cryptocurrency designed from the ground up to serve anyone around the world with unreliable central banks, the decision marks a surprising end.
Tomi Engdahl says:
Cambridge Judge Business School:
Study: crypto asset service providers have 139M total users and at least 35M identity-verified users whose growth nearly doubled in first three quarters of 2018
Second annual survey of global cryptoasset activity
https://insight.jbs.cam.ac.uk/2018/second-annual-survey-of-global-cryptoasset-activity/
Findings by the Cambridge Centre for Alternative Finance describe the evolution of an industry that saw big growth in 2017.
The new findings reflect the growing maturity – and recent cooling off – of an industry that experienced huge growth in 2017. The aggregate market capitalisation of cryptoassets skyrocketed from $30 billion in April 2017 to more than $800 billion at its peak in early January 2018, until coming down again to hover at around $200 billion.
Multi-coin support is rapidly expanding.
Multi-coin support has nearly doubled from 47 per cent of all service providers in 2017 to 84 per cent in 2018. This is a trend primarily driven by the emergence of common standards on some cryptoasset platforms (e.g. ERC-20 on Ethereum) that has resulted in a rapid increase in the supply of tokens.
The majority of identified mining facilities use some share of renewable energy sources as part of their energy mix.
The study estimates that as of mid-November 2018, the top six proof-of-work cryptoassets collectively consume between 52 and 111 terawatt-hours (TWh) of electricity per year. The mid-point of the estimate (82 TWh) is the equivalent of the total energy consumed by the entire country of Belgium – but also constitutes less than 0.01 per cent of the world’s global energy production per year. A notable share of the energy consumed by these facilities is supplied by renewable energy sources in regions with excess capacity.
Self-regulatory efforts reflect growing industry maturity.
Industry actors are pro-actively adopting measures that appear to comply with existing regulation despite not necessarily being explicitly subject to regulations.
Tomi Engdahl says:
In the winds of crypto winter
https://techcrunch.com/2018/12/16/in-the-winds-of-crypto-winter/?utm_source=tcfbpage&sr_share=facebook
Well, it was surreal while it lasted, by which I mean the 2017-18 cryptocurrency bubble. For a while there, Coinbase was #1 in the App Store, Bitcoin was above $10K, and there were more notional crypto zillionaires out there than you could shake a Merkle tree at.
Those were the crazy days. Now, though, a rude awakening has come. Now Bitcoin is down to $3200 and counting, other cryptocurrencies are down well over 90%, and worst of all, none of the billions of dollars which poured into cryptocurrencies during the bubble have led to anything even remotely like a killer app. Instead the crypto space remains a giant casino of penny stocks
Tomi Engdahl says:
Bitcoin miners shutting down world wide! Bitmain in trouble.
https://www.youtube.com/watch?v=lhg87v7kQvw
Bitcoin miners shutting down world wide! Bitmain in trouble. And it looks like the problem is getting worse for all the big miners across the world. Makes me wonder is this is the real sign bottom is close.
Bitcoin Mining Explained
https://www.youtube.com/watch?v=iyq4od8MBoE
Tomi Engdahl says:
Bijan Stephen / The Verge:
Sources: blockchain incubator ConsenSys, which helps ~36 startups, will spin some of them off; source speculates layoffs will be between 600 and 700 — As many as 50 to 60 percent of the company’s employees could be let go — Layoffs are coming to ConsenSys, the Ethereum-focused startup incubator …
ConsenSys plans to spin out most of its startups, and it’s going to mean layoffs
As many as 50 to 60 percent of the company’s employees could be let go
https://www.theverge.com/2018/12/20/18150036/consensys-layoffs-employees-pending-startup-ethereum
Layoffs are coming to ConsenSys, the Ethereum-focused startup incubator and blockchain technology conglomerate. According to sources at the company, ConsenSys is quickly spinning out startups that it previously supported
at least two incubated startups within the company showed that ConsenSys is beginning to spin out its large portfolio of blockchain projects, often without the financial support they’d need to find outside funding and succeed
The news comes just a month after the company laid off around 13 percent of its staff.
Lubin is credited as the co-founder of Ethereum, a decentralized platform for applications and a cryptocurrency based on Ethereum, Ether, that was introduced in a 2013 paper by Ethereum co-founder and programmer Vitalik Buterin; its value rose 13,000 percent in 2017, with the price of a single ETH token hitting a record high of $1,417.38. That incredible rise made Lubin one of the richest men in crypto
“The world has not collapsed as [Lubin] planned, and so he needs to pivot his company because it was orchestrated for a vision only where Ethereum would be $10,000,” says the source.
Tomi Engdahl says:
https://www.tivi.fi/Kaikki_uutiset/mies-paatti-lyoda-rahoiksi-omilla-henkilotiedoillaan-nain-paljon-jai-kateen-6753084
https://www.wired.com/story/i-sold-my-data-for-crypto/
Tomi Engdahl says:
Facebook Is Developing a Cryptocurrency for WhatsApp Transfers, Sources Say
https://www.bloomberg.com/news/articles/2018-12-21/facebook-is-said-to-develop-stablecoin-for-whatsapp-transfers
First focus will be on remittance market in India, people say
Social network is still working out its blockchain strategy
Tomi Engdahl says:
Wall Street Journal:
Analysis: SEC and state regulators brought 90+ crypto-related cases in the past two years, recovering just ~$36M; cases increased as the market crashed — SEC and state regulators have brought more than 90 crypto cases over the past two years, but tracing funds is hard because of the elusive nature of the currency
Crypto Craze Drew Them In; Fraud, in Many Cases, Emptied Their Pockets
https://www.wsj.com/articles/crypto-craze-drew-them-in-fraud-in-many-cases-emptied-their-pockets-11545820200
SEC and state regulators have brought more than 90 crypto cases over the past two years, but tracing funds is hard because of the elusive nature of the currency
Tomi Engdahl says:
Wolfie Zhao / CoinDesk:
Crypto mining startup Bitmain confirms layoffs, which, source says, may affect half of its total headcount, with some departments being laid off entirely — Months after it filed an application to go public on the Hong Kong Stock Exchange, Beijing-based cryptocurrency mining giant Bitmain …
Layoffs Underway Amid ‘Adjustments,’ Bitcoin Miner Bitmain Confirms
https://www.coindesk.com/layoffs-underway-amid-business-adjustments-bitcoin-miner-bitmain-confirms
Months after it filed an application to go public on the Hong Kong Stock Exchange, Beijing-based cryptocurrency mining giant Bitmain is undergoing a series of business changes that extend even to its China offices, the company confirmed Tuesday.
“There has been some adjustment to our staff this year as we continue to build a long-term, sustainable and scalable business. A part of that is having to really focus on things that are core to that mission and not things that are auxiliary,” a company representative said in a statement.
Tomi Engdahl says:
Alastair Marsh / Bloomberg:
Crypto efforts of Goldman Sachs, Morgan Stanley, Barclays, and others are in limbo after bitcoin’s months-long fall and weak demand from institutional clients
Wall Street Quietly Shelves Its Bitcoin Dreams
https://www.bloomberg.com/news/articles/2018-12-23/wall-street-quietly-shelves-its-bitcoin-dreams
Goldman Sachs, Morgan Stanley and many more built it. But they didn’t come.
“The market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business,” said Daniel H. Gallancy, chief executive officer of New York-based SolidX Partners, which hopes to launch a Bitcoin ETF in the U.S. “That was top-of-the-market-hype thinking.”
Tomi Engdahl says:
As Bitcoin sinks, industry startups are forced to cut back
https://techcrunch.com/2018/12/26/as-bitcoin-sinks-industry-startups-are-forced-to-cut-back/?sr_share=facebook&utm_source=tcfbpage
Around this time last year, the price of Bitcoin hit an all-time high of nearly $20,000. Cryptocurrency enthusiasts everywhere boasted about the wealth 2018 would bring, initial coin offerings exploded and startups continued to pull in record amounts of venture capital. Fast-forward one year: Bitcoin is down 75 percent to a meager $3,700, sinking as quickly as its meteoric rise, and industry startups are paying the price.
Tomi Engdahl says:
Facebook is reportedly planning its own stablecoin — here’s what you need to know
https://techcrunch.com/2018/12/21/facebook-stablecoin/?utm_source=tcfbpage&sr_share=facebook
The US tech giant would be the largest entrant to the consumer blockchain space
Tomi Engdahl says:
Yogita Khatri / CoinDesk:
Japan’s GMO Internet says it will stop making and selling cryptocurrency miners, but will continue its in-house cryptocurrency mining operations for now
GMO Quits Selling Mining Machines After Crypto Market Downturn
https://www.coindesk.com/gmo-quits-selling-mining-machines-after-crypto-market-downturn
Japanese IT giant GMO Internet has said it will quit making and selling crypto miners following a year of bear market losses
The firm announced Tuesday that given the current “increasingly competitive” business environment and weak crypto market, it will “no longer develop, manufacture, and sell mining machines.”
On a consolidated basis, GMO is to record an “extraordinary loss” of 35.5 billion yen (or $321.6 million),
GMO first launched its miner making business in September 2017 and set up its in-house mining operations in northern Europe at the end of last year. The decision to quit its miner making business comes just months after GMO formally launched its B3 miner equipped with a 7nm mining chip.
GMO’s crypto mining business reported a loss of 640 million yen (about $5.6 million) in Q3 2018
Tomi Engdahl says:
Ex-MtGox Bitcoin Chief Maintains Innocence in Trial Closing Arguments
https://www.securityweek.com/ex-mtgox-bitcoin-chief-maintains-innocence-trial-closing-arguments
The former head of collapsed bitcoin exchange MtGox apologised Thursday for losses that bankrupted the firm but insisted he was innocent of charges including embezzlement at closing arguments in his Tokyo trial, local media reported.
Tomi Engdahl says:
How Hackers Stole $1B From Cryptocurrency Exchanges In 2018
https://www.forbes.com/sites/daveywinder/2018/12/31/how-hackers-stole-1b-from-cryptocurrency-exchanges-in-2018/#ef0b73a4d879
According to the Cryptocurrency Anti-Money Laundering Report from Ciphertrace some $927 million had been stolen from cryptocurrency exchanges in the first three quarters of 2018 alone. That total will almost certainly have hit, if not smashed straight through, the $1 billion mark by now. So, who were the hackers behind the heists and how did they get away with it?
The how remains sadly predictable throughout the year, truth be told; exploiting vulnerabilities in crypto wallet software and servers, social engineering/password compromises and insider theft. The who covers equally predictable territory with lone wolf criminal opportunists at the lower end of scale through to well-resourced nation-state actors at the other.
SIM-swapping endeavor, an increasingly common method used to compromise otherwise secure accounts by gaining access to two-factor authentication codes sent via SMS
Then there are the state-sponsored actors.
North Korea remains firmly in the cross-hairs for anyone investigating cryptocurrency theft, especially at the bigger end of the attack scale. One group in particular, the Lazarus Group, is thought to have been involved in a number of attacks. Often launching their attacks out of China, possibly in order to try and obfuscate accurate geo-political attribution, the Lazarus actors are widely thought to be nation-state players tasked with cyber heists to help boost the beleaguered North Korean economy.
In this regard, Lazarus is thought to have been spectacularly successful: more than $571 million in cryptocurrency is reported to have been stolen by the Lazarus Group since the start of 2017 and it is thought that 65% of stolen cryptocurrency ends up in North Korea.
Tomi Engdahl says:
Arjun Balaji:
Thoughts on the state of crypto in 2018, which marked the start of a crypto recession, and predictions for 2019 as experts now focus on adoption and usage — My thoughts on the state of crypto in 2018 and where we’re headed — As another year wraps up, I started writing an email …
Crypto Theses for 2019
My thoughts on the state of crypto in 2018 and where we’re headed
https://medium.com/@arjunblj/crypto-theses-for-2019-dd20cb7f9895
Tomi Engdahl says:
Ethereum Plans to Cut Its Absurd Energy Consumption by 99 Percent
https://spectrum.ieee.org/computing/networks/ethereum-plans-to-cut-its-absurd-energy-consumption-by-99-percent
Bitcoin soaks up most of the hype and the opprobrium heaped on cryptocurrencies, leaving its younger and smaller sibling Ethereum in the shadows. But Ethereum is anything but small. Its market capitalization was roughly US $10 billion at press time, and it has an equally whopping energy footprint.
Ethereum mining consumes a quarter to half of what Bitcoin mining does, but that still means that for most of 2018 it was using roughly as much electricity as Iceland. Indeed, the typical Ethereum transaction gobbles more power than an average U.S. household uses in a day.
“That’s just a huge waste of resources, even if you don’t believe that pollution and carbon dioxide are an issue. There are real consumers—real people—whose need for electricity is being displaced by this stuff,”
plan to field-test a long-promised overhaul of Ethereum’s code. If these developers are right, by the end of 2019 Ethereum’s new code could complete transactions using just 1 percent of the energy consumed today.
Ethereum’s attempted rebirth will be one of the year’s “most fascinating technologies to watch,”
Like Bitcoin, Ethereum relies on a blockchain, which is a digital ledger of transactions maintained by a community of users.
What gives the Ethereum blockchain such potential is its ability to store data, support decisions, and automate the distribution of value. It manages these tasks through smart contracts, programs written by users or developers in Ethereum’s custom coding language. Smart contracts have obvious business applications, but the long-term hope is that apps built from them will eventually make Ethereum the ultimate cloud- computing platform.
That lofty vision clashes with Ethereum’s current reality. While there are some multimillion-dollar apps running on it, even Buterin says he suspects that Ethereum is consuming more resources than it returns in societal benefits.
The problem is all that mining. Like most cryptocurrencies, Ethereum relies on a computational competition called proof of work (PoW) .
It’s a winner-takes-all contest, rewarded with newly minted cryptocoins.
PoW mining is difficult by design. The idea is to prevent any one entity from controlling the blockchain.
In theory, PoW keeps mining a distributed affair. In practice, however, the development of application-specific ICs (ASICs) that accelerate mining, produced by a handful of chip fabs in China, has concentrated power over many cryptocurrencies.
Ethereum took the fight against concentrated power one step further by selecting a memory-intensive PoW algorithm for mining “ether,” as its value token is known. This ether-mining algorithm penalizes the use of ASICs.
What Ethereum’s PoW algorithm has not prevented, however, is explosive growth in the computing resources devoted to ether mining.
The resultant energy demand has created a backlash from environmentalists. Utilities and communities, meanwhile, see financial risk and opportunity costs if they cater to cryptocurrency miners that gobble up cheap electricity while creating few jobs. Serving miners may require utilities to make equipment upgrades, which could become superfluous if cryptocurrency prices crash and mining operations shut down.
Recent market dynamics support the utilities’ concerns. The value of ether peaked at $1,385 last January and then began a downward slide. In November it crashed below $120—low enough to erase miners’ profit margin and to prompt some to slow down or turn off mining rigs.
“It’s widely accepted in the Ethereum community that PoW uses far too much energy. For me it is the No. 1 priority,” says Ethereum contributor Paul Hauner
Ethereum’s plan is to replace PoW with proof of stake (PoS)—an alternative mechanism for distributed consensus that was first applied to a cryptocurrency with the launch of Peercoin in 2012. Instead of millions of processors simultaneously processing the same transactions, PoS randomly picks one to do the job.
Moving to PoS will cut the energy consumed per Ethereum transaction more than a hundredfold, according to Buterin: “The PoW part is the one that’s consuming these huge amounts of electricity. The blockchain transactions themselves are not super computationally intensive. It’s just verifying digital signatures. It’s not some kind of heavy 3D-matrix map or machine learning on gigabytes of data,” he says.
Moving to PoS could also boost security. Under PoS, the location of each validator’s account is known and can be destroyed if that validator breaks the rules. Vlad Zamfir, Ethereum Foundation’s lead PoS developer, likens this to the Bitcoin community gaining the power to incinerate the data centers of a miner who abuses his power.
The two-chain solution—dubbed Ethereum 2.0—makes a world of difference for Ethereum’s programmers because continuing on the original chain would have meant writing the machinery of PoS as a sophisticated set of smart contracts. Hauner, who is leading an effort called Lighthouse to build an Ethereum 2.0 software client, says Ethereum’s smart-contract language is a tough medium for writing complex code. “Writing smart contracts is a very constrained environment for computing. You can’t do complicated things on it,” he says.
there could still be “unknown unknowns” lurking that could set their timeline back.
As a multibillion-dollar network, Ethereum obviously has a lot to lose if it launches glitchy or insecure technology
Any missteps could jeopardize the entire ecosystem of developers and projects that use Ethereum’s smart contracts.
But Ethereum also has a lot to lose if it delays much longer. An array of well-capitalized projects—Cardano, Dfinity, Eosio, and Manian’s Cosmos, to name just a few—are hatching their own PoS-based blockchains.
Tomi Engdahl says:
Adrian Zmudzinski / Cointelegraph.com News:
Cryptocurrency exchange Kraken says it has received 475 law enforcement inquiries in 2018 compared to 160 in 2017; 315 of the inquiries came from US agencies — Cryptocurrency exchange Kraken has received nearly three times more law enforcement inquiries in 2018 than in 2017, the exhange reported in a tweet Jan. 5.
Law Enforcement Inquiries Sent to Kraken Nearly Tripled in 2018
https://cointelegraph.com/news/law-enforcement-inquiries-sent-to-kraken-nearly-tripled-in-2018
Tomi Engdahl says:
cryptocurrencies based on proof of work/stake/kittens don’t work because they will suffer rollback attacks when the price drops sharply.
Modern cryptography is based on the principle of exponential leverage. AES128 is 2^128 times harder to break than to use. Proof of work/stake/etc put the exponent on the wrong side. Using is 2^n and breaking is 2^n-1.
It’s broke people.
Almost $500,000 in Ethereum Classic coin stolen by forking its blockchain
https://arstechnica.com/information-technology/2019/01/almost-500000-in-ethereum-coin-stolen-by-forking-its-blockchain/?fbclid=IwAR0UN_DynWdToCxeteXhr-DbYvv9KfXEijXVu74KaS8NEueOiTe-8CjjkMM
Rollback attack let attackers spend 88,500 previously spent coins.
Attackers have stolen almost $500,000 worth of the Ethereum Classic digital currency by carrying out a compute-intensive hack that rewrote its blockchain, officials with Coinbase, one of the leading crypto currency exchanges, said on Monday.
The heist was the result of carrying out what’s known as a rollback attack, which allowed the attackers to reorganize the Ethereum Classic blockchain
the attackers were able to “double spend” about 88,500 ETC
Rollback attacks are often referred to as 51-percent attacks, because, in theory, they require an attacker to control a majority of the CPU power generating a blockchain. Such an arrangement violates a core requirement of any blockchain-based currency: it allows a single entity to write the contents of its universal shared transaction history.
Stated a different way, a rollback attack generates a new fork of the blockchain. This causes nodes to replace the original blockchain with the new one and makes it possible for attackers to reverse previously made transactions
Coinbase paused movements of affected ETC fund
Tomi Engdahl says:
Coinbase freezes Ethereum Classic trading following attack
https://techcrunch.com/2019/01/07/coinbase-ethereum-classic-freeze/?sr_share=facebook&utm_source=tcfbpage
The exchange said it has stopped all trading on Ethereum Classic — a cryptocurrency it added back in August — after it detected an attack on the cryptocurrency’s network.
Coinbase identified “a deep chain reorganization” of the Ethereum Classic blockchain which essentially means that someone controlling miners on the network had rewritten transaction history. Such tampering can allow what’s called ‘double spending,’
Tomi Engdahl says:
How blockchain technology will revolutionize the next decade’s supply chain
https://ces.eetimes.com/how-blockchain-technology-will-revolutionize-the-next-decades-supply-chain/
There has been a lot of talk about blockchain disrupting banking, investment, insurance and government. But if there is one industry in which the distributed ledger technology can make its most significant impact, it is logistics and supply chain.
Utilizing blockchain to record the provenance of products and components would remove any opportunity to tamper with records
Tomi Engdahl says:
Transmute Launches Blockchain Framework Focused on Identity
https://www.securityweek.com/transmute-launches-blockchain-framework-focused-identity
Blockchain remains the unfulfilled promise of new technology. Perhaps the problem was the success of Bitcoin’s tech — it made people realize that distributed ledgers (DTLs) could be used for almost any IT requirement. It took a bit longer for people to realize that while true, for most commercial applications blockchains offer no real improvement on the capabilities of traditional distributed databases.
The blockchain hype remains, but it is beginning to focus on government use (the UK government says it has the potential “to help governments to collect taxes, deliver benefits, issue passports, record land registries, assure the supply chain of goods and generally ensure the integrity of government records and services”), and specific commercial use cases with specific problems.
One of these commercial use cases is identity management, particularly from the users’ viewpoint. The current system is simply inefficient: it overshares too much personal information with too many different organizations who each then store that data in a single point of failure (a central target for criminal access) that has ramifications for all the other single points of failure. One breach can lead to the loss of personal data for millions — and even billions — of people; and each breach places the victims in greater danger of identity theft, and other organizations under threat of criminal access through stolen credentials.
The realization that a distributed ledger for identity management can solve many of these problems by eliminating the single point of failure and giving the user greater control over the sharing of personal data for access purposes has led to a rapid spurt in blockchain IAM start-ups. One more, Transmute, emerged Tuesday.
Tomi Engdahl says:
Zheping Huang / South China Morning Post:
Sources: Bitmain co-founders Wu Jihan and Zhan Ketuan to step down as co-CEOs, will be succeeded by product engineering director Wang Haichao
Bitmain’s two founders to step aside as Chinese cryptocurrency giant taps software coder as new CEO
https://www.scmp.com/tech/policy/article/2181392/bitmains-two-founders-step-aside-chinese-cryptocurrency-giant-taps
Bitmain accounts for 75 per cent of the world’s specialised computers used to earn new units of digital money
Bitmain Technology, the world’s biggest maker of cryptocurrency mining rigs, is poised to name a new CEO to replace company co-founders Wu Jihan and Zhan Ketuan, people with knowledge of the matter said.
Bitmain, which accounts for 75 per cent of the world’s specialised computers used to earn new units of digital money, is going through tough times amid a prolonged bear market in cryptocurrencies. In 2018 bitcoin, the world’s biggest form of digital money, lost more than 70 per cent of its value. In total nearly US$500 billion has been wiped off the value of the more than 2,000 cryptocurrencies in the market.
Last month Bitmain said it was planning lay-offs amid the industry crunch, though it did not specify the extent of the job cuts.
At the end of June, Bitmain had 2,594 full-time employees including some 840 engineers
Tomi Engdahl says:
Yogita Khatri / CoinDesk:
China’s internet censor approves new regulations for blockchain startups, requiring registration of users’ names, content censorship, and more, starting Feb. 15
China’s Internet Censor to Start Regulating Blockchain Firms Next Month
https://www.coindesk.com/chinas-internet-censor-announces-rules-for-blockchain-providers
Tomi Engdahl says:
New Ethereum version postponed after discovery of serious security flaw
https://www.zdnet.com/article/new-ethereum-version-postponed-after-discovery-of-serious-security-flaw/#ftag=RSSbaffb68
Ethereum Constantinople Upgrade hits last minute snag that saves many users from catastrophic losses.
A major upgrade of the Ethereum blockchain has been postponed today by the Ethereum team after a security company found a vulnerability that could have allowed hackers to steal users’ funds.
Tomi Engdahl says:
Anna Irrera / Reuters:
Chainalysis: Bitcoin transactions on darknet markets rose throughout 2018 to an average of $2M/day, nearly double the activity measured at the start of the year — NEW YORK (Reuters) – Use of bitcoin as a form of payment doubled in 2018 on darknet market sites, where users can buy anything …
Daily bitcoin transactions on darknet markets doubled throughout 2018: report
https://www.reuters.com/article/us-crypto-currencies/daily-bitcoin-transactions-on-darknet-markets-doubled-throughout-2018-report-idUSKCN1PC1OE
Tomi Engdahl says:
Liz Alderman / New York Times:
Despite Bitcoin’s dive, thousands of Georgians have sold cars to buy computers to mine Bitcoin; ~10% of the country’s energy output goes into mining Bitcoin — Tax breaks, land deals and cheap energy have spurred cryptocurrency mining in Georgia, which wants to be a digital data leader.
Despite Bitcoin’s Dive, a Former Soviet Republic Is Still Betting Big on It
https://www.nytimes.com/2019/01/22/business/georgia-bitcoin-blockchain-bitfury.html
Tax breaks, land deals and cheap energy have spurred cryptocurrency mining in Georgia, which wants to be a digital data leader.
Tomi Engdahl says:
Yogita Khatri / CoinDesk:
The UK’s Financial Conduct Authority publishes draft guidelines on cryptoassets and how they fit within the UK’s current regulatory framework — The U.K.’s Financial Conduct Authority (FCA) has set out proposed guidance for how crypto assets should be regulated in the country.
UK Financial Watchdog Plans Oversight of Security Tokens, Some Stablecoins
https://www.coindesk.com/uk-financial-watchdog-plans-oversight-of-security-tokens-some-stablecoins
Tomi Engdahl says:
Liz Alderman / New York Times:
Despite Bitcoin’s dive, thousands of Georgians have sold cars to buy computers to mine Bitcoin; ~10% of the country’s energy output goes into mining Bitcoin
https://www.nytimes.com/2019/01/22/business/georgia-bitcoin-blockchain-bitfury.html
Tomi Engdahl says:
Monero: Cybercrime’s Top Choice for Mining Malware
https://threatpost.com/monero-cybercrime-mining-malware/141116/
Illicit Monero-mining malware accounts for more than 4 percent of the XMR in circulation, and has created $57 million in profits for the bad guys.
An academic analysis of cryptomining malware has determined that the Monero virtual currency (XMR) is “by far” the most popular cryptocurrency to mine among cybercriminals. And, it would appear that cryptomining as a criminal enterprise is unlikely to wane anytime soon.
After examining approximately 4.4 million malware samples (1 million of which turned out to be malicious miners) over a period of twelve years from 2007 to 2018, Sergio Pastrana of the Universidad Carlos III de Madrid and Guillermo Suarez-Tangil of King’s College London carried out a profit analysis that shows that criminals have mined more than 4.32 percent of the circulating XMR.
Tomi Engdahl says:
New ransomware strain is locking up Bitcoin mining rigs in China
https://www.zdnet.com/article/new-ransomware-strain-is-locking-up-bitcoin-mining-rigs-in-china/#ftag=RSSbaffb68
Ransomware threatens to overheat and destroy mining rigs if victims don’t infect 1,000 other devices or don’t pay a 10 Bitcoin ransom.
Tomi Engdahl says:
Lucas Mearian / Computerworld:
The Linux Foundation launches the Hyperledger Grid project to let developers create blockchain-based supply chain apps running atop the distributed ledger tech — The Linux Foundation’s blockchain initiative – Hyperledger Project – has created a set of developer tools to allow the creation …
Linux’s Hyperledger to give developers supply chain building blocks
https://www.computerworld.com/article/3336036/blockchain/linuxs-hyperledger-to-give-developers-supply-chain-building-blocks.html
Grid, a new project from the Linux Foundation, will offer developers tools to create supply chain-specific applications running atop distributed ledger technology.
Tomi Engdahl says:
Nikhilesh De / CoinDesk:
Coinbase partners with TurboTax, will allow its customers to upload their transactions, gains, and losses in 2018 to TurboTax Premier to help file crypto taxes
Coinbase Integrates TurboTax to Help US Clients File Crypto Taxes
https://www.coindesk.com/coinbase-integrates-turbotax-to-help-us-clients-file-crypto-taxes
Tomi Engdahl says:
https://www.tivi.fi/Kaikki_uutiset/suomalaisilta-huijattu-jopa-miljoonia-poliisi-varoittaa-helppoa-rahaa-kryptovaluutoilla-lupaavista-rikollisista-6756429
Tomi Engdahl says:
Miranda Karanfili / Cointelegraph:
BitTorrent completed its token sale on Tuesday on the Binance Launchpad platform, netting $7.1M in under 15 minutes with the sale of 50B tokens
BitTorrent Tokens Sold Out in Under 15 Minutes, Netting Over $7 Mln
https://cointelegraph.com/news/bittorrent-tokens-sold-out-in-under-15-minutes-netting-over-7-mln
The BitTorrent token (BTT) sale on the Binance Launchpad platform concluded today Jan. 28, netting $7.1 million dollars with the sale of 50 billion tokens in under 15 minutes
BitTorrent is a protocol for peer-to-peer file sharing, allowing users to distribute files such as music or videos over the internet.
BTT is based on a Tron TRC-10 token, and will be used on the platform to “transact in computing resources shared between BitTorrent clients and any other participating service requesters and service providers.”
Tomi Engdahl says:
Gemini Crypto Exchange Undergoes Security Compliance and Data Protection Audit
https://cointelegraph.com/news/gemini-crypto-exchange-undergoes-security-compliance-and-data-protection-audit
Gemini crypto exchange, founded by brothers Cameron and Tyler Winklevoss, completed a SOC 2 Type 1 security compliance review, according to a post made on their Medium blog on Jan 29.
An organization that undergoes a Service Organizational Control (SOC) 2 audit aims to ensure that it has met the service criteria set by the American Institute of Certified Public Accountants (AICPA). These criteria pertain to standards of confidentiality, security, privacy, processing integrity and availability.
Tomi Engdahl says:
Olga Kharif / Bloomberg:
Crypto funds have begun resembling VC funds more than hedge funds, following a tough year; Polychain Capital raises $175M for fund with a 7-year lockup period
Crypto Funds Morph Into Venture Capitalists Shunned in ICO Boom
https://www.bloomberg.com/news/articles/2019-01-30/crypto-funds-morph-into-venture-capitalists-shunned-in-ico-boom
As cryptocurrency prices continue to languish, hedge funds investing in digital assets are increasingly starting to look more like venture capitalists.
Polychain Capital, which reached more than $1 billion in assets right before the 2018 market crash, just raised $175 million for a fund with a seven-year lockup period
“There’s going to be a lot of opportunity in distressed buying and even activist investing,” said Jeff Dorman, partner and portfolio manager at Los Angeles-based Arca. “Often you can buy below even the cash value of the company.”
The line is being blurred in the wake of the collapse of the initial coin offering market, where startups were bypassing traditional venture funding by selling tokens directly to investors. But with a regulatory crackdown raising the risk of forced refunds, and with coin prices plunging as much as 90 percent last year, many investors want out — allowing the funds to come in and make purchases for cents on the dollar.
“Funds have silently transformed from hedge funds into venture funds as their liquid portfolios shrank in value, making a very high percentage of AUM illiquid,” said Kyle Samani, managing partner at Multicoin Capital Management in Austin, Texas. Multicoin has traditionally done venture deals in addition to investing in tokens, he said.
Tomi Engdahl says:
Christine Kim / CoinDesk:
“Wrapped Bitcoin” (WBTC), a joint initiative between BitGo and other partners, has launched its ERC-20 token that is backed one-to-one by a regular bitcoin
A Bitcoin-Backed Stablecoin Has Launched on the Ethereum Blockchain
https://www.coindesk.com/a-bitcoin-backed-stablecoin-has-launched-on-the-ethereum-blockchain
A new token backed one-to-one with bitcoin is now live on the ethereum blockchain.
“Wrapped BTC” (WBTC) officially launched its ERC-20 token Wednesday evening. The project was first unveiled in October as a joint initiative between decentralized exchange startups Kyber Network and Republic Protocol, as well as cryptocurrency custody company BitGo.
As stated on the project’s website, the aim of WBTC is to bring “greater liquidity to the ethereum ecosystem including decentralized exchanges and financial applications.”
Leveraging a technology known as “atomic swaps” to facilitate cross-chain cryptocurrency trades, users on ethereum can request WBTC from certified “merchants” after undergoing necessary anti-money-laundering and know-your-customer (AML/KYC) identification procedures.
Tomi Engdahl says:
Now That’s What I Call Crypto: 10 Years of The Best of Bitcoin
https://hackaday.com/2019/01/29/now-thats-what-i-call-crypto-10-years-of-the-best-of-bitcoin/
On January 3rd, 2009, the Genesis Block was created. This was the first entry on the Bitcoin blockchain. Because of the nature of Bitcoin, all transactions lead back to this block. This is where Bitcoin began, almost exactly ten years ago.
The entire idea of a blockchain is to record each and every transaction. That’s pretty much the only solution a blockchain solves, and that’s straight from the mouth of the National Institute of Standards and Technology. Because of this, we can trace Bitcoin back to the very beginning.
Tomi Engdahl says:
Frank Chaparro / The Block:
Binance now allows users to buy cryptocurrencies like bitcoin, ethereum, litecoin, and XRP with a credit or debit card
Binance opens the fiat floodgates, accepting credit card payments for crypto
https://www.theblockcrypto.com/2019/01/31/binance-opens-the-fiat-floodgates-accepting-credit-card-payments-for-crypto/
Tomi Engdahl says:
QuadrigaCX Owes Customers $190 Million, Court Filing Shows
https://www.coindesk.com/quadriga-creditor-protection-filing
Troubled Canadian crypto exchange QuadrigaCX owes its customers $190 million and cannot access most of the funds, according to a court filing obtained by CoinDesk.
“only a minimal amount of coins” were stored in the hot wallet
“The normal procedure was that [QuadrigaCX founder and CEO Gerald Cotten] would move the majority of the coins to cold storage as a way to protect the coins from hacking or other virtual theft.”
Cotten reportedly died of Crohn’s disease in Jaipur, India in early December 2018.
The founder seemingly had sole control or knowledge of Quadriga’s cold storage solution. Robertson wrote that after his death, “Quadriga’s inventory of cryptocurrency has become unavailable and some of it may be lost.”
Cotten’s laptop, the device is encrypted and she does not have its password or recovery key.
The exchange’s access to its fiat holdings have also been “severely compromised” by banking issues, the filing says.
the exchange is considering selling off its operating platform
Tomi Engdahl says:
Digital exchange loses $137 million as founder takes passwords to the grave
https://arstechnica.com/information-technology/2019/02/digital-exchange-loses-137-million-as-founder-takes-passwords-to-the-grave/?amp=1
A cryptocurrency exchange in Canada has lost control of at least $137 million of its customers’ assets following the sudden death of its founder, who was the only person known to have access the the offline wallet that stored the digital coins. British Columbia-based QuadrigaCX is unable to access most or all of another $53 million because it’s tied up in disputes with third parties.
QuadrigaCX stored the vast majority of its cryptocurrency holdings in a “cold wallet,” meaning a digital wallet that wasn’t connected to the Internet. The measure is designed to prevent hacks that regularly drain hot wallets of millions of dollars (Ars has reported on three such thefts here, here, and here.)
Thursday’s court filing, however, demonstrates that cold wallets are by no means a surefire way to secure digital coins. Robertson testified that Cotten stored the cold wallet on an encrypted laptop that only he could decrypt.
As of Thursday, the site had 115,000 customers with outstanding balances.
The debacle should be unthinkable for any financial institution, but sadly it’s just one of many similar issues to hit a cryptocurrency exchange in recent years. Attorney, educator, and lawyer Pamela Morgan penned an article in 2015 outlining the disaster preparedness steps cryptocurrency holders should take to ensure they can recover digital tokens when unexpected events strike.
Tomi Engdahl says:
Introducing the Helium Blockchain
https://blog.helium.com/introducing-the-helium-blockchain-dc2f8997083c
The challenges of a centralized trust model for IoT
Fast forward to today, and with the IoT, we’re trying to extend the Internet, with all its naive trust in the network, to tiny devices with little RAM and a very thin pipe back to the internet. The big problem of Internet security doesn’t fit well on a microcontroller.
One way of solving this is to introduce a trusted party that the devices look to for instructions and relay all their traffic through. By necessity these systems are a centralization point, everyone has to agree to use them, or they have to be federated. IoT’s track record on federation at this point is abysmal. Almost every IoT system to date requires customers to delegate trust to a service offered by the vendor. Additionally, in many of these systems, the gateway device (that bridges the wireless protocol and the internet protocol) also occupies a trusted position, or at least is not an open-access routing device (meaning it only works for devices using the same trusted party).
This is fine, but it’s not how the internet works. The internet, for all its flaws, is still a decentralized system. You can operate on the Internet with very little dependence on a trusted party.
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Andrew Thompson
May 10, 2018
The Internet we have today dates back a long, long time. Back in the days when the ARPANet was designed, which eventually became the Internet, there were only a handful of sites participating, mostly Universities. In those days, when the early services that underpin the internet like BGP, DNS, and SMTP were designed, the designers assumed that the operators of those services would operate in good faith. The community was small and everyone knew everyone else, or at least knew where to find them.
As the years passed, more and more people gained access to the Internet and the strong identity and responsibility around using and operating services began to erode. Today many critical internet services rely on simple access control to secure them from attack and much effort is expended in the resulting arms-race between people trying to profit from attacking the Internet and those trying to defend it.
The challenges of a centralized trust model for IoT
Fast forward to today, and with the IoT, we’re trying to extend the Internet, with all its naive trust in the network, to tiny devices with little RAM and a very thin pipe back to the internet. The big problem of Internet security doesn’t fit well on a microcontroller.
One way of solving this is to introduce a trusted party that the devices look to for instructions and relay all their traffic through. By necessity these systems are a centralization point, everyone has to agree to use them, or they have to be federated. IoT’s track record on federation at this point is abysmal. Almost every IoT system to date requires customers to delegate trust to a service offered by the vendor. Additionally, in many of these systems, the gateway device (that bridges the wireless protocol and the internet protocol) also occupies a trusted position, or at least is not an open-access routing device (meaning it only works for devices using the same trusted party).
This is fine, but it’s not how the internet works. The internet, for all its flaws, is still a decentralized system. You can operate on the Internet with very little dependence on a trusted party. Your laptop works fine at home on a Comcast Internet connection and it works fine when you hotspot with your AT&T phone. Your laptop doesn’t care, or need to care, how it’s connected to the internet. IoT devices today are not like this. They might speak the same wireless protocol (unlikely), but two products from two different vendors are very unlikely to interoperate. Additionally, if your neighbor has the same IoT device as you do, your device won’t use his gateway if the cat pulls the plug out of yours, nor vice versa. This is not an Internet of Things, it’s something else.
Rethinking the Internet of Things
Helium was founded with the idea that an internet of Things, that was publically accessible and ubiquitous, should exist as a public commodity. Unfortunately, even we fell into the trap of centralizing around a trusted party, namely ourselves. While we were never entirely comfortable with the idea, it was difficult envisioning how an alternative could work.
About a year ago, we had a deep re-think about what we were offering and how it differed from what we wanted to offer: a crowd-sourced network of open-access gateways that users could depend on and gateway operators could be rewarded for maintaining. We also wanted to let users operate their own infrastructure (or use ours, if they trusted us). How do you build a trustless IoT network, though?
At the time blockchains had come back into vogue and we had many joking discussions about merging blockchains and IoT. Finally, though, we had a really interesting insight; what if we could replace Bitcoin-style Proof-of-Work (PoW) with something useful and relevant to the IoT.
Fundamentally, Bitcoin-style proof of work is about defeating Sybil attacks.
This effectively means that Bitcoin and other proof-of-work style blockchains rely on the fundamental limits of computation (although our own technological limitations get in the way first) to construct an unforgable identity.
Defining the first blockchain proof-of-work for wireless
The challenge we posed ourselves is what does a equivalent to proof-of-work look like in the world of radio?
Initially we wanted to build a network around an ERC20 token
Writing secure smart contracts is still far from a solved problem and the stakes are high. Second, storage on the Ethereum blockchain is extremely expensive, so we’d have to store a lot of things off-chain, which defeats the purpose of building a decentralized system. Finally, Ethereum is slow, on the order of 5 to 7 transactions per second across the entire Ethereum network.
we’ve come up with a way to turn our gateway’s access to radio equipment and location into a proof of coverage suitable for use as an identity. Essentially Helium gateways assert their location (according to their GPS coordinate) and other Helium gateways routinely challenge these gateways to prove their location. Our next generation gateways contain a Software Defined Radio (SDR).
Over time, with enough successful responses to these challenges, the gateways can create a strong identity with an associated trust score that we can use to defeat Sybil attacks.
Because a gateway is anchored in space, and only a single gateway can occupy a point in space (we don’t allow two gateways to claim the same location), these identities are also unique.
it’s fine to have a ‘first seen block wins’ approach.
In Helium’s blockchain we rank the proofs in order of how much they tell us about the network and the trustworthiness of the reporter.
Another aspect we considered was to make certain kinds of transactions “free” — as in free of transaction fees. This is important if you want to account per-packet because not only do we want to keep a trace that the packet was sent on the blockchain (for proof of location/transmission of the transmitter), but we also want to enable a “pay as you go” settlement scheme, rather than a pre-pay or pay-in-arrears settlement scheme
Miners in a blockchain system are not your friend, they cooperate as long as it is in their interest to do so.
Choosing a hybrid consensus model for speed and scalability
Tomi Engdahl says:
Hackers may have just stolen $1 million from the Ethereum Classic blockchain in a “51%” attack
https://www.technologyreview.com/the-download/612728/hackers-just-stole-1-million-from-the-ethereum-classic-blockchain-in-a-rare-51/?utm_source=facebook&utm_campaign=site_visitor.unpaid.engagement&utm_medium=tr_social
Tomi Engdahl says:
$145 million funds frozen after death of cryptocurrency exchange admin
https://www.zdnet.com/article/145-million-funds-frozen-after-death-of-cryptocurrency-exchange-admin/
Highly unlikely that the exchange and its users will ever get access to these funds ever again.