Bitcoin

Has bitcoin found its identity as an asset class?

Last month, bitcoin briefly decorrelated from tech stocks. While benchmark stock indexes cratered, bitcoin firmly held its ground. In September, the S&P 500 and Nasdaq were down 10% and 12%, and bitcoin barely budged (until this week).

Whats going on here?

Your guess is as good as mine because, unlike other asset classes, bitcoin doesn't have much of a valuation benchmark.

After all, we cant value it as a currency (or a medium of exchange). There is very little, if anything, we can buy with it without the involvement of a fiat currency. And despite its long correlation with tech equities, we cant value it as a stock either. It doesnt generate earnings, nor does it pay a dividend.

So what is it then and how can we put a price tag on such an asset, if any?

A decentralized fairytale

A decentralized currency is a lovely democratic idea, and you can discuss its merits against fiat currencies day and night. But the hard truth is, no government, however democratic, will give away its control over legal tender.

You dont have to look far back to see what they are capable of.

Take gold. Its the worlds oldest currency that is still used to date. Even after fiat currencies replaced it, its one of the vital reserve assets of central banks and by far the most popular alternative asset class.

And yet, any time gold threatened to strip the government of its power to control money, lawmakers quickly stepped in.

A good example is the U.S. during the Great Depression. In 1931, the nation was in the heat of the worst financial crisis in history. But unlike today, the Feds hands were mostly tied.

It couldnt print that many dollars to prop up the economy because the currency was linked to gold. So Franklin Roosevelt passed Executive Order 6102, later dubbed the Great Confiscation,which forced Americans to turn in their gold at well below market rates.

This allowed the Fed to print more dollars to support the economy and shore up the exchange rate. Later the dollar was re-pegged to gold at a ~50% higher price.

And the U.S. is not alone. In the 1950s and 60s, Australia and the UK carried out similar gold confiscations to stop the decline in their currencies.

Banning bitcoin at this point would be a political walk in the park compared to the Great Confiscation and other measures governments have taken in the past. So we have to get realistic here.

Unless theres some kind of political cataclysm that shreds the world order as we know it to pieces, bitcoins chances as a currency are very slim. If it grows too big to compete with paper money, lawmakers will eat it alive.

But the fact that bitcoin cant become a currency doesnt necessarily mean bitcoin is worthless.

Bitcoin BTC doesnt compete with paper money. It competes with insurance against paper money

From an investment and ideological standpoint, bitcoin is more like a commodity than a currency. More precisely, goldone of the most expensive and useless commodities in the world.

Unlike other commodities like oil, gold has limited use. For example, ~3,000 tons of gold were dug up and sold last year. And of that amount, just 35% went into electronics and jewelry. The rest was melted into bars and coins and stowed away in vaults

Nor is gold legal tender. You cant walk into Pizza Hut, drop a sliver of gold on the counter, and expect to get a slice of pizza in return. And yet, central banks hold 34,000 tons of the shiny, yellow bullion bars in their reserves. Institutional and individual investors have sunk ~$2.7 trillion into gold. And every year, gold holdings keep growing and growing.

Thats because gold has just one job: sit tight in a vault and hold its value. And it does that job very well.

In fact, gold has outlived every modern currency ever created. And for thousands of years, it has successfully fought off inflation and even gone up in value.

In other words, gold is the insurance against everything that can go wrong with paper money. Inflation, devaluation, and whatnot. Or, as my ex-colleague Jared Dillian puts it: Gold is a hedge against bad government decisions.''

In form, bitcoin is probably the furthest thing from gold you can think of. But as asset classes, the two are very much alike. Like gold, bitcoin has little utility. Its supply is limitednot by nature but by design. And its value purely depends on supply and demand rather than centralized monetary policy.

Can bitcoin beat golds track record?

For a store of value, gold has a hell of a credential.

By ancient sources, it has held its value against inflation for over 5,000 years. (As a rule, an ounce of gold has always been worth as much as a decent suit. If you dont believe it, look it up for yourself.)

The catch is, if held directlywhich makes the most sense for its purposegold is expensive to store/trade and illiquid. Plus holding metal slivers in a vault these days is a bit archaic.

This is where bitcoin comes in

Technically, it has it all to replace gold as a more convenient store of value.

Yes, its digital but it has a built-in incentive system that makes it scarce. It employs a distributed ledger, which means anybody can mine or use it without centralized oversight like gold. And its monetary policy, which is largely deflationary, is dictated by the people who use it.

Its weak spot is that its still on a roller coaster. And for a store of value, 13 years and one recession are just baby steps compared to golds track record.

So the question crypto investors should be asking isnt Will bitcoin replace the dollar? but rather Will crypto convince institutional investors to swap their gold with bitcoin as part of their 5%-something allocation in the portfolio?

Is bitcoin maturing into a store of value?

Bitcoin has come a long, long way and deserves credit no matter where you stand in the crypto debate.

Just a few years ago, it was just this fringe asset that institutional investors laughed off as nerds play money. Warren Buffet famously trashed it as rat poison squared. But during Covid, investors have come around. They began to recognize bitcoin as a legit alternative to traditional asset classes, one that deserves a place in the portfolio.

Last year was more talk, but this year weve seen see some real action.

This past April, Fidelity became the first asset manager to offer bitcoin in 401(k) plans. And later, the Wall Street Journal reported rumors that Fidelity is seriously considering adding bitcoin trading to its 34 million brokerage accounts.

Then, in August, Americas largest crypto exchange, Coinbase, formed a partnership with BlackRock BLK the biggest asset manager in the worldto bring bitcoin to institutional investors at scale.

In short, Coinbase will provide Blackrocks Aladdin clients with direct access to bitcoin. For the first time, most institutional investors will be able to hold, trade, and broker the actual cryptocurrency instead of derivative instruments.

Aladdin is Blackrock's flagship asset management platform that serves as a dashboard for some of the biggest fund managers in the world. As of 2020, it administered a crazy $21.6 trillion, which comes to around 7% of all assets in the world.

Of course, we have to be careful about jumping to conclusions from such moves.

For one, adopting crypto has become sort of a marketing/PR gimmick because it earns a lot of free media and can acquire a ton of diehard customers from the crypto community.

A good example is MicroStrategy MSTR . In August 2020, this business intelligence company made a splash by becoming the first public company to plow as much as $200 million into bitcoin and adopting it as a reserve asset.

When the news broke, the obscure Nasdaq company became the talk of the town and jumped ten-fold in a few short months. And despite losing money for three quarters, it attracted $4 billion in capital.

All at the expense of spending $200 million on bitcoin.

(Im not saying MicroStrategy did it on purpose, Im just showing the ROI of using crypto as a PR move. Controversy alert!: Who do I think did it on purpose? Musk. Yes, hes an eccentric nerd who at first might have trolled around for fun. But part of me thinks it later became a conscious strategy to build a retail fan base that can shore up Tesla stock at insane valuations. If he was so serious about making a change, he would have spent more time advocating something of utility like bitcoin or ethereum rather than shitcoins.)

We have to be even more careful celebrating bitcoin adoption by Wall Street because the sell-side doesnt invest and make money from asset appreciation. They are market makers who earn money from trade commissions. All they care about is volume, and if theres demand for an asset, theyll do everything in their power to fill it.

So just because Wall Street lets its clients trade bitcoin doesn't necessarily mean it has much conviction in it.

What does bitcoins price action say?

Another way to proxy the market's collective opinion of bitcoin is to look at its correlations.

Until Covid, bitcoin prices were all over the place. It was this weird, nerdy thing that a lot of people didn't get it, and crypto didnt correlate much with anything. But then the pandemic hit, and bitcoin found its new identity.

All of a sudden bitcoin became a mainstream technology play and began moving in tandem with the Nasdaq. That correlation steadily grew for most of the pandemic. And at one point in 2020, it hit 0.8where 1 means that assets move in perfect sync. For perspective, very few asset classes and sectors have such a strong correlation.

Which means one thing.

The market didnt buy bitcoin for its original promise. It wasnt a hedge against fiat devaluation or the end of traditional finance. Instead, it was a highly speculative, risk-on investment.

In fact, bitcoins biggest run-up began in late 2020, only when Fed dollars sparked a speculative boom and it became clear there was a lot of money to be made from risky bets. Compare that to gold, which had already peaked at $2,000 by July.

But now, at least briefly, bitcoin went its own way.

From Sep 29 Meanwhile in Markets issue:

In the past week, all major stock benchmarks were deep in the red. The S&P 500 cratered to 3,600 and hit the lowest level since Dec 2020. And both the Nasdaq and Dow were down some 5%.

Meanwhile, crypto has unexpectedly lunged in the opposite direction. In the same span, bitcoin jumped 6%, ethereum is up 4%, and many major altcoins scored near double-digit gains.

This decoupling came as a big surprise because for much of 2022 crypto moved in tandem with stocks.

One plausible explanation is that bitcoin has gained a critical mass of HODLers who are ready to hold it no matter what. Such devotion is reminiscent of gold bugs for whom gold is more a political statement than an investmentwhich means bitcoin may indeed fulfill golds anti-establishment appeal.

From Sep 29 Meanwhile in Markets issue:

In a recent note, Bitnex wrote that their data shows the anomalous rise of bitcoin HODLers despite the bear market: The number of HODLers in the top 5 categories (up to 0.1 BTC) has grown under bearish market conditions since April 2022, which is anomalous to previous bear market data. This is even more testament to retail investors and crypto adoption growing even when the macro conditions face headwinds.

Glassnodes on-chain analysis confirms that HODLing is at record levels and has a profound effect on bitcoin prices: The cohort of investors with older coins remain steadfast, refusing to spend and exit their position at any meaningful scale with mature spending severely muted, the degree of HODLing behavior is historically high.

Of course, bitcoins decorrelation with stocks lasted for just a month and broke this week when bitcoin sank with stocks after hotter-than-expected inflation. So its way too early to jump to any conclusions.

Just out of curiosity, what would happen if bitcoin proved itself as a mainstream store of value?

It was estimated that private investments in gold (excluding central bank reserves) amounted to over $2.3 trillion last year. If bitcoin captured just half of this store of value market, it would alone quadruple its market cap.

That would send bitcoin to near a seven-figure mark, but then the question is

Do we need bitcoin as a store of value?

If bitcoin doesnt get much more than a store of valuethat is, it doesnt have much utility as a medium of exchange or any other application apart from storing valueit, in effect, invalidates its own digital superiority to gold.

In that case, does gold really need a replacement? A digital thing that sits in a vault anyway.

Im not saying no, but itd be interesting to take a pragmatic look at bitcoin and gold sheerly as stores of value from different points of viewincluding economics, sustainability, and ethics. But thats for another day.

Stay ahead of the market trends with Meanwhile in Markets

Every day, I put out a story that explains whats driving the markets. Subscribe here to get my analysis and stock picks in your inbox.

Read the original:
Do We Need Bitcoin For What It's Become? - Forbes

Bitcoin, which once reigned at $67,000, is struggling to even close above $20,000 successfully today. The fall of the crypto market has left investors yearning for an exit, but the global markets bearishness is keeping the crypto market subdued as well.

Following the failed recovery back in September, Bitcoin is back at the lows that might support a bullish bias.

According to the Net Unrealized Profit/Loss (NUPL) ratio, Bitcoin is cushy in the capitulation zone, which it entered for the second time this year alone. The crash of June was the first time that BTC visited these lows, and it recently went back down in August after BTC fell from $23,000 to $19,000.

This year stands to be one of the most disappointing years for the crypto market in terms of profits. Not only is this Bitcoins second capitulation this year, but the sixth in its entire 12-year history.

Bitcoin NUPL

Usually, this low is a sign of trend reversal, but that is no longer a certainty given Bitcoins growing correlation with the broader markets. As of last month, the correlation shared between BTCs price and the S&P 500 index stood at 0.59, and the same with NASDAQ reached 0.62.

Furthermore, Trading at $19,200 at the time of writing, BTC has seen no change in its price in over a month due to the lack of bullish cues. Treading just above the critical support line of $18,600, BTC is still under the 50-day Simple Moving Average (SMA) as well as the 100-day SMA.

Bitcoin 24-hour price chart

It is cues as such that evince just how much longer investors will have to wait in order to regain their profits.

The one cohort that can certainly make the most even of this situation is the long-term holders (LTH). According to the Reverse Risk, this cohort is just below the ideal zone of accumulation that has been the indicators home for almost the entire year.

Bitcoin Reverse Risk

During periods of high confidence and low price, BTC presents an attractive risk/reward to invest, which LTH can benefit from, provided there is a potential for recovery. As mentioned above, this could take time but since the average time a Bitcoin is held by LTHs is at three years, they might just end up accumulating.

See more here:
Bitcoin becomes this cohorts target after capitulating for the sixth time in history - FXStreet

Hold Bitcoin till the very end or sell a little bit to start a family? For one Bitcoiner in northwest London, it was a no-brainer.

Noodle (a nickname), a Brit who first heard about Bitcoin around 2012, took profits on his Bitcoin buys to pay for in vitro fertilization (IVF) treatment for his wife. He told Cointelegraph he has no regrets, about his decision to start a family using fiat-denominated profits from buying, holding, a then selling Bitcoin.

Noodle first found out about Bitcoin at the tail end of 2012, when 1 BTC was worth roughly $13.

The now-defunct marketplace Silk Roadwas a place where early Bitcoin users could buy and sell pretty much anything using Bitcoin as the in-house currency. At the time, Noodle didnt necessarily dismiss Bitcoin despite his gym buddy's recommendation, but it passed him by until a close friend explained how to buy cannabis with Bitcoin on the Silk Road.

Once his close mate had explained that they might be able to use the Bitcoin to buy real-world items, Noodle was convinced:

The price of Bitcoin has since risen almost 400x higher, to a $20,000 bear market value in 2022. For Noodle in 2013, he explained it was actually quite difficult to obtain Bitcoin it was a really convoluted process. However, he persevered and managed to obtain Bitcoin to buy goods. Unknowingly, Noodle had alsotripped down the rabbit holeand his Bitcoin journey had just begun.

For Noodle, Bitcoin opened his eyes to finance, education and a whole world of new information. From fractional reserve banking tothe Federal Reservetocurrency debasement and how money works, Noodle was hooked. Naturally, Noodles wife with whom hed been since 2008, was exposed to Noodles newfound passion.

The passion eventually rubbed off as in 2014, Noodles wife took some of the newly married couples wedding money to buy Bitcoin. Noodle jokes, And who would know [...] that that Bitcoin would then go on to effectively fund IVF which is not fuking cheap!

The Noodle family had always planned to have kids. Sadly, due to the medical condition of his wide, conceiving was a challenge. They sought medical advice and soon realized that they may have to undergo fertility treatment:

IVF is a fertility technique in which an egg is removed from the woman's ovaries and fertilized with sperm in a laboratory. The fertilized egg is returned to the woman's womb to grow and develop.

The process is time-consuming, expensive and has a success rate of 4% to 38% depending on various factors. Plus, as Noodle alluded to, there is still a stigma attached to IVF treatment, despite being a regular occurrence in Noodles home country, the United Kingdom.Noodle continued:

So Noodle sold some Bitcoin. In sum, Noodle converted north of $70,000 in Bitcoin into government-issued poundsover the course of a few years. The fiat-denominated profits paid for several rounds of IVF treatment for both of his children leading to two healthy babies.

Without Bitcoin, Noodle explained he would have likely taken out a loan to pay for the treatment: Family is important to me, and I would have thrown anything and everything at it in order to try and make it work. But we were very fortunate that we had some Bitcoin, and I didn't sell it for a long time.

Related: The UK 'Bitcoin Adventure' shows BTC is a family affair

With Bitcoin, Noodle and his wife were able to live their dream of starting a family, but debt free. As for whether or not there might be any more Bitcoin baby Noodles running around northwest London soon, Noodle joked, I think we're done with two kids unless the price goes super crazy!

Noodles story is part of an upcoming crypto story on Cointelegraphs YouTube channel. Subscribe here.

Read the original here:
To HODL or have kids? The IVF Bitcoin Babies paid for with BTC profits - Cointelegraph

Nonfungible token (NFT) trading volumes may have dropped nearly 98% since January, but several industry executives tell Cointelegraph that its nothing to fear as the technology continues to develop and mature.

Jonathon Miller, managing director of cryptocurrency exchange Kraken in Australia, said despite NFT market activity and sales volume having slowed down in September, we are still seeing positive adoption signals at an institutional level and continued growth in use cases.

He told Cointelegraph that the company remains bullish on the NFT space and believes it will be just as disruptive and innovative as Bitcoin was 10 years ago. Moreover, he said he was particularly intrigued by JPMorgan signing a lease using the technology as well as hearing the news that the Vatican has opened an NFT gallery.

He, however, acknowledged that the NFT industry is still in its infancy and that the biggest barrier to mass adoption is nightmare user experiences, saying that it is very hard to say to someone who wants digital art, that you have to install a wallet and you have to onboard with that exchange.

The Kraken executive said it has been a priority for them to make that process smoother.

John Stefanidis, CEO and founder of NFT gaming platform Balthazar DAO, told Cointelegraph that the trading downfall is not significant in the grand scheme of NFTs as people need to understand that NFTs are more than just photos.

Stefanidis said its natural for this decline to happen after something has experienced extreme growth under one application.

He believes this has the potential to stabilize the market more, saying that whenever there is horizontal growth, people diversify and pull back, and were going to see a more gradual growth in NFTs.

Related Reading: Web3 gaming still a long way from mainstream adoption: Survey

Mason Edwards, chief commercial officer of Tezos Foundation an organization focused on promoting and developing the Tezos blockchain and related technologies told Cointelegraph that its beneficial the market has shaken out a bit, people will buy things they care about, rather than speculation, noting:

Go here to read the rest:
NFTs will be as disruptive as Bitcoin was 10 years ago Kraken exec - Cointelegraph

Ethereums transition to Proof-of-Stake has sparked the debate if Bitcoin should follow Ethereums footsteps or stick to Proof-of-Work.

The Merge upgrade transited Ethereum to the Proof-of-Stake consensus mechanism on Sep 15. It reduced the energy consumption of Ethereum by 99.95%

According to a Cambridge University study, Bitcoin uses 108.4 TWh per year, which is more power usage than the entire country of Pakistan or Kazakhstan. Bitcoins Proof-of-Work (PoW) mechanism is energy intensive because it uses high-powered computers to validate the transactions on the blockchain. The high energy usage of Bitcoin has raised concerns about the environment.

According to Alex De Vries, founder of Digiconomist, if Bitcoin uses PoS, it can probably get away with using 10,000X less power than PoW. Charles Hoskinson, the co-founder of Cardano, believes that PoS can actually work for Bitcoin.

Post-merge, Ethereum is now more centralized because five major entities dominate the blockchain. Staking solution Lido Finance controls more than 30% of staked ETH. The crypto Twitter believes that PoS will turn out to be worse for Ethereum in the long run. The PoS will just make Ethereum more censored and centralized.

Jack Mallers, the founder and CEO of Strike, believes that:

Proof of Work is like, We finally got an airplane to fly, and Proof of Stake is like, We know how to make it cheaper, faster, and less carbon efficient just by not flying.

Among Bitcoin and PoW supporters, there is a widespread belief that Bitcoins Proof-of-Work is a feature, not a bug.

The community widely believes that Bitcoin holds value because miners are spread worldwide. The nodes are not centralized, with few entities alone.

Got something to say on whether Bitcoin should adopt Proo-of-Stake or anything else. Write to us or join the discussion on our Telegram channel. You can also catch us on Tik Tok, Facebook, or Twitter.

For Be[In]Cryptos latest Bitcoin (BTC) analysis, click here

DisclaimerAll the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Here is the original post:
Should Bitcoin Follow Ethereum and Adopt Proof-of-Stake? - BeInCrypto

The below is a direct excerpt of Marty's Bent Issue #1272: "De-banking as an attack on speech." Sign up for the newsletter here.

On October 12, Candace Owens made the world aware of the fact that Ye West, more commonly known as Kanye West, had his corporate bank account shut down by JPMorgan Chase. This move is seemingly a reaction to comments Ye made over the weekend on social media. I have to concur with what Owens says in the second tweet above. I do not care what you think about Ye, but I do care about what you think of one of the largest banks in the world abruptly rug-pulling his multibillion-dollar companys bank account.

This all comes on the heels of PayPal attempting to implement a $2,500 fine on any users it deems to be exhibiting wrongthink. PayPal was forced to quickly detract their policy and pretend like it was an accident after they felt the wrath of their customer base calling out the insanity of a fintech company attempting to dictate what is and isnt acceptable speech. Zooming out from the particular saga with Ye and what he said, I think its important to identify the accelerating trend of incumbent companies, with insane amounts of entrenchment and influence across the banking and payments sectors, attempting to pick and choose who can and cannot receive, hold and send money within their hyper-surveilled systems based on political or personal beliefs.

Like it or not, freedom of speech is a cornerstone of the republic here in the United States. Actions like the one made by JPMorgan Chase against Ye and attempted by PayPal before they were forced to save face are an encroachment on freedom of speech. Obviously, JPMorgan Chase and PayPal didnt prevent Ye or PayPal customers from speaking their minds. However, moves like this attack free speech in a more insidious fashion by incentivizing self-censorship by individuals who become afraid to speak their minds because they do not want to be deplatformed and demonetized by the technocratic goliath they have become dependent on to operate throughout the economy on behalf of their businesses and themselves.

This type of control is exactly what the incumbent power structure wants. Trying to eliminate free speech via the political process is an idea that is dead on arrival here in the U.S. Those in power do not want dissent propagating throughout the populace. Those same people are far more protected from the political backlash that would come with trying to legislate what can and cannot be said. The last few years have taught us that this is exactly the playbook the entrenched power structure is running in order to get what they want. This was made abundantly clear when people who exhibited perceived wrongthink during COVID-19 lockdowns and the ensuing vaccine rollout were deplatformed and demonetized across the web.

Thanks to Alex Berenson suing Twitter after being kicked off the platform, we have cold, hard evidence that the White House was actively pressuring those in charge of the bird app to kick him off the platform because he was delivering facts that went against the controlled narrative they wanted the public to believe. Again, whether or not you agree with Ye, Berenson or any of the potential PayPal users who may have said things in opposition to the majority, you would have to be an absolute moron to not view this trend as a direct assault on freedom of speech. Do you really want the people who are so obviously completely detached from reality who sit at the top of the power structure in this country dictating to you what is and isnt reality?

What has become abundantly clear over the last few years is that the systems that exist today need to be completely abandoned in favor of systems that make it impossible for the people who told you we needed two weeks to flatten the curve, and Iraq is harboring weapons of mass destruction, and this vaccine is safe, effective and will prevent spread, and crack cocaine should be prosecuted differently than powdered cocaine, (among many other falsehoods) to have control over any essential part of speech and the movement of money. In the realm of money how people hold it, how they receive it and how they send it Bitcoin is the new system that is being built to prevent the power structure from nudging us into a future built on self-censorship as a means of self-preservation.

If JPMorgan Chases actions against Ye and PayPals attempted actions against their user base mean anything, it is that bitcoin provides an extreme amount of value to a human race in desperate need of a solution to this growing problem. Bitcoins value is driven by the utility provided by its distributed peer-to-peer nature and the fact that any individual who is so motivated can take complete control over their money: How they receive it, how they hold it and how they send it. I hope this message reaches Ye and he thinks seriously about ditching a banking system that has abandoned him in favor of a distributed system that will have no idea who he is or what he has said. It only knows whether or not he possesses valid UTXOs and the private keys necessary to move them throughout the timechain.

Visit link:
Why Kanye West And Other Free Speech Advocates Need Bitcoin - Bitcoin Magazine

This week's news is action-packed, with police tricking ransomware into releasing keys to victims calling ransomware operations liars.

The most interesting news this week is about the Dutch Police and Responders.NU working some trickery on the DeadBolt Ransomware operation that caused them to fork over 155 decryption keys for victims.

Other interesting research includes fake adult sites pushing data wipers, TTPs on Black Basta, info on a new Prestige Ransomware targeting Ukraine and Poland, and Magniber ransomware being installed via JavaScript files.

We also learned some information about some attacks that were made public recently.

Healthcare org CommonSpirit admitted this week that they suffered a ransomware attack. However, ADATA denies they suffered a recent attack by RansomHouse and says the data is being recirculated from a 2021 breach by RagnarLocker.

Contributors and those who provided new ransomware information and stories this week include: @struppigel, @VK_Intel, @serghei, @BleepinComputer, @billtoulas, @LawrenceAbrams, @malwareforme, @demonslay335, @FourOctets, @jorntvdw, @PolarToffee, @Ionut_Ilascu, @Seifreed, @fwosar, @malwrhunterteam, @DanielGallagher, @AuCyble, @UID_, @linuxct,@MsftSecIntel, @ahnlab, @Amermelsad, @TrendMicro, and @pcrisk.

Taiwanese chip maker ADATA denies claims of a RansomHouse cyberattack after the threat actors began posting stolen files on their data leak site.

Malicious adult websites push fake ransomware which, in reality, acts as a wiper that quietly tries to delete almost all of the data on your device.

PCrisk found a VoidCrypt variant that appends the .solo extension and drops a ransom note named unlock-info.txt.

PCrisk found a new Dharma variant that appends the .dkey extension to encrypted files.

Microsoft is investigating reports of a new zero-day bug abused to hack Exchange servers which were later used to launch Lockbit ransomware attacks.

For years, Bittrexs AML program and SAR reporting failures unnecessarily exposed the U.S. financial system to threat actors, said FinCEN Acting Director Himamauli Das. Bittrexs failures created exposure to high-risk counterparties including sanctioned jurisdictions, darknet markets, and ransomware attackers. Virtual asset service providers are on notice that they must implement robust risk-based compliance programs and meet their BSA reporting requirements. FinCEN will not hesitate to act when it identifies willful violations of the BSA.

As previously shared, upon discovering the ransomware attack, we took immediate steps to protect our systems, contain the incident, begin an investigation, and ensure continuity of care. Our facilities are following existing protocols for system outages, which includes taking certain systems offline, such as electronic health records. In addition, we are taking steps to mitigate the disruption and maintain continuity of care. To further assist and support our team in the investigation and response process, we engaged leading cybersecurity specialists and notified law enforcement.

We analyzed a QAKBOT-related case leading to a Brute Ratel C4 and Cobalt Strike payload that can be attributed to the threat actors behind the Black Basta ransomware.

PCrisk found new STOP ransomware variants that append the .powz and .pohj extensions.

A recent malicious campaign delivering Magniber ransomware has been targeting Windows home users with fake security updates.

PCrisk found a new Dharma variant that appends the .CYBER extension to encrypted files and drops a ransom note named CYBER.txt.

Microsoft says new Prestige ransomware is being used to target transportation and logistics organizations in Ukraine and Poland in ongoing attacks.

The Dutch National Police, in collaboration with cybersecurity firm Responders.NU, obtained 155 decryption keys from the DeadBolt ransomware gang by faking ransom payments.

In this report, we will provide our analysis of Ransom Cartel ransomware, as well as our assessment of the possible connections between REvil and Ransom Cartel ransomware.

For example, after the RCMP seized cryptocurency held by Canadian Sebastien Vachon-Desjardins, an affiliate of the Netwalker ransomware gang, it tried returning the funds to Canadian victims. Some organizations refused to acknowledge being hit, she said.

See the rest here:
The Week in Ransomware - October 14th 2022 - Bitcoin Trickery - BleepingComputer

This is an opinion editorial by Ariel Deschapell, co-founder of multi-cloud hosting platform Hydra Host, senior fellow at Lincoln Network and a team member at BIPBounty.org.

The idea that Bitcoin lacks innovation compared to other cryptocurrencies is pervasive, but is it true?

The Bitcoin protocol undergoes significant changes much more slowly than other cryptocurrencies, the latest, of course, being the implementation and activation of Taproot. But this is a feature, not a bug.

As the foundation of a massive open-source ecosystem, changes should be well thought out and should consistently demonstrate widespread consensus that the benefits of the change outweigh costs. While true and generally accepted, this line of thinking can also be a cop out. Its important to recognize the necessity of consensus, but we must think deeply about what consensus means, how it is achieved and how we could potentially improve upon how it happens.

Overall, the idea that slow development is a better pattern is simply an awful heuristic and a false dichotomy. The options available to the Bitcoin communitys protocol development are infinitely more varied and nuanced than simply slow or fast. Careful, comprehensive, deliberate, inclusive; all of these adjectives do a much better job of describing what the Bitcoin community should actually aim to facilitate. This explicit wording is important, for whatever values we subscribe to will be used to judge initiatives and efforts, and the only aspiring ideal worse than slow is likely fast.

The simple passage of time does nothing on its own to ensure a Bitcoin Improvement Proposal (BIP) receives more eyeballs, reviews, serious consideration or engagement. It also does nothing to ensure that the developer community is focusing its finite efforts and attention on the right areas.

If we seek to defend innovation in the Bitcoin community, the easiest way to do so would be to point at the truly expansive body of continuous research and development in the bitcoin-dev mailing group and other forums of technical information exchange. It is undeniable that Bitcoin boasts a huge mindshare of world-class programmers, cryptographers, mathematicians, economists and more. These individuals continue to wrestle with pivotal problems, such as implementing greater degrees of privacy, and scaling the greater Bitcoin network to global throughput without losing the very characteristics that make it Bitcoin.

This community is delightfully and intentionally unstructured and informal. There exists no standardized process by which any idea or proposal graduates to becoming included in Bitcoin. The only way for a proposal to reach eventual inclusion is to receive the extensive attention, support and subsequent work from the community required to do so. From the research and analysis required to convince the community that the benefits significantly outweigh the costs, to the breakdowns and communication necessary to motivate the wider ecosystem to upgrade software and prepare use cases, to the actual work of finalizing and implementing the code itself.

Maintaining and supercharging this process is essential, and while it will always be slower than a standardized and formalized system in a relative sense, there is always room for improvement to make it happen more effectively on its own terms.

The knee-jerk impulse to fight against any assertion that the Bitcoin development process is not ideal, or that it can benefit from improvement, is usually based on the implicit assumption that any effort to improve it necessarily means adding more centralization and control. However, this is far from true. Just as the Lightning Network debunked the claim that increasing transacting scalability necessitated increasing the block size.

Similarly, BIP bounties are an attempt at improving the incentives driving Bitcoin development and consensus building. Administered by the Lincoln Network, a nonprofit organization focused on fostering technologies that support human liberty, BIPBounty.org collects donations to fund standardized bounties earmarked for specific BIPs. Although it only lists one bounty at the moment, this structure is designed to accomplish the following:

BIPBounty.org sprang out as a concept from the BIP119 controversy. In December 2021, the BIPs author, Jeremy Rubin, placed a bug bounty on his own BIP via Twitter.

Very quickly, other supporters of the BIP threw in their hats and offered their own complimentary bounties. The total bounty amount quickly snowballed. That this happened completely spontaneously and organically was a tremendous sign of pent-up community willingness and demand to dedicate financial resources to move the ball forward on discourse and consensus.

Naturally, BIPBounty.org has begun with the BIP119 bounties, but as a project it has no aims in regards to any specific BIP. Its goal is to encompass all BIPs and allow the Bitcoin community itself to decide which proposals are of greater interest and worthy of their tax deductible contributions.

BIPBounty.org is new and is attempting to tackle an ambitious problem. The hypothesis by which we will evaluate our efforts is that there is community interest for such an endeavor beyond a one-time interest in the context of a single BIP. By enabling that, we can sustainably accelerate research and development deliverables and discourse across BIPs.

All of this requires community buy-in and engagement. And most crucial at this early stage is feedback. To that end, we at Lincoln Network hope that the best and brightest of the Bitcoin community will continue to engage with us and help us in our efforts to drive effective, collaborative and sustainable Bitcoin development.

This is a guest post by Ariel Deschapell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

More:
How BIP Bounties Will Supercharge The Bitcoin Network - Bitcoin Magazine

Employees work on bitcoin mining computers at Bitminer Factory in Florence, Italy.

Alessandro Bianchi | Reuters

Software used in bitcoin mining just got its first upgrade since late 2012, and a coalition of companies including payments giant Block (formerly Square) is trying to help push the open-source protocol forward to become an industry standard.

The move could help open bitcoin mining to more participants by supporting lower-quality internet connections, as well as improving security so miners get properly compensated for their work.

Bitcoin operates on a proof-of-work mining model, meaning that miners around the world run high-powered computers to create new bitcoin and validate transactions. Mining requires professional-grade equipment, some technical know-how, a lot of electricity and a special kind of software.

Rather than directly accessing the bitcoin protocol, the vast majority of miners today work through an intermediary protocol called Stratum, which facilitates communication between the bitcoin network, miners, and the mining pools that combine the hashing power of thousands of miners all over the world.

Miners use Stratum to submit their work and to collect a reward if they successfully complete a new block of transactions.

On Tuesday, a coalition of bitcoin developers is releasing version 2 of Stratum under an open-source license for the mining industry to evaluate and test.

It will take some work to convince the mining industry to adopt the new protocol, so Spiral a subsidiary of Jack Dorsey's payments companyBlock(formerly Square) is teaming up with bitcoin mining company Braiins to launch a group to test and fine-tune the open-source software before they push mass adoption.

Steve Lee, the lead at Spiral, tells CNBC there are several significant benefits to the upgrade, including cutting down on the use of data.

Currently, it is common for each mining rig in a large farm to directly connect to a pool. This setup wastes a lot of energy. Lee says that Stratum V2 supports a proxy that aggregates all the connections and only establishes one connection with the pool.

The process of sending that data is also changing to a more efficient method.

"All told, much less data needs to be transmitted between miners and pools, and this could help miners in remote regions of the world with poor internet," noted Lee.

The upgrade is designed to improve security, as well. Today, it is possible to steal hash rate from a miner, which can lead to some miners losing money. Hash rate is a term for the collective computing power of the bitcoin network. To resolve this, Lee says Stratum V2 introduces a standard security mechanism with authentication and encryption between miners and pools.

The version being released Tuesday is for initial testing, and in early November, a more robust version will come out that supports additional functionality, including job negotiation a "feature that represents a historic shift in the censorship-resistant mechanics of bitcoin mining by replacing a pools responsibility of assigning work to miners with the ability for miners to select their own work," according to a joint statement released by Spiral and Braiins.

There are orders of magnitude more miners than pools, so if miners select transactions it is far more decentralized than just a handful of pools, Lee explained.

"Working for industrywide adoption of the upgraded Stratum protocol is one of the most important developments in improving the decentralization and censorship resistance of bitcoins architecture," Lee said.

As for timing, the pilot and integration testing will happen this fall, and next year, the upgraded protocol will likely see greater adoption once miners and pools are confident it is working well.

"I'd anticipate a gradual increase in hash rate in 2023," Lee told CNBC. "Reaching 10% hash rate by the end of 2023 would be a great success," continued Lee.

Lee added that it will likely take several years to see the latest version of Stratum replace the original.

Miners know the benefits of upgrading to Stratum V2 very well, but pushing the entire mining industry over some of the remaining development and adoption hurdles is a big task," said Jan Capek, co-founder of Braiins.

"Universal standards for running and building Stratum V2 and the efforts of this working group to push the industry forward will provide the momentum bitcoin needs to finally upgrade from a version of its mining protocol that was built a decade ago, continued Capek.

Similar to the Lightning Network, which is a technology built on top of bitcoin's base layer to make payments more efficient, there will be different implementations of Stratum V2. However, the open-source version released Tuesday will make it easier to collectively test out the technology. It will also ensure that the various projects can interact with one another.

Tuesday's announcement is part of Block's larger push into the bitcoin mining industry.

On the sidelines of the Bitcoin 2022 conference in Miami in April, digital assets infrastructure company Blockstream and Block announced that they were breaking ground on a solar- and battery-powered bitcoin mine in Texas that uses solar and storage technology fromTesla.

Tesla's 3.8 megawatt solar PV array and 12 megawatt-hour Megapack will power the facility.

Block is also independently working on a project to make bitcoin mining more distributed and efficient.

The idea of making the mining process more accessible has to do with more than just creating new bitcoin, according to Block's general manager for hardware, Thomas Templeton. Instead, he says the company sees it as a long-term need for a future that is fully decentralized and permissionless.

"Mining needs to be more distributed," Dorsey wrote in a tweet in October,when he first floated the idea. "The more decentralized this is, the more resilient the bitcoin network becomes."

Toward that end, the company is solving one major barrier to entry: Mining rigs are hard to find, expensive and delivery can be unpredictable. Block says it is open to making a new ASIC, which is the specialized gear used to mine for bitcoin.

The project is being incubated within Block's hardware team, which is beginning to build out a core engineering team of system, ASIC and software designers led by Afshin Rezayee.

See original here:
The software used in bitcoin mining is getting its first big makeover in more than a decade here's what's changing - CNBC

Oct 11 (Reuters) - It's not easy being a crypto investor.

They've seen the value of their holdings drop like a brick this year, and now many are stewing over the safety of their crypto cash after a series of heists that's seen around $2 billion spirited away by hackers.

Enter the ghost of technology's past.

Register now for FREE unlimited access to Reuters.comRegister

Hardware wallets - old-school physical devices similar to USB drives that stash crypto holdings offline - might seem a throwback to a more innocent digital age, but they're proving to be a popular response to a cutting-edge conundrum.

The global hardware wallet market, valued at $245 million in 2021, is expected to swell to over $1.7 billion by 2030, according to market research firm Straits Research.

It's being fueled by a steady stream of cyber robberies that, according to researcher Chainalysis, has seen thieves steal $1.9 billion in crypto in the first seven months of the year, an increase of 60% from a year earlier. Much of this was stolen directly from blockchains or "hot" online wallets.

It's not only hacks making investors edgy. Others lost access to their crypto when major lenders such as Celsius Network and Voyager Digital collapsed in July.

"We have definitely seen increased interest in hardware wallets, and in general self-custody, post-several issues," said Adam Lowe, chief product and innovation officer at U.S.-based CompoSecure (CMPO.O), one of several hardware wallet makers seeking to capitalize on a rush for safety.

"The day of or day after those events, we would see very significant (sales) lifts."

There's no such thing as a free crypto lunch, though: While hot wallets are convenient and allow for quick trading, hardware wallets typically don't appeal to first-time investors, who often buy cryptocurrencies on big exchanges and might choose to keep their assets on those platforms, where they can simply log in with a username and password.

Although hot wallets are usually free and offer quick access to crypto, they can be vulnerable to hacks. In August, nearly 8,000 crypto wallets on the Solana blockchain were hit by hackers who made off with more than $5 million in crypto.

"Users are strongly encouraged to use hardware wallets," Solana said at the time.

France's Ledger, another hardware wallet maker, said it saw a spike in sales after the Solana wallets heist.

"We do see significant uptick in user-based interest in some of these situations of stress in the markets," aid Alex Zinder, global head of Ledger Enterprise.

Most hardware wallets connect to a mobile app, where the owners of the digital keys needed to access their crypto keys can control their funds. Some use "Secure Enclave" technology, a security feature used to store sensitive data.

Josef Ttek, bitcoin analyst at Czech-based hardware wallet company Trezor, says he expects better phone interaction with cold storage wallets in the future, to serve investors in places like South America and Africa, where it's more common for users to have mobile phones than personal computers.

Yet companies in this ballooning market might be advised to make hay while the sun shines.

One long-term question is whether phone makers will want to get in on the action, said Stan Miroshnik, co-founder and partner at 10T Holdings, which led Ledger's $380 million Series C funding round last year.

"One question, I think, for the industry and where it's going and in part what will drive consumer adoption, is what if every iPhone has a built-in Secure Enclave hardware wallet?"

Register now for FREE unlimited access to Reuters.comRegister

Reporting by Hannah Lang in Washington; Editing by Tom Wilson and Pravin Char

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Original post:
Cryptoverse: Hack jitters push bitcoin investors back to the future - Reuters