Category Archives: Cryptocurrency

We have come a long way since the days of a barter system. It hasn't been necessary to have a specific good and trade it for some other specific good for a long time. For most of written history, there were only two types of currency: fiat or commodity. Fiat currencies have been the dominant currency since the 1970s, when the U.S. ended the Bretton Woods system and abandoned the gold standard.

Fiat currencies are great because they don't require physical commodity reserves and countries can control their own money supply. Currencies can be valued constantly against each other in floating exchanges. As for integrity and widespread implementation, governments are generally trustworthy and are a central regulating force that ensures transactions are fair, accurate, and not manipulated.

Today, with the advent of cheap computing power and networked systems (i.e., the Internet), there is a new contender to the currency game. The new guy to disrupt the duopoly of currency is the cryptocurrency. These are Bitcoin and its peers that have only become feasible in the last twenty years or so.

What Cryptocurrencies are, and their benefits

Cryptocurrencies exist only in computers. This shouldn't scare you, though, because the majority of most fiat currencies also only exist as numbers in a computer system. They require distributed systems to ensure integrity and reliability, and they can be a good alternative to national currencies. They are, in the simplest terms, digital records held by many parties that track how much currency any single wallet holds.

Some of the benefits of cryptocurrencies include decentralisation, deregulation, anonymity, increased transaction transparency, and the facilitation of cross-border trade. Cryptocurrencies are not based in any single country or jurisdiction, because the ledgers and servers are spread out over the globe. Since there is no central bank, the system is distributed and therefore not easily manipulated either by large institutions or by governments. This means there is little regulation and more freedom on who spends how much on what and where. This benefit is enhanced by the fact that there is less private information attached to each transaction. There are even cryptocurrencies whose main goal is to provide an untraceable, secure, and anonymous means of payment.

Payments are transparent because every transaction can be verified by anyone. This means fraud is more difficult because there are many copies of the transaction record available for anyone to see. Furthermore, everyone knows how much every wallet contains (though real names are not included). The public balances come from the way in which balances are implemented in the technology.

As for cross-border trade, since cryptocurrencies are non-national, anyone can pay anyone anywhere without needing to convert currencies. This raises interesting questions on conversion and payments, as owning 1 BTC (Bitcoin's currency symbol) in France and owning 1 BTC in Thailand are not the same. If converted to a local currency, it means much different buying power in the two host countries.

How they work

There is a distributed ledger or a publicly viewable list of transactions. Since they are distributed, there is more than one copy (there are actually a lot of copies). There are "miners", who are like the keepers of the system.

Whenever a transaction is made, the keepers of the system broadcast the transaction to everyone. The transaction is placed in a pool of pending transactions, whose order of addition to the chain is determined by competing miners. Participants choose a transaction and solve a math problem linking it to the last recorded transaction. Whichever miner can solve their problem first gets to add their transaction to the end of the chain, effectively determining a unique order.

If two miners finish different blocks at the same time, the blockchain branches. Each node keeps its own copy of the transaction set and works from that. Once the next block is solved, all nodes switch to the transaction set used by the last solve.

Since transactions are simply messages with the sender, receiver, and an amount, it is essential that all transactions are signed. This is completed using the sending wallet's private key, and the signature is unique for each transaction, so it cannot be duplicated. Furthermore, a message cannot be altered or the resulting signature will no longer be valid. Even more, since transactions are lumped together in blocks, if one transaction changes, the hash output of the entire block changes, and hence doesn't link correctly with the next block - i.e., it is not possible to modify blocks undetected.

Balances are not stored in the system, but they are based on previous transactions (basically add prior transactions A + B + to determine if you have enough for transaction 1). This requires that "unspent" transactions be added every time one wants to send money, but it does not require the processing of the entire blockchain (that would be rather inefficient).

Where does Cryptocurrency get its value

Like fiat currencies, cryptocurrencies have no intrinsic value. They're just numbers stored on a system somewhere, much like the way modern digital banking treats national currencies. Fiat currencies then derive their value from the collective faith of a society using them. If A believes B will accept USD, then A will accept USD for whatever they want to trade, too. B will only accept USD if s/he thinks C will also take USD, and from this collective faith, the value of USD arises.

Cryptocurrencies are similar. They are only worth as much as everyone deems them to be worth. One advantage for national fiat currencies is that a central authority issues and regulates them, and one can generally trust the government in this regard. Furthermore, governments require that taxes be paid, and they will usually only accept their own currency for this. Hence, to be a citizen of a country, one must deal with the national currency. This is a good basis to simply use the same currency for every transaction within the country.

Major Price Gains (and a major adoption event)

One major reason for the generally increasing value of cryptocurrencies is more widespread interest. While cryptocurrencies may not be prevalent, they do have a following on the Internet, and many people will ask for cryptocurrencies donations or payments. If the demand for such currencies increases faster than units are added the price will rise.

Looking at the charts of the four largest cryptocurrencies after conversion to USD, it looks like there has been a significant increase recently in all four (not all the same scale, as these are the lifetime charts). This is a phenomenon that is clear in 2017.

Fears over capital restrictions and government spying may be pushing up the price. A renewed interested in privacy, especially after the Snowden leaks, might be a reason. The increasingly watchful eye of Big Data by both Google (NASDAQ:GOOG) et al. and the banks and credit card companies may be a reason. The wider general acceptance is almost certainly a reason.

Chart Source: Highcharts.com

Chart Source: Highcharts.com

Chart Source: Highcharts.com

Chart Source: Highcharts.com

Government Acceptance?

This acceptance extends to governments. Most notably, Japan, a market highly accepting of innovative technologies, recognised Bitcoin on April 1st, 2017. It is also set to standardise blockchain technology. This acceptance by the world's third largest economy is a huge boon to cryptocurrencies. There is a clear uptrend for the four largest cryptocurrencies around the time of recognition. Russia is also attempting to legitimise, as it would help the government crack down on money laundering.

Why is cryptocurrencies value always fluctuating against national currencies

It is important to note that national fiat currencies are valued against other currencies based on the state of the issuer's economy. If it is expected that many people will want to buy Korean products, there is more demand for KRW. This means each KRW costs more JPY, whether the central bank of Korea does anything or not. Cryptocurrencies are really no different, but they fluctuate much more.

Looking at any charts of cryptocurrencies against a national currency (usually the USD, but it doesn't matter), one can see there are huge fluctuations. Since there is no central authority, there is no one to stabilise cryptocurrencies against national currencies. One of the libertarian goals of many cryptocurrencies is exactly this fact: market forces are the only forces that influence the value.

Advocates of a global cryptocurrencies system argue that as it becomes more popular the value should stabilise on its own. The main driver of upside movements so far has been more interest, i.e., more demand. It is somewhat similar to real estate. If someone buys 100 acres in a secluded area, it may not be worth much at first. However, if the area starts to become populated, the original owner can divide the 100 acres, unchanged in physical size, into smaller pieces, each worth as much as the original 100 acres. However, there is an upper limit to the divisions, because people can't build houses on one one-hundredth of an acre (let's ignore building up for this example).

Cryptocurrencies may appreciate over time, but there is also an upper limit to the number of units that are available in a currency. For example, Bitcoin miners will no longer receive coins for solving the blockchain linking problem around 2140. This is when the supply is expected to hit 21 million BTC, which is the set upper limit. At this point, coins will probably start to fall out of circulation without a replacement.

Each cryptocurrency has an associated "market capitalization", or what the entire exchange would trade for in a national currency equivalent. This can be a determinant in which system to use because someone trying to move large amounts wouldn't be able to trade on a small exchange or currency.

Differences between Various Currencies

Note: the charts in this section reflect MARKET CAPITALIZATION over the last year (as of May 17, 2017). The previous section was prices over the last few years. These are not in exact lockstep because the number of coins (units) increases with time.

There are many cryptocurrencies out there. They have different features for different users. This is actually one major problem for widespread adoption - without a dominant currency, which one should people adopt? Small ones inveigle people with potentially large gains, but big ones have a better chance of acceptance by more people. Being early on a new social network could give you star status later, or you could forever be confined to a quiet corner of the social media space.

Here are the four largest ones, each with a market capitalisation over 1B USD.

Bitcoin (BTC, MC: ~30B USD) - by far the largest and most well-known, this is the cryptocurrency that really kicked off the revolution. Its market cap (MC) is around 30B USD, and it has reached 350k transactions per day on busy days. The currency has an upper limit on the number of possible coins (21 million), but you can trade as little as one one-hundred-millionth of a BTC, so you don't have to worry about it becoming too expensive to do daily transactions.

Chart Source: Highcharts.com

Litecoin (LTC, MC: ~1.6B USD) - this cryptocurrency's main feature is that it is much faster to transact. Since each transaction takes so much calculation, BTC transactions take upwards of 10 minutes to confirm. This is not feasible for paying on-the-go. LTC gets the time down to about 2.5 minutes, though that is still much longer than the seconds it takes for credit cards or cash.

Chart Source: Highcharts.com

Ethereum (ETH, MC: ~8B) - ETH is the second largest cryptocurrency by market cap, sitting at about 8B USD. ETH was originally designed to be a platform and not really a cryptocurrency. The transaction time is on the order of 10-15 seconds for confirmation, which is a huge improvement. ETH are also released every year, so there is no hard upper limit of ETH like with other cryptocurrencies. This means that not all the coins are in the hands of early miners.

Chart Source: Highcharts.com

Ripple (XRP, MC: ~7.2B USD) - XRP has no public ledger, but instead uses an "iterative consensus process". The result is a much shorter transaction time (a few seconds), and it uses much less computing power. Ripple is its own exchange, and hence there is no fear of an exchange vanishing (like the fiasco that was Mt. Gox).

Chart Source: Highcharts.com

There are many more cryptocurrencies, and here I mention a couple with interesting features. This is by no means an extensive list, as there are literally hundreds of CCs. These are just a couple that have interesting features (both I and others (1, 2) think they're interesting).

Chart Source: Highcharts.com

Chart Source: Highcharts.com

Chart Source: Highcharts.com

Dangers to Widespread Adoption

The greatest barrier to widespread adoption is acceptance. If you can't use it to buy a coffee at your local shop or a train ticket at the station, no one will use it. The first step in expanding acceptance is for large companies to accept them, and some do. Here is a list, longer than one might expect, of companies that accept at least Bitcoins. Unfortunately, there are not many big names on there. Once your local shops start to accept it, it will become more feasible for the average person to adopt it.

Another major problem is fragmentation. Currently, Bitcoin is the largest one, but there are many competitors that take market share. One must be adopted as a standard - people don't want to use five different currencies, all fluctuating against each other, in their everyday life. Businesses also don't want to have to set up all the tech to accept five different currencies and always adjust their prices.

It not only exposes businesses to wild fluctuations between customer cash inflow and material buying cash outflow, but sovereign nations will also be open to the fluctuations of the global market without a means to control the money supply in their own economies. This is something hardcore libertarians champion, but the average person is probably not interested in his country losing control of such an important affair as the economy.

Technical issues are another issue. Of course, it is possible that a bank's electronic accounting system fails, but CC systems are very new. Do we really want to risk a potentially catastrophic meltdown of our economy because there was some exploit? At least with fiat currencies, people can still trade physical notes of cash to buy food and water even in a disaster.

Conclusion

So, what do we make of cryptocurrencies? They are an interesting technological novelty for now. If they can be completely secured, beyond doubt, and many people start to adopt them, it is entirely possible the future will be transacted in cryptocurrency. At this time, though, they are really only useful as a speculative investment tool for early capital gains or FX traders who think they can guess the direction.

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Cryptocurrency - Everything You Need To Know In 2017 - Seeking Alpha

For the time being, people are waiting for an official explanation from DirectBet.

There are a lot of Bitcoin gambling platforms all over the world. Unfortunately, not every single company can remain in business over time. For DirectBet.eu, the decision to shut down was made rather hastily. Nearly 24 hours later, no one seems to know why the decision was made in the first place. It is possible mounting Bitcoin transaction fees forced the companys hand.

A lot of Bitcoin gamblers are shocked to learn DirectBet has closed down. The news comes as a total surprise to the entire community. In fact, the company was still running promotions a few hours before making this drastic decision. No one knows for sure why the company is halting their services. Speculation is running rampant, though. Many people claim the mounting Bitcoin transaction fees are to blame for this sudden decision.

It is never good to see such a popular platform disappear all of a sudden. The company has built up a solid reputation over the past few years. They also offered gambling opportunities for a lot of different sports. Although other platforms offer similar services, DirectBet was a platform near and dear to the hearts of many. Especially people who bet on golf will have a hard time finding a different platform. There are a lot of other companies to choose from, although they will all need to step up their game.

Moreover, the reason why DirectBet was so popular was due to them accepting altcoins. Users who wanted to gamble with Dash or Litecoin could make use of the platform without issues. Very few gambling platforms accept payments other than Bitcoin these days for some reason. In doing so, they miss out on a big opportunity, as altcoin gambling is getting more popular. Companies active in the world of cryptocurrency gambling will want to look at integrating altcoin support in the future.

For the time being, people are waiting for an official explanation from DirectBet. Their approach to cryptocurrency gambling was the right one. Users do not have to create accounts whatsoever, which makes it all the more appealing. It will be difficult to fill the void left behind by this company, that much is certain. Gambling and cryptocurrency are two peas in a pod. Anyone looking to enter the market should do so right now.

Continued here:
Cryptocurrency Gambling Platform DirectBet.eu Shuts Down Although The Reason Why Remains Unclear - newsBTC

NEM and its token XEM have made significant gains over the past few months. Some analysts including Koji Higashi, the co-founder of IndieSquare based in Japan, have attributed the increase in the market cap of NEM and price of XEM to the exponentially growing alternative cryptocurrency (altcoin) market in Japan.

A major factor that has allowed NEM to transform into one of the most popular altcoins in Japan is its development team and company composed of Japanese founders and talents. NEM was initially developed and introduced in Japan by Makoto Takemiya, the co-founder and CEO of Soramitsu, the company that has also introduced the Iroha blockchain project to the Linux foundations Hyperledger Project.

Takemiyas involvement in some of the largest and most prominent blockchain projects and consortia as well as the Japanese governments legalization of bitcoin led to a surge in interest toward altcoins such as NEM that originated from Japan.

Japanese roots are acting as validation points for local Japanese altcoin traders. Specifically, NEM and Ripple are the two most popular altcoins in Japan in terms of demand and trading volumes. Higashi explained that local investors are demonstrating an increasing level of interest toward the two altcoins because of NEMs Japanese origin and Ripples association with Japanese banks.

In regard to NEMs strong brand in the Japanese market and community, Higashi wrote:

NEM is popular thanks to the strong backing of the platform from the Zaif exchange, one of the biggest exchanges in Japan along with bitFlyer and coincheck. NEMs private blockchain solution developed by Zaif with NEMs core developers is called MIJIN and it has established itself as a strong brand in the crypto space in Japan.

While NEM gained its image over a long period of time through organic growth, on April 21, Ripple announced the formation of the Japan Bank Consortium and that its participating banks that include the most influential financial institutions in Japan will be using Ripple-powered payments platform to facilitate both domestic and international transactions. The announcement of Ripple and its partner banks led to surge in demand for its native token XRP.

The Ripple team stated:

In order to address these emerging needs, banks have come together to launch the Japan Bank Consortium for cross-border and domestic payments which enable a flexible and efficient payment system. It is the worlds first case to implement Ripple solution in a cloud environment.

However, Higashi strongly emphasized that the Japanese altcoin market is attracting not-so-smart money from investors that have little to no actual understanding of the purpose, vision, philosophy and technical specifications of cryptocurrencies including NEM, Ripple and others. He went as far as to say that the Japanese market is leading a bubble for the global altcoin market.

Another thing to note about this new trend is that the general lack of understanding or appreciation of the technology by many of new users. This is no surprise and all of us have been there at one point but the new wave of Japanese investors seem to be exhibiting a whole new level of incomprehension and misguided decision making in my opinion, said Higashi.

To NEMs credit, it has maintained its strong brand image in Japan with its impressive achievements and long-term objectives.

On January 5, Umar Jundi Alfaroq, the community communications & marketing agent for NEM Association Malaysia, laid out the following achievements of the NEM team in 2016:

The release of NEM Apostille was a major announcement and achievement for NEM as it enabled the transfer and creation of digital certificates. That widened the applicability of NEM and its technologies across various industries.

As for this year, the price of NEM remains high and XEM is maintaining an upward momentum due to the tight partnership between Mijin and NEM. Many commercial projects based on Mijin, NEM and Apostille technologies are currently being developed and the Japanese market is anticipating such objectives in 2017.

Featured image from Shutterstock.

Original post:
NEM Gains 500% in May as the Fifth Largest Cryptocurrency; Factors & Trend - CryptoCoinsNews

Bitcoin continues to set new record highs on a daily basis, and taking a host of altcoins along with it as investor demand for alternatives to equities remains strong.

Source: Coinmarketcap

Bitcoins market cap surpassed $37 billion today when the price hit $2271.16, commanding more than a billion in trade volume in a 24-hour period, according to coinmarket.com. The total value of the coin market is now at $81.3 billion, as the last two days added more than $10 billion to the capitalization.

Bitcoins value has almost doubled in the last month, even while its market share has fallen below 50%, thanks to the gains of other cryptocurrencies. Bitcoins gains have been steadier than most of the altcoins, but collectively, altcoins are rising at a faster pace.

Rising demand for bitcoin by Chinese and Japanese investors combined with falling stocks and other factors to push bitcoin to newheights. Because the Japanese yen holds the largest share of bitcoin trading, Asian tradingpushes the prices higher.

The Nikkei Asian Review today reported, Bitcoin going mainstream as Japanese business signs on, signaling bitcoins growing popularity in Japan, which recently recognized bitcoin as a method of payment.

Asian interest in bitcoin increasingly carries over to other currencies, as indicated by the gains for Ripple and NEM, the two most popular altcoins in Japan in terms of demand and trading volumes.

Japanese regulators also decided to abolish the 8% consumption tax on transactions of bitcoin bought from exchanges, which is set to go into effect in July this year.

Todays announcement that a majority of bitcoin miners have reached a consensus to deploy the Segwit2Mb protocol upgrade for bitcoin also bodes well. Bitcoins rise has benefited from an alleviation of the fear that a hard fork will be needed dividing bitcoin into two currencies to improve bitcoin transaction times. A successful deployment of an alternative scaling solution indicates the hard fork that would have resulted in two separate currencies in order to speed up bitcoin transactions may not be required.

Wences Casares, CEO of bitcoin wallet Xapo and a member of PayPals board of directors one bitcoin would hit $1 million before the next ten years while speaking at the Consensus 2017 conference in New York.

Ethereum, the largest altcoin, hit more than $16 billion market capitalization with a $179.68 price, followed by Ripple at more than $13 billion. The top three cryptocurrencies bitcoin, Ethereum and Ripple are the only players to boast more than $10 billion market cap.

Ethereum has witnessed the fastest growth of any digital currency ever. Not even two years old, the platform is now worth more than $16 billion with its trading spaces consistently attracting more online active users than even bitcoins.

Ripple, designed for enterprise use and can be used by institutions for on-demand liquidity for cross-border payments, also continues to post rapid gains. Banks and payment providers that use XRP will secure better access to emerging markets at lower settlement costs.

Ripple recently committed to placing 55 billion XRP in a cryptographically secure escrow account at the end of the year, addressing concerns that it will eventually sell its 61.68 XRP as it seeks to strengthen XRPs exchange rate against other currencies.

NEM, number four commands a $2.299 billion cap, followed by Litecoin at $1.575 billion and Ethereum Classic at $1.02 billion.

There are now six cryptocurrencies with more than $1 billion market caps.

Aside from bitcoin, the rotation shifts fairly frequently among the billion dollar players. A day ago, Litecoin, Monero, and Dash displaced Ethereum and NEM, with gains of 15%, 20%, 25%, respectively.

NEM, number four, commands a $2.299 billion cap, followed by Litecoin at $1.575 billion and Ethereum Classic at $1.02 billion. There are now six cryptocurrencies with more than $1 billion market caps.

NEM has also made significant gainsover the past few months. A major factor that has allowed NEM to transform into one of the most popular altcoins in Japan is its development team and company composed of Japanese founders and talents. NEM was initially developed and introduced in Japan by Makoto Takemiya, the co-founder and CEO of Soramitsu, the company that has also introduced the Iroha blockchain project to the Linux foundations Hyperledger Project.

Litecoin, one of the oldest altcoins, gained visibility this month because of its successful activation of SegWit, a scaling solution that circumvents the need for a hard fork.

Featured image of luxury yacht from Shutterstock.

See the rest here:
Billion Dollar Cryptocurrency Club Swells to Six Members - CryptoCoinsNews

Tech developers

Many talented tech developers have devoted their efforts to cryptocurrency mining, while others have focused on more entrepreneurial pursuits such as developing exchanges, wallet services, and alternative cryptocurrencies. In our view, the cryptocurrency market has only started to attract talent with the depth, breadth, and market focus needed to take the industry to the next level. For the market to gain mainstream acceptance, however, consumers and corporations will need to see cryptocurrency as a user-friendly solution to their common transactions. Further, the industry will need to develop cybersecurity technology and protocols.

Investors generally appear to be confident about the opportunities associated with cryptocurrencies and cryptography. The inherent value of the underlying technology, discussed above, gives these investors good reason to be optimistic. As a result, only recently have some of the more established cryptocurrency companies attracted institutional investors and Wall Street attention.

Traditionally, banks have connected those with money to those who need it. But in recent years, this middleman position has been diluted, and disintermediation in the banking sector has evolved rapidly. This has resulted from the rise of Internet banking; increased consumer usage of alternative payment methods like Amazon gift cards, Apple Pay, and Google Wallet; and advances in mobile payments.

Government attitudes around the world toward cryptocurrency are inconsistent when it comes to the classification, treatment, and legality of this technology. Regulations are also evolving at different paces in different regions.

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Money is no object: Understanding the evolving cryptocurrency market - PwC

I am gonna go make a cryptocurrency company, BitTorrent inventor Bram Cohen told Steal This Show podcast host Jamie King. That is my plan.

Mr. Cohen plans to release a cryptocurrency to address Bitcoins mining inefficiency when it comes to wasting energy.

There is a loophole, Mr. Cohen notes. You can get them to work with proofs-of-work, but then this involves these warehouses burning electricity. But there is a loophole in that, which is proof-of-storage. Mr. Cohen believes this problem can be solved by using the extra storage space on computers.

Instead of computers burning electricity to mine, you have storage space that is implicitly mining because its sitting there, and proves its sitting there. The storage space is already sitting online not doing anything on desktop computers and cloud offerings with extra storage capacity, according to Mr. Cohen on the podcast.

He adds: There is lots of storage capacity out there, and its value is much greater than bitcoin mining rewards handed out.

Mr. Cohens vision for his cryptocurrency involves fusing proof-of-space and proof-of-time. Proof-of-space work when users have an interest in allocating non-trivial amounts of memory or disk space to solve a challenge presented by service providers. Proof-of-space are similar to proof-of-work. They do not, however, use CPU-bound functions.

There are some technical issues, which adding in proofs-of-time fixes, Mr. Cohen tells Crypto Insider over text chat, admitting the concept is difficult to explain. The short of it is that proofs-of-time keep an attacker from making a whole new fake history instantly, a problem caused by the property that mining requires no power.

Mr. Cohen adds: Proof-of-time refers to a sequential proof-of-work, like the old saying that one woman can make a baby in nine months, but nine women cant make a baby in one month.

The main idea is zero waste in mining. One of the benefits of storage based things is there is a lot less centralization in mining, so there is less concern about a 51% attack.

The good part of this is subtle, Mr. Cohen tells Steal This Show listeners.There are economic resources that you can apply towards rewards, he elucidates. People will spend resources getting rewards. So it will still be wasteful, but there is a waste that has already happened and youre leveraging that at no additional cost.

The BitTorrent founders specialty might work well applied to the world of cryptocurrency. Mr. Cohen launched BitTorrent to solve problems with bandwidth scarcity in sharing data over the internet, and his platform still today enables individuals to distribute large files sans the need for specialized infrastructure.

Before starting on his own cryptocurrency, Mr. Cohen must first tie up loose ends with BitTorrent, Inc., the business wing of his distributed software. In the next few months, Im going to devote myself full-time to the cryptocurrency stuff, Mr. Cohen notes on the podcast.

Burstcoin, an altcoin listed on Coin Market Cap, uses what the developers term proof-of-capacity as its consensus method. It appears to merely be a re-brand of proof-of-space, the latter of which is the term preferred by academic literature.

As Mr. Cohen tells Crypto Insider, critics of Burstcoin lament the developers do not acknowledge Hellman time-space trade-offs in their coding. The coin, they say, attempts to solve problems by relying on a platform called NXT, instead of developing their own innovations.

Its not the first time Mr. Cohen mentioned this plan. The BitTorrent founder presented a talk at the Stanford Blockchain Conference, in which he examined the potential of proof-of-space and proof-of-time in a cryptocurrency.

One slide in his presentation reads: There are massive amounts of unused online storage in the world. [A cyptocurrency] requires no additional power to mine. No potential for ASICs. The available miners are highly decentralized.

Picture from Cory Doctorow/Flickr.

See the article here:
The Inventor of BitTorrent Plans His Own CryptoCurrency - Crypto Insider (press release) (blog)

An international assault on computer users provides a illuminating vehicle for interpreting the dubious political and economic constructs, presented by corporate news media as unambiguously real. In this instance closer consideration of the events reportage and context suggest an intent to undermine and confuse public interest in the burgeoning cryptocurrency space. The WannaCry cyberattack follows a decade of commodity price manipulation by central bankers necessary to support the value of fiat currencies amidst profligate money creation.

The recent price explosion across a wide swath of virtual currencies is the exact opposite of the stagnation experienced in precious metalsspecifically gold and silverthe traditional measures of fiat currencies true worth. This sharp contrast augments theories of central bank manipulation of the metals markets that seek to preserve the US dollar especially against the accelerated inflationary policies instituted over the past decade.

Quantitative Easing is a threat to the dollars exchange value, Paul Craig Roberts and David Kranzler write in a key 2014 article. The Federal Reserve, fearful that the falling value of the dollar in terms of gold would spread into the currency markets and depreciate the dollar, decided to employ more extreme methods of gold price manipulation. As the authors explain alongside a compelling array of data,

The Feds gold manipulation operation involves exerting forceful downward pressure on the price of gold by selling a massive amount of Comex gold futures, which are dropped like bombs either on the Comex floor during NY trading hours or via the Globex system. A recent example of this occurred on Monday, January 6, 2014. After rallying over $15 in the Asian and European markets, the price of gold suddenly plunged $35 at 10:14 a.m. In a space of less than 60 seconds, more than 12,000 contracts traded equal to more than 10% of the days entire volume during the 23 hour trading period in which which gold futures trade.

There was no apparent news or market event that would have triggered the sudden massive increase in Comex futures selling which caused the sudden steep drop in the price of gold. At the same time, no other securities market (other than silver) experienced any unusual price or volume movement. 12,000 contracts represents 1.2 million ounces of gold, an amount that exceeds by a factor of three the total amount of gold in Comex vaults that could be delivered to the buyers of these contracts.

The absence of derivatives in most cryptocurrency markets makes these digital assets (and the perpetual computational power necessary to affirm their blockchain presence) impervious to price suppression via futures contracts used by central bankers and their agents.

With the above in mind, there is indeed a distinct possibility that WannaCrys deployment and far-reaching publicity constitute a desperate attempt to undermine public interest in the rapidly-expanding crypto space.

On May 12 hundreds of thousands of computers utilizing Microsofts operating system were struck with a ransomware virus encrypting users data and offering to unlock it in exchange for $300 USD. The apparent pandemonium is related by major financial news publications, including the Wall Street Journal.

The cyberattack that spread around the globe over the weekend, hitting business, hospitals and government agencies in at least 150 countries, is likely to keep growing as people around the world return to work, law enforcement authorities warned.

The identical software vulnerability the WannaCry culprits employed was, perhaps not coincidentally, secretly developed by the US National Security Agency and leaked online by an anonymous entity calling itself Shadow Brokers. While Microsoft promptly issued a remedy, countless computers lacking the patch remained vulnerable.

At the core of this narrative is the fact that WannaCry attackers demanded the $300 ransom in Bitcoin, the most well-known and highly valued of the cryptocurrencies, oft-identified by prominent financial spokespersons and news outlets with drug smuggling and terrorism. The Justice Department has successfully prosecuted online criminal operations that used bitcoin, the Washington Post instructed in a piece reminding its readers of Bitcoins nefarious history. In 2013, the government arrested Ross Ulbricht, the founder of a major underground drug market, and seized more than $3.5 million worth of bitcoin.

When an event transpires and quickly gains traction via abundant and sensational news coverage, while tending to convey a certain uniform impression, there is a strong possibility of deep state agendas and objectives at play. As the late journalist and author Udo Ulfkotte observed, today more than ever intelligence agencies exert direct influence over what is proffered as responsible reportage and opinion. Much as Soviet citizens resorted to detecting truth between the lines of reports from a party-controlled press, so it has become necessary to place contemporary phenomena in a broader context.

Along these lines news outlets serving the cryptocurrency enthusiasts quickly found contradictions in the mainstream account built around WannaCry, noting how the incident was likely intended to serve Western financial elites by implicating Bitcoin in the cyberattack, thereby causing retail investors to vacate their positions. Indeed, in the events immediate prelude the fiat valuation of the entire crypto space more than doubled, from $25.5 billion on April 15 to $53.65 billion on May 11.

One has to suspect this is a big ploy by the US government led by the [Securities and Exchange Commission] and other concerned parties to discredit Bitcoin, by association, CoinTelegraph argued.

It is overwhelmingly a ploy especially given the SECs position as they are those who are pushing the [European Union] and [European Central Bank] to begin blocking users of cryptocurrency, in a vague attempt to regulate it, to control it, to scare people off.

If WannaCry is in fact an attempt to keep the public from using Bitcoin and its crypto peers, as is suggested by broad media attention, it appears to have been a colossal failure. As of this writing the valuation of all cryptocurrencies is approaching $70 billion USD. The week of May 15 has seen new records set by not only Bitcoin, but several of its peers, including Ethereum, Dash, Ripple, NEM and Monero.

In light of 9/11 and the continuum of often suspicious terror incidents punctuating the Wests War on Terror mainstream news media persist in matter-0f-factly accepting and promoting dubious events at face value, shorn of almost any historical, political, or economic context.

More:
WannaCry Cyberattack: Deep State Assault on Cryptocurrencies? - Center for Research on Globalization

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Coinbase Hopes For Cryptocurrency's 'Netscape Moment' With New App, Token - Forbes

Overview

On Friday, May 12, attackers spread a massive ransomware attack worldwide using the EternalBlue exploit to rapidly propagate the malware over corporate LANs and wireless networks. EternalBlue, originally exposed on April 14 as part of the Shadow Brokers dump of NSA hacking tools, leverages a vulnerability (MS17-010) in Microsoft Server Message Block (SMB) on TCP port 445 to discover vulnerable computers on a network and laterally spread malicious payloads of the attackers choice. This particular attack also appeared to use an NSA backdoor called DoublePulsar to actually install the ransomware known as WannaCry.

Over the subsequent weekend, however, we discovered another very large-scale attack using both EternalBlue and DoublePulsar to install the cryptocurrency miner Adylkuzz. Initial statistics suggest that this attack may be larger in scale than WannaCry: because this attack shuts down SMB networking to prevent further infections with other malware (including the WannaCry worm) via that same vulnerability, it may have in fact limited the spread of last weeks WannaCry infection.

Symptoms of this attack include loss of access to shared Windows resources and degradation of PC and server performance. Several large organizations reported network issues this morning that were originally attributed to the WannaCry campaign. However, because of the lack of ransom notices, we now believe that these problems might be associated with Adylkuzz activity. However, it should be noted that the Adylkuzz campaign significantly predates the WannaCry attack, beginning at least on May 2 and possibly as early as April 24. This attack is ongoing and, while less flashy than WannaCry, is nonetheless quite large and potentially quite disruptive.

The Discovery

In the course of researching the WannaCry campaign, we exposed a lab machine vulnerable to the EternalBlue attack. While we expected to see WannaCry, the lab machine was actually infected with an unexpected and less noisy guest: the cryptocurrency miner Adylkuzz. We repeated the operation several times with the same result: within 20 minutes of exposing a vulnerable machine to the open web, it was enrolled in an Adylkuzz mining botnet.

Figure 1: EternalBlue/DoublePulsar attack from one of several identified hosts, then Adylkuzz being download from another host - A hash of a pcap of this capture is available in the IOCs table

The attack is launched from several virtual private servers which are massively scanning the Internet on TCP port 445 for potential targets.

Upon successful exploitation via EternalBlue, machines are infected with DoublePulsar. The DoublePulsar backdoor then downloads and runs Adylkuzz from another host. Once running, Adylkuzz will first stop any potential instances of itself already running and block SMB communication to avoid further infection. It then determines the public IP address of the victim and download the mining instructions, cryptominer, and cleanup tools.

It appears that at any given time there are multiple Adylkuzz command and control (C&C) servers hosting the cryptominer binaries and mining instructions.

Figure 2 shows the post-infection traffic generated by Adylkuzz in this attack.

Figure 2: Post-infection traffic associated with the attack

In this attack, Adylkuzz is being used to mine Monero cryptocurrency. Similar to Bitcoin but with enhanced anonymity capabilities, Monero recently saw a surge in activity after it was adopted by the AlphaBay darknet market, described by law enforcement authorities as a major underground website known to sell drugs, stolen credit cards and counterfeit items. Like other cryptocurrencies, Monero increases market capitalization through the process of mining. This process is computationally intensive but rewards miners with funds in the mined currency, currently 7.58 Moneros or roughly $205 at current exchange rates.

Figure 3 shows Adylkuzz mining Monero cryptocurrency, a process that can be more easily distributed across a botnet like that created here than in the case of Bitcoin, which now generally requires dedicated, high-performance machines.

Figure 3: Part of the behavioral analysis from an Adylkuzz-infected VM showing it, among other things, closing SMB door and launching Monero Mining

One of several Monero addresses associated with this attack is shown in Figure 4. The hash rate shows the relative speed with which the specific associated instance of the botnet is mining Moneros, while the total paid shows the amount paid to this particular address for mining activities. In this case, just over $22,000 was paid out before the mining associated with this address ceased.

Figure 4: One of several Monero addresses associated with income from Adylkuzz mining

Looking at the mining payments per day associated with a single Adylkuzz address, we can see the increased payment activity beginning on April 24 when this attack began. We believe that the sudden drop that occurred on May 11 indicates when the actors switched to a new mining user address (Figure 5). By regularly switching addresses, we believe that the actors are attempting to avoid having too many Moneros paid to a single address.

Figure 5: Daily payment activity associated with a single Adylkuzz mining address

Statistics and payment history for a second payment address are shown in Figure 6. This address has had just over $7,000 paid to date.

Figure 6: A second Monero address associated with income from Adylkuzz mining

A third address shows a higher hash rate and a current payment total of over $14,000 (Figure 7).

Figure 7: A third Monero address associated with income from Adylkuzz mining

We have currently identified over 20 hosts setup to scan and attack, and are aware of more than a dozen active Adylkuzz C&C servers. We also expect that there are many more Monero mining payment addresses and Adylkuzz C&C servers associated with this activity.

Conclusion

Like last weeks WannaCry campaign, this attack makes use of leaked NSA hacking tools and leverages a patched vulnerability in Microsoft Windows networking. The Adylkuzz campaign, in fact predates WannaCry by many days. For organizations running legacy versions of Windows or who have not implemented the SMB patch that Microsoft released last month, PCs and servers will remain vulnerable to this type of attack. Whether they involve ransomware, cryptocurrency miners, or any other type of malware, these attacks are potentially quite disruptive and costly. Two major campaigns have now employed the attack tools and vulnerability; we expect others will follow and recommend that organizations and individuals patch their machines as soon as possible.

Acknowledgments

We want to thank:

Indicators of Compromise

Also available in MISP JSON format.

Select Dropped Samples

Executed commands:

taskkill /f /im hdmanager.exe C:Windowssystem32wbemwmiprvse.exe -secured -Embedding taskkill /f /im mmc.exe sc stop WELM sc delete WELM netsh ipsec static add policy name=netbc netsh ipsec static add filterlist name=block netsh ipsec static add filteraction name=block action=block netsh ipsec static add filter filterlist=block any srcmask=32 srcport=0 dstaddr=me dstport=445 protocol=tcp description=445 netsh ipsec static add rule name=block policy=netbc filterlist=block filteraction=block netsh ipsec static set policy name=netbc assign=y C:WindowsFontswuauser.exe --server C:WindowsFontsmsiexev.exe -a cryptonight -o stratum+tcp://xmr.crypto-pool.fr:443 -u 49v1V2suGMS8JyPEU5FTtJRTHQ9YmraW7Mf2btVCTxZuEB8EjjqQz3i8vECu7XCgvUfiW6NtSRewnHF5MNA3LbQTBQV3v9i -p x -t 1 C:WindowsTEMP\s2bk.1_.exe /stab C:WindowsTEMP\s2bk.2_.log taskkill /f /im msiexev.exe netsh advfirewall firewall delete rule name="Chrome" netsh advfirewall firewall delete rule name="Windriver" netsh advfirewall firewall add rule name="Chrome" dir=in program="C:Program FilesGoogleChromeApplicationchrome.txt" action=allow netsh advfirewall firewall add rule name="Windriver" dir=in program="C:Program FilesHardware Driver Managementwindriver.exe" action=allow C:Windows445.bat C:Windowssystem32PING.EXE ping 127.0.0.1 net stop Windows32_Update attrib +s +a +r +h wuauser.exe C:Windowssystem32SecEdit.exe secedit /configure /db C:Windowsnetbios.sdb C:Windowssystem32net1 stop Windows32_Update

Select ET signatures

2024217 || ET EXPLOIT Possible ETERNALBLUE MS17-010 Heap Spray 2024218 || ET EXPLOIT Possible ETERNALBLUE MS17-010 Echo Response 2024216 || ET EXPLOIT Possible DOUBLEPULSAR Beacon Response 2000419 || ET POLICY PE EXE or DLL Windows file download 2826160 || ETPRO TROJAN CoinMiner Known Malicious Stratum Authline (2017-04-28 1) 2017398 || ET POLICY Internal Host Retrieving External IP via icanhazip.com - Possible Infection 2022886 || ET POLICY Crypto Coin Miner Login

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Adylkuzz Cryptocurrency Mining Malware Spreading for Weeks ...