The Venezuelan government has recently launched a Petro savings plan that allows the country’s citizens to put their money into the oil-backed cryptocurrency and “save by means of a certificate.”
Venezuela Launches Petro Savings Plan for 18 Million Citizens
According to local news outlet Telesur, the savings plan is part of the “Comprehensive National Cryptoasset Plan,” and will in its initial phase “make available” 4 million petros, equivalent to 14,400 million sovereign bolivars, the country’s fiat currency. The amount equals $240 million.
The savings plan is set to be available on an online platform called the “Plataforma Patria,” which is reportedly accessible to 18 million Venezuelans with an identity card. To take advantage of the savings plan, Venezuelans will have to invest in sovereign bolivars.
Venezuela’s vice president of the economy, Tareck El Aissami, explained:
“The savings method includes quarterly amortizations and a final payment that can be executed between 90, 180 or up to 270 days, a scheme that allows to safeguard the value of the investment “
Per Aissami, there’s a formula that “will be applied so that the value of the bolivar in the present is equal or superior than at the moment that (the savers) withdraw their money.” The minimum amount of petros that can be purchased is 0.01, equivalent to nearly 39 sovereign bolivars.
Its sovereign bolivar is pegged to the cryptocurrency, which seems to be a “blatant” copy of Dash after analyzing its whitepaper, as it has the same mining algorithm and has other suspiciously-similar features to it. Part of the Petro’s whitepaper, in fact, appears to have been lifted from that of Dash.
Statcounter is one of the oldest third-party user tracking services on the web, having existed since 1999. Beginning as a simple statistics and visitor counting service, Statcounter over time grew into what it is today: a full-fledged, enterprise-quality analytics service.
Gate.io, a more recent entrant in the bitcoin exchange space, used Statcounter to track user traffic until this week when a security researcher named Matthieu Faou discovered a breach in the Statcounter JavaScript file which was specifically targeted at Gate, capturing and hijacking bitcoin transactions made through the Gate interface.
Faou works for ESET, a security firm on the order of MalwareBytes or Norton, which provides consumer and enterprise security products and necessarily conducts research and penetration tests. He says the compromise was designed to replace bitcoin withdrawal addresses on the Gate.io platform with addresses belonging to the attacker.
Primary Script Was Compromised, But Only Gate.io Was Targeted
The attack was more sophisticated than some previous attacks of the same nature, such as malicious malvertising based attacks which installed themselves and did the same thing across websites, living in the browser rather than a piece of code on a single site. More sophisticated because the attackers generated a new address for each attack, making it extremely difficult to track the destination of the stolen funds.
It’s thus difficult to determine exactly how many users were affected. It’s also unknown how the breach went down in the first place via Statcounter.
The malicious code specifically targeted a relevant sector of the Gate.io code – namely, its withdrawal interface – and to Faou’s knowledge, the part of the script dedicated to stealing funds would not have worked on any other site because other sites are designed differently.
In response to the attack, Gate.io has removed the Statcounter script from their site.
Gate.io Says No Damages
According to a blog post by Gate.io, nothing actually happened as a result of the attack. This can only mean a couple things.
One, the script was poorly written and failed to actually do its job.
Two, ESET and Faou discovered the attack before anyone made a withdrawal on which the JavaScript would fire.
“On Nov. 6, 2018, we got the notice from ESET researcher’s report and the “ESET Internet Security” product that there’s a suspicious behavior in Statcounter’s traffic stats service. We immediately scanned it on Virustotal in 56 antivirus products. No one reported any suspicious behavior at that time [ …] However, we still immediately removed the Statcounter’s service. After that, we didn’t find any other suspicious behaviors. The users’ funds are safe. To have the maximum security, please make sure you have two-factor authentication (Google OTP or SMS) and two-step login protected.”
If it is indeed the case that no user transactions were compromised, then this was a narrow miss. All the same, the fact that the attackers went to the trouble of compromising a stalwart piece of web software in order to get at one single exchange demonstrates the need for constant awareness in cryptocurrency dealings. Do you trust the tools you’re using?
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A prominent bitcoin cash startup has launched a mining pool designed to attack altcoins and BCH forks that it does not believe fulfill Satoshi Nakamoto’s original vision for the cryptocurrency.
SharkPool: Supporting Bitcoin Cash by Attacking other Networks
Dubbed “SharkPool,” the service aims to conduct a two-pronged attack on other cryptocurrency networks, exclusively mining empty blocks and then selling the profits for bitcoin cash (BCH).
In the announcement, the group said that it believes all cryptocurrencies except for its preferred version of bitcoin cash are “acts of war against Bitcoin” and that BCH supporters should attack them back.
“All alts, including forks and splits are acts of war against Bitcoin and are going to be treated as such. Shark Pool miner will exclusively mine empty blocks on alts and sell the profits for Bitcoin (BCH). We are looking for capable generals to hunt alts down at 0% poolfee!”
Shark Pool miners will exclusively mine empty blocks on alts and sell the profits for Bitcoin (BCH).
SharkPool is operated by CashPay Solutions, the parent company of several bitcoin cash services including e-commerce platform Cryptonize.It, decentralized crowdfunding application Lighthouse, and the eponymous CashPay wallet.
Promoting the new mining pool, CashPay co-founder Ari Kuqi boasted that he planned to make good on his long-standing promise to “hunt down alts, ICO’s and shitcoins and burry [sic] them.”
“If you don’t have a seat at this table, you’re dinner,” he added.
I’ve been saying for a year I will hunt down alts, ICO’s and shitcoins and burry them. It’s time to deliver on that promise.
If you don’t have a seat at this table, you’re dinner.
SharkPool is attracting miners with hardware compatible with a wide variety of different hashing algorithms, and it has not announced which cryptocurrency network(s) it will turn its attention to first. However, CashPay and Kuqi been outspoken about their views on the looming Bitcoin Cash civil war. In particular, they are vocal supporters of Bitcoin SV, the BCH implementation promoted by Craig Wright, Calvin Ayre, and their respective blockchain firms. By extension, they are fervent critics of Bitcoin ABC and the technical upgrades that ABC’s BCH clients will activate when the network hard forks on Nov. 15. Consequently, it seems that BCH — that is, the version supported by Bitcoin ABC — would be a likely initial target.
CCN has reached out to CashPay Solutions for comment and will update this article upon receiving a reply.
Breaking Down SharkPool’s Attack Plan
As outlined above, SharkPool plans to exclusively mine empty blocks and then sell the proceeds for bitcoin cash.
The second prong in that attack is simple enough. By converting all proceeds to bitcoin cash, SharkPool will concurrently provide BCH with consistent buy pressure while placing downward pressure on the prices of any other networks that it mines. However, the other component of SharkPool’s strategy requires a bit more explanation.
Why Miners Produce Empty Blocks
In Proof-of-Work (PoW) crypto networks, miners earn rewards for producing blocks and adding valid transactions to the blockchain’s public ledger. As long as new coins continue to enter circulation, the rewards come in two forms: coinbase rewards (i.e., the new coins generated in the block) and miner fees from the transactions included in the block.
Occasionally, a miner produces an empty block, which includes no transactions except for the coinbase transaction that distributes the block reward to the miner. That may seem counterintuitive since, assuming there are transactions in the memory pool (mempool), miners would be willingly forfeiting potential revenue.
However, as Bitcoin Unlimited developer Andrew Stone explained in a research paper on the subject, the economics and technical practicalities of cryptocurrency mining make the matter substantially more complex.
On the technical side, there are several time-consuming steps miners must perform before they can mine on top of a block produced by another miner. One of these steps involves downloading all the transactions from the previous block and removing them from their copy of the mempool. This prevents the miner from producing a block that includes transactions that were already in the previous block, which would render the new block invalid.
Hashing an empty block candidate gives the miner a head start since they would not need to wait to download the transactions from the previous block or update their mempool before they can begin searching for a new block. Consequently, when block rewards are high and transaction fees are low, miners are incentivized to mine empty blocks.
As Stone explained:
“Since mining pools maximize profit by maximizing the time their ASICs are hashing blocks likely to be added to the chain, some pools use this technique to construct a single-transaction block candidate to mine while they are waiting to fully receive and validate the newly found block. When the block is validated, mining pools typically use the available transactions to construct a block candidate that maximizes profitability and then switch their ASICs to mine that candidate.”
How SharkPool Will Use Empty Blocks to Attack other Crypto Networks
Though not a violation of the network’s rules, mining a high rate of empty blocks is frowned upon, especially when network activity is high and the number of unconfirmed transactions is growing.
On the Bitcoin network, more than 18 percent of all blocks mined have been empty, though this percentage has dropped dramatically over the years due to increased network activity and transaction fees, as well as the activation of upgrades that remove incentives to mine empty blocks. According to BTC.com, just 0.86 percent of blocks mined over the past year have been empty, though Bitmain-operated AntPool has an empty block rate as high as 2.12 percent.
By exclusively mining empty blocks, SharkPool aims not only to accrue block rewards that can be converted into BCH but also make it difficult for affected networks to process transactions. If the pool attracts enough hashpower, it could cause severe network disruptions by causing the number of unconfirmed transactions to pile up, which would, in turn, lengthen confirmation times and increase transaction fees. Such an attack would be especially potent if paired with a spam attack designed to clog the mempool further.
Moreover, depending on the size of SharkPool’s hashpower as well as the cumulative hashpower of the networks on which the pool is mining, it’s possible that the attack could grind smaller blockchains to a crawl if SharkPool waits until the network difficulty goes up and then redirects the attack to a new victim.
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Gavin Newsom is considered to be “pro-bitcoin.” Certainly, he’s willing to accept BTC for campaign contributions. He also has a record of being pro-technology in general, believing the government should be “performance-based” and that “government information and services at every level should be thoroughly ‘digitized,’ enabling citizens to conduct business with public agencies online.”
California’s New Governor Has Accepted Bitcoin Donations
Most importantly, he’s now the governor of California. This means that one of the most influential people in the most populated state with the largest technology sector in the United States is friendly to the cause of bitcoin. This alone is cause to celebrate, maybe, but it doesn’t mean the Democratic politician is necessarily all in for the various stances that many — though not all — cryptonaughts hold: the right to privacy, low if any taxes, and so forth.
Congratulations to early Bitcoin adopter @GavinNewsom on being elected Governor of California!
“I should promote the technology ever so subtly by saying I’ll accept bitcoin in the campaign”. “I’m ready for it”. “But how the hell do I explain it to anybody?” – 2014 pic.twitter.com/4RLGa9BdMf
It’s no secret that California, particularly Northern California, is home to some of the largest technological and financial technology innovation companies in the world. Coinbase, based in San Francisco, is probably relieved to have a Bitcoiner in the governor’s mansion. The California BitLicense proposal died in the legislature in January, and with a pro-bitcoin governor now holding sway, it’d be harder to get restrictive bills signed into law.
Freedom to participate and innovate is crucial for the growth of a crypto economy, and while other states may be focused on collecting fees and restricting the activities of crypto exchanges and other types of crypto businesses, California is still free from overly restrictive laws like the BitLicense in New York.
Colorado Also Gets Bitcoiner in the Governor’s Mansion
Jared Polis, newly elected governor of Colorado, has frequently spoken of the benefits of the blockchain. He specifically advocates making Colorado a “safe harbor” for bitcoin companies:
“Similar to Wyoming, I will work alongside the legislature to create a statewide safe harbor designed to exempt cryptocurrencies from state money transmissions laws, and I will work to establish legislation that protects “open blockchain tokens” or cryptocurrencies that are exchangeable for goods and services. These moves could allow our state to attract innovative companies and allow them to engage freely in them – as issuers, exchanges, wallet providers – without the licensing requirements of the multitude of securities and currency laws. Colorado can pave the way into the future and implement safeguards here at home with the hope that the federal government can catch up to our progress. These ideas, while bold, will put Colorado on the map for fostering new technology and experimenting with the best way to implement safeguards here at home and across the nation.”
Polis was the first US representative to ever accept bitcoin as a campaign contribution. He didn’t spend long in Congress before vying for the governor’s seat, and now he’s won, meaning that Bitcoiners in Colorado may find themselves in a specifically friendly environment to begin doing various types of blockchain business – legally, with limited interference at the behest of the government.
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Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim LLP, has stated that while there are some positives in the entrance of Bakkt into the crypto market, its impact on the emerging asset class is yet to be determined.
Throughout the past several weeks, Bakkt has been considered as a major catalyst for the next rally of Bitcoin and other major cryptocurrencies in the global market. However, as of November, it is premature to conclude that Bakkt will initiate the next big rally of the cryptocurrency market.
“In the minds of many, Bakkt’s launch has become a full-fledged narrative for when & how the bear market will end. It plays the same role as bitcoin ETFs as a trusted vehicle to bring that sweet institutional money into the space, but without all the trouble of SEC approval,” Chervinsky said.
Why Bakkt is Important to Crypto
Bakkt is a platform for institutions, merchants and consumers to trade, store and spend cryptocurrencies, as former ICE Digital Assets head and Bakkt CEO Kelly Loeffler explained, backed by ICE, the parent company of the New York Stock Exchange (NYSE).
As the operator of the biggest stock market in the world, ICE has decades of track record and reputation in the traditional finance sector, as well as the authorization by the Commodities and Futures Trading Commission (CFTC) to operate as a designated contract market with the ability to self-certify a futures product.
Hence, Bakkt has the ability to operate a Bitcoin futures market without direct approval from the CFTC. By merely filing a license prior to its launch on December 12, Bakkt can operate a Bitcoin futures market.
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Dissimilar to existing Bitcoin futures market, ICE and Bakkt will physically deliver BTC to the buyers of Bitcoin futures contracts on Bakkt, which will have an impact on the supply of the dominant cryptocurrency, and most importantly, its price.
“ICE entering crypto feels like a big deal. It’s an established, respected & powerful player in the finance industry. In other words, large institutions trust ICE with their money, including those institutional investors who many people think are key to the next bull run. Also noteworthy is the fact that Bakkt will custody & deliver real bitcoin. That means institutional inflows would reduce supply & thus (maybe) increase price too.”
There still exists many variables and conditions to the successful long-term growth of Bakkt.
The Bitcoin futures market of Bakkt is the company’s first product and the start of the first phase of its development. Phase two, as Chervinsky explained, is expected to be a consumer payment application that allows companies like Starbucks, a backer of Bakkt, to process merchant payments with ease.
But, it remains unforeseen whether Bakkt has established a clear vision to target merchant adoption or to leverage the involvement of conglomerates like Starbucks and Microsoft in its business to expand its crypto venture aggressively.
“Phase two is a mystery. Bakkt hasn’t said what it is or when it’s coming. Given all the talk about ‘spending’ via Bakkt, I’m guessing it’s some type of consumer-grade payment system. Maybe the kind you’d use at Starbucks to buy coffee with bitcoin. We’ll have to wait and see.”
The first phase of Bakkt, which is the release of its futures market, has to be completed first to evaluate its potential impact on the asset class properly. Until the company release its plans to pursue its second phase of growth, it is too early to determine the effect Bakkt will have on the industry.
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