Nearly 11 months into a bear market that has seen the bitcoin price take a two-thirds haircut from its all-time high, the flagship cryptocurrency could be on the verge of a year-end rally.
Mati Greenspan, senior market analyst at eToro, has been watching for a bitcoin breakout for some time now, and he said in market commentary made available to CCN that there are early indications that cryptocurrencies will see a “Santa Claus rally” heading into the new year.
“In traditional markets, it’s very common to see a stock rally leading up to the end of the year due to the increased activity in the private sector during the holidays,” he wrote. “It may be too early to say this, after all we’ve only seen very moderate crypto gains this week, but it is very possible that we might see a Santa Claus rally in the crypto markets.”
BTC/USD | 200 DMA | Coinbase
Notably, Greenspan identified the looming Bitcoin Cash hard fork as the catalyst for this rally, noting that the BCH price had exploded in advance of the Nov. 15 fork, which seems likely to split the network into multiple competing versions.
“The gains are being led by Bitcoin Cash ahead of the hard fork next week. It’s kind of funny to see that after all this sideways movement, a possible break out could come from a disagreement in the BCH community of all places,” he said.
“In any case, the fire doesn’t usually care where the spark came from. Upward momentum has a way of snowballing in financial markets no matter what the drivers of that momentum may have originally been.”
Greenspan tempered his bullish outlook with the qualification that he believes bitcoin needs a strong breakout above its 200-day moving average (DMA), which is currently sitting at $7,068, to truly put the bear trend in its rearview mirror.
However, he isn’t the only analyst pounding the table on bitcoin’s technical indicators. Earlier this week, Bloomberg reported that bitcoin’s directional movement index (DMI) had entered a bullish phase and that its price trends had broken out of their VERA band upper limit. Moreover, the moving average convergence divergence (MACD) gauge for the Bloomberg Galaxy Crypto Index — which features a heavy BTC weighting — recently entered positive territory for the first time in a month.
Featured Image from Shutterstock. Charts from TradingView.
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Calling it an “open invitation for the world to “rethink the existing economic framework,” eToro co-founder and CEO Yoni Assia today announced the launching of GoodDollar, a blockchain-powered, non-speculative crypto project which is geared towards a global distribution on the principles of the universal basic income. The launch has the backing and blessing of eToro, with $1 million in funding from the trading platform to start things off.
Using Blockchain to Distribute a Universal Basic Income
The universal basic income (UBI) is a concept that has been exploredby blockchain enthusiasts and technologists for some years as the divide between the technorati and non-technological workers deepens. The advent of artificial intelligence has hastened concerns for displaced workers. Several UBI experiments have been conducted or are ongoing, with varying results. The concept of the UBI is simple: everyone in a given group is given a guaranteed subsidy with no strings attached. People are still free to work or pursue entrepreneurial goals.
In the case of GoodDollar, according to a press release, from eToro:
“The experiment will research implementing a cryptocurrency that pays social interest to those who have less, and is continuously distributed to any verified participant for free, creating a global, open, universal basic income (UBI).”
The concept of social interest is explained a bit more in the primer. It is defined as “a monetary inflation mechanism designed to benefit the poor by allocating them most of the newly minted currencies.”
Yoni Assia has long been a proponent of acting in ways that have a positive impact on wealth disparities. He first described the Good Dollar nearly ten years ago in a blog post.
“Once all money is transparent, we believe that the invisible hand will become the visible hand, and the philanthropy bank could actually direct the economy to create more value. […]
“The most important intrinsic value are of individuals, since we believe that human life has value, meaning that individuals should get better interest rates than any other entities, hence a better world for all individuals. As for other entities, the value should be derived from their added value to the world in a democratic way. Academic institutions, for example, should have higher intrinsic value than corporations, and should receive higher interest rates. Culture and education have added more value to the world than can/should be derived as direct payment.
“Assuming that eventually all money is transparent and all his funds are in the system, an individual who has only $100 should receive higher interest rate since he needs more support to maintain his basic life necessities, while an individual that has $1M in deposit should receive a lower interest rate since he can add more value to the world through investments.”
The design of the GoodDollar system is such that simply amassing wealth does nothing to create more wealth, whereas using it to benefit those individuals perceived to need such investment will benefit both parties. (We suggest the reader check out the blog posts on the subject for a deeper understanding.)
GoodDollars will be available to anyone who undergoes social verification, and every person will, therefore, be assigned a value on the blockchain such that the algorithm will allocate them a share of the funds.
Interview: Yoni Assia on GoodDollar
We asked a few questions of Assia and garnered the following responses, which have been lightly edited for clarity.
CCN: Is there a particular incentive for blockchain companies to tackle issues like wealth inequality?
Assia: Even though wealth inequality is an expected outcome of free markets, good actors should care about helping those on the extreme end of poverty. Due to the decentralized nature of blockchain, blockchain can help wealth building in economies plagued with corruption and instability since bad actors can’t manipulate the value and records. In 2017, just 1% of the world’s population owned more than 50% of the wealth, and a lot of the individual members of the 1% have had the opportunity to accumulate wealth thanks to environments where the rule of law determines how things are run. In the world of digital assets, 0.7% of cryptocurrency wallets holding as much as 87% of total Bitcoins in supply. However, it might very well be that those 0.7% live in very unstable environments and this is how they manage to protect and build their wealth. Expanding adoption and use of crypto in undeveloped countries, war zones, or other areas where people can’t protect and build their wealth can therefore help those on the extreme ends of poverty close some of the gap with the wealthier population in developed ones, and help the poor in developed countries have a much more sophisticated mechanism to deal with impending technology unemployment, where menial jobs will be replaced by robotics. A voluntary universal basic income run on a blockchain may help those with less money break the cycle of struggling to fulfill their most basic needs and provide them with the ability to pursue their purpose.
CCN: How important is liquidity in the GoodDollar ecosystem?
Assia: Liquidity is certainly important in the GoodDollar ecosystem. A universal basic income is only valuable if the cryptocurrency is liquid with real purchasing power. GoodDollar aims to create a non-speculative cryptocurrency that will not be volatile in value and will be minted and freely distributed to any person, based on social identity verification on the blockchain.
CCN: What are some ways that everyday cryptocurrency users can help?
Assia: When the cryptocurrency will launch, individuals will be incentivized to hold their assets, receiving interest based on the respective individuals wealth. Until then, we ask the everyday crypto user to continue utilizing this ground-breaking technology.
CCN: Is the $1 million investment the last of eToro’s investments in the project?
Assia: eToro’s investment into the GoodDollar experiment will assist further development, deep research, economic modelling, product design, community outreach, and building partnerships with relevant tech companies, foundations/NGOs, and more. Currently, we don’t have further plans for investment but we are passionate about this project and will support this experiment with the resources we have on hand.
CCN: What kind of results are expected?
Assia: We’re still in the process of finalizing the mechanics of GoodDollar and are actively looking for experts in crypto and economics to provide the proper incentives to the GoodDollar framework. Once the details have been solidified, we can circle back for further conversation.
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?
Featured Image from Shutterstock
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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.
Images from Shutterstock
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