Ethereum Sharding & Casper

On the 8th of May, a planned improvement to the Ethereum network is being released by the developers. This upgrade is a new and improved version of Casper, the Hybrid Friendly Finality Gadget. This update intends to move the network away from mining-related issues as was becoming increasingly frequent with the old implementation.

These issues exist because of the excessive dependence on Proof-of-Work for platform security and immutability, and they include;

  • mining-related problems
  • increased centralization of mining pools
  • energy consumption issues 
  • a massive influx of ASICs onto the market

The ultimate goal is to eventually move the Ethereum network from a Proof-of-Work to a Proof-of-Stake based system, massively reducing the computational burden on the net.

Let’s take a look at some of the more delicate details of possibly the most significant Ethereum network upgrade to date.

Energy consumption and transaction fees

Casper update is the first step towards crypto sustainability, the first impact will be on energy consumption, as the network moves towards the Proof-of-Stake algorithm.

Although 2017 was an excellent year for cryptocurrency owing to their meteoric growth, it was revealed that neither Ethereum nor Bitcoin in their current iteration would be capable of competing with fiat on a global scale due to their limited transaction throughput.

Another concern that was highlighted is the massive amount of energy it takes to run the mining networks of these cryptocurrencies. Because of this, researchers, journalists, and analysts have taken it up themselves to compare mining costs with the average energy cost in each country in an attempt to find the most profitable country to mine in.

As of 2018, the scaling problem facing most, if not all cryptocurrencies, is yet to be resolved. Ethereum, in particular, has repeatedly been blasted for scaling very poorly despite the size of its mining network. It seems common logic that as the size of the mining network grows in hashing power and number of miners that the number of transactions the system can handle per second should increase linearly in tow.

Miners are going to get paid less and less after the main update goes through, which is designed to direct the network towards POS.

However, the reality is that because all of these miners simultaneously process one block and because the difficulty increases periodically, the relative hashing power of the network does not increase.

Unfortunately, this means that it will still take 10 seconds to produce a block, and the cost of electricity noticeably increases despite the fact that the number of miners on the network has increased drastically.

One of the significant consequences of poor scalability is high network commissions. Miners can choose to prioritize transactions offering higher commissions to increase their return on investment (ROI) and hence maximizing their profit. This leads to the accumulation of thousands of low commission transactions which are left waiting to be accepted onto the next block, which can take hours, several days, or possibly infinitely long if the fee is low enough.

The advent of incredibly power new ASIC miners also threatened the Ethereum network, as they increase the odds that one of the mining pools will attain a significant share of the network hashing power, hence increasing the centralization of Ethereum.

An adapting system

Blockchain and cryptocurrencies are fluid systems, changing and adapting to the environmental cues, similar to how nature responds to the changing conditions of the four yearly seasons.

There have been several attempts to solve these problems, most of which are hard forks aiming to improve the transaction speed by creating “the new Bitcoin.” Since then, other cryptocurrencies have experienced the same phenomenon, with several forks occurring with some of the more popular cryptocurrencies, such as Ethereum, Monero, and Litecoin. The overall movement behind this has been termed the  “ASIC resistance” and has been gathering support as the threat of ASIC mining to the long-term viability of cryptocurrency becomes recognized.

One of the most reasonable approaches to solving this cascade of issues was demonstrated by the team behind Ethereum, who took it upon themselves to combine both the Proof-Of-Stake (PoS) and Proof-Of-Work (PoW) algorithms into a combination of the two they term ‘Casper – Friendly Finality Gadget (FFG).

This new system radically changes the principles of creating and distributing blocks in Ethereum, while also reducing the complexity of the blockchain as a whole. Ethereum developers are confident that the PoW principle is the root of all problems cryptocurrencies face. They believe that despite its effectiveness in achieving decentralized consensus, PoW also causes a tremendous energy burden, has no economic finality and no effective cartel resistance strategy. Furthermore, it is widely acknowledged that the PoW algorithm limits the performance of the blockchain, restricting to several dozen transactions per second at best.

Because of these limitations, the Ethereum team announced a plan to move away from the PoW algorithm, instead adopting the more efficient PoS algorithm. For the PoW algorithm, users can directly buy real computers that consume energy and calculate blocks at a rate roughly proportional to the investment level (computer cost). However, for the PoS case, the subject of purchase are virtual coins inside the system which are then converted by virtual computers that calculate the blocks. This approach does not rely on processing power, but instead on the number of coins in the account of a user-validator. If this validator participates in confirming transactions, their funds are frozen with each block awarded.

The Casper protocol is somewhat of an intermediate step in the transition from PoW to PoS, by combining principles from both of these protocols. FFG allows the underlying PoW blockchain to be finalized through the use of Ether deposits, slashing conditions and a modified fork. As the security of the network transitions from PoW to PoS, the rewards for PoW blocks will be reduced.

Sharding

It’s going to cause the network to break off into separate “islands”, each having its own processing power, authority, and connection to the main network.

Besides the Casper update which leads the transition to a PoS system, there is another potentially profound technology being developed with high hopes in mind – sharding.

The idea behind sharding is that only part of the distributed registry is stored on any particular node, but the mathematics underlying the core protocols ensures that each node can rely on the information of other nodes, to provide the transparency and accountability of the system. Vitalik Buterin, the founder of the Ethereum network, compared the elements of sharding with islands belonging to the same archipelago, imagining that even if Ethereum were split into thousands of islands, each island would still be capable of contacting the other islands through some protocol. Also if each of the islands has its particular features and population (e.g., a fraction of the blockchain), the islands can work together to form a fully featured environment.

In layman’s terms, this means that Ethereum’s main chain will be divided into separate chains termed shards. These shards will be associated both with each other and with the main block. Shards function to provide parallel processing of the transaction, whereby each node can process its shard separately, and work in parallel with other nodes to increase the network’s bandwidth and transaction speed by several orders of magnitude while permanently solving the scaling problem.

Miners and Validators to the Rescue

“I can see a valid block!” – The validators yell, as they are trying not to lose their Ethereum deposits.

Transactions within each shard will be verified by validators – the main marshals of the Casper system along with the miners. The validators work to ensure the legitimacy of operations with coins, acting as a sort of system escrow confirming transactions with their deposit. The system acts as follows – if the validator finds a block that it believes should be included in the blockchain, they will be able to approve it by placing a deposit on this block. If this block is added to the blockchain, then the validator will receive a reward proportional to the amount they invested in the block, whereas if this block turns out to be invalid, or malicious, they will lose their investment.

Validators are also tasked with creating checkpoints every fifty blocks. Producing checkpoints ensure the completion of the blockchain and increase the security of the network significantly by excluding the possibility of returning transactions before the checkpoint. According to Vlad Zamfir, a prominent Ethereum developer, any manipulation or attempt to attack will be of no economic interest to validators, quoting: “It’s as though your ASIC farm burned down if you participated in a 51 percent attack.”

The minimum deposit size a validator must wager for confirmation is set at 1500 ETH, a significant amount to lose under anybody standards, and a potent deterrent for taking part in any manipulation schemes. The developers also offered a solution to the scaling problem, widely considered to be crucial for the further development the Ethereum network, and required to allow Ethereum to compete with more advanced blockchains such as Graphene.

This update is like getting a processor upgrade for your PC, except it is for the entire Etherum network, upgrading speed, capabilities, and long-term reliability.

The increases in processing speed the developers reached is largely due to the participation of fewer nodes and delegation of most of the major work to light clients. Because of this, the transaction processing speed will be much higher than on a separate computer, while the network will be capable of maintaining decentralization while working on a large number of conventional laptops. Additionally, the security of the network is undergoing a significant change from the complex PoW system to the “expensive” PoS system where both miners and validators are provided block rewards. The reward for miners and ether production will decrease fivefold under the new system, reducing from the current 3 ETH to just 0.6 ETH, making the coin less attractive to ASIC miners while concurrently reducing the risk of network centralization.

Under the new system validators are the recipients of rewards, but in smaller amounts with their reward limited to just 0.82 ETH per block (almost four times lower than the current reward level). In future Vitalik Buterin claims Ethereum developers will be able to completely depart from the old PoW system, further reducing the reward for validators to 0.22 ETH per block.

Besides changes in the reward system,  the network will also see a significant increase in efficiency for two reasons. The first is due to the PoS algorithm consensus which is achieved without mining, hence reducing energy costs and ensuring the necessary emission of ETH. The second is achieved by reducing the block generation time to a minimum, as it is now easier to check who owns the largest share, rather than determining who has the greatest mining power.

News updates

Many news updates are expected to fall through about this update, as well as the full implementation afterward. Keep in touch with www.crypto-news.net for the latest information.

During the Edcon conference in early May 2018, Vitalik Buterin – creator of Ethereum provided some insight about the “friendly ghost’ update. Buterin reported that the validator reward system present in the Casper update would also include a penalty system. In the reward system, the greater the stake is the lower the interest rate earned on that stake, for example, staking 2.5 million ETH will generate an annual fee of 10%, whereas a stake of 10 million ETH would only generate 5% interest.

The penalties a validator is subjected to is dependent on the severity of its faults but can be as high as 100% of its stake. Validators will be subject to fines if they are frequently absent from the network. Additionally, if problems are discovered within a shard or disk on which the wallet has located a punishment of 2% of the deposit amount will be issued. If the shards for a group of validators are simultaneously defective or absent from the network, then the penalties will be much higher, reaching into the double digits. At the same time, Buterin notes that this approach will likely be the target of hacker attacks as collective penalties can leave validators with up to 100% penalty, hence making them vulnerable to malicious hackers with an intention to cause damage.

The most recent news relating to the “friendly ghost” hit on May 8th, when Denny Ryan, an Ethereum developer published the code for the first version of Casper on GitHub:

“v0.1.0 marks us more clearly tagging releases to help clients and external auditors more easily track the contract and changes.” Ryan also noted that client developers can also start writing and testing software in their own languages, rather than being restricted to Solidity as was previously the case.

Casper – What to expect

Better start stockpiling on the ETH if you want to be able to mine Ethereum after the major update goes through, as it is going to cost 1500 ETH to process a block.

The Casper FFG launch is planned for Q3 2018. As this is a significant network upgrade, it will be incompatible with previous versions of the Ethereum software, and as such will be implemented through a hard fork.

Due to its potential in solving the scalability problem, Casper stands as one of the most important blockchain upgrades to date, providing numerous benefits to both developers and ordinary users. It has taken three years of work by the Ethereum Foundation to piece together all the steps necessary to make the Ethereum network decentralized, efficient and competitive in an industry with so many new players looking to usurp it.

With this increase in bandwidth, the Ethereum network is to see much faster transaction confirmations and greatly increased transaction throughput, which will provide the backbone needed for a large-scale decentralized application. The Ethereum platform has a large, talented community behind it contributing to its development and improving its functionality.

Although a lot of work remains to determine how this new reward system will work in practice, one thing is certain – Casper is coming.

 

Featured Image via BigStock.

Source: Crypto News

PR: GigTricks Launches Global on Demand Platform for the Gig Industry

GigTricks Launches Global on Demand Platform for the Gig Industry

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

Have you ever wondered why, even though the freelance industry has grown tremendously in the past decades, it failed to acknowledge the recession issue at so many levels? We will come to that but let’s first explore the growing industry a little.

The industry, without a doubt, is trending upwards. To be fair, it has been growing for a couple of years, to the point that freelancers are nearly 35% of the American workforce these days. Isn’t that impressive? Those numbers show a remarkable paradigm shift in a country that, in other times, used to be the image of the 8-to-5 worker that made his, or her, living while being 100% loyal to the company or employer.

Working from the luxury of your home, at the time you feel most productive, is the real deal, and is a method that is still oozing potential for further growth; but at what cost? The freelance industry is not the fairytale that everyone wants to be in anymore. It has got its nightmares.

Granted, freelance platforms can connect people with numerous employers in almost every field: data entry jobs, writing, content creation, rewriting, editing, graphic design, programming, web designing, and so on. The world is filled with possibilities and with people that are willing to hire and pay freelancers in a timely and fair way. However, most freelance networks can’t assure you 100% that the employer is going to provide the payment, or that he/she won’t give you an unfair review despite you finishing the task in time and with wonderful results.

The never-ending quest for reliability

If it isn’t evident by now, the freelance industry is in dire need of a system or environment that can provide a sense of trust in the relationships and daily interactions between the two most relevant actors in the field, which are freelancers and employers.

In short, the industry currently lacks the foundations and principle standards to establish a trustworthy relationship between the two. That is where GigTricks comes into play, to try and solve the trust issue in the field.

GigTricks will provide all the ingredients to enhance transparency and trust levels between the clients and the freelancers. How does it do it? By implementing the blockchain technology, a very trendy measure that can offer reliability and security when it comes to transactions at all levels.
A complete, on-demand ecosystem with endless possibilities

Existing freelance platforms are excellent tools to get a job or, if you are an employer, to assign a task to someone under your own terms: you need it to be completed by a specific date and will pay a fixed, previously-agreed amount of money in exchange for the freelancer’s services and talent. However, some of these networks have issues in the reviews and skill rating sections, as they can provide a wrong public image about the business relationship established between the two parties.

GigTricks appears as a worldwide solution to those issues, as it represents the first truly 360® freelance and on-demand ecosystem, which will be reviewed and approved by millions of users around the globe.

All things considered, the platform will provide invaluable help in the freelancer community, as it is prepared to deal with any trust issues with the help of the blockchain model. The final goal is to put up a fight against global recession by giving people endless opportunities to work from their homes and generate profit to spend on their specific consumer needs.

Additionally, the freelancer community faces other challenges related to their activity, such as unstable internet connections. As the world becomes more crowded; services such as connectivity can fail in some locations. To combat that, GigTricks offers an innovative working mode: the blockchain-based Point-of-Sale will let freelancer conduct their business while being offline.

The GigTricks PoS devices will allow freelancers to have an integrated profile for both online/offline orders i.e. local clients can make payments in any currency or even crypto, and it will be converted into GBTC at real time. The local order record history will be stored in hyperledger and show in the GigTricks Pro profile. Moreover, the local clients can also submit a review that is after an initial automatic screening and manual filtration will be added to the Pro profile and incorporate in the overall profile rating as well as the individual skill rating of the freelancer.
Enhancing freelancer’s reputation with the most complete suite

The freelance industry is all about reputation. Employers tend to assess at least 50 applications before committing to giving their project to one freelancer in particular. Chances are that the person employing the subject in question spent hours looking at each profile, and he went for the one who they thought was more qualified.

How does a freelancer earn a strong profile? With skill ratings, reviews, and comments from the community, a term that can encompass previous employers, colleagues, and fellow freelancers.

The GigTricks Pro feature can be of great help for freelancers all over the world, no matter the location, as it can provide endless job opportunities by showcasing verified online profiles and portfolios.

The platforms contain several devices and tools that can make sure all actors stay connected and in constant communication in the entire process, all in a trustworthy and reliable way. The GigTricks Point of Sale (PoS), Marketplace, Social, Pro, and Learning services aim to leverage each other to offer benefits to everyone.

These benefits can also come in the form of GigBit Tokens, a special crypto utility token to interact with the GigTricks environment and that can be earned via the GigTricks Social activity. The ecosystem has a number of unblock-able achievements, skill tests, and other premium features, which can be purchased using the mentioned mean of payment.

The world’s best referee!
The freelance industry is also famous (or notorious, if you prefer the term) for hosting more than one dispute about a project. It is a natural course of things: sometimes, the client and the freelancer can’t seem to agree upon anything. However, these issues are not always solved in the fairest terms in existing freelance platforms.

However, GigTricks provides a feasible solution for disputes: the platform encourages an incentivized voting system within the community that adds the one ingredient missing in the equation that is trustworthiness. That way, both parties will have the certainty that the problem was dealt with in a fair way and not by a small, possibly biased staff.

All things told, the GigTricks ecosystem is a perfect measure to add trustworthiness to a growing industry. After all, more than 80 million people in North America, Europe, and Asia formally identify themselves as freelancers, and that number doesn’t include fast-rising markets such as South and Latin America.

Almost half of the millennials (approximately 47%) are into freelancing, and by current growth rates, by 2025, nearly half of the people in the United States of America will freelance. There is no denying that freelance-related activities represent the future of making money, and GigTricks is one of the best measures to provide the playing field with the right levels of reliability, transparency and security.

Join the freelance and on-demand revolution having 5 innovative products integrated into a single ecosystem. Presale will be live from 1st July 2018 to 30th July 2018.
Telegram: “https://t.me/gigtricks

Contact Email Address
richard@2xico.agency
Supporting Link
https://www.gigtricks.com/

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

The post PR: GigTricks Launches Global on Demand Platform for the Gig Industry appeared first on Bitcoin News.

Source: Bitcoinnews.com

Altcoins Get Clobbered, Taking the Brunt of the Bitcoin Bear Market

Following the hack of a largely unheard-of cryptocurrency exchange in South Korea and a probe by US government investigators into Bitcoin price manipulation, the cryptocurrency market has once again broken to the downside — and things aren’t looking pretty. 


Brutality

At the time of this writing, the total market capitalization for cryptocurrencies is sitting at roughly $283 billion USD — a number many would’ve found unbelievable following January’s high of over $830 billion.

With bears firmly in control, it is likely the overall market cap will test critical (and psychological) support around $250 billion — before potentially smashing through and eradicating all gains made during Q4 2017’s run-up.

Bitcoin (BTC), unsurprisingly, has been hit the least. The first and foremost cryptocurrency is trading at around $6,600, down over 13 percent over the last seven days. Of course, such a weekly decline is nothing to scoff at — and things have only been worse for the altcoin market.

Bitcoin’s main rival, Bitcoin Cash (BCH), has taken a significantly worse beating — losing over 23 percent of its value over the same timespan. BCH is now trading at around $870.

Bitcoin tag-along Litecoin (LTC), meanwhile, is struggling to maintain the psychologically-critical price point of $100, having already fallen through in recent hours. At the time of this writing, LTC is trading at around $100, down 17.5 percent over the last week.

Arguably over-hyped projects like EOS (EOS) and TRON (TRX) are receiving brutal beatdowns. The former is down 26.9 percent over the last week, with problems compounded by a questionable mainnet launch plagued by voting issues and concerns about centralization. The latter, meanwhile, has failed to react positively to news that TRON founder Justin Sun acquired file-sharing giant BitTorrent.

Things are not better for other popular altcoins. Cardano (ADA), Stellar (XLM), IOTA (MIOTA), NEO (NEO), Monero (XMR), and VeChain (VEN) are all down over 20 percent. ICON (ICX), meanwhile, is down nearly 30 percent.

Only Binance Coin (BNB) and Ethereum Classic (ETC) have managed to stem the bleeding, with the latter recently announced to soon be supported by Coinbase’s suite of products.

If Bitcoin price fails to see a flood of buyers enter the market at these prices, expect things to get a lot worse before they get better. However, those looking at the bigger picture may find themselves eyeing the current market’s prices greedily.

How is your portfolio looking these days? Are you still optimistic about Bitcoin’s long-term future? Let us know in the comments below!


Images courtesy of Shutterstock, CoinMarketCap.com.

The post Altcoins Get Clobbered, Taking the Brunt of the Bitcoin Bear Market appeared first on Bitcoinist.com.

Source: Bitcoininst

Coinbase To Add New Token, Announces Crypto Index Fund for U.S. Investors

Just this morning, US-based exchange Coinbase who currently supports four digital currencies on its platform has revealed in a blog post its plans to add Ethereum Classic (ETC) to its list of tradable cryptocurrencies in the coming months.

This is good news for coinbase Investors as they are only able to trade Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum (ETH) but soon they will be able to trade Ethereum Classic.

Ethereum Classic (ETC) is a hard folk of Ethereum that was created after the smart complex system hack dubbed Decentralized Autonomous Organization (DAO) in June 2016.

Coinbase Index Fund

Ethereum classic

At the time of writing, Ethereum classic is the 18th largest cryptocurrency in the world and trades at $14.50 with a total market cap of $1,482,481,909 and 24 hours trade volume of $379,985,000, according to CoinMarketCap.

Coinbase, in a blog post, says it will publicly announce the launch date via blog and Twitter after it has successfully added the digital asset to its list. But users can do follow-ups on the process through the company’s public-facing APIs.

As part of the good news, the crypto exchange also announced that the Coinbase Index Fund is now open for investments of $250,000 to $20M.

“We’ve seen overwhelming interest from investors since we announced the fund earlier this year. At this stage, we have opened the fund to those who wish to invest $250,000 to $20M,” the company said in a blog post.

According to the exchange, the Coinbase Index Funds will give eligible investors access to all the assets available on the platform and the Fund will be rebalanced each time a new asset is listed on the exchange.  

This exciting new feature, however, is limited to accredited investors in the United States. But there may still be opportunities for non-US investors as the company has said that it is “working on launching more funds which are accessible to all investors and cover a broader range of digital assets.”

But no one is certain how soon this will happen given that the exchange is also working towards being SEC-compliant.

The post Coinbase To Add New Token, Announces Crypto Index Fund for U.S. Investors appeared first on CryptoPotato.

Source: Crypto Potato

Bitcoin Price Analysis June.13

Three days ago we wrote: “The support level to look at is the $7,000 support. We’ve been there 2 weeks ago (May 29). Breaking down will probably lead a move to $6,600 support area.” Unfortunate to Bitcoin, the way to $6,600 support zone was quick as expected. The last days were very painful for the crypto markets, the market cap dropped below 300 Billion and the sentiment is very negative.

As seen on the chart, Bitcoin stopped at support level at $6,400 which is the low of April 1st. Breaking it down will probably send a quick drop to re-test the 2018 low at $5,900. Not much more to say. The volume down was huge, what can tell a heavy seller is clearing his bags. From the bull side, the $6800 support turned resistance and $7,300 are the levels to keep an eye on.

BTC/USD BitFinex 4 Hours chart

BTC Jun.13

The post Bitcoin Price Analysis June.13 appeared first on CryptoPotato.

Source: Crypto Potato

Module Sells $2 Million Worth of MODL Tokens During Their Private Presale

Module, Japan’s disruptive answer to the present-day inefficiency problems of blockchain Proof-of-Work (PoW) mining, has just released their early sales numbers for their MODL token private presale, and it seems their innovative project is already showing signs of being a popular hit. The company has announced that so far they’ve collected $2 million in the private sale and are well on their way to achieving their soft cap of $5 million.


The blockchain world is abuzz recently on how to deal with energy consumption issues related to PoW mining protocols, and Module has come up with an intriguing solution that allows just about anyone to use a powerful asset they carry around with them everywhere, but almost never use: their mobile devices’ storage.

Module’s technology will allow anyone to take the unused storage space on their mobile devices and put it to use for mining the new MODL cryptocurrency. Module says they are effectively replacing the old Proof-of-Work (PoW) algorithm with their Proof of Space, Time, and Transaction (PoSTT) algorithm, which will be truly decentralized and available to anyone who wants to participate in crypto mining, regardless of their means.

The ideals of crypto have always been about creating a truly democratic, decentralized system that everyone can benefit from equally. Yet, physical constraints, such as energy consumption and hardware purchase and maintenance, get in the way of a truly equitable and decentralized system. Module has solved this problem by developing their mining protocol so that any mobile device owner can use the storage that’s already just sitting there to mine MODL and reap rewards. With mining spread out over millions of devices, energy impact is mitigated, while more people benefit.

The company is also developing state-of-the-art P2P cloud-based data storage featuring client-side encryption. The Module system will be built like Ethereum, Stellar and EOS, so it will also enable users to develop Dapps (decentralized applications), as well as create new tokens. They are developing a secret sharing system for decentralized, split data encryption as well.

Check out their website for more information at modltoken.io.

What are your thoughts the Module project? Is it the solution to inefficient PoW mining? Let us know in the comments below.


Images and media courtesy of Module

The post Module Sells $2 Million Worth of MODL Tokens During Their Private Presale appeared first on Bitcoinist.com.

Source: Bitcoininst

Japan Cracks Down on Illegal Use of Computers to Mine Crypto

Japan Cracks Down on Illegal Use of Computers to Mine Crypto

The police in Japan are cracking down on the illegal use of personal computers for cryptocurrency mining. Multiple prefectural police departments are currently investigating one particular case and pursuing criminal charges, which would make it the first criminal case in Japan where computers are illegally used for mining cryptocurrencies.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Police to Press Charges

Japan Cracks Down on Illegal Use of Computers to Mine CryptoA police investigation is underway in Japan over the hijacking of personal computers to mine cryptocurrencies, the Mainichi reported.

“According to investigative sources, people involved in the case set up websites in the fall of 2017 to install a program on viewers’ computers and use the machines for mining the monero cryptocurrency,” the news outlet conveyed, elaborating:

If police press charges, it will be the first case in Japan where illegal use of computers in cryptocurrency mining would become a criminal case. The incident is being pursued jointly by multiple prefectural police departments including those in Kanagawa, Chiba and Tochigi in central Japan.

Growing Use of Coinhive

Three people are being investigated including a website designer for using a web browser-based mining program, Coinhive, to mine crypto using website visitors’ computers. The program, freely available online, allows website owners to mine cryptocurrencies using the processing power of their visitors’ devices.

Japan Cracks Down on Illegal Use of Computers to Mine CryptoJapanese cyber security and defense company founded in Los Angeles, Trend Micro, detected 181,376 terminals running mining software from January through March this year in Japan, the publication conveyed, adding that this is a substantial increase from 767 in the same period a year ago.

However, not all uses of the mining program are malicious. Last month, Unicef Australia launched a website to allow visitors to donate computer power to mine cryptocurrency using Authedmine – an opt-in version of Coinhive’s API. In February, mainstream web magazine Salon started offering visitors the option to opt-in to mine crypto instead of viewing ads.

The use of Coinhive has been growing due to its ease of use and profitability. In its research published in March, Cyren Security Lab found that domains with mining scripts rose 725%. In October last year, Adguard independently published a study showing that over half a billion people had been mining crypto without knowing it through websites using Coinhive and another similar program called Jsecoin.

Criminal Case Justification

The Japanese investigators are pursuing the case criminally “because the installation of the mining program was done without the consent of the computer owners and those machines were forced to function in ways not intended by their legitimate owners,” the Mainichi detailed, adding:

Police do not intend to press charges over websites that clearly say they are placing mining software on visitors’ computers.

Japan Cracks Down on Illegal Use of Computers to Mine CryptoThe investigators will only press charges against “websites without clear notices about mining, because they judged that users remain in the dark about the use of their computer power, users often can deny ad distribution to their computers,” the news outlet described.

The Yokohama Summary Court has already ordered one person to pay 100,000 yen (~US$906) for illegally storing a computer virus. However, the defendant “argues that it was not a virus as it uses a method similar to distributing advertisements online. The case is set to proceed to a fully fledged trial at the Yokohama District Court.” The defendant’s lawyer, Takashi Hirano, confirmed that he intends to “wage a full-scale legal fight.”

What do you think of the Japanese police’s action? Let us know in the comments section below.


Images courtesy of Shutterstock and Coinhive.


Need to calculate your bitcoin holdings? Check our tools section.

The post Japan Cracks Down on Illegal Use of Computers to Mine Crypto appeared first on Bitcoin News.

Source: Bitcoinnews.com

India Hit with Crime Wave as Cryptocurrencies Continue to Gain Popularity

It seems that every time a new technology emerges, so too do ne’er-do-wells seeking to exploit that technology for their own gain. Cryptocurrencies are no exception. Bitcoin’s meteoric rise last December led to a whole slew of hacks and scams being perpetrated around the world. Of late, India has been experiencing its own crypto crime wave that shows no signs of abating anytime soon.


Scams, Bamboozles, and Hoodwinks

2018 is going to be one for the record books. In the first half of this year alone, more than $2 billion has been lost to cryptocurrency exchange hacks and scams. India, in particular, seems to be experiencing a spate of crypto-related crimes.

As in most other parts of the world, the increase in popularity of cryptocurrencies in India brings with it no shortage of criminals eager to exploit investors. When cryptocurrencies were first taking off in the Asian subcontinent, scams were mostly limited to phishing links and key-stealing malware. Then came ransomware – malware that encrypts or otherwise locks important files on a user’s system until a ransom is paid – and mining malware.

As prices began to rise, fraudsters got more creative. Fake apps and social media accounts began to emerge, as did multi-level marketing (MLM) ponzi scams like BitConnect. Unscrupulous fraudsters have found easy pickings taking advantage of new investors eager to “strike it rich” with a technology of which they have little to no understanding.

The most infamous crypto scam in India to date was GainBitcoin, founded by Amit Bhardwaj in 2013. Operating as a multi-level marketing company, GainBitcoin promised users an exorbitant 10% monthly return on their investments plus bonuses for every person an investor signed up under them. The scam reportedly defrauded thousands of investors out of an estimated Rs 2,000 crore – $296 million at current rates.

Bitcoin Ponzi Scams

India’s Embattled Relationship with Bitcoin

While countries like Switzerland, Malta, and Belarus have embraced cryptocurrencies with open arms, India remains at loggerheads with the technology. During his budget speech in February 2018, Finance Minister Arun Jaitley was bluntly clear on the government’s stance on cryptocurrencies:

The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system.

India turned the screws on crypto even more when, in April 2018, the RBI (Reserve Bank of India) banned all banks and other RBI-regulated entities from “[dealing] with or [providing] services to any individual or business entities dealing with or settling [virtual currencies].” In the wake of the ban, some crypto exchanges shut down altogether while others contemplated relocating operations to friendlier climes.

Cryptocurrency in India

If the RBI thinks that the ban will stifle interest in cryptocurrency within the country, they are in for a disappointment. Despite the ban, India still accounts for roughly 10% of the Bitcoin market and 6% of the total cryptocurrency market. Ironically, trade volume actually increased following the RBI’s announcement. Some people attribute the increase to investors scrambling to take advantage of the 3-month grace period before the ban goes into effect while others credit the tenacity of the country’s several million crypto investors.

Several exchanges and a number of individuals acting on their own behalf are challenging the ban, arguing that it is unconstitutional. Anirudh Rastogi, a managing partner at TRA, a law firm that represents several local crypto exchanges, said:

It has come with this overarching order that can be challenged on several counts. There is a right to trade, and it cannot be restricted in absolute terms. Only reasonable restrictions can be imposed and applied but a complete prohibition as restrictive as this was unnecessary.

Since the RBI’s announcement, many Indian exchanges have reached out to the government seeking a compromise – increased regulation and transparency – rather than an outright ban on cryptocurrencies. Rastogi clarified:

A ban is counter-productive, therefore, we have suggested that there should be appropriate regulations that can address the government or the central bank’s concerns.

What are your thoughts on India’s attitude towards cryptocurrencies? How can the recent rash of crypto crimes in the country be addressed? Let us know in the comments below.


Images courtesy of Shutterstock, Bitcoinist Archives

The post India Hit with Crime Wave as Cryptocurrencies Continue to Gain Popularity appeared first on Bitcoinist.com.

Source: Bitcoininst

Crypto Exchange Buda Subject of Sudden Banking Embargo in Colombia

Crypto Exchange Buda Subject of Sudden Banking Embargo in Colombia

Major Latin American bitcoin exchange, Buda, recently suddenly become the subject of a banking embargo in Colombia, according to local reports. Buda similarly experienced the termination of its Chilean banking services in March of this year.

Also Read: Six Major Banks in Chile Sued by Another Cryptocurrency Exchange

Buda Suffers Termination of Banking Services in Colombia

Crypto Exchange Buda Subject of Sudden Banking Embargo in ColombiaBuda, a Latin American bitcoin exchange formerly known as Surbtc servicing the Argentinian, Chilean, Colombian, and Peruvian markets, suddenly became the subject of a financial blockade from Colombian banking institutions. The sudden termination of the exchange’s Colombian bank accounts has disrupted customer withdrawals, which are expected to be processed as normal from June 13th onward.

The CEO of Buda, Alejandro Beltran, confirmed that Bancolombia, Davivienda, and BBVA have all terminated financial services provided to the exchange via an email sent to customers. Buda also sought to assure customers that despite their funds are safely protected despite the disruptions to exchange’s operations.

No Other Exchanges Appear to Have Been Targeted

Crypto Exchange Buda Subject of Sudden Banking Embargo in ColombiaLocal reports have attributed embargo to a warning issued by the Superintendence in February that encouraged banks to avoid having ties to Buda.com. The embargo does not target other Columbian exchanges, with local media reporting that “other local crypto exchanges remain open and unimpeded,” as neither Panda Exchange nor Bitinka has reported terminations of banking services.

The financial embargo against Buda has come at a time of increasing parliamentary dialogue regarding cryptocurrencies in Colombia.

During a recent debate in the Colombian Senate attended by representatives of the country’s Financial Superintendency, Bank of the Republic, and National Banking Association, Senator Antonio Navarro Wolff asserted that “the State assumed the task of warning about the risks of operations with cryptocurrencies but did not take actions to prevent or hinder these operations.”

“It is necessary to advance the issue of cryptocurrency, to be at the level of the countries that use this technology,” Senator Wolff added.

Buda Faces Banking Hurdles in Chile

Crypto Exchange Buda Subject of Sudden Banking Embargo in ColombiaIn March, Buda, alongside cryptocurrency exchanges Cryptomarket, and Orionx, became the subject of an aggressive banking embargo from Chile’s seven major financial institutions, including state-owned bank, Banco del Estado de Chile.

Buda filed a lawsuit with Chile’s Court for the Defense of Free Competition, leading to the court ordering Banco del Estado de Chile, Scotiabank, and Itau Corpbanca to reopen the accounts of Buda and Cryptomkt. Banco del Estado de Chile has confirmed that it will comply with the court’s wishes, however, neither Scotiabank or Tiau have indicated that their intention to reopen the exchanges’ accounts.

Do you think that Buda will be driven from the Colombian markets? Share your thoughts in the comments section below!


Images courtesy of Shutterstock, Buda


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The post Crypto Exchange Buda Subject of Sudden Banking Embargo in Colombia appeared first on Bitcoin News.

Source: Bitcoinnews.com

Sports Betting to Meet Cryptocurrencies in FIFA World Cup 2018

While the world stirs with excitement for the FIFA World Cup 2018, cryptocurrency developers are going to great lengths to build applications for capitalizing on the football fever.

Ether Up For Grabs

According to a report on Forbes, the World Cup 2018 will witness a blockchain-based betting game built to incentivize football speculators with ether (ETH). To win, contestants will have to predict the outcome of football matches, with a total of 42 ETH ($22,477.81 at the time of writing) up for grabs for the top 10 percent of speculators.

The betting game is built on the Ethereum blockchain and enables the player to generate unique a ERC 721 token which represents the team they back for the win.

Being a decentralized app, CryptoCup users need not fear interference from the government or other regulatory bodies that disallow competitive betting. However, while no lawful binding is applicable for the bets,  all transactions will be publically viewable on the Ethereum blockchain.

To participate, players log in with MetaMask and proceed for the token building. After completion, players can set a value for their tokens. The application process runs June 14, post which players can speculate on game outcomes.

The Chief Executive of CryptoCup, Federico Goldberg, stated:

“We wanted to combine that popularity with blockchain technology to build something different than an ICO or collectible.”

The FIFA World Cup starts June 14, 2018, in Russia. As per statistics, an approximate one billion viewers followed the 2014 World Cup finals.

Smart Contracts to Augment User Experience

The game functions on a smart contract that ensures transparency. Moreover, the acquired data secured in the public blockchain ensures easy access to tokens. Importantly, the game’s underlying Ethereum provides an additional advantage of maintaining token authenticity.

Speaking about the benefits of using blockchain, CryptoCup engineer Martin Nagelberg stated:

“Decentralization is a great way to clear up much of the corruption that comes with sports gambling. We have created a fair, honest and transparent betting project. The concept will also be easy to scale to other sporting events, such as the UEFA Champions League, the NFL and the NHL. The World Cup platform is exciting, as we grew up loving the sport and tournament, but it’s also just the tip of the iceberg.”

The post Sports Betting to Meet Cryptocurrencies in FIFA World Cup 2018 appeared first on BTCMANAGER.

Source: BTC Manager