Most DEXs are unsafe, alleges new report

Only two decentralized exchanges on the list received high cybersecurity scores.

14 out of 25 decentralized exchanges, or DEXs, scored poorly in terms of cybersecurity according to a recent report. 

Source: CER.

CER’s criteria included several factors such as whether a DEX underwent security audit, availability of bug bounties, and proper SSL/TLS certificates. CER deemed any score below 6 as “low” and thus “not safe”. Only two of the DEXs received a “high” score — Uniswap and Syntetyx.

“It is important to note that 6 exchanges (24%) failed to pass a security audit or did not publicly announce that they have undergone an audit. It should be noted that an unaudited exchange cannot be considered safe.”

Some of the 25 exchanges used individual researchers rather than companies — a practice that the report's authors strongly discouraged. Remarking on the incredible growth of DeFi in the last few months, the researchers concluded that DEX users are more exposed to fraud than hacks:

“Despite the fact that there haven’t been any significant hacks on decentralized exchanges in comparison to centralized platforms, DEX users are actually more susceptible to fraudulent attacks"

Cambodia launches inter-banking platform that runs on blockchain

But don’t call it a CBDC, says central bank reps.

Amid a global race toward central bank digital currencies, or CBDCs, Cambodia officially launched a blockchain-based platform for digital money transactions called Bakong. 

"Bakong, a payment and money transfer service through banks or microfinance institutions, was established under the initiative of the National Bank of Cambodia," said an article from Dap-News on Oct. 28. The Asian country's central bank collaborated with a number of entities on the project.

Bakong first secured involvement from Cambodian financial giant PRASAC in October 2019. In January 2020, Cambodia's central bank forecast the platform's launch, revealing the system as a closed circuit enterprise. 

"Bakong is a new and modern payment tool that allows customers to make interbank transactions and bill payments easily, quickly, securely and free of charge," PRASAC's executive vice-president, Sony Say, said, as quoted by Dap-News.

"I hope the official launch of the Bakong System today will help promote social welfare and also prevent the spread of [Covid-19] by providing seamless e-payments from person to person," Cambodian central bank director general, Chea Serey, said, as reported by The Phnom Penh Post on Oct. 28. "Online payments can also be made through Bakong System, which also offers alternative options for … transactions such as deposits, withdrawals, sending and receiving [via] e-wallet.”

The Phnom Penh Post article clarified, however: 

"In response to rising concerns domestically and internationally, Serey stressed that Bakong is not a Central Bank Digital Currency." 

Although the news does not definitively confirm the presence of an actual CBDC, the global race toward each country's version of such an asset remains a hot topic. The U.S. has taken a slower approach when it comes to a national digital currency, aiming for accuracy over speed

Partisan dunks eclipse Section 230 in Senate hearing on social media giants

Though the hearing did not focus on solutions, open source looks like a real way of addressing the committee's concerns about transparency and accountability.

In a hearing before the Senate Commerce Committee on Friday, the CEOs of Facebook, Twitter, and Google’s parent company Alphabet faced a veritable firing squad, in what has become bipartisan hatred based on partisan reasons. But while Republicans and Democrats have different gripes with the platforms, all are clearly out for blood. 

Today’s hearing theoretically set out to focus on Section 230, a component of the Communications Decency Act that has historically served to protect online content hosts from the responsibilities that publishers take on. However, the actual questioning ended up being primarily political dunking.

Many members commented on the speed with which the hearing was set up, which was clearly in response to the fact that the national election is Tuesday. The three CEOs — Mark Zuckerberg, Jack Dorsey and Sundar Pichai — all appeared remotely, but it was after threat of subpoena. Democrat Senator Richard Blumenthal chided the Republicans on the committee for trying to sway the election last-minute:

“I am appalled that my Republican colleagues are holding this hearing days before the election when they seem to want to bully and browbeat the platforms here to try to tilt them toward President Trump’s favor. The timing seems inexplicable except to game the ref, in effect.”

Senator Brian Schatz (D-HI) went further: “We have to call this hearing what it is: It’s a sham.”

Meanwhile, Republicans like Ted Cruz, who lost to Trump in the presidential primaries in 2016, portrayed Twitter’s removal of the New York Post’s story on alleged corruption by the son of Democratic Presidential Candidate Joe Biden as proof that they are censoring conservative narratives. Cruz said:

“The three witnesses we have before us today collectively pose, I believe, the single greatest threat to free speech in America and the greatest threat we have to free and fair elections.”

Since the 2016 elections, Facebook in particular has fallen far out of the favor of Democratic congresspeople. Many attribute Donald Trump’s victory to Russian misinformation on the platform, as well as the sale of user data to the Trump campaign. Given the continued circulation of conspiracy theories and far-right recruitment on the platform, Democrats have put new pressure on Facebook to do more content moderation.

Meanwhile, President Trump and the Department of Justice have attacked Section 230 as a means for these platforms to remain unaccountable for how they perform content moderation. Here is a rare area where everyone seemed to agree. These platforms don’t make any of the algorithms running their suggestions public, and had very limited information available about their new content moderation practices.

“The moderation practices used to suppress or amplify content remain a black box to the public,” said Senator John Thune (R-SD). “Due to exceptional secrecy with which platforms protect their content moderation practices it’s been impossible to prove one way or another whether political bias actually exists.”

Thune is a co-sponsor alongside Sen. Schatz on a bill that aims to add accountability to social media content practices while operating within the boundaries of Section 230. Other bills are floating around with more aggressive provisions against partisan removal of content.

But at least one leader in blockchain-based social media noted that proprietary controls over the algorithms running searches and content suggestions have no accountability because nobody ever sees them. This, says Bill Ottman, CEO of Minds.com, is something you could actually change fundamentally with legislation:

“The algorithms have to be open source. If the algorithms are not open source, there's no way for anyone to know if they're playing favorites. So that's the regulation that would actually be useful to everybody, because it's not so much a question of if search is a part of the multi-headed monster that is Google, it's more like, can we audit search?”

Cointelegraph has previously speculated on whether the continuing attacks on Big Tech could ultimately push the market towards decentralization. Ottman suggested that making algorithms open source would allow public accountability on an ongoing basis, similar to how crypto operates.

Underlying all of these complaints is the awareness of the power of these platforms. They have become more critical to public discourse than anyone could have predicted in the mid-90s, when Section 230 emerged. Facebook, Twitter and Google are leading sources of information for many U.S. voters, a status some allege they have used to feed into their own size. Zuckerberg, Pichai and Dorsey all appeared before the House Judiciary Committee for antitrust violations in July.

The blockchain revolution is already here, say Alex and Don Tapscott

Tech evangelists Alex and Don Tapscott believe blockchain will “rewrite the economic power grid and the old social order.”

According to tech evangelists Don and Alex Tapscott, blockchain technology will prove itself the most disruptive technology of the next decade.

“We now have an Internet of value that can give us another opportunity to rewrite the economic power grid and the old social order”, said Don Tapscott.

However, Tapscott senior underlines that it will take a while to transform established, multi-trillion dollars industries, such as the supply chain and financial transaction sphere.

Even so, Alex Tapscott pointed out that successful blockchain use cases are already gaining traction. For instance, he mentioned that stablecoins are already having a significant impact on remittances and cross border transactions.

“Flows between different countries, especially in the global south, have increased dramatically”, he pointed out.

Decentralized exchanges have been showing impressive growth in recent months, Tapscott stated. Tapscott predicts traditional assets will gradually migrate on these types of exchanges, which do away with cumbersome middlemen.

Despite much of the ICO boom being tainted by questionable projects, Tapscott still identified this fundraising model as one of the most successful implementations of blockchain.

“It doesn't matter where in the world you are (...) If you have a compelling enough idea, you can tap into a global pool of capital and start running a business.”

Finally, according to Tapscott, central banks will need to use blockchain to build their central bank digital currencies if they hope to compete with Bitcoin or corporation-made assets such as Libra.

In particular, he said, blockchain technology could provide the degree of privacy, which CBDCs need if they are to replace cash.

Check out the full interview on our Youtube channel and don’t forget to subscribe!

This social media platform gives you the option to make your posts undeletable

The CEO of Minds thinks that others will follow suit.

Alternative social media platform Minds is now letting users permanently save their content on the Arweave platform, which ensures that nobody can ever delete it once published.

Minds users can choose to publish their content on the “permaweb” with no payment or additional setup required. After several minutes, the content can be viewed on the Arweave block explorer and it is expected to remain there forever — or at least for as long as Arweave exists, Minds CEO Bill Ottman told Cointelegraph.

This marks the first major integration of blockchain — or a "blockweave" in Arweave terminology — in the company's content infrastructure. While Minds has an Ethereum-based token used for rewards and paying for the company’s services, the social media platform itself was entirely based on traditional web servers.

To inaugurate the new feature, Ottman published a picture and quote of George Orwell, which says, “The past was erased, the erasure was forgotten, the lie became the truth.”

The idea of permanently storing content is not entirely new in the cryptocurrency space. Systems like Hive automatically save all posts to the blockchain, but Ottman believes this is not the ideal outcome. “It's all about providing optionality to the users,” he said.

Not everyone may want to keep their social media history forever. European privacy regulations go as far as establishing the “right to be forgotten” by online platforms, so that users may delete all traces of their previous activity if they so chose.

“I don't think [permanent storage] necessary for every post. It's a pretty big deal to post something permanently, you better not be saying anything that you’re going to regret. [...] I do think you want to give people both options.”

Using blockchain for content storage also carries the benefit of a more resilient infrastructure. “If [Amazon] S3 goes down, we can use it as a backup,” he added.

Still, the most obvious use case of such a feature is censorship-resistance. Content that cannot be removed or modified after publishing should also be extremely difficult to censor.

This can be seen as a double-edged sword. Major social media platforms are currently being scrutinized for simultaneously doing too much content moderation and doing too little — depending on the personal views of the critics.

“You have to ask yourself, which 1984 scenario do you want? Do you want a scenario where all information can be burned to the ground [...] or do you want more content being permanent?”

Ottman is a firm believer in the idea that information should not be stifled. “If in ten years we have moderators who are just banning random shit, please attack us,” he said.

But trusting the founders of a company on their word may not be enough. Twitter leadership famously referred to itself as “the free-speech wing of the free-speech party” in 2012, but a few years later Twitter CEO Jack Dorsey distanced himself from those comments.

Ottman believes that immutable data storage will become more common. “It's just the inevitable evolution of technology. Things are becoming more permanent, more transparent,” he said. Perhaps surprisingly, this view is shared by Dorsey himself, Ottman noted.

Storing data on an immutable ledger could remove many of the mechanisms of control that enable censorship, but not all. As Ottman said, Arweave nodes enforce a certain degree of content moderation before deciding whether to include it. Furthermore, information could still be hidden by the front-ends of the social media platforms, which could significantly limit its reach.

3 Hints Why Bitcoin Might Be ‘Poised for Biggest Breakout Yet’

Bitcoin (BTC) has hit new 2020 highs, nearing the price of USD 14,000, and it's "poised for takeoff," according to crypto analytics firm Coin Metrics that gave three reasons why that might be the case. In the past 24 hours, BTC had surpassed USD 13,800, or the level last seen in January 2018, before falling below USD 13,000 again and later rebounding to USD

Bitcoin RSI Moves Into Bull Market Territory, Here’s What Happens Next

Bitcoin price nearly set a new higher high and confirmed a bull trend. But before the leading cryptocurrency by market cap could set a new peak, a popular trading indicator might have jumped the gun and confirmed the bull market.

The rare reading on the Relative Strength Index has only happened a grand total of 14 times in more than a decade, and on average each impulse has resulted in over 239% upside. This signal has only just appeared, potentially, suggesting that the latest impulse could reach as high as $31,000 per BTC. Here’s what could possibly happen next in crypto.

BTCUSD Weekly Relative Strength Index Reach Bull Market Levels

Browsing anywhere in the media or in social communities, and you’ll find talk about Bitcoin and how it could finally be turning a corner with investors.

Businesses, institutions, and hedge fund managers are suddenly pouring money in, rather than past bull cycles being driven by retail investors. Over 3% of the total BTC supply of 21 million BTC is now held by 24 companies alone.

Related Reading | Crypto Analyst Warns That A Bitcoin “Hell Candle” Is Coming

The asset’s block reward halving, expected to be the catalyst to start the new cycle, is now in the past. The only thing missing is a higher high to confirm an uptrend and new bull market.

Bitcoin missed the mark by just a few bucks last night and has since sunk nearly $1,000, briefly crashing below $13,000 less than 24 hours later.

Two failed early BTC bull market readings, led to the third being the charm | Source: BTCUSD on TradingView.com

But it could be too late for bears that initiated last night’s selloff? On the weekly BTCUSD Relative Strength Index indicator, the top cryptocurrency might have already confirmed a new bull market or at least a bullish impulse just starting that should send the cryptocurrency soaring higher.

RSI Breakout Results In Bitcoin Rally Of 239% On Average, Only 14 Times In History

The leading cryptocurrency by market cap could be about to pull off an amazing feat, and rise anywhere from 36% on the lowest end to as much as 1913% once breaking above 70 on the weekly Relative Strength Index.

Fourteen RSI breakouts resulted in 239% climb on average | Source: BTCUSD on TradingView.com

On average, across only 14 times that this bullish signal happened, Bitcoin continued to climb another 239%. Another 239% from current levels, would put the BTC at a price of roughly $31,00 and set a new all-time high.

Related Reading | Bitcoin Whale Wallets With 1000+ BTC Or More Spike To Highest Levels In History

Past results don’t guarantee future performance, and anything is possible. But if the weekly can close above this key bullish level, a new bull run could be here, and an explosive move will soon confirm it.

Featured image from Deposit Photos, Charts from TradingView.com

Bitcoin’s organic valuation is at an all-time high and it’s a bright mid-term sign

The Bitcoin NVT Ratio is at an all-time high, which indicates that the blockchain network activity is supplementing the price. The metric shows the ongoing rally of BTC is organic, led by genuine retail and institutional demand.

bitcoin nvt
The Bitcoin NVT price hits a new all-time high and enters price discovery. Source: Willy Woo

Bitcoin’s NVT is calculated by dividing its market cap by the sum of capital moved daily on the blockchain.

At its core, Bitcoin is a blockchain network and a settlement layer. Hence, one of the most important fundamental factors would be the amount of money moved on the blockchain network.

The NVT Ratio evaluates the current valuation of BTC by gauging the price and the sum of capital transmitted through the Bitcoin blockchain. Analysts at Woobull.com explain:

“When Bitcoin`s NVT is high, it indicates that its network valuation is outstripping the value being transmitted on its payment network, this can happen when the network is in high growth and investors are valuing it as a high return investment, or alternatively when the price is in an unsustainable bubble.”

Real demand for Bitcoin, real rally, sustainable uptrend

There are three components that typically make a Bitcoin rally a sustainable and prolonged uptrend.

First, the spot market has to lead the futures market, not the other way around. This shows there is genuine demand from retail and institutional buyers.

Second, the daily transaction volume on the Bitcoin blockchain network, along with other fundamentals such as hash rate, has to remain high.

Third, BTC ideally should establish clear support and resistance levels over a long period, rather than a massive run-up in a short time span.

In recent months, the NVT Ratio has continuously climbed, which indicates the user activity of Bitcoin is steadily rising with the price.

bitcoin price btc
The weekly price chart of Bitcoin. Source: BTCUSD on TradingView.com

As the fundamental factors strengthen in tandem with the ongoing rally, that raises the probability of a broader uptrend. Woo said:

“While we wait for BTC post an all-time-high, both on the monthly chart of $14k and the 20k prior top. I’ll point out that the organic valuation under NVT Price from underlying long term investors is already at an all-time-high. Price will follow.”

Where is the BTC ceiling?

In technical analysis, the term “price discovery” is used to describe a situation where an asset’s price reaches a new record-high.

Since it is at a previously unseen peak, it is not possible to predict where the next peak would be.

The NVT Ratio is in a similar situation where it has reached an all-time high and its next peak remains uncertain.

“In markets when all-time-highs are broached, there’s no prior history to go back on, so price discovery swings wildly upward exploring different levels as there’s no history to say ‘that’s not valid,’” Woo said.

For Bitcoin, which relies heavily on blockchain network fundamentals, the price discovery of the NVT Ratio is a highly optimistic sign.

The post Bitcoin’s organic valuation is at an all-time high and it’s a bright mid-term sign appeared first on CryptoSlate.

Bitcoin price sees pullback, but bulls still marching toward $20K

Bitcoin’s price saw a 4% drop in the last 24 hours, but it’s unlikely to see a correction like in previous cycles for three reasons.

The price of Bitcoin (BTC) has increased by 36% in the last 35 days, showing a strong rally. The market sentiment has been optimistic due to rising institutional demand and the perception of BTC as an inflation hedge. 

But after a large uptrend, the belief that BTC may pull back has begun to increase. While a minor correction could occur, like the 4% downward trip to just under $13,000 on Oct. 28, a sizable downtrend is becoming increasingly unlikely. Bitcoin was at $13,860 at the day’s peak, which marked the top of the July 2019 rally. After hitting such a resistance area, a minor pullback is expected. Following a drop to below $13,000, BTC has quickly recovered to $13,150, demonstrating resilience.

Throughout the past 11 years, Bitcoin price has moved in cycles. One of the most prominent narratives, among many others, is the block reward halving, where roughly every four years, the Bitcoin blockchain cuts in half the amount of BTC mined. The halving slows down the pace at which new BTC is created, causing its overall circulating supply to decrease over time. The year following every halving, BTC has rallied strongly, as seen in December 2017 when BTC hit $20,000, subsequent to the July 2016 halving.

If a similar pattern follows, the price of Bitcoin will likely hit $20,000 in March 2021, an analyst known as Ceteris Paribus said. “For $BTC to match last cycle’s time to regain all time high, it would need to hit $20k on March 11, 2021. Would be kind of poetic for it to happen a year after (arguably) the most infamous day in bitcoin’s history.”

As such, analysts anticipate the road to $20,000 in the medium term to be met with obstacles and minor corrections. But three reasons could prevent Bitcoin from seeing a big pullback in the near term.

Lower exchange inflows, staircase rally, and spot-led uptrend

During a bull cycle, the biggest threat to an uptrend is a potential sell-off from long-time hodlers and whales. Before the sell-off happens, some on-chain indicators could show an intent to sell. The most widely used indicator to gauge seller activity is exchange inflows.

When whales prepare to sell Bitcoin, they typically transfer their BTC holdings to exchanges. On some occasions, if a high-net-worth individual is dealing with extremely large BTC holdings, then they might engage in peer-to-peer trades on over-the-counter markets. But in most cases, whales use exchanges like Coinbase, Gemini and Binance. As such, when inflows to major exchanges increase, it often suggests the selling pressure on BTC might intensify.

In the past month, as Bitcoin has rallied, exchange inflows have not increased substantially. Ki Young Ju, CEO of analytics firm CryptoQuant, reaffirmed on Oct. 27 that Bitcoin exchange inflows are declining. On Oct. 22, whale inflows temporarily spiked, causing concerns of heightened selling pressure. Ju noted, “Still safe from short-term $BTC dumping as well.”

With no large selling pressure coming from whales on exchanges, derivatives traders have explained that the ongoing rally is spot-led, not futures-driven. This differentiation is critical because when a rally is primarily fueled by the futures market, it could raise the probability of a rapid pullback. The reason behind this tendency is the possibility of cascading liquidations.

On a Bitcoin futures exchange, cryptocurrency traders place short or long positions with leverage. But that also indicates that if BTC drops 10%, the position would get liquidated and the trader would lose the base capital of $10,000. When the futures market drives the rally and a small drop rattles traders, it could cause a cascade of long futures contracts, causing the market to drop.

The recent rally, however, has seen significant demand from spot and institutional markets. “Light,” a pseudonymous Bitcoin derivatives trader, said, “Market structure is distributed with no exchange monopolizing price discovery. spot is leading derivatives. make of that what you will.” The continuous increase in the trading volume of LMAX Digital, Coinbase, Bakkt and Binance demonstrates the dominance of the spot market in the recent uptrend.

Lastly, the staircase rally of Bitcoin supports the argument that a large price drop has become less likely. In December 2017, Bitcoin crashed after reaching $20,000 because the uptrend occurred in a short period, so there was not enough time to establish support and resistance levels. This time, BTC is climbing a staircase, consolidating after each rally. Such a technical pattern strengthens the uptrend and uplifts the overall momentum.

Potential reasons for a Bitcoin downtrend

Still, there are two key reasons why traders anticipate a short-term Bitcoin downtrend. First, the U.S. dollar index (DXY) has been rebounding. Since alternative stores of value, including gold and Bitcoin, are priced against the dollar, the recovery of the DXY could negatively affect BTC. Second, Bitcoin market sentiment is demonstrating FOMO-level excitement — the fear of missing out — which raises concerns of an overheated rally.

Bitcoin traders Michael van de Poppe and Nick Cote both emphasized that the rising DXY could be a problem for BTC in the near term. Van de Poppe, a full-time trader at the Amsterdam Stock Exchange and a Cointelegraph contributor, said that $12,700 remains a potential target if the DXY continues to climb:

“Retrace here on $BTC, as $DXY is pushing upwards given the surrounding coronavirus pandemic fears. To avoid deviation above the range high, $13,250-13,325 has to hold for support. If that breaks, $12,700 seems next.”

Researchers at Santiment also emphasized that the “social mood” of the Bitcoin market has been increasing quickly. Marking a positive factor in the long term, in the foreseeable future it raises the chances of an overheated rally. If so, the derivatives market could begin to get overcrowded and whales could ponder taking profit on their positions: “Overall social volume is also rising, indicating higher than normal FOMO levels.”

Possible variables

In the last three days, the hash rate of the Bitcoin blockchain network has dropped substantially. According to data from ByteTree, miners have been selling large amounts of BTC in the past week. Analysts attribute this trend to the end of the rainy season in China, which affects the cost of electricity of Bitcoin miners. During the rainy season, miners can gain access to cheaper electricity, which allows them to mine more BTC with lower costs.

There is a possibility that, as miners slow down their operations, they will sell BTC to take profit. As Cote, an on-chain analyst, said, the hashing power outflows out of China have been fast and could further accelerate in 2021. While this is a positive development for the decentralization of the hash rate, in the short term, it could affect the markets:

“The only thing faster than $BTC outflows from exchanges will be hash power outflows out of China in 2021. The energy goliaths are here and they are ready to supply all the good miners with cheap electricity to put a plug in their own bleeding.”

Atop the mass exodus of miners in China, the uncertainty around how the United States presidential election will affect the global equities market is causing both American and European stocks to slump. The Dow Jones Industrial Average has decreased by 5.10% in the past five days, rattling all risk-on and risk-off markets. The DXY aside, gold, Bitcoin and stocks have all fallen in tandem in the last 24 hours, demonstrating a high level of uncertainty in the market.

Bitwise Hits USD 100m, SBI to Launch XRP, Bitcoin, and Ether Fund + More News

Get your daily, bite-sized digest of cryptoasset and blockchain-related news – investigating the stories flying under the radar of today’s crypto news. Crypto adoption news Bitwise Asset Management, a provider of cryptoasset index funds to professional investors, said that it recently surpassed USD 100m in assets under management. The majority of demand has been for its

After Praising Bitcoin, JPMorgan Pushes JPM Coin, Sets Up Dedicated Crypto Unit

After Praising Bitcoin, JPMorgan Pushes JPM Coin, Sets Up Dedicated Crypto Unit

JPMorgan Chase has revealed that its own JPM Coin is now being used commercially by a large tech company. The company has set up a dedicated crypto business unit with a focus on cross-border payments. This news follows a group of JPMorgan analysts praising bitcoin as an alternative investment to gold.

JPMorgan’s Crypto Now Used Commercially

Global investment bank and financial services company JPMorgan Chase has set up a dedicated crypto business unit called Onyx with more than 100 staffers, CNBC reported Tuesday.

Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, revealed to the publication that JPMorgan’s own cryptocurrency, the JPM Coin, is being used commercially for the first time this week by a large, unnamed technology client to send payments around the world. He added that other clients are being on-boarded.

“The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional clients,” according to JPMorgan’s website. “A JPM Coin always has a value equivalent to one U.S. dollar.” In addition, “The JPM Coin will be issued on Quorum Blockchain and subsequently extended to other platforms.”

Georgakopoulos further explained that the bank is focused on improving wholesale payments, specifically in areas where a better solution could save the industry hundreds of millions of dollars. CNBC noted that as one of the largest players in this industry, JPMorgan moves more than $6 trillion a day across more than 100 countries.

JPMorgan’s announcement regarding Onyx and the JPM Coin came after a team of analysts at the firm’s Global Markets Strategy group touted bitcoin as an alternative investment to gold among millennials, suggesting that bitcoin’s price may be “doubling or tripling” if current trends continue.

What do you think about JPMorgan’s crypto strategy? Let us know in the comments section below.

The post After Praising Bitcoin, JPMorgan Pushes JPM Coin, Sets Up Dedicated Crypto Unit appeared first on Bitcoin News.

The Number of Bitcoin Millionaires Cross 20k—Why It’s Not a Good Sign

According to the data from Glassnode, the number of millionaire Bitcoin holders surpassed 20,000. Albeit the figure shows many investors are profitable after BTC’s recent rally, it might also show a sign of a top.

Glassnode analysts wrote:

“The number of #Bitcoin millionaire addresses (addresses holding ≥ $1M worth of $BTC) crossed 20,000. It is the highest value since January 2018.”

In the past 20 days, the price of Bitcoin has increased by around 31%. It massively outperformed both gold and the U.S. stock market.

bitcoin

The number of Bitcoin addresses with balances over $1 million. Source: Glassnode

Is a Minor Take-Profit Pullback Becoming More Likely?

When the price of Bitcoin rises so rapidly in a short period, the cryptocurrency market often becomes vulnerable to a pullback.

There is a large number of investors holding onto high unrealized profits. Although the high time frame technical structure of BTC remains highly optimistic, there is a risk that investors might take profit.

Cole Garner, an on-chain analyst, hinted that a “hell handle” could come soon. Throughout previous bull cycles, following a major BTC run-up, the dominant cryptocurrency saw large short-term corrections.

bitcoin

Previous Bitcoin cycles with major pullbacks. Source: Cole Garner

In the past 24 hours, Bitcoin rose by 6%, despite the growing expectations of a minor pullback. But, Garner said a “hell candle” could follow after one more market upsurge. He said:

“Dynamic RSI on the daily. Hell candle has followed pretty much every DRSI overbought signal that prints > 75 since the beginning of the last bull market. Though a leg up sometimes happen first, as it did today.”

There is One Variable

While the expectations of a market pullback after such a massive rally are typical of previous rallies, there is one variable.

In past bull markets, even during the 2017 craze, the Bitcoin futures market accounted for a large portion of the market volume.

This time around, due to the decline of BitMEX and an overall drop in futures activity relative to previous cycles, the spot market is leading the rally.

Hence, whether investors in the spot market would be compelled enough to sell at the $13,875 resistance level remains to be seen.

On the weekly chart, the $13,875 level has acted as a heavy level of resistance for sellers throughout the last three years.

But a counter-argument to that is that there is little resistance above $13,000 all the way to the all-time high at $20,000. As such, there is a strong possibility that retail and institutional investors could continue to bid above $13,000 expecting a run-up to the record-highs.

A well-known pseudonymous trader known as “Loma” wrote:

“If BTC dumps back down to ~$12,500 area, I’d be surprised. Off the top of my head, I can’t think of many examples where a bullish assets in a bullish trend gives back the entire expansion.”

bitcoin price

The daily price chart of Bitcoin. Source: BTCUSD on TradingView.com

Here’s One Key Reason Why This Bitcoin Uptrend Differs from Previous Ones

It has been a turbulent past few days for Bitcoin and the aggregated crypto market, with bulls primarily controlling the cryptocurrency.

Bears have gained some ground today, however, as the recent rejection at $13,800 has sparked a somewhat intense selloff that isn’t showing any signs of slowing down.

This downtrend has been perpetuated by strength seen by the US Dollar as well, which BTC has formed an inverse correlation to throughout the past few months.

So long as Bitcoin holds above $12,800, however, its bull case is still incredibly strong, and there’s a solid possibility that it will see further upside in the days and weeks ahead.

One analyst is now noting that there are also some key differences between this rally and the one seen in the summer of 2019.

Unlike then, and in previous years, BTC’s ascent has been slow and measured, with the cryptocurrency largely lacking volatility as bulls slowly push the cryptocurrency higher.

So far, each pullback has also been tempered, with bulls rapidly absorbing the selling pressure each time it nears support.

These are positive trends that may indicate upside is imminent.

Bitcoin Faces Harsh Rejection at $13,800, Plunges to Key Support

At the time of writing, Bitcoin is trading down roughly 4% at its current price of $13,150. This marks a notable decline from its recent highs of $13,800 that were set yesterday afternoon at the rally’s peak.

The rejection here was not instant, as BTC consolidated for several hours before witnessing an influx of selling pressure.

This is a positive sign, as it suggests that the sell-side pressure at this level isn’t too intense.

Nonetheless, it still sent BTC down to a key support region, and whether or not bulls can defend it should offer insights into their underlying strength.

Analyst: Lack of Immense BTC Volatility a Positive Sign

Despite seeing some moves that he describes as “intermittent whipsaws,” one analyst is noting that the general lack of volatility seen throughout the past couple of weeks as Bitcoin has advanced higher shows that this rally is different than those seen in years past.

“BTC saw these prices in Dec 2017 then once in Jun 2019. We’re here again today but volatility hasn’t even started picking up. Yes this time is different.”

Bitcoin

Image Courtesy of Mohit Sorout. Source: BTCUSD on TradingView.

Unless this recent decline marks the start of heightened volatility, the steady upward progression and lack of any big movements point to some underlying bullishness.

Featured image from Unsplash.
Charts from TradingView.

Bitcoin gaat upgraden: Schnorr en Taproot komen eraan

Schnorr en Taproot zijn weer een stapje dichterbij. Onlangs werd de code goedgekeurd om deze nieuwe technologieën in de Bitcoin Core software te implementeren. Nu moet alleen nog worden besloten op welke manier het op het netwerk wordt geactiveerd.

Schnorr signatures en Taproot komen langzaam dichterbij. Met Schnorr signatures zijn digitale handtekeningen efficiënter te verifiëren en nemen ze minder data in beslag. Meerdere digitale handtekeningen kunnen ermee worden samengebracht tot een enkele ondertekening, waardoor CoinJoin goedkoper worden. Bovendien zijn transacties waarbij meerdere ondertekeningen nodig zijn (multisig) met Schnorr signatures meer privé, omdat ze er door Schnorr signatures als normale transacties uitzien.

Taproot is een andere technologie die op dat laatste verder borduurt om de privacy van smart contracts te verbeteren, zodat het voor buitenstaanders niet zichtbaar is dat het een smart contract is.

De code om deze twee technologieën te implementeren in de Bitcoin Core software is onlangs goedgekeurd en samengevoegd met de rest van de code. Het ontwikkelingsproces is daarmee in principe afgerond en het enige dat nu nog resteert is de activatie op het Bitcoinnetwerk.

Soft fork

Dat klinkt eenvoudiger dan het is. Bitcoin is decentraal en daarom kan je upgrades niet zomaar via een hard fork afdwingen zonder het risico dat het netwerk in tweeën splitst omdat een deel niet meedoet.

De huidige insteek is daarom dat de activatie van Schnorr en Taproot gebeurt via een soft fork. Dat gebeurde in het verleden ook al eens om SegWit te activeren. Bij een soft fork is ondersteuning van Schnorr en Taproot optioneel en is het proces meer geleidelijk.

Activatie

Er wordt op dit moment nog gediscussieerd over de manier waarop zo'n soft fork het beste kan gebeuren. De meeste aandacht gaat uit naar twee voorstellen: BIP8 en Modern Soft fork Activation. In beide gevallen krijgen de miners eerst een periode om op eigen initiatief de overstap naar Schnorr en Taproot te maken.

Jij kan meedoen

Met een eigen Bitcoin node ben ook jij onderdeel van het proces. Dat hoeft tegenwoordig helemaal niet moeilijk te zijn. Jij kan meedoen!

Men lijkt bij BIP8 aan te sturen op een tijdsbestek van ongeveer een jaar. Als het binnen die tijd niet lukt kunnen de Bitcoin nodes de upgrades proberen te forceren door zelf als eerste te upgraden. Miners die daarin dan niet meegaan kunnen als gevolg geen Schnorr of Taproot transacties van gebruikers verwerken, terwijl miners die er wel in meegaan dat wel kunnen. De gedachte hierachter is dat de meeste miners erdoor uiteindelijk zullen upgraden, omdat ze anders winst mislopen en door de overige miners uit de markt worden weggeconcurreerd.

Modern Soft fork Activation werkt vergelijkbaar, maar verlengd het proces met een aantal extra fasen. In de eerste instantie is de inzet ook een jaar, maar als dat niet lukt zouden erna nieuwe fasen ingaan en kan het in totaal tot 42 maanden duren. Ook hierbij geldt dat de Bitcoin nodes de upgrades uiteindelijk kunnen proberen te forceren.

Hoe lang nog?

Hoe lang het allemaal nog duurt is dus lastig te zeggen. In het ergste geval nog een paar jaar, maar het kan ook opeens heel snel gaan. Anders dan bij eerdere upgrades zijn Schnorr en Taproot namelijk niet erg controversieel en men verwacht daarom weinig tegenstand. Miners verdienen bovendien hun brood met de verkoop van bitcoin, dus een betere Bitcoin is voor hen in principe ook wenselijk. Misschien valt het daarom allemaal wel mee.

Toch is dat allemaal een beetje koffiedik kijken, want met een decentraal project als Bitcoin weet je het immers nooit van te voren. Het is dus vooral een kwestie van afwachten.


Lees ook zelf eens de BIP8 of Modern Soft fork Activation voorstellen. Je kan eventueel ook mee discussiëren over de activatie in het kanaal #taproot-activation via IRC.

NEM Partners with Simplex to Enable Fiat Credit and Debit Purchases Globally

NEM Partners with Simplex to Enable Fiat Credit and Debit Purchases Globally

Leading Fiat On-Ramp to Broaden Reach of XEM and NEM Ecosystem

Gibraltar – 28 October, 2020NEM today announced their partnership with Simplex, the leading fiat infrastructure provider, to make XEM, NEM’s native token, purchasable by credit and debit card across Simplex’s global network of partners, including exchanges, brokers, and wallets.

Commenting on the news, Nicholas Pelecanos, Head of Trading at NEM, “We’re excited to make XEM more globally accessible through Simplex’s vast network of partners and exchanges. Simplex’s user experience is unparalleled, and we’re thrilled to work with this industry behemoth to extend NEM’s global reach. This will enable anyone, anywhere, to have a foray into NEM and the digital assets space, democratizing access and propelling the industry forward to the next phase of adoption.”

Simplex’s fiat credit and debit purchase options offer a simplified process for individuals entering the cryptocurrency space. This partnership will provide an easy global on-ramp to XEM, enabling access to Simplex’s extensive network of exchanges globally. By providing users with greater flexibility in purchasing, Simplex will broaden the reach of XEM.

As the leading, risk-free, fiat infrastructure provider for the cryptocurrency market, Simplex is a licensed EU financial institution. The payment processor uses artificial intelligence (AI) technology to analyze every transaction using proprietary, fully automated, machine-learning algorithms that eliminate fraud, while increasing conversion.

XEM is the native currency of NIS1, NEM’s original blockchain platform. NEM recently announced the opt-in process to Symbol, in which users will be eligible to receive equivalent XEM=XYM tokens on Symbol, the next-generation enterprise-grade blockchain solution from NEM, purpose-built to help businesses cut costs, reduce complexities, and streamline innovation. To accommodate existing NIS1 users, the two chains will continue to run side-by-side.

“Simplex gives anyone, anywhere, the ability to buy crypto securely and easily”, said Nimrod Lehavi, Simplex CEO and founder. “We’re excited to partner with NEM Group to give millions of people access to XEM, through our network of trusted partners.”

###


About NEM Group

NEM Group supports the development of Symbol from NEM, a trusted and secure enterprise blockchain that smooths business friction, increasing the flow of data and innovation to supercharge the creation, exchange and protection of assets.

NEM Group comprises three separate entities: NEM Software, NEM Trading, and NEM Ventures. NEM Group shapes the future of blockchain by nurturing a strong and healthy ecosystem that will contribute to the development of blockchain technology for generations to come.

About Simplex

Simplex has been changing the status quo of crypto on/off ramps since 2014. As the market leader, we pioneered the first riskless global fiat onramp using a credit and debit card, which promises a zero chargeback guarantee. Simplex Banking offers the Simplex fraudless payment processing, with global payment accessibility. Working alongside the biggest names in the crypto ecosystem, including Binance, Huobi, Bitpay, among hundreds of others, Simplex provides the complete fiat infrastructure for the cryptocurrency ecosystem. As a licensed EU financial institution, Simplex was selected as one of the 10 most impactful companies in blockchain in 2020. Put simply, Simplex is making crypto accessible to humans, turning the complex into the Simplex. Keep up with the latest Simplex news by following them on Twitter or visiting www.simplex.com.

Media Contact:
Wachsman
Laura Cooley
E: laura.cooley@wachsman.com
P: +353 87 3519392

Nicholas Pelecanos is available for interviews.

This article was originally published on: The NEM Blog on 

The post NEM Partners with Simplex to Enable Fiat Credit and Debit Purchases Globally appeared first on Coin News 24/7 | All Crypto news sorted for all Coins.

Visa’s foray into fintech provokes DoJ antitrust investigation

U.S. authorities want information from Bain & Co about Visa's Plaid acquisition.

The U.S. Department of Justice, or DoJ, recently publicized an investigation into Visa's ongoing acquisition of fintech company Plaid.  

"Today, the Department of Justice filed a petition in the U.S. District Court for the District of Massachusetts to enforce Bain & Company’s compliance with the department’s Civil Investigative Demand (CID)," the DoJ said in an Oct. 27 public statement. Essentially, U.S. authorities have taken legal action to obtain information from Boston-based consulting giant Bain & Company on Visa's acquisition of Plaid. 

"On June 11, 2020, the division issued Bain a CID requiring the company to answer interrogatories and produce documentary material, including documents that discuss Visa’s pricing strategy and competition against other debit card networks that may be important to the division’s analysis of the proposed acquisition’s effects. The petition alleges that Bain has refused to produce these documents, claiming a seemingly blanket privilege over almost all of them."

Payments behemoth and credit card provider Visa unveiled its $5.3 billion Plaid acquisition on Jan. 13, 2020. Citizens' financial lives often require a number of apps or platforms, countless transactions, and siloed information. Plaid aimed to bridge the disconnect between those platforms and their involved information. 

"As alleged in the petition, Bain, a consulting firm, has withheld important documents demanded under the CID, asserting unsupported claims of privilege over the documents, thereby stymying the Antitrust Division’s investigation," the DoJ statement said. 

Makan Delrahim, the Antitrust Division's assistant attorney, noted the importance of such third parties giving pertinent information to authorities. "Too often, third parties seek to flout these requirements," Delrahim said. The action stands as an accountability play, keeping Bain in line with regulatory expectations, while also seeking pressing details surrounding its investigation.

Earlier this year, following the acquisition's announcement, Plaid faced at least two lawsuits. The first surfaced in June, alleging Plaid used customers' information for its own gain. The second legal action came out in July, claiming a breach of privacy requirements. 

3 reasons why Bitcoin price suddenly dropping below $13,000 isn’t bearish

The price of Bitcoin dipped below $13,000 on Wednesday but despite the 7% drop in 11 hours, the market sentiment remains positive for three key reasons.

The price of Bitcoin (BTC) fell below $13,000 on Oct. 28 shortly after hitting $13,850 at the day’s peak. Despite the 7% drop in 11 hours, however, the market sentiment remains positive for three key reasons.

First, Bitcoin is still at where it was on Oct. 27, merely 24 hours ago. Second, BTC rose to $13,850, right below a multi-year resistance area at $13,873. Third, a marketwide drop was expected due to declining stablecoin inflows into exchanges.

Bitcoin drops to where it was yesterday

In the last two days, the price of Bitcoin rallied 8.5% from $13,783 to $13,850 on Coinbase. The move came after a month-long uptrend during which BTC rose from around $10,200 to $13,850.

Now, on high time frame charts, like the daily chart, for example, BTC price is hovering above a key short-term moving average.

The recent pattern of Bitcoin following up each uptrend with a consolidation phase makes the ongoing rally sustainable.

The daily Bitcoin price chart with funding rates. Source: TradingView.com

The strength of the spot market over the derivatives market also indicates that the uptrend is strong and healthy. A pseudonymous trader known as “Byzantine General” said:

“A higher spot price & higher spot volume (relatively speaking) is considered bullish because it means that the rally is based on actual buying instead of degenerates gambling on derivatives.”

The $13,873 level is a multi-year resistance area

Bitcoin peaked at around $13,900 in July 2019 across major exchanges. As Cointelegraph reported, many traders pinpointed the $13,875 level as the pivotal resistance area in the short term partially for this reason.

If BTC had continuously risen beyond $13,875 without any pullback, it would have caused the rally to become massively overheated. In the medium term, that would have raised the probability of deep pullback, or as some on-chain analysts call it, a “hell candle.”

BTC decline coincided with lack of stablecoin inflows

Prior to the short-term correction of Bitcoin, CryptoQuant CEO Ki-Young Ju warned that stablecoin inflows into exchanges were declining.

The inflow of stablecoins is an accurate metric to gauge buyer demand because stablecoins, like Tether, account for a large portion of the cryptocurrency market’s volume.

Stablecoin inflows into exchanges sharply drop. Source: CryptoQuant

According to CoinMarketCap, the daily volume of Tether exceeds $59 billion across major exchanges. Purely in terms of daily volume, Tether is the most-traded cryptocurrency in the global market. A few hours before the BTC drop occurred, Ju tweeted:

“Fewer people are depositing #stablecoins to exchanges. BTC Buying power is weakening in the short-term(72h).”

The drop in stablecoin inflows might have triggered a sharp Bitcoin pullback because buyers and sellers were intensely battling over the past week. Some miners and whales were selling, while new inflows continuously offsetted the selling pressure.

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Mastercard CEO is bearish on Bitcoin, but sees growth for CBDCs

Ajay Banga, CEO of global payments and card technology firm Mastercard, is not sold on the Bitcoin promise of banking the unbanked individuals, he said in an interview with Fortune yesterday.

Mastercard processes billions of dollars in daily transactions around the world and is present in over 110 countries. The firm does provide fiat on-ramps to crypto exchanges and wallets but has otherwise not made any exclusive offerings for crypto users.

Why Bitcoin isn’t a great payments tool

While Mastercard’s motto is to provide the global population with easy access to financial services, its CEO does not see any use for Bitcoin (or other cryptocurrencies) for one significant reason — volatility.

Banga pointed out price volatility as a huge concern that could impede the growth and adoption of Bitcoin as a payment asset.

Mastercard’s Ajay Banga is not sold on Bitcoin. Image: Your Tech Story

“Bitcoin per se is volatile in its valuation,” Banga said at the Fortune Global Forum conference on Tuesday, adding that imagining someone who is financially excluded from trading “in a way to get included through a currency that could cost the equivalent of two Coca-Cola bottles today and 21 tomorrow?”

“That’s not a way to get them [included]. That’s a way to make them scared of the financial system,” he stated.

Banga’s thoughts are similar to those made by other business heads in the past decade — that the infamous ebbs and flows are difficult to position the digital currency in the same segment as fiat.

To understand the above point, consider people without access to banking, credit, lending, and other services that a minority of the population can take for granted (and even pay high fees to afford). For those in rural areas, handling volatility presents another issue on top of those stated.

Bullish on stablecoins and digital currencies

Despite the words for Bitcoin, the rise of stablecoins in recent years has tackled the long-stated volatility issue for cryptocurrencies and is a segment that Mastercard is looking to tap into.

Banga noted the development of state-backed digital currencies — such as the Chinese digital Yuan pilot project — by central banks “could be an improvement.” He said in the regard, “fiat currencies if they were to go digital, would they be helpful in cross-border trade flows and improving the efficiency of those — yes for sure.”

Digital yuan in use on a state-owned wallet app. Image: Asia Times

Earlier this year, Mastercard created a testing environment for helping central banks develop digital currencies. Rival company Visa has also developed a similar environment for Ethereum-based applications.

Similar other projects are the JPM coin maintained by US bank JPMorgan, which, as CryptoSlate reported yesterday, said the currency was seeing huge traction among clients and provided a quick, transparent trading experience for those who used it thus far.

The post Mastercard CEO is bearish on Bitcoin, but sees growth for CBDCs appeared first on CryptoSlate.

Protect and serve? The dilemma of reissuing lost or frozen DeFi tokens

DeFi apps attempt to return crypto funds affected by the KuCoin hack to users. Are they to blame for the issues?

The recent KuCoin exchange hack and ongoing OKEx incident, during which withdrawals have been frozen, have raised questions as to how blockchain projects with coins traded on exchanges should act when said exchanges are hacked or funds are stuck.

When it comes to projects such as Tron, which replaced tokens that were held by OKEx, such actions are to be expected because their work is based on a central governance model. However, are projects able to pause smart contracts or freeze tokens if they are truly decentralized?

Was all this legal?

Choosing a strategy to save users’ funds in a force-majeure situation can be a real dilemma for a project whose tokens are traded on crypto exchanges. Taking any action with funds that belong to other people is quite a responsibility, especially when it happens without these people’s prior consent.

The incidents that happened over the past month with KuCoin and OKEx — two major crypto exchanges — showed that different DeFi projects treat the security of user funds with varying degrees of responsibility. In response to the Sept. 26 hack of KuCoin, some projects froze funds, some implemented a hard fork, and others took a wait-and-see approach. Just a spoiler: All these measures effectively blacklisted the hackers’ stash of stolen tokens and helped users get their funds back, a step unprecedented for the industry. However, some people feel dislike that projects are making decisions without giving the community a choice.

Related: OKEx’s lips remain sealed on its sudden crypto withdrawal freeze

In an attempt to stop the KuCoin hackers from cashing out stolen assets, blockchain projects pushed measures to lock the affected tokens with a share of total supply varying from 10% to 40%. Velo, Orion, Noia and about 30 other projects in total restored access to transactions by implementing a token swap, according to KuCoin data. But in fact, these were not token swaps in the usual sense of the term, as the projects replaced user tokens with new ones.

Orion Protocol was one of the first projects to respond to the announcement of the KuCoin hack. In an attempt to save 38 million tokens affected by the incident, the project team decided to reissue ORN tokens one-to-one via a token swap the same day that the hack was announced. This step, according to the project’s founders, made the previous contract address and tokens obsolete. Alexey Koloskov, CEO of Orion, told Cointelegraph:

“With near immediate effect, the stolen ORN tokens were worthless and had little to no impact on the secondary market. We worked swiftly to update our smart contract address across official exchange listings and self-listing exchanges to ensure normal trading could resume as soon as possible.”

KardiaChain, another DeFi project affected by the KuCoin security breach, with a total amount of $10 million worth of KAI missing, also took the action of making the previous contract address obsolete and underwent a token swap to eliminate any risk of the stolen KAI tokens ever being sold on the secondary market. Astrid Dang, head of marketing and partnerships at KardiaChain, explained that as a result of this tactic, the hackers’ tokens become worthless, while all other KAI addresses were credited with the new KAI token on a new contract address.

Other projects such as Covesting opted for less drastic measures that did not “affect immutability or decentralization of the token itself.” Specifically, Covesting locked addresses selectively, leaving user funds intact.

There were also projects such as Synthetix and Compound that had users who were affected as a result of the KuCoin hack, but they did not fork their contracts or freeze wallets. Does this imply they are more decentralized than others? Maybe, but it’s worth noting that the stolen amount is relatively minor — less than 1% of the circulating supply.

All’s well that ends well

Did the projects have another choice? The question becomes especially acute when considering the matter of the urgency required in situations where there are large amounts of money at stake. The KuCoin hack shook the entire market, and many projects were faced with a choice: act or lose control of a significant part of their funds.

The share of stolen tokens for some projects reached 40% of the total supply, which means that an attacker could cause even more damage by manipulating the price of the coins. Koloskov, whose project Orion had 38% of its circulating ORN supply compromised, told Cointelegraph:

“In order to prevent the hacker profiting from the exploit at the expense of the ORN community, we were left with little choice but to execute a token swap. We took the executive decision to immediately pause trading, deposits, and withdrawals on KuCoin, while deposits were temporarily suspended across other official listing partners.”

Some projects could not avoid falling prices. Ocean Protocol’s OCEAN lost 8%, according to CoinGecko, when the hackers sold the stolen tokens in batches of 10,000 coins. In an attempt to prevent coin prices from falling further, the project initiated a hard fork of the contract to reverse the hack for anyone choosing to adopt the new version of the contract.

Was it an action contradicting blockchain immutability? The answer is, possibly, both yes and no. On the one hand, if a project can roll back a smart contract to its previous state, then it can do it at any time to manipulate user funds. On the other hand, if the Ethereum team had not implemented its famous hard fork after the hack of The DAO in 2016, its users would not have gotten back $16 million.

Related: KuCoin hack unpacked: More crypto possibly stolen than first feared

For many projects, such as KardiaChain, KuCoin was the main market bringing liquidity to their investors and serving their users, and therefore, they could not allow the bulk of the funds to fall into the fraudsters’ hands. KardiaChain’s Dang said that a token swap might not have been the ideal response to a hack, but the KuCoin hack was particularly special and unique in its own way, as someone knew the private key and gained complete control. He added:

“In fact, we hesitated but when we saw the transaction where the hackers tested transferring 10,000 KAI away, we decided to pause the old smart contract. If that amount is all 524 million KAI, we would feel regretful forever.”

The community’s verdict

It may seem that a token swap can happen because projects control ERC-20 tokens on the Ethereum network. But the projects cannot control the network’s validators, so the projects need a voting session to revert the malicious attacks — that is how decentralization and blockchain work.

In response to the KuCoin hack, some projects took measures immediately, claiming they did not have any time to wait, while others asked their users for input. Judging by Twitter posts, the majority of the community supported protective actions, although there was a fair share of criticism. Koloskov explained that Orion’s initiative to implement its token swap was suggested by users:

“When the first project on Kucoin responded by token swap, Orion Protocol, our community quoted the link and suggested we do it the same way. In fact, Kucoin has been smart in coming up with this tactic and we were all in talks to take the action. Some of the projects did witness the loss when responding slowly.”

Domantas Jaskunas, the co-founder of Noia, also claimed that his project received “overwhelming support” for the solution, saying that “The alternative simply wasn’t an option.” Speaking with Cointelegraph, he added:

“Given the size of the hack, everyone including those who hold their NOIA tokens off exchanges would have been severely affected in a negative way.”

Kardiachain’s Dang noted that the KuCoin hack is a one-off, one-of-a-kind situation, and it is very rare that so many affected projects and exchanges agree on a token swap, which is unprecedented: “We can see it’s not always that we have that kind of support in this crypto world.”

The indicative situation

As of this writing, KuCoin has resumed the full service of 130 tokens on the platform. Meanwhile, crypto traders are still waiting for withdrawals to reopen on OKEx. It seems that the crypto community has not been this united since the hack of The DAO. Only the successful cooperation between exchanges and projects made the swift identification of the hacker possible and avoided even greater losses.

The available evidence suggests that it would not have been possible to quickly solve the problem without interfering with the structure of the blockchain. However, in the future, projects and users will likely be able to come to a consensus on resolving issues around the security of funds in the case of force-majeure situations. Initiatives such as the Safeguard program offered by KuCoin for supporting institutions and users affected by security incidents may make this process smoother and more transparent for the whole industry.

Bitcoin Corrects Lower, Altcoins Reverse Gains

After a strong increase, bitcoin price faced sellers near USD 13,850. BTC started a corrective decrease and traded below the USD 13,600 and USD 13,500 support levels. The price is currently (13:00 UTC) trading well below USD 13,500 and it seems like the bears are aiming for a test of USD 13,000. Most major altcoins faced renewed selling interest after morning’s recovery, including ethereum, XRP,