Weekly Roundup: BTC Flat, Blockchains in Business on the Rise, Tether’s Troubles, North Korea’s Hackers
In this week’s edition, we go over the latest in bitcoin price developments (there weren’t many last week), discuss how blockchain tech is managing to penetrate an even wider array of industries than was previously suspected, review the latest going-ons with the unstable stablecoin Tether, and talk about how North Korea is managing to dominate exchange hackings.
Bitcoin Ends Week Flat, Bitfinex Premium Gap Closing
After the previous week’s disturbances caused by the breakdown of Tether (USDT), the price of bitcoin put on a rather lackluster show last week, ending nearly flat in movement over the last 7 day period. BTC was still down close to 5% as of Monday morning on Bitfinex, which handles the bulk of all BTC/USDT trades, as the price premium normally associated with the exchange dwindled from $400 to $200. The Bitcoin Network itself neared 95% capacity for the first time since drastic reductions in traffic incurred earlier this year thanks to the introduction of SegWit and the Lightning Network, although the median transaction fee remains relatively low at 2,700 satoshis, or $0.16 per transaction.
For nearly the past 2 months, bitcoin has been caught in a tug-of-war between the bears and the bulls, appearing to be on the verge of breaking out upward according to some and on the brink of collapse to others. Some of bitcoin’s bullish champions, such as Mike Novogratz, have been re-adjusting their predictions to make room for the chance that bitcoin might not end the year on a spectacular high note, as many had hoped. A new technical analysis report from CoinDesk puts the make-or-break level for bitcoin’s continued rise at $6,800, predicting that to be the magic number that bitcoin must remain above in order to break out into a new, bullish trend.
Blockchain to the Rescue: Business Use Case Scenarios on the Rise
The number of problems for which blockchain technology is currently being investigated as a solution is on the rise. Due to is ability to act as an immutable, secured database, the blockchain has often been looked at for use in supply chain logistics, healthcare record maintenance and even voter registration. In 2018, the number of potential use cases for its application has grown significantly. As a matter of fact, it is estimated that about 150 different blockchain company mergers and acquisitions will be completed by the end of the year. New ways of employing the blockchain include using it to ease traffic congestions, protect rainforests, manage intellectual property rights, determine the value of surplus solar power, and even transform the professional sports industry.
Financial institutions like Visa and MasterCard are discovering the non-malleable, non-corruptible implementation of a blockchain consensus mechanism to be lucrative and have been investing millions of dollars into the development of blockchain research and technology. Well over 50 major financial institutions have publicized the fact that they are on the hunt for blockchain specialist employees to help them save money and improve business operations by shortening transaction, settlement and payment times.
As a result of this increased demand, crypto jobs have been quantifiably surging, and the average salary for a blockchain-related job has more than doubled since 2017, which makes it an especially promising employment prospect for an up-and-coming workforce. Some prominent companies which are seeking the use of blockchain technology to increase the performance of their businesses, and the industries to which they are currently being applied include:
IBM – carbon offset management and supply chain management
Microsoft Azure – enterprise and business solutions
Walmart – supply chain management
Ripple – mobile payments
AIG – insurance
DeBeers – diamond tracking and logistics
Maersk – large-scale shipping and freight
essentia.one – government functions, border control and energy
A few of the other industries in which the blockchain is already being used include real estate (Propy), advertising (NIAX), music royalties (arbit), railway management (Novotrans), and national security (U.S. Department of Homeland Security). As the blockchain becomes more integrated and commonplace in business operations, its possible utility will undoubtedly be explored in other industries, such as travel, education, healthcare, entertainment, and even the media.
Tether Woes Continue
Last week we extensively covered Tether’s (USDT) precipitous uncoupling from the US dollar, something which was theoretically never supposed to happen but long suspected to be a possibility. Interestingly, Tether decided to pull out huge amounts of its stablecoin in response, with 500 million coins deposited from Bitfinex back to the company in the last week alone. It is suspected that the move is being performed to help make an audit easier to perform in case it should ever have to undergo one as the result of investor demand or at the request of a government agency. USDT briefly dropped to $0.93 last week – as low as $0.91 on some exchanges – becoming more unglued from the value of a dollar than at any time previously in its 4 year history.
This caused a noticeable spike in the prices of many coins as money rushed out of USDT in panic that it may collapse, as ironically just about anything else was seen as being more stable. In the list of the top 7 coins below, as ranked on coinmarketcap.com on October 18th, the price surge can be easily visualized by a sharp rise in the top 6 coins, with a sharp drop occurring in the 7th, USDT:
While the fallout from Tether’s image problems is no doubt bad for the entirety of cryptocurrency, it does have the side effect of increasing coin prices as investors find other places to park their money. Other stablecoins, such as TrueUSD (TUSD) and the Winklevoss Twins-backed Gemini dollar, are experiencing a great deal of newfound popularity as well. No doubt the increased competition is good for the stablecoin space, but for the moment, Tether remains a liability capable of shaking the markets in ways that might not always be advantageous.
You guys, I'm a USDT maximalist now. It's faster & cheaper than bitcoin (more decentralized too) & up like 10% today. At this rate it hits $300 by 2019, easy.
And don't give me any Tether FUD because USDT will still exist if Tether disappears, it's totally different. #USDTArmy
— Jake Chervinsky (@jchervinsky) October 16, 2018
North Korean Hacking Group “Lazarus” Most Successful Crypto Hackers Ever
North Korea has long been suspected as being the masterminds behind the vicious WannaCry ransomware that locked hapless users out of their computers, and a new report from cybersecurity experts Group-IB names Lazarus as a shadowy state-backed hacker group that is behind at least 14 hacks on various crypto exchanges since January 2017, pulling in an astounding $571 million from their attacks. Cybersecurity officials propose that Lazarus may also have been behind the January hacking of the Coincheck exchange, in which over $500 million in NEM and other cryptocurrencies was stolen.
All in all, the report estimates that $882 million in cryptocurrency was stolen from crypto exchanges between 2017 and 2018, with Lazarus being responsible for most of the theft. It is also estimated that up to 10% of all funds received by ICOs have been stolen by hackers. Information gained from phishing attempts used to compromise ICO and exchange servers is used to not only drain accounts of their funds but also to pry into other business accounts which might not specifically be related to the phished accounts.
The company behind the report, Group-IB, warns that hackers may soon begin to look into subverting mining pool operations to organize 51% attacks on cryptocurrency networks. The idea of a 51% attack remained a purely hypothetical one until this year, when Bitcoin Gold (BTG) was famously the victim of such an attack wherein the attackers created double-spends on addresses held by themselves, eventually making off with $18 million in BTG over the course of a few days. Incredibly, the estimated cost of successfully performing a 51% attack on many coins is quite smaller than might be expected, which suggests that an increase in such attacks may be on the rise in the near future.
Also in the News
- An opinion piece on the politics-oriented website The Hill demonstrates a rare favorability for bitcoin in the establishment media, calling the usual arguments brought up by crypto’s long-standing naysayers to be “old and tired.”
- A new report from Princeton University describes just how thoroughly China has been dominating bitcoin and cryptocurrency mining, suggesting that it may wield significant control over crypto prices in the near future, despite the reluctance from the country’s government to give the enterprise its official blessing.
- A Canadian Bitcoin ATM firm breathes a sigh of relief as a judge rules they should not be held responsible for the error of a Canadian woman who inadvertently sent tens of thousands of dollars to scammers from one of their machines, thinking that she was paying off legitimately incurred back taxes.
- In one of the first cases of its kind, a U.S. federal court fines and convicts a bitcoin Ponzi schemer who managed to bilk over $2.5 million from unwitting clients drawn in to an investment opportunity that promised weekly returns of up to 11%. As is the signature move of any Ponzi scheme, the defendant was found to be using from new clients to pay back his old, before suddenly shutting down operations when the “investment program” was no longer profitable, claiming to be the victim of a hacking attack.
- The U.S. Marshals get ready to hold an auction for close to $4 million in bitcoin taken in as the result of federal investigations. Potential bidders will be subject to strict background checks, as well as be willing to be comfortable with the fact that the U.S. federal government can probably trace every single activity they do with their purchased bitcoin.
- In another first of its kind, a Norwegian man was found slain in his apartment hours after selling a substantial stash of bitcoin. The proceeds, still in his apartment at the time of his death, were going to be used for the purchase of a new apartment, and the perpetrator remains at large.
- Bitcoin evangelist and renowned expert speaker Andreas Antonopoulos finishes work on the Ethereum-based follow-up to his best-selling book Mastering Bitcoin, aptly titled Mastering Ethereum. The book, over 400 pages in length, is a comprehensive guide to successful DApp building and smart contract usage, delayed in publishing due to what Antonopoulos describes as the ever-evolving nature of Ethereum, and is set to ship in early December.
- Contrary to a popular rumor circulating on Twitter and other social media outlets, Elon Musk’s new flamethrower company won’t be accepting bitcoin. Apparently, the tech titan didn’t actually buy popular video game Fortnite so he could delete it, either.
- Satire masters at The Onion have released their own guide to blockchain technology, mimicking efforts made by traditional media outlets like CNBC, Forbes and The Independent. The guide is a brief but humorous poke at cryptocurrency, with questions like “What is the benefit of using blockchain?” being answered with responses like, “Provides a more efficient way for you to lose all your money at once.”