Colleagues, we return once again to
the Achilles heel of cryptocurrency mass-market adoption – security. The Coinbase exchanges’ new open source
software Salus purportedly will eliminate the need having to
configure a scanner for each different project. Instead, crypto exchanges IT
staff should be able to centrally managed security scans across a large number
of software repositories. The US-based Coinbase exchanges shares highest
quality ranking among Bitcoin trading platforms along with ChangeBelly and Binance according to Bitcoin
Exchange Guide, which boosts its credibility in the global cryptosphere. Two
key questions emerge. First, how widely will Salus be used by other exchanges?
Second, what level of incremental security will Salus deliver? Our assumption
is that other exchanges will closely monitor the Salus rollout before deploying
it on their platforms. Separately, we are not likely to know true value of
Salus in preventing – or at least mitigating – security threats for 4-6 months.
Nevertheless, given the plight of security in the cryptocurrency ecosystem we
believe that more security can only help strengthen investor confidence in
crypto exchanges. Review and download the Salus code at GitHub. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)
Our mission is to provide Training and Certification programs to enable Cryptocurrency, Blockchain and FinTech traders and investors worldwide to achieve their career goals.
Friday, October 19, 2018
Thursday, October 18, 2018
Does Crypto Smart Contract Predictive Code Violate US CFTC Policies?
Colleagues, as the debate continues regarding whether cryptocurrencies
are securities or commodities, a parallel debate is emerging which concerns the
legality of including predictive code in smart contracts. The Commodities Futures Trading Commission governs the use of binary options, derivatives and event
contracts for US-based traders and investors. The centerpiece of CFTC
enforcement is protecting the “public interest”. Crypto smart contract security issues, which may lead
to financial losses, are under particular scrutiny by the CFTC. Best practices
concerning smart contracts vary by the Blockchain used by each
cryptocurrency. If your prediction is right, the
contract automatically sends you the remittance as long as it is in the public
interest. The issue of nefarious uses of cryptocurrencies let alone betting on
illicit financial transactions (e.g. money-laundering, evading economic
sanctions and payment for drug trafficking). Smart contract security audits are key to uncovering vulnerabilities in the
underlying Blockchain. The CFTC’s chief concern is the prohibition of so-called
“prediction markets”. Bottom line: When it comes to US-based cryptos and developers
including predictive code in smart contracts raises a red flag by the CFTC.
Until the CFTC issues formal guidelines, our recommendation is to avoid
predictive code in crypto Blockchain. Post a comment today! Lawrence – Cryptocurrency
Academy (https://cryptocurrencyacademy.blogspot.com/)
Wednesday, October 17, 2018
Fiat to Digital Deposits and Withdrawals for Cryptocurrency Exchanges – Can Binance’s third party method work for smaller exchanges?
Colleagues, unlike Bitfinex the market cap leading Binance
exchanges requires investors to convert their fiat currencies using third party
portals localbitcoins.com, otcbtc.com or Bitfinex. By contrast Bitfinex does allow
direct fiat currency deposits which are then converted to cryptocurrencies …
which if desired can then be transferred to other crypto exchanges. Here is the
issue: What happens to Binance market cap and trading volume if one or more of
their fiat currency “on-ramps” fails? Case in point is the bug in the Bitfinex deposits
processing system last week which rendered their deposits on ramp unavailable. Fortunately,
they have resolved this problem with the implementation of a new “distributed
banking solution”. Ease of use – for both fiat to crypto deposits and
crypto to fiat withdrawals – is yet another critical success factor (primarily
for individual investors) which needs resolution if cryptocurrencies are to
penetrate the mass market. The development of user friendly processes will
greatly benefit the global crypto ecosystem. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)
Tuesday, October 16, 2018
Fidelity Digital Asset Services – One Small Step toward Cryptocurrency Mass Market Adoption
Colleagues, we at the Cryptocurrency Academy view Fidelity’s announced its new Digital Assets Services as one important, albeit fully anticipated,
step toward mass-market adoption of cryptocurrencies. Unlike most other moves
by leading financial institutions this announcement is noteworthy for two key
reasons. First, DAS will provide custody and trading services for institutional
investors trading millions+ of crypto market cap (in stark contrast to
individual consumer traders). Second, we applaud the vision articulated by Fidelity’s Tom Jessup that DAS will grow into “a
full-service enterprise-grade platform for digital assets”. We fully
expect that the next 12-24 months will see similar announcements coming from
BlackRock, Schwab, Templeton and BNP Paribas … just to name a few. We also
foresee that the private sector firms will far outpace sovereign central bank
adoption of digital assets … with the US Federal Reserve, ECB and PBoC topping
the list. So what comes next in the global cryptosphere? Look for one or more
global 100 firms such as Amazon, Facebook or AramCo to introduce their own
“private labeled” cryptocurrencies. Post a comment today! Lawrence – Cryptocurrency
Academy (https://cryptocurrencyacademy.blogspot.com/)
Monday, October 15, 2018
What is the scope and impact of Bitcoin time warp attacks cyber criminals? Should the software bug be fixed?
Colleagues, crypto time
warp attacks occur when miners collude to report incorrect timestamps that are farther
apart, messing with the rate at which blocks can be mined. Incorrect timestamps
are do occur and can be innocuous. Chain Analysis reports that timestamp errors have steadily
decline since 2018. However, specific manipulation by miners who bends the
rules with the goal of creating illegitimate tokens is cybercrime … pure and
simple. Bitcoin (along with Litecoin) are most susceptible to time warp
attacks. However, some argue that the same Blockchain bug which allows these
attacks have favorable unintended positive side effects … faster transaction speeds and attraction of
more users. By contrast, if the
difficulty of creating a new block is low, a cyber-criminal can mine many fast
coins, or in the case of a small chain, a criminal with 51% hash power could reduce the difficulty to one and mine a new fork from the original block.
The debate continues within the Bitcoin developer community. While consensus
will be hard to reach, the community needs to reach at least a majority vote or
risk a division, which split BTC into Bitcoin and Bitcoin Cash in 2017. Post a comment today! Lawrence – Cryptocurrency
Academy (https://cryptocurrencyacademy.blogspot.com/)
Friday, October 12, 2018
PBoC vs. US Federal Reserve - Will China outpace the US in central bank cryptocurrency adoption?
Colleagues, last week we reported that the US
Fed’s Jim Cunha, Vice President
for Treasury and Financial Services,
speculated that the US central bank could issue a digital asset within the next
five years. By contrast the People’s Bank of China is aggressively entering the
R&D phase of a planned launch of a sovereign digital asset in the next 2-3
years. Herein we see two very different perspectives on cryptocurrencies. The
US is understandably concerned about security of the underlying Blockchain
technology. The PBoC is
actively hiring technical staff to build and test a cryptocurrency and has filed
41
patent applications. This situation has many similarities with the
two countries’ race to adopt 5G
telecommunications infrastructure. Bottom line: Despite a highly
centralized bureaucracy and conservative political system, China seems poised
to be the move mover when it comes to central bank cryptocurrency. Do first
movers necessarily have a competitive advantage? When it comes to a sovereign
digital asset this trend may not be valid. Post a comment today! Lawrence – Cryptocurrency
Academy (https://cryptocurrencyacademy.blogspot.com/)
Thursday, October 11, 2018
Cryptocurrencies with lower market capitalization have the greatest risk of 51% mining attacks
Colleagues, the threat of 51% attacks loom
large in the global cryptosphere. However, findings suggest that the potential
for a 51% mining attack has an inverse correlation to the market cap of a given
cryptocurrency. Attacks by a group
of miners controlling more than 50% of
the network's mining hashrate or computing
power of the currency’s Blockchain. Two factors drive the propensity of a
cryptocurrency 51% attack. First, cryptos with smaller market caps typically
have fewer active miners. It is easier to gain control over 1000 miners of ZCoin, which ranks 100th
in market cap by CoinMarketCap at some $60m USD #1 ranked Bitcoin valued at roughly
$114t USD with perhaps 1,000,000 active miners worldwide. Second, the
availability of relatively low-cost mining pools enable cyber criminals the opportunity to “rent”
GPU power from multiple
pools simultaneously while subtly approaching the 51%+ threshold for
controlling hashrates. Pre-emptive measures include making code changes at the Blockchain protocol level, boycotting likely attackers, increasing the
number of confirmation requirements and unleashing a DDoS attacks on suspected hackers. Bottom line: There is no
fail-safe strategy become a victim of a 51% Attack, however, investing in Tier
1 cryptocurrencies (e.g. the CoinMarketCap’s top 10 cryptos) provides optimal security
and peace of mind. Post a comment today! Lawrence – Cryptocurrency
Academy (https://cryptocurrencyacademy.blogspot.com/)
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Colleagues, crypto time warp attacks occur when miners collude to report incorrect timestamps that are farther apart, messing with the ...
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