Ethereum’s Parity Client Users Lose Millions in a Multi-Sig Hack

On July 19 the ethereum community was warned that the Parity client version 1.5 and above contained a critical vulnerability in the multi-signature wallet feature. Further, a group of multi-signature “black hat exploiters” has managed to drain 150,000 ether from multi-sig wallets and ICO projects.

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A Vulnerability Found in the Multi-Signature Contract “Wallet.sol” Used in Parity Clients

Ethereum's Parity Client Users Lose Millions in a Multi-Sig HackAccording to the company Parity and the firm’s founder Gavin Wood, the startup’s product the Parity wallet version 1.5 and above contained a bug that enabled the theft of $30 million worth of ETH. The vulnerability discovered in these specific Parity wallets used a multi-signature contract called “wallet.sol” and the contract was utilized by a few initial coin offerings (ICO) as well. Circulating reports believe that three particular ICO projects were compromised including Swarm City, æternity, and Edgeless Casino.

The Parity startup had issued a security warning on its website on July 19 detailing the extent of the issue stating;

A vulnerability in Parity Wallet’s variant of the standard multi-sig contract has been found — Immediately move assets contained in the multi-sig wallet to a secure address.

The Mysterious ‘White Hat Group’ Returns to Rescue Funds

Ethereum's Parity Client Users Lose Millions in a Multi-Sig HackFollowing this incident, a group of unknown “white hat group” hackers took it upon themselves to drain the rest of the vulnerable multi-sig wallets by sweeping the network. According to the group, they recovered 377,105 ether worth about $85M at the time of writing. The group says they will be returning the funds to accounts that have been drained and are using the DAO rescue donations for the gas to send the ether forward.

“The White Hat Group were made aware of a vulnerability in a specific version of a commonly used multisig contract,” explains the hacker’s announcement. “This vulnerability was trivial to execute, so they took the necessary action to drain every vulnerable multisig they could find as quickly as possible. Thank you to the greater Ethereum Community that helped finding these vulnerable contracts.”

If you hold a multisig contract that was drained, please be patient. We will be creating another multisig for you that has the same settings as your old multisig but with the vulnerability removed and we will return your funds to you there. We will be using the donations sent to us from The DAO Rescue to pay for gas.

How Many More Faulty Contracts Will Be Found in the Future?

The news of the vulnerability comes just after the Coindash ICO hack last week which saw the loss of $10M worth of ether. The malicious hacks from that event last week and yesterday’s multi-signature wallet drain has had little effect on the price of ethereum. However, the cryptocurrency community is once again discussing the issue of faulty contracts held within the Ethereum network that currently hold millions of dollars in funds. Close to a quarter of a billion dollars in ether has been drained by either the “black hat exploiters” or the “white hat group” since the notorious DAO debacle last year.

What do you think about the latest multi-signature wallet ethereum hacks? Let us know in the comments below.

Predicting the August 1 Split Flow Chart the Hard Way

Below is a detailed flow chart graphic that depicts the possible outcomes to the upcoming scaling proposals that may be implemented in the near future. We hope to help our readers get a better understanding of what’s going on with these specific Bitcoin network developments.   

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A Visual Flow Chart Depicting the Possible Outcomes of Bitcoin Proposals That Might be Implemented

Over the next few weeks, the Bitcoin network and its participants may see some scaling proposals implemented to the protocol and the subject can be confusing. Right now there are multiple scenarios between three possible plans that include a user-activated soft fork (UASF), Segwit2x, and a user-activated hard fork (UAHF). We’ve done a run down of each proposal, community sentiment, and possible outcomes in recent articles to give our readers some information on the topics.

We want to take it a bit further and give our readers a visual glimpse at the possible outcomes of Segwit2x, UASF, UAHF, all the Bitcoin Improvement Proposals (BIP) involved, signaling periods, and a timeline of dates and requirements. Bitcoin.com would like to also thank our friends Hampus Sjöberg, Eric Wall, and Tomislav Dugandzic for allowing us to use the initial template for this flow chart.

Predicting the August 1 Split Flow Chart the Hard Way

Lots of Support Directed at the ‘New York Agreement’

At the moment there is a lot of support showing for BIP91 with intentions to activate Segregated Witness (Segwit) as part of the “New York Agreement” (NYA) roadmap. At the time of writing as you can see from the chart below BIP91 support is approximately 80.5 percent and the proposal needs to maintain 80 percent to lock in Segwit over 336 blocks. Following a successful lock in period another 336 blocks has to pass to successfully activate Segwit. After the Segwit activation, NYA participants agreed to implement a 2MB hard fork which is proposed to take place ~3 months after the Segwit activation.

Predicting the August 1 Split Scare Flow Chart the Hard Way
BIP91 support is 80.5 percent on July 19, 2017.

User-Activated Forks and Exchange Contingency Plan Announcements

Another part of the discussion is the two user-activated forks that may be attempted on August 1. If Segwit2x fails to activate Segwit, then there is a possibility both user-activated forks will proceed with their plans on that date. UASF participants will then try to activate Segwit using full nodes aimed at blocking non-segwit blocks and hoping hash power will follow this move. Further, the UAHF is a contingency plan against this effort and plans to utilize a bitcoin implementation called Bitcoin ABC. This plan will remove segwit from the bitcoin code and use an adjustable block size instead. Moreover, the company Viabtc has pledged to support Bitcoin ABC with its own mining pool and will call the token “Bitcoin Cash” if the protocol splits off from the main chain.

Predicting the August 1 Split Flow Chart the Hard Way
Nineteen bitcoin trading platforms have issued statements as of July 19, 2017, concerning possible forks over the next few weeks.

Additionally, there have been some exchanges that have announced how they will handle a possible Bitcoin network fork. So far multiple exchanges have issued contingency plans and warnings about the possible network changes planned. This includes exchanges such as Bity, GDAX and Coinbase, China’s top three trading platforms, and thirteen Japanese cryptocurrency exchanges have made statements concerning these events. On August 1 specifically, these exchanges say they will likely disable deposits and withdrawals, and possibly halt trading as well.

In addition to the announcements from nineteen global bitcoin exchanges on July 19, the firm Coinbase announced it would not support the user-activated hard fork and its associated token. The San Francisco-based bitcoin company says it will not honor the UAHF blockchain because “it is incompatible with the current Bitcoin ruleset and will create a separate blockchain.” Coinbase users are advised to withdraw their bitcoins from Coinbase by July 31st if they desire access to UAHF coins. Nevertheless, the trading platform will monitor the UAHF situation but doesn’t plan on supporting any new blockchains anytime soon.

What do you think about the upcoming network changes? Let us know what you think about our flow chart in the comments below. 

Following Money Through the Bitcoin Laundry Is Not So Easy

Just recently there was a small ransomware outburst called “Peyta” that attacked various computers around the world. The creators of Peyta didn’t make as much money as the Wannacry extortionists had made a few weeks earlier, as Petya only raked in around $8,000 worth of BTC. However, the money the hackers accumulated has moved and following those bitcoins has proven to be extremely difficult.

 

Petya Ransomware Funds Travel Through the Tumbling Process

The latest Petya ransomware wasn’t as crazy as the mainstream media portrayed it to be, and the creators only made off with $8,000 in extortion funds. One of the reasons the attackers didn’t make much money was due to their email being shut down. What’s interesting about the Petya ransomware is the hackers chose to use one particular address to collect funds as opposed to multiple addresses commonly used in these types of protocols. After a couple of days, the hackers started moving the money to different addresses. Individuals following the funds believe the money was sent through a tumbler or a platform that mixes bitcoins in order to obfuscate the sending process.

Following Money Through the Bitcoin Laundry Is Not So Easy
A depiction of a Coinjoin mix or tumbling process.

‘A Vast Majority of Transfers had More Than Ten Total Transactions’

According to the publication Quartz those bitcoins will be extremely hard for law enforcement to locate. The news outlet says they followed the money as far as they could, but the bitcoins were sent through a series of transfers and one of them was a legitimate bitcoin exchange. After the first few hops, the publication details funds were sent to a “high volume address” which they assumed was the trading platform.

After this point Quartz explains, they could only speculate on which transactions belonged to Petya.

“We collected each spent output from that address, then each spent output from those addresses, and so on,” explains Quartz columnist Keith Collins. “In order to limit the number of rabbit holes the crawler followed, we only included transfers that occurred within eight hours of the first outgoing transaction from the first wallet. We considered high-volume wallets to be wallets that had three or more total transactions, as returned from the Blockchain.info API, but the vast majority of those had more than ten total transactions.”

Following Money Through the Bitcoin Laundry Is Not So Easy
This picture depicts the Petya funds which were mixed through over 2000 addresses.

Taking Action Against Digital Currency Mixers

There are multiple ways for groups and individuals to mix their bitcoins to confuse blockchain surveillance. These include tumblers like Joinmarket and the many other mixing platforms found on the deep web. Further, some users opt to utilize altcoins like Zcash and Monero, because they believe these cryptocurrencies offer better anonymity. In the future, many people think better forms of cryptocurrency anonymization will be coming like Schnorr signatures and other types of Zero Knowledge platforms. However, law enforcement and government officials have been saying for quite some time that bitcoin mixers and anonymizers should be illegal. For instance, the Basel Institute on Governance, Europol, Interpol, and U.S. officials have been discussing proposals to “take action against digital currency mixers/tumblers.”

Can Law Enforcement Really Follow 2373 Hops?

Quartz details that the Petya funds were estimated to be sent to over 2373 addresses over the course of the mixing process. “If we knew what bitcoin address or addresses the Petya money ended up in, we’d likely find hundreds of thousands of transactions between that address and the starting address,” explains the news outlet. “That’s more than we could ever chart.”

The news comes at a time when blockchain surveillance companies have become a hot topic, and just recently Chainalysis claimed to know the destination of the missing 650,000 Mt Gox bitcoins. With hackers mixing their coins through a series of transfers blockchain forensic companies may be fabricating how well they can follow these transactions.

What do you think about mixing transactions? Do you think law enforcement can really follow all the outputs when funds are sent through a bitcoin tumbler? Let us know in the comments below.

The Bitcoin Scaling Countdown: Miners Begin Running Segwit2x Software

It seems July 17 has initiated the beginning steps towards Segwit2x activation as the code has been released and miners who supported the “New York Agreement” (NYA) have started running the new BTC1 software.

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Miners Begin Running the New Segwit2x Software

As the price of bitcoin dropped to new lows this weekend, some bitcoin proponents were patiently waiting for the promised BTC1 software. Now it seems in a short period of time the bitcoin ‘community’ may see the protocol Segregated Witness (Segwit) activated as the mining community has begun to signal BIP91. The proposal BIP91 is a combination of Segwit2x and BIP148. The version 1.14.4 code has been pushed to the repository by the Segwit2x working group, and a few mining pools have already started running the protocol. The China-based Bitmain technologies announced their support via Twitter by stating;

All of our bitcoin mining pools will start running the new Segwit2x software today  

Other mining pools signaling and mining BIP91 blocks include Bixin, Antpool, BTC.com, Bitfury, and Bitclub so far. Now spectators are waiting for other pools like BTCC, F2pool, Slush, and a few others to join. Back in June Bitcoin.com reported on how a vast majority of the hashrate was signaling their initial support for Segwit2x. Miners running the new BTC1 software and currently signaling BIP91 means that if enough hashrate reaches over 80 percent and continues for a 336 block period, Segwit will “lock in”. If all is successful, this will then lead to another 336 block period that will activate the Segwit protocol on the main chain.

The Bitcoin Scaling Countdown: Miners Begin Running Segwit2x Software
Mining pools mining BIP91 blocks on July 17, 2017.

Bitcoin Community Sentiment

It’s still a bit early and hard to gauge the overall sentiment of bitcoiners, but there are definitely a lot of individuals on forums and social media who support the Segwit2x plan. For instance, Fred Wilson, managing partner at Union Square Ventures revealed he favored Segwit2x adoption on July 17 via the investor’s blog.

“I am for the Segwit2x proposal and hope that we see it broadly adopted later this month,” explains Wilson. “There is a chance that doesn’t happen, and a user activated soft fork (UASF) could be used to force Segwit into the market. I personally hope that a user activated soft fork doesn’t happen as it would create a lot of turbulence.”

The Bitcoin Scaling Countdown: Miners Begin Running Segwit2x Software
An explanation of BIP91.

Rootstock Chief Scientist, Sergio Demian Lerner also states his opinion of the Segwit2x compromise revealing he doesn’t believe the intention is to “fire core programmers,” which is one of the conspiracies that has been spread around the community.

“In my humble opinion the New York Agreement wanted to start from Bitcoin Core 0.14 because the group wants core to keep leading Bitcoin,” explains the Rootstock developer and initial creator of the Segwit2x proposal.

It doesn’t try to be the next core — If NYA intention was to dump Core, they would have started from BU or Bitcoin Classic or they would have removed the witness discount

Further Sergio Demian Lerner details that he knows Segwit isn’t perfect but he doesn’t think perfection is obtainable anyway.

“I audited Segwit in 2016. Found problems. Code far from perfect. HOWEVER I DO support Segwit because I don’t believe in perfection,” says the Rootstock engineer. “You have to know the actual code in detail to say you know Segwit. That’s the problem with Segwit. That’s a community fault.”

Many Others Just Want This All to Be Over

The Bitcoin Scaling Countdown: Miners Begin Running Segwit2x Software
BIP91 begins to gather support on July 17, 2017.

There are still those who vehemently disagree with the progression of BTC1 and are showing sole support for either UASF or UAHF, vowing never to compromise. However, gauging sentiment via Twitter or Reddit forums is a horrible metric, and the only things that matters now in this debate are the actions from the network’s participants, rather than mere internet chatter.

People are also discussing the next step of the Segwit2x plan after the Segregated Witness protocol is implemented, which is the 2MB hard fork. The hard fork subject is also a contentious topic, and people are wondering if NYA participants will still support the hard fork after Segwit gets implemented. If Segwit2x continues to be agreed upon then exactly 12,960 blocks (~3 months) after Segwit activates — The hard fork will commence.

Now if mining pools continue to do what they agreed upon in regards to the NYA plan and other miners join in then the implementation of Segwit will likely happen soon.

What do you think about Segwit2x? Are you in favor of this compromise? Let us know in the comments below.

Markets Update: Bears Drag the Bitcoin Price Down to New Lows

This week the price of bitcoin has been descending downwards following a bearish trendline and is currently hovering just around the US$2000 range. The price started its downtrend on July 10 after staying around the $2550 territory for a few days, but subsequently started dropping to a low of $2225 on July 14. At press time the price of BTC is struggling to stay above $2K, and current technical indicators are showing the bear run may not be over.

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Fear Uncertainty and Doubt Plagues Cryptocurrency Markets

It’s been a pretty grueling week if you’ve been watching cryptocurrency markets, as bitcoin and various altcoins have drastically corrected in value. On July 14 bitcoin’s price formed some new lows dipping to the $2225 range forming a downwards triangular pattern. Over the course of the day and into the overnight the price per BTC continued to slide until finally subsiding to just above the $2K mark. The decentralized currency’s total market capitalization is now only $33 billion, but due to the significant drop in altcoin markets, BTC dominance is up to 46 percent. Bitcoin trade volume is seeing mediocre activity compared to weeks prior at roughly $1 billion USD worth of trading per day.

BTC/USD July 15, 2017, 9:30 am EDT.

BTC/USD Technical Indicators

Technical indicators show that traders have allowed bears to reign over the market and the ball is in their court now. At press time the long term 200 Simple Moving Average (SMA) is well above the 100 SMA, pointing to continued market losses. The Relative Strength Index (RSI) has dropped pretty low since July 12 indicating the beginning of the seller’s market takeover. Further stochastic indicators are also signaling bearish conditions and those shorting the market may be able to set some downside targets. However, at the time of writing, there is a significant foundation at the $1950-2K range and the price may hover in this vicinity for a few more hours.

Markets Update: Bears Drag the Bitcoin Price Down to New Lows
Bitstamp BTC/USD prices July 15, 2017, 9:30 am EDT.

Market Sentiment: Upcoming Protocol Changes Has Likely Created Weak Hands

The bearish market sentiment is likely due to the protocol changes planned for the end of the month. There have been many discussions on the various scenarios where the bitcoin blockchain could split on August 1. Many bitcoiners are patiently waiting to see if the storm passes, but no one knows exactly how things will play out between UASF, UAHF, and Segwit2x. Some bitcoin proponents are fairly positive that Segwit will be implemented soon and the August 1 scenarios may not happen. Other bitcoin enthusiasts are waiting for the next Segwit2x release that is expected to come out this weekend, according to Jeff Garzik. When this happens, the vast majority of miners signaling support for Segwit2x will actually start running the code.

The uncertainty tied to the bitcoin ecosystem is likely affecting altcoins markets as well. Just like Crypto Compare’s Charles Hayter told us last week, “a rising tide lifts all boats, but the opposite is also true.”

Waiting on the Sidelines for the Perfect Entry Point

Overall bitcoiners are either not happy about the price drop or enthusiastically detailing they are buying the dip. It’s safe to assume as the next two weeks get closer, there will be some volatile action for intra-range players to profit off scalps and breaks. Some traders are speculating that Segwit will be activated soon and the price will reverse back up the ladder. Other traders are envisioning a continued drop to the $1800 territory and a possible following rise after that low price point. One thing is for sure is that traders are uncertain right now and the bulls have stepped off to the sidelines for a lower price entry.

Bear Scenario: If bitcoin breaks the key resistance range below $2K we will see lower trajectories towards the $1800-1900s. At press time according to order books and depth readings, there is a solid foundation within the $1800-2000 territory that should certainly last for the next few days. These critical zones, however, can cause quite a bit of fear and uncertainty which can always spark the possibility of more intensified panic selling.

Bull Scenario: If buy pressure picks up after consolidating above the $2K range we could see some nice recovery over the next 24-hours. Sell walls are pretty flat at the moment, and the price could break higher with ease if bullish traders decide to jump back in the game. However, it seems most buyers are waiting for a lower price trajectory and are assuming this will happen with the current looming possibility of a chain split. Another bullish theory that could take place is; Segwit gets activated within the next two weeks, and the price climbs upwards following this event.

Where do you see the price of bitcoin going from here? Let us know in the comments below.

Disclaimer: Bitcoin price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither  http://blog.easypaypakistan.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.

August 1 Will Be the Potential Disruption of the Bitcoin Network

If you’ve been listening to the bitcoin ‘community,’ you’d know in about two weeks the bitcoin network may face some protocol changes. Due to the possible user-activated soft fork (UASF) planned and the chance some groups may counter this plan, this has created thousands of discussions concerning August 1. Now the bitcoin-focused web portal Bitcoin.org has issued a warning on the site that informs users of a “potential network disruption.”

 

August 1st and the Potential Network Disruption

Bitcoin users everywhere are getting prepared and heavily discussing the possibility of a blockchain split. The subject was discussed a lot this past March when bitcoin proponents and cryptocurrency businesses feared a potential split when the Bitcoin Unlimited implementation was seeing strong support. Now the conversation has resurfaced, but the topic of UASF or BIP148 is an entirely different scenario.

August 1 and The Potential Disruption of the Bitcoin Network

UASF (BIP148) is a mechanism designed to start on August 1st, at 00:00 UTC that activates a soft fork enforced by full nodes. After this point, full nodes participating in this plan will reject blocks that have not upgraded to BIP141 otherwise known as Segregated Witness (Segwit). At press time there are 1095 total UASF nodes out of 7896 reachable bitcoin nodes globally according to Bitnodes. UASF requires a lot of industry support and miners to activate Segwit, by this point if they do not support the activation the chain could diverge into two.

August 1 and The Potential Disruption of the Bitcoin Network

Currently, there are businesses that have announced initial support for BIP148 such as Abra, Trezor, Samourai Wallet, Electrum, Coinomi, Mycelium and roughly 37 other organizations. However, there are many wallets and a vast majority of exchanges that have not announced any support or issued warnings about the upcoming August 1st Segwit enforcement. This includes a significant amount of wallet providers and exchanges including Bitstamp, Kraken, Bitfinex, Gemini, BTCC, Poloniex, and many more. One relatively small exchange in Switzerland called Bity has warned its customers the platform will be halting trading on August 1st.

Bitcoin.org’s Warning

On Wednesday, July 12, 2017, 08:00:00 GMT Bitcoin.org issued a warning in regards to the potential network disruption that may take place on July 31, 20:00:00 GMT/August 1st, 00:00 UTC.

“Bitcoin confirmation scores may become unreliable for an unknown length of time,” explains the network disruption warning. “This means that any bitcoins you receive after that time may later disappear from your wallet or be a type of bitcoin that other people will not accept as payment.”

Once the situation is resolved, confirmation scores will either automatically return to their normal reliability, or there will be two (or more) competing versions of Bitcoin. In the former case, you may return to using Bitcoin normally; in the later case, you will need to take extra steps in order to begin safely receiving bitcoins again.

August 1 and The Potential Disruption of the Bitcoin Network

The warning gives users some preparation guidelines and possible outcomes for during and after the UASF event. This includes not trusting payments during this time, and not sending payments until after the dust has settled. Even the maintainer of the website Bitcoinuptime.com says that there may be “potential bitcoin downtime from the upcoming BIP148 fork” and the network’s 99.991523267% uptime will have to be updated. Further, there was an issue concerning the Bitcoin.org alert over the wording “Bitcoin may be unsafe to use starting July 31st” in contrast to saying “potential network disruption.” The developer who made the change writes;

Note: I object to this change, which I think makes the alert less clear, less forceful, and degrades alert usability.  I make this change only because the Bitcoin.org site maintainer insists upon it.

GDAX Issues a Statement Concerning UASF

Following Bitcoin.org’s disruption alert one large bitcoin exchange has come forward issuing a warning and how the company will handle the August 1 situation. The cryptocurrency trading platform GDAX, a subset of Coinbase announced there will be a temporary suspension of deposits, withdrawals, and possibly trading on August 1. GDAX executive Adam White says, “the activation of UASF may create two blockchains,” and outlines how the company plans on handling the possible fork. If August 1 results in two chains, GDAX states;

  1. One blockchain becomes dominant, resulting in the other blockchain having low community adoption and value.
  2. Both blockchains are adopted, co-existing and operating independently of one another with roughly equal community adoption and value.

In either scenario, we will implement safeguards to ensure the safety of our customers’ funds. For example, we will temporarily suspend the deposit and withdrawal of bitcoin on GDAX and may pause the trading of bitcoin as well. This decision will be based on our assessment of the technical risks posed by the fork, such as replay attacks and other factors that could create network instability.

Bitcoin ABC

Another possible scenario to think about is the “Bitcoin ABC” (Adjustable Blocksize Cap) implementation that was revealed by the software engineer, Amaury Séchet at The Future of Bitcoin event in Arnhem. The project has released its latest client Bitcoin ABC 0.14.2 and says it’s a full node implementation of Bitcoin that removes Segwit code and replaces it with an adjustable block size cap. During the initial announcement, Séchet detailed that Bitcoin ABC is part of the user-activated hard fork contingency plan against BIP148.

August 1 and The Potential Disruption of the Bitcoin Network

In essence, the ABC protocol prepares for any disruptive risks associated with UASF activation and could also activate during the August 1st “Flag Day” as well. Besides being a contingency plan, the UAHF protocol will move the block size cap towards the activation of emergent consensus where users can decide block size themselves. Bitcoin ABC could counter the BIP148 soft fork which could cause network disruption, and a possible blockchain split as well.

Meanwhile, the Segwit2x Plan Moves Forward In the Midst of Egos and Constant Bickering

Alongside these two alternative plans, the Segwit2x working group has also been steadily preparing the compromise idea announced called the “New York Agreement.” The group released beta code and have been experimenting with the Segwit protocol and a 2MB hard fork on a Bitcoin testnet. So far there has been a lot of bickering about Segwit2x between the project’s lead developer Jeff Garzik, Bitcoin core developers, and the Blockstream CEO Adam Back. Many core supporters refuse to compromise on Segwit2x calling it “Franken-segwit” and a great majority of core developers have rejected supporting the idea. However, some core maintainers have been making comments on Segwit2x’s Github and the working group’s Slack channel. There is still uncertainty concerning the New York Agreement plan, but the working group is still moving along as August 1st gets closer.

As far as August 1st is concerned users should make sure they hold their private keys. There is a possibility of network disruption and Bitcoin.com will inform our readers of everything people need to know, including exchange updates, trading, withdrawal and deposit suspensions, and any other important information that arises in regards to this specific date.

What do you think about August 1st? Do you think there will be any potential network disruption or do you think nothing will happen at all? Let us know what you think in the comments below

Alpari Major Russian Forex Broker: Launches Bitcoin Trading Pairs

Alpari Group, Russia’s largest native forex broker, has announced the launch of two bitcoin trading pairs, with the company now offering BTC/USD and BTC/EUR CFDs to traders. Alpari Group joins a growing list of international forex and CFD brokers that have introduced cryptocurrency trading markets in recent weeks.

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The Introduction of Bitcoin Derivatives Trading Is of Prescient Timing for Alpari

Major Russian Forex Broker Alpari Launches Bitcoin Trading Pairs

Alpari Group is a forex and contracts for difference (CFD) broker that is licensed in Belarus, Belize, Mauritius, and Russia. Alpari has launched BTC/USD and BTC/USD trading pairs this week, joining a growing list of international derivatives markets that have begun to offer cryptocurrency trading products.

The company was founded in 1998, and since 2014 it has been recognized as the largest Russian Forex broker based upon monthly turnover and number of clients. Despite its Russian success, Alpari has seen significant struggles in recent years – following the insolvency of its UK entity and the revocation of the company’s United States National Futures Association and subsequent exit from the US markets.

The introduction of bitcoin derivatives trading is of prescient timing for Alpari, following recent announcements that Russia is developing a regulatory framework for bitcoin and cryptocurrencies. Many commentators are skeptical that Putin’s Russia will fully embrace bitcoin, as cryptocurrency has the potential to further erode the Russian state’s ability to exercise centralized control over financial circulation.

Alpari Group Has Become the Latest Major International Forex Broker to Introduce Bitcoin Trading Pairs

Major Russian Forex Broker Alpari Launches Bitcoin Trading Pairs

From the perspective of the Russian state, encouraging bitcoin-based trading could facilitate growth in Russian fintech firms like Alpari – allowing such to cash in on the growth of cryptocurrency without promoting the disruptive potential of free and direct cryptocurrency trading, or risking encouraging direct competitor to the national cryptocurrency that Russia has announced it is developing.

Alpari has joined a growing list of international forex and CFD brokers who have recently launched bitcoin and cryptocurrency trading pairs. Israeli-based Panda Trading Systems also announced the introduction of seven cryptocurrency CFD products this week, with Panda’s Ori Hazan stating that Panda is “very pleased to be a part of this exciting new direction the online trading industry is taking. Cryptocurrencies have been on our radar for quite a few years now, but they finally seem to be moving into mainstream adoption and we’re ready for this change.”

In recent weeks HYCM has launched bitcoin derivatives trading to UK, Dubai and Cyprus customer, with Ayondo, Etoro, Plus500, and many other CFD brokers also introducing cryptocurrency CFD markets in recent months.

Do you think that Russia will encourage cryptocurrency trading through derivatives whilst attempting to limit the direct use cryptocurrency by its citizens? Share your thoughts in the comments section below!

Investment Funds That Offer Cryptocurrency Exposure See Big Gains

These days bitcoin continues to outperform many traditional assets as the decentralized currency has become the premiere digital asset class of the 21st century. There are many ways individuals can obtain bitcoins and hold the appreciating investment themselves. However, there are also other traditionalized methods where people can invest in cryptocurrencies through trusts, self-directed IRAs, hedge funds, and other investment vehicles.

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In 2017 Bitcoin Visibility Increases Among Mainstream Investors and Traditional Fund Managers

Bitcoin’s performance as an asset class continues to outshine traditional investments like stocks, precious metals, and the bond market. Just recently the well-known mainstream financial publication Bloomberg called bitcoin an “exchange traded fund (ETF) on steroids.” Furthermore, people have found that there are other ways to invest in bitcoin which are similar to traditional individual retirement accounts (IRA), or stock market investments. This includes cryptocurrency based investment trusts, exchange-traded notes and many more types of methods.

Investment Funds That Offer Cryptocurrency Exposure See Big Gains

So far in 2016 and the past six months of 2017 cryptocurrency funds have soared in value considerably compared to traditional assets. Some of these traditional investment rails just offer bitcoin while others offer a basket of cryptocurrencies that can sometimes outperform one single digital asset if managed properly.

BK Capital Management

Investment Funds That Offer Cryptocurrency Exposure See Big GainsThe BKCM investment asset fund was created by CNBC host and investment analyst Brian Kelly. The firm specializes in the macro-economics of digital assets and offers mainstream investors exposure to currencies like bitcoin. BKCM says its managers are fluent in “traditional capital markets, blockchain assets, and technology experience.” According to the company’s website, the fund focuses on “liquid exchange” digital assets. Kelly has been an active proponent of bitcoin and other emerging digital assets throughout many of his broadcasts on the network CNBC.

Investment Funds That Offer Cryptocurrency Exposure See Big Gains
This Spring BKCM was up 68% in April and 172% YTD according to the company’s reports.

Grayscale’s Bitcoin Investment Trust

Investment Funds That Offer Cryptocurrency Exposure See Big GainsThe Grayscale Bitcoin Investment Trust (GBTC) is a fund run by the Digital Currency Group’s (DCG) Barry Silbert. The DCG founder Silbert has been well known among investment circles when he created the brokerage firm Secondmarket and since then focused his efforts towards cryptocurrencies and blockchain startups. The publicly quoted GBTC is an easy way for investors to get exposure to bitcoin and can be purchased through traditional self-directed IRAs. The Bitcoin Investment Trust has outperformed the S&P 500, gold shares, and treasury bonds by gaining 220.59 percent this year. Moreover, GBTC shares trade at a premium compared to an individual purchasing bitcoin traditionally through an exchange. Alongside this, Grayscale also offers an Ethereum Classic fund that is similar to GBTC. The ECX Index is eligible to be held in an IRA, Roth IRA, and other investment accounts.

Investment Funds That Offer Cryptocurrency Exposure See Big Gains
GBTC sees considerable gains over the past year.

Ark Investment Management

Investment Funds That Offer Cryptocurrency Exposure See Big GainsArk Innovation (ARKK) is a fund that invests in innovative technologies and companies, as well as funds like GBTC. Ark investment says they see the internet, mobile, and other technologies transforming the world’s business models. “We’re believers in bitcoin, the currency, and Bitcoin, the technology platform,” explains Ark’s Founder and Chief Investment Officer Cathie Wood. Currently, Ark has four ETF’s for investors to choose from which include the Industrial Innovation ETF, Web x.0 ETF, Genomic Revolution Multi-Sector ETF, and the Innovation ETF.

Investment Funds That Offer Cryptocurrency Exposure See Big Gains
Ark Innovation’s one year chart shows a significant spike over the past six months.

Self-Directed IRAs

There are other ways investors can add bitcoin to their portfolios like self-directed IRAs. The California-based company Bitcoin IRA allows you to purchase bitcoins or ethereum with traditional IRAs or a 401K. The firm’s offering is a modest interest bearing account that utilizes the high returns from ETH and BTC markets. Other self-directed IRAs can allow people to purchase bitcoin as well through companies like the Millennium Trust, Entrust Group, and Pensco. “Technology is having a transformative effect on our daily lives, and the alternative investment industry is no different,” explains Millennium Trust.

Investment Funds That Offer Cryptocurrency Exposure See Big Gains

Mainstream Investment funds and IRAs That Include Bitcoin Are Prospering

There are many other ways mainstream investors can gain exposure to bitcoin rather than purchasing it directly, and more are popping up in great number. Just recently Bitcoin.com reported on Britain’s largest online trading platform, Hargreaves Lansdown, which has announced it will allow its customers to invest in bitcoin. The firm commands over £70bn of investors funds and will allow its 876,000 customers access to the decentralized currency. With cryptocurrencies performing so well and gaining in value exponentially many more mainstream funds and IRAs are likely to include digital assets for their customer’s portfolios. While there are no ‘official’ Securities and Exchange Commission approved ETFs at the moment there are still plenty of similar investment options in 2017.

What do you think about these funds and IRAs? Let us know in the comments below.

GPU Shortage Intensifies as Cryptocurrency Mining Offers up to Twice the Average Russian Monthly Wage

European consumers in general and especially russian consumers have faced massive graphics card shortages following a dramatic increase in demand for cryptocurrency mining hardware. With some miners claiming that they can make up to $1600 USD a month and the average Russian wage sitting at less than $700 USD monthly it is unlikely that demand will subside soon.shutterstock_395785147-640x452

The Ease With Which Anybody Can Begin Mining Cryptocurrency Is Attracting the Interest of Many Russians

Local Russian media outlets are reporting a dramatic shortage of graphic cards. The shortage has been attributed to an increase in demand for cryptocurrency mining hardware, following extensive media coverage documenting the meteoric rise of many cryptocurrencies this year.

GPU Shortage Intensifies as Cryptocurrency Mining Offers up to Twice the Average Russian Monthly Wage

Reports have suggested that individuals are purchasing up to 600 graphics cards at once, driving prices to surge by approximately 80 percent. Russian IT hardware distributor Treolan has told journalists that graphics cards shipments have tripled over the past two months.

The ease with which anybody with a desktop computer can begin mining cryptocurrency is attracting the interest of many Russians. With the average monthly wage sitting at approximately $680 USD during April 2017 (a 10% increase since January), many Russians can exceed the wages offered them in the labor market simply by hoarding and running graphics cards mining altcoins.

The Augmented Demand for Mining Hardware Has Not Been Confined to Russia

With bitcoin mining being conducted on an industrial scale using Application Specific Integrated Chips (ASICs) many miners from lower income nations are choosing to mine alternative cryptocurrencies. ASICs are not available for many altcoins still, meaning that GPU-based mining rigs can still be used profitably to mine said altcoins.

Cryptocurrency Mining Offers up to Twice the Average Russian Monthly Wage

The augmented demand for mining hardware has not been confined to Russia, with recent reports of graphics card shortages originating from across the globe. South Africa has reported similar shortages amongst commercial retailers, whilst proliferating stories of online computing hardware stores being sold out of graphics cards led to PC Gamer to report on a global shortage of GPUs.

With cryptocurrency mining offering profits that are potentially higher than those offered by the labor markets of many developing nations, it is unlikely that the demand for GPUs in low-wage nations like will Russia cease anytime soon.

What cryptocurrencies do you mine? Tell us in the comments section below!

New York Regulator Reports on Cryptocurrency Licensing, Inspects Businesses

An annual report by the New York State Department of Financial services reiterates the importance of regulating digital currency businesses. The report was released on June 15, and it summarizes the departments activities with regards to its Bitlicense regulation for crypto-companies. 

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It said cryptocurrencies provide new New York Regulator Reports on Cryptocurrency Licensing, Inspects Businesseschallenges for regulators, because of their transaction speed and anonymous movement of funds. The report said, “Blockchain technologies present both opportunities and challenges for industry as well as regulators. Building innovative platforms for conducting commerce can help improve the efficiency of financial transactions, record-keeping and clearing.”

The report went on to say the technology allows for too many risks, because regulation can simply be bypassed by people or organizations. The speed of transactions and relative anonymity tend to deter oversight and control. The New York Agency said they want to protect customers and investors from fraud and other illegal behavior.

Easier facilitation of payments and anonymous movements of funds can be dangerous without the compliance and oversight designed to safeguard consumers, and to prevent money laundering and funding illegal activities

The regulation agency has already applied its licensing regulation requirements to several companies, which were mentioned in the report. It determined the Gemini Trust Company LLC could trade in ether. Recently it approved XRP II LLC, an affiliate of Ripple Labs, Inc. In total, 5 companies are registered with Bitlicense, and they are currently receiving periodic inspections and examinations via direct oversight from the agency.

The History of Bitlicense; Great Crypto-Company Exodus

The regulatory agency originally initiated the Bitlicense back in 2015 with the help of Ben Lawsky. The document was 44 pages and it outlined all the necessary requirements for businesses who want to trade in cryptocurrencies. To this day, it is mandatory that companies submit an application to manage and use digital currencies.

Jamie Redman covered it atNew York Regulator Reports on Cryptocurrency Licensing, Inspects Businessesbitcoin.com. He mentioned how many businesses criticized the licensing requirements. He said, “Executives and investors have been very concerned that the Bitlicense would hurt New York innovation and starting businesses. With KYC and AML rules and quite an extensive guideline to give the state private information many companies are unsatisfied with this law.”

The executives warnings rang true. When Bitlicense was put into place, it caused several popular companies to discontinue services in the State. Many of them made statements about how Bitlicense negatively impacted their ability to serve their customer base. They included Xapo, Shapeshift, Poloniex, Bitfinex, and Kraken among others.

Kraken’s response to Bitlicense was most pointed. The company said, “Today Kraken discontinues service to New York Residents. Regrettably, the abominable Bitlicense has awakened. It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth. It’s at least a 40-man, bro.”

Do you think Bitlicense has been success or failure? Share your thoughts below!