Schnorr Signatures Await Bitcoin Cash as the Next Fork Draws Near

Schnorr Signatures Await Bitcoin Cash as the Next Fork Draws Near


The Bitcoin Cash network is scheduled to fork on May 15
and the community has been steadily preparing for the next upgrade, which will entail the addition of Schnorr signatures and Segwit recovery exemption.

Bitcoin Cash Upgrade Time: May 15, 2019, Shortly After 12 pm

Every six months the BCH chain upgrades the protocol in order to add new features that benefit scaling, privacy, and overall network performance. The upcoming hard fork scheduled for May 15 is a change that requires all participants to upgrade their software. The compatible full node implementations for the BCH fork next slated for next Wednesday include Bitcoin ABC 0.19.4, Bchd 0.14.2, Bitprim 0.19.0, and the Bitcoin Unlimited Cash Edition There are two protocol features that will be added to the chain: Segwit recovery and the highly anticipated Schnorr signatures.

The Upgrades: Segwit Recovery Exemption and the Benefits of Schnorr Signatures

Segwit recovery is basically an add-on to the last protocol upgrade implementation of a new CLEANSTACK rule which made it impossible for miners to recover BCH from Segwit addresses. Essentially, after May 15 the upgrade will make an exemption for these unrecoverable coins and make them spendable. “This means that once the P2SH redeem script pre-image is revealed (for example by spending coins from the corresponding BTC address), any miner can take the coins,” explains the hard fork specifications on Github.

The high profile feature being added to the chain which has garnered the most attention is the addition of Schnorr signatures. The digital signature scheme invented by Claus Schnorr will allow BCH users the ability to build cryptographic keys in extraordinary ways. For example, using Schnorr signatures in place of ECDSA signatures allows for future concepts like multisignature aggregation. To the layman, the concept basically reduces transaction size by utilizing an aggregated signature in contrast to using multiple signatures. Essentially, the grouping produces the same cryptographic proof which in turn will reduce blockchain storage and bandwidth. Another advantage Schnorr signatures can offer is privacy when users and developers combine one batched pubkey scheme with different protocols like OP_CHECKSIG and pay-to-public-key-hash (P2PKH) addresses.

BCH developers have added the Schnorr signatures scheme as an optional replacement for traditional ECDSA signatures. The engineers will introduce Schnorr by using the same curve as ECDSA so regular users will not notice the upgrade as much as with prior forks, such as when the block size was raised. On the development side, however, Schnorr signatures only use 64 bytes which is lower than the typical 70-byte ECDSA signature. Basically, programmers who implement the upgraded feature can reduce transaction sizes by roughly 4%. But again, the switch from ECDSA to Schnorr is completely optional, but there are encouraging benefits of implementing the change. Besides a mixture of scaling and privacy, one attribute Schnorr will give to wallet platforms that use the protocol is replay protection. Other benefits of Schnorr that BCH developers will be able to utilize after May 15 include:

  • Payment channels hidden as ordinary payments.
  • Atomic swaps hidden as ordinary payments.
  • Lightning-style payment channel networks too, if desired.
  • Secure chains of unconfirmed transactions involving multiple parties (layer 2).

Future Schnorr Related Upgrades Could Bolster Public Signature Aggregation, Reduce Blockchain Storage and Bandwidth by 25% and Design Complex Smart Contracts

In the past, many cryptographers have recognized Schnorr for being a more polished scheme than ECDSA, but blockchain programmers could not use the concept because it was patented. Now that the patent has expired, BCH programmers can use Schnorr signatures and build a myriad of improvements going forward. After the May 15 fork, the new features will bring the very basics of Schnorr signatures at first which in turn will set the protocol up for future Schnorr related forks. For instance, further upgrades will be able to bolster public signature aggregation which could reduce blockchain storage and bandwidth by 20-25%. Another upgrade could help eliminate signature malleability so programmers can design complex smart contracts.

Further upgrades could introduce public signature aggregation which could reduce storage and bandwidth alongside the introduction of more complex concepts.

As mentioned above, the fork will take place next Wednesday, shortly after 12:00 p.m. UTC on May 15 and the protocol will lock in at a certain block height. After that takes place, there will be another 11 blocks and the BCH chain will have executed the upgrade and rule changes will take effect. BCH fans will be able to watch the fork in real time on data websites like Coin Dance in order to see that the consensus rule changes have been implemented as planned.

Moreover, existing wallets using ESDSA will be functioning in the same manner as before so regular users probably won’t notice much of a difference right away. Developers will find the feature appealing due to the 4% size decrease and the ability to build in new ways. There’s a wide variety of complex schemes that can be introduced in the future and the upgrade on May 15 will be the foundation for all types of innovative concepts. More information about the Bitcoin Cash development process and scheduled hard fork can be found here and here, and users can watch the countdown in real-time here.

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Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for about the disruptive protocols emerging today.

What’s the Difference Between Bitcoin BTC and Ethereum ETH?

What’s the Difference Between Bitcoin (BTC) and Ethereum (ETH)?


Bitcoin (BTC) is a peer-to-peer (P2P) digital asset system which has been implemented

on an immutable and distributed ledger, which allows users to view transaction details including the amount of funds transferred and the addresses of the recipient and sender. In a way that’s somewhat similar, Ethereum (ETH) is also a public blockchain-based network that allows users to build and deploy decentralized applications on its platform.

Because there’s no central authority which is responsible for determining how the ongoing development of both Bitcoin and Ethereum should be carried out, individuals and organizations are allowed to submit Improvement Proposals in order to further enhance both decentralized protocols.

Bitcoin Proposed As “Experiment In Monetary Theory”

Joseph Lubin, the founder of ConsenSys, a Brooklyn, New York-based organization focused on the ongoing development of Ethereum, the world’s first blockchain-based platform for building smart contract-based dApps, has explained why the Bitcoin (BTC) protocol was developed. Lubin, a crypto pioneer and also one of the co-founders of Ethereum, delivered a short explanation in the form of a comparison between Bitcoin’s and Ethereum’s use cases. He explained: “Ethereum is different from Bitcoin in that it was realized as a platform for decentralized applications (dApps) – whereas Bitcoin was proposed as a sort of an experiment in monetary theory.”

Ethereum Co-Founder: Bitcoin’s “Experiment In Monetary Theory” Has “Caught On”

Lubin has acknowledged that the Bitcoin protocol, which provided the specification for the very first blockchain-enabled, P2P “electronic cash system”, has “caught on” and has become “quite successful.” He added that the “Bitcoin network exists in support of the bitcoin token whereas the Ethereum token (Ether) exists in support of the Ethereum platform.”

According to Lubin, “Ethereum’s really all about developers building applications on a new kind of platform … [and] on a new kind of world wide web.” He pointed out that “many of us” have been referring to the new web, or internet, as “Web 3.0” or the “decentralized world wide web.” Lubin argued that “Ethereum is one of the foundational protocols that will be part of” Web 3.0 – as the smart contract-enabled platform “brings trusted transactions, automated agreements, [and] smart software objects.”

“Heavy Compute Platforms” Being Built On Ethereum

Per the former Goldman Sachs executive, Ethereum “already interoperates with other decentralized protocols” such as those currently being used for “storage, bandwidth,” and “heavy compute” tasks. Lubin also revealed that “heavy compute platforms” have already been “built on top of Ethereum.” These include “decentralized identity” and “decentralized proof of location” software solutions, Lubin noted.

Ethereum Full-Node Operators Will Significantly Increase As It Moves From PoW To PoS

As Ethereum’s ongoing development continues, Lubin believes “hundreds of other protocols will either be built on Ethereum or adjacent to” it. These protocols will also “enable interoperation” – which puts “Ethereum in a special position,” Lubin stated. He argued that Ethereum “is the most decentralized of all these platforms” because it has “about 20,000 nodes worldwide.” The number of full-node transaction validators for the Ethereum network are “likely to grow quite dramatically when we move from the proof-of-work (PoW) consensus algorithm to the proof-of-stake (PoS) consensus” mechanism, Lubin predicted.

Proof-of-Stake (PoS)-Based Ethereum Will Be Even “More Decentralized”

Assuming the Ethereum network successfully transitions from PoW to a PoS-based blockchain, Lubin believes the smart contract platform will become even more decentralized “because the barrier to entry to participating, to validating transactions on the system, and securing the network … [will] drop quite dramatically.” He noted that “you get trust from decentralization, you get greater trust from greater decentralization.”

Lubin also explained that “if you have many of these different nodes that everybody can access, everybody can inspect, everybody can ensure that there isn’t improper manipulation … and the Ethereum platform resists manipulation if [at least] half of the actors of the system are honest in that sort of world.” He continued: “We can envision Ethereum as essentially the base layer, [or] the layer one trust infrastructure and upon that we’re already seeing many layer two technologies, state channels, different kinds of sidechains, plasma mechanisms … those are all being built and sort of anchored into Ethereum to garner that trust property from the base layer of Ethereum,”

Owning Bitcoins Is One Of The “Few Asymmetric Bets”

Although Lubin’s brief discussion about Bitcoin and Ethereum did not provide detailed insights into how the Bitcoin protocol has managed to achieve increased adoption, there have been many recent developments which suggest that Bitcoin is increasingly being used as a medium-of-exchange (MoE) and store-of-value (SoV). Vijay Boyapti, a former software engineer at Google and a widely-followed crypto analyst, has argued: “Owning bitcoins is one of the few asymmetric bets that people across the entire world can participate in.”  

In a detailed Medium blog post (published in March 2018), Boyapati wrote that “the bullish case for investors might seem so obvious it does not need stating.” Although the bitcoin price has dropped considerably after reaching its all-time high of nearly $20,000 on December 17th, 2017, Boyapati has noted in many different Twitter threads that Bitcoin is arguably one of the most important inventions in modern history. In his blog, Boyapti mentioned: “Never in the history of the world had it been possible to transfer value between distant peoples without relying on a trusted intermediary, such as a bank or government.”

Lightning Network (LN) Adoption Growing Steadily

While the Bitcoin blockchain has been plagued with scalability problems – as the distributed ledger can only handle around 7 transactions per second (TPS), second-layer payment solutions such as the Lightning Network (LN) protocol have been increasingly adopted. Blockchain developers are working on many different implementations of the LN and there are currently 7,979 nodes on the layer-two network.

Although the LN is only able to process relatively smaller bitcoin payments, there are many development teams throughout the world that are focused on improving the second-layer network. LN’s main design goals include enabling faster and more cost-effective cryptocurrency payments. At the time of writing, the LN’s capacity is only around 1,067 BTC, an amount valued at approximately $5,430,000 at press time – according CryptoCompare data. However, development has been steady as at the time of writing, in the past 30 days, the LN’s capacity has increased by 29% and there are now 38,707 active LN channels – which represents an increase of about 6.6% in the past month.

Bitcoin Adoption Has Increased 700% In Past 6 Years

In addition to software architects working consistently to improve the Bitcoin protocol, reports have revealed that Bitcoin adoption has increased by over 700% in the past 6 years (worldwide). This, according to Coinma’s data, which is a Bitcoin directory service provider. Meanwhile, Kaspersky Labs, a leading Russia-based cybersecurity firm, conducted a survey a few months back in which it asked shoppers whether they had used bitcoin to pay for goods and services online. Notably, about 10% of those who responded to Kaspersky’s survey said they had used BTC or another cryptocurrency to make purchases through e-commerce websites.

Founded in Moscow in 1997, Kaspersky Labs’ recent crypto survey was performed by gathering responses from more than 13,000 online shoppers based in 22 different countries. Significantly, 81% of survey respondents said they prefer using a bank-issued credit card to pay for items online. This suggests that cryptocurrencies are still not a widely used payment method, however an increasing number of merchants worldwide have started taking crypto payments.

Increasing Number Of Merchants Accept Bitcoin

According to Cointelegraph en Español, Paraguay paid for a shipment from Argentina with bitcoin on February 16th, 2019. The BTC transaction involved Paraguay purchasing pesticides and fumigation products worth around $7,000 from Argentina. Bitex, a Latin American financial services company, helped process the crypto transaction. In early February 2019, the management at Argentina’s public transport system announced that it would start accepting bitcoin payments. Passengers in 37 different localities throughout the South American nation are now able to use bitcoin to add credit balance to their SUBE (Sistema Único de Boleto Electrónico) travel cards. Bitex also helped in the integration of bitcoin payments into the SUBE travelcards.

In December 2018,, a Denmark-based online food takeaway portal which helps process orders from more than 1,500 restaurants in the European nation, started accepting bitcoin payments again. Representatives from told the Bitcoinist that they had first started taking crypto payments in 2016. However, they briefly stopped accepting bitcoin when “average transaction times took too long” towards the end of 2017 – which was during the time that digital asset prices recorded all-time highs.

Ethereum Still In Early Stages Of Development & Adoption

Compared to Bitcoin, Ethereum’s adoption or usage rate does not appear to be that high. On February 9th, 2019, Twitter user Kevin Rooke pointed out (while referencing that “there [were] 1375 live [Ethereum-based] dApps” and “86% of them had 0 users” that day. Moreover, 93% of dApps on Ethereum did not record any transactions that day. Competing dApp creation platforms such as EOS and Tron were not much better – as out of 1828 live dApps that day, “77% of them had 0 users” and “85% of them had 0 [transaction] volume” on the same day. Ethereum Already Has Legitimate Use Cases Being Built On Top Of It

Anthony Sassano, a cybersecurity professional and the co-founder of EthHub, an organization focused on Ethereum-related research, has argued via Twitter that there are already several legitimate use cases for the smart contract platform. According to Sassano’s assessment, “people are putting too much emphasis on scale as a ‘make or break’ for Ethereum.” While he acknowledged that Ethereum must be able to scale effectively in the long-term, he listed the following platforms (which have already been launched on Ethereum):

  • Augur: an Ethereum-based decentralized predictions market platform,
  • Burner Wallet: a tool that allows users to transact in “an intuitive currency like DAI” through an easy-to-use UX/UI. It’s ideal in situations “where it's hard to find important goods with the traditional currency or the currency may fluctuate immensely in value due to inflation.”
  • Compound: an “Ethereum protocol that establishes money markets with algorithmically set interest rates”,
  • Dharma: a “suite of smart contracts and developer tools that make it possible to borrow and lend cryptoassets on blockchains like Ethereum”,
  • dYdX: a protocol designed to enable “decentralized margin trading and derivatives”,
  • Gnosis: a predictions market platform developed on Ethereum,
  • MakerDAO: a platform that utilizes a stablecoin called Dai to issue “collateralized loans” – which are part of an ecosystem managed by “decentralized governance”,
  • Stablecoins (a few examples):
    • Gemini Dollar (GUSD) – ERC-20-based token backed 1-to-1 with USD;
    • USD Coin (USDC) – “an Ethereum token, so you can store it in an Ethereum-compatible wallet, like Coinbase Wallet.”
  • Uniswap: a protocol for “automated token exchange” on Ethereum,

Looking Forward

Bitcoin is intended to function as decentralized means of value transfer whereas Ethereum is a protocol that allows users to develop decentralized applications on top of a blockchain network. As prominent Ethereum developer Vlad Zamfir has confirmed on several occasions, Ethereum is “not money.” Ethereum’s native token, Ether (ETH) exists in order to facilitate the process of building and deploying distributed applications. Meanwhile, the bitcoin currency exists on the Bitcoin blockchain to facilitate peer-to-peer (P2P) exchange of uncensorable, non-confiscatable money.

Because both Bitcoin and Ethereum are open-source protocols, their standard accepted definition and use cases are continuously evolving. Developers, business leaders, entrepreneurs, traders, individuals and organizations throughout the world expect different things from both Bitcoin and Ethereum. Due to different expectations and perceptions, Ethereum Improvement Proposals (EIPs) and Bitcoin Improvement Proposals (BIPs) are used to manage the ongoing development of both blockchain networks.

Hard forks (backwards incompatible upgrades) and soft forks (backwards compatible upgrades) are used to make codebase modifications to both the Bitcoin and Ethereum blockchain networks. In principle, these changes are only made after a BIP or EIP are approved through distributed consensus by active members of the Bitcoin and Ethereum community, respectively.

A decade after the launch of Bitcoin and about five years after the introduction of Ethereum, there are thousands of businesses and various other decentralized application layers being developed on top of both Bitcoin and Ethereum. In the words of Ethereum co-founder Vitalik Buterin: “Cryptocurrency Protocols Are Like Onions… One common design philosophy among many cryptocurrency 2.0 protocols is the idea that, just like the internet, cryptocurrency design would work best if protocols split off into different layers. Under this strain of thought, Bitcoin is to be thought of as a sort of TCP/IP of the cryptocurrency ecosystem, and other next-generation protocols can be built on top of Bitcoin much like we have SMTP for email, HTTP for webpages and XMPP for chat all on top of TCP as a common underlying data layer.”

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Singapore Regulator Recognizes Potential of Blockchain for Cross-Border Payments

Singapore Regulator Recognizes Potential of Blockchain for Cross-Border Payments

Sopnendu Mohanty, Chief Fintech Officer of the Monetary Authority of Singapore (MAS),

said that blockchain has potential for cross-border payments but the agency “does not see much” in retail bank digital currencies. Mohanty delivered his comments at the Blockchain in Business event at the Massachusetts Institute of Technology on May 2.

Mohanty revealed that back in 2016, policy makers did not have a clear understanding of what blockchain is, so the MSA — Singapore’s central bank — decided to experiment with the technology to better understand it. The  MSA has since learned a variety of blockchain-related use cases, including how to deploy the technology to organize payments in the banking system, settle payments against securities, as well as how to conduct cross-border payments, said Mohanty.

He continued that, while the agency came to recognize the efficiency gains the technology could bring, it did not see a compelling future for retail bank digital currencies. As an example, Mohanty referenced the central banks of Singapore and Canada having successfully used their blockchain networks to send each other digital currency. Commenting on the development,

Mohanty said then:

“The next wave of central bank blockchain projects can make further progress by bringing technology exploration together with policy questions about the future of cross-border payments.”

In January, the MAS warned the public against an alleged scam, which claimed a cryptocurrency was officially adopted by the government. Apart from reporting on the new crypto scam, the MAS also warned the public in the statement about common problems in investing in cryptocurrencies or digital tokens, emphasizing that such investments are associated with high risk.

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Ana Alexandre

Total change in her career took Anastasia into the world of analytics and business information as a researcher and translator in 2010. Some time later she got into FinTech, a dynamically developing segment at the intersection of the financial services and technology. Ana joined Cointelegraph in September 2017.

325 Million Bitcoin-Accepting Real Estate Project in Dubai Pauses Operations

$325 Million Bitcoin-Accepting Real Estate Project in Dubai Pauses Operations


The Aston Plaza in Dubai, a major bitcoin (BTC) real estate project,

is reportedly pausing its operations, British daily news agency The Times reports on April 28. The $325 million project — developed by founder of the Ultimo lingerie brand Michelle Mone and her billionaire partner Douglas Barrowman back in 2017 — includes 1,300 luxury apartments, with at least 150 units planned to be sold in bitcoin.

Touted as the first major development of this size to be available for purchase in cryptocurrency, the Aston Plaza initially offered $130,000-priced studios, about 15 BTC as of February 2018, as well as two-bedroom apartments for $380,000, worth around 45 bitcoins. As previously reported by Cointelegraph, the entrepreneurs sold 50 apartments for bitcoin as of February 2018.

According to the Aston Plaza website, the venture now offers studios as well as one- and two-bedroom apartments starting at 9 BTC; however, the website notes that price is pegged to the United States dollar exchange rate for bitcoin as of Jan. 8, 2018, making 9 BTC equal to around $147,000. As previously reported by CNBC, the project was originally scheduled to be completed by September 2019.

However, citing government inspectors who visited the site in January of last year, The Times reports that construction of the venture has stopped. As presented on the project’s website, 25% of the project has been constructed to date, with over 400 apartments already sold. According to Lady Mone’s press office, The Times’ categorization of the construction as stopped is “damaging as the towers are currently being re-designed.” In an email to Cointelegraph, the press office noted that the clients’ money is currently being held in an escrow account.

Mone had previously founded another crypto-related initiative known as Equi Capital, according to tech news outlet The Next Web. The Equi project — with reported involvement from Apple co-founder Steve Wozniak — was initially set for launch as an initial coin offering (ICO). Following a $7 million pre-sale, the ICO was eventually cancelled, with refunds issued to investors due to loss of interest and failure to make targets.

The press office of Lady Mone told Cointelegraph in an email that the Equi project was stopped by them as they worked on their partnership with Wozniak, and thus cannot be considered a failure. The email notes that due to legislation surrounding security tokens, they have a team of lawyers working on how to move forward, with a launch planned for later this year. In February of this year, the UAE’s largest real estate development firm, Emaar Properties, has officially denied reports that it enabled crypto payments for property.

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Helen Partz

Helen is passionate about learning languages, cultures and the Internet. She has years of experience working at international online advertising projects. Growing interested in Bitcoin and cryptocurrencies in late 2017, she joined Cointelegraph as a writer.


At Least 95 Percent of Crypto Crimes Involve Bitcoin Chainalysis Executive Says

At Least 95 Percent of Crypto Crimes Involve Bitcoin, Chainalysis Executive Says

At least 95% of cryptocurrency crimes investigated by law enforcement involve bitcoin (BTC,)

the co-founder and COO of Chainalysis told Fortune on April 24. Jonathan Levin, whose company offers investigation software for law enforcement to pursue bad actors, said BTC is “by far the favorite” for hackers and criminals. He revealed that law enforcement needs to take more sophisticated approaches to tackle darknets — and warned that the crypto industry was starting to see the beginnings of terrorism financing.

Levin said the records left behind by crypto transactions has led to many arrests, as officials in the United States tackle the deadly opioid crisis and try to stem the flow of illegal drugs into the country, often from China.

He told Fortune:

“What we’ve seen is that there is the ability to tie some of those cryptocurrency transactions either to the pharmacies in China or actually to the services that people are using to distribute fentanyl.”

According to Levin, the transparency of cryptocurrencies is helping law enforcement to build cases against suspects quicker than in traditional finance, namely because investigators no longer need to rely on obtaining records from foreign banks. Even though bitcoin is overwhelmingly used by crypto criminals, Levin noted that Chainalysis has launched real-time transaction monitoring for 10 cryptocurrencies, as well as a basket of stablecoins, because law enforcement agencies are trying to invesOKtigate hacks on crypto exchanges where other tokens are stolen.

Levin also said he has been investigating the case of QuadrigaCX, the major Canadian crypto exchange that was officially declared bankrupt earlier this month. The company lost access to cold wallets and corresponding keys following the CEO’s death in December last year, and reportedly owes more than $195 million to 115,000 customers. In the interview, the Chainalysis executive suggested Quadriga “was operating on fractional reserve and

in deep trouble”:

“We were looking at the bitcoin holdings and also tether holdings of Quadriga and what we found very quickly was that Quadriga as an exchange actually didn’t have those customer funds that were reported in the media to be lost. Those funds actually never existed.”

Levin also repeated claims made in a Chainalysis report earlier this year that two hacker groups have been responsible for stealing $1 billion in cryptocurrency, representing the majority of the funds lost in scams.

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Thomas Simms

Thomas is a British reporter who loves all things breaking news and crypto. When out of the office, he also likes backgammon and gin.

Fundstrat’s Tom Lee: Current Bitcoin Misery Index Never Been Reported in Bear Market

Fundstrat's Tom Lee: Current Bitcoin Misery Index Never Been Reported in Bear Market.

Fundstrat Global Advisors founder Tom Lee

pointed out that the value currently reported by his company’s bitcoin (BTC) sentiment indicator Bitcoin Misery Index (BMI) has never been seen in a bear market. Lee made his comments during an interview with Cointelegraph published on April 19. During the interview, Lee noted that through 2018, the BMI has not been over 50, while it now recently touched a value of 89. According to Lee, values over 67 have never taken place in a bear market.

Lee concluded:

“It means that a bull market is likely starting.”

Still, he also explained that when the indicator reported such a high value, “six out of six times, there was a drawdown in the market.” Lee claims the drawdown averaged to 25% in such instances, and that in the short term, the market could see a headwind. Moreover, he also stated that this could also mean that investors could be moving their capital to altcoins instead.

Lee also pointed out that bitcoin recently broke the 200-day moving average, which he believes means that bitcoin’s recovery is happening faster than they expected. This is in line with what he stated in mid-March, when Lee said that he thinks “the key number to watch is the 200-day moving average.” Lee noted that this breakout could also mean that this time, the recovery won’t be different than it has been in the past, and that bitcoin could easily recover to new highs. Still, when asked if new highs for the coin will be achieved this year, Lee answered that while he believes they will be reached, he does not know when.

According to Lee, there are various reasons for the recent trend inversion in the crypto market. For instance, he mentioned that old and wealthy bitcoin wallets have recently started adding BTC, and that transaction activity has begun increasing along with crypto exchange volumes. As Cointelegraph reported in January, the number of active bitcoin wallets, many of which have long been dormant, has seen an uptick. Earlier this week, digital assets fund Adamant Capital published a report claiming that the cryptocurrency bear market is winding down and is in its final stage.

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Adrian Zmudzinski

Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.

Bitcoin Accounts for 98 of Crypto-Denominated Ransomware Payments Study

Bitcoin Accounts for 98% of Crypto-Denominated Ransomware Payments, Study


Bitcoin (BTC) continues to account for the lion’s share of crypto-denominated ransomware payments,

according to Coveware’s Q1 2019 Global Ransomware Marketplace report, published on April 15. The report — reportedly based upon aggregated ransomware data from cases tackled by Coveware’s Incident Response Team — indicates that in Q1 2019 the ransomware landscape saw a sharp increase in the average ransom demanded by threat actors. The average sum — demanded in exchange for the ostensible delivery of a decryptor tool that can help victims recover data after a ransomware attack — rose 89% from a median $6,733 in Q4 2018 to $12,762 in Q1 2019, the report states. Of these ransoms that were paid in cryptocurrency, 98% were payable in bitcoin.

The report outlines that in Q1 2019:

“[H]andling cryptocurrency continued to be a major source of friction for victims, and thus the threat actors as well. It is unlikely that ransomware rotates towards a different cryptocurrency anytime soon as they are even more nuanced to procure and handle.”

Coveware notes that threat actors have scant need to migrate away from bitcoin to other coins as they reportedly face little difficulty using mixing services to exchange bitcoin for privacy-focused cryptos such as dash (DASH) or monero (XMR). Privacy coins are thus used for only 2% of ransomware payments, according to Coveware’s data, and are largely used later in the process, once the payment has been received and threat actors subsequently attempt to obfuscate the transfer of their ill-gotten funds. GandCrab — a strain of ransomware that accounts for 20% of the market, according to Coveware’s data — was the only prevalent strain where threat actors accept payment in either dash or bitcoin.

Moreover, the report notes, GandCrab victims who pay with bitcoin face a 10% additional fee due to the costs incurred by the threat actors’ use of mixing services to anonymize the cryptocurrency after payment. As reported earlier this week, digital payments giant PayPal recently won a cybersecurity patent to protect users from crypto ransomware. In March, Big Four auditor PwC linked Iranian nationals behind the bitcoin ransomware scheme SamSam — which reportedly damaged multiple American companies, government agencies, universities, and hospitals —  to the crypto exchange WEX.

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Marie Huillet

Marie Huillet is an independent filmmaker, with a background in journalism and publishing. Nomadic by nature, she’s lived in five different countries this decade. She’s fascinated by Blockchain technologies’ potential to reshape all aspects of our lives.

Local Media: Afghanistani Tunisian Central Banks Consider Issuing Bitcoin Bonds

Local Media: Afghanistani, Tunisian Central Banks Consider Issuing Bitcoin Bonds


Afghanistan and Tunisia’s central banks are looking to issue a bitcoin (BTC) bond,

Hong Kong-based news outlet Asia Times reports on April 17. Per the report, the governors of the two country’s central banks spoke at the annual Spring Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund in Washington between April 8 and 14. Afghanistan’s central bank governor Khalil Sediq allegedly told Asia Times that the institution is considering issuing a sovereign crypto bond to raise $5.8 billion. The funds would be used for private-sector investment in mining, energy and agriculture. Alongside bitcoin, Sediq reportedly mentioned metal futures (for instance lithium) and pointed out that the country’s mineral reserves are estimated to be worth over $3 trillion.

On the other hand, Marouane El Abassi, governor of Tunisia’s central bank and former World Bank official, purportedly declared that the institution is looking into the issuance of a bitcoin bond. According to the report, Abassi also claimed that the country was one of the first to issue a digital currency and already implemented payments through a digital system.

Furthermore, Abassi also reportedly lauded bitcoin, blockchain and Hyperledger as a tool for central banks to combat money laundering, manage remittances fight terrorism and limit grey economies. Lastly, the article also notes that Uzbek ambassador Javlon Vakhabov mentioned that Uzbekistan does not rule out the development of a bitcoin bond either.

As Cointelegraph reported in September last year, Austria’s government also launched €1.15 billion ($1.35 billion) of government bonds on the Ethereum (ETH) public blockchain. More recently, in March, Germany’s justice and finance ministries have proposed to launch a state-run register to boost the use of blockchain for electronic bonds.

Article Produced By
Adrian Zmudzinski

Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.

A Brief History of the SEC’s Reviews of Bitcoin ETF Proposals

A Brief History of the SEC’s Reviews of Bitcoin ETF Proposals


It may span only a couple of years, but the history of Bitcoin exchange-traded funds (ETFs)

and the United States Securities and Exchange Commission (SEC) is already a long one. Back in March 2017, the SEC rejected the application for a Bitcoin ETF put forward by the Winklevoss twins, claiming that the underlying Bitcoin market was still too manipulable, volatile and resistant to surveillance. Fast forward to March 2019 and the SEC has still yet to approve a single Bitcoin ETF, with the comments to its latest public consultation remaining largely negative.

Such an absence of major progress may seem fatally discouraging to casual observers hoping for an ETF to provide crypto with added legitimacy. Nonetheless, the intervening period between March 2017 and the present day has witnessed a softening of the SEC's stance, with members of the commission even going so far as declaring that they expect a Bitcoin ETF to be approved sooner or later. There is, then, plenty of reason to draw hope from the SEC's recent dealings with Bitcoin ETF applicants, even if the longer-term history shows that the commission hasn't always adopted a favorable stance toward crypto.

2017: SEC claims manipulability, volatility and absence of surveillance

On June 30, 2016, the Bats BZX Exchange filed a proposed rule change with the SEC, which would have permitted it to list and trade shares of the Winklevoss Bitcoin Trust. If approved, the Winklevoss' ETF would have been the first Bitcoin exchange-traded fund licensed to appear on a fully regulated stock exchange, thereby making it possible for the layperson to gain exposure to Bitcoin without having to actually own the cryptocurrency or wrestle with crypto exchanges or wallets. No doubt this would have represented a big step toward the mainstream for crypto, yet after a long period of deliberation and consultation, the SEC rejected the proposed rule change. On March 10, 2017, it released a statement explaining the reasoning behind its decision, with the difficulty of preventing manipulation and fraud being at the

top of its list.

"Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. Therefore, as the Exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market — the Commission does not find the proposed rule change to be consistent with the Exchange Act."

Barely two weeks after this judgment had been published, the SEC denied a similar proposal submitted by NYSE Arca, which is owned by the Intercontinental Exchange and which wanted to list the SolidX Bitcoin Trust ETF. Reusing many of the same phrases and declarations, the commission wrote on March 28 that "it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices."

As the two episodes above imply, 2017 wasn't a particularly great year for Bitcoin ETFs or for the notion that the SEC might be inclined to license one of them — because, aside from SolidX and Winklevoss, an ETF from Barry Silbert's Grayscale Investments was registered with the the SEC in January 2017, and it fared no better than its rivals. It was subject to a delay on March 22, after it had received three comments — all negative — from members of the public, and then in September of the same year, it withdrew its application, citing a lack of "regulatory developments" in the crypto market as the main reason for this action.

Between March and September, the public sent the SEC additional comments as part of the consultation, and while they ended up numbering only 21 in total, a portion of them provide insight into why Grayscale Investments wasn't likely to gain approval for its ETF at that time.

For example, a seven-page letter from Mark T. Williams, a finance professor at Boston University, details a long list of reasons as to why a Bitcoin ETF — particularly from Grayscale Investments — wasn't appropriate. These include Bitcoin market flaws, such as "poor price discovery, irregular trade execution, shallow trade volume, hoarding, relatively low liquidity, hyperprice volatility, a global web of unregulated bucket-shop exchanges, high bankruptcy risk and oversized exposure to trading and price discovery in countries outside the jurisdiction of the SEC." Yet, Williams also noted that Digital Currency Group — which owns Grayscale Investments and Coindesk (among other ventures) — "is fraught with inherent conflicts of interest."

But while this would suggest that there was some strong opposition to this particular ETF, other researchers outside the cryptocurrency industry were more positive. "Moving bitcoin trading activity to regulated US exchanges will improve price discovery and reduce the potential for manipulation and money laundering," argued James J. Angel, an associate professor of finance at Georgetown University.

Likewise, professor Campbell R. Harvey of Duke University (and colleagues) wrote that "allowing the Bitcoin Investment Trust to list its shares on the NYSE Arca as a bona fide Exchange-Traded Product (‘ETP’) would demonstrate the Commission’s utmost commitment to achieving" its aims of protecting investors, maintaining efficient markets and aiding capital formation. Given that six other economists from six other American universities signed this statement, it revealed that there was actually considerable support for the idea of a Bitcoin ETF, even if the SEC couldn't be disabused of its view that the cryptocurrency market was still too anarchic for it to approve such a fund.

2018: Growing support from the wider industry

As 2017 came to close, there was then a very real sense that the SEC viewed the Bitcoin market with suspicion, and that its sceptical views on the market were reinforced by a significant chunk of the comments it had received from people outside of the crypto industry. However, this unfavorable situation began to change gradually over the course of 2018, because, even though the SEC continued to reject Bitcoin ETFs, dissenting voices from within the commission began emerging.

This was most in evidence in July, when the SEC rejected — for a second time — the Winklevoss Bitcoin Trust proposed for listing by the Bats BZX Exchange. Once again, it judged that Bats' proposal failed to demonstrate that it was consistent with rules "designed to prevent fraudulent and manipulative acts and practices." However, it took the unusual step of adding a disclaimer to this rejection, writing, "Although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment." Even more significantly, Hester Peirce (now dubbed “Bitcoin Mom” by the community) dissented from this decision, despite being a commissioner at the SEC. On July 27,

she wrote:

"The disapproval order focuses on the characteristics of the spot market for bitcoin, rather than on the ability of BZX — pursuant to its own rules — to surveil trading of and to deter manipulation in the ETP shares listed and traded on BZX."

This open dissent from an SEC commissioner indicated a subtle turning of the tide in favor of Bitcoin ETFs. And while one of the comments submitted during the brief SEC consultation in May was trenchantly hostile to the Winklevoss ETF, most were supportive. More importantly, the supportive letters and comments didn't always come from people working directly within the crypto industry, with four companies operating within the global exchange-traded products market providing key testimony in favor.

For example, C&C Trading concluded in its comment that it "supports listing the COIN ETF and believes it will be an innovative product for investors and market professionals to trade," with the ETF market-making specialist also adding that many existing ETFs "are based on opaque and illiquid underlying instruments." Still, despite the fact that wider industry and public opinion was in general warming to the idea of Bitcoin ETFs, 2018 unsurprisingly set the record for the number of proposals dismissed by the SEC. On Aug. 22 alone, the commission rejected nine applications, with the likes of Direxion, ProShares and GraniteShares having their applications turned down (and in some cases, more than one application). And once again, the SEC explained these rejections mostly in terms of a failure to prove that the applicants' rules were "designed to prevent fraudulent and manipulative acts and practices."

The fact that the commission remained fixed to this point of view shouldn't be surprising, not least because this decision followed soon after the publication of fairly damning research into crypto-market manipulation. In June, University of Texas researchers released a paper concluding that Tether and Bitfinex manipulation was responsible for around 50 percent of Bitcoin's price rises in 2017. Barely a month before, the U.S. Department of Justice had opened a criminal investigation into Bitcoin price manipulation, while, at the beginning of August, the Wall Street Journal published a study that found that price manipulation was mostly being perpetrated by “trading groups” using Telegram and other messaging services.

2019: Increased hope despite decreased momentum

In light of all this negative publicity, it's unsurprising that the SEC continues to refuse the approval of a Bitcoin ETF. And while nothing has essentially changed in 2019 (and no ETF has so far been approved), there is once again increased cause for hope. In February, Robert J. Jackson Jr. – a commissioner with the SEC – went on record as saying that he expects the commission to license a Bitcoin ETF

sooner or later.

“Eventually, do I think someone will satisfy the standards we’ve laid out there? I hope so, yes, and I think so.”

That same month, a commissioner with the Commodities and Futures Trading Commission (CFTC) criticized the SEC for having rejected previous ETFs on the grounds of potential price manipulation. Speaking at the BiPartisan Policy Center in Washington D.C.,

Brian Quintenz said:

"There are mathematical ways through a settlement index to design a contract where even if there isn’t a lot of liquidity on one exchange referenced, the index itself is not readily susceptible to manipulation."

Added to Hester Peirce's continued support for the crypto industry, such remarks indicate a climate in which the SEC is becoming incrementally more receptive to the idea of a Bitcoin ETF, despite Peirce’s warning in December 2018 that an approval could take longer than some people would hope. Indeed, an approval could take some time, since the prognoses for the ETFs currently under review don't look especially encouraging. In February, Reality Shares withdrew its own ETF trust after the SEC had encouraged it to do so, largely because the ETF took the unusual step of combining Bitcoin futures, sovereign debt instruments and money market mutual funds into a single derivative. And while there has been some hope in the Chicago Board Options Exchange's (CBOE) reapplication for a Bitcoin ETF, this has been dampened by the public's largely negative response to the application.

Of the 18 comments submitted to date (between Feb. 13 and March 31), only three were in favor of the ETF. However, it would be extremely rash to conclude on the basis of 15 disapproving comments that the general public or the wider financial industry are growing increasingly weary of the idea of a Bitcoin ETF. That's because some of these comments lack any real credibility, being either extremely minimal at best or downright incoherent at worst. As for the other, even though they generally argue their points with more depth and rigor, they're all from repeat commentators. The two contributions of a one “Sam Ahn” are his eighth and ninth, for instance, while "investment professional" Jonathan Harris has sent at least two very similar letters containing general Bitcoin-scepticism, as well as one from April 2017.

This reappearance of entrenched critics undermines any suspicion that opposition to a Bitcoin ETF somehow might be growing. However, by much the same token, it's discouraging to note that there aren't really any significant contributions to the consultation on CBOE's latest application. While it's hard to conclude anything on the basis of a single proposal, this might indicate that the push for an ETF is losing some momentum — or, at least, publicity. At the very least, interest from the wider public and from industries outside of crypto may be waning, even though the cryptocurrency industry remains firmly behind the idea.

And even if interest is waning, this is likely due to a recognition that it isn't letters from the public that will now sway the SEC, but actual evolution in the maturation and regulation of the cryptocurrency industry. And because there have been multiple developments on this front — from the United States to Russia and Japan — it's likely only a matter of time before the SEC approves its first Bitcoin ETF.

Article Produced By
Simon Chandler

Simon Chandler is a journalist based in Hove, UK. He writes mostly about technology, with his specialties including cryptocurrencies, AI, VR, and social media. He also occasionally writes about politics, culture and music, and has contributed to the likes of Wired, the Daily Dot, the Verge, Computer Weekly, Techcrunch, Bandcamp Daily, the New Internationalist, the Kenyon Review, and Tiny Mix Tapes

TokenPay Seals Equity Deal in Australian Lingerie Giant Naked Brand Group

TokenPay Seals Equity Deal in Australian Lingerie Giant Naked Brand Group


Swiss decentralized payment startup TokenPay has acquired a large number of shares

in an Australian lingerie giant, a document originally issued on March 19 reveals. According to the filing, TokenPay purchased 1,840,216 shares of Naked Brand Group’s (NAKD) common stock, a 6.2 percent stake. The company has various brands on the market, perhaps the best-known of which is supermodel Heidi Klum’s Intimates line. Explaining the impetus behind its choice of spending and subsequent area for development, TokenPay revealed NAKD had in fact suggested it was curious about blockchain technology. “Why the move into lingerie? $NAKD management has expressed interest in exploring blockchain technology,” TokenPay wrote on Twitter on March 27,


“It also operates iconic fashion brands w [with] $100m in sales, mostly to women. This is an undertargeted market in our industry. Potential for excellence by embracing crypto is real.”

Once the NAKD deal completes, TokenPay hinted there would be the option to purchase the company's products using crypto. As Cointelegraph reported, TokenPay has branched out into unanticipated industries before. In June last year, the startup partnered with the nonprofit body behind Litecoin (LTC) to acquire a roughly 10 percent stake in a German bank. Prior to that, a $2.5 million token investment saw TokenPay support efforts by privacy-focused cryptocurrency Verge to make major adult entertainment website Pornhub support its XVG token. The project appeared to have mixed success.

Article Produced By
William Suberg

William Suberg got into Bitcoin while completing his Masters degree and hasn't looked back since, writing about anything crypto-related which makes him sit up and pay attention. He started working with Cointelegraph in October 2013.