Sergey Nazarov is the co-founder of Chainlink. In this podcast, Sergey lays out his current thinking on DeFi (Decentralized Finance), how it improves on CeFi, the role of oracles in decentralized finance, and the fast and slow cases on what is needed for DeFi to go mainstream. Sergey says “decentralized finance is the thing that people want. They just don’t know that they want it yet.”
Day: February 15, 2021
Pornhub Payment Option Verge Suffers Massive Blockchain Reorganization
Verge, a small cryptocurrency serving as a payments option on Pornhub, suffered a massive 560,000-block reorganization Monday, according to researchers at Coin Metrics. Verge’s Twitter account seemed to acknowledge the attack late Monday.
Disclosure
Crypto Exchanges Say Hong Kong’s Ban on Retail Crypto Trading Could Be Counterproductive
Some major cryptocurrency exchanges have expressed concern regarding Hong Kong’s proposal to ban retail investors in the city from participating in crypto activities, stating that it could have an adverse effect.
Hong Kong’s Proposed Ban Could Affect 93% of Its Population
According to the South China Morning Post on Monday (Feb. 15, 2021), the Global Digital Finance, a body representing crypto exchanges such as Huobi, BitMEX, and Coinbase, and OKCoin, warned that Hong Kong’s proposal could drive retail investors to seek unregulated platforms.
Back in November 2020, Hong Kong’s Financial Services and the Treasury Bureau published a consultation paper that included a proposal to ban retail investors from trading cryptocurrency. The proposal, according to Hong Kong, would bring its domestic rules on Anti-Money Laundering and counterterrorism financing in line with recommendations from the Financial Action Task Force (FATF).
Meanwhile, crypto exchanges operating in Hong Kong are allowed to serve professional investors, who hold a minimum of HK$8 million ($1 million). The agency further consulted with the public and industry bodies, which closed in January 2021. The Hong Kong government is also looking to introduce the proposal as a bill to the legislative council later in 2021.
However, the chairman of Global Digital Finance’s advisory council, Malcolm Wright, argued that limiting crypto trading to professional investors did not apply to the U.K., Singapore, and the U.S., who are all members of the FATF. Wright added that if the bill is passed, retail traders would use overseas crypto exchanges for trading activities, or may turn to unregulated platforms.
Furthermore, a survey conducted by Citibank revealed that seven percent of Hong Kong’s population had net assets with a minimum of HK$10 million (US$1.3 million) as at mid-2020. Using Citibank’s survey, about 93 percent of Hong Kong’s population would be affected by the proposed ban, according to an estimate by South China Morning Post.
Following the introduction of the proposal, the digital trading company OSL became the first platform to receive a license from Hong Kong’s Security and Futures Commission (SFC).
Bitcoin Association Seeks Justification for Ban on Retail Crypto Trading
Apart from Global Digital Finance, the Bitcoin Association of Hong Kong have also kicked against the ban on retail crypto trading. The Association, which was involved in a bitcoin ad back in September 2020, stated that the government needed to provide a concrete reason why it would restrict retail investors from trading crypto. According to the body:
“Any barrier put in place to restrict the sale or purchase of bitcoin needs to be reasonable and well justified. Individuals … need to be able to use and accept bitcoin as payment.”
Bryan Cheung, the association’s president earlier commented on the proposal, stating that it would only drive companies out of the city. Cheung added that an awareness and education would have been a better alternative.
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Crypto Strategist Michaël van de Poppe Names Top 5 Altcoins for February and March
Crypto strategist and trader Michaël van de Poppe is unveiling the names of a select group of altcoins that he says have the potential to significantly grow your Bitcoin holdings.
In a new video, Van de Poppe tells his 29,500 YouTube subscribers that while many altcoins have already gone ballistic against USDT (Tether), a handful are just starting to show signs of life in their Bitcoin pairs.
The trader is keeping an eye on Cosmos (ATOM) which he says is not granting an entry as it trades close to its all-time high of $22.02. Instead of chasing the pump, Van de Poppe suggests looking at ATOM/BTC, a pair that may be on the verge of igniting its uptrend.
“We still have to make a higher low on the trend here for Cosmos (ATOM/BTC). I’m going to look at this range here (0.00034), which is this previous level, so this block we have. Then, I’m going to look for the block we have here (0.00026) for potential dips buying. And then we get the next impulse wave [to 0.00063].”
It’s the same case for Celer Network (CELR) says Van de Poppe. The trader notes that CELR/USDT just completed a big parabolic move while the CELR/BTC pair is starting to heat up after a long downtrend.
“We are making a nice bullish divergence on the bottoming construction [for CELR/BTC]. So we lost this support (0.00000025), which is also the range support… We flipped back. We made this level again support. Confirmed the bullish divergence. Make a run upwards…
What we’re most likely going to see is we might be getting a run at 60 sats (0.0000006), another correction, and then the real impulse wave [to 0.00000115].”
The trader is also looking at Harmony (ONE/BTC) which is also printing a similar market structure to CELR/BTC according to Van de Poppe.
“Given that we’re currently into a resistance area, it is very likely that we’re going to get a corrective move towards the range here (0.00000032), get a period like this, and then we start accelerating towards this range high (0.0000012) and possibly even towards 180 sats (0.0000018).”
Another pair that’s also trying to carve a bottom according to Van de Poppe is DIA/BTC.
“[DIA/BTC] is still facing resistance. Might be making another drop down towards support here (0.000003) and then start accelerating when it breaks this level around 770 sats (0.000007). I think we’re going to run towards this area here (0.00025).”
The last coin on Van de Poppe’s radar is TomoChain (TOMO). According to the crypto analyst, TOMO/BTC is barely waking up.
“As you can see, we’re still consolidating. If the Bitcoin pair starts to run towards the levels that we see here (0.000007, 0.000008, and 0.000012), we can see that the price is going 3x from here.”
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Pornhub Favorite Verge Token ‘Loses’ 200 Days of Transactions
In brief
- The Verge blockchain was hit with an apparent 51% attack, according to Coin Metrics’ researchers.
- Verge contests that characterization.
- Verge had a $400 million market cap as of this morning.
This morning, Antoine Le Calvez, a data engineer with blockchain research firm Coin Metrics, pointed out that something funny was happening over on the Verge (XVG) blockchain.
“Looks like $XVG (Verge) experienced a massive 560k+ blocks reorg,” he wrote. His colleague, Lucas Nuzzi, chimed in a few hours later: “The past 200 days worth of $XVG transaction history just vanished. This is likely the deepest reorg that has ever taken place in a ‘top 100’ cryptocurrency.”
Indeed, Verge was a borderline top-100 cryptocurrency, with a market cap above $400 million, before it was seemingly victimized by a 51% attack. In a 51% attack, an often malicious actor gains control of a majority of the hash power on a blockchain; they can then use that power to “reorganize” the blockchain and replace legitimate blocks with their own and “double-spend” funds.
51% attacks can be hugely profitable on certain types of blockchains. Ethereum Classic experienced multiple 51% attacks last year. ETC Labs’ Terry Culver explained to Decrypt last October that “a combination of access to liquidity, a lot of exchange listings, and low hash rate” make a blockchain a good target for such attacks.
But Verge says that isn’t what happened here. A pinned message from an administrator in Verge’s Telegram channel reads:
“The official block explorer has been restarted and syncing now, the [database] was corrupted, and it looks like some malicious nodes attempted some [transaction] spam and failed at their goal of causing a fork, this is all the information I have currently, an official update will be coming soon, stay calm and be assured your coins are safe, and yes we will be communicating with the exchanges as soon as we have all the details, No there was not a 51% attack.”
Adult website Pornhub has been accepting Verge since since April 2018; in fact, it was the first cryptocurrency Pornhub embraced. That could be because XVG matched the website’s need for discretion; it was originally conceptualized in 2014 as a privacy-centric version of Dogecoin, called DogeCoinDark.
Turns out it’s a little too private. It made transactions disappear.
Crypto lender Celsius has paid out $250M in rewards
Celsius, a centralized cryptocurrency lending platform, claims to have paid out over $250 million in rewards to its 415,000 users, underscoring the rapid growth of blockchain lending protocols.
Celsius announced the milestone in a Monday press release, which highlighted the company’s significant growth over the past two years. “Celsius remains one of the fastest-growing companies in finance as it achieves new milestones week-over-week,” the company said.
Unlike DeFi protocols, Celsius offers a centralized alternative that lets users deposit crypto assets onto its platform. The deposited assets are lent out to exchanges and market makers, with the vast majority of interest payments distributed to depositors.
By Nov 2020, Celsius had paid out more than $80 million in crypto rewards to depositors. That figure appears to have more than tripled, based on Monday’s press release.
Celsius users have the ability to earn weekly rewards of up to 18.5% APY on over 40 crypto assets. The company now manages over $8 billion in cryptocurrency assets.
Alex Mashinsky, Celsius’ co-founder and CEO, said:
“Celsius was built to act in the best interest of the community, and we have consistently delivered honest, transparent, and rewarding financial services.”
The continued growth of Celsius helped land Mashinsky a spot in the Cointelegraph Top 100 for 2021. Mashinsky not only helped put Celsius Network on the map in 2020, but he was instrumental in securing an additional $20 million in crowdfunding from over 1,000 investors. The platform’s native token, CEL, vastly outperformed most major cryptocurrencies last year.
Graphic Designer David Rudnick Sells NFT for $20,000
In brief
- David Rudnick, a graphic designer, sold a Valentine’s Day NFT for nearly $20,000.
- The bidding happened on Zora, an NFT marketplace in the vein of SuperRare and Nifty Gateway.
- Via Zora, artists earn a portion of the sale every time their piece is resold.
David Rudnick, a graphic designer known for high-profile collaborations with musicians such as Black Midi, Nicolas Jaar, and Oneohtrix Point Never, has sold a Valentine’s Day NFT for nearly $20,000.
NFTs, or non-fungible tokens, are one-of-one collectibles on the Ethereum blockchain. Where cryptocurrencies like Bitcoin and Litecoin are fungible tokens, in the sense that each coin is interchangeable with any other, NFTs are unique assets that can be anything at all. An early example was CryptoKitties: a game based around collectible cats, each of which was an NFT.
Rudnick’s NFT is a digital image called “Stem”—a glitchy rendering of a flower with an ominous subheading: “I’ve had this dream for a long time.”
An anonymous bidder paid 10.8 WETH (Wrapped Ether) for the piece on the NFT marketplace Zora, which raised $2 million in seed funding from the likes of Kindred Ventures and Coinbase Ventures late last year.
Zora sets itself apart from competitors such as SuperRare and the Winklevoss-backed NiftyGateway with its focus on creators’ rights. Once a work is sold in the traditional market, artists are essentially screwed out of any future profits the piece might make on the secondary market. But if you mint an NFT on Zora, you get to keep a percentage of all future sales. In the case of Rudnick’s “Stem,” the creator share is 10%.
NFTs have exploded in popularity over the past year as a medium for visual art. At an auction in December, the artist Beeple made $3.5 million on a collection of 20 NFTs. And Linkin Park’s Mike Shinoda dropped an NFT on Zora last week.
But Rudnick isn’t under the spell of the blockchain utopians: responding to a tweet about how platforms like Zora mostly lend themselves to well-known, tech-savvy artists, Rudnick suggested the NFT space has room to grow.
“If this tech remains a marketplace,” he wrote, “it will only further inequality.”
EXMO crypto exchange suffers second attack in two months
London-based cryptocurrency exchange EXMO suffered a distributed denial-of-service attack earlier today, causing the platform’s servers to become unavailable.
In a tweet earlier today, EXMO reported that hackers had targeted the exchange with $75 million in trading volume in a distributed denial-of-service, or DDoS, attack. These cyberattacks typically overload a system with numerous requests from multiple virus-infected servers.
Important: DDoS attack on EXMO ❗️
Please note the EXMO exchange website is now under the DDoS attack. The servers are temporarily unavailable.
We are solving this issue right now. Please stay tuned.
— EXMO (@Exmo_Com) February 15, 2021
The attack comes two months after the crypto exchange reported that hackers had stolen $10.5 million in Bitcoin (BTC), Ether (ETH), XRP, Bitcoin Cash (BCH), Tether (USDT), and Zcash (ZEC). Executives later suggested some of the funds could not be recovered because the attackers had withdrawn $1 million in XRP and $2.8 million in ZEC through Poloniex.
According to data from CoinMarketCap, the total volume on EXMO fell 4.9% in the last 24 hours. The incident in December caused the exchange to lose about 5% of its total assets, though only EXMO’s hot wallets were reportedly affected by the hack.
Maria Stankevich, the chief business development officer at EXMO, told Cointelegraph that since the December breach the exchange has implemented a number of measures to reduce the possibility of a future attack. She said EXMO transferred cryptocurrency withdrawals to the custody arm of hardware wallet manufacturer Ledger, and created a bug bounty program to test the exchange, among other solutions.
As of Jan. 10, all crypto exchanges in the U.K. are required to be registered with the country’s Financial Conduct Authority, which verifies they are in compliance with anti-money laundering regulations. However, a number of firms which have submitted applications — including EXMO — have received temporary registrations from the FCA allowing them to continue trading until July 9.
Verge Suffers Massive Six-Month Block Reorganization
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Market Wrap: Crypto Market Cap Breaks $1.5T as Buyers Show Up for the Dip
Bitcoin has fully pared losses from Sunday’s dip as the leading cryptocurrency fell from around $48,600 to below $46,000 early Monday morning. As of 21:00 UTC (4 p.m. ET), bitcoin was trading above $48,600 on Coinbase. But the leading cryptocurrency still has yet to trade above the psychologically significant $50,000 mark.
Much of bitcoin’s choppy price action and its recent dip could be attributed to futures deleveraging. Eager bulls piled into long trades expecting a swift breakout to $50,000 or higher. Funding rates for perpetual bitcoin futures have steadily increased through February, according to market data collected by Skew, with some funding rates reaching their highest levels in the past 12 months.
Confirming this market condition, bitcoin futures saw over $520 million in liquidated contracts over the past 24 hours, according to data from Bybit. The eager buyback after these liquidations hints at the market’s resilient bullishness after resetting over-eager bullish futures traders.
High positive funding rates signal an increase in long positions, whereas negative rates indicate a more bearish sentiment. The market tends to reset when traders, especially in overcrowded derivatives positions, become overly bearish or bullish.
Even though some traders may be dissatisfied by the choppy price action, other market participants are enjoying themselves. Bitcoin miners, for example, hauled in a record $354 million in revenue last week, passing the previous record of $340 million set in mid December 2017. Network fees contributed over 15% of this revenue.
Ether, the second-largest cryptocurrency by market capitalization, was up Monday trading around $1,820 and climbing less than 1% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
Shortly after setting new record highs above $1,850, ether also suffered a sizable drop, falling almost 10% to roughly $1,660 early on Monday. Over $313 million in ether futures were liquidated in the past 24 hours, per Bybit.
The DeFi sector in aggregate followed suit, per data from Messari. But Ethereum and the various assets in the DeFi ecosystem have since recovered, with DeFi’s aggregate performance up nearly 3% in the past 24 hours, per Messari.
Other alternative cryptocurrencies have also recovered from the market’s dip. FTX’s altcoin index perpetual futures are up nearly 20% from early Monday morning lows, completely retracing the correction.
Digital assets on the CoinDesk 20 are X Monday. Notable winners as of 21:00 UTC (4:00 p.m. ET):
Disclosure