New York Economic Dev. Non-Profit NYCEDC Opens Blockchain Center

Blockchain Education

The New York City Economic Development Corporation has announced the opening of a Blockchain Center in the city.

The New York City Economic Development Corporation (NYCEDC) has announced that it is opening its Blockchain Center in Manhattan, Bloomberg reports today, Jan. 10.

The organization told reporters that the center is part of a partnership with international trade organization Global Blockchain Business Council and affiliates of New York-based venture capital fund Future Perfect Ventures.

Located in the Flatiron District of Manhattan, the 4,000-square-foot center will reportedly offer blockchain-oriented educational services to the general public, such as programming classes to lectures for software developers.

Ana Arino, chief strategy officer at the NYCEDC, told Bloomberg in a phone interview that the organization is “playing the long game” in terms of the potential of blockchain tech, and looking to keep New York at the forefront of future development. Arino stated:

“[Blockchain is] a nascent technology, so there’s bound to be uncertainty around this evolution from year to year. While we don’t know what the future holds, we want to make sure we have a seat at the table shaping it.”

The city is reportedly contributing a “one-time initial investment of $100,000.” Bloomberg reports that the organization will seek to raise further funds via membership fees and through corporate partners, which already reportedly include Microsoft Corp. and International Business Machines Corp.

According to Bloomberg, the city has tentative plans to test the use of blockchain tech this fall.

The NYCEDC’s president and CEO first announced plans to open a blockchain-focused resource and education center in the city in May.

This month, a New York state legislature assemblyman announced that New York had become the first United States state to create a cryptocurrency task force aimed at studying the regulation, use and definition of digital currency.

Bitwise Files With the US SEC for a Physically Held Bitcoin ETF

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Cryptocurrency index fund provider Bitwise Asset Management has applied with the U.S. Securities and Exchange Commission to launch a new Bitcoin ETF.

Cryptocurrency index fund provider Bitwise Asset Management has applied with the United States Securities and Exchange Commission (SEC) to launch a new Bitcoin (BTC) Exchange Traded Fund (ETF), according to a registration form published today, Jan. 10.

According to the form, Bitwise’s proposed ETF will track the Bitwise Bitcoin Total Return Index, the value of which is “calculated based on the prices of bitcoin that the Index Provider derives from bitcoin price transactions occurring on cryptocurrency exchanges.” According to a press release accompanying the newly filed form, the firm’s proposed Bitcoin ETF reportedly differs from other previously proposed Bitcoin ETFs in that it draws prices from a variety of crypto exchanges, with the aim of better representing the market.

Bitwise’s Bitcoin ETF reportedly also differs from other applications in that it would require “regulated third-party custodians to hold its physical bitcoin.”

In the firm’s press release, John Hyland, Global Head of ETFs at Bitwise declared:

“Having a regulated bank or trust company hold physical assets of a fund has been the standard under U.S. fund regulation for the last 80 years, and we believe that is now possible with Bitcoin.”

As Cointelegraph reported in July, Bitwise had filed with the SEC to launch a crypto ETF tracking the Bitwise HOLD 10 Private Index Fund, a basket of ten cryptocurrencies. To press time, a decision from the SEC is still pending.  

An ETF is a security that tracks an asset or a group of assets and is traded the same way in which stocks are on an exchange. As Cointelegraph reported earlier this month, Japan’s Financial Services Agency (FSA) has denied that it is considering allowing Bitcoin exchange-traded funds.

The crypto industry has long awaited the approval of a Bitcoin or generally crypto ETF by U.S. regulators, since a number of firms have applied to launch such products in the country. In December, the SEC further postponed its decision on a Bitcoin ETF by investment firm VanEck and blockchain company SolidX on the Chicago Board Options Exchange (CBOE),  setting the new deadline for Feb. 27, 2019.

Also in December, an SEC commissioner said “not to hold your breath” waiting for a Bitcoin ETF, speaking at the Digital Asset Investment Forum held in Washington.

Daily On-Chain Bitcoin Transactions Hit Yearly High

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Despite the prolonged bear market of 2018, the year has seen a steady increase in the number of confirmed Bitcoin transactions. They are currently at their highest point since mid-January 2018.  Real Adoption Regardless of the sharp decline in Bitcoin price in 2018, the cryptocurrency has seen a steady increase in the number of transactions throughout the entire year. Data from Blockchain.com shows that the number of confirmed Bitcoin transactions is currently higher than that on January

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Bitcoin Dips Below $3,700 as All Top Cryptos See Severe Losses

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All of the top 20 cryptocurrencies report severe losses, with Bitcoin tumbling below the $3,700 threshold.

Thursday, Jan. 10 — all of the top 20 cryptocurrencies are seeing severe losses in the 24 hours to press time. Bitcoin’s (BTC) price has dipped below the $3,700 mark, according to Coin360 data.

Market visualization from Coin360

Market visualization from Coin360

At press time, Bitcoin is down over 9 percent on the day, trading at around $3,661. Looking at its weekly chart, the current price is lower than $3,888, the price of BTC one week ago. The current Bitcoin value is also substantially lower than $4,108, its mid-week high reported on Tuesday.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: CoinMarketCap

Ripple (XRP) has regained its position as the second-largest cryptocurrency by market cap, overtaking Ethereum (ETH). Moreover, the divide between the two assets coins has shrinked, with Ethereum’s market cap being $13.3 billion and Ripple’s — $13.57 billion.

Ripple is down over 9 percent on the day, trading at around $0.33 at press time. On the weekly chart, the current price is lower than $0.364, the price at which the cryptocurrency started the week. XRP’s current price is also notably lower than its high of $0.381, reported earlier today.

Ripple 7-day price chart

Ripple 7-day price chart. Source: CoinMarketCap

Ethereum has seen its value decrease by about 16 percent over the last 24 hours. At press time, ETH is trading at around $127, having started the day around $151. On the weekly chart, Ethereum’s current value is significantly lower than $150, the price at which the coin started the week.

Ethereum 7-day chart

Ethereum 7-day chart. Source: CoinMarketCap

Among the top 20 cryptocurrencies, none are experiencing growth other than the stablecoin Tether (USDT), which grew by 0.65 percent in the last 24 hours. The cryptocurrencies reporting the most substantial losses in the top 20 by market cap are Iota and Neo, which are down over 16 percent.

The combined market capitalization of all cryptocurrencies — currently at about $122 billion — is lower than $130 billion, the value it reported one week ago. The current value is also substantially lower than $138 billion, the value it reached earlier today.

Total crypto market cap 7-day chart

Total crypto market cap 7-day chart. Source: CoinMarketCap

As Cointelegraph reported today, a critical vulnerability that leaked sensitive user data has been discovered and quickly patched on the Nasdaq-powered cryptocurrency and tokenized stock exchange DX.Exchange.

Furthermore, news broke earlier today that several tobacco shops in Paris, France, have started selling Bitcoin despite a degree of regulatory uncertainty. Customers can reportedly purchase tickets for the sums of 50, 100 or 250 euros with an alphanumeric code and a QR code, which can then be used to obtain Bitcoin.

Maltese Celebrities Notify Police After False Report of Involvement in Crypto Investment Scheme

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A Maltese actor and two TV show hosts notify the police following a fake news article about their involvement in a crypto investment scheme.

A Maltese actor and two hosts of a local TV show have notified the police after a false report that they are involved in a Bitcoin investment scheme called “Bitcoin Revolution.” The story was reported by the Malta Independent and Malta Today on Thursday, Jan. 10.

As per the Malta Independent, an article with a fake endorsement of Bitcoin Revolution was initially published on a website called Major News. It depicted two hosts of the One Breakfast show, Wayne Sammut and Elaine Degiorgio, and falsely claimed that Davide Tucci, a Maltese actor and TV star, was a guest on their show.

Major News continued its false report by claiming that Tucci convinced Degiorgio — as they were “on air” — to make a 250 euro deposit to a trading platform called Bitcoin Revolution, which supposedly had helped himself out of bankruptcy. The money invested during the fake “show” has increased to 483.18 euro “within three minutes,” Major News added.

The media outlet’s fake report also provided detailed instructions on how to use the platform and instructed potential customers on how to sign up.

Tucci quickly reacted to the fake news article, posting a video statement on his Facebook page. He claimed that he has never promoted or engaged in any activities related to Bitcoin or other cryptocurrencies, describing any reports to the contrary as a scam: “This is clearly a scam and click-bait, please don’t buy into this.”

Furthermore, Tucci declared that he has reported the case to the Malta Police Force’s Cybercrime unit.

The One Breakfast hosts Sammut and Degiorgio have told the Malta Independent that Tucci had never been their guest and no investments had ever been made live on their show. They have similarly notified the Maltese police of the incident.

Another local news outlet Newsbook asked the Malta Financial Services Authority (MFSA) to clarify the legal status of Bitcoin Revolution. The MFSA responded, stating that the company of that name had never been authorized by the Maltese government. In addition to that, the regulator has informed Newsbook that it is conducting its own investigation into the case.

Bitwise Submits Bitcoin ETF Filing Saying ‘2019 Should Be The Year’

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Cryptocurrency asset management firm, Bitwise, has submitted another Bitcoin ETF filing to the United States Securities and Exchange Commission (SEC). The firm’s previous BTC ETF filing was among the ones rejected by the SEC in 2018 Physically-backed Bitcoin ETF If at first, you don’t succeed, try again. The famous maxim seems contextual for Bitwise as the firm prepares for another go at obtaining SEC approval for a Bitcoin ETF. According to a press release published on

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Report: Critical Vulnerabilities Leaking User Data Found on DX.Exchange, Patched Later

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Estonia-based cryptocurrency and tokenized stock exchange DX.Exchange has reportedly patched a critical vulnerability that leaked sensitive user data.

Estonia-based cryptocurrency and tokenized stock exchange DX.Exchange has reportedly fixed a critical vulnerability that leaked sensitive user data.

Technology news website Ars Technica reported on the security leak Jan. 9, citing an anonymous trader who conducted a security analysis of DX.Exchange.

According to Ars Technica’s article, a trader, who wished to remain anonymous due to legal concerns, noticed that the exchange was sending sensitive data of other users to their browser. After examining the data, the trader has reportedly found that the data included other users’ authentication tokens and password reset links:

“I have about 100 collected [authentication] tokens over 30 minutes, […] if you wanted to criminalize this, it would be super easy.”

The authentication tokens were reportedly formatted in the JSON Web token standard and could be easily decoded with the use of online tools, obtaining full names and email addresses of the exchange’s users.

According to Ars Technica, the trader has explained that the tokens could grant access to their associated accounts, as long as the user hasn’t manually logged out after the token was leaked.

The trader has also reportedly found a way to permanently backdoor an account by using the platform’s programming interface, which would grant them access even after a user has logged out.

Furthermore, Ars Technica reported that some of the login data leaked by the platform belongs to the employees of the site. The article explains the severity of the issue:

“In the event that such a token gave unauthorized access to an account with administrative privileges, the hacker might be able to download entire databases, seed the site with malware, and possibly even transfer funds out of user accounts.”

Ars Technica itself has reportedly checked and confirmed the presence of the vulnerabilities discovered by the trader, obtaining what it described as a large number of authentication tokens through the publicly available programming interface.

Ars Technica contacted the DX.Exchange, and according to the article, the leak has now been fixed.

In response to a request for commentary from Cointelegraph, DX.Exchange has claimed that the vulnerability has been successfully patched and the customers’ funds are completely safe. The CEO of the exchange Daniel Skowronski has commented:

“We are happy to report that the vulnerability has been successfully patched, and no user funds were compromised.”

As Cointelegraph reported Jan. 3, DX.Exchange leverages Nasdaq’s Financial Information Exchange (FIX) protocol and allows its users to trade tokenized stocks of major companies, including Google, Facebook and Amazon.

Ethereum Classic 51% Attack — The Reality of Proof-of-Work

Altcoin ETC

A successful 51 percent attack on the Ethereum Classic blockchain has raised some big questions around smaller cryptocurrencies using proof-of-work algorithms.

Just two weeks into the new year and the cryptocurrency community is grappling with the reality of an alleged “51 percent attack” on the Ethereum Classic (ETC) blockchain.

While there is still no clear idea of who is responsible for the manipulation of ETC’s blockchain by controlling the majority of CPU power in the mining pool, the circumstances raise some big questions concerning the security and power of proof-of-work (PoW) algorithms.

It is worth taking a look at the chain of events leading up to the confirmation that ETC had indeed been the target of a blockchain reorganization.

On Jan. 7, ETC developers were alerted of a possible attack on the network by Chinese blockchain security firm SlowMist, which was relayed to the wider community on Twitter.

A tweet from the ETC Twitter handle, which has since been deleted, speculated that testing of new 1,400/Mh ethash machines by application-specific integrated circuit (ASIC) manufacturer Linzhi may have been a potential cause.

ETC developers said that the attack was “most likely selfish mining,” noting that they had not detected any double spends at the time.

Following this, American cryptocurrency exchange and wallet service Coinbase also detected what it described as a 51 percent attack. The company then paused all ETC transactions.

Coinbase had identified a “deep chain reorganization” of the ETC blockchain which included a double spend on Saturday, Jan. 5. By the evening of Jan. 7, the company had taken stock of multiple double spends on the network:

“At time of writing, we have identified a total of 15 reorganizations, 12 of which contained double spends, totaling 219,500 ETC (~$1.1M).”

The Coinbase team seems to have conducted a thorough blockchain analysis and provided specific instances of blockchain reorganization.

Crypto exchanges Coincheck and BitFlyer followed suit, announcing halts of ETC transactions on their platforms.

On Jan. 9, SlowMist released a detailed report on the 51 percent attack, corroborating the same chain reorganizations released by Coinbase, as well as other transactions targeting Binance and Bitrue wallets. Bitrue also confirmed the attack on Twitter.

SlowMist also believes that a concerted effort by all the exchanges involved could help identify the perpetrator:

“Through our intelligence analysis, the identity of the attacker can be finally located if the relevant exchanges are willing to assist.”

Cryptocurrency exchange Gate.io also confirmed that it had picked up at least seven double spend transactions after conducting its own investigation into the attack. Users of the exchange were guaranteed to be paid back for any losses experienced.

Unpacking blockchain reorganization

The notion of a 51 percent attack is not new, and there have been instances of this over the years — even being popularized by the Hollywood sitcom Silicon Valley.

An attack on a blockchain that uses a PoW algorithm for consensus is possible if the attackers have over 50 percent control of the network hash rate.

If this is the case, the controlling CPU power will allow an attacker to create a seperate chain from any previous block in the blockchain. Given that it has the majority of computing power, its new chain will eventually overtake the accepted chain by the network, thereby defining a new transaction history.

In this new chain, the attackers are able to double spend virtual currency, meaning that the funds that have already been spent on the network’s chain could be spent again on the attackers chain.

As Emin Gün Sirer, a developer and professor at Cornell University, told Cointelegraph, a 51 percent attack is bad, but it does not give attackers omnipotent power:

“Miners at 51 percent or more have a lot of powers, but they do not have the ability to change the actual rules of the system, nor can they usurp funds. They can rewrite the existing blockchain in a limited fashion: they cannot introduce transactions that don’t already exist, they can omit any transaction that they want, and they certainly cannot change any of the existing rules.”

The reality of consensus

Proof-of-work consensus requires a network of miners to process transactions. This is clearly set out in Satoshi Nakamoto’s Bitcoin white paper, which also makes it clear that more than half of the network must be so-called “honest” workers:

“If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains.”

Thus, vulnerability is inherently built into PoW consensus algorithms, as the network assumes that mining nodes are honestly validating transactions. The evolution of mining has seen the rise and domination of ASIC chips — as well as the amassing of hash power by massive groups of mining pools, which then share the rewards of their combined work.

These large pools potentially pose a threat to any cryptocurrency using PoW algorithms, as a concerted effort to pool resources that would combine hash rate over 50 percent of the total network gives them control. In this instance, the network becomes centralized like a bank.

Following the ETC attack, Litecoin (LTC) founder Charlie Lee said this vulnerability is a necessary point of weakness for a fully decentralized cryptocurrency:

“By definition, a decentralized cryptocurrency must be susceptible to 51% attacks whether by hashrate, stake, and/or other permissionlessly-acquirable resources. If a crypto can’t be 51% attacked, it is permissioned and centralized.”

Gun Sirer was far less positive in a thread of posts on Twitter, noting that the immutability of the blockchain was completely compromised:

“A deep reorg is a rewrite of the blockchain, a rewriting of history. As such, it marks complete failure of immutability. Since immutability is ETC’s main claim to fame, this is technically a catastrophic failure. Let’s see what the exchanges will do in response.”

Changes to Ethereum proof-of-work

While the ETC blockchain comes to grips with this most recent debacle, Ethereum (ETH) core developers reached a tentative consensus to implement a new PoW algorithm on Jan. 4.

The move aims to address the apparent divide in efficiency between ASIC and GPU mining on the Ethereum network.

ASIC mining has been developed to efficiently mine cryptocurrencies using specific algorithms. Ethereum was originally designed to be ASIC-resistant, although ASIC chips were eventually developed that were able to run the ethash algorithm.

Nevertheless, changes have been on the horizon for Ethereum for some time now. Core developers are expected to make a more detailed call on the implementation of “ProgPoW” on Jan. 18.

This is all in line with an end goal of transitioning entirely to a proof-of-stake (PoS) consensus system. The first major move to this eventuality is the Constantinople hard fork, which is expected to take place this month as well.

The hard fork will also include other Ethereum Improvement Proposals (EIPs) to streamline the transition from PoW to PoS.

While Ethereum forges ahead, the ETC developers will be pondering their next move. Smaller cryptocurrencies using PoW algorithms are at more risk of these types of attacks, but that is not to say they are going to be targeted by attackers.

Donald McIntyre, a member of the ETC development team, wrote a succinct post on Medium, unpacking the attack and possible ways forward for ETC.

“My personal opinion is that what happened is a significant setback, but I think ETC still has a unique positioning as a PoW + Turing-complete network with an active community with sound principles. The question is whether a recovery in the medium or long term is plausible or if the network, unless it grows significantly, is perpetually vulnerable, therefore unusable.”

Once the ETC development team and community have taken stock of the damage, the way forward can start to be considered. Whether this encompasses a change in the method of consensus remains to be seen.

French Tobacco Shops Start Selling Bitcoin Despite Regulatory Uncertainty

Bitcoin France

Several tobacco shops in Paris have started selling Bitcoin in partnership with local crypto wallet despite the regulatory uncertainty.

Several tobacco shops in Paris, France, have started selling Bitcoin (BTC) for fiat despite regulatory uncertainty, Reuters reports Tuesday, Jan. 8.

Reuters has learned that the world’s largest cryptocurrency can now be purchased at six tobacco shops throughout Paris. However, in a contradicting report French magazine Capital has claimed that there are as many as 24 shops currently participating in the experiment backed by Keplerk — a French cryptocurrency wallet provider.

According to Capital, customers can purchase Bitcoin for the sums of 50, 100 or 250 euros. The tobacco shop then provides a ticket with an alphanumeric code and a QR code, which can then be used to obtain the purchased bitcoins via Keplerk’s website. The magazine adds that Keplerk collects a 7 percent fee on each payment, 1.25 of which then goes to the tobacco shop.

Adil Zakhar, a co-founder of Keplerk — the French crypto wallet provider that has backed the experiment — has told Reuters that he plans to expand the project to 6,500 tobacco shops by February.

As Cointelegraph reported in November 2018, France’s tobacco federation has obtained permission to trade Bitcoin in its shops from the French Prudential Supervision and Resolution Authority (ACPR), an independent agency that operates under the auspices of the French central bank.

However, on the same day that the news broke, the country’s central bank denied the reports, saying that it had not greenlighted any deals related to cryptocurrencies.

Moreover, French stock market regulator (AMF) issued a related statement reminding the public of the risks of dealing with cryptocurrencies. In addition to that, AMF stated that PAYSAFEBIT SASU — the legal entity behind Keplerk — was not licensed by French authorities.

Nonetheless, in its most recent article Reuters reports that the French government has not imposed a de facto ban on selling Bitcoin at tobacco shops.

France continues to demonstrate a mixed attitude towards cryptocurrencies: for example, in December, the AMF blacklisted four crypto-related websites for unauthorized investment offerings. On Dec. 18, the French parliament rejected the majority of crypto-related amendments to the 2019 finance bill, which were expected to ease taxation for entrepreneurs and traders.

Bitmain Replaces CEO Jihan Wu After Bitcoin Cash Gamble Fails

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Bitmain Woes

Inside sources say that Bitmain Technologies plans to name a replacement CEO to take over from co-founders Jihan Wu and Ketuan Zhan. New Bitmain CEO According to the South China Morning Post (SCMP), the Bitcoin mining behemoth is looking to name a new CEO to replace the company’s co-founders. Anonymous sources say, Haichao Wang, the current Engineering Director is the front-runner for the job. While there is no official word from Bitmain, these sources say the

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