BitConnect Shutters Crypto Exchange Site After Regulator Warnings
The company behind the controversial cryptocurrency BitConnect has announced that it will close down its lending and exchange platform.
BitConnect’s lending service will be shuttered, effectively immediately, while its exchange platform will close in 5 days, according to a post on its website published Tuesday.
“In short, we are closing lending service and exchange service while BitConnect.co website will operate for wallet service, news and educational purposes,” the post explained.
The announcement blames a myriad of factors, perhaps most notably the cease-and-desist letters issued in recent days from regulators in Texas and North Carolina.
Both letters stated that BitConnect was engaging in the sale of unregistered securities tied to a token sale.
“We have received two Cease and Desist letters, one from the Texas State Securities Board, and one from the North Carolina Secretary of State Securities Division,” the BitConnect team wrote. “These actions have become a hindrance for the legal continuation of the platform.”
The post also blamed “bad press” that has “made community members uneasy and created a lack of confidence in the platform.”
BitConnect has been accused of constituting a Ponzi scheme, and several figures in the space, including the founder of ethereum, Vitalik Buterin, have levied criticisms against it in recent months.
The BitConnect team also blamed a string of dedicated denial-of-service attacks (DDoS).
Since as early as Jan. 13, BitConnect’s Twitter account has blamed DDoS attacks for problems with its website.
Yet despite the cease-and-desist letters, BitConnect said that its in-progress initial coin offering (ICO) will continue, and that it is building an alternative exchange for the BitConnect token.
“This is not the end of this community, but we are closing some of the services on the website platform and we will continue offering other cyptocurrency[sic] services in the future,” the team wrote.
Image via BitConnect.
215,000+ Sign Petition Against South Korean Crypto Regulation – Government to Respond
A national petition against extreme cryptocurrency regulations in South Korea has exceeded 200,000 signatures, the requirement for the government to respond. The petition entitled “Has the government ever dreamed a happy dream for the people?” was filed on December 28. Meanwhile, another related petition calls for the removal of the governor of the country’s Financial Supervisory Service.
Government Will Respond
The South Korean government announced a series of regulatory measures for cryptocurrencies in December. Immediately following the announcement on December 28, a national petition entitled “Has the government ever dreamed a happy dream for the people?” was filed and will run through January 27. According to the rules set by the Blue House, if more than 200,000 people sign a petition within a month, the government will respond within 30 days.
On Tuesday, January 16, the number of signatures exceeded that threshold for the above petition, with 215,140 signatories at the time of writing.
The petition reads:
Our people have been able to make a happy dream that they have never had in Korea because of virtual currency…I might be able to buy a house in Korea where it is hard [for me] to buy my house.
Concerning illegal gambling, the author argues “people are not stupid. In the current era, virtual currency is invested because it is judged to be the 4th revolution and it is not just a random investment…I invest wisely to the extent that I do not overdo my money.”
After acknowledging the risks, the author emphasized:
The world you [the government] see is different from the world our people see. You think you protect the people, but the people think that the government takes away our dreams.
The petition does not object to the real-name system which regulators are trying to implement or taxes that must be imposed. However, “Please do not take away our happiness and dreams that we had for the first time in Korea,” it concludes.
Another Petition and A Constitutional Court Case
On December 28, another national petition was filed. It “calls for the dismissal of Choi Heung-shik, the director of the Financial Supervisory Service, who is offering speculation to the people,” the document states.
This filing was in response to a speech Choi gave on December 28 in which he reportedly said it is a good bet that bitcoin’s bubble will burst. “Bitcoin will lose its bubble later. You can bet,” Hankook-Ilbo and other news outlets quoted him. At the time of writing, 37,911 people have signed this petition but the count is still rising.
Meanwhile, the country’s Constitutional Court has entered into a preliminary hearing on the case against cryptocurrency regulation filed on December 30. Anguk Law Offices appealed “over the government’s regulations on cryptocurrency trading, saying regulating the trade through administrative guidance without any legal grounds is an infringement of property rights,” the Korea Times explained.
The court will examine whether the constitutional appeal is appropriate and whether a full-scale trial is necessary.
Written by Bitcoin.com
Bitcoin Cash Tip Bot ‘Tippr’ Distributes Thousands of Micropayments
The Bitcoin Cash Tip Bot ‘Tippr’ Is Gaining A lot of Traction
A few years ago many people used to send BTC micropayments and tips to each other on forums and social media apps like Twitter. These days you can’t do that anymore because bitcoin core’s average fees are too high to send small increments under 15 dollars, and because companies like Changetip stopped offering tip services. Since the inception of bitcoin cash this past August, BCH users have been able to send small increments because fees are 2 cents or less per transaction.
The BCH Tippr bot is available on Reddit and Twitter. At the moment a lot of users are using the program to tip people. Tippr users on Reddit simply call “/u/tippr” and enter the number of funds they want to send and specify another user. The same thing can be done on Twitter by tagging the bot and the person on the receiving end and typing “$0.50 @tipprbot.” Tippr has been used on Twitter quite a lot since it started last September and you can observe this by scrolling through the bot’s account.
“I’m a bitcoin cash tip-bot for Reddit and Twitter, allowing you to send bitcoin cash to other users easily,” explains Tippr’s introduction.
20,000 Tips Worth $71K of Bitcoin Cash Sent Across Reddit
Additionally, Tippr sees a lot of use on Reddit according to the bot’s stats. Users on Reddit are sending anywhere between $200 to $4600 in BCH per day using Tippr. The bot has transmitted approximately $71,036 (50.5 BCH) since it started offering tip services on Reddit. According to the data, there are some pretty big tippers as some accounts on the forum have sent between $5,000-7,300 worth of BCH. Out of 9,915 Reddit users sending BCH with Tippr over, 20,000 tips have been sent to users on the popular forum.
Tippr is operated by the digital goods merchant and payment processing firm Rocketr and individuals who have issues with the tip bot can reach out to the Rocketr team. The team is also helping merchants accept BCH with the company’s own gateway.
Images via Shutterstock, Tippr, and Tippr Stats.
Written by Bitcoin.com
The Sidechains Breakthrough Almost Everyone in Bitcoin Missed
You’ve heard of proof of work, but what about proofs of proofs of work?
A complex notion, the research on “Non-Interactive Proofs of Proofs of Work,” or NiPoPoW, released in October, has received very little attention so far but is heralded as breaking through one of the major roadblocks that has stalled the widely anticipated sidechain technology.
In the paper, researchers from IOHK, IC3 and the University of Athens describe a mechanism for proving that data exists in the bitcoin blockchain in a more efficient way.
Though the idea can be useful in more than one context, it’s perhaps most exciting in the way the researchers describe the proofs’ benefits for sidechains, a technology that pegs other blockchains to bitcoin, which some, because of its obstacles, have called vaporware, but that others refer to as the “altcoin killer.”
Sidechains seek to solve a vexing problem – that adding features to bitcoin is a dangerous process since $230 billion of value is at risk if the new feature doesn’t work or malfunctions in practice.
Instead of adding new features directly to the bitcoin blockchain, sidechains allow developers to attach new features to a separate chain. Since the chains are still attached to the bitcoin blockchain, the features can take advantage of the cryptocurrency’s network effects and test those applications, without harming the main network should vulnerabilities arise.
Because of this, sidechains were met with excitement initially, but has faced contention since many have concerns about the security of the technology.
Even still, some engineers have been grinding away at a parallel version of the technology that tries to rely on better economic incentives to make sidechains more secure, yet some developers remain skeptical they’re ready to add to the bitcoin network.
But skeptics see this NiPoPoW research as a big step.
Blockstream’s Mark Friedenbach, who co-authored the original sidechains white paper, first proposed in 2014, told CoinDesk:
“This moves the ball down the field significantly.”
The paper helps move forward the idea of trustless sidechains, over the more centralized type of sidechains – where the movement of funds of a federated sidechain is governed by a few companies – used today.
While a simple idea, trustless sidechains are hard to put into practice.
They rely on a technology called SPV (simplified payment verification) proofs, which work like this: in order to send money to a sidechain and back to the main bitcoin network again, users need to attach a proof that they really have the funds. Without these proofs, when users or miners move their money back to the main chain, under certain conditions, they could take more money than they really have.
These proofs need to do two things before the technology can be added to bitcoin: one, prevent this sort of theft, and two, be small enough that they can actually be sent over the network.
While so-called “compact SPV proofs” have been proposed, they’ve proved vulnerable to certain attacks, ones that would potentially allow miners to steal money left on the sidechains.
Yet, the proof outlined in the NiPoPoW paper claims to be resistant to these attacks.
“It’s the first protocol, to my knowledge, which makes [sidechains] secure at all,” University of Athens cryptography Ph.D. candidate Dionysis Zindros, one of the co-authors of the paper, told CoinDesk.
He went on to explain that by “secure” he really means resistance to double spending, where users or miners could spend their coins more than once.
“It’s really a missing piece in sidechain constructions that we fill in,” Zindros said.
Friedenbach described the change in more technical terms: “This is a big step towards defining a block header commitment structure that allows for log-sized chain proofs, of the sort that one might use in a decentralized sidechains implementation.”
While Friedenbach calls NiPoPoW “good research,” he added, work remains before the technology can be deployed on bitcoin.
This is a recurring theme in the cryptocurrency world, where developers are careful about making changes to the still young and novel code. And while sidechains look to make the process of trying out new features easier and less nerve-wracking, implementing even that will take further deliberation.
For one, to make sidechains more secure, many developers believe merge-mining – when miners mine multiple coins at the same time – would be essential.
“There is still significant scripting capabilities that would be required before merge-mined SPV-proof sidechains could be supported on bitcoin mainnet,” Friedenbach said.
But there are other worries around merge-mining that are more paramount.
“There is also, of course, the non-trivial incentive problem of merged-mining and whether such a solution would be a step back in security, given the current state of the oligarchical mining industry,” Friedenbach added.
In many’s view, since the industry relies on the work of a few large mining pools, it could be possible for these miners to have significant control over sidechains, and it’s not yet clear whether mining pools would have the power to steal funds.
That said, this piece of the puzzle is exciting to Friedenbach, even though buzz around the paper has been subdued.
“This idea deserves more attention.”