Top Crypto News – 03/04/2017

Telegram’s ICO Has Raised $1.7 Billion – But Not Everyone Is Impressed


A Billion Reasons Not to Buy In

Telegram’s ICO Has Raised $1.7 Billion – But Not Everyone Is ImpressedMoney talks, and thus it’s no surprise that most of the talk surrounding Telegram’s proposed blockchain concerns the obscene amount it’s raising. Not content with securing $850 million in its initial private sale, the Russian messaging app has doubled up, taking its total proceeds to $1.7 billion. It’s hard to envisage what couldn’t be built for that sort of money: a literal moonshot would not be out of the question.

On Thursday, Telegram filed a Form D with the U.S. Securities and Exchange Commission, confirming its second round of “purchase agreements for cryptocurrency”, and Pavel Durov’s company might not be done. It’s been reported that Telegram might keep on fundraising until it’s hit $2.25 billion. Aside from the pleasing problem of dreaming up ways to spend this money, Telegram has its investors to placate, who are worried that all this capital may be diluting the token value. Some investors have expressed disquiet, while others have stayed away altogether.

Chris Burniske Bows Out

Telegram’s ICO Has Raised $1.7 Billion – But Not Everyone Is Impressed
Chris Burniske

Chris Burniske, one of the best known figures in the cryptocurrency space, and head of venture capital (VC) firm Placeholder, has steered clear. He believes that Telegram has “raised an unnecessarily large amount of money, which may ultimately hurt more than it helps”. Placeholder gets first dibs on major crypto projects, and if Burniske had wanted to buy into Telegram’s ICO, he’d have had no trouble securing an allocation.

“Considering the Telegram ICO? Proceed with Caution” wrote Justine and Olivia Moore in a scathing critique published last week. As VC investors at CRV, the pair are accustomed to evaluating projects such as Telegram, and their decision to warn investors off is telling. After outlining the project’s pros (of which there are many), they explore the cons, which are just as numerous. The Moores touch upon the huge amount being raised, claiming that it could ultimately top $2.6 billion. Remarkably, this money may not even be enough to support Telegram for long, as the leaked whitepaper has $620 million budgeted for the next four years. The Moores write:

If Telegram isn’t able to start generating revenue and spend continues to increase, the company could eventually risk bankruptcy or be forced to raise additional capital at unfavorable terms.

They conclude: “We aren’t convinced that Telegram will deliver significant upside beyond the ICO valuation.” There are reasons to admire Telegram, not least its CEO’s refusal to hand over encrypted user data to the Russian authorities – though the courts may eventually force his hand. Pavel Durov is certainly pro crypto and pro privacy, but that has little bearing on how Telegram’s own cryptocurrency project will play out. Despite being on course to exceed $2 billion when the dust settles, Telegram’s problems may have only just begun.

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Bitcoin Cash Community Bolsters Instant Transactions


The Quest for Instant Transactions

Bitcoin Cash Community Bolsters Instant TransactionsThe zero confirmation discussion has been talked about for quite some time in the cryptocurrency space and well before bitcoin cash existed. In the early days, there were many heated debates on whether or not accepting bitcoin transactions without a miner confirmation was safe. Zero confirmation transactions are broadcasted throughout the network’s nodes but have not been etched into the blockchain. A confirmation or blockchain record doesn’t happen until the miner mines a block which contains the specific transaction. The instant transaction topic is controversial because some believe the idea opens merchants up to double spend attacks. A double spend consists of spending the same transacted bitcoin twice before the miner confirms the transaction’s first confirmation.

On the Bitcoin Core (BTC) blockchain the average time is traditionally ten minutes, but when blocks are full that time can be extended to days. Even the bitcoin cash chain has a wait time of ten minutes and blocks are never full. For this reason, lots of BCH supporters believe bitcoin cash is a perfect network to start the widespread use of zero-confirmation transactions.

Bitcoin Cash Moves Towards 0-Confirmation Adoption

There are three fundamental reasons why individuals think BCH is the perfect candidate for zero-confirmation transactions. The first is the fact that BCH has removed Replace-by-Fee (RBF), a contentious piece of code that allows an unconfirmed transaction to be replaced by one that’s similar but with a higher fee. Secondly, there is plenty of room for transactions even with low fees, and, lastly, since the BCH hard fork this past November, confirmation times are always consistent.

Bitcoin Cash Community Bolsters Instant TransactionsAbout four years ago before bitcoin cash was even born, Gavin Andresen and Tom Harding wrote some code that created a relay for the BTC network that would prevent double spend attacks. This patch would allow the use of zero-confirmations in a much safer manner. The code was merged into the Bitcoin Core software but was later removed by Core developers. Core developers who removed Andresen and Harding’s patch from the equation then started claiming that zero-confirmation transactions were not safe. The Bitcoin Cash community believes that zero-confirmation transactions are reliable and secure.

Moreover, BCH-focused businesses and infrastructure providers have started putting zero confirmation acceptance to the test by allowing customers to transact that way. The firm offered a challenge to anyone willing to double spend on a $1,000 transaction. A person attempted it in the end and lost $2,000 worth of BCH in the end. Just recently the Chinese exchange Bitasia started allowing zero confirmation BCH deposits as well.

Bitcoin Cash Community Bolsters Instant Transactions
Just recently the exchange Bitasia started offering 0-confirmation bitcoin cash deposits.

Safe, Fast and Reliable

Additionally, Tom Harding recently discussed the concept of zero confirmation transactions during his speech at the Satoshi’s Vision Conference in Tokyo. Harding’s discussion called ‘Native Respend Resistance’ discussed how the network could prevent double spends and enable the network to allow instant payments before they are verified by a miner. Harding says zero-confirms work on the BCH chain but he doesn’t know how many people are trying to double spend. Harding emphasizes the BCH community needs to be vigilant. The XT developer details how he experimented with these types of transactions, and explains his opinion of the maximum advisable value for a zero-confirmation transaction.

“That should be decided by the merchants themselves but generally the value should be much less than the cost to attack it,” Harding states during the end of his talk.

Right now the subject of instant BCH transactions is being discussed widely among the community. A few businesses are trialing the idea but the concept is not yet widely adopted. Some believe the next BCH upgrade will address zero confirmation transactions and possibly add some more preventive measures against double spending.


Chinese Engineer Arrested for Stealing 100 Bitcoin From His Own Company


An Inside Job

Chinese Engineer Arrested for Stealing 100 Bitcoin From His Own CompanyZhong Mo, a tech company employee, allegedly used his position to steal 100 bitcoins from his employer. The Haidian police recently confirmed his arrest for the crime of illegally acquiring computer information. Haidian is the area where most universities are located in Beijing and contains the Zhongguancun electronics district where many tech companies have their Chinese headquarters, locally known as “China’s Silicon Valley.”

The prosecutors of the Science and Technology Criminal Investigation Department of Haidian investigated the case and found that the accused was an operation and maintenance engineer of a technology company. The claims are that during a routine maintenance of the company’s server, he found out that someone tried to steal the company’s cryptocurrency by hacking, but failed. After eliminating the abnormal interference, the engineer used his administrator’s authority to log in to the server himself and insert a piece of code to transfer 100 bitcoins from the company’s holdings to his own account registered on a website outside China. He also tried to eliminate traces of the act, taking steps to avoid tracking.

The Thief Falls Victim to Another Crime

Chinese Engineer Arrested for Stealing 100 Bitcoin From His Own CompanyAfter losing 10 bitcoins to a phishing scam and apparently getting cold feet, the employee returned the remaining 90 bitcoins to the company. According to the exchange rate at the time of the incident, September 16, 2017, 100 bitcoins were worth about $380,000. Local reports claim that this is the first case of bitcoin theft handled by the police in Beijing.

The prosecutor in the case said that according to China’s Criminal Law, violating state regulations regarding data stored in a computer system, the employee can be sentenced to imprisonment of no more than three years, but if the circumstances are found to be particularly serious he can face up to seven years in prison, plus a fine.

Earlier in 2017 another Chinese citizen was arrested for stealing bitcoins. The programmer was arrested in Shanghai for an alleged theft of ¥20 million (about $3 million).

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Bitcoin Price Surges 6% to $7,350 as Cryptocurrency Market Gains $10 Billion


After recording a rebound from $6,500 to $7,000 on April 2, the price of bitcoin has surged 6 percent again today, on April 4, as the entire cryptocurrency market recorded a daily gain of $10 billion.

While several smaller cryptocurrencies like Steem and VeChain have outperformed bitcoin with a 50% and 25% increase in value, major cryptocurrencies including bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, and EOS have performed generally well over the past few days.

Bitcoin’s Run

Since March 30, for about 4 days, bitcoin has not been able to surpass the $7,350 mark, due to low volumes and lack of demand on most major cryptocurrencies. Over the past 12 hours, buy volumes have spiked on Bitfinex, Binance, and other trading platforms, as seen below in the bitcoin 30-minute candle chart.

On March 25, the price of bitcoin achieved $9,000, with relatively strong volumes on both the bitcoin futures market and cryptocurrency exchanges. However, since then, bitcoin has been on a continuous decline. Bitcoin tested several levels, including $8,800 and $8,000, but failed to sustain momentum and dropped to $6,400.

Over the next few days, if bitcoin can sustain its volume and surpass the $7,500 margin, it is likely that bitcoin could make a move back to the $8,000 region, moving to where it was five days ago. Its entrance to the $8,000 region could lead bitcoin to prepare for a strong rally.

Currently, the the Relative Strength Index (RSI) of bitcoin is at 39.2, which is at a neutral level. Previously, the RSI of bitcoin was at 30, signifying oversold conditions. At the time of reporting, bitcoin is being traded in a neutral zone, and the cryptocurrency has not demonstrated overwhelming demand or sell volumes.

Consequently, the next few days could be an important short-term period for bitcoin, as it has increased by more than $700 over the past 48 hours, and it is starting to gain some momentum, according to bitcoin’s moving average convergence divergence (MACD).

Jon Matonis, a well recognized investor, co-founder at Bitcoin Foundation, and an executive at VISA, stated that in the mid-term, the entrance of financial institutions like Goldman Sachs could lead to a surge in demand towards bitcoin. If the dominant cryptocurrency can recover from its current bear cycle, analysts like Matonis predict a bull run for bitcoin later this year.

“I think it’s fabulous that they’re getting into it because it brings in new liquidity. They’re going to develop futures markets, options markets, I even think you’re going to start to see interest rate markets around bitcoin. We’re used to hearing things about Libor, the index for bitcoin interest rates is Bibor,” said Matonis.


Earlier today, Nathaniel Poppers from the New York Times reported that the founders of an ICO called Centra were arrested for distributing securities without the authorization from the US Securities and Exchange Commission (SEC). If the SEC continues to crackdown on ICOs, it could lead to a decline in activity within the global ICO ecosystem, and ultimately the value of Ethereum as well.

Featured image from Shutterstock.
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Vitalik: Ether Limit Is a ‘Joke’ Worth Taking Seriously


Just trolling – but maybe we should do it anyway.

That’s the gist of a tweetstorm Monday from Vitalik Buterin, in which the ethereum creator said his proposal to create a hard cap on the supply of ether tokens was intended as an April Fool’s “meta-joke.”

While he said he originally just wanted to see people argue over the merits of fixing the supply, Buterin added that he now believes the idea is “worth considering.”

Ethereum Improvement Proposal 960, published April 1, suggested that the ether supply be capped at 120,204,432 units, twice the amount originally sold in 2014. Addressing the cryptocurrency’s presently unclear monetary policy, the proposal suggested that a hard cap would “ensure the economic sustainability” of ethereum.

It should not matter whether or not the proposal was written as a joke, Buterin said Monday on Twitter. Because “the words actually were written in the github issue, and the arguments for it are real arguments,” he said the suggestions are “very real.”

He continued, saying:

“If the community wants fixed supply and people believe that EIP 960 is a good way to achieve that, then it should adopt the proposal. If the community does not, then it should not. This is true regardless of whether or not the original intent was in jest.”

Buterin also said some 20 percent of his blog post announcing the EIP was plagiarized from the website of Tron, a digital entertainment blockchain startup.

Yet based on community feedback, Buterin said he “now believes” that developers should look at creating a hard cap. He listed some arguments in favor of the proposal, including that in the long run, “inflationary tokens are a bad idea.”

Buterin concluded by saying that the ethereum community has progressed from waiting for the core developers to make every change to debating ideas regardless of who proposes them, but noted that “there’s still a long way to go.”

Image via CoinDesk archives
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