Cryptocurrency Baskets Are Growing in Popularity
A Bountiful Basket of Crypto Assets
2018 was meant to be the year of security tokens, or at least that’s what we were promised in 2017. There’s still time for that prediction to be proven correct, but in the meantime 2018’s big token trend is crypto baskets. These comprise curated suites of digital assets, often based around a specific theme, that can be purchased via a single token or on a crypto exchange with a single click.
So far, crypto baskets have been largely geared around “entry level” tokens such as LTC and ETH. Coinbase Index Fund gives investors exposure to all assets listed on GDAX, but since these comprise various weightings of BTC, BCH, ETH, and LTC only, there’s little imagination on display. Nor is there an entry route for retail investors; you’ll need at least $250,000 to buy in. Not all basket-based services are as exclusive though.
One Basket, Many Tokens
On Tuesday June 5, a service called Flipside Crypto released a basket that was created in conjunction with Coinmetrics.io. Its smart contracts basket of the day contained eight Proof of Work coins. At the start of each new day, a new basket is created, with each one rated according to its volatility, developer activity, and other metrics. Dailycryptobasket.com is a novel take on crypto baskets to date, and one which shows there’s scope for originality and innovation in this field.
Set Protocol is a project that’s taking a different approach to serving up collateralized baskets of tokens. Sets of ERC20 tokens can be grouped together using smart contracts and exchanged via a single token. Then there are projects like FCTF (First Crypto Traded Fund), which aims to peg the price of 10 digital assets to a single token. It even enables token holders to profit from fees paid to a Dash masternode in theory.
As a relatively new trading option, crypto baskets have yet to prove themselves or to gain mass adoption. They also face competition from tokenized projects that enable traders to follow the profile of experienced traders and to have their trades automatically emulated, with all profits paid back in the form of yet more tokens. For now, crypto baskets are still viewed as “starter packs” best suited to new traders. With China’s Okex having just launched its OK06 Exchange-Traded Tracker, days after Huobi issued its own basket of 10 tokens, crypto investors will soon be in need of baskets to hold their baskets of tokens.
Written by Bitcoin.com
Testing for Ethereum’s Coming Consensus Change Is Moving Ahead
A hotly anticipated change aimed at ridding ethereum of its bitcoin-inspired mining process is moving forward in testing, with the platform’s popular software clients now participating in review.
Following on an April software release that saw the idea formalized in code, the upgrade looks to transition the world’s second largest blockchain to a new way to keep those running its software in sync. However, the current iteration of the idea (called Casper FFG) actually finds ethereum’s developers proceeding with a plan that would enable both its new and old consensus algorithms to work together to protect the network from unexpected attack vectors that may arise during the transition.
Under the proposal, smart contracts will link miners that secure the network with a new set of participants called “validators.”
The code provides a way for mining to continue undisturbed by layering a smart contract on top of ethereum that allows users to bet on transaction histories in exchange for rewards. The smart contract also contains a “difficulty bomb,” which would (upon bing enacted) propel an upgrade by making mining this iteration of the code more prohibitive over time.
According to the current block times, the difficulty bomb is expected to activate in about two years, at which time the new consensus method, proof-of-stake, is expected to launch – and ethereum will relinquish its mining layer entirely.
But while much of that has been in the project’s official roadmap, what’s new is that the smart contract in question is getting tested by Parity, the second largest ethereum software client. Plus, Geth, the largest ethereum software client by users, is getting closer to launching its implementation of the code on testnet.
“All of the major clients are working on implementation,” author of the proposal Danny Ryan said.
The forward momentum will come as a relief to many in the ethereum community who are upset by the recent release of specialized crypto mining hardware that some believe will upset the platform’s distributed network of users.
And with the work going toward testing the smart contract – less than a year from when the Casper white paper was released – it seems clients are equally as interested in pushing proof-of-stake from concept to code.
Ryan told CoinDesk:
“Proof of stake has been on the roadmap since day zero. Our community is very excited to take the first step with this hybrid model and to follow it up with a full [proof-of-stake] implementation soon after.”
Critiquing the contract
And there’s reason for those backing the software to feel confident in their current approach.
For one, proponents argue releasing the code as a smart contract first reduces the complexity of the full proof-of-stake transition and creates a software-agnostic template for ethereum’s various software iterations, or clients, to build upon.
“The contract acts as a black box for much of the functionality and thus greatly reduces the complexity of the code that has to be replicated across clients,” Ryan said.
As client developers implement the spec, Ryan said, they’re likely to identify issues that can feed back into the initial code as well. Already an issue has been identified – a piece of code that could enable spam transactions.
Wei Tang, the developer leading Parity’s integration, told CoinDesk:
“The Casper research team is really open to those critiques.”
Tang added that his team has been proactively addressing problems as they come up, and said, “I think Casper research team, Geth, Parity and other implementations still need to work together to agree on and improve the specifications.”
As such, it’s a collaborative moment between Casper researchers and client developers are working together.
Ryan echoed this, saying, “Formalizing the spec in EIP 1011 really opened contributions and development up to the entire community.”
According to Wei, Parity is using the testnet specification to test out network functionality, such as how voting happens and blocks are formed, in an effort to make sure the smart contract code behaves in conditions that mirror those of ethereum itself. Not only that, but Wei said, the testing is also about making sure the smart contract doesn’t conflict with the way ethereum clients are written.
And in these tests, Wei said, both the Parity and Geth teams have made good progress.
“I’m excited about Parity’s testnet,” Ryan told CoinDesk, “I believe they are the first client to get EIP 1011 implemented. As more clients implement, we will either have them join Parity’s net or we will coordinate a new testnet.”
Parity’s current testnet won’t be the only one, though.
“The current Parity Casper testnet is certainly not the last one,” Wei said, noting that the specification will have to be tested many times before it’s finally released to all users.
“Casper is a relatively big change to the consensus protocol, so we need to be careful, and there are also many parameters in specifications that need to be finalized.”
Ryan said similar things about not rushing the implementation, during an ethereum core developer call on June 1.
According to Ryan, the smart contract is unlikely to be launched alongside ethereum’s upcoming hard fork, Constantinople. Rather, Ryan continued, it’s important to have all ethereum clients testing the code in a shared testing environment before such decisions can be made.
“Parity’s done some great work and there’s some ongoing work with the side team with Geth, kind of putting all the pieces together and hopefully getting a testnet with more than just Parity up in the next few weeks,” he concluded.
Welding image via Shutterstock
Written by CoinDesk.com
IMF Says Bitcoin Could Create Less Demand for Regular Debt-based Fiat Money
Crypto Assets Will Eventually Be More Widely Adopted
One thing is for sure the IMF has a lot to say these days about Bitcoin technology and other cryptocurrency solutions. More recently the Managing Director of the IMF, Christine Lagarde, has had a lot of positive words to say about digital currencies. Moreover, the IMF also showcased a picture of money evolving featuring a picture of a bitcoin which was displayed on the front page of the IMF website. Now the IMF has released a report written by a variety of IMF researchers who state:
We cannot rule out the possibility that some crypto assets will eventually be more widely adopted and fulfill more of the functions of money in some regions or private e-commerce networks.
A Payment Shift
The study notes that the global financial crisis and bank bailouts have “renewed skepticism in some quarters” of the world and there’s a possibility that digital assets can affect the traditional global monetary policies. There’s also talk of a “payment shift” within the study where cryptocurrencies could replace fiat in some regions.
“Such a shift could also portend a change in the way money is created in the digital age: from credit money to commodity money, we may move full circle back to where we were in the Renaissance,” explains the IMF report.
Economists continue to debate the origins of money, and why monetary systems seem to have alternated between commodity and credit money throughout history. If crypto assets indeed lead to a more prominent role for commodity money in the digital age, the demand for central bank money is likely to decline.
Competitive Pressure and the Allure of the Central Bank Coin
The IMF paper also details how banks should respond with competitive pressure and they should continue to solidify fiat currencies as a “unit of account.” Cryptocurrencies, however, have a hard time becoming a standard unit of account the IMF notes and this is because “valuation is largely based on beliefs that are not well anchored” which has made the majority of digital currencies quite volatile.
The researcher’s paper mentions that central banks could counteract with their own digital currencies. It goes on to say that the banks have many challenges and opportunities in this digital age but they must regain the public’s trust to remain relevant. “They can remain relevant by providing more stable units of account than crypto assets and by making central bank money attractive as a medium of exchange in the digital economy,” the IMF paper concludes.
Written by Bitcoin.com
Crypto-Wary Australian Bank to Pay Record Fine For AML/KYC Violations
The Commonwealth Bank of Australia (CBA), which recently banned customers from buying cryptocurrencywith credit cards, has agreed to pay AUD $700 million in addition to legal costs for violating anti-money laundering and anti-terrorist laws that delivered millions of dollars to drug dealers, according to ABC News.
AUSTRAC, the federal financial agency, accused the bank last year of failing to report suspicious activity. The fine is believed to be the largest such fine in the country’s corporate history.
Bank Admits Failings
CBA acknowledged the late filing of 53,06 reports about transactions in its “intelligent deposit machines” of $10,000 and more. Under the law, banks have to report such transactions in 10 business days or less.
The bank claimed a coding error was responsible for failing to report the transactions, and had originally considered only disputing the number of failed reports. It eventually decided to agree to a settlement and admit most of the failures.
The bank also failed to check for money laundering on 778,370 accounts over a three-year period. The bank acknowledged there were 149 suspicious reports that were either filed late or not at all.
The bank further failed to conduct checks on 80 suspicious customers and did not properly monitor certain accounts from October 2012 and October 2015.
There were also 14 occasions in which the bank did not sufficiently assess risks connected to its IDM machines.
The bank acknowledged it did not report millions of dollars possibly connected to money laundering.
The agreement between the bank and AUSTRAC said the agency suspected additional money laundering in bank accounts that should have been reported.
AUSTRAC Cites Warning To Banks
The federal court still has to accept the agreements’ terms. AUSTRAC, meanwhile, pointed to the settlement as a warning to other banks.
A statement from Nicole Rose, AUSTRAC chief executive, said the agency is encouraged by how the bank has handled the negotiations.
Matt Comyn, the bank’s chief executive, agreed the breaches are serious and that the bank has thus far spent nearly $400 million in trying to rectify the problems. He said the mistakes were not deliberate.
Scott Morrison, treasurer, claimed that last year he warned Catherine Livingstone, bank chairman, there was a long way to go to restore public trust and that he expected the government to take action.
The bank noted that it will account for the penalties in its full-year accounts, and that it has already provided half of the $700 million in its half-year results. The bank will also pay $2.5 million to AUSTRAC for legal costs.
The largest settlement for money laundering breaches was $45 million paid by Tabcorp, a wagering company, for 84 failures.
Maximum Fine Nearly $1 Trillion
Both of the companies could have faced a maximum fine of $18 million per breach.
Ian Ramsay, a professor at Melbourne University who specializes in corporate law, said the maximum theoretical fine of nearly $1 trillion was never a realistic possibility. That amount is several times the bank’s value.
Ramsay said a settlement was in the bank’s interest, despite the cost, and that it would be rare for the judiciary to alter the settlement’s terms.
Morrison said the fine matched the gravity of the offense.
Bank Wary Of Cryptocurrency
The bank’s recent ban on buying cryptocurrencies with credit cards includes Perth-based Bankwest, which CBA acquired. The restriction does not, however, include customers who can buy and sell cryptocurrencies with debit cards.
CBA was also among the banks that were accused of freezing bank accounts of cryptocurrency traders last year. Other banks included National Australia Bank, ANZ and Westpac Banking Corporation.
CBA said at the time that it does not embrace cryptocurrencies because they have not been regulated.
Written by CCN.com
This hacker made $120K in a week by finding bugs in EOS cryptocurrency
Researchers have continuously shown that even the largest cryptocurrency and blockchain platforms often suffer from severe security vulnerabilities – that is despite being worth billions of dollars. So if you’re looking to make a quick buck with your extraordinary pentesting skills, you might want to take a cue from this researcher who found a series of bugs in trending blockchain solution EOS.
After a thorough analysis of the technology, Dutch ethical hacker Guido Vranken found several vulnerabilities in the EOS network which entitled him to a hefty $120,000 reward from the company’s bug bounty program.
Vranken says he discovered 11 confirmed bugs in the EOS software last week. The HackerOne report reveals that the hacker has already received $90,000 in bounty payments from EOS parent company Block.one for nine different bugs he found in the system.
According to Vranken, the total amount owed to him comes close to $120,000 and the rewards are still pouring in. He has also previously reported bugs to Ethereum, Ripple, and Stellar.
Indeed, Vranken says that EOS purportedly offered him a position in the company shortly after he reported his discovery.
EOS has received widespread criticism for the lack of product development and the security glitches in spite of raising $4 billion in a year-long initial coin offering (ICO). John Oliver, the host of the popular HBO show Last Week Tonight called EOS “a software startup that doesn’t plan to sell any software.”
Just last week, Chinese internet security company, Qihoo 360 found a series of high-risk vulnerabilities with EOS before the network’s mainnet launch on June 2, 2018.
Qihoo 360 said that Block.One has promised to hold off EOS mainnet launch until the vulnerabilities are eliminated, but the company went ahead with the launch anyway stating that all the bugs will be fixed by the time of the launch. Reports have since indicated that days after the official launch, the EOS blockchain is still not fully up and running.
It is not yet known whether the bugs pointed out by Vranken have been fixed or not. But if you are a startup with $4 billion in your account, you can probably afford to keep paying developers to find and fix bugs.
We have reached out to Guido Vranken for a comment. If he responds, we will update the story accordingly.