How Did Litecoin Owner Lose $350,000 Worth of Coins?

An American took to the litecoin subreddit on April 21, 2018, to say “Today I found out Two thousand three hundred ninety-nine Litecoins were stolen from my wallet on April 12, 2018.” A few days earlier he had reached out to the developers of the Electrum LTC wallet on GitHub with his plight. In both the GitHub and Reddit posts danbel79 provided a detailed breakdown of how he lost the coins.

When the litecoins (LTC) were lost, they were worth more than $350,000, but a few months earlier they were worth almost $800,000. It’s fairly clear that danbel79 is not new to crypto and has a good understanding of how computers work. Ian Balina was in the same position when he was hacked, a high value of crypto, experienced in crypto and an ex IBM employee. So why are these people not using hardware or paper wallets to store their wealth?

Over the last decade, the convenience of cloud computing has been promoted by companies like Salesforce, Amazon, and Google. The Salesforce website links to a Rapidscale Slideshare presentation which states “94% of businesses say they saw an improvement in security after implementing cloud solutions.” There is no doubt that for some applications cloud solutions, and software has its merits. Being able to provide access to your holiday snaps to friends and family around the world via cloud storage is useful, and there is not an issue if a hacker sees a photograph of you riding a camel in Egypt.

When it comes to crypto security using cloud storage and software systems is very dangerous as the hackers now that some of these systems could give them access to billions of dollars. Hackers will spend months, if not years, painstakingly trawling through the code to find weaknesses that they can exploit. Early indications are that danbel79 may have lost his LTC because of the hard fork to Litecoin Cash (LCC). The LCC wallet contained additional java packages in the binaries and danbel79 has confirmed he downloaded the wallet in March 2018. Although he didn’t claim the LCC, merely downloading the wallet may have been enough to compromise his system and expose his LTC wallet seed to the hackers.

Hardware and paper wallets are essential once you have more than a few hundred dollars worth of crypto and comments on the subreddit have been quite scathing towards danbel79. These are just a few of the comments:

“How come you didn’t have that much money stored in a hardware wallet? Or even a paper wallet?”
“Why would you not move it to cold storage with that much money is what I’m asking.”
“This kind of money makes me wonder if it’s real post, because I would have cold storage wallet immediately with even few thousands worth LTC.”
“Have multiple wallets and only a reasonable amount within each one.”

Crypto Disrupt has tried to reach out to danbel79 and Ian Balina to ask why they were not using hardware and cold storage wallets but neither of them has responded thus far.

Originally posted at cryptodisrupt.com

Coinbase Crypto Exchange Closes WikiLeaks Shop Account

The irony of Coinbase closing WikiLeaks account wasn’t lost on crypto guru Andreas Antonopoulos. Antonopoulos tweeted “We have come full circle. Many people’s interest in bitcoin started when Wikileaks was out under an extrajudicial embargo by VISA, MC, PayPal, and banks. Now Coinbase has repeated history. Oops.”

Many Twitter users have said they will close their Coinbase accounts in protest at the action taken against WikiLeaks. The notice received by WikiLeaks states that Coinbase is a Money Services Business (MSB) which means they must conform to FinCEN regulations. Coinbase stated that the WikiLeaks account has breached their terms of service but didn’t provide details of the misuse. Maybe one of the FinCEN regulations states funds must not be used to spy on US computer networks. Interestingly Coinbase has not seized the WikiLeaks funds on behalf of the US government. Many tweets have followed up by pushing for decentralized exchanges as soon as possible to prevent what they see as abuse of power by existing exchanges.

WikiLeaks was founded by Australian computer programmer Julian Assange in 2006. He began hacking in 1987 and is known to have gained access to computer systems at the Pentagon, US Department of Defense, Lockheed Martin, Panasonic, and Nortel. The Nortel hack lead to his first brush with the law in 1996. He pleaded guilty to the hack and was given a lenient punishment of having to repay Nortel A$2,100 in damages. One of the reasons given for the lenient penalty was his disrupted childhood having attended no less than 37 different schools.

The sole aim of WikiLeaks was to release confidential documents to the world that Assange and his team thought the public should be aware of. It wasn’t until WikiLeaks started publishing the classified documents obtained by Chelsea Manning in 2010 that most of the world took much interest in the website. In the same year, an international arrest warrant was issued by Sweden for Assange in relation to allegations of sexual assault and rape.

Assange surrendered to British police but was released on bail pending an extradition hearing. He believed he would ultimately be extradited to the US where he could face the death penalty for espionage. He skipped bail and has remained at the Embassy of Ecuador in London ever since, even though Swedish prosecutors dropped the charges against him in May 2017.

Originally published at cryptodisrupt.com

Amazon Announces Its Own Blockchain Project

Amazon has announced the creation of a blockchain-based framework aimed at helping developers create products and services with ease. The AWS Blockchain Template allows you to ‘deploy Ethereum and Hyperledger Fabric frameworks using managed and certified AWS CloudFormation templates’— it is essentially a means of streamlining the process of making and manipulating DApps (decentralized applications).

Amazon claims that some of the major perks of using their framework, rather than working from scratch, are that you gain access to their advanced management tools and ‘pay-as-you-go’ marketplace— meaning that they give you a step up to create a professional and error-free program. Amazon’s cloud computing capabilities also mean that producing, distributing, and maintaining DApps becomes much easier.

There are currently two different sets of Blockchain Templates: one for using Ethereum and one for using Linux and IBM’s HyperLedger Fabric. The projects created with these templates can be either public (with Ethereum) or private (with either Ethereum or HyperLedger). One of the most recent projects launched on HyperLedger is Huawei’s BaaS (blockchain as a service).

AWS has been planning to work in the blockchain sector for some time now, with work being done by them as early as 2016. You can find a guide to getting started with the AWS Blockchain Template here. There are no additional costs for using the software, but you will still have to pay for any other AWS resources that are used (such as data).

Originally published at cryptodisrupt.com

The Future Is Bright for Crypto

It has not been the best start to the year for crypto enthusiasts. All the news in Q1 seemed to be dominated by FUD as financial authorities slated crypto, high profile hacks seemed to doom the industry to a future of harsh regulation, and investors felt the effects of the bear market, but this is only half the story. If you’ve been looking in the right places, there are plenty of reasons to be optimistic about crypto.

A possible Bull Market
Bitcoin is currently holding steady at around $8000, and if you look at the markets, most coins are awash with a healthy green hue. Some speculators are predicting that we will be heading into a bull market soon and with the positive sentiment regarding cryptocurrency in the media recently they might not be right. The last bull market ended in January and was always bound to bring some negativity, but it looks like we’re finally coming out of that slump.

You can find a few tips on how to prepare for a possible bull market here.

Regulations
The community is right to be suspicious of calls to regulate the space because there is always the danger that regulation could stifle innovation — especially if regulations are introduced to preserve the power of central authorities, but in many regions, this doesn’t seem to be the case at all. In Japan, the FSA has introduced regulations to ensure that exchanges are taking precautions to protect their customers. A lack of regulation means a lack of legal protection too. This would be a difficult obstacle on the road to widespread adoption of crypto so a safety net may be just what we need to encourage more people to join the community.

Swiss authorities aren’t sitting on their hands either, FINMA has introduced ICO guidelines that attempt to demystify the nature of tokens, and this could provide the groundwork for more balanced approaches toward regulation. Given the hostility shown towards crypto by the US’ SEC (Securities and Exchange Commission) and the Bank of England any attempt to understand the technology before deciding which rules govern it has to be welcomed. Europe seems to be gearing up to become the heart of the crypto world, with several nations already famous for their support of Fintech, and a largely pragmatic approach towards legislation. The EU commission has also announced a blockchain partnership involving 22 nations. The partnership may make it easier to implement regulations that work across borders making it easier for a token economy to thrive in the region.

Experts praising Blockchain technology
Recently, Christine Lagarde praised bitcoin and even crypto-critics like BoE chairman Mark Carney have been unable to dismiss the potential of the technology. There has also been news that wealthy families like Soros, Rockerfella, and Rothschild are moving into the space too. Some have suggested that these and similar stories are partially responsible for Bitcoin’s recent upswing. It may be difficult to prove what effect these developments have on the crypto sphere, but so much positivity can’t be a bad thing.

Projects
The sheer amount of projects looking into the implications of DLT should be enough to make any crypto enthusiast excited. More projects seem to emerge every day and, though they can’t all be successful, the hype is incredible. You’d be hard-pressed to find an industry in which entrepreneurs and developers are ignoring the technology. P2P transactions, car insurance, data protection, social media. CocaCola is even involved in a blockchain project aiming to end modern-day slavery. I could go on, but you get the point. It only takes one good idea to bring the technology into the mainstream and when it does the crypto space is going to explode.

Originally published at cryptodisrupt.com

Pavel Durov, Founder of Telegram, Refuses to Give Russia the Encryption Keys

Russian entrepreneur Pavel Durov was CEO of social networking site VKontakte, which he founded with his brother Nikolai, until the Kremlin and Putin’s allies took over the network in 2014. Since then, he’s been a wandering nomad moving from country to country every few weeks, but he’s technically now a citizen of St Kitts and Nevis.

The Durov brothers formed Telegram around the same time as their relationship with VKontake ended. In 2014 and 2015, the Telegram headquarters were in Berlin, but the team of developers has since moved on to Dubai, with the company being registered as an English LLP and also an American LLC. Towards the end of 2017, it was reported that Telegram was planning to launch their own cryptocurrency. The proposal is for a new blockchain known as the Telegram Open Network (TON) which will use Gram tokens.

Investors were eagerly awaiting the launch of the public ICO, but it appears they will be disappointed as the first two rounds of the pre-sale have secured the $1.8 billion target for the project. Towards the end of March 2018, a Russian court notified Telegram that they must hand over the encryption keys for the smartphone app to the Federal Security Service (FSB). Durov stated in 2017 that he had been asked to provide backdoor access to the FSB but had refused. In defiance of the court order, Durov has again said he would not hand over the encryption keys.

In an attempt to block users in Russia from using Telegram 16 million IP addresses were blocked by the authorities April 16, 2018. Durov has fought back by handing out bitcoin to enterprises running VPN’s to circumvent the IP block. Telegram has said they haven’t seen any noticeable drop in usage from Russia since the IP block was put in place.

In a strange twist to the story April 18, 2018, Russian authorities have announced that they are not banning Telegram because they want to be able to eavesdrop on confidential communications between users but moreover that they have an issue with the ICO. Russian website RBC indicates the authorities are not happy with Durov’s plans to launch a “completely uncontrolled financial system” which could undermine the Russian rouble. Russia has previously stated that they plan to introduce their own cryptocurrency in 2019.

Originally published at cryptodisrupt.com

Details About Ethereum’s Huge Update Have Been Released

Details about the much anticipated Casper version of Ethereum have been released, giving the public a general idea of what changes we should expect. The biggest feature of Casper is that it will eventually convert Ethereum from Proof of Work (PoW) to Proof of Stake (PoS).

Before Casper fully arrives, the ‘Hybrid Casper‘ version will be released, essentially preparing the network for the version. Hybrid Casper will change the consensus protocol into an amalgamation of PoW and PoS, also known as the ‘Friendly Finality Gadget’ (FFG). This means that staking Ethereum will soon be a possibility— it also means that mining Ethereum will become less lucrative. Mining will only provide a reward of 0.6 ETH, instead of the 3 ETH it currently gives. This is, in part, a means of discouraging mining on the blockchain— two of the main reasons Vitalik wants to move Ethereum to PoS is because PoW requires a huge amount of electronic power and because he believes that PoW does not have the capabilities to prevent against common attacks such as the 51% attack. Lowering the amount made from mining also increases Ethereum’s rarity, which could help its price.

The minimum amount of ether you will need to stake is 1500 ETH. Using Ethereum’s current price, it would cost $885,000 to stake, people considering doing so should view this as an investment because it is certainly possible to make lucrative amounts of cash via staking. Stakers do not lose their money, but the ether used to stake will get locked, meaning that they cannot access it for around 130 days. After that, it can be freely used once again. This acts as a means of preventing people from fraudulently flooding the system and trying to damage it.

Many people in the Ethereum community see the Hybrid Casper update as a step towards a more robust and secure blockchain. This is partially because it will be introducing ‘checkpoints’ to the network which will prevent hackers or 51% attackers from using their resources to change the data in earlier blocks. After 50 blocks are on the chain, a staker will create a special new block called a checkpoint which will prevent attackers from editing any blocks before it.

It is unlikely that there will be many stakers right now, considering the current cost, but because mining is still functional during Hybrid Casper, this should not be a problem. There is a possibility that the amount of Ether needed to stake will drop sometime in the future once mining has been entirely ushered out.


Originally published at cryptodisrupt.com

Yassin Hankir Exit Scam of Savedroid Was a Despicable PR Stunt

Like many crypto-based websites, Crypto Disrupt published the story about Yassin Hankir doing an exit scam with the proceeds of the Savedroid ICO. Estimates of the amount of money he had plundered ranged from $4 million to $50 million and a worldwide hunt for the conman was quickly put in place by the tech-savvy crypto community.

In the Crypto Disrupt article, and across the whole crypto ecosystem, questions were being asked how Yassin Hankir and Savedroid managed to fool the rating system of ICObench. The answer appeared to be that ICObench were not up to the task or the panel of “experts” were paid to give false ratings. Meanwhile, stories were spreading across the internet of investors that were now suicidal as they had lost their life savings. How could this scam happen for an ICO registered in Germany since they have quite strict crypto controls?

As time progressed, the manhunt for Yassin Hankir was closing in as the Twitter images he posted had given enough clues to pinpoint his location at a beach in Egypt. It was only a matter of time before law enforcement officers arrested him, or so the community thought. The day after the news of the scam broke, Savedroid posted on YouTube that the scam was actually an elaborate PR stunt. In the video, Hankir justified the hoax with two reasons:

He argued that investors don’t research ICOs in sufficient depth to know if they can trust the team behind the project. Hankir points out that some ICOs were scams and others have simply failed, so he was attempting to help investors by staging this prank. This is a fair point, and standards do need to improve as they have over hundreds of years for traditional securities. ICOs raise millions of dollars, and in the real world, withdrawing a few thousand dollars from a bank account requires more than one signature. It’s very rare for ICOs to provide details of who these signatories are, and in this hoax, it was assumed Hankir was the sole signatory.

His second point was that it was intended to promote a new venture for Savedroid, which included appraising ICOs and offering an advisory service to businesses considering an ICO. Most investors and many businesses will not want to be involved with Savedroid as this is not the way to highlight the weaknesses in ICOs. The Savedroid ICO has a strong German bias with most of the posts in their Telegram channel being in German. Following this despicable hoax the channel now has posts from all over the world including death threats against the Savedroid team and many soft porn images.

Ironically, a few days before the hoax, Savedroid tweeted an offer of a “Job of the week: Social Media Marketing Intern.” If you think you will enjoy looking at soft porn images and reading death threats for the next few months, an internship with Savedroid will be your perfect job of the week.


Originally published at cryptodisrupt.com

Does anyone know how many tokens per participant?

This airdrop looks quite promising!

Terrorists and criminals can just as easily use fiat on the black market. It's not like crypto is what makes things possible for them. I wish that this argument would be put to bed.