BTC-e Closure: Clients Are Mt. Goxed by the U.S. – A New Front in Crypto Wars

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For the first time, the U.S. government attacked a foreign exchange on foreign soil. It closed down the Russian-based exchange BTC-e. (Russian-based refers to ownership, not location.) BTC-e reported, “On July 25…the FBI staff came to the data center…and seized all equipment, the servers contained databases and purses of our service.” BTC-e is charged with 21 violations of U.S. financial law; the Financial Crimes Enforcement Network also hit it with a $110,003,314 penalty. The move was stunning not only because BTC-e is one of the oldest and largest exchanges but also because many now locked accounts are owned by U.S. citizens, non-residents.

Also read: Fork Watch: Block 478558 Initiates ‘Bitcoin Cash’ Split

Russian Native Alexander Vinnik Indicted and Awaits Extradition

BTC-e Closure. Its Clients Are Mt. Goxed by the U.S. A New Front in Crypto WarsThen, on July 27, the Russian Alexander Vinnik was arrested on vacation in Greece and also charged with 21 counts of financial crime. He is allegedly an owner or operator of BTC-e, although BTC-e denies it. Assessed with a $12 million penalty, Vinnik’s arrest was prompted by a U.S. warrant and he awaits extradition.

Perspective is difficult to come by. News accounts are biased toward painting BTC-e as a criminal site designed to launder ‘dirty’ funds, yet discussion forums brim with panicked account owners who are clearly legitimate traders. And, then, there are gleeful trolls who plant fake stories. BTC-e’s twitter updates contradict government accounts. And no one seems to know key details like what exactly was on the seized equipment.

The secrecy surrounding BTC-e also causes confusion. A statement from the law site J.D. Supra captures it well. “The superseding indictment notes that BTC-e’s website stated that it was located in Bulgaria yet subject to the laws of Cypress [sic]; its managing shell company, Canton Business Corp., was based in the Seychelles but affiliated with a Russian phone number and had web domains registered to shell companies in countries including Singapore, the British Virgin Islands, France and New Zealand.”

One question has a clear answer, however. How can the U.S. claim jurisdiction on foreign soil and force a foreign company to close?

America’s Global Jurisdiction

BTC-e Closure. Its Clients Are Mt. Goxed by the U.S. A New Front in Crypto WarsThe answer is two-pronged: domestic laws on financial transfers; and, international treaties.

Domestic Laws. U.S. law requires a foreign Money Service Business (MSB) doing business in America to be registered and to comply with a list of conditions. Because BTC-e “conducted at least 21,000 bitcoin transactions worth more than $296 million in the United States, with….some…funds being sent customer to customer,” it is deemed to operate in the U.S. even without a physical presence. Thus the first charge against BTC-e and Vinnik is being unregistered.

The remaining twenty charges are multiple violations of two statutes. 18 U.S.C. § 1956 governs money laundering and imposes a punishment of up to 20 years imprisonment. 18 U.S.C. § 1957 addresses money transfers that involve the proceeds of a crime and imposes a punishment of up to 10 years. Both allow for a $500,000 fine or twice the value of the property involved in the transaction (each count).

The U.S. is a mishmash of laws on whether cryptocurrency is money and, usually, ambiguity in the law favors the defense. Here, it would either favor the prosecution or it would not matter. The prosecution enjoys a strong political atmosphere and will to convict cyber ‘criminals’, such as drug dealers or terrorists. Besides which, most trades and accounts involve fiat currency at some point.

As long as BTC-e and Vinnik avoid the U.S., however, an indictment or a conviction in absentia would have little impact. At least, that was the case before a series of treaties changed law enforcement relationships around the world.

A Department of Justice press release accompanied the indictment and stated, “The arrest of Alexander Vinnik is the result of a multi-national effort and clearly displays the benefits of global cooperation among US and international law enforcement.”

There are so many international agreements to share financial information and law enforcement that it is simpler to list non-participants rather than signatories. An article entitled “International Law Enforcement Gathered to Share Concerns About Bitcoin and Money Laundering” described a January 2017 international conference of more than 400 cybercrime, cybersecurity, and money laundering investigators; they discussed the problem of digital currency. One solution: “international cooperation to investigate should be given to the ‘international exchange of suspicious Bitcoin addresses’.”

A signatory nation with the powerful U.S. is likely to respect a warrant based on U.S. law. If a targeted person travels to the signatory nation, then he is vulnerable.

BTC-e Closure. Its Clients Are Mt. Goxed by the U.S. A New Front in Crypto Wars

Status and Significance

BTC-e has promised to refund its clients’ funds. It stated, “The next update will be information on what options are available to restore the service, as well as the procedure for obtaining funds, in the event that the service is not started….Then from September 1 we will start the process of refund. In the next 1-2 weeks, we will evaluate and publish information about how much money fell into the hands of the FBI and what amount of funds is available for return.”

Thus far, Vinnik has refused to assist the law enforcement investigation. His silence may slow the investigation but not halt it. Rooting out “bad actors,” including tax evaders, has a high priority for the U.S. government and others. A few weeks ago, the BBC announced, “Two of the largest dark web marketplaces have been shut down following a ‘landmark’ international law enforcement investigation. The AlphaBay and Hansa sites had been associated with the trade in illicit items such as drugs, weapons, malware and stolen data.” U.S. Attorney General Jeff Sessions held a prominent press conference at which he declared to cyber criminals, “You cannot hide. We will find you.”

Dave Lee, BBC’s North America technology reporter, explained that the significance of this statement would become “known over the coming year of more as authorities follow up the ‘many leads’ they…found as a result of infiltrating and shutting down these two enormous networks….What authorities really want to do is start putting significant numbers of people behind bars.” The problem is that the “huge coordinated action has only resulted in a handful of arrests.” They need a large network of criminals, and the data seized from BTC-e may provide it.

The grim determination with which the U.S. is pursuing BTC-e can be judged by the indictment’s which states, “The case is being investigated by the Internal Revenue Service…; Department of Homeland Security, Homeland Security Investigations; FBI; U.S. Secret Service Criminal Investigative Division; and Federal Deposit Insurance Corporation. ” The seizure notice on BTC-e included the U.S. Department of Justice, Computer Crime and Intellectual Property Section. The shutdown of BTC-e may well be a first of many attacks on unregulated exchanges and markets both inside and outside American borders.

What To Do If You Belong to an Unregulated Exchange

Prudence suggests at least three steps.

  • Do not trade in or for fiat. Cryptocurrency is a gray area but fiat is clearly covered by anti-money laundering laws
  • Keep coins on an exchange only for as long as trading takes
  • Use a VPN, preferably not Tor

Innocence is not a defense. Most of BTC-e’s clients are clearly innocent, yet the indictment’s wording reflects the authorities’ view that all users are criminals. With a licensed exchange, law enforcement may need to link specific accounts to criminal activity. With an unlicensed one, they are under no such constraint and the incentives point to grabbing funds and making headlines.

Of course, Americans may not need to worry. More and more exchanges and services are going to decline American clients and this time enforce the ban.

What do you think about the U.S. seizing BTC-e? Let us know your thoughts in the comments below. 


Images via Shutterstock, BTC-e, and the Associated Press.


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Fork Watch: First Bitcoin Cash Block Mined Included Over 6K Transactions

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As Bitcoin.com reported earlier today, Bitcoin Cash miners initiated the beginning of the fork on August 1 at 12:37 p.m. UTC at block height 478558. Now, six hours later Viabtc mined the first Bitcoin Cash block (nr 478559) at 6:14 pm GMT. This was followed by the second block (nr 478560) that was also mined by the mining pool Viabtc.

Also read: Fork Watch: BCH — The Ghost in the Exchange — Mostly

Bitcoin Cash is Born

The Bitcoin Cash blockchain has successfully split away from the legacy chain as of block 478559. The block was mined by the China-based mining pool Viabtc at 2:14 pm EDT (6:14 GMT) and the pool also found the next block 478560 shortly after. The first Bitcoin Cash block was 1915175 Bytes or 1.9 MB in size, holding 6,985 transactions. This is much larger than BTC’s 1MB limit and approx. 3,000 transaction throughput. The mining pool Viabtc also wrote in the block’s Coinbase data “Welcome to the world.” The organization also showed excitement via Twitter stating;  

Welcome to the world, Shuya Yang! And Bitcoin cash!

Fork Watch: First Bitcoin Cash Block Mined Clears Over 6K Transactions
Block #478559 the first official Bitcoin Cash block mined on August 1, 2017, at 2:14 pm EDT.

Bitcoin Cash Network Sees a Hashrate Increase, but a Swift Drop in Price

Bitcoin Cash prices have dropped significantly since this morning’s high of $400 to a low of $220 at the time of writing. The price of BTC seems unfazed by the first blocks found and is still hovering around the $2740 range. Throughout forums and social media, everyone is talking about the fork. Of course, big blockers are celebrating the split while small blockers are waiting to see something bad happen.

Fork Watch: First Bitcoin Cash Block Mined Clears Over 6K Transactions

At the moment the Bitcoin Cash hashrate is growing slowly and is currently operating at 247 PH/s or 3.9% of the BTC network hashrate. So far, at press time, five blocks total have been mined on the Bitcoin Cash network. Bitcoin.com will be sure to follow the split events closely so our readers can be informed every step of the way.

What do you think about Bitcoin Cash officially splitting off from the legacy chain? Let us know in the comments below.


Images via Pixabay, Blockchair, and Twitter.


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Fork Watch: BCH – The Ghost in the Exchange

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Ghost in the Exchange

Bitcoin Cash (BCH) has so far been like a ghost in the exchange; there was little market activity with the currency this morning. Market actors appeared to be waiting for the network to settle. However, Kraken does seem to be trading more intensely now, at press time. The start of the Bitcoin Cash chain split has begun. The divide was initiated on August 1 at 12:37 p.m. Futures of BCH have been trading for about $400, and it spiked this morning before shedding a bit of its value. 

Also read: Fork Watch: Block 478558 Initiates ‘Bitcoin Cash’ Split

Current Exchange Activity is Mostly Silent, but the Kraken has Awakened

Kraken

There was little BCH activity on the exchanges earlier this morning. Things have been mostly silent. However, Kraken tweeted they brought Bitcoin Cash live for trading. After a few hours, there now seems to be more activity on the exchange, albeit mainly sell orders populate the first page. Earlier the exchange announced it would begin crediting bitcoin cash this morning.

BCH: The Ghost in the Exchange
Current Kraken Trading
BCH: The Ghost in the Exchange Awakens
Kraken buy orders earlier this morning prior to heavier trading

Poloniex and Bittrex

Other exchanges may be silent in regards to BCH because they may not be providing support for it. For instance, Poloniex has said they “may” support it depending on the outcome of the fork, so it is no surprise that trading is silent.

Bittrex, on the other hand, said they will allow active trading for BCH and credit users for their BCH. However, the site mentioned that if no active market opened up for BCH, they would forgo trading and allow people to withdrawal it. They said:

Bittrex will monitor the BCC network stability and developments and assess the viability of opening trading of BCC assets. There is no guarantee that any markets will open to allow BCC assets to be tradable on Bittrex exchange. In the case of no BCC market opening you will be able to withdraw BCC.

As of the time of writing, they have not opened up BCH trading.

Other Exchanges and Their Plans for BCH

Large exchange Bitfinex has promised to credit BCH, but they were more silent on whether they will allow trading. This morning they halted btc trading altogether. They said, “We will stop processing  deposits at noon UTC until the situation has settled. Deposits after that time will not be eligible for $BCH.” At press time, there was no BCH trading on Bitfinex.

There has been some active trading on Viabtc, although it seems the trading has just begun to pick up a bit. From the get go, the exchange planned to support BCH. Cryptofacilities provided a handy chart with what exchanges were originally planning to do in terms of BCH:

A Wild Ride on the Markets

Overall, the pace of trading BCH on these exchanges could change wildly and rapidly. The morning was slow, but market indicators suggest that more trading is beginning to pick up. It is hard to say how BCH will perform, especially since the network is still trying to find its comfort zone. It will be interesting to see if BCH gains traction on the market. Either way, prepare for unexpected twists and turns as the fork situation unfolds.

Do you think there will be a market for BCH? Will trading begin to pick up? Let us know in the comments section below.


Images courtesy of Shutterstock and Kraken


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Fork Watch: First Bitcoin Cash Block Mined

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Fork Watch: First Bitcoin Cash Block Mined

The first Bitcoin ABC (Bitcoin Cash) block was mined on August 1 at approximately 12:37 p.m. UTC at block height 478558.

Also read: Indian Bitcoin Hotspot Bangalore Sees 50+ Merchants Added This Month

The First Bitcoin Cash Block Was Mined at Block Height 478558

Fork Watch: First Bitcoin Cash Block Mined
The first Bitcoin ABC/Bitcoin Cash fork took place at block height 478558 according to BTC Fork Monitor.

Over the past week, the central theme of discussion has been the August 1 hard fork and the possible birth of a new token called ‘Bitcoin Cash’ (BCC). The fork has come about after months of long debates, scaling proposals, and community infighting and many bitcoin proponents from both sides are showing a sense of relief although some are still uncertain of the events that will take place, and how the bifurcation of the Bitcoin blockchain will play out.

Today a whole lot of people have been patiently waiting for the user-activated hard fork (UAHF) to commence and the coming of the new digital currency Bitcoin Cash.  August 1 has arrived and the 12:20 UTC time period has officially passed. The first BCC block 478558 has been mined, but at the time of writing a split has not yet occurred.

Judgement Day Comes as the First Bitcoin Cash Block Was Mined  Places to ‘Watch’ the Fork Unfold

Now the fork didn’t happen at exactly 12:20 UTC but took place six blocks later. There are a few places where bitcoin proponents can follow the behind the scenes action and watch for BCC blocks to be found at data collection sites like Coin Dance, Blockchair, and BTCforkmonitor. Further, there is a live stream “fork party” called Countdown to Bitcoin Cash with over 1400 viewers at press time. And of course, the Reddit forums r/btc, r/bitcoin, and Twitter are filled with discussions concerning today’s events. Judgement Day Comes as the First Bitcoin Cash Block Was Mined

BTC and BCC Markets

Yesterday bitcoin markets were very active, and bulls managed to push the price up to $2929 just twelve hours before the possible fork. Now the price is down 8 percent to a low of $2700 as people sit and wait for the fork’s outcome to commence. Many traders believe the BTC price spike is currently valued with the BCC token’s value priced into it, but market predictions are very speculative. At the moment BCC futures are trading at 0.15 BTC or US$400 after seeing a decline in value over the past week. The San Francisco -based bitcoin exchange Kraken has announced it would begin crediting Bitcoin Cash shortly and trading has begun on the platform. Bitcoin Cash prices on Kraken are similar to Viabtc’s futures at the time of writing. 

Judgement Day Comes as the First Bitcoin Cash Block Was Mined
Bitcoin prices hit a high of $2929 on July 31st overnight but subsequently dropped to $2700 during the August 1 morning hours. Bitcoin Cash is trading for about $400 on Viabtc and Kraken at the moment. 

At the moment bitcoin proponents are glued to their screens waiting for the next course of action regarding the August 1 split. Block 478558 was the last common block found and the next event will be the first big block found which could take some time depending on hashrate. 

How are you watching today’s events? Let us know in the comments below.


Images via Shutterstock, BTC Fork Monitor, Bitstamp, and Twitter.  


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Bitcoin.com Pool Members Now Have the Option to Mine Bitcoin Cash

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Bitcoin.com Pool Members Now Have the Option to Mine Bitcoin Cash

This past March Bitcoin.com launched its mining pool which has garnered quite a bit of hashrate since it started. This is due to the pool offering the best payout plans in the industry with a 110% block reward, 0% fees. Now we are pleased to announce that pool.bitcoin.com members can prepare to mine the Bitcoin Cash (BCC) protocol when the chain starts on August 1st.

Also read: August 1 and the Potential Disruption of the Bitcoin Network 

Bitcoin.com Pool Will Give Members the Option to Mine Bitcoin Cash

On August 1 after 12:20 UTC there is a planned hard fork taking place on the Bitcoin network which will bifurcate the blockchain into two separate paths. Discussions concerning this event have been happening for weeks, and our readers can get up to date by reading this article here. After the split, a new token will be created called ‘Bitcoin Cash’ (BCC or BCH) and it will offer a few different aspects compared to the current bitcoin protocol; raising the block size limit to 8MB and removing protocol changes like Segregated Witness and Replace-by-Fee (RBF).

In our recent PSA concerning Bitcoin.com’s official position on the BCC chain, we remain committed to the Segwit2x proposal, otherwise known as the New York Agreement. However, due to significant demand from our users, the Bitcoin.com pool will give mining customers the option of supporting the Bitcoin Cash chain with their hashrate. Since the fork is almost upon us, we’ve decided to let pool.bitcoin.com members get prepared to mine the BCC chain.

Bitcoin.com Pool Members Now Have the Option to Mine Bitcoin Cash   Supporting On-chain Scaling and Getting the Best Reward Payout in the Industry

Starting now pool.bitcoin.com clients can point their miners to stratum.bcc.pool.bitcoin.com:3333, which will allow them to mine the legacy chain for now. Then, as soon as the BCC hard fork happens, miners pointed to the above address will automatically be mining on the BCC fork.

Bitcoin.com is a huge supporter of on-chain scaling, and many of our mining pool members are as well. Further, we believe the market should decide the best path forward for digital currencies and by allowing our miners to choose which chain they point their hashrate towards, we will give them a stake in this decision process. In addition to being able to participate in the decision-making process, our customers choosing to mine the BCC chain will still get 110% block rewards with 0% fees for PPS and PPLNS.

Members of our pool that choose to remain mining the legacy chain can continue as is, but if there are customers who wish to mine the BCC fork they can do so now by pointing their hashrate to stratum.bcc.pool.bitcoin.com:3333.

Not a member of our pool and want 110% rewards with 0% fees? Register Here.


Images via Bitcoin.com

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20+ New ICOs Announced Despite SEC Warnings

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SEC

Last week, SEC announced that some Initial Coin Offering (ICO) tokens could be considered securities. This means startups catering to US citizens would need to abide by current regulations and register with SEC. However, it appears that many firms may be ignoring SEC’s warnings. They may push forward with their token distribution events regardless of the rules.  

Also read: Blockchain Education Network to Conduct Multi-City ‘Bitcoin Airdrop’

According to a tokendata.io, there are about 120 upcoming/active token distribution events for 2017 and roughly 20 announced since SEC issued its warning. A Tech Guam article covered the information:

Some industry participants and analysts had thought such a decision would have a chilling effect on the ICO market. But 20 new ICOs were announced since the SEC’s decision, with more than 120 scheduled to launch this year….

Several ICO’s are also about to begin their token distribution. These include, Groceryx, Corion, Eros, and many more.

20+ New ICOs Announced Despite SEC Warnings

SEC Requirements for Security-Based Tokens

According to SEC’s considerations on the matter, most of the aforesaid tokens may not fall into their regulatory framework. This means some tokens do not genuinely fit into the “securities” category. For instance, most crypto-tokens do not grant equity in a company. They also have limited disclosure requirements, according to the Tech Guam article.

These tokens actually have utility or use cases in order to bootstrap a project, whereas a ICO Startups to Push Forward Despite SEC threatssecurity represents ownership or stake in a particular company. An Investopedia article explained what a security is:

“A security is a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation (via stock), a creditor relationship with a governmental body or a corporation (represented by owning that entity’s bond), or rights to ownership as represented by an option.”

Under this nomenclature, it appears few ICO’s will fall into the security category, but SEC may make their own mind whether the firm fits the criteria. Some entities advise that new startups call SEC and determine if their digital asset requires regulation. In either case, there does not seem to be any stopping the creation of new blockchain firms and their initial coin offering events.

Do you think SEC regulations will be able to halt ICO’s? Will decentralization keep the regulators at bay? Share your thoughts in the comments section below!


Images courtesy of Shutterstock and Tokendata.io


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Coinbase Customers Suffer from Delays as Withdrawal Period Ends

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Coinbase Customers Suffer from Delays as Withdrawal Period Ends

Over the past few days the bitcoin platform Coinbase has been experiencing some significant withdrawal backlog from customers trying to move their bitcoins in order to obtain bitcoin cash (BCC) after a possible network fork. Since the company stated it would not support the BCC blockchain, and associated token many customers have been scrambling to withdraw. Now the time to withdraw from Coinbase and other exchanges has officially ended. 

Also read: Indian Bitcoin Hotspot Bangalore Sees 50+ Merchants Added This Month

As the Bitcoin Fork Approaches Coinbase Customers Complain About Withdrawal Delays  

Coinbase Customers Suffer from Delays as Withdrawal Period Ends
Coinbase dashboard presents this message after login.

It seems it’s been a difficult few days for the bitcoin exchange Coinbase as the company has been processing a lot more withdrawals lately due to the upcoming August 1 fork. Over the past couple of days, customers have been complaining of twelve-hour delays to get their funds off the platform. Coinbase addressed the problem a few times via Twitter stating;

Were experiencing delays due to a large number of bitcoin withdrawals. All funds remain secure. We understand this is frustrating for customers and will continue our efforts to process all these withdrawals as swiftly as possible.

Coinbase Customers Suffer from Delays as Withdrawal Period Ends
Withdrawals delays started a few days ago for Coinbase.

Coinbase and Many Other Bitcoin Exchange Withdrawal Periods Have Ended

Furthermore, the San Francisco based company suffered from a DDoS attack on July 28 and temporarily went offline. When viewing the Coinbase dashboard customers are greeted with a warning about the company not supporting the bitcoin cash currency. The post warns clients that if they wish to access both bitcoin (BTC) and bitcoin cash (BCC) need to withdraw before 10 am PT, July 31, 2017.

Coinbase Customers Suffer from Delays as Withdrawal Period Ends
Coinbase announcement via Twitter.

Coinbase and its associated exchange GDAX was one of the first companies to explain that it would not support BCC. In fact, the GDAX revealed this information a while ago on July 19 when many other exchanges not supporting BCC have just announced their plans over the past few days. Because Coinbase has such a large customer base, there’s been a lot more complaints directed at their business and customer support.

Following the fork, those who leave funds on exchanges that don’t support bitcoin cash like Coinbase, Bitstamp, and a few others will not be able to access tokens on the other chain after the fork settles. As of now Coinbase and nearly every other exchange have officially shut down deposits and withdrawals for the next 12-36 hours so users who want BCC and hold funds on these specific exchanges will not be able to withdraw or claim those funds.

What do you think about the withdrawal backlog Coinbase has experienced over the past couple of days? Let us know what you think in the comments below.


Images via Shutterstock, Coinbase dashboard, and Twitter. 


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What Do Core Think of Bitcoin Cash?

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What Do Core Think of Bitcoin Cash?

The question in the title is misleading. Because what Core think, and what Core and Blockstream want you to think and believe, are two entirely separate things.

Recently Bitcoin Core developer Luke Dashjr (aka Luke-jr) wrote an opinion piece almost entirely about “Bitcoin Cash” itself.

But before we get onto the Bitcoin Cash topic here, let me address one glaring point made by Luke early on in his piece. Given that Segwit2x is well underway now, Luke actually makes an admission – stating, and I quote “Basically, BIP148 (UASF) was an early success”. This statement conclusively reaffirms statements I made in an earlier piece that Blockstream (UASF) and DCG ( Segwit2x) are in bed together. And I’m going to restate this – big blockers have been played.

But Luke’s ponderous post is genuinely a marvel in deceit. He bewilderingly states that “Bitcoin Cash” is an altcoin, and that it is an attempt to hijack Bitcoin.

This play on words is all too common within the Blockstream camp. The hijacking came from Blockstream and no one else. But to help illustrate this point, allow me to paint this picture. Suppose you are part of an open source project. You release a founding paper specifying your project’s inner workings, methods, and overall operation. Your project is unfunded, but passionately developed within an open, transparent, thriving community. A new company emerges, and cleverly makes its way among your development team, and receives an incredibly large amount of funding from some very big players in the industry. This company then starts to weed out some of the early developers of the project, and particularly those who don’t agree with the company’s very distinct vision.

Discussion and promotion of the original founding paper is prohibited. This company then (for argument sake let’s just call it Blockstream) rewrites the project to a vision that is incompatible with its original founding paper. So then in retaliation a small group of people, some who were there in the beginning, come together, and re-launch or rather see the continuation of the original project with the original intention, following the original founding paper.

Who in the above paradigm hijacked the project? Unless you are heavily compromised, it takes no genius to figure out the answer. Blockstream took over Bitcoin, fundamentally changed its course direction, and are now actively attacking the minority who wish to retain the original vision.

Bitcoin’s community has been aggressively split for several years now. If Luke’s heart was in the right place, he should genuinely wish Bitcoin Cash all the best, and in fact thank them for going their own way, and finally ending years of dispute. Instead he chooses to attack further.

Segregated Witness is an extreme departure from the Bitcoin described in inventor, and creator, Satoshi Nakamoto’s white paper.

Satoshi in his wisdom wrote “Bitcoin can already scale much larger than [VISA] with existing hardware for a fraction of the cost.” Bitcoin was already scaleable, it didn’t need Segwit. The threat “Bitcoin Cash” poses is that it can finally prove itself, with the removal of the 1MB temporary cap it will demonstrate to the world that Core devs were lying all along, and Bitcoin can scale to astronomical heights, and operate very efficiently and securely.

So now the new agenda by Core and Blockstream is to attack “Bitcoin Cash” as an altcoin, and to discredit its position as the true Bitcoin. But anyone reading Satoshi’s whitepaper and other writings will instantly recognise that ‘Bitcoin Cash’ is indeed the coin the inventor and creator desired. But this isn’t about doing it for ‘Satoshi’. It is about recognising that there was nothing ever wrong with the original roadmap for Bitcoin. The derailment by Blockstream into Segwit isn’t for Bitcoin’s benefit, it is actually for the benefit of Blockstream and its many investors.

Luke also stated that “this isn’t a particularly unique or even first-of-kind altcoin: “Bitcoin Dark” and “Bitcoin Plus” have tried to hijack the “Bitcoin” name previously”.

Again, he mentions the term ‘hijacking’. This isn’t hijacking anything. If Blockstream chooses to fundamentally change the inner workings of Bitcoin, and a group of loyalists who truly believe in Bitcoin’s capability in its current form with the transaction cap removed choose to keep things as they are –  why should it not be called Bitcoin? Bitcoin Cash is true Bitcoin in every sense of the word, and is 100% aligned to the whitepaper description.

Luke’s stated “Bitcoin Plus” and “Bitcoin Dark” are both non-compliant to Bitcoin’s whitepaper, and further they did not maintain Bitcoin’s existing ledger as they were not forks of the main chain. Luke’s inclusion of these two cryptos is intentionally misleading.

Segwit on the other hand is so much a departure from Bitcoin’s whitepaper that if you would determine altcoins on technicalities alone, Segwit would be it, hands down. Where does the white paper mention splitting witness data?

Why should a central body, such as Blockstream, have the final say as to what Bitcoin is and isn’t? Bitcoin Cash’s value and status will in the end be determined by the free and open market, not by the rantings of a Core developer.

Written by Eli Afram

This post was originally published here and has been re-published with the permission of Coingeek and the author.


This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

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PR: Top Blockchain Companies AlphaPoint, Bloq and RSK Labs Show Support for Exchange Union

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Top Blockchain Companies AlphaPoint, Bloq and RSK Labs Show Support for Exchange Union

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

July 31th, Shanghai, China – Exchange Union has attracted the support of high profile blockchain companies AlphaPoint, Bloq and RSK Labs ahead of its crowd sale on Aug 7. Exchange Union aims to bridge digital currency exchanges via XUC, an inter-exchange token that allows secure cross-platform trading.

Exchange Union has appeal for blockchain technology companies, particularly those specialized in use cases and infrastructure. AlphaPoint is one such company that provides asset digitization through its distributed ledger platform. With a growing following of clients from around the world, AlphaPoint president and COO Igor Telatnikov was clear on the benefits that Exchange Union can bring;

“Exchange Union will bridge digital currency exchanges by breaking the barriers of separation among them, thus raising the liquidity of digital asset markets. This will be of great benefit to the industry. We believe Exchange Union will lead the trend for settlement on blockchain.”

Exchange Union has also been favoured by RSK Labs. As a distributed platform of smart contracts on Bitcoin Blockchain, RSK Labs has developed an extensive fan-based Bitcoin and blockchain community and is widely regarded as one of the best solutions to the Bitcoin scale debate. Gabriel Kurman is co-founder of RSK Labs and sees value in Exchange Union commenting,

‘Exchange Union can play a key role connecting exchanges across the world and enabling the full potential of the internet of value. RSK technologies, such as the Lumino network, will allow Exchange Union members to trade up to 20,000 transactions per second of any kind of digital asset. We will pay close attention to this promising project and support its development.’

Exchange Union has also caught the attention of Bloq that is widely recognised in the industry as a leading provider of enterprise level blockchain technology offering software solutions, business consultation and blockchain application support. Jeff Garzik is the co-founder of Bloq, a member of Bitcoin Core, a very experienced developer and also a “Linux lieutenant” maintainer working directly under Linus Torvalds, creator of Linux, for over 10 years.

Garzik recognizes the Exchange Union project objectives such as its ability to bridge global digital currency exchanges and the benefit of fast, secure and convenient transactions on the Exchange Union Chain, and added that he will support the development of the project.

Exchange Union token sale will go live at 09:00 EST on August 7th 2017. The token sale is being held via the largest token sale platform Token Market. For more information, visit http://ift.tt/2vjIjzG or contact us at contact@exchangeunion.net.

We are looking forward to your support!

Press Contact Email Address
contact@exchangeunion.net
Supporting Link
http://ift.tt/2vjIjzG


This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Bitcoin Exchange Sued for 3085 Bitcoins After Reversing Bitcoin-Ether Trades

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Bitcoin Exchange Sued for 3085 Bitcoins After Reversing Bitcoin-Ether Trades

A major bitcoin exchange with a strong presence in Japan, Quoine, is being sued for reversing bitcoin-ether trades after it allegedly suffered from a system glitch. Cryptocurrency trades on the platform are supposed to be irreversible, so the plaintiff claims Quoine acted fraudulently and seeks the return of 3,085 bitcoins.

Also read: Indian Bitcoin Exchanges Will Not Support Bitcoin Cash

Quoine Sued for Reversing Trades

Bitcoin Exchange Sued for 3085 Bitcoins After Reversing Bitcoin-Ether TradesOne of Asia’s largest bitcoin exchanges, the Singapore-based Quoine, is reportedly being sued over the reversal of bitcoin-ether trades. This lawsuit is the country’s first bitcoin-specific legal dispute, according to The Straits Times on Monday.

The plaintiff is a market marker known as B2C2, who placed sell orders on Quoine’s platform at the rate of 10 bitcoins for one ETH on April 19, when the market price of one Bitcoin Exchange Sued for 3085 Bitcoins After Reversing Bitcoin-Ether TradesETH was about 0.04 bitcoin. The orders were filled and credited on the same day; B2C2 paid 309.2518 ETH and received 3092.517116 bitcoins. However, the next day Quoine reversed the trades and deducted 3084.78582325 bitcoins from the market maker’s account without authorization, the news outlet detailed.

The trades were “inadvertently” executed at the “abnormal rate of… 10 bitcoins for one ethereum, which was approximately 125 times higher than the actual market price of ethereum on April 19,” the exchange admitted. Quoine attributed the cause to a technical glitch which occurred when it was “reconfiguring passwords for its critical systems to fend off persistent attempts by hackers to break into its systems,” adding that:

The glitch severely disrupted Quoine’s ability to retrieve actual market prices for bitcoin and ethereum.

Was the Reversal Fraudulent?

B2C2 claims Quoine “acted fraudulently” because their trading agreement states that orders are irreversible once filled.

Bitcoin Exchange Sued for 3085 Bitcoins After Reversing Bitcoin-Ether TradesIn contrast, the exchange claims that it was entitled to do so because the trades were “mostly trades with huge mark-up over fair global market price.” In addition, it revealed that B2C2 had done other bitcoin and ether-related trades on its platform at prevailing market rates between April 15 and 18. Quoine asserted that B2C2, as a “sophisticated” investor, should have suspected that the “abnormal rate” was a mistake, adding that the market maker was “being opportunistic and seeking to profit from a technical glitch.”

The plaintiff is seeking to recover 3084.78582325 bitcoins from Quoine in Singapore’s High Court; no dollar amount was provided in the lawsuit, according to The Straits Times. The price of one bitcoin has more than doubled by the end of July from its April 19 price of $1,221.

Bitcoin Exchange Sued for 3085 Bitcoins After Reversing Bitcoin-Ether Trades
Bitcoin’s exchange rate vs the USD, April 19, $1,221.

Should Exchanges Reverse Trades?

Other bitcoin exchanges have also had to decide on trade reversals. In December 2015, Gemini was heavily criticized for reversing a trade after a customer placed a very large buy order on its platform in error. The exchange stated that its decision was due to the trade being “empirically disruptive to an orderly market.”

Bitcoin Exchange Sued for 3085 Bitcoins After Reversing Bitcoin-Ether TradesLast month, Coinbase came under fire from its users for not reversing trades during the Ethereum flash crash, which caused the price of ETH to fall from around $320 all the way down to 10 cents on its GDAX platform. One investor placed a multi-million dollar ETH sell order, sinking its price and triggering “approximately 800 stop loss orders and margin funding liquidations,” GDAX explained. However, two days later, the exchange announced that it would honor all executed buy orders as well as credit customers who had margin calls or stop loss orders executed using company funds.

Do you think Quoine should have reversed the trades? Let us know in the comments section below.


Images courtesy of Shutterstock, Quoine, Coinbase, and Bitcoin.com


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