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Crypto Highlights: Week of November 20th 2020

Crypto Highlights: PayPal BTC record trading volume at Binance.US, Bitcoin ATMs up by 85% this year, $7.6B stolen in crypto since 2011, Value DeFi protocol hacked, Yet another BCH fork: There is more in this week’s crypto highlights. 

Top Crypto Headlines By Crypto Gator

Top Stories Across The Industry

Ethereum Crypto Network Apps and DeFi

Crypto Exchange Service Launched by Belarus’ Largest Bank 

The other day it was a bank in Singapore, now Belarus is in the news; has the institutional ‘FOMO’ already begun?

The largest bank in Belarus, BelarusBank has just announced launching cryptocurrency exchange services. The services adopted aim at facilitating access to the use of cryptocurrencies. It allows one to easily buy BTC (Bitcoin) in exchange for Fiat currencies such as the US dollar (USD), Russian Ruble (RUB) and Belarusian Ruble(BYN). 

Belarusbank transacts based on the optimum market price at the time of transaction. Details of service as reported on Whitebird’s website states that the service will be conducted online. Purchases and sales procedures will be carried out using Visa payment cards.

“Trading Bitcoin using Euros will soon be added to the list” says BelarusBank. 

A local media source reveals that services were initially targeting citizens of Russia and Belarus. However, plans are on-going to expand its customer base in the future. BelarusBank further plans to engage Whitebird to support the bank in providing other cryptocurrencies related services to its customers. 

Value DeFi Protocol Suffers Six Million Dollar Flash-loan Exploit.

DeFi hacks have been on the rise in 2020, from bZx protocol hack to Akropolis. Now Value DeFi is in the headlines for the wrong reasons. 

Value DeFi lost $6 million dollars to flash loan exploiter. On Friday, a thread on Twitter showed a complicated manipulation of flash loans by an attacker who made away with an estimated six million dollars.

Emilio Frangella called attention to a huge loan request of 80,000ETH from Aave amounting to about $36 Million on November 14th, 2020.  “This is the most complex exploit I’ve ever seen”, says self-described whitehat hacker and co-founder of DeFi Italy.

Value DeFi token plunged 25% from 2.73 to 2.01 at press time due to exploitation. In this incident Multi Stable vault pricing loopholes were exploited to the tune of $6million. Community discord acknowledged the exploit and had asked for some time to work on the MultiStable vault fixes.

Attackers spent $0.31ETH from profits made,  to send a message to the protocol deployer’s address, saying: “Do you really know flash loans?” As attacks on DeFi increases, Stani Kulechov of Aave commented on Twitter that  “building resilient DeFi is becoming difficult”. 

The DeFi Market to Connect with Real-world Assets for Economic Gains 

Within the last year, the financial world has experienced a boom in decentralized finance or  DeFi with over $13 billion in TVL(Total value locked).  As a technology framework, DeFi has demonstrated to the world its staggering potential to revolutionize access to business loans.

DeFi protocol offers a win-win solution for both crypto holders through incentivization mechanisms, yield farming and for borrowers through access to loans with friendly terms.

First, high volatility and over-collateralization posed significant challenges to DeFi loaning. Collateral volatility led to a loss of $6.5million DAI for MAKER alone and there may be similar occurrences in the future. Secondly, the inability of traditional businesses to borrow from DeFi as well as the real cash flow behind protocol tokens poses a major setback. 

Going forward, speculators believe that the DeFi market is in desperate need of rebuilding infrastructures and systems that can bridge the gap with traditional businesses. There needs to be a seamless interconnection between DeFi and CeFi for the decentralized products to strive better in the financial market. 

Bitcoin Cash Hard Fork Goes Live, will BCH Owners receive new coins? 

Since Bitcoin Cash forked out of Bitcoin, the crypto asset has been caught in a web of multiple forks arising due to one controversy or the other. After the BSV split, BCH has opened up for yet another fork. 

The highly controversial hard folk of the (BCH) Bitcoin cash blockchain has now finally been executed. A report on this says, “currently there is a clear winner in the dispute between the developer teams of Bitcoin Cash (BTC ABC) and Bitcoin Cash Node (BCHN). 

A peep into the hash rate of both parties BCH, ABC and BCHN shows that BCHN  is the winner with all 73 blocks mined through the use of a BCHN software mining pool. 

Bitcoin Cash Node’s victory was expected even prior to the Bitcoin Cash hard fork, 88% of miners already declared support to  Roger Ver, Chief developer of the BCHN. More so, major exchanges like Coinbase also declared their support for BCHN. 

Dispute Behind the Hard Fork

The dispute resulted in a fork centered on the “Coinbase Rule”, which states that 8% of Mined BCH be directed to Bitcoin ABC to finance the development of the protocol. Roger Ver regards the Coinbase rule visual as a soviet-style central planner’s dream come true and as such he was against it. 

Hackers and Scammers Have Stolen $7.6 Billion in Crypto Since 201

Over $7.6 billion worth of cryptocurrencies have allegedly been stolen since 2011 by two predictable bucket names; Hacks and Scams. According to a report, $2.8 billion has been stolen via Hacks totaling about 113 attacks, with the largest being the Coincheck hack in 2018 with about $535 million worth of NEM Coin.

The United States, United Kingdom, China, Japan, and South Korea have experienced the highest number of exchange security breaches, where the United States is leading with about 13 targeted attacks. Crystal blockchain has identified 23 prominent fraudulent schemes with $4.8 billion stolen via scams. 

$7.6 billion is the total rough estimate of crypto assets stolen in the past 10 years, where China is leading the pack in terms of its major counterparts. Sadly, the number of sophisticated hacks and scams only stand to increase as the years go by. 

Coronavirus lockdown drives adoption of Bitcoin ATMs up by 85% 

Across the globe, Bitcoin automated teller machine installations surged this year due to the coronavirus-induced need for contactless transactions. The number of BTC ATMs  increased by 85% bringing the total to 11798, as reported by Coin ATM Radar

In another report by Global Trade Magazine, reveals an expanding adoption of Bitcoin as the fear of coronavirus infection accelerates market growth. Bitcoin ATMs allow for transactions using credit or debit cards, through both mobile or computer devices. 

Well over 800 BTC ATMs have been installed in October in the US only and more countries are likely to follow suit. This drives increased participation and use in cryptocurrencies the world over as Bitcoin marches stronger than ever towards mainstream adoption. With giant companies like PayPal now lending their support, cryptocurrencies are well set to step into the next wave of mass adoption. 

DeFi the odds: Total User Number up 55% in just six weeks

You cannot keep the world of Decentralized Finance out of the spotlight. DeFi has managed to record a thumping 55% growth in the total no. of users within the past six weeks in spite of the huge losses experienced in the last month. Largely due to the negativity around DeFi, many critics hastily wrote off the “DeFi bubble”. Measuring metrics however proves that the industry sustained a sector-wide growth. 

Crypto markets data aggregator Dune analytics noted that the total number of unique DeFi users increased roughly ten times over compared to statistics from last year. To give some perspective, 85,000 new users were found added to the existing number of DeFi users within the first two weeks of November 2020. 

Compound and Dydx are among DeFi’s strongest gainers in recent times. Uniswap has also expanded rapidly as the number of pairing rose by 34%. Uniswap, Curve, Sushiswap and Ox makeup for more than 91% of total Decentralised Exchanges.  

PayPal Reaches 85% of Binance.US Volume in First Month

American users are closing in on a record $25 million trading volume in Binance.US exchange, within just one month of PayPal’s crypto service launch. On 13th November,  PayPal lifted the waitlist period for its US-based customers.

PayPal began crypto offerings in collaboration with Paxos in October. Daily trade volume on Paxos trading service, ItBit exchange rose about four times within November. Following PayPal’s crypto launch, $30 million USD in day trades were recorded bringing PayPal to the front pages of major media and news platforms. 

However, PayPal still needs to cover significant ground, before it can comfortably pick up competition with exchanges like Kraken and Coinbase Pro where the daily trading volume exceeds $500 million. PayPal may however unlock the next phase of cryptocurrency mainstream adoption through its pool of 364 million retail users as operational services kick off in the US.

At this moment, PayPal supports only four cryptocurrencies: Litecoin, Bitcoin, Bitcoin Cash, and Ethereum. There are plans to expand across Europe than to go global by making its service available to all PayPal users.

What has to be mentioned is that PayPal does not allow users to withdraw their cryptocurrency from their platform, effectively defeating the whole purpose of purchasing cryptocurrencies through PayPal. Furthermore, PayPal has a track record of freezing accounts with no warning, leaving some clients with no recourse to dispute PayPal’s decision and potentially leaving some clients with major losses.

As stated previously in our post titled “4 Best Practices To Follow In Securing Your Cryptocurrency Holdings”, if you do not own the keys to your cryptocurrency wallet(s), you might as well consider the cryptocurrency as not yours. Therefore it is wisest to purchase cryptocurrencies through an exchange like Binance which lets you withdraw your crypto to your own personal wallet address.

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4 Best Practices To Follow In Securing Your Cryptocurrency Holdings

Secure Your Cryptocurrency Holdings

One of the most essential lessons recommended for a newbie in the cryptocurrency space is how to safely handle and store cryptocurrency assets. This is probably the most important lesson in crypto education especially when getting started. In this space, you are your own bank and as such you are solely responsible for any potential losses incurred. 

From buying cryptocurrency using a crypto exchange to finding a secure wallet for storage & safe transaction of cryptocurrencies on a daily basis, a lot could go wrong simply due to ignorance or for not possessing enough knowledge on cryptocurrencies. So let’s talk a little about blockchain technology and how cryptocurrencies tie into it. 

Cryptocurrency and Blockchain: Let’s get to know the basics! 

Bitcoin was the first cryptocurrency founded by an anonymous person or group of persons under the pseudonym Satoshi Nakamoto in the wake of the 2008 financial crisis. Since their inception, Bitcoin and other cryptocurrencies have continued to march towards mainstream adoption. 

A cryptocurrency is basically a virtual or digital currency secured by a cryptographic ledger which renders it almost impossible to produce counterfeits and make it immune to double-spend. Most cryptocurrencies are decentralized and built on top of blockchain technology

A common feature among most cryptocurrencies is that they are neither issued nor controlled by any central party. As such, they are resistant to censorship and government interference or manipulation. By design, they are decentralized. 

Cryptocurrencies can be transacted directly between parties seamlessly without the need for a third party; no banks, no escrow system. Usually, a mining fee is charged for sending cryptocurrencies, which is paid by the sender. Most blockchains support lower fees of less than a cent or few cents which competes favorably with the exorbitant fees charged by banks. 

Bitcoin runs on a trustless and transparent ledger technology (blockchain) which broadcasts a copy of all its transactions to all parties involved. Every transaction is therefore visible and verifiable by everyone in the network.  

In verifying transactions blockchain technology assumes a consensus algorithm. For any changes to be made on the network, a consensus must be reached by all the peers of the network (for. Eg all miners in the case of Bitcoin). Should a proposed change fail to gain the needed consensus, such a change will be dropped by the network automatically. 

1. Choosing a Bitcoin Wallet

Buying cryptocurrency for the first time would also imply finding a trusted cryptocurrency wallet to safely store your assets. Knowing the right features to look out for when choosing your crypto wallet is of utmost importance for a crypto enthusiast. Many have experienced tragedies and at times lost faith in cryptocurrencies altogether as a result of ignorantly choosing less safe options for crypto wallets. 

Cryptocurrency users have the option of choosing between online, offline or hardware wallets. Depending on the choice you make settling for a wallet with the most secure features is optimal. Although offline and online wallets have proven to be secure, however, hardware wallets are known to provide the highest security for your digital assets.  

Online wallets are generally free, user-friendly and readily available and as such, they are the most commonly used wallets in the crypto industry. At the same time, they’re the most vulnerable among the different types of crypto wallets. Next to a hardware wallet, an offline wallet offers relatively better security for your crypto assets. With the offline wallet, you stand the risk of losing your funds only if you lose the paper slip. 

2. Crypto Wallet Security

When considering a web wallet, make sure to choose from a list of wallets that are HTTP secured (HTTPS). You can narrow down your choices based on whether the wallet is 2FA/MFA enabled and has support for a stronger password. A web wallet that does not support these features could pose some dangers to users’ funds. Blockchain.com is a good example of such an online wallet, easy to use and suitable for secure storage. Online wallets are often referred to as cloud wallets. 

If security has the highest consideration above user friendliness, cost of service etc, a hardware wallet is always recommended. Ledger Nano X is widely recognized among hardware wallets out there and to its credit has historically recorded almost zero attacks in the past.  

Most Bitcoin wallets are Multisig; meaning they require more than one key to authorize a transaction (it takes multiple parties to sign a transaction before being executed). This is another great way to secure Bitcoin from potential theft. Some popular multi-currency wallets are Trust Wallets, Coinomi, Blockchain.com mobile wallet, etc. 

If you are using a cryptocurrency wallet for the very first time, sticking to a secure yet user-friendly wallet should be your goal. Most times, losses occur due to inadequate knowledge on how to transact cryptocurrency assets. These kinds of losses are amplified if the wallet is complex; making it hard to navigate through. 

Of course, there are cases where crypto assets are lost having sent them to the wrong recipient. For example, Bitcoin is sent to an ETH address; especially when you are using multi-currency wallets. Cases like these are quite common but are also categorized as a rookie’s mistake. Therefore, wallets that do not flag an invalid address should be completely avoided. 

3. Securely Backing Up Your Wallet

You will have little or no control over your wallet if it is not properly backed up. A typical wallet consists of a private and public key. As the name implies, public keys are not secret; they can be seen by anyone without any potential consequences. Public keys carry information about all your transaction history. Anyone who gets hold of your public keys can view all your transactions history but cannot make changes to your fund balance. 

Private keys on the other hand are secret keys and are very important; they should be kept as a secret from any third party. Private keys are the master keys to your funds, anyone with your private keys can spend your funds without authorization. That string of characters is all that you need to recover your funds in the event of losing access to your mobile device or PC which stored your wallet. 

Therefore, it must be correctly copied and kept somewhere private for maximum protection. It is a good practice to save these keys in multiple offline locations. Never store your private keys online especially in an email or a central database that can be exploited. 

When choosing a cryptocurrency wallet, make sure the wallet gives you an option to export your private keys in an encrypted file. Avoid taking screenshots of your private keys or passphrase, as some apps could have access to your screen and files. 

It is also considered best practice to try restoring your funds using those private keys or passphrases to ensure that your backup works. Although, they work without failure if copied correctly. 

4. Not Your Keys, Not Your Coins!

Chances are that you probably have heard about this statement a few times! The statement became a crypto-household amidst the rising popularity among centralized exchanges which store your keys but never give you access to them. 

If you don’t own your keys, you have limited control over your funds –  it’s as simple as that! Although centralized exchanges are easy to use and best for trading, they are always the prime targets for crypto hacks, as such users can easily lose their funds in the case of a large-scale attack. 

A centralized cryptocurrency exchange can deny you access to your funds at any time, act on government directives to seize your assets or simply turn out to be a fraudulent business and steal your funds.

Keeping this in mind, cryptocurrency exchanges aren’t a good place to store your crypto assets except temporarily for trading. If it becomes paramount to move your crypto funds to an exchange, then it’s best to stick to the reputable ones

A decentralized wallet which gives you access to your private keys should be the preferred choice for storing cryptocurrency assets. Crypto security is one of the most discussed topics in the industry, yet many people aren’t paying enough attention to it.  

Most crypto thefts, hacks, and scams occur due to mistakes, negligence by users which further emphasizes the importance of crypto education, especially as crypto security is its most valuable lesson. 

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Crypto & Blockchain News – Week of November 11th 2020

Crypto Highlights: Lebanon to launch digital assets, DeFi hacks are on the rise, New Jersey introduces Crypto License, Cred files for bankruptcy, KuCoin recovered 84% of stolen crypto: more interesting details below!

This week’s crypto highlights by Crypto Gator focus on the following top stories and many others from around the world. 

Top Crypto Headlines 

  • Following Kucoin’s major hack, CEO Johnny Lyu announced on November 11 that the company has so far recovered up to 84% of total assets stolen in the recent legendary hack. 
  • Major crypto lender Cred has reportedly filed for bankruptcy following reports that its balance sheet had been “negatively impacted” by a “perpetrator of fraudulent activity”
  • The current DeFi boom has attracted a lot of bad eggs resulting in the rise in DeFi hacks despite the major decline in crypto scams in 2020. 

Top Crypto Stories

Crypto and Blockchain News

Image source: Forbes

Lebanon to launch digital currency in face of economic and financial turmoil

As the digital currency continues to gain massive adoption, most countries are now looking at launching a digital version of their native currency to curb harsh economic realities. In this light, Lebanon is now taking a similar route. As announced by the country’s central bank, Lebanon is preparing the launch of its digital currency in 2021.

“We must prepare a Lebanese digital currency project,” commented Central bank governor Riad Salameh. Salameh mentioned that they estimated that there are $10 billion stored inside homes according to the state-owned National News Agency. The digital currency is positioned to restore confidence once again in the banking system. 

The central bank has noted that the digital currency project scheduled to launch in 2021 will be instrumental in the implementation of a cashless financial system to enhance both local and international cash flow. 

According to the World Bank, the country’s personal remittance ranks almost 14% of its GDP.  This will unarguably foster a frictionless remittance system from a vast global diaspora.

Report: Crypto crimes declined in 2020, but DeFi hacks are on the rise

No doubt, 2020 has been phenomenal for Decentralized finance (DeFi), with a surge in massive interest. The adoption that accompanied the industry sector was equally matched by rising protocol hacks that have left most DeFi projects bleeding to death. 

Although, data from crypto analytics firm CipherTrace shows that the total number of crypto losses as a result of crypto theft, fraud, and hacks has plummeted from $4.4 billion in 2019 to $1.8 billion over the first 10 months of 2020, signaling a major drop in the crypto crimes. CipherTrace CEO Dave Jevans further emphasized that the major drop in crypto crimes is a testament to recent breakthroughs in security measures deployed across the industry. 

Despite the decline in crypto crimes in 2020, CypherTrace further recounted that there has been a major arsenal being targeted at DeFi projects which has resulted in rising DeFi hacks which now accounts for 20% of all crypto losses due to theft. “The surge in DeFi was what ultimately attracted criminal hackers, resulting in the most hacks for the sector this year,” the report further clarifies.

West African Program Will Store Weather Data on Telos Blockchain

The march to mainstream adoption continues as more Nations look to tap into blockchain’s capabilities. This time, popular blockchain platform Telos has reached a partnership with open-source weather technology company Telokanda Weather Group. The partnership is aimed at launching a program that collates and shares weather reports in the West African region on the Telos public blockchain. 

According to information, the West African company will leverage the Telos blockchain to aid students of tertiary institutions and the farming community to record and share weather reports with the aim of improving climate research, local weather forecasting, and hurricane tracking. 

As at the time of compiling this information, Telokanda has already reached a partnership with the University of Uyo and Rivers State University in Nigeria, and also Academic City through which students will be able to launch weather tracking balloons for data tracking. 

Starting out, Telokanda plans to have each university launch one balloon per week, scaling up to daily launches by 2021, the spokesperson commented.

New Jersey Moves Closer to Crypto License With Introduction of Senate Bill

Crypto regulation has been a hot topic in the industry this year and as expected, most crypto firms are more likely to tilt towards regions that promote fair crypto regulations. Although the reason for regulations might differ with jurisdiction and as such most countries are already drafting laws to regulate crypto activities. New Jersey is the latest on this list. 

The New Jersey crypto bill “Digital Asset and Blockchain Technology Act” was sponsored by  Sen. Nellie Pou on Thursday, the 3rd of October. Senate bill 3132 is positioned to regulate cryptocurrency service providers under the watch of the N.J. Department of Banking and Insurance.

This new bill implies that businesses and individuals will be restricted from conducting any crypto business activities unless they have appropriately obtained a license in New Jersey or have a reciprocal license in another state.

As a result, any unlicensed entities operating a crypto business in New Jersey will be charged a $500 fee a day until an application for an approved license is filed.

Digital currency lender Cred files for bankruptcy

Crypto hacks and frauds have been a bane in the industry and have contributed chiefly to the non-existence of some crypto firms that started off on a glorious note. In a recent development, Cred a digital currency service provider that gave interest on digital currency deposits has reportedly filed for bankruptcy as the company declares a negative balance sheet. 

On October 28, Cred revealed that its balance sheet had been “negatively impacted” by a “perpetrator of fraudulent activity.” Following this development, Cred had reportedly suspended customer’s withdrawals deposits to CredEarn, the company’s interest-bearing service.

In the 11 chapter bankruptcy document filed by Cred on November 7th, the company reportedly has between $50-$100 million in assets but a whopping $100-$500 million in liabilities. This shows Cred has been financially distressed for a while prior to filing for bankruptcy. 

As a result, digital currency trading platform Uphold has decoupled its relationship with Cred as announced in a blog post, Uphold went on to say that they are suing Cred LLC and its affiliates, together with Cred’s founders for alleged fraud, breach of contract, and reputational damage.

To advance from this stage, Cred has allegedly hired MACCO Restructuring Group to lead its financial advisory services towards assessing available merger and acquisition opportunities. 

KuCoin recovered 84% of stolen crypto after $280M hack, says co-founder

KuCoin hack ranks among the biggest crypto thefts in 2020. Despite the breakthrough in security enforcement, crypto exchanges are still a prime target for hackers and nefarious actors. On September 25, a popular crypto exchange was reportedly hacked for an estimated $280 million, resulting in multiple ERC20 assets and Bitcoin being whisked away from the exchange. 

In the most recent development, KuCoin announced that it has recovered the majority of funds lost in a $280 million hacking incident in September. CEO of Kucoin, Johnny Lyu announced on November 11 that the company has so far recovered up to 84% of total assets stolen in the major hack. 

According to Lyu, the recovery process involved “on-chain tracking, contract upgrade, and judicial recovery.” He further reiterated that the exchange will in the coming days publish more details on reimbursement once every detail of the hack has been ascertained. 

Kucoin is finally resuming full services gradually, so far, the exchange has resumed full trading services for 176 out of the total 230 tradable assets to date. The CEO has noted that full services for the remaining assets will open before Nov. 22. 

Every Major Bank Will Have Exposure to Bitcoin, Says Renowned Fund Manager Bill Miller

As Bitcoin continues to march to institutional adoption, there is a popular assertion that sooner than later banks will have to offer crypto financial services to be considered a full-fledged bank. Renowned Fund Manager Bill Miller has recently aligned his thoughts in this light. 

According to legendary investor Bill Miller, major banks, high net worth companies, investment houses will be left with no option than to have major exposure to Bitcoin, and consequently embrace the digital asset. 

Miller’s assertions anchor on the growing numbers of corporate entities currently gaining widespread exposures to Bitcoin, and as such he is making predictions on when other corporate entities will follow suit. High profile firms that have embraced Bitcoin in 2020 include Microstrategy’s $425 million investment, Paypal launching a cryptocurrency service, and Square’s Bitcoin investment. 

Institutional exposure is crucial for Bitcoin to gain mainstream adoption, and according to Miller, the recent moves by firms that have already embraced Bitcoin could spur other giant companies into action. 

Commenting on the attractiveness of Bitcoin investment, Miller has reiterated the limited supply of Bitcoin as a major reason why demand will always remain on the high side. Bitcoin is a decentralized ledger protocol, with a limited supply and increasing demand. Bitcoin’s supply is steadily growing at around 2.5% a year and is capped at 21 Million total supply of Bitcoin by year 2140.

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