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Stanford Student Calls Out Crypto Professor for Inaccurate Bitcoin Lecture

In January of 2019, student Conner Brown attended a guest lecture by a Professor Susan Athey at the University of Stanford Graduate School. She gave a presentation to his “Evolution of Finance” class titled “Blockchain and the Future of Finance.” According to Brown, the presentation contained “multiple misstatements” about Bitcoin and its fundamentals.

After the presentation, Brown was dissatisfied with how Bitcoin was referenced by Athey during the lecture to a room comprised (mostly) of people who were unfamiliar with the fundamental concepts behind the technology. This prompted him to write an email to the Stanford Graduate School Board, expressing his concerns.

Brown says that the only response he has received from the university thus far is an email stating, “We will get back to you on this.” That’s when he posted his complaint on Twitter.

What She Got Wrong

Athey, who Brown told Bitcoin Magazine is also slated to teach an entire course at Stanford next semester called “Cryptocurrencies,” claimed that not only is Bitcoin "controlled by a small group of miners in China," but that it also “wastes electricity by stealing from rivers to solve useless math problems.” Athey also mentioned that bitcoin is "secured economically and not cryptographically."

In her presentation degrading the first digital, decentralized currency, Athey drew comparisons to what she considered a better solution in Ripple’s technology, using XRP. Specifically, she cited exchange rate volatility, trust issues with exchanges, and long transaction times as drawbacks to using Bitcoin (stating that, subsequently, exchanges needed to buy bitcoin). Athey then, according to her presentation, explained how Ripple’s XRP, xRapid API, and overall consensus mechanism provide an alternative that is faster, cheaper, more secure, and more energy friendly than Bitcoin.

In protest, Brown composed a letter addressed to the Graduate School of Business, expressing his thoughts that certain statements about Bitcoin should have been subject to “high caliber discussion and peer review.”

In addressing Athey’s claims against Bitcoin, Brown properly explained where Athey missed key concepts.

Addressing her claim on mining centralization by a small group in China, Brown explained that Athey was conflating mining nodes with full nodes and had used this misrepresentation to position Ripple as a better alternative to Bitcoin. He also countered by explaining that miners often compile their resources together in a mining pool, but there are many individual miners in these pools and not one entity can completely control Bitcoin.

To Athey’s claim that Bitcoin is secured economically and not cryptographically, Brown pointed out that she is once again conflating two different things: Stealing funds by cracking the encryption of the wallet and using mining power to 51% attack a network.

Conflict of Interest?

As the matter came to light on Twitter, it was pointed out that Athey was welcomed to the Ripple Labs Board of Directors back in April 2014, where she still maintains an active role. When Nic Carter asked on Twitter if Athey had made any disclosure before her presentation, she replied directly: “Five minute verbal introduction discussing my background in the space — no way to miss it!”

Whether or not Athey had any ill-intent in her presentation, Brown told Bitcoin Magazine that is not what mattered to him.

“It concerns me that my classmates’ first introduction to Bitcoin contained severe factual errors along with strong anti-Bitcoin rhetoric. The academy is not a place for marketing, but rigorously testing ideas. If a professor has a potential conflict of interest, they should be held to the highest standards of scrutiny and peer review.

“That being said, Bitcoin is a creature of the internet. Its properties are difficult for academics to appreciate due to its deeply interdisciplinary and evolutionary nature. This makes it difficult for developing a curriculum because of the siloed design of academic disciplines and the slow pace of the peer review process. The internet will always be the best place to pursue a Bitcoin education.”

This article originally appeared on Bitcoin Magazine.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://bitcoinmagazine.com/articles/stanford-student-calls-out-crypto-professor-inaccurate-bitcoin-lecture/

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<h1>Coinhive To Shut Down Mining Operations In March</h1>

It’s something unpredictable, but in the end it’s right, this malvertiser had the time of its life.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/coinhive-to-shut-down-mining-operations-in-march

[ellahmacdermott]

<h1>South Africa's Standard Bank To Use Blockchain Tech To Facilitate Overseas Trade</h1>

The bank also wants to use the platform to extend its business into China.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/south-africas-standard-bank-to-use-blockchain-tech-to-facilitate-overseas-trade

[ellahmacdermott]

<h1>Coinomi Responds To Wallet Vulnerability Claims</h1>

After patching a bug, the wallet provider claimed the security issue could not have resulted in funds being stolen.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/coinomi-responds-to-wallet-vulnerability-claims

[ellahmacdermott]

<h1>Moscow Introduces Bill To Use Blockchain For E-Voting</h1>

The new platform is intended to fight voter fraud and keep votes anonymous.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/moscow-introduces-bill-to-use-blockchain-for-e-voting

[ellahmacdermott]

<h1>Distributed Digest: Thursday, February 28, 2019</h1>

Golem ditches Medium in favor of Ghost, the 0x Extensions feature enables different exchange types, and Set Protocol introduces Strategy Enabled Tokens.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/distributed-digest-thursday-february-28-2019

[ellahmacdermott]

Blockchain Advocacy Coalition Sponsors Bill to Allow Crypto for Legal Cannabis Tax

Activist group Blockchain Advocacy Coalition (BAC) has sponsored a bill in California’s 19th State Assembly District, set to allow legal cannabis businesses in the district to pay their state taxes using cryptocurrency. The bill was proposed by Assemblymember Phil Ting on February 20, 2019.

If put into law, it would affect the district’s many cannabis businesses, particularly all of those in San Francisco.

Logistical Barriers: Delivering Bags of Cash

One of the most prominent driving factors behind this bill, and where the decentralized nature of financial blockchain technology really has a chance to shine, is the fact that banks lack cooperation with these businesses. Citing a conflict with federal law, many financial institutions refuse to let cannabis businesses open bank accounts, thereby cutting off this multibillion-dollar industry from using digital money transfers.

“The current recommendation from the state of California to cannabis businesses is that they use armored vehicles to pay their taxes,” said Alexandra Medina of the BAC. “That’s inefficient and risky. It’s closer to how one might pay taxes during the gold rush, with a stage coach and gunman, than how you would expect California to accept taxes in 2019.”

This current approach is a logistical “nightmare for cities, the state and businesses,” she claimed. It’s dangerous to money couriers, and it forces revenue agencies “to count tens of thousands of bills,” causing tax offices to “smell like weed and fabric softener.”

So far, there has been little progress made to alleviate the situation. “The previous state treasurer convened a working group to solve this issue, and a year later their report did not have a solution,” said Medina. The physical cash transport is “a problem the state has tried and failed to solve.”

Opportunities for Blockchain and Open Finance

Medina called the new bill “a great use case for blockchain and open finance.” To this end, the Blockchain Advocacy Coalition will help educate policymakers about the basics of digital currency and blockchain technology in the hopes of getting the bill passed.

The group has already hosted roundtables for the state’s new treasurer, Fiona Ma, and Governor Gavin Newsom. “They are both very tech savvy and innovative leaders for our state,” said Medina. “Now is a really good time to introduce something like this.”

In the grander scheme, Medina believes that “California has the opportunity to turn around a lack of regulatory clarity” and serve as an example for other states in the Union.

Getting the Bill Passed

At present, getting the bill passed is the group’s main concern. The bill recommends using a stablecoin for these tax payments, but in its current form it will not be prescribing a specific stablecoin. For now, according to Medina, the bill’s supporters will “work to create standards for what kind of coins and wallets the state uses to make sure we have the highest degree of stability and safety for both the state and businesses.”

Medina claimed that the group has already supported two bills that were signed into law in the last year. This new bill will start going through the assembly committee(s) in March and April and has until the end of May to pass the Assembly. Then it will repeat the process with the Senate; it has to get through committee and through the Senate floor by September 13, 2019. If all of these processes go smoothly, and the governor signs it into law by October 13, 2019, Medina expects the bill to be implemented by June 2020.

Medina said that in the BAC’s previous campaigns, over 50 businesses signed support letters for their initiatives, and the group “would like an even stronger showing this year.”

She added that the group has plans to organize “a blockchain education day, where industry advocates can meet with legislators 1:1 and answer questions about the technology and bill,” before the vote reaches the Senate.

This article originally appeared on Bitcoin Magazine.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://bitcoinmagazine.com/articles/blockchain-advocacy-coalition-sponsors-bill-allow-crypto-legal-cannabis-tax/

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Grim Stories of Ethical, Privacy Abuses Emerge About Coinbase’s New Partners

When Coinbase acquired Neutrino for an unspecified amount in February 2019, the news looked like business as usual: A cryptocurrency juggernaut had made another acquisition. But the company in question, specifically the ties it has to the unethical practices of one of its predecessors, suggests that the monolithic Coinbase may be joining the oligarchic ranks of its privacy-hostile, too-big-for-consumer-comfort counterparts in legacy tech.

The Ties That Damn

On its website, Italian blockchain analysis company Neutrino proudly advertises that its proprietary software offers all-in-one “solutions for law enforcement” and “financial services.” Its two flagships, XFlow nSpect and XFlow nSight, are billed as “comprehensive solution[s] for monitoring[,] analyzing and tracking cryptocurrency flows across multiple blockchains.” nSight was built to help exchanges and financial service companies like Coinbase to stay regulatorily compliant. nSpect, on the other hand, was built for “criminal investigations and intelligence gathering” and is specifically marketed toward law enforcement.

Continuing on with their work at Coinbase, the Neutrino team, a three-man show consisting of CEO Giancarlo Russo, CRO Marco Valleri and CTO Alberto Ornaghi, are no strangers to building complex computer monitoring software for law agencies.

In another life, they did it as Hacking Team, the notorious Italian software services firm whose dubious business practices made them an antagonist of the wider tech and privacy community. Hacking Team got their start when Valleri and Ornaghi (under the aliases NaGa and ALoR) sold man-in-the-middle attack software to the police force of Milan, Italy, in 2003. These two founders would later be joined by Russo, who acted as COO of the company.

Throughout its history, Hacking Team sold its services to oppressive regimes in Saudi Arabia, Morocco, Sudan, Kazakhstan, Bahrain and Turkey, among others. These services centered around Hacking Team’s proprietary Remote Control System (RCS) software, a Trojan horse malware that gives users the ability to remotely access files, record keystrokes, take photos and read emails from any infected device.

Email leaks reported by The Intercept trace the team’s cyber footprints to human rights abuses around the world. Hacking Team’s RCS technology was used by the Ethiopian government (which ranks as one of the most oppressive in Africa, with a penchant for silencing free speech) to surveil and interfere with the operations of Ethiopian Satellite Television and Radio, a news outlet run by Ethiopian expats. The technology helped the Turkish government to spy on an American, and it was also sold to the Sudanese National Intelligence and Security Service in 2012 for a whopping €960,000 (around $1,210,000 at the time), though the team shuttered Sudan’s access to their software in 2014 when the government’s clumsy implementation of the software showed that they weren’t “enough prepared for the product usage,” Hacking Team emails reveal. It also played its part in the murder of journalist Jamal Khashoggi in Saudi Arabia and the assault and arrest of UAE activist Ahmed Mansoor.

Reporters Without Borders labeled Hacking Team as one of five “Enemies of the Internet” in 2013 for its role in humanitarian abuses against journalists.

During the 2012 uprisings in Morocco that were inspired by the Arab Spring movement, RCS, under the control of the Moroccan government, singled out Mamfakinch.com, an outlet that published journalists who were vocal critics of the regime. The leaked emails prove that Hacking Team had been selling its software to Morocco since 2010. This would culminate in Mamfakinch’s hardware being infected by a Trojan horse virus, which originally masqueraded as a news tip.

“Mamfakinch.com came as the first citizen media portal to document protests, providing tools like mapping of protests and also articles. At the time it started, I was not a member. I was asked to join later by one of the co-founders,” Zineb, a pro-democracy activist who was involved with Mamfakinch, told Bitcoin Magazine.

The outlet employed the help of the Citizen Lab to dismantle the virus and trace it back to its Hacking Team source, though most of the damage had already been done by the time they consulted this help.

“Moroccan activists suffer tremendously from what government surveillance provides them with, and former ones like myself have seen what that can be like. From physical threats to family threats, and even worse threats to fellow activists who were part of the human rights and digital rights effort in Morocco,” she said.

Hacking Team repeatedly refused to disclose its clients, and the internal emails betray that, more often than not, when their ties to human rights abuses and oppressive regimes were unearthed by international media, they always tried to mitigate the scrutiny and severity of the ensuing bad press.

In June of 2014, a U.N. panel inquired into Hacking Team’s business with Sudan for violating sanctions regarding weapons exports to the country. The U.N. considered Hacking Team’s software a weapon of sorts, something that Russo refutes in internal emails while also emphasizing that the team wants to keep its name clear from any records regarding the investigation.

“It looks like their focus is to trace every single armament,” wrote Russo. “We absolutely need to avoid being mentioned in these documents.”

Why Coinbase (and We) Should Care

The U.N. investigative panel would mark the beginning of Hacking Team’s unraveling. By March 2016, the Italian government revoked Hacking Team’s export license after an Italian PhD student was murdered in Cairo, Egypt. Hacking Team’s software was allegedly involved in the crime. With the company’s revenue streams severely restricted, Hacking Team was on its last financial leg.

Conveniently, Neutrino was founded the same year that Italian officials revoked Hacking Team’s export license, “very obviously around the time that they would have been desperate for money and needing to start fresh somehow,” Janine, a member of crypto podcast Block Digest who initially raised the alarm about Hacking Team and Neutrino’s ties, told Bitcoin Magazine.

Bitcoin Magazine spoke to Janine to learn more about the possible ramifications of this acquisition. In addition to her work at Block Digest, Janine has been a consistent and reliable whistleblower for industry developments that could indicate privacy threats. In the past, she also helped dissect community concerns surrounding the privacy implications of Bitfury’s Peach Lightning suite.

As with the Bitfury situation, Janine has covered every angle of Neutrino and Hacking Team’s shared past on Twitter, and she helped Block Digest produce a two-hour segment on the subject, as well.

Hacking Team has been listed as an "Enemy of the Internet" by @RSF_inter because they "sell products that are used by authoritarian governments to commit violations of human rights and freedom of information." https://t.co/9xDnfJotYo

— Janine (@J9Roem) February 20, 2019

Since Neutrino was acquired by Coinbase, the team is more than financially secure. Furthermore, as part of the deal, it will continue to act autonomously out of Coinbase’s London office. The exchange framed the buyout as a means to outfit itself with the proper tools to remain KYC- and AML-compliant with regulators. Janine points out that the company will likely make use of XFlow nSight to this end, though she’s also worried that Neutrino’s technology will come with more serious privacy trade-offs than nSight’s base functionality.

“The chain analysis stuff is not really that interesting to me; it is how much access Coinbase will give to Neutrino,” she told Bitcoin Magazine.

More specifically, she expressed concern about Money Module, a Hacking Team software that allows the user to access devices and private keys. Janine is also suspicious of the backdoors that Hacking Team coded into their software: “They likely had access to whatever data these government clients were collecting from their targets.”

If Coinbase forks over too much data to Neutrino for transaction analysis, and if a backdoor to the software exists in tandem with Money Module, this could spell disaster for user privacy and private key security.

That this backdoor may exist alongside a vehicle for stealing user funds is disturbing — even more disturbing, Janine and other critics have suggested, is Coinbase’s ability to overlook the history of unethical business practices of Neutrino’s team.

When Bitcoin Magazine reached out to Coinbase to ask about the acquisition and how it plans to use Neutrino, the exchange sent back a general statement, indicating that they are aware of and don’t condone Hacking Team’s practices. But this past behavior is not enough for Coinbase to distance themselves from a team whose expertise is in line with its vision:

We are aware that Neutrino’s co-founders previously worked at Hacking Team, which we reviewed as part of our security, technical and hiring diligence. Coinbase does not condone nor will it defend the actions of Hacking Team. Increasingly, third-party blockchain analysis companies are requesting customer data from cryptocurrency companies that they serve. It was important for Coinbase to bring this function in-house to fully control and protect our customers’ data and Neutrino’s technology was the best we encountered in the space to achieve this goal.

Zineb, who is also a crypto enthusiast, told us that it’s disheartening to see the same privacy-compromising and autocratic software eke its way into the cryptocurrency space. You expect this from the legacy tech industry, she expressed, but you don’t expect it in an industry whose tenets rest on privacy, freedom and censorship resistance.

“To have Coinbase acquire anything run by anyone ever associated with Hacking Team is alarming,” she said. “Perhaps Coinbase is clueless as to WHY it’s important to protect [these virtues], but I’m not. When banks freeze or easily hand over private financial information of dissidents in autocratic countries, that’s when a system like [Bitcoin] is needed.

“They say this is to protect user data. But how can they possibly trust that those who engaged in such appalling actions would somehow have Coinbase user data privacy’s best interest at heart? I can’t say much for others but I can only speak for myself: I won’t be using any of their tools in the future, and shame on them for allowing the Hacking Team people to continue to thrive."

This article originally appeared on Bitcoin Magazine.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://bitcoinmagazine.com/articles/grim-stories-of-ethical-privacy-abuses-emerge-about-coinbases-new-partners/

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<h1>Cryptopia Finally Opens Up About Exchange's Status After January Hack</h1>

Cryptopia tweets about its possible total losses and its strategy to secure user wallets one at a time.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/cryptopia-finally-opens-up-about-exchanges-status-after-january-hack

[ellahmacdermott]

<h1>Japanese Companies To Store Academic Records On Blockchain</h1>

Japan’s visa processors need to know if prospective students and workers are proficient in Japanese. Blockchain is here to help.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/japanese-companies-to-store-academic-records-on-blockchain

[ellahmacdermott]

<h1>QuadrigaCX Wants More Time And A New Chief Restructuring Officer</h1>

Jennifer Robertson’s affidavit offers a glimpse at the Canadian exchange’s internal structure in the midst of its legal proceedings.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/quadrigacx-wants-more-time-and-a-new-chief-restructuring-officer

[ellahmacdermott]

<h1>Distributed Digest: Wednesday, February 27, 2019</h1>

ConsenSys announces a new partnership, PegaSys releases Pantheon 1.0, and MetaMask proposes an EIP related to app keys.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/distributed-digest-wednesday-february-27-2019

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Cryptopia Calculates That 9.4 Percent of Assets Stolen in January Hack

The New Zealand-based crypto asset exchange Cryptopia has made their assessment of a January hack, claiming that up to 9.4 percent of all their assets were stolen.

In January 2019, the exchange went offline after publicly reporting a “major security breach,” which likely resulted in a theft of at least $3 million USD. Promising to involve several of the nation’s law enforcement agencies, Cryptopia’s announcement also stated that all of the exchange’s functionality and trading services would be suspended until further notice.

The exchange, as well as Cryptopia’s website, are still down in late February. Users have been left largely in the dark as to any updates on the site’s functionality or Cryptopia’s plans to deal with the fallout of this hack.

On February 26, 2019, the exchange’s Twitter account began posting several updates to the situation. First, they claimed to have calculated a worst-case scenario for January’s hack: up to 9.4 percent of all holdings in the exchange. Later that same day, tweets on the account suggested that the exchange is making preparations to reopen trading by securing individual accounts, though a later tweet instructs users to not deposit any further funds into their old wallet addresses. Cryptopia’s Twitter account is promising future updates to come regarding the site’s reopening.

According to a Chainalysis report issued at the beginning of February 2019, it is likely that this hack and several others were perpetrated by two groups, dubbed “Alpha” and “Beta.” These hackers displayed a sophisticated method of funneling stolen crypto assets into a variety of wallets and exchanging said assets into fiat without leaving a trail that investigators could follow.

This article originally appeared on Bitcoin Magazine.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://bitcoinmagazine.com/articles/cryptopia-calculates-94-percent-assets-stolen-january-hack/

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<h1>DARMA Capital's New ETH Fund Uses Quant Analysis To Gauge Risk Conditions</h1>

“We know that with quantitative analysis, you’re focusing on the facts, not the emotions, says DARMA Capital CEO James Slazas. "So, we take the emotion out of the decision-making process ..."

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/darma-capitals-new-eth-fund-uses-quant-analysis-to-gauge-risk-conditions

[ellahmacdermott]

<h1>HTC, Electroneum, And Samsung Aren’t Phoning It In With Crypto-Friendly Smartphone Offers</h1>

Suddenly, the blockchain smartphone marketplace is a little crowded. Here's a quick review.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/htc-electroneum-and-samsung-arent-phoning-it-in-with-crypto-friendly-smartphone-offers

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<h1>Swiss Bank Julius Baer Partners With SEBA Crypto AG To Offer Digital Asset Services</h1>

The private bank reaches out to digital asset owners while SEBA Crypto AG continues to place its roots in Switzerland’s crypto banking sector.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://www.ethnews.com/swiss-bank-julius-baer-partners-with-seba-crypto-ag-to-offer-digital-asset-services

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Decentralized Payment Processor BTCPay Adds New Invoicing Options

Decentralized payment processing service BTCPay Server announced a new service available through their platform on February 22, 2019: a way to request payments by simply sharing a URL, thereby streamlining many of the model’s existing hangups.

BTCPay Server has been in the space since late 2017, serving as a decentralized payment processor that allows peer-to-peer transactions without any fees or third-party wallets. Using the updated functionality of Payment Requests, users will be able to generate URLs that allow people to request payments and produce documentation of the transactions, eliminating many of the inconveniences of most peer-to-peer bitcoin interactions.

Payment processors have become integral to the crypto sphere, with several different models available. Tippin.me, for instance, relies on the Lightning network to let users receive tips via a QR code, or even, still in development, over other apps. Bitwage also opened a marketplace this February, allowing freelancers to create bank accounts that will accept crypto assets as payment from a variety of sources. BitPay, another payment processor, has set record revenue numbers for the past two years, as well.

All of these processors, however, are centralized for convenience. BTCPay Server, a decentralized option which was forked from BitPay’s software, wants to make crypto payment processing decentralized, and its new service, the initiative claims, will make this even easier.

Payment Requests will allow users to directly request amounts of money from the wallets of other users, keeping with BTCPay’s existing standard of refusing to involve third-party custodians or additional fees. Usually, third parties are typically involved in these transactions because of a large variety of inconveniences associated with peer-to-peer transactions: e.g., having to update addresses for privacy reasons, staying on top of fluctuating exchange rates and the lack of any formal invoice used for record keeping.

Ideally, BTCPay’s new form of payment will make using a decentralized service as easy as following a URL created for each transaction, providing many of the features of a third-party payment processor but without either taking a cut or mandating that funds be stored in a wallet owned by the processor in question.

The news is the latest in a steady period of growth for the BTCPay. In December of 2018, the processor announced that it had integrated support for c-lightning, an implementation of the Lightning network.

This article originally appeared on Bitcoin Magazine.

from InvestmentOpportunityInCryptocurrencies via Ella Macdermott on Inoreader https://bitcoinmagazine.com/articles/decentralized-payment-processor-btcpay-adds-new-invoicing-options/