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Bitcoin price plummets while miner hash rate soars to all-time highs

The overall security of the Bitcoin protocol, or hash rate, hit a new high of 158 exahash per second despite the price being down over 50% year to date.

Bitcoin miners can’t stop, won’t stop. The Bitcoin (BTC) hash rate continues to surge to new all-time highs, despite a heavy price drawdown. 

The Bitcoin mining hash rate peaked at 258 exahashes per second (EH/s) on Oct. 4, according to Braiins Insights, a mining data tools and metrics company. Although the Bitcoin price is down 58% year-to-date against the United States dollar, the mining hash rate is up 43%.

The past 3 months Hashrate. Source: Braiins. 

Bitcoin Gandalf from the marketing team at Braiins told Cointelegraph that, “The hash rate hitting another all-time high shows that miners are bullish about the future prospects of Bitcoin.” Nonetheless, the current macroeconomic environment could pose an issue, as “the present isn’t so rosy for Bitcoin miners,” Gandalf said, adding:

“Bitcoin continues to trade in this tight band between $19,000–$20,000 and this recent increase in hash rate will result in a sharp upward adjustment in mining difficulty meaning that miner margins will be further squeezed.”

In a series of tweets, mining engineers and hobbyists shared their thoughts regarding the hash rate hitting all-time highs while the price remains low. Rob W of Bitcoin mining company Upstream Data summed up the sentiment: 

I’m really proud of all of my mining friends, things are going great. pic.twitter.com/dIzh2ITTfq

— Rob W. (@BikesandBitcoin) October 3, 2022

Market analyst Zack Voell explained that the surging hash rate could be as a result of “XPs coming online.” The S19 XP Antminer is the latest model from Bitmain, one of the world’s most popular Bitcoin mining hardware suppliers.

The number of hashes produced in a second is commonly referred to as the hash rate. In Bitcoin speak, hash rate is a critical security metric as well as one that many BTC miners keep their eyes on.

In simple terms, the more hashing — or computing power — that the network churns out, the greater the overall security of Bitcoin. As a result, Bitcoin is more resistant to attack, the most common of which is known as a 51% attack.

Currently, more and more miners are coming online to attempt to solve valid blocks to receive the Bitcoin block reward, which is currently 6.25 BTC, roughly $120,000. Blocks are solved and added to the Bitcoin blockchain on average every 10 minutes.

Related: Nuclear and gas fastest growing energy sources for Bitcoin mining: Data

The difficult adjustment determines the rate at which blocks are solved. It fluctuates roughly every two weeks and is expected to increase on Oct. 10 based on the surging hash rate. The difficulty adjustment has been on a steady march upward in 2022 — meaning blocks are, on average, getting harder to solve — after falling for the first time in March 2022.

In sum, despite the fact that the Bitcoin price continues to wallow under $20,000, more and more miners find value in supporting the network. James Check, an analyst at Glassnode, explained in a tweet, “With hash rate pushing to new all-time-highs once again, despite all the promises to the contrary, it appears that #Bitcoin is still not dead.”

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Mastercard launches new crypto fraud protection tool

Mastercard’s new product allows banks to find and prevent fraud on crypto merchant platforms within its network.

The financial service provider Mastercard launched a new crypto service related to risk management on Oct. 3. Mastercard’s new service, Crypto Secure, is aimed to help banks find and prevent fraud on crypto merchant platforms.

Crypto Secure combines the usage of artificial intelligence, blockchain data and public records of crypto transactions, along with other sources, to determine crime-related risks of crypto exchanges within the Mastercard network.

Mastercard already has a similar service with fiat currency transactions available to banks.

The president of cyber and intelligence business for Mastercard, Ajay Bhalla, said this development helps its partners stay compliant with local regulations when fighting fraud in the crypto space:

“The idea is that the kind of trust we provide for digital commerce transactions, we want to be able to provide the same kind of trust to digital asset transactions for consumers, banks and merchants.”

Banks and other Mastercard card issuers that use Crypto Secure will see color-coded risk ratings of crypto merchants, which represent the risk of suspicious or fraudulent activity connected to said merchant.

Crypto Secure is run by CipherTrace, a California-based startup for blockchain security that was acquired by Mastercard the previous year.

While the tool doesn’t make judgements for banks it provides another level of advisory on crypto transactions. Mastercard currently has around 2,400 crypto exchanges within its network.

Related: Mastercard to allow 2.9B cardholders to make direct NFT purchases

Crypto payments are becoming more mainstream thanks to centralized payment processors like Visa and Mastercard. Last year Visa reported over $1 billion in crypto spending, while Mastercard has recently created new crypto payment options in countries such as Argentina and Indonesia.

However, as crypto continues to enter the public eye so does any fraud and crime related to the industry. According to Chainalysis data, 2021 marked a new all-time high in crypto crime with fraudulent wallet addresses receiving $14 billion.

In Australia, in 2022, investors lost $242 million to investment and crypto-related scams. While some executives have recently related crypto to a Ponzi scheme, others are calling on social media giants to be aware of crypto scams linked to their platforms.

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Law Decoded, Sept. 26–Oct. 3: New episode of Do Kwon saga

Terra’s co-founder continues his adventures, writing code in his living room, posting on Twitter and hiding from Interpol all at once.

Terra co-founder Do Kwon, wanted by South Korean authorities, seems to live in a digital-era James Bond movie. The businessman, whose whereabouts are currently unknown, reacted via Twitter to Interpol issuing a Red Notice on him. Kwon told his followers that he calmly writes code in his living room, “making zero effort to hide.” Active on social media while facing potential arrest and prosecution in South Korea, Kwon showed his location as Singapore on his Twitter account at the time of publication.

Meanwhile, South Korean authorities have requested crypto exchange OKX and Kucoin to freeze 3,313 Bitcoin (BTC) reportedly tied to Do Kwon. Reportedly, he created a new wallet under the name of Luna Foundation Guard (LFG) on Sept. 15, just a day after a Korean court issued an arrest warrant against the fugitive crypto founder. The movement of BTC from the LFG wallet raised many eyebrows, as it contradicts Kwon‘s early claims of having used all the BTC in the LFG’s reserves to defend the peg of TerraUSD — since renamed TerraUSD Classic.

However, Terraform Labs claims that South Korea’s case against its co-founder has become political, alleging that prosecutors expanded the definition of a security in response to public pressure. “We believe, as do most in industry, that Luna Classic is not, and has never been, a security, despite any changes in interpretation that Korean financial officials may have recently adopted,” Terraform’s spokesperson said told the Wall Street Journal last week. The company also believes the case to be “a failure to uphold basic rights guaranteed under Korean law.”

Another blow for the SEC in the Ripple case

Ripple Labs scored another victory in its continuing legal battle with the United States Securities and Exchange Commission on Sept. 29, as United States District Court Judge Analisa Torres ruled to release the documents written by former SEC Corporation Finance Division Director William Hinman. The documents predominantly relate to a speech Hinman delivered at the Yahoo Finance All Markets Summit in June 2018 and could make evidence of Hinman stating that Ether (ETH) was not a security. Judge Torres’ decision overruled SEC objections to releasing the documents following District Court Judge Sarah Netburn’s order declaring that the emails and drafts of the speech were not protected by deliberative process privilege, as the SEC has claimed.

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Russia aims to use CBDC for international settlements with China

Russia is reportedly planning to use the digital rouble for mutual settlements with China by next year. The digital rouble is currently being tested for bank settlements and is expected to be completed by early next year. Anatoly Aksakov, head of the finance committee in Russia’s lower house of parliament, admitted that the geo-political crisis has limited Russia’s accessibility to the international trade market. This is why they have been actively working for alternate modes of payment and trade settlements, and national digital currency seems to be the primary choice at the moment.

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UAE Ministry of Economy opens up its headquarters in the Metaverse

The United Arab Emirates Ministry of Economy has announced a new headquarters located where anyone in the world can visit — the Metaverse. The headquarters will feature a multiple-story building, each serving a different purpose. Visitors will be able to take a ticket, which will prompt a “customer happiness center employee” to join the Metaverse and interact with the visitor. Visitors to the virtual headquarters will be able to sign legally binding documents, which eliminates the need for signatories to visit one of their physical locations in order to provide their signatures.

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When Imagination Comes to Life: More on the Slenderman and the Black Eyed Children

Just a couple of weeks ago I wrote an article here at Mysterious Universe on how the Slenderman was brought to life by the massive numbers of people who willed him into life. Not a good thing to do. But, certainly, a lot of people have done exactly that. For example, In 2015, publicity was given to a story coming out of the U.K. of sightings in and around Britain’s Cannock Chase woods, of something described as looking like the legendary “Slenderman.” If you don’t know, it’s a fictional character created in June 2009 by Eric Knudsen (using the alias of “Victor Surge,” at the forum section of the Something Awful website), who took his inspiration from the world of horror-fiction. The Slenderman (also spelled as Slender Man) is a creepy creature indeed: tall, thin, with long arms, a blank (faceless, even) expression, and wearing a dark suit, it sounds almost like a nightmarish version of the Men in Black. While there is no doubt that Knudsen was the creator of what quickly became a definitive, viral, meme, people have since claimed to have seen the Slenderman in the real world.

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Pink Sarcophagus of the Money Man for the Greatest Pharaoh is Found in Near Perfect Condition

In ancient Egypt, the pharaoh may have had the title, but he or she was still powerless without money … which made the head of the pharaoh’s treasury the real controller of the power of the pharaoh’s kingdom. Since many Egyptologists consider Ramesses II (also spelled Ramses II) to have been the greatest and most powerful pharaoh of the New Kingdom, the most powerful period of Ancient Egypt, that would have made his head of treasury the most powerful money man in ancient Egypt. We now know just how powerful Ptahemwia, Ramesses II’s treasurer, was — the Supreme Council of Antiquities announced the discovery of his pink granite sarcophagus – and archaeologists are calling it a “dream discovery.” What makes it so dreamy?

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And You Thought Your Neighbors Were Weird

We all have to sometimes deal with bad neighbors. Whether they are rude, inconsiderate, or just plain annoying, it seems pretty much everyone has their horror stories of less than satisfactory neighbors. While many of us might have had such experiences, at least we could probably say that they were at least human. The same cannot be said about one very strange case of a man who had some very bizarre new people move in next door. 

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Binance opens two new offices in Brazil as team doubles since March

Binance revealed it has more than 150 employees to cover its operations in Brazil and appears to be in good standing with the local government and regulatory agencies.

Changpeng “CZ” Zhao-led crypto exchange Binance has opened up two offices in Brazil as the firm looks to tap the country’s emerging crypto market, with reportedly more than 34.5 million crypto users there.

According to an Oct. 3 announcement, Binance has now opened offices in São Paulo and Rio de Janeiro, with more than 150 employees to be spread across the firm’s operations in Brazil.

“The exchange operates in full compliance with the Brazilian regulatory landscape and believes that regulation is the only way for the digital asset industry to grow and reach the general public, allowing more people to enjoy the benefits that cryptocurrencies and blockchain offer,” the announcement reads.

#Binance opens two offices in Brazil in a move to expand in the country and to grow crypto adoption in Latin America.

The offices were announced by @cz_binance, who visited the country in March this year. Since then, we have more than doubled the team dedicated to Brazil.

— Binance (@binance) October 3, 2022

Binance stated that it has been working on a Brazilian expansion since CZ initially visited in March, with the firm doubling the size of its team focused on the country since then.

In September, Binance also hosted a series of crypto and blockchain workshops for law enforcement agencies in Brazil and Argentina to help them identify and fight crypto crime, suggesting it may hold a decent relationship with Latin American regulators.

The company has notably upped its focus on working with regulators after a spate of regulatory reviews and investigations from several government agencies in 2021.

Brazil looks to be a market prime for further growth, with blockchain research firm Chainalysis recently ranking the country seventh on the 2022 Global Crypto Adoption Index report.

The firm ranked Brazil just two places behind the United States and five places ahead of its Latin-American counterpart Argentina.

Binance expansion

In what has been a productive week for the company, Binance also announced on Monday that it had signed a memorandum of understanding (MoU) with the Financial Monitoring Agency of Kazakhstan as a part of its global law enforcement training program.

Under the MoU, Binance will work with the local government to help identify and block digital assets obtained illegally and used to launder criminal proceeds and finance terrorism.

Related: Binance Global Law Enforcement Training Program is official after year of activities

On Sept. 29, Binance also announced that it had registered with New Zealand’s Ministry of Business, Innovation and Employment and opened local offices in the country.

“New Zealand is an exciting market with a strong history of fintech innovation,” CZ said.

Last 48 hrs or so:

CZ (me) in some mountain in Africa, preaching crypto#Binance opens 2 offices in Brazil #Binance signs MOU with Kazakhstan #Binance burns $1.8m worth of LUNC from Binance’s income.

— CZ Binance (@cz_binance) October 3, 2022

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CoinShares’ Butterfill suggests ‘continued hesitancy’ among investors

Matrixport’s head of strategy said he believes the market is currently in a “wait-and-see environment” but could shift after the U.S. mid-term elections in November.

Minor inflows for digital asset investment products over the last few weeks suggest a “continued hesitancy” towards crypto amongst institutional investors amid a slowdown of the U.S. economy. 

In the latest edition of CoinShares’ weekly “Digital Asset Fund Flows” report, Coinshares head of research James Butterfill highlighted stand-offish institutional sentiment towards crypto investment products, which saw “minor inflows” for the third week in a row.

“The flows remain low implying continued hesitancy amongst investors, this is highlighted in investment product trading volumes which were US$886m for the week, the lowest since October 2020.”

Between Sept. 26 and Sept. 30, investment products offering exposure to Bitcoin (BTC) saw the most inflows at just $7.7 million, with Ether (ETH) investment products close behind with $5.6 million worth of inflows. Short BTC products represented the only other notable inflows of $2.1 million.

These inflows were offset by more than $3.5 million worth of outflows for investment products offering exposure to altcoins such as Polygon (MATIC), Avalanche and Cardano (ADA), while multi-asset and Solana funds also shed $700,000 and $400,000 during that week.

Commenting on the current state of the crypto market, and the institutional outlook of late, Markus Thielen, head of research and strategy at Singapore-based crypto financial services platform Matrixport noted that:

“The market is currently in a wait-and-see environment whereas a potential positive shift after the US Mid-Term elections could have significant regulatory changes.”

“Last night’s US economic data, notably the ISM index, showed that growth has materially slowed down in the US economy and there is now the possibility that the Fed will become less hawkish. The USD rally appears to have lost one of its key drivers and this could signal a pause in rate hikes. This could be very bullish for digital assets into year-end,” he added.

Looking at the month-to-date (MTD) flows as of Sept. 30, ETH products have been the most offloaded by institutional investors despite the Merge going through on Sept. 15, with $65.1 million worth of outflows.

“Looking back, the Merge was not good for sentiment with outflows totaling US$65m in September. Increased regulatory scrutiny and a strong US Dollar being the likely culprits as the shift to Proof of Stake was executed successfully,” said Butterfill. 

In contrast, Short BTC funds and BTC investment products saw minor inflows of $15.2 million and $3.2 million MTD.

Crypto ETF outflows slowing

While there has been limited action of late for crypto investment products tracked by CoinShares, Bloomberg Intelligence has observed a notable trend in crypto exchange-traded funds (ETFs).

Related: A crumbling stock market could create profitable opportunities for Bitcoin traders

According to Bloomberg Intelligence data, institutional investors offloaded $17.6 million from crypto ETFs during Q3 2022, providing a stark contrast to the “record $683.4 million withdrawn from such funds” in Q2 2022.

“The outflows mainly took place in the past two months. In July, investors poured upwards of $200 million into crypto ETFs,” Bloomberg noted in a Sept. 30 article, adding that the decreased outflows was likely due to “narrow fluctuations” in crypto prices during Q3.

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Beeple’s Discord URL ‘hijacked,’ directing users to wallet drainer

Other users in the crypto Twitter Community believe lax security management is to blame for the latest phishing scam aimed at Beeple’s fans and followers.

Non fungible token (NFT) artist Mike “Beeple” Winkelmann has found himself the target of phishing scammers yet again, warning users that the URL link to his official Discord server was “hacked” — sending unaware new members to a wallet draining Discord channel if they follow the link. 

In an Oct. 3 post, the NFT artist warned users not to go into the “fraudulent” Discord channel and verify as it will “drain your wallet.”

it appears our discord URLs were hacked to point to a fraudulent discord. DO NOT go into that discord and do not verify, it will drain your wallet!!

once again massive thanks again to discord for being garbage.

— beeple (@beeple) October 3, 2022

However, Beeple wasn’t the first to notice the URL slight-of-hand, with Twitter user maxnaut.eth noting in a post hours earlier that the Discord link connected to the Beeple: Everydays – 2020 Collection on NFT marketplace OpenSea marketplace may have been “hijacked.”

The screenshot shared by maxnaut.eth suggests that the URL points to a “CollabLand wallet drainer,” showing a Collab.Land Bot on Discord which directs members to verify account ownership — instead it works to drain their wallets, noting:

“Your Discord URL probably got hijacked and your team didn’t update it on OS. You need to change that ASAP or people going to get rekd.”

While Beeple claims the URLs were hacked and that Discord is to blame, other crypto Twitter community members are arguing that lax security measures are truly to blame.

NFT analyst and blockchain detective “OKHotshot” replied to the artist’s announcement, stating the URLs were not hacked but instead alleging: “Mismanagement of discord URLs allows this happen, probably just like it happened to CryptoBatz.”

While cybersecurity firm Black Alchemy Solutions Group commented their belief that it was not “a Discord problem.”

“This is a problem with a mismanagement of the Beeple Information Security apparatus. If you haven’t already, hire a vCISO (Security Officer), web3 doesn’t = Natively Secure.”

It appears that the misdirecting Discord URLs have been fixed by the artist, according to maxnaut.eth, noting that it “Seems Beep Man picked it up and has fixed it now.”

At the time of writing, the Discord link in the affected Opensea listing also appears to be gone.

Related: 8 sneaky crypto scams on Twitter right now

Beeple’s social media and messaging platforms appear to be a popular target for scammers and hackers, having sold some of the most expensive NFTs on record, including the First 5,000 Days, a compilation of 5000 pieces of artwork that sold for $69.3 million.

Elon Musk’s spacecraft manufacturer Space X, tech giant Apple, luxury brand Louis Vuitton and other high-profile companies and individuals are all listed as clients on Beeple’s website.

In May, a phishing scam netted $438,000 in crypto and NFTs through a hijacking of his Twitter account, linking to a raffle purporting to be related to a Louis Vuitton NFT collaboration. 

In Nov. 2021, his Discord was part of another scam, where an admin account was compromised and a fake NFT drop was advertised, netting the scammers an estimated 38 Ether (ETH) worth roughly $176,378.14 at the time.

Beeple did not disclose how many users may have been impacted by the current malicious Discord links.

Cointelegraph has reached out to Beeple but has not received an immediate response at the time of publication.

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Tether commercial paper exposure now under $50M, says CTO

Tether is also looking to become more transparent, having hired a new accounting firm to conduct regular audit and attestation reports to ensure its stablecoin is properly backed by the USD.

Stablecoin issuer Tether (USDT) has nearly completely slashed its commercial paper holdings, with less than $50 million worth of commercial paper units as of Sept. 30, 2022.

Tether CTO Paolo Ardoino made the announcement in an Oct. 3 tweet, adding also that Tether’s United States Treasury bills increased to 58.1% of its total portfolio, up 25.1% from its Jun. 30 figure of 43.5%.

#tether portfolio update. Tether as of 30 September 2022 holds ~58.1% of its assets in US t-bills. Up from 43.5% on June 30 2022.
CP exposure is < 50M now.@Tether_to

— Paolo Ardoino (@paoloardoino) October 3, 2022

Commercial papers are short-term debt instruments issued by companies, which are often used to finance various business operations, while treasury bills are claimed to be more stable than commercial papers as they offer “zero default risk” since investors are guaranteed to at least recoup the purchase price.

In June, Tether said it was aiming to decrease commercial paper backing of USDT to “zero,” and rolled into short-maturity U.S. Treasury bills — aimed at increasing the stability of its ecosystem and USDT stablecoin.

The stablecoin issuer has also been seeking to increase transparency into its dollar reserves and backing. 

In July, it appointed European accounting firm BDO Italia as a new auditor to independently review its stablecoin reserves in a bid to improve transparency and more regularly disclose audit and attestation reports.

Last month, Tether was ordered by a United States District Court in New York to provide documents that prove the U.S. dollar 1-to-1 backing of the USDT stablecoin on Sept. 19.

As for when Tether’s transparency report will be updated, Ardoino said the deadline usually takes 45 days, but now expects its new auditor to improve this process and reduce that timeline.

Related: Tether aims to decrease commercial paper backing of USDT to zero

Tether’s plan to slash its entire commercial paper holdings by the end of 2022 is well underway, with the firm cutting down its reserves from 20 billion units as of Q1 2022 to 8.4 billion units as of Q2 2022. 

USDT is currently the largest stablecoin, with a market capitalization of $67.95 billion, the third highest of all digital assets according to CoinGecko data.

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