The cyber attackers may intercept ongoing HTLC contracts to steal satoshis. Vulnerability in the “transaction standardization” protocol also exposes the network.

Users of versions before 0.11.0 are at risk of potential theft of funds due to two critical vulnerabilities on the Bitcoin payment network, Lightning (LN). The Lightning Labs team has published the details of these errors that affect smart contracts and network security protocols.

The Lightning Network Daemon (LND) client nodes, which the security breach specifically affects reported that they need to update to the latest version of the software. The Eclair and c-lightning teams also know of the event as a preventive measure.

The developers state that it is possible to exploit these vulnerabilities to conduct a Denial-of-Services (DoS) attack, which might disrupt LN transactions and intercept HTLC contracts. They also note that Antoine Riard, a contributor to Bitcoin Core and Rust-Lightning, discovered the error last April.

Riard said that bugs are “serious vulnerabilities” since they could easily steal user funds. The expert explained that “the channel connections of the nodes were open,” so anyone who discovered these flaws could “put funds in a node and steal them.” Antoine Riard also stated that “(Lightning) nodes are hot wallets.” Therefore, if an attacker took advantage of the bug, it would surely be a loss of money.

According to the developers, the two flaws are already patched in the latest version of the LND client, 0.11.0. Although the nodes received a two-week extension to update their software, previous versions of LND still have the bug. Consequently, potential attackers may be looking for nodes not yet updated.

Problem in Nodes of Bitcoin Lightning Network

Riard found vulnerabilities that affect two different functions of the Lightning Network nodes, the first of which is a security measure known as “transaction standardization.” They are a set of anti-denial of service (DoS) rules implemented in the nodes, in addition to Bitcoin’s basic consensus rules.

This measure emerged to protect the network, but no one expected it to have a malleability error. An attacker may use the protocol to improperly “invalidate” a transaction, as though it had not occurred. Any accidental or malicious failure has a direct impact on the loss of funds while opening avenues for a DoS attack that it should count.

Hashed Timelock Contracts (HTLC) would also be at risk of malicious third-party attacks. This function allows two parties to agree to make a payment at a specified time. It blocks the money until there is a confirmation of the payment, and generates a pre-image of the canceled invoice when the operation finishes.

Concerning the error that Riard found, it would allow a user to interrupt a transaction and thus not pay the generated invoice. The attacker would receive the pre-image to claim the invoice as paid, but the money would not reach its destination. Malicious third parties could take advantage of HTLC contracts to rob unsuspecting users.

Now that the LN can create channels of up to 10 BTC, the network’s security has to be more robust, a need that still challenges Lightning developers.

By Alexander Salazar

A businessman had remained kidnapped since last October 13^th in Argentina. The kidnappers demanded Bitcoin as a ransom to release him.

A band that had kidnapped a businessman in the city of Buenos Aires, Argentina, on October 13^th, recently released him in the town of Quilmes. According to a statement in local media, they had previously demanded a ransom in Bitcoin.

They also reported that the authorities arrested a suspect related to the band of captors. They have already identified one of the kidnappers and have ordered his arrest.

The statement said that “a band kidnapped the victim, the owner of a supermarket located in Quilmes, last October 13^th. At the time, they intercepted him as he was leaving his home in the Autonomous City of Buenos Aires.”

“Shortly after the extortive kidnapping, the captors began to make calls to his relatives from telephone lines in Colombia and Venezuela to demand a ransom to release him. After keeping him captive for almost five days, the kidnappers released the businessman last October 18^th. They collected a certain amount of money in the digital currency Bitcoin.”

The police already have the kidnappers in Argentina who demanded Bitcoin as a ransom in custody. At the moment, they are investigating all the facts related to the event.

New Bullish Cycle for BTC

Bitcoin has recently climbed above USD 12,000. The leading cryptocurrency by market value is currently trading at around USD 11,977, with a 1.90% profit in just one day.

In recent days, the prices of Bitcoin broke a descending triangle pattern. This confirmed the resumption of the rally from the lows of last October 8^th near USD 10,500. Also it has opened the doors to USD 12,000.

Given that the US dollar currency index (DXY) dropped considerably, the weakness of the US dollar occurred along with this bullish movement. This correlation has already been in effect throughout 2020.

Cryptocurrencies Are as Popular as Gold among Russian Investors

One of the most popular investment tools in Russia is precisely investing in cryptocurrencies, according to a new report.

Last October 20^th, the World Gold Council published a report on the prospects for retail gold in Russia; this London-based non-regulatory, non-profit market development organization for the gold industry.

Cryptocurrencies are currently the fifth most popular investment tool in Russia, according to their report. Following them are savings accounts, foreign currencies, real estate, and life insurance policies.

According to the World Gold Council ranking of Russian investments made in the last year, gold follows cryptocurrencies, representing 16% and 17%, respectively.

A survey of 2,023 online interviews with investors from Russian cities served as the basis for the report. The respondents are “active investors”, that is, those who made at least one investment in the 12 months before the survey.

The report indicates that cryptocurrencies such as BTC are still popular in Russia and benefit from being an accessible investment tool. On the contrary, gold has not yet established itself as a conventional investment asset due to the lack of education and confidence.

By Willmen blanco

Russia is considering the development of a digital currency to evade sanctions from the United States. The digital ruble and Petro show similar graphic images.

Russia seems to be joining the trend of various governments around the world: launching its central bank digital currency (CBDC). While the focus is currently on the digital yuan, other countries such as Brazil, Japan, Canada, or Jamaica also plan to create their digital currencies. However, the Moscow government seems to have the Venezuelan Petro as a reference for developing its CBDC.

The Central Bank of that nation has already made it clear that it is exploring the possibilities of issuing the digital ruble. However, Russia has not made a final decision on the matter. The financial institution outlines some advantages that an additional form of money would offer the country, which would circulate alongside cash rubles.

It is striking that the digital ruble shows a logo similar to that of Venezuela’s Petro, as appears in the report of the Central Bank of Russia. Since its launch in February 2018, Venezuela’s cryptocurrency project has been a long way from what the government promised when announcing its creation.

The Digital Ruble and Petro Show the Same Logo

The logos of the Digital Ruble and the Petro would be similar, but Russia seems to have first selected the symbol. In 2013, the citizens of that country chose “the letter P of the” Cyrillic alphabet (equivalent to R in the Latin alphabet). This would be a graphic symbol to represent their national digital currency.

In addition to the similarity in their logos, both projects also have similar objectives. They emerge as formulas to reduce national dependence on the US dollar and, consequently, to reduce their exposure to sanctions from third countries.

The report of the Central Bank also highlights that digital ruble can serve to pay salaries, benefits, and other social payments. In early 2020, the Venezuelan government announced that it would use Petro to pay up to 9 state services. However, there is no real evidence to confirm that this is happening, 10 months after that announcement.

In any case, the introduction of the digital ruble will require the creation of a special payment infrastructure and new types of services. They would allow ensuring transfers without the need for an Internet connection, according to the Ministry of Economic Development and Trade of Russia.

In its report the Central Bank of Russia highlights some tasks that the digital ruble platform could perform for the benefit of the Russian economy. In this regard, it sates that it would offer transfers cheaper than current ones and cross-border payments more convenient for citizens.

Objective of Digital Currencies

The Venezuelan government initially focused on Petro as an alternative to reduce dependence on the US dollar. However, this has not been possible, two years after the project emerged. The country has dollarized its finances as a formula to fight the hyperinflation that is affecting everyone. Many citizens have expressed their opinion on Twitter, saying that the experiment has been a failure.

Regarding the Russian government, they have pursued a policy of reducing dependence on the US dollar for several years. In 2018, they started to devise a special plan to de-dollarize the Russian economy, but no one knows yet whether they have adopted it.

Over the years the Central Bank of Russian has maintained an attitude of opposition to cryptocurrencies. It recently issued a resolution limiting its citizens from investing in digital assets, such as Bitcoin, other cryptocurrencies, or their derivatives. The Ministry of Finance also proposed an amendment including fines; even imprisonment for those who do not declare the possession of Bitcoin, and cryptocurrencies in general.

By Willmen Blanco

According to the judge, Arbistar “could really be a pyramid scam.” The executive received charges with money laundering and belonging to a criminal group.

In recent days, the Spanish National Police arrested the CEO of Arbistar, Santiago Fuentes, after a procedure in one of his properties in the south of Tenerife. However, Arona’s Court of Instruction number 3 ruled his probation without bail, just 24 hours later.

According to local media, agents attached to the Provincial Brigade had conducted raids at the place and three other homes, where the executive spent the night randomly. At the hearing, the court formalized three charges against him: fraud, belonging to a criminal organization, and money laundering.

Arbistar rewarded its members only for the acquisition of additional funds from new customers, instead of making the committed investment in the “virtual markets”. For that reason, Judge Javier García Ramila considered that Arbistar “could really be a pyramid scam.”

There is no evidence that Arbistar invested the money of its users in the cryptocurrency markets, the court highlighted. Besides, they noted that the problems of those affected to withdraw funds have been occurring since August.

In case the court finds Fuentes guilty, he could face up to 16 years in prison. Concerning the application of more restrictive measures such as preventive detention, local media highlighted that the Public Prosecutor’s Office did not request their implementation. He was only required removing his passport and enforcing court appearance every 15 days.

Automated service for cryptocurrency arbitrage Arbistar closed the operations of the so-called community bot in mid-September, which affected 32,000 users. Since then, the operators have been demanding the return of their funds.

Reactions to the Arbistar Case

There is skepticism about the arrest of the executive among those affected. In messaging groups on social networks, they said that it will now be much more difficult to recover their blocked funds. Others stated that the court would release Fuentes in 72 hours.

The executive reportedly stayed with the company’s lawyers during the procedure. This type of arrest can occur when there is an accumulation of complaints about alleged financial fraud. In this specific case, there could be 21 complaints made in Tenerife, La Palma, Malaga, Huelva, Granada, Mallorca, and Lugo.

Other affected users noted that, after waiting weeks to receive the funds, they began to receive pending payments last October 22^nd. Curiously, those still waiting for the return of their bitcoins stressed that some people began to report payment notifications when the arrest took place.

Fuentes recently stated that they had not “committed any crime” and that he would stay in Spain. He also told those who point to Arbistar as a Ponzi scheme that “it would be absurd to start a Ponzi scheme in Spain.” He added that, if they were, they would not be registered in the ZEC zone (Canary Islands special zone).

The CEO of Arbistar has repeatedly said that the closure of the bot was due to a technical failure, not related to any other cause. According to Arbistar, the bot assigned operators higher profits than corresponding for one year. The situation caused a deficit in the funds of the company that, in theory, they have not yet settled.

By Alexander Salazar

The long-awaited EIP-1559 would have recorded nearly a million ETH burned in the last 365 days, but miners still reject the proposal.

The implement of the controversial Ethereum (EIP) 1559 upgrade proposal would have burned 970,000 Ether (ETH), worth a total of $ 360 million in the last year. EIP-1559 Is currently up to find ways to reduce transaction fees by introducing fixed fees along with a burn mechanism.

The findings based on data from Dune Analytics and published by DTC Capital director Spencer Noon, generated questions among some in the Ethereum community about why the proposal is still on hold. Twitter user ‘Laur Science’ suggested it should be rolled out at the next fork, adding:

“Hopefully we won’t keep discussing this for another two years while miners get too much $ ETH and undo it for $ USD, keeping the price of $ ETH in check.”

Despite the fact of ​​burning fees taken into consideration before, even before Ethereum’s genesis block in 2015, EIP-1559 was the first serious proposal that suggested integrating the concept into the Ethereum code.

The current proposal, first suggested in 2018 by Vitalik Buterin, would dramatically change the way transaction fees are calculated. EIP-1559 proposes that all transactions have a standard flat rate called a ‘base rate’. This fee is burned and the incentive for miners comes from users adding a ‘tip’ on top of the base fee.

The proposal allows the base rate to help keep the size of the block around 10m of gas. Ultimately, the proposal has four design goals: predictable fees, consistent block size, increased security, and prevention of economic abstraction (fees that are paid in other tokens).

Since EIP-1559 will have an unforgettable impact on how miners earn income, it influenced pushback from the mining community that, since not so long have been enjoying record income. A week ago, Messari stated that Ethereum fees exceeded Bitcoin fees by a record two months.

That same day, ConsenSys developer Tim Beiko published the results of a survey of 25 Ethereum-based computers on the proposal. Of those surveyed, 60% answered in favor; however, eight of the nine mining companies consulted stated that they would reject the proposal if it were implemented as a hard fork.

Earlier this year, Metamask lead developer Dan Finlay raised concerns about assigning the responsibility to miners for correcting the ‘base fee’ parameters. Ultimately, Finlay suggested that the net effect of the proposal would be to make “the tip a kind of single price auction within each block that reproduces all the problems of the current market but with the additional complexity of this”.

Ethereum Name Service developer Nick Johnson expressed apprehension over the proposal due to “the lack of a formal analysis showing that 1559 performs as expected.”

Within a month of the Buterin Tweet, total transaction fees for Ethereum surpassed those for Bitcoin (BTC) before taking a sharp rise to all-time highs.

This is not the first time that EIPs have divided the Ethereum community due to misaligned goals. Last month, EIP-2878, which would cut block rewards by 75%, was also heavily criticized by the mining community.

By: Jenson Nuñez.

The entry of firms such as Square, MicroStrategy, and Stone Ridge can open the floodgates of BTC and provide “confidence for other companies to follow in their footsteps.”

On October 8, mobile payments giant Square, the firm that boasts a market capitalization of $ 86.6 billion, announced that the inversion of $ 50 million in Bitcoin (BTC). Five days later, asset manager Stone Ridge Holdings, the firm that manages more than $ 10 billion in assets, revealed that it bought more than 10,000 BTC, valued at about $ 114 million, as part of its cash reserve strategy.

The two mentioned firms followed the footsteps of MicroStrategy, a Nasdaq-listed asset manager, which gained $ 425 million in Bitcoin the last month, making BTC the foremost holding company for its cash reserve strategy.

On the one hand, three public companies and three large BTC purchases sound like a mere coincidence. On the other hand, the Federal Reserve’s balance sheet soared by $ 3 trillion since the beginning of 2019, while the US dollar got depreciated 70% against BTC, as noted by Stone Ridge founder Ross Stevens in the company press release dated October 13.

The fight for alternative investments has just begun.

Edward Moya, a senior market analyst at Oanda – a currency trading company told that the COVID-19 pandemic has changed the macro backdrop for fiat currencies, adding: “The Federal Reserve, in particular, clearly shown that an ultra-modern monetary stance will hold for a few years, and that is causing many institutional investors to scramble for alternative investments. “.

Gold, the traditional haven in times of crisis, recently disappointed, and as a result of this decrease, “it will likely attract new institutional investors consistently,” Moya said. Ammous also added: “There is a short-term concern of the devaluation of the dollar in light of increased government spending and stimulus in response to the coronavirus panic crisis.”

The critical long-term problem many companies face with the diminishing returns they can get from their cash reserves.

The anguish caused by COVID-19 may soon retrocede. This action leads to “the critical long-term problem many companies face with the diminishing returns they can get from their cash reserves by holding them in banks or treasuries,” according to Ammous.

 In the past, companies were able to maintain their reserves in government bonds as well as being reasonably sure of exceeding the consumer price index (CPI), which is inflation. But today, “there seems to be a growing segment of companies that no longer reasonably expect that in the future,” Ammous said.

Indeed, hidden in the Stone Ridge announcement was a call for banks and philanthropists to also make Bitcoin the main component of their treasury reserve strategies. To do this, Stone Ridge started offering the services of its New York Digital Investment Group unit, which is licensed by the State of New York to turn dollars into cryptocurrencies and vice-versa, along with custody, financing, anti-money laundering, and well-planted customer policy.

By: Jenson Nuñez.