The recent Twitter hack has led to the questioning of Bitcoin’s potential. However, this has not affected the cryptocurrency.

The biggest hack in Twitter’s history occurred in recent days. To be more exact, the attackers put the Twitter accounts of some celebrities at risk, as part of an apparent Bitcoin scam.

The news caused a stir on social networks since it involved accounts of celebrities such as Barack Obama and Elon Musk, among others.

In this sense, many comments and discussions arose on social networks. Overall, many people assumed that the hack was somehow the fault of Bitcoin or the cryptocurrency community.

The hackers posted in the victims’ Twitter accounts messages requesting the latter’s followers to send Bitcoin to a specific anonymous address. In other words, the scammers used Bitcoin for their plans, which damaged the image of the cryptocurrency.

Was the Interest in BTC Affected?

Although Bitcoin is not responsible for the hackers using it as part of their strategy, that affects it.

The attack strengthened the anti-Bitcoin belief that many people still have, as though the hack had changed the potential behind the cryptocurrency.

After people learned about the event on Twitter, the price of Bitcoin dropped. No one can say that this was the cause, but it was undoubtedly an important factor.

However, regarding the interest behind Bitcoin, the cryptocurrency has managed to recover and increase in recent days.

This reaffirms the fact that Bitcoin has nothing to do with what happened, but that it was the scammers who used it as a mechanism to execute their plans.

Saying that Bitcoin is responsible for what happened is like saying that the US dollar is to blame for such terrible actions as drug trafficking and human trafficking, among others.

What Did the Attackers Get from the Hack?

The mass Twitter hack has been one of the worst cybersecurity breaches to date. This crime led to the breach of the accounts of great business and political personalities.

The massiveness of this attack may have led to its ineffectiveness. Using the accounts of people like presidential candidate Joe Biden and Amazon CEO Jeff Bezos, the hackers immediately activated the alarms of the cryptocurrency community.

They turned a deaf ear to the hackers’ promise to double the amount of Bitcoin that they sent to a specific address. This helped the result of the attack to be quite disappointing in monetary terms for the attackers.

When reviewing the operations conducted in the Bitcoin address that they used for scamming users of the cryptocurrency world, it is possible to observe that it only received 12.86 Bitcoin (equivalent to about USD 117,000).

Although the damage done to Twitter will likely cost the company several million USD dollars, the scammers’ gains have been minimal. Furthermore, the attention that they have drawn to themselves will surely lead the American police forces to pursue them.

To conclude, Twitter users must always be alert to any kind of misleading messages that could make them lose their cryptocurrencies. Furthermore, they should remember that Bitcoin is not responsible for the crimes that hackers commit.

By Alexander Salazar

The person involved requested the money to allegedly pay the payroll of two companies. Now he is accused of wire fraud, bank fraud, and illegal transactions.

A man, identified as Joshua Thomas Argires, went to prison in the USA after using nearly USD 1 million worth of government loans to buy Bitcoin and other cryptocurrencies. The involved Mr. Argires applied for financing twice through the Paycheck Protection Program (PPP) to allegedly meet the payroll of two companies in the USA after the stoppage due to the COVID-19 pandemic.

The Justice Department reported that Argires, who is 29 years old, received charges for false statements, wire fraud, bank fraud, and illegal monetary transactions.

The investigators stated that the suspect “executed a plan” to submit two applications for loans for USD 1.1 million at the agency for the Small Business Administration in Houston. The requirements were for the companies Texas Barbecue and Houston Landscaping.

The investigation began on suspicion about Argires’ application for Texas Barbecue. This included the payment, on average, of about USD 90 thousand for the 51 employees of the company. The indictment noted that such a high average salary for the operations of a barbecue business raises more suspicion.

According to the justice agency, Argires claimed that the companies had numerous employees and hundreds of thousands of US dollars in payroll expenses. However, the two entities either do not have employees or do not pay the payroll for the stipulated amount.

Regarding the destination of the money, the department highlighted that this man invested the funds that he received on behalf of Texas Barbecue in a cryptocurrency account. Besides, he kept the funds that he obtained for Houston Landscaping in a bank account, which he slowly depleted through ATM withdrawals.

The defendant could have sent USD 956,250 to an account on the exchange Coinbase through five bank transfers. He requested another USD 160,657 for Houston Landscaping, but Argires withdrew this amount via ATM.

According to the Justice Department, the money for Texas Barbecue remained in Coinbase’s account. The defendant made several purchases that generated profits, as this entity reported on July 16^th.

The man was released from prison on bail after paying USD 25,000, while the investigations continue. It was not clear when the next hearings will be and the type of sentence that the defendant could pay.

The US government executes the Paycheck Protection Program through the Coronavirus  Aid, Relief, and Economic Security (Cares) Act. The legislation allows small businesses to receive loans with a maturity of two years and an interest of 1%.

Contributions have also reached companies related to blockchain technology and cryptocurrencies. In recent days, the USA granted more than USD 18 million as a stimulus to around 40 companies in the ecosystem. Among them are CosenSys, Electric Coin Company (Zcash), Bittrex, Messari, and ShapeShift.

The United States is the country with the most COVID-19 cases reported and the one with the most deaths. In the North American country, there are more than 3.5 million people infected, while the number of deaths from the disease already exceeds 138,000.

By Alexander Salazar

With this attack, it is possible to identify the sender and receiver of the payment, as well as the amount sent. There is a proposal to solve this, but it would reduce the speed of payments.

A security vulnerability on the Lightning Network could compromise the privacy of users if they are exposed to a timing attack. Elias Rohrer and Florian Tschorsch, from the Technical University of Berlin, published a paper that shows it.

Initially, the Lightning Network was a proposed tool for immediate transactions. However, it also has the collateral effect of increasing the privacy of transactions. All in all, this attack could compromise that functionality.

The vector in this timing attack is in the channel routing. The more channels go through the attacker’s node, the more likely it is to compromise anonymity. The attacker looks for coincidences between amounts and times to identify the sender and the final receiver of a transaction.

The potential attack occurs on negotiation messages in hashed time-locked contracts (HTLC). In the search for common features, the attacker excludes those nodes that do not coincide in terms of the amount or value of time locked in these contracts. In this way, he or she can very precisely identify the payment endpoints.

The paper shows that knowing the amount of the payment and the value of the HTLC allows achieving this. Following this initial reduction in privacy, the attacker can run time-based estimators to infer the most likely endpoints of the payment route. If the attack is successful, he or she can identify both the sender and the receiver of a payment.

After numerous simulations, Rohrer and Tschorsch concluded that the results confirm the feasibility and success of this type of privacy attack on the Lightning Network’s payment channel.

As a measure to mitigate this risk, they propose that the Lightning Network nodes delay responses to messages for a random time, as part of the protocol. However, they consider that this would be detrimental to speed, which is precisely one of the objectives of the Lightning Network. They explain that changing the latency a few milliseconds would be enough to make the information misleading to the attacker’s eyes.

Near the end of the report, they note that they conducted the research exclusively on Lightning’s public node model, but that the protocol also allows establishing hidden payment channels, which the public network does not broadcast. They mention that it would be interesting to do future research on this type of attack on private payment channels.

Other Vulnerabilities on Lightning Network

This research demonstrated a new vulnerability on the Lightning Network that adds to others already known. Those other vulnerabilities include congestion, channel exhaustion, and node isolation attacks, among others, as well as the possible manipulation of routing algorithms to include a malicious node.

The pace at which the Lightning Network’s development advances suggests the possibility of overcoming vulnerabilities. Regarding Lightning, bitcoiner Giacomo Zucco describes the situation as a very vibrant moment, at which there are dramatic changes in innovation and implementation practically overnight.

By Willmen Blanco

The boost to yield farming due to the launch of COMP makes DeFi more attractive. Amid the huge boom in DeFi, major security challenges arose.

Joseph Lubin, Ethereum Co-Founder, and Consensys Founder, recently announced the release of the report on DeFi growth on Ethereum in the second quarter of 2020. Consensys’ Codefi unit, dedicated to systems for decentralized finance, released the report.

Highlights of the report include the fact that the presence of Bitcoin-pegged tokens on Ethereum outpaces BTC on the Lightning Network. Besides, the last quarter recorded three security incidents that led to the theft of USD 26 million. The study also highlighted the mid-June launch of Compound’s governance token, COMP, responsible for the recent yield farming fever on Ethereum.

According to the report, one of the main indicators of the boom in DeFi’s Ethereum operations is the total locked volume of ETH (including ETH-pegged tokens, WETH). Said volume had reached a record high in the first quarter but the market crash on March 12^th caused that volume to drop to stagnate between 2.5 and 3 million ETH.

However, locked ETH recorded an increase of 500,000 in mid-June, after the launch of the COMP token of the lending platform Compound. The quarter ended with a new all-time high of 3.3 million ETH locked.

USD Total Locked Value Grows

When Ethereum reached USD 6 billion locked in DeFi on February 6^th, the total USD value of locked ETH corresponded to 64% of the total, that is, USD 640,000. The remaining 36% of the value in US dollars was for the ERC-20 tokens.

Codefi notes in its report that, for the second quarter, the USD value of locked ETH doubled from less than USD 400 million in early April to USD 750 million at the end of the quarter. From that increase, the report indicates that around USD 200 million emerged in the last two weeks of the quarter, which it attributes to Compound.

The daily number of DeFi platform daily users interacting with the various decentralized protocols remained between 3,000 and 5,000 most of the quarter.

However, it is possible to observe an increase to 6,333 daily users since mid-June, a figure that the platforms reached on June 21^st. According to the report, a total of 79,648 unique addresses interacted with a DeFi protocol on Ethereum during the quarter.

The amount of locked ETH grew significantly since mid-June, according to the study. However, the impact of the launch of COMP on the total users of the DeFi ecosystem was not as significant as the growth of users of the platform Compound.

Compound users went from 30,000 to 40,000 at the end of June, but that increase only represented about 3.42% of total users. This suggests that most new users of Compound turned to this protocol in the last two weeks of June, motivated by the benefits of yield farming.

Furthermore, the study addresses automated market makers (AMMs), which are liquidity pools of two or more assets. These AMMs adhere to a smart contract that determines the price of each asset against another asset in the pool, basing on the volumes of each asset.

The report says that Uniswap is one of the most successful AMMs on Ethereum, while others like Balancer and Curve have emerged in 2020. As for the number of users, Balancer grew from zero to 4,000 in the quarter, while the number of daily users rose to 1,678. From 260 ETH locked in early April, at the end of the quarter there are more than 45,000 ETH locked.

By Alexander Salazar

Some of the hacked accounts had a two-factor authentication system. Most of the affected companies are currently under investigation.

Last July 15^th, there was a mass hack into multiple Twitter accounts, whereby criminals committed a theft equivalent to USD 123,000 worth of Bitcoin. Several of the affected people (or close people) have expressed their reactions to the social network.

The affected accounts, linked to the cryptocurrency sector, include that of the exchange Gemini. Cameron Winklevoss, Co-founder of the platform, states on his Twitter account that Gemini had both a strong password and an activated two-factor authentication system.

It is not clear to Winklevoss how the hackers compromised these accounts and were able to bypass 2F authentication. Before that event, his brother Tyler Winklevoss had already posted a warning tweet. There, he said that the Binance and Coinbase accounts had also suffered attacks from hackers, so he recommended not clicking on the links.

In parallel, the Binance en español support team reacted, offering recommendations to users concerning the security of their cryptocurrencies. It is important to remember that there have been complaints about this type of situation in the past.

Hours before, an unidentified spokesman for the exchange said that the security team was actively investigating the situation of this coordinated attack on the cryptocurrency industry.

For his part, Bill Gates spokesman Teddy Schleifer confirmed that the Microsoft co-founder did not send that message on his initiative. Schleifer stated via Twitter that they can confirm that Bill Gates did not send that tweet. He added that the situation seems to be part of a bigger problem. Likewise, he said that Twitter is aware and working to recover the account.

Uber, the company that provides international transportation services through a mobile application, also mentioned the hack. The company’s communications team said that a scammer hit their @Uber account on July 15^th. They removed the tweet and are working directly with @Twitter to discover what happened exactly.

According to information published in various media, many of those affected have no commented on the matter so far. This could be because the mass hack is recent and possibly all of them are in an early stage of investigation.

The Twitter profiles hacked on July 15^th showed a pinned message that linked to a website of a well-known scam. This message encouraged users to send bitcoins to a wallet with the promise that they would receive them back multiplied.

The list of the attacked profiles includes well-known people and institutions, such as Barack Obama, Warren Buffet, Jeff Bezos, Elon Musk, Joe Biden, Bill Gates, Mike Bloomberg, Wiz Khalifa, Uber, Apple, Ripple, and Bitcoin, among others.

So far, most of the affected users have removed those messages. At the same time, a Twitter spokesperson said that the company is investigating the problem.

Cryptocurrency users have to be alert to the risks of clicking on links attached to messages that they receive. Hackers take advantage of famous people and reputed institutions to attract their victims.

By Alexander Salazar

The difficulty in mining blocks on the Bitcoin network rose by about 10%. The processing power of miners exceeded 125 TH/s.

Bitcoin’s mining difficulty reached its all-time high with the new adjustment last July 13^th. This occurred shortly after the hash rate also reached a new high. Currently, the difficulty in processing on the network is 17.35T, with an increase of nearly 10% compared to the last period, which was 15.78T.

The total of 17.35T represents the all-time high, exceeding the 16.55T that Bitcoin recorded between March 9^th and 25^th of this year, according to data from statoshi.info. The same source records that between the end of April and mid-May (the last two periods that started before the halving); there were also levels of difficulty above 16T.

The difficulty in mining Bitcoin is the value that determines the complexity of the mathematical puzzle that it is necessary to solve to mine a block on the chain. This value varies according to the processing power that miners have accumulated; it adjusts automatically every 2,016 blocks.

A rebound in Bitcoin’s hash rate preceded this adjustment in difficulty. The 7-day average of the network’s cumulative processing power peaked above 125 EH/s last July 7^th. That figure also represents an all-time high for the network, according to data from blockchain.com.

After the third Bitcoin halving, the hash rate dropped to 90 EH/s. The processing power has been recovering until returning to the levels before that event and has recently exceeded them.

The period of early June had the lowest difficulty to mine a block so far this year. Right after the halving, Bitcoin’s mining difficulty reached 13.73T. At the beginning of the year, the lowest level was 13.79T.

Biggest Adjustment in Bitcoin’s Mining Difficulty since 2018

After the post-halving drop, the difficulty adjusted upwards again in mid-June, since the adjustment on June 16^th was 14.95%, compared to the previous period. In percentage terms, that change was the largest that Bitcoin had recorded since January 2018.

After the reduction of mining rewards by half, Bitcoin’s hash rate dropped by more than 16%. However, said drop was less than that what some predictions had estimated. Analysts of the industry came to consider a possible drop of up to 30% in Bitcoin’s computational power in mid-April.

There was already a reversal of the drop that occurred. Both the hash rate and the difficulty are at all-time highs, signaling that the network’s activity maintains the same strength that it had before the halving. The greater the processing power, the greater security on the network. A hypothetical attack is more difficult and expensive as the accumulated power becomes higher.

At the same time, the behavior of Bitcoin in the cryptocurrency market remains stable. It is important to remember that Bitcoin has been able to recover from all-time lows on several occasions. This is positive for those who want to invest in the main cryptocurrency.

By Alexander Salazar