He needed computational power similar to that of a mining group to reach his goal. He used the clues that the owner of the wallet revealed to mine 1 BTC.

After announcing the launch of his Juggernaut instant messaging app on the Lightning Network, developer John Cantrell admitted being the one who discovered the key to access the Bitcoin wallet of cryptocurrency entrepreneur Alistair Milne.

Cantrell posted in an article on his Medium blog details of how he succeeding in earning 1 BTC (equivalent to USD 9,400 at the time). He noted that he tried one trillion words to decode the key that allowed him to complete the challenge.

He explained that it was not theft but the evidence that he won a challenge that Milne launched in late May. In his Twitter account, the CEO of Altana Digital Currency Fund invited him to win 1 BTC that he had deposited in his wallet. The award would go to the first person to collect the 12 words of the seed phrase, with which he or she would access the wallet.

To fulfill his promise, Milne periodically revealed a new clue. He had reported that he would launch the last four keywords that would be released simultaneously with the idea of preventing someone from hacking the wallet. However, before posting the eighth word, the businessman realized that his plan had failed, since Cantrell had already guessed the remaining words, found the correct combination, and transferred the funds to his wallet.

Scoping the Problem

Cantrell described in his article that he started preparing just before Milne revealed the eighth clue. He explained that it is necessary to use 2048 words from a fixed list to generate a mnemonic phrase or seed. Without the clues that Milne revealed, the task would have been practically impossible. However, the chances to succeed increased once he knew some of the words that the owner of the wallet posted on his social networks.

Besides, the developer said that knowing eight words, there would be around 1.1 trillion possible mnemonic phrases to verify. He also needed to generate a master private key from the seed and an address from the master private key. However, after several attempts, he realized that the equipment that he was using at the time was not suitable for the task.

The developer said that his laptop could only check about 1,250 mnemonic phrases per second or 108 million phrases per day. Cantrell wrote in his post that it would take his CPU about 25 years to generate and try over a billion possible phrases to open the wallet, with only eight words available.

To accelerate the process, the developer paid about USD 350 for a computational power rental service. However, after checking 85% of the combinations, he was not able to find the correct one. At that moment, he realized that he had to review his method to determine his mistake.

Finding the Solution

A deep review allowed him to verify that the success of the plan that he was implementing depended on the selection of the words in the correct order, which the method that he was using used did not ensure. He even lost hope that it would work and thought about quitting.

Once Cantrell had access to Milne’s wallet, he paid a high fee of 0.01 BTC (equivalent to USD 93) for the mining devices to confirm his transaction faster. He feared that someone else could hack the wallet before him. Later, Milne himself confirmed the withdrawal of 1 BTC from his wallet.

In his article, Cantrell comments that the clues that Milne had revealed m his task, which was still complex. Even Milne invited to read Cantrell’s article, noting: “For those who think that hacking a wallet is easy, read this thread. I knew that every word I revealed made a brute force attack 2048 times easier. ”

Cantrell’s achievement demonstrates that it is necessary to be cautious about the security of wallets and never reveal information about them, especially on social media.

By Willmen Blanco

Unemployment and idleness are factors that play in favor of these fraudulent schemes. The only way to make money with these systems is by taking it away from another.

The world has almost stopped and many economic activities have been paralyzed due to the current COVID-19 pandemic. However, it is possible to observe a resurgence of pyramid schemes, Ponzi systems, and other fraudulent organizations. They use Bitcoin, other cryptocurrencies, binaries, and trading, among others, to take advantage of so many idle and desperate people who are locked in their homes, without producing, spending, and even unemployed due to the quarantine.

Coronavirus seriously affected many economic sectors: tourism, non-food retail trading, transportation, textiles, consumer durables, and leisure and cultural activities. In Latin America, 44% of workers participate in these high-risk sectors, which is why the International Labor Organization (ILO) has estimated that 17 million people in the region have lost their jobs.

This shows that a large number of people will have to survive on their savings or find new forms of income in order not to starve. This desperate group of people is surely the perfect victims for any type of pyramid schemes, which offer “safe” businesses with non-transparent conditions.

The current idleness of people has led many unscrupulous entities to search for new victims on their social networks to run their fraudulent schemes. This would explain why some famous actors have joined to promote them.

The volume of advertising messages from these schemes has increasingly become viral. Offers to “become your own boss” and “get rich working from your cell phone”, among other stories, reach people residing in Latin America. Besides, there are other more sophisticated fraudulent systems with Ethereum smart contracts, whose promoters probably think that they achieve more credibility.

It is striking that people who understand some of the new technologies want to use their knowledge about them to impress the unwary, show it as the “new business of the century”. Due to their complexity, they create multiple forms of deception. These range from a clear pyramid scheme that uses blockchain technology to the ICO (Initial Coin Offer) fever of 2017, where they stole more than USD 100 million.

It is important that those who are thinking about entering a pyramid scheme out of desperation or because it is “big business” become aware of it. The only way to profit from these systems is by attracting other people to enter, who can eventually lose their money if they do not do it.

These “projects” harm the relatives and friends of those who invite them to participate in them, hoping to make a few US dollars instantly, which is not ethical. Given that these businesses look “too good to be true,” their own instincts tell them that there is surely something wrong in them. If they agree to enter that type of schemes, they could become victims like those of the AirBit Club in Mexico, who have long struggled to recover their money.

By Willmen Blanco

A recent post by two New York Federal Reserve economists explores Bitcoin as money. They consider that the cryptocurrency is not a new type of money, but a new mechanism for exchanging it.

According to a post by Michael Lee, an economist in the Research and Statistics Group of the Federal Reserve Bank of New York, and Antonie Martin, Vice President of the Group, Bitcoin does not represent a new idea of money, but a new idea of money exchange.

The document explores the definition of money, indicating that there are three types of money: fiat money, asset-backed money, and claim-backed money. The analysts say that fiat money responds to intrinsically useless objects that have a value based on the belief that people will accept them in exchange for valuable goods and services.

Second, they define asset-backed money as money that derives its value, at least in part, from the assets that back fiat money. This is the case of commodity money, exemplified by gold coins, according to the post.

They explain that claim-backed money derives its value, at least in part, from the promise of some institution to exchange money for something of value. For instance, an unlocked bank deposit has a value based on the promise that the bank makes to exchange the deposit for money, according to the analysts.

Bitcoin as Exchange Mechanism

Economists claim that Bitcoin corresponds to a new type of exchange called “electronic transfer without a third party”, an alternative to “physical transfers” and “electronic transfers with a trusted third party”.

While physical transfers are physical money exchange mechanisms, electronic money transfers with the backing of a third party correspond to the vast majority of electronic payments, by involving entities that validate such exchanges.

According to the analysts, Bitcoin enters the category of decentralized electronic transfers, that is, an entity in charge of unilaterally validating transactions does not participate. This type of exchange was born with Bitcoin in 2009 and also applies to cryptocurrencies in general.

The authors state that it is more accurate to think of Bitcoin as a new type of exchange mechanism that can support the transfer of money. They note that this view is important as history provides lessons on what makes good money, as well as what makes a good transfer mechanism. They say that these lessons could help cryptocurrencies evolve in a way that makes them most useful.

Reactions

Of course, members of the cryptocurrency community have been critical of the economists’ vision. They have mentioned conceptual differences in the argumentation of both analysts in their Twitter accounts.

Content creator “Ivan on Tech” did not hesitate to comment on the post and question the “terrifying incompetence” behind it. “The Moon Carl” reinforced Ivan on Tech’s vision, adding that he considered it to be “one of the dumbest things” he had ever read.

Renowned investor Peter Schiff aligned his thoughts with the New York Federal Reserve post, regarding Bitcoin as fiat money. He dismissed the “digital gold” narrative and stated that, as confidence in traditional fiat money and cryptocurrencies is lost, savers will return to gold.

Many members of the community made Schiff aware of their vision for why Bitcoin was more valuable than gold.

However, recent data highlight that many Bitcoin investors believe that the cryptocurrency represents a long-term reserve of value, following the “digital gold” narrative of the asset.

By Alexander Salazar

Turkish company Antalya Homes mentioned that it accepts up to 8 types of cryptocurrencies including Bitcoin.

Through an announcement for its clients, the real estate company Antalya Homes, in Turkey, informed that it enabled the option of payments with cryptocurrencies. In this way, those interested in paying with cryptocurrencies can use the new company’s platform to buy a property, using Bitcoin (BTC).

The Turkish company has recently completed the sale of a property using Bitcoin as payment, according to the statement that Antalya Homes sent. This means that the company has made history in the country since this would be the first sale of a property using cryptocurrencies. This is the first crypto-registry that the real estate company has accepted. The company assures that it is feasible to continue conducting this type of operation.

Among the main reasons why this company decided to finalize the sale of the property through Bitcoin, a spokesperson of Antalya Homes commented that they had to adapt to the current reality. Now, one of the reasons to accept crypto-payments is mostly due to the crisis that the Covid-19 pandemic has generated, but also innovate the payment options.

Regarding how the company made the sale, Antalya Homes detailed that it adapted its web platform so that people interested in any property can take a virtual tour of the property. Then, to finalize the sale, the company added support tools for bitcoin.

Bayram Tekce, President of the Turkish company, stated that drones and virtual methods were used for this sale to hold meetings with buyers. “In the sale of an Antalya property, we shot images of the house with a drone and took an online tour with the client. Then, we bring the buyer and seller together in a virtual meeting and finalize the sale,” he explained. This distance-process is very positive during quarantine times.

Referring to the value of the property, Tekce said they agreed with the buyer on how they would make the payments, adding that this sale has been the highest value recorded in Turkey, for an approximate amount of USD 1.25 million.

During an interview, Tekce recalled that the Antalya Homes website has enabled a section that is only dedicated to clients who are interested in buying properties with cryptocurrencies. This section, called “Pay with Bitcoin”, is focused on this type of payment and accepts up to 7 types of cryptocurrencies.

This website that sells properties using cryptocurrencies as payment accepts Bitcoin (BTC), Ether (ETH), XRP, Bitcoin Cash (BCH), Litecoin (LTC), Bitcoin Gold (BTG), Stellar (XLM), and Tether (ETH).

Greater Advantages in Purchases with Digital Currencies

Many countries are conducting these types of operations more frequently, especially since real estate companies see the use of these assets that are not subject to heavy taxes, or banking mechanisms for capital disbursement, as something positive.

Also, another example of property sales with bitcoins was evident in the city of Manhattan when a real estate investor named Ben Shoaul agreed to sell his property for USD 15.3 million in bitcoins.

The current crisis that the Covid-19 generated will probably cause more people to decide to buy with bitcoins. In this way, they can avoid cash exchange and also take advantage of the savings they have in cryptocurrencies, as well as crypto miners will surely want to take advantage of the income they have collected during the quarantine time.

By María Rodríguez

DeFi platforms pay more for borrowing than they charge in fees, according to an analyst. Trading pools of US dollar-pegged stablecoins also offer high interests.

The incorporation of new products and services in the decentralized finance (DeFi) ecosystem is increasingly attracting capital and new users. At the beginning of June, the total locked capital associated with the different DeFi services exceeded USD 1 billion and reached USD 1,512 on June 21^st, with an increase of 55% during that week, according to data from DeFi Pulse.

This accelerated growth leads more users to become interested in cryptocurrency loans, attracted by an increasing interest rate. Analyst Tony Sheng recently posted a thread on Twitter, giving concrete instructions for allegedly earning 100% annual interest, through investments in decentralized loans, on various DeFi platforms.

Sheng states that in traditional finance banks can obtain an interest of 0.01% for whom they offer loan capital, but some options can even pay up to 1%. On the contrary, those who are seeking loans in the DeFi sector are not only willing to pay much higher interest rates but also offer additional bonds to borrowers.

The reason for those bonds is in the stimuli that DeFi platforms offer for borrowing, according to Sheng. “When someone requests a loan at @compoundfinance, they receive a kind of cashback. The greater the loan, the greater the cashback.” the platform delivers this stimulus to the applicant of the loan in COMP, the Compound token, says the analyst.

That stimulus is now higher than the fee for the loan, according to Sheng. This implies that an increasing number of people are interested in requesting loans, only to receive the stimulus payment.

On the other hand, borrowers also receive incentives of up to 50% on the interest that they earn on the loans, states Sheng. To reach a 100% annual interest rate, borrowers take the money pledged as collateral security and lend it back. USD holders can earn a 100% annual interest rate instead of the 0.01% that their bank offers, which represents a profit between 100 and 10,000 times the amount invested.

Sheng notes that the bonds depend on the different types of digital USD or US dollar-pegged stablecoins. He advises that to trade these different versions, it is best to do it on a specialized exchange.

For example, participants go to @Curvefinance with their funds and contribute to a pool. They not only earn fees on their funds, but they can also offer loans from the funds contributed and earn additional interest. The demand for both loans and trades of digital USD variants is so high that the contribution to the pool has come to produce returns of 200%.

There are different ways to make substantial profits on DeFi, using the so-called “farming yields”. However, such a wide profit margin also makes it important to be aware of the risks. After explaining the steps to reach a 100% return on the investment in DeFi, Sheng warns of the risks.

By Alexander Salazar

The authorities estimate that the new rules will be ready by the second semester of 2020.

The Ministry of Economic Affairs and Digital Transformation in Spain has updated the control measures for companies that operate offering safeguard services and exchanges with cryptocurrencies. Through a preliminary bill, last June 12^th, the government entity included an additional set of measures that will establish more controls over crypto operations in the country.

According to the announcement about these new measures, all the companies that use this type of assets to conduct business will be required to comply with a series of regulations that seek to prevent the use of cryptocurrencies for illegal acts. Some of the acts that the government wants to avoid are terrorist financing and money laundering.

Once these measures come into effect, all crypto companies operating in Spain must be registered with the authorities and explain their operations through the supervision established by law. The report detailed that one of the main control measures that will be under the supervision of the Ministry is the creation of a unique registration system, which will serve as an advanced identification system.

Regarding the aforementioned registration system, the report on the measures detailed that it will serve to store information on the holders of the company, institution, or organization that is within the commercial registry of Spain.

This system will also require cryptocurrency companies to enter the trust register. This registry keeps a list of entities that provide financial services in the European country and also includes many other companies that conduct similar businesses.

This new registry of companies that operate with cryptocurrencies in Spain will be freely accessible to those who want to have information about it. Besides, this data will be part of a single list of companies that provide commercial and financial services in all countries belonging to the European Union (EU).

Among the main mandatory measures that the Ministry will request for registration, it highlights that crypto companies will have to provide information that will serve as a support for the identification system. All the companies that make business with other legal entities will have to meet this requirement.

The Spanish authorities publicly consulted the instrument of law as a requirement for approval. The Commission for the Prevention of Money Laundering and Monetary Offenses prepared a report on the concept, which is the entity that oversees financial actions in Spain and prevents certain crimes.

Although the exact date for the approval of the law was not specified, the authorities plan these additions to the law for the middle of the second semester of 2020. In this way, the law will be ready very soon.

This new set of rules can establish certain drawbacks for cryptocurrency companies operating in the country. Especially, these new rules can generate problems for the industry since it could trigger more controls in the future, which may limit the scope of business.

As several reports on crypto-companies in Europe detailed that, currently, according to the “Guide to Crypto Companies in Spain 2020”, there are about 75 organizations that will have significant commercial growth in the coming years.

By María Rodríguez