Bitcoin Is Put To Test as a Refuge of Value after Stock Market Falls in Fear of Coronavirus

Alexander Salazar
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Bitcoin Is Put To Test as a Refuge of Value after Stock Market Falls in Fear of Coronavirus

Last February 24th, Bitcoin’s price dropped by 4.6% while stock shares fell by 3.6%. The stock market crash is due to the fear of the coronavirus, which puts the world economy at risk.

The US Stock Market collapsed last February 24th to one of its lowest levels in the last six months, due to the fear of the coronavirus. Meanwhile, Bitcoin (BTC) barely staggered, at least in terms of the evident volatility recorded throughout its trading history.

On February 24th, Bitcoin fell by 4.6% at 6:17 pm (UTC time) reaching USD 9,517, which represents the biggest drop within a week. It is worth mentioning that, so far this year, the main cryptocurrency has suffered other losses of 3% or more over one day. However, due to the strong bullish rally in recent months, Bitcoin still records an increase of 32% in 2020.

It is relevant to highlight that such performance contrasts sharply with the Standard & Poor’s 500 index of US large stocks, whose collapse by 3.6% was the largest in a single day since early August and ended the investors’ earnings of the year.

This situation could renew a current debate among investors about whether Bitcoin should be traded as a risk asset, such as stocks and bonds, or if it is more similar to a valuable refuge asset, such as gold or US Treasury bonds. There is also the possibility that it is not any of the two things, that it is in its category and that it does not correlate with the price of traditional assets.

The news reports on the coronavirus were not the only factors that potentially affected Bitcoin’s price last February 24th. Billionaire Warren Buffett also said that he considers the cryptocurrency to be of no value.

It was reported that the stock market crash occurred at the same time as the world authorities struggle to contain the coronavirus. This situation has led to fear that the world economy, as well as delays in international travel and business, will suffer a great shock due to quarantines. Currently, the epidemic has spread to more than 30 countries including South Korea, Italy, and part of the Middle East.

Assets such as gold and US government bonds, which traditionally serve as a refuge of value, rose on February 24th. Gold increased by 1.7% reaching USD 1,676.50 per ounce, representing the highest point in recent years. US Treasury bonds also increased as their ten-year return went from 0.11% to 1.36%. In this case, the price of bonds moves in the opposite direction to the return.

It is important to note that the increase in Bitcoin’s price last January, after an incident that resulted in the death of an Iranian leader, also caused growing concern about possible geopolitical and economic disturbances. The fact led some traders to speculate that Bitcoin could have been gaining acceptance among investors as a valuable refuge asset.

According to Greg Cipolaro, co-founder of Digital Assets Research, the acceptance of the Bitcoin market could still be positive. Investment funds and other large investors are usually seeking assets mostly not correlated with traditional markets, but with a history of high returns adjusted to risk.

By Alexander Salazar

Visa is Looking for Companies Interested in Creating Virtual Cards for Cryptocurrencies

Maria Rodríguez
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Visa is Looking for Companies Interested in Creating Virtual Cards for Cryptocurrencies

The announcement invites startup companies that want to develop ways to facilitate all financial and payment services with cryptocurrencies.

The renowned provider of credit cards and financial and payment services Visa is looking for companies that want to develop digital cards that could be recharged with cryptocurrencies such as Bitcoin or altcoins.

Cuy Sheffield, who is Visa’s CEO for the crypto and digital currencies sector, issued the announcement using his official Twitter account a few days ago.

Through the announcement, Sheffield called on crypto companies that are interested in belonging to the program called Fast Track Fintech. Through this program, they hope to integrate cryptocurrency wallet services with Visa cards.

“For fintech developers who build crypto or DeFi wallets, here are three examples of consumer experiences and value propositions that are possible today with crypto card programs…”, the proposal says.

The announcement is based on an alliance produced between Visa and Coinbase since 2015 and is currently paying off. The cooperation agreement between these companies sought to include Visa cards in Coinbase exchange services. But, recently it has been possible to go beyond the initial agreements since a few days ago it was announced that Coinbase hopes to launch debit cards. Said cards will facilitate direct purchases of goods and services using bitcoins.

According to data provided by the Visa program, it is specified that these services improve your experience if you use tools such as digital wallets when making transactions and payments. “Users of digital wallets can download the application, provide a virtual card, make wireless transactions at the point of sale or request payments”.

The product manager for the cryptocurrency area, Cuy Sheffield, managed to fill this position after the Visa company had this vacancy in 2019. A large part of his responsibilities is creating strategies capable of evaluating a cryptographic product and its scope within the market, as well as its ways of including actions by Visa to make it happen.

By sharing some positive experiences of people who have used these new technologies in payments and transactions, Sheffield stressed that it is very possible to link Visa services with operations made with cryptocurrencies such as bitcoin. In addition to making use of all the points of sale that the company has around the world. The manager also indicated that it is possible to make payments with stablecoins or use fiat money as a traditional way to receive cryptocurrencies, inter alia.

Sheffield also said he feels excited to promote this project, as well as imagining the advances that this technology can bring. “This is just the beginning because there are other possible user experiences that we cannot imagine today. I trust that cryptocurrencies have the potential to receive developers to create financial services. I am excited about the new products that may arise”, he highlighted.

This movement implies a change in Visa’s position concerning cryptocurrencies since in previous years it would have maintained as a strong idea that this technology did not result to be innovative and decisive enough for the economy.

Despite this, Visa has not been inactive in this sector, since it would have maintained a research program that would be responsible for evaluating the advances in cryptocurrencies. An example of this was its participation in the Libra Association, promoted by the social media giant Facebook. Although its participation in that project was short, due to its voluntary departure in the middle of last year, the company has not remained technically outside the growth and recognition of the crypto industry and now keeps working on it.

By María Rodríguez

Divided Opinions in Ethereum Community Regarding Next ProgPoW Implementation

Alexander Salazar
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Divided Opinions in Ethereum Community Regarding Next ProgPoW Implementation

Ethereum developers will conduct the ProgPoW fork, despite the negatives. ProgPoW opponents consider that this change will only benefit GPU miners.

The Programmatic Proof-of-Work (ProgPoW) is an algorithm aimed at benefiting mining with graphics processing units (GPU) over mining with application-specific integrated circuits (ASIC). It should be mentioned that the proposal was introduced in 2018 as a solution to keep Ethereum’s processing power decentralized.

Since ASICs concentrate large amounts of hash rate, some members of the Ethereum community consider them a threat to the proper functioning of the network. Such devices can be used for 51% of the attacks, where one or more miners concentrate a large processing power to manipulate transactions.

Their high performance also allows ASIC miners to concentrate on higher profits whilst reducing GPU mining profitability. For this reason, ProgPoW implies a design whose processing requirements are adapted to GPU miners. In this sense, ASIC mining loses profitability with minimal earnings, while GPU mining gains ground.

Changes Will Occur in July

Last February 20th, Ethereum developers agreed to implement the ProgPoW proposal to the blockchain code. They decided to conduct two hard forks between June and July 2020, according to the hard fork coordinator at Ethereum, James Hancock.

The first fork, Berlin, will perform technical upgrades on the network and prepare the community for deposits in the Ethereum 2.0 blockchain. On the other hand, the fork Standalone will be focused on changing the algorithm, thus introducing ProgPoW mining to Ethereum.

According to plan, Ethereum would start using the ProgPoW algorithm in late July, when the launch of Ethereum 2.0. was scheduled. This new network will use the Proof of Stake (PoS) to approve transactions and create new blocks.

Those Opposing ProgPoW

Among the Ethereum users against ProgPoW algorithm are personalities such as Ameen Soleimani and Eric Conner. The common argument among them is that ProgPoW is an outdated upgrade.

Marck Zeller, Aave researcher and founder of TheBlockCafe, said that the developers had not upgraded the algorithm at the right time. Also, Soleimani stated in March 2019 that this new algorithm is not a priority since Ethereum 2.0 is also a solution to the predominance of ASICs.

Eric Conner stated that he will leave his node working on a new Ethereum version without ProgPoW whilst expecting the launch of Ethereum 2.0. These types of statements make users fear that the change in the algorithm will lead to a non-consensual fork on the network.

Some Say Yes to ProgPoW

Despite the arguments against the ProgPoW, some Ethereum developers and holders insist that this new algorithm will help the network. According to James Hancock, the proposal should be implemented as it has already been audited and approved by the developers.

Likewise, he believes that the fact that Ethereum 2.0 is being developed in parallel is no excuse to stop the development of the current network. It should be considered that the next blockchain could be enabled later than expected due to some delays last year.

Engineer Jacob Wright also said that he would upgrade his node to ProgPoW. He believes that the new algorithm will improve the network and will allow smooth transactions to Ethereum 2.0.

Some users think that this upgrade will protect Ethereum from about 51% of the attacks that might occur during the months before the migration of the new blockchain is completed.

By Alexander Salazar

Central Bank of England Exhorts Other Central Banks to Use Cryptocurrencies

Maria Rodríguez
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Central Bank of England Exhorts Other Central Banks to Use Cryptocurrencies

The Bank of England is a member of a cryptocurrency research group that has had obvious results in Sweden and Japan.

As part of a plan for prevention and obtaining valuable information, Sarah John, who is chief cashier of the Central Bank of England (BoE), states that it is vitally important that the Central Banks of the world learn all about blockchain technology and cryptocurrencies. This would make it possible to achieve greater balance and control among the monetary flow of private entities that issue and manage crypto assets.

The employee of the BoE considers that there is no need to stop paying attention to cryptocurrencies, so she suggests to the other Central Banks that they develop research programs for this new technology, since it could determine the new payment systems in the future. She also clarified that if this becomes established, it would be important to have crucial data to form a correct and adjusted regulation for these assets.

In a recent interview with the employee, John’s determination was known to keep up with this new way of managing assets. “The Bank of England must consider its position on technology to ensure that the United Kingdom has a wide range of payments that can be used with confidence”, she said.

John even dared to show the idea of ​​a cryptocurrency issued and managed by the bank as a regular circulation asset for its territory. “It is right that the central bank thinks which of the sectors, public or private, would be the most suitable for issuing a cryptocurrency in the future”.

In her role as chief cashier of the BoE, John believes that central banks must have some management of the digital currencies they issue and that, as private companies manage their cryptocurrencies. This means that the regulatory financial entity of the country should do so.

However to date, the Central Bank of England does not consider issuing any cryptocurrency that is part of its administration, but it has made significant research advances in this area.

Last January, this important institution was part of the study group that focused on giving its conclusions on the use of Central Bank Digital Currencies (CBDC). Its work showed part of the need to occupy media that are being occupied by private sectors and that must be regulated or at least, the institution must know more about them.

A clear example of results on CBDC research conducted Sweden’s central bank, Riksbank, to announce the development and initiation of e-krona tests, a digital currency that will be in charge of the institution and that could be ready for 2021.

In the same way, it was known that authorities of the Central Bank of Japan have met on several occasions with members of the Financial Services Agency (FSA) and the Ministry of Finance. They intend is to assess the possible financial impact of issuing a digital currency as well as of the incorporation of a new asset to its economy.

In this aspect, it was determined that Haruhiko Kuroda, the highest representative of the Central Bank of Japan, is working on developing all the legal and technical section that is vital so that, if necessary, they can issue a digital currency that serves the institution.

By María Rodríguez

Aragon Court Uses Developer’s Name in Simulated Legal Dispute without His Consent

Alexander Salazar
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Aragon Court Uses Developer’s Name in Simulated Legal Dispute without His Consent

Aragon Court used a developer’s private data in a pilot test without his authorization. Following the developer’s complaint, Aragon apologized for the incident.

It was reported that Yaz Khoury, a developer from the Ethereum Classic Cooperative (ECC), denounced that Aragon had used his name without his consent in a pilot trial held at Aragon Court, a protocol designed to resolve real legal disputes.

The Aragon Court pilot test also included evidence and other elements inspired by real events. This caused excitement and confusion among the community, raising doubts about his reputation and integrity.

The developer said a version of the sequence of events that was supported by the Aragon Foundation. The latter also issued a statement apologizing for what happened and explaining the measures to vindicate those affected.

Source of Dispute

The case discussed in the simulated trial refers to Khoury’s participation in the Gitcoin platform, where he organized last January a fundraising campaign under the CLR (Capital-constrained Liberal Radicalism) format, a scheme described in the white paper published by Vitalik Buterin and Glen Weil.

It should be mentioned that this scheme allows the organizers to receive more funds from the Ethereum Foundation and Consensys for each donor contributing to the campaign. This system also allows placing funds strategically to benefit different public interest projects within the platform.

Khoury explained that the fact that he was approved to conduct his fundraising round did not please some members of the Ethereum community, who initiated a debate on which people should be authorized to participate in the platform.

He Ethereum developer claimed to have been advised by a legal team to file defamation complaints, upon receiving hundreds of messages and comments making false assumptions. Some even thought that Gitcoin had begun proceedings against Khoury in Aragon.

The developer said that seeing his name involved in this type of controversy compromised all his work and reputation within the community.

Response and Proposed Solutions

Aragon apologized, acknowledging that they had made several mistakes including not having the consent of the parties involved (Yaz Khoury and Gitcoin) in the virtual trial. They also apologized to the jury and other participants for the inconvenience caused when discussing this issue without authorization.

They also affirmed that this discussion scenario interested them because they discussed key aspects regarding fund-raising rounds and other activities done by the DAO (Decentralized Autonomous Organization), the organizational structure of Aragon Court.

After talking to the parties involved, Aragon informed that it was decided that this pilot test will never be considered as a case study or practical example of the functions of the platform, thus not establishing such a confusing precedent.

It was also decided to erase the entire content of the dispute, which Aragon One considers challenging as the information is distributed in various nodes with which a consensus must be reached. Similarly, it was indicated that the funds invested or spent by the parties in this process will be returned. This situation has been a valuable learning experience for Aragon to avoid making similar mistakes in the future.

By Alexander Salazar

After Closure Due to Fund Theft, IOTA Network Will Be Reactivated

Willmen Blanco
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After Closure Due to Fund Theft, IOTA Network Will Be Reactivated

The IOTA Foundation said that it is working on a plan to reimburse the victims of the attack. A hacker was able to take over MoonPay’s content distribution network.

The IOTA Foundation already resolved the vulnerability that allowed the hackers to steal around USD 2 million in MIOTA tokens. The former plans to reactivate its network next March 2nd, which would result in a 17-day interruption until then. The organization wrote a long article in which it provided details of the attack on February 12th, which affected about 10 users of the Trinity wallet.

In the document, the Foundation indicated that the theft was caused by a vulnerability detected in MoonPay’s software development kit (SDK). This is a gateway application that was integrated into the Trinity wallet last November to allow the exchange of MIOTA for a fiat currency. According to statements by IOTA Foundation’s co-founder Dominik Schiener, the IOTA mainnet will resume its operations next March 2nd, following a 17-day interruption.

The investigation conducted jointly with the German Center for Cybercrime and the US Federal Bureau of Investigation (FBI) revealed that the hacker took over the distribution of MoonPay’s content, infiltrating the portfolio, to then distribute malicious SDK packages to users and thus seize their funds.

The IOTA Foundation said that the pressure for the launch, along with the human error, led them not to audit the most secure NPM package before integrating it. It should be highlighted that this was the weakness that the hacker exploited, which the Foundation could have resolved by conducting a more extensive review process.

The NPM (Node Package Manager) is a package manager that allows having any library available through only one code line, such as a static file, thus avoiding the reception of a malicious SDK. The report describes that the malicious code was loaded into the local Trinity instance. After unlocking the user’s wallet, it decrypted the seed and sent it to a server controlled by the attacker. Before transferring the tokens, the hacker waited for the launch of a new version of Trinity, which would overwrite the caché files in the wallet and thus eliminate the traces of the attack.

The IOTA network has been inactive for approximately 11 days. The organization announced last February 14th that it would disconnect the “Coordinating” node that validates transactions on this network until it is reactivated on March 2nd.

The non-profit organization also explained that it is developing transition tools for users to transfer their funds from their existing accounts to new ones. After the transition is complete, the Foundation will put the network online and provide details of the plan that will be activated to reimburse the funds to the victims of the attack.

Some days after the attack, the upgraded version of the Trinity wallet was released. Users must install this new version of the wallet so that they can check their balance and most recent transactions. Likewise, they must change their password and store it in a password manager to reinforce the security of their tokens.

By Willmen Blanco

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