British firms are stockpiling cryptocurrencies including bitcoin and ethereum so they can pay off hackers in the event of a ransomware or malware attack.
A lack of synergistic connection points between the blockchain sector and traditional finance is currently hindering progress within the world of banking. Opportunities abound for the deployment of smart contracts and tokenization, fueling crowdfunding, chain finance and other forms of financial transactions. These efforts at boosting external infrastructure hold the key for greater efficiency and time effectiveness in todays evolving financial ecosystem. One firm at the cutting edge of resha
According to the owner of the Russian cryptocurrency news outlet Forklog, Anatoly Kaplan, his media firm is being harassed by Ukrainian law enforcement officials. On December 15, agents from the Ukrainian Security Service (SSU) searched both Kaplan’s apartment and the Forklog offices in Odessa for an alleged association with U.S. nationals committing criminal activities.
Russian Cryptocurrency Media Outlet Forklog Says the Ukrainian Security Service Committed Unlawful Acts Against the Company
The Ukrainian Security Service (SSU) is a law enforcement entity that specializes in terrorism investigations, and counterintelligence activity. According to Mr. Kaplan owner of the regional cryptocurrency news publication, Forklog, agents revealed they were looking for clues in connection with a group of Ukrainians and U.S. nationals committing financial fraud. The SSU explained to Forklog representatives that the suspects used Forklog to exchange bitcoin for the national currency hryvna. Mr. Kaplan and the Russian media organization believe the search was “unwarranted,” as neither Forklog nor sites associated with the website have ever provided these types of services. “Forklog doesn’t even have software that provides such services,” Mr. Kaplan tells new.Bitcoin.com.
SSU Agents Confiscate a Computer, Cold Storage Devices, and Ethereum
During the search, Mr. Kaplan details that SSU agents confiscated his laptop, and several cold storage devices. Moreover one of the SSU agents tried to transfer some of Mr. Kaplan’s bitcoin funds to another address during the search. According to Mr. Kaplan, the only reason the agent stopped is because his lawyer called, and threatened the agents with robbery charges. However, the officials still confiscated Mr. Kaplan’s devices, and the very next day a large sum of ethereum was transferred from Mr. Kaplan’s wallet to another address.
“I believe that this strange situation perfectly illustrates one of the possible scenarios for the state-crypto community relationship — That is why we decided to make this public,” Anatoly Kaplan tells news.Bitcoin.com. “It’s not as much about protecting my personal interests as it is about protecting the interests of the entire community. This sends a warning to everyone who is in any way connected to bitcoin and blockchain technologies. It doesn’t matter if you are a public figure.”
Right now we are trying to return what we believe was unlawfully seized from us. We find the attempts to transfer cryptocurrencies to wallets controlled by SSU agents to be an extremely strange practice — During the search my lawyer has detected a score of other procedural violations, including turning off the camera.
The Ukrainian Security Services’ ‘Search Season’ Now Targets Cryptocurrency Related Businesses
Mr. Kaplan and his lawyer say this isn’t the first time SSU agents have harassed and seized the property of individuals involved in the tech industry. ‘Search Season’ as it’s called in the Ukraine, started in early 2015 as SSU officials have been raiding well-known figures in the IT industry from time to time. Bitcoin and blockchain related startups “are no different,” says Mr. Kaplan describing a Ukrainian case involving the Kuna Bitcoin Agency. Kuna’s founder Michael Chobanian also had his residential apartment searched by SSU officers. Further, even more recently Mr. Kaplan says SSU officials have raided mining farms this year as well.
Forklog and Mr. Kaplan’s attorney say they are going to take legal action against the SSU agents involved with Forklog’s illegal search and seizure.
“We expect a prompt and proper reaction from the authorities and a swift return of seized Imacs. As for the return of seized cryptocurrency and SSU agents’ legal liability, I can only say that this will be a highly emblematic and evincive case,” Mr. Kaplan’s lawyer concludes.
What do you think about Forklog and other cryptocurrency related businesses being harassed by SSU agents? Let us know what you think about this case in the Ukraine in the comments below.
Images via Shutterstock, Pixabay, and Forklog.
The post Russian Crypto News Outlet Shook Down by the Ukrainian Security Service appeared first on Bitcoin News.
In 2014, Newsweek doxxed Dorian Nakamoto, an unassuming senior, as the creator of bitcoin. The bumbling Dorian, who claimed never to have heard of the digital currency, was besieged by journalists for days, prompting him to plot a harassment lawsuit. As introductions to bitcoin go, Dorian’s was hellish. And yet, three years on from the false dox, something strange has happened: Dorian Satoshi Nakamoto has embraced the bitcoin life and assumed the persona of his faceless namesake.
Would the Real Satoshi Please Stand Up
At Bitconf 2017, a gathering of bitcoin luminaries and blockchain startups held on December 4-5 in Colombia, there were the usual faces including veteran cryptographer Nick Szabo. Also in attendance was an elderly Japanese-American whose hobbies include model trains and who has struggled to find work for the past decade, save for brief stints as a laborer, poll-taker, and substitute teach. Dorian S. Nakamoto.
How did the man once misidentified as the creator of bitcoin wind up thousands of miles from home at a bitcoin conference? A man who was once forced to issue a statement through his lawyer noting:
Newsweek’s false report has been the source of a great deal of confusion and stress for myself, my 93-year old mother, my siblings, and their families.
In the three years since Dorian was misidentified as Satoshi, a lot has happened to bitcoin. And a lot has happened in the life of the now 67-year-old who got off on the wrong foot with bitcoin. In the intervening years, Dorian’s stance on the cryptocurrency has softened. At the fifth annual Bitconf in Bogotá, Dorian Nakamoto looked relaxed. He seemed to be relishing his role as the fake Satoshi, and even attended a press conference with the event’s organizers.
There, he shared his perspective on winding up unexpectedly as the face of the world’s hottest digital currency. Dorian recalled the first time he learned of bitcoin, after son Erick contacted him to report that a journalist had been digging into his background. He added:
[They] approached my wife and asked her personal things. And I did not like it when they approached my children later. Why would I involve my children? I am not a superstar, I am not a public person…I believe in freedom of expression, but I do not believe that the media should take a person from his private life and wash his dirty laundry, including my medical history, including my recent battle with cancer.
A Self-Fulfilling Prophecy
Dorian Nakamoto wasn’t Satoshi Nakamoto in 2014 and yet, to all intents and purposes, that’s effectively what he’s become. Being identified as the creator of bitcoin, despite the scrutiny it invites, can also be lucrative, as Craig Wright, “the other Satoshi” can attest. Despite Wright’s claims to have invented bitcoin being disproved, the Australian seems to have had no trouble securing funding since then for his work on blockchain scaling.
Few would begrudge Dorian Nakamoto, “the original Satoshi”, a chance to cash in on his e-fame and have a little fun in the process. Even without the elderly man’s say-so, he’s become the face of bitcoin, his “Nope” reaction face having been memed hard and purposed for everything from Telegram stickers to t-shirts.
Memed Into Being
At Bitconf, Dorian S. Nakamoto spoke of his discomfort at being doxxed as Satoshi and the protracted legal battle that ensued. Unemployed and strapped for cash, Dorian confessed: “I had to make a big decision. Should I fight Newsweek or not? And finally I said no.”
The former teacher hasn’t warmed to the publication in the years since, but the bitcoin community has warmed to Dorian – and the occasionally cantankerous grandfather has reciprocated. It’s a happy end to an unhappy story.
For conspiracy theorists, the sight of Dorian Nakamoto rubbing shoulders with the likes of Nick Szabo at bitcoin conferences is evidence that perhaps Newsweek were onto something after all. Could Dorian have found a way to become the face of his creation, whilst dissuading attempts to steal his multi-billion dollar fortune? If so, it would have to go down as Satoshi’s smartest trick yet. We will likely never know the true identity of Satoshi Nakamoto, who now may rank among the 50 richest people in the world. In his absence, substitute teacher Dorian S. Nakamoto seems a fitting choice to become the substitute face of bitcoin.
Do you think Dorian Nakamoto has been treated harshly by the press? Let us know in the comments section below.
Images courtesy of Digitaltrends.
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The post What is the Bitcoin Lightning Network A Beginner&8217s Explanation appeared first on 99 Bitcoins.nWhile the Lightning Network is extremely promising as a cryptocurrency game-changer, its also pretty complicated. But dont worry! As always, were here to translate this fascinating aspect of Bitcoin into plain English. Since Lightning Networks are anchored to traditional blockchains, a solid understanding of the basic workings of blockchain technology is helpful in understanding them. .
Any American bitcoin investors who were hoping to avoid paying taxes for their profits this year by trading them for altcoins are in for an unpleasant surprise. New regulations have been tailored specifically to make sure U.S. taxpayers can’t use this method to avoid giving the IRS their cut.
Bitcoin to Altcoin is Not a “Like Kind” Exchange
Until today a crafty tax attorney or accountant could have tried claiming that trading bitcoin for another cryptocurrency is not a taxable event, but U.S. authorities are now moving in fast to plug this loophole. The latest tax bill contains clarifications which make this a non-valid tax-minimizing strategy going forward.
The issue arises from the IRS categorizing bitcoin as property, which can be argued makes crypto to crypto trades “like kind” exchanges under Section 1031 of the Internal Revenue Code. The new tax bill defines “like kind” exchanges to pertain only to real estate deals. To make things as clear as possible, this means that if you trade bitcoin for tether (USDT) for example, that is a taxable event.
“Some people think, ‘I’m taking my bitcoin, which the IRS has deemed to be property, swapping it for another property and doing it for investment reasons,’ so it sounds like it could be a 1031 exchange,” Evan Fox, tax manager at New York accounting firm Berdon, told CNBC. “I think it’s a stretch.”
The Current Framework
According to the current tax framework, Americans need to self report their bitcoin trading profits and calculate their dues according to their tax brackets. Selling after holding the asset for less than a year qualifies as a short term investment and is taxed between 10% to 39.6%. Selling bitcoin after holding for over a year is qualified as a long-term investment and taxed up to 20%. Conveniently, if you traded over $20,000 with Coinbase the IRS already has your records.
“If you put money into the cryptocurrency space, and you decide to buy (an altcoin), and you one day monetize it and show up with a $2 million house, the IRS is not stupid,” Fox said. “Money doesn’t just appear out of nowhere.”
The IRS can also decide to audit someone’s tax going up to three years back and is known to use the services of Chainalysis, a blockchain analysis specialist, to hunt down bitcoin users for evading taxes.
“If a few years from now the IRS is able to decode what happened, and you made a significant amount of money in 2017 and didn’t report it, you’ll face interest and penalties that have been accruing,” Fox explained. “It might be a risk some people want to take, but there are some bad consequences if you get caught.”
Could tax authorities crack down on altcoin exchanges to make sure investors aren’t hiding bitcoin gains? Share your thoughts in the comments section below!
Images courtesy of Shutterstock.
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The post Trading Bitcoin for an Altcoin Won’t Shield You From the IRS Anymore appeared first on Bitcoin News.
If the safety of your bitcoins is keeping you awake at night, perhaps it’s time you considered a more secure solution. Exchanges can be hacked, smartphones can die, and hardware wallets can be lost. For the ultra-paranoid, there’s only one storage option that’s impregnable to all known attack vectors – the brainwallet. If you get it right that is.
Bitcoin on the Brain
Bitcoin is thought of as a digital currency, but unlike Paypal or credit card, it’s equally suited to the analogue world. You can’t spend bitcoin offline, but you can store it in the form of a paper wallet (saving the pass key on a piece of paper). Take that approach one step further, by removing the paper, and you’ve got yourself a brainwallet. It’s the only bitcoin wallet that’s 100% impervious to phishing or hardware failure. If you die, the wallet dies with you, but by that stage, bitcoins – and indeed life itself – will no longer be your concern.
Creating a brainwallet is as simple as memorizing the wallet’s mnemonic recovery phrase. For those who desire the ultimate in privacy and discreteness, it’s possible to memorize the wallet address too. That way there’s no paper or digital trail tying you to your coins.
There are numerous reasons why it may be desirable to create an invisible wallet. Paranoia, primarily, but it’s also a neat solution for anyone who trusts their memory better than they trust third party technology. For “persons of interest” passing through U.S. customs, for instance, a brain wallet is one repository that’s guaranteed to be off-limits to curious TSA agents. They can rifle through your hard drive but, for now at least, they can’t rifle through your head.
How to Create Your Own Brain Wallet
To make your own brainwallet all you need is a brain and a mnemonic seed generator. Electrum, Armory, and Mycelium will all do the trick. There’s also Brainwallet.io, a deterministic bitcoin address generator. It explains: “Store bitcoin in your brain by remembering your passphrase and salts. Address generation takes place in your browser, and no information is ever sent to our server.” The site’s Github repository can be inspected for those of a cautious disposition – and if you’re considering a brainwallet, that’s you.
There aren’t many do’s and don’ts when it comes to generating a brainwallet, but the following is an absolute don’t – don’t use an existing phrase as your passphrase. People have created scripts that can search through millions of wallet addresses and try known phrases against them. Thus, your favorite biblical scripture or Katy Perry lyric is out of the question. Instead, use a genuinely random sequence of words. To ensure true randomicity, Brainwallet.io lets you drop any file into the text box. Your browser will then perform a SHA256 hash and use the checksum as your passphrase.
How to Remember Your Mnemonic Passphrase
The simplest way to ensure you never forget your passphrase is to write it down and store it in a very safe place. That’s fine if you’re traveling to a different country, as you can leave a backup at home in case your memory fails you. Writing down a brainwallet kind of defeats the point of creating one though. If you want to stay true to the spirit of the game, you’re gonna need to remember, and remember good. To do so, you’ll want to create a memory palace.
The seed provided as an example on bitcoin wiki’s brainwallet page is as follows:
witch collapse practice feed shame open despair creek road again ice least
To memorize this, you’d take a familiar place – your childhood home perhaps – and construct a visual sequence: You open the door to your house to find a witch staggering about in the hallway. She’s having a heart attack and is about to collapse. As you’re preparing to practice your CPR, she sinks her teeth into your neck and begins to feed on your jugular.
Yes, memory palaces are very silly, but that’s what makes them so effective. Moonwalking with Einstein: The Art and Science of Remembering Everything is an excellent read for anyone with an interest in such matters. Creating a brainwallet may seem excessive, but so long as you can recall your seed, it’s guaranteed to keep hackers and quantum computers at bay. And at zero dollars, it’s infinitely cheaper than a hardware wallet.
Would you trust your memory enough to use a brainwallet? Let us know in the comments section below.
Images courtesy of Shutterstock.
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EtherSport, an innovative online sports lottery platform based on blockchain technology an Ethereum smart contracts, is about to finish it’s ICO. EtherSport has created a unique kind of lottery, contrary to many similar services, not based on guessing random numbers, but involving the exact determination of sports events results, which cannot be influenced by anyone. This means that players can leverage their analytical skills, to generate immense profits. You can still take part in the last, 4th, stage of the ICO and receive the 100% bonus.
EtherSport, the sports prediction platform, launches its MVP. This is a test product said to be rapidly updated with new functionality during the end period of the ICO. The interface as simple as possible, so there are no distracting factors. To predict the results in one line, just press on it, enter your predictions and press ‘Try.’ And that’s all, enjoy the sports and wait for the results!
During the early testing stages, testers are welcome to fulfill three lines a day, provided by EtherSport.
Currently, the MVP includes only the player interface and EtherSport official lines, but the independent Lotter capabilities and will be added soon.
The possibility to become a Lotter and create your own lines will be added later, after the best conditions for becoming a Lotter will be determined based on the gaming process and the appropriate functionality will be developed. These conditions will be developed in a way offering the best utilization of blockchain and smart contract technology, and to keep the amount of Lotters and their lines at an optimal point.
EtherSport announces a test net prediction competition. All registered participants are welcomed to predict the outcome of all lines to receive a prize in ESC tokens. 1st place will win 3000 ESC, 2nd will achieve 1500 ESC, and 500 ESC will be granted to the 3rd place.
Alex Tsymbal, CEO and Co-Founder of EtherSport:
‘During the ICO we have received several useful feedbacks from our investors. Now we can certainly say that we’re making a unique product for this market, which is fully open and decentralized. Our task was to create a simple and straightforward interface, so as much as possible people would be able to take part in the gaming process and make sure that our platform is easy and understandable. With the MVP launch we would like to make a gift to our users, so first 3 testers who will guess the most results will receive prizes from EtherSport.
We also offer an additional 100% bonus to all 4th stage ICO contributors, due to the rise of ethereum exchange rate. We make a product which is an interesting contribution for the investors and affordable for other players at the same time.’
Currently, EtherSport runs its final, 4th stage of the ICO. The price of ESC token is 0.002 ETH, but every contributor is eligible for 100% bonus.
Visit the Ethersport Website here to learn more: https://ethersport.io
Visit the Ethersport MVP here: https://mvp.ethersport.io/
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French Finance Minister Bruno Le Maire announced on Sunday December 17th that the next Group of 20 (G20) meeting would include discussion about how to regulate the world’s most popular cryptocurrency, bitcoin. The digital asset hasn’t ceased in making news all year, and European politicians appear more concerned in direct proportion to its price increase, as shown by the EU legislative body urging strict compliance laws upon coin exchanges this week. The G20 establishing regulatory frameworks, however, would spread across the world and have enormous impact.
A G20 Discussion All Together on the Question of Bitcoin
Speaking to La Chaîne Info (LCI), French Finance Minister Bruno Le Maire declared: “I am going to propose to the next G20 president, Argentina, that at the G20 summit in April we have a discussion all together on the question of bitcoin.”
The G20 includes central bankers and leaders from 19 countries and the European Union, spanning the entire globe: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russian Federation, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, and the United States.
“There is evidently a risk of speculation,” Mr. Le Maire continued. “We need to consider and examine this and see how…with all the other G20 members we can regulate bitcoin.”
That bitcoin would make it into the agenda is nothing short of jaw-dropping. G20 nations soak up more than eighty cents on every economic dollar around the world in terms of trade and productivity.
Mr. Le Maire was wrapping his session at the One Planet Summit in Boulogne-Billancourt this week. The week prior, the Finance Minister seemed to welcome bitcoin and its undergirding technology, blockchain. “The use of this new technology will allow fintech firms and other financial actors to develop new ways of trading securities that are faster, cheaper, more transparent and safer,” he said, referencing new rules to allow for trading unlisted securities. These would add “another asset for Paris’ attractiveness as a financial center” he was quoted as saying.
A Delicate Tango
Indeed the Macron government has largely been viewed as neoliberal, reordering France’s clunky and notorious bureaucracies toward less regulation.
The first scheduled calendar meetings at the Argentina G20 in April are of its Development Working Group in Buenos Aires, April 10th, 2018. Priorities announced for the gathering include, “the future of work and what this means for education, infrastructure for development, and a sustainable food future,” its website reads.
In anticipation of the meetings, Argentine President Mauricio Macri explained, “Technology is quickening productivity at an unprecedented rate, which presents both opportunities and challenges. We want to ensure that adopting technological advances does not lead to economic exclusion or other negative side effects.”
Bitcoin investor Tim Draper held a meeting with President Macri and an advisor in late November of this year. By all accounts, Mr. Macri seemed at least receptive to the idea of cryptocurrencies. That same month, the country’s Rofex exchange announced it would be offering bitcoin futures.
What do you expect will be the G20 outcome regarding bitcoin? Tell us in the comments.
Images via Pixabay, WikiCommons, G20.
The post Crypto to Take Center Stage at G20 – “Need to See How We Can Regulate Bitcoin” appeared first on Bitcoin News.
Last week the Chicago Board Options Exchange (Cboe) introduced its bitcoin-based futures markets and the first day got a reasonable level of fanfare. Now the largest options exchange in the world, the Chicago Mercantile Exchange (CME Group) has launched its bitcoin derivatives products. Here’s what you can expect from CME Group’s bitcoin futures opening day.
One of the Oldest and Largest Prediction Markets the Chicago Mercantile Exchange Enters the Bitcoin Arena
Last week Cboe’s XBT futures launch caused quite the stir and volume was pretty decent on the first day of trading. There’s been interest in the January expiry contracts as there are a little over 1,500 sold. However, the following months have waned as there are only 70 for February and 150 for March. Of course, it’s early, but major derivatives players see a lack of liquidity. That could all change as CME Group has just launched its bitcoin futures products. It’s safe to say CME is a far bigger whale in the sea of options markets and has a much broader customer base. CME’s launch should provide more liquidity while also making longs and shorts easier for institutional traders.
Legalized Betting Using Leverage
Futures markets are no different than legalized gambling where traders are allowed to place bets on the future outcome of a commodity, stock, currency, and bitcoin as well. Futures are popular because they enable leverage options (using leverage means you are getting a loan based on a deposit) and typically most futures contracts only require 10 percent. However, CME Group’s futures will require investors to meet a margin requirement of 43 percent. A contract unit is five bitcoins defined by the price of the CME CF Bitcoin Reference Rate (BRR).
So the reason retail investors dig investing in futures is because at an example price of $19K per BTC, a person would have to invest $95,000 to catch profits from price rises or drops for five bitcoins. Essentially through the magic of borrowing power (leverage), traders only have to pay $40,850 in order to make some gains. This means making profits off the price rises and dips tethered to five bitcoins at a much cheaper rate. Unlike Cboe’s futures which is solely based on the Gemini index, CME Group’s price reference rate is gathered from four. The BRR rate comes from the bitcoin exchanges Kraken, GDAX, Bitstamp, and Itbit which will coincide with the firm’s Bitcoin Real-Time Index (BRTI).
Limited Brokerage Service Options Will Mean Limited Liquidity
Just like Cboe’s bitcoin futures contracts, for CME Group’s derivatives, investors will need to utilize a brokerage service. Currently, there are not that many services offering futures for both companies which is likely causing the liquidity issues. On Monday the largest online brokerage service TD Ameritrade will offer Cboe’s contracts but will not provide CME’s products at the moment. Interactive Brokers who were one of the first to provide Cboe’s products will also allow CME’s futures. CME’s futures will be able to be purchased in contracts for the nearest two months in the March quarterly cycle (Mar, Jun, Sep, Dec) alongside the nearest two serial months.
Many bitcoin proponents have been excited about the CME addition, and some speculators believe the spot market price reflects the optimism. Last week just before Cboe launched its futures product, the spot price of bitcoin was low and started climbing precisely on the hour the derivatives were launched. Three days prior to the Cboe launch, bitcoin’s price tumbled to $13,400 across global exchanges but jumped back to $15,400 after the futures launch. The CME launch had the exact opposite happen to the spot price of bitcoin.
What do you think about CME Group’s bitcoin futures launch? Let us know what you think in the comments below.
Images via Shutterstock, CME Group, and Northwestern Medill
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The post Options Giant CME Launches Bitcoin Futures — Here’s What to Expect appeared first on Bitcoin News.