Top Bitcoin, Blockchain and Cryptocurrency News And Analysis From January

January 1 Bitcoin completes improbable black-swan decade by posting a 9 million percent gain!

Even 10 months after Satoshi Nakamoto mined the first block of bitcoins, bitcoins had no official value. Then in October 2009, a Bitcointalk forum member named “NewLibertyStandard” devised a method of price evaluation based on the amount of energy required to mine bitcoins, giving rise to the rudimentary bitcoin market website which operated as the first-ever bitcoin exchange.

From trading below $0.001 in July 2010 to trading as high as $19,893 in December 2017, Bitcoin positioned itself as by far the best performing asset of the decade. By comparison, S&P 500 tripled in value and gold value rose just 25%, only marginally above the inflation rate for the decade.

January 3 Bitcoin network celebrates its 11th birthday by setting a new hash rate record.

Growing steadily throughout 2019, the Bitcoin network hashrate set a new record of 120 ex-hashes per second (EH/s) which represents a 186% rise from 42 exahashes per second (EH/s) a year ago. On the development front, Bitcoin Core Github grew from 19,104 commits from 601 unique contributors to 22,536 commits from 678 contributors.

The number of active addresses crossed half a million with a 20% increase from 433,715 to 524,360. Lightning network also witnessed significant growth, with the number of channels increasing 41% from 21,130 to 36,130 and, even more impressively, the number of Lightning network nodes rising 114% from 2,297 nodes to 4,923.

January 4 South Korea refrains from taxing cryptocurrency profits.

Only a month after it was reported that the Ministry of Economy and Finance was seeking to impose capital gains tax on incomes from digital currencies, South Korea's Ministry of Finance and Strategy made it clear that the current tax law does not consider crypto trading gains as taxable income for the time being due to a lack of legal definition of virtual currencies. The ministry, however, stated that it was looking into amending the laws based on a review of cryptocurrency taxation in other countries,

“The income tax law is only taxable on income listed as taxable. We are preparing a taxation plan for virtual assets by comprehensively reviewing the taxation of major countries, consistency with accounting standards, and trends in international discussions to prevent money laundering.”

January 6 Telegram issues statement regarding its role in the development of Telegram Open Network (TON) blockchain.

In a public notice issued on its official website, Telegram noted that it had been careful not to speak publicly on the project while it was working to ensure that it was compliant with all relevant laws and regulations. The statement, intended to dispel misleading rumors, revealed that the TON blockchain will be fully open-source and decentralized with Telegram having no control or involvement with the project after its launch, relying solely on community developers for further development.

Since raising $1.7 billion in early 2018 in a private ICO, Telegram had maintained complete radio silence on the development of the TON blockchain. It wasn't until October 2019 that Telegram even officially confirmed its involvement in the project.

January 7 IBM launches the blockchain app to allow consumers to trace the origin of their coffee.

Built by the IBM Food Trust with the support of 10 leading organizations in the coffee industry, the app, named “Thank My Farmer” was unveiled by IBM's food traceability platform Farmer Connect at the 2020 International Consumer Electronics Show (CES) in Las Vegas and is expected to be made available to consumers in the US, Canada, and Europe later this year.

The idea behind the project is to bring traceability, efficiency, fairness, and communication across the coffee supply chain which supports the $200 billion industry. The app will let the coffee consumers learn about the provenance of their coffee and even support the farmer who grew the beans.

January 8 Libra executive dismisses Bitcoin’s merit as a means of payment.

Speaking at the Digital Money Forum at the Consumer Electronics Show (CES) in Las Vegas, vice chairman of the Libra Association Dante Disparte argued that Libra was being unfairly subjected to what he called “a crypto purity test” when permissionless decentralized crypto projects have failed to deliver a payments system capable of scaling and meeting the needs of people in the developing world,

“Bitcoin as an asset class has proven that mathematical scarcity can support an incredibly exciting asset. It’s not a means of payment.

The bottom rung of the ladder of economic mobility is payment access and crypto isn't cutting it on payments. How do you remove insidious levels of friction that basically make it cost-prohibitive to give people access to payments?”

January 10 Kaspersky report identifies Telegram as a key attack vector for Lazarus hacking group.

The cybercrime group from Pyongyang, designated as an Advanced Persistent Threat (APT) and believed to be responsible for various cyberattacks since 2009 has made “significant changes to the group’s attack methodology” according to the report. Taking more careful steps than before and employing multi-stage infection procedures, Kaspersky found that fake cryptocurrency companies with Telegram trading groups were being used to fool victims into downloading a malicious payload.

Once the payload infected the victim's system, the attackers would gain remote access to control the compromised device to execute the next stages of their attacks. Several cryptocurrency businesses from UK, Poland, Russia, and China were identified as victims of such attacks.

January 13 CME Bitcoin options go live and surpass Bakkt's reported volume on the first day of trading.

Options on CME bitcoin futures contracts were opened for trading on the CME Globex Trading System with each contract, quoted in US dollars, representing five bitcoins and relying on trade flow data from several of the largest bitcoin exchanges to track the price.

Remarkably, on the first day of trading itself, 55 contracts worth 275 bitcoin or $2.1 million were trading on the Chicago-based derivatives exchange, nearly double the reported cumulative volume of $1.15 million attracted by Bakkt's bitcoin options which had been trading for over a month since December 9. Trading activity confirmed reports from JPMorgan ahead of the launch that there was greater anticipation for the CME options than Bakkt's options.

January 14 Craig Wright notifies the court of the arrival of the bonded courier.

Wright had originally claimed that a bonded courier would arrive on January 1, delivering him the keys to the bitcoins held in the Tulip Trust. On January 10, Wright requested an extension to file a notice and was granted until February 3 to notify the court of the courier's arrival.

In the court filing submitted, Wright notified the US District Court of Southern Florida that he had obtained all the necessary information to unlock the bitcoins held in the Tulip Trust and that he had produced to the court a list of 16,404 addresses which held the bitcoins. The Kleiman estate promptly refuted Wright's notice as “simply a list of addresses” with no reference or information pertaining to the bonded courier. Wright's lawyer later admitted that Wright did not receive private keys to the addresses.

January 15 LinkedIn report reveals blockchain as the most in-demand skill in 2020.

In its annual list of the most in-demand skills sought by recruiters, the employment networking website listed blockchain as the hard skill companies needed most in 2020, ahead of cloud computing, analytical reasoning, and artificial intelligence. The report stated that companies were looking at blockchain as a transformational technology beyond its scope in financial services, seeing it as a secure, decentralized, and cost- and time-efficient way to transparently track shipments and transactions of all kinds.

While companies recognized the concerns surrounding lack of standardized protocols, regulation, and scalability, they were sufficiently convinced by blockchain's potential to view it worthy of the gamble.

January 16 Korean cryptocurrency exchange Bithumb disputes $69 million tax bill.

Less than two weeks after the Finance Ministry said it would not tax cryptocurrency profits, Korea's leading cryptocurrency exchange Bithumb filed a complaint with the Tax Tribunal against the National Tax Service (NTS) over what it considers a “groundless” tax the agency imposed on its customers.

Bithumb claimed that cryptocurrency is not a legally recognized currency and therefore the authorities did not have grounds to impose a withholding tax, also known as a retention tax, which is an income tax paid to the government by the payer of the income rather than by its recipient. A withholding tax of 80.3 billion won ($69.1 million) was imposed by the NTS on cryptocurrency profits withdrawn in Korean won from accounts held by foreigners.

January 17 UK Government seeks software to trace cryptocurrency transactions.

Her Majesty's Revenue and Customs (HMRC) posted a contract offer on the UK government's official public sector information website offering $130k for a,

“cryptoasset blockchain analysis tool that will support intelligence gathering methods to identify and cluster cryptoasset transactions into linked transactions and identify those linked to cryptoasset service providers.”

Seeking the ability to identify transactions linked to service providers such as mixing, gambling, and dark market services, HMRC noted that the blockchain analysis tool was primarily required to trace Bitcoin, Ripple, Tether, Litecoin, Ethereum, and Ethereum Classic transactions, but also preferably privacy-focused cryptocurrencies such as Monero, Zcash, and Dash.

January 18 Grayscale Investments reports that it attracted an inflow of $608 million in 2019.

The New York-based digital currency asset manager raised $225.5 million into its investment products, bringing assets raised for the year 2019 to $607.7 million, a figure which surpasses cumulative investment across Grayscale products from the last six years since its inception in 2013.

Grayscale's Bitcoin Trust continued to lead 2019’s investment demand with $471.7 million total, $193.8 million of which were raised in 4Q2019, marking the largest ever quarterly investment into the Trust. Nearly three-quarters of Grayscale's 2019 assets raised came from institutional investors like hedge funds, with institutional investors accounting for 71% of inflows in 2019, up from 51% in the previous year.

January 19 Gold bug Peter Schiff claims he lost all his bitcoins due to a corrupt wallet.

Blaming Bitcoin for his inadequate understanding of how his wallet worked, Schiff tweeted,

“I just lost all the Bitcoin I have ever owned. My wallet got corrupted somehow and my password is no longer valid.

So now not only is my Bitcoin intrinsically worthless; it has no market value either. I knew owning Bitcoin was a bad idea, I just never realized it was this bad!”

Schiff went on to claim that he had a simple numeric password which he remembered, not realizing that it was only a login PIN for his blockchain wallet. After several days of hand-wringing and gum-flapping, Schiff eventually conceded that he had confounded his PIN for his password. Having failed to back up his seed phrase, Schiff was unable to recover his bitcoins.

January 20 Indian IT minister calls for blockchain solutions to improve the quality of government schools.

Speaking on the occasion of the inauguration of a Centre of Excellence (CoE) in Blockchain Technology set up by the National Informatics Centre (NIC) in Bengaluru, Telecom and IT minister Ravi Shankar Prasad asked the NIC to come up with blockchain-based solutions to improve the quality of government schools in the country.

The CoE develops blockchain-based Proof of Concepts (PoCs) for select government use cases to understand potential benefits provided by the emerging technology. Urging the NIC to work on a mechanism to involve more startups in the field, Prasad added that blockchain technology would open up new frontiers in areas of governance, treasury management, excise operations, agriculture, health, and education.

January 22 Vodafone pulls out of the Libra Association.

The London-based telecommunications giant became the eighth company to join the wave of exodus from Facebook's Libra project, after Mastercard, Visa, PayPal, Stripe, eBay, Mercado Pago, and Booking Holdings. Vodafone said in a statement that while it was committed to financial inclusion, it felt that such interests would be better served by focusing its efforts on M-Pesa, the company's mobile phone-based money transfer service,

“We have said from the outset that Vodafone’s desire is to make a genuine contribution to extending financial inclusion. We remain fully committed to that goal.

We will continue to monitor the development of the Libra Association and do not rule out the possibility of future cooperation.”

January 24 Bitcoin money laundering suspect Aleksandr Vinnik extradited to France.

Following a ruling of Greece’s Council of State, Russian national Vinnik, operator of defunct cryptocurrency exchange BTC-e, was extradited from Greece to France. Vinnik's lawyer, Zoe Konstantopoulou, claimed that his client had been kidnapped, and suggested he had been sent to France without her knowledge. Vinnik was arrested on a US arrest warrant in 2017 on a Greek beach while vacationing with his family as the alleged mastermind behind an international money-laundering scheme that had processed over $4 billion in cryptocurrency transactions, including bitcoins stolen from Mt. Gox.

A Greek court had initially approved Vinnik's extradition to the United States in December 2017 but an extradition request by France in 2018 was given precedence.

January 27 Dubai government agency announces crypto valley to promote blockchain growth.

Dubai’s Multi Commodities Centre (DMCC), the world's flagship free zone and Government of Dubai Authority on commodities trade and enterprise, announced its plans to launch a crypto valley in partnership with CV VC and CV Labs.

An agreement, aligned with the Dubai Blockchain Strategy launched by the Crown Prince of Dubai, was signed at the World Economic Forum (WEF) in Davos to develop an ecosystem in Jumeirah Lakes Towers (JLT), DMCC's business district, where over 17,000 companies are currently registered. Research from DMCC's Future of Trade report found that blockchain could help reduce up to 20 percent of the physical paper costs associated with global trade, currently estimated at USD 1.8 trillion.

January 29 Cambodia set to implement a blockchain-based digital payment system.

Speaking to Cambodia's oldest English daily, the Phnom Penh Post, director-general of the National Bank of Cambodia (NBC), Chea Serey said that the central bank was preparing to launch a blockchain-based peer-to-peer payment and money transfer platform within the next few months. Dubbed ‘Project Bakong’, Serey described the system as “the national payment gateway for Cambodia” and said that the scheme was already launched on a trial basis in July and was expected to become fully operational within the first quarter of 2020,

“Bakong will bring all players in the payment space in Cambodia under the same platform, making it easy for users to pay each other regardless of the institutions they bank with. Eventually, we hope to allow cross border payment through the Bakong system.”

January 31 Kraken discloses a critical flaw in Trezor Bitcoin hardware wallets.

Security researchers at San Francisco-based cryptocurrency exchange Kraken managed to hack both of Trezor's flagship hardware wallets within 15 minutes. Kraken Security Labs disclosed the critical flaw, first identified in October 2019, through a blog post. Taking advantage of inherent flaws within the microcontroller used in the Trezor wallets, the attack exploited voltage glitching in Trezor’s hardware design to extract an encrypted seed, after which the security researchers were able to brute-force the PIN protecting the encrypted seed.

The only way for Trezor to fix the vulnerability would be to fully redesign its hardware. Until then, users of Trezor wallets are advised not to allow physical access to their wallets and enable their BIP39 Passphrase with the Trezor client.

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