Hardware Wallet Trezor Confirms Upcoming Cashaddr Support for Bitcoin Cash

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There’s good news for Bitcoin Cash users as Trezor announces upcoming support for cashaddr, a BCH address format. The announcement is a significant development for Bitcoin Cash as support from the most popular hardware wallet could spell new money coming into the market, or at least increased security for those wishing to safeguard their investment carefully.

The news was announced over Twitter by Bach N. of Trezor who posted a link from Jochen Hoenicke, lead developer of cashaddr #285.

Cashaddr was developed as a way of distinguishing between Bitcoin Cash and Bitcoin Core addresses, and while it was supposedly expensive to implement the change, the move has paved the way for further innovations.

Pavol Rusnack of Satoshi Labs is often credited with the change, saying “I suggest to change the address version to something different, so it is obvious the address is a Bitcoin Cash address. (It can start with C for example). Don’t forget to change also address version for P2SH!”

Bitcoin Cash developer Amaury Séchet responded saying “Agreed. I have a plan to change the address format. Changing the address format is expensive, so I would like to investigate various other option than just changing the prefix before settling on something. I would also have to convince other in the space that this is a good address format.” This would eventually manifest as cashaddr.

In his Github post, cashaddr dev Hoenicke stated:

“This needs to be done outside the firmware for cashaddr support. Webwallet: compute cashaddr addresses from xpub. Note that only the last step from hashed public key to address needs to be changed. The webwallet checks that the address the Trezor returns is as expected. This check should also allow 1.. addresses so that it works with older firmware (so we don’t have to deploy both at the same time); allow cashaddr as send to address. The firmware supports both and both use SPENDADDRESS. The only difference is the confirmation message given to the user; the transaction format did not change at all.”

Hoenicke clarifies that the change will not affect the means of transaction and handles the issues such as the misleading address keys once and for all. Trezor follows Coinbase and Bitpay in integrating cashaddr, helping to develop community consensus and raise the profile of the altcoin. There is currently no timeline at the moment, so users waiting to store their BCH will have to make do with the beta wallet for now before entering true cold storage.

Featured image from Trezor.

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Fintech Firm’s Stock Drops By 30 Percent Following Announcement of SEC Investigation

Following the announcement of an investigation by the US Securities and Exchanges Commission (SEC) into is business, stock value of the fintech firm Longfin dropped by 30 percent, CNBC reported April 3.

Longfin disclosed the investigation in a public 10-K filing to the SEC on April 2. Longfin shares closed 30.89 percent lower today, trading at $9.89 a share. This year so far the stock is down by 82.43 percent.

Longfin is a NASDAQ-listed fintech company (LFIN) whose market cap skyrocketed more than 1,000 percent in two days last December following an announcement that they acquired Ziddu.com, a firm specializing in smart contracts and micro-lending using Blockchain technology.

Pic

LFIN Stock Chart Dec. 2017-April 2018

Source: nasdaq.com

The Division of Enforcement of the SEC informed Longfin on March 5 that they would be investigating trading in the company’s shares and requested documents regarding its IPO and acquisition of Ziddu.com. Longfin expressed its full intention in cooperating with the SEC investigation in the 10-K filing:

“We are in the process of responding to this document request and will cooperate with the SEC in connection with its investigation. While the SEC is trying to determine whether there have been any violations of the federal securities laws, the investigation does not mean that the SEC has concluded that anyone has violated the law.”

Even Longfin CEO Venkat Meenavalli acknowledged the enormous spike in stock value last December, stating, “This market cap is not justified. I valued my IPO pricing at $5.” Meenavalli added, “We are a profitable company… We have nothing to do with this euphoric mania.”

In January of this year, the SEC reported it would crack down on companies that used public enthusiasm surrounding Blockchain technology to manipulate their stock prices. 

Blockchain Protocol to Link Professionals and Businesses Directly

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A start-up company is launching a Blockchain-powered platform which facilitates direct interactions between professionals and businesses – eliminating the need for intermediaries.

Profede claims firms will find it easier to get in touch with people whenever they are looking to hire new talent or collaborate on projects. Through the company’s “professional protocol,” a decentralized system, the person being contacted receives a payment whenever their details are accessed by an interested party.

The company has already entered into a partnership with beBee, a “personal branding platform for professionals” that is currently used for networking by more than 12 mln people. Under their arrangement, beBee is going to become the first platform to benefit from Profede.

Fixing the recruitment sector

Based in Estonia, Profede says existing networking platforms are failing to provide businesses and professionals with the opportunities they deserve.

Because individuals are constantly inundated with pitches they are uninterested in, companies with legitimate opportunities have difficulty in grabbing their attention – meaning their subscriptions can represent poor value for money.

Profede wants to tackle the high fees that businesses have to pay in order to be introduced to the qualified individuals they seek, while making sure that the professionals they are reaching benefit from some of this revenue.

Making networks profitable for professionals

Profede defines professionals as those who have registered an account on LinkedIn, and those with a presence on job sites and networks which are tailored to particular industries.

When a professional joins Profede, they have the chance to decide which information is publicly available, and how much their full profile is worth. Businesses and other professionals must pay this fee to gain access.

Participants are rewarded in Professional Activity Tokens (PATO) with a small cut of their earnings, being taken just 2% as a fee by Profede.

The business wants to ensure that individuals feel like they are appreciated, and simultaneously help companies to achieve results quickly and without great expense. Because of the way the protocol works, a company would only need to spend money when a profile matches their requirements. To help businesses make an informed decision, they will be able to check the feedback a professional has received in the past.

According to Profede, its Blockchain-driven protocol would be useful when a company is trying to source a qualified specialist in a particular industry to join their team, or when the said specialist is trying to find new employment.

What’s next?

An alpha version of Profede is expected to be completed by the autumn, with beBee integrating a beta model of the professional protocol into its platform come the end of the year.

Once fully released the following year, the company plans to go on a marketing drive so smaller firms can discover more about how it works. The company hopes that it will incentivize professionals to create profiles onto apps for recruiters and use Profede’s protocol.

Profede are currently in their pre-sale period, you can find out more on their Token Sale by visiting their website or Telegram, or by reading their white paper. The hard cap is $20 mln, with the entire volume being 6 bln PATO.

Bitmain Releases Ethash ASIC Miners

Chinese tech giant Bitmain announced that they are releasing an Ethash ASIC miner, according to a tweet April 3.

In the tweet, Bitmain says that the Antminer E3 is the “world’s most powerful and efficient EtHash ASIC miner.” The units will retail for $800 each and according to the tweet, are not available in China, nor can they be shipped to Hong Kong, Macau, or Taiwan. Orders are limited to one per person. Bitmain will only accept Bitcoin Cash (BCH) and US dollars for payment in this first batch of units.

This release of new mining hardware from Bitmain confirms rumors circulating in the crypto community that Bitmain would soon develop an Ethash ASIC miner. Ethash is the Proof-of-Work (PoW) hashing algorithm used by Ethereum (ETH) and a variety of other altcoins.

As Cointelegraph reported yesterday, some in the Ethereum community suggested the possibility of a hard fork in the ETH protocol to invalidate ETH ASICs. Ethereum founder Vitalik Buterin suggests the protocol is already resistant to mining centralization in the Ethereum White Paper:

“First, Ethereum contracts can include any kind of computation, so an Ethereum ASIC would essentially be an ASIC for general computation – ie. a better CPU… [The algorithm] allows anyone to “poison the well”, by introducing a large number of contracts into the Blockchain specifically designed to stymie certain ASICs.”

Bitmain surpassed the US GPU manufacturer Nvidia in terms of overall profits in 2017, earning an estimated $3-4 bln and taking 70-80 percent of the market for Bitcoin (BTC) miners and ASICs.  

Overstock Cancels Secondary Stock Offering after Share Price Plummets

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E-commerce retailer and blockchain investment firm Overstock has shelved plans to hold a secondary stock offering after the company’s share price plunged in response to the announcement.

The Wall Street Journal reports that although Overstock was “pleased” with the interest in the offering, market conditions forced the company to terminate the sale.

“Given the market volatility and price we are terminating the offering,” Overstock President Saum Noursalehi told the publication in a statement, adding that the firm had conceived of the offering as an “opportunistic financing.”

Though best known as an e-retailer, Overstock has been investing in blockchain and cryptocurrency startups for several years through Medici Ventures, its wholly-owned subsidiary. Medici has roughly a dozen portfolio companies, including Factom, Ripio, and tZero — which is in the middle of an initial coin offering (ICO) that Overstock expects will raise $250 million.

Due to its involvement in the blockchain space, Overstock has been characterized by some analysts as a “proxy stock” for cryptocurrencies. Its share price, unsurprisingly, has behaved accordingly, rising and falling along with the cryptocurrency market writ-large.

overstock share priceSource: Google Finance

In early January, Overstock shares peaked at an all-time high of $86.90. Since then, it has plummeted by 62 percent to a present value of $32.57.

This decline has largely tracked with the decline seen across the cryptocurrency markets. Bitcoin, for example, is down approximately 60 percent from its high-water mark.

However, there were two triggers that were Overstock-specific.

First, Overstock revealed that the Securities and Exchange Commission (SEC) is investigating tZero’s ICO as part of its broad inquiry into the nascent fundraising model. CEO Patrick Byrne has stated that the firm was not issued a subpoena – as many ICO operators were – but has been submitting documents voluntarily. He has also maintained that tZero’s offering complies with federal securities laws.

The second trigger was the secondary stock offering, through which Overstock had planned to issue four million new shares. The company’s share price fell by 10 percent on the news since the offering would have diluted the value of the currently-existent 29 million shares.

Featured image from Shutterstock.

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John McAfee Charges $105,000 Per Tweet For Promoting Cryptocurrency Projects

John McAfee, computer programmer and founder of the eponymous antivirus software, who drew his focus toward digital currency over recent years, disclosed that he charges $105,000 per tweet to promote cryptocurrency projects and products.

Last week, McAfee tweeted that the McAfee Crypto Team team has produced and published a guide on how the promotional tweets work on their website. The Team is a marketing agency for promoting initial coin offerings (ICO) and other projects in the cryptocurrency industry.

According to data provided in the guide, a series of polls carried out by McAfee reveals that 259,000 of his followers on Twitter “have more than 50 percent of their total assets in cryptocurrencies” and 224,000 followers represent “at a minimum, $4.48 bln in crypto investments.”

McAfee’s website offers a simple calculation of dividing the cost per tweet, $105,000, by McAfee’s 810,000 Twitter followers to assure potential clients that the “cost per investor reached” is no more than $0.13, claiming, “This is orders of magnitude less than any other approach.” McAfee allegedly promotes only those products and services that he “truly believes in”. “

Notably, when asked in an interview with Cointelegraph in January 2018 whether anyone had tried to pay him for promoting their project, McAfee responded negatively and evaded the question:

“I would say definitely they tried to pay me. I’m not going to talk about my personal finances where I make my money or from who. I set up on stage as it’s my business and it should be everybody’s business. And actually, I think it’s rude to even ask such questions of people. No offense.”

Vitalik Buterin and Joseph Poon Call Out Craig Wright at Deconomy 2018

Deconomy, an international blockchain forum, is taking place in Seoul, South Korea, from April 3 to 4 at the Walkerhill Hotel. Organizers have looked to bring audiences the “brightest entrepreneurs, thought leaders, investors, developers, academic and policy groups, and blockchain enthusiasts” to present and discuss the biggest topics within the blockchain industry.

Among the event’s many speakers was Craig S. Wright, chief scientist at nChain, who in 2016 controversially proclaimed himself to be Satoshi Nakamoto, the inventor of Bitcoin. He joined Blockstream CSO Samson Mow and Bitcoin Cash proponent Roger Ver on a panel discussion entitled “Bitcoin, Controversy over Principle.”

Ethereum co-founder Vitalik Buterin is also a featured speaker at the event, but on the afternoon before his panel, he live-tweeted the presentation featuring Mow, Ver and Wright.

During Wright’s comments, Buterin tweeted that the scientist was “crazy.” In the subsequent Q & A period, he pointed out several errors in Wright’s presentation and asked, to hefty applause, “Why is this fraud allowed to speak at this conference?”

A longtime proponent of Bitcoin Cash, Wright’s views on the cryptocurrency differ from the Ethereum mogul’s, who claims that Bitcoin Cash is a “fraud.” At the beginning of Wright’s segment, Buterin stated on Twitter:

Craig Wright begins: “We’re going to talk about the lies.”
“Samson said that money was used first in barter and as a store of value — BULL****!”
Then proceeds to brag about how many university degrees he has….. eh, at least he read Graeber.

During his presentation, Wright spoke directly about the lighting network, which was created by OmiseGO advisor Joseph Poon. Wright commented that “LN work is as hard as breaking a discrete log.” He later got technical in his speech, saying that “gamma can be less than zero” while discussing the concepts of “selfish mining” and “honest mining.”

His ideas were difficult to understand even for Poon, who commented from the audience, “I wrote the lightning network paper, and I straight up don’t understand a word of your presentation.”

In response to Buterin’s barrage of tweets, Wright fired back and insinuated that ether was an inferior currency, stating, “Vitalik has one issue… When we demonstrate what BCH can do, he knows that ETH will wither and die.” He later followed up with a comment that he “broke Vitalek [sic]” — that he was a “twig” and that Wright “must remember to be gentle next time.”

The ongoing feud began following Wright’s previous statement that he was Satoshi Nakamoto. Buterin has long been skeptical of this, and he has repeatedly asked Wright to “cut the lies and drop the claims.”

In addition, Wright was the subject of a recent lawsuit by his former business partner Dave Kleiman, who claims Wright “swindled” him out of $5 billion in bitcoin.

To see Buterin’s live tweetstorm, click here.

Is Nasdaq’s Latest Slip Good for Cryptocurrencies?

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The Nasdaq continued the fall from its all-time high on March 12, 2018. The Nasdaq is down nearly 10% since the high on a variety of news. The Nasdaq, which tracks tech stocks has suffered under the weight of massive losses in market capitalization by the likes of Facebook, Amazon, and Twitter. The causes, which we’ll analyze below, are two-fold. In typical American fashion, they both revolve around Donald Trump.

The first Trump revolving drag on the Nasdaq has been the never-ending controversy over Facebook. Facebook continues to suffer the fall out of the Cambridge Analytica Scandal. Here’s how the story goes:

  • Aleksandr Kogan,  a data scientist, develops a Facebook survey app called MyDigitalLife. MyDigitalLife amasses 300,000 users and has access to the data of more than 50 million of those users friends.
  • Cambridge Analytica employed Aleksandr Kogan and used this data to create personality models on these 30 million Americans
  • The company was then able to use organic Facebook action: likes, shares, and comments to target “persuadable” voters, leading to the election of Donald J. Trump
  • Christopher Wylie blows the whistle on Facebook, fallout ensues.

In the days since Wylie’s stunning accusations, both Cambridge Analytica and Facebook have both vehemently denied these accusations. Nonetheless the damage has been done: Wylie and Zuckerberg are testifying in front of Congress, and Zuckerberg has been asked(and refused) to appear before Parliament; Cambridge Analytica is being investigated by Nigeria for the role it played in their elections, and Palantir has launched an internal investigation  into its own employees connections to Cambridge Analytica (a sensitive matter in front of a potential IPO).

All this chaos has certainly done damage to Facebooks stock. Since the scandal broke, it has dropped more than 15%. The fallout of the scandal has spread beyond Facebook and is being echoed across the social media sector with Twitter following Facebook: the stock is down by 22% (despite not leaking any data). The scandal has, of course, raised broader questions over the sustainability of the business models of the many tech & media giants that appear on the Fortune 500 list and shows no signs of stopping.

Further dragging on the Nasdaq is retail giant Amazon. Amazon is the latest in a string of companies(62, to be exact) that Trump has attacked on Twitter. Trump has threatened to raise shipping costs to hurt Amazon, and is even rumored to be exploring anti-trust action against Amazon. Some speculate the real source of the president’s ire is Amazon CEO Jeff Bezo’s ownership of the Washington Post. Sources have said of the Washington Post that “Trump doesn’t like The New York Times, but he reveres it because it’s his hometown paper. The Washington Post, he has zero respect for”. Essentially, Trump is waging a personal war against Bezos. Whether they like him or hate him, the stock market reveres Donald Trump. This reverence is evinced by Amazon’s 8% fall  over the last month.

The Nasdaq’s slump is expected to continue over the coming weeks and the market as a whole looks like it will remain flat. So what does this mean for crypto? I set out to answer the question of how the stock market affects crypto markets in my previous post “How Today’s Stock Markets Crash Will Affect Cryptocurrency Markets” and re-analyzed my conclusion in another article later this month. The conclusion I arrived at, by comparing the VIX and Bitcoin and concluding that as the market performs better, so will Bitcoin. So what’s going on here? How can the entire crypto market be up when some of the biggest stocks are down double digits? Fundamentals.

My previous article was based on a technical analysis of the market. It turns out, this uptick might have something to do with the applications of blockchain rather than the markets themselves. Late last month, CCN contributor Gerelyn Terzo wrote an article examining how blockchain might fix the problems that plague centralized data systems like Facebook and allow users to reclaim their data. These same sentiments were echoed by the New York Times, CNBC, CNN and virtually every other mainstream media company. This in addition to broad market sentiment that all crypto is undervalued at current levels, a further legitimization of crypto and even a lawsuits against Google, Facebook, and Twitter for banning cryptocurrency advertising have combined to create the market conditions for a rally. We might even be starting to see the shift of crypto from a risky asset, to a hedge against centralized tech stocks that I described when the Dow Jones made a significant downturn last month. Only time will tell, but it’d appear the whole market is feeling pretty good about crypto at the moment.

Featured image from Shutterstock.

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Story of Coincheck: How to Rebound After the ‘Biggest Theft in the History of the World’

Those who held Bitcoin through the Mt. Gox hack of 2014 experienced one of the most tumultuous times in cryptocurrency history, having seen some of the darkest days in the ecosystem. However, Mt. Gox has been overtaken as the biggest single exchange hack with Coincheck, also a Japanese exchange, taking the title.

While thieves walked away with a bigger payday from the recent hack, the effect on the entire cryptocurrency market was far less severe. Were there lessons that have been learnt from previous hacks? Or perhaps the market has become more secure and steady in the light of major tragedies.

In a strange twist of fate, Coincheck may have an offer tabled to it by Japanese brokerage firm, Monex, who are mulling over buying a majority stake in the cryptocurrency exchange.

Regardless of the aftermath, and the effects it could still have, it is important to go over the past few months and see how this 523 mln NEM coins hack, worth approximately $534 mln on Jan. 26, has moved things into place on Japan and the rest of the world.

‘Biggest theft in the history of the world’

The aftermath of the Mt. Gox hack was wrought by dark dealings and hidden facts, but the Coincheck one was handled far better as the heads of the exchange not only kept their investors in the loop, but made promises about reimbursing the lost funds.

It all began on Jan. 26 when Coincheck suspended all deposits in NEM on their exchange.

Later in the day, with suspicions high and tension thick, NEM Foundation president Lon Wong confirmed Coincheck was hacked, calling the stolen funds “the biggest theft in the history of the world.” This figure beat Mt. Gox by just over $50 mln as the Mt. Gox hack was estimated at 850,000 BTC, valued at $473 mln at the time.

Details emerge

Once the hack was confirmed by the exchange, reported to have happened 3:00 AM local time on Jan. 26, there was a buzz of attention in the media, and concern from the users of Coincheck that were implicated in the massive hack.

It was then revealed that the hack resulted in a loss of 523 mln NEM coins, worth approximately $534 mln around Jan. 26. The coins were stolen via several unauthorized transactions from a hot wallet.

The news of the hack quickly spread via official channels, including the broadcasted press conference where details of how the hack happened were furnished. Unlike Mt. Gox, there was not so much confusion as to what took place. Coincheck, in that press conference explained what went on, and what would happen going forward.

The key information given out by Coincheck in their first public statement after the hack was as follows:

  • The hack only involved NEM Coins;

  • The hackers managed to steal the private key for the hot wallet where NEM coins were stored;

  • The stolen money belonged to the customers of the exchange; and

  • When Coincheck became aware of the breech, they halted withdrawals in the hope of stemming the drain.

The biggest issue that emerged with these details being made public was that Coincheck had kept its NEM stocks on a simple hot wallet rather than a much more secure multisig wallet.

The exchange claimed that the security setup differed between various coins on the exchange.

Other cryptocurrencies on the site were stored in multisig wallets, but the NEM was not. When pressed by the media, the company insisted that security standards were not low, however the lack of multisig protection for NEM did not seem to agree with that statement.

Moreover, Coincheck said that it had an eye on the stolen funds and was aware where they were being stored, with hopes of tracking the funds. The exchange also expressed its desire to try and repay all 260,000 users affected by the hack, as well as up its security and continue running as a business.

CEO Koichiro Wada stated:

“In addition to strengthening in-house monitoring as countermeasures against unauthorized access from the outside as in this case, we will be carrying out security monitoring by external expert institutions concerning financial systems security and cyber security.”

Repaying the stolen funds

Following their intentions to refund, Coincheck reiterated plans of working towards repaying all 260,000 victims of the NEM hack.

As of March 12, Coincheck announced their reparations plan as follows:

  • It would begin effective March 12

  • Reparations amount to 88.549 JPY x the amount held at 23:59:59 JST on Jan. 26, 2018

  • Qualifications for reparations: Users in possession of NEM on the platform at 23:59:59 JST on Jan. 26, 2018

Coincheck also confirmed that they would be remaining in business, and not filing for bankruptcy. This was almost in direct contrast to the way in which Mt. Gox handled its hack and its obligation to affected users; there are still many who are waiting for a refund from the 2014 hack.

With the dust settling after the hack, markets reacted surprisingly favorably.

Even more surprising was the reaction of NEM’s price at the announcement of Coincheck’s intentions to repay the lost funds. The price jumped nearly 30 percent.

NEM

Image source: Coinmarketcap

Japanese regulators’ reaction

Something that seemed far less surprising was the reaction from the Japanese regulators. The country had already been a victim of the biggest cryptocurrency hack in Mt. Gox, and now, it picked up the same record, but with a bigger margin.

Japan’s Finance Minister Taro Aso confirmed that the country’s Financial Services Agency (FSA) inspected the exchange in the wake of the hack. To this end, Coincheck also delivered their report to the FSA, indicating their intention to remain within the regulatory boundaries since being compromised.

While dealing with the regulators and the effects of the hack itself, including lining up funds to make repayments, the exchange still faced a fightback from some users who began filing lawsuits.

Seeking reimbursement

Heading into March, still without compensation, as many as 132 Coincheck users had begun filing a joint lawsuit in seeking reimbursement from the hack. This was added to the 10 other users who had already filed lawsuits in the middle of February.

More headaches came Coincheck’s way when Japanese regulators took the attack as a catalyst to delve deeper into the workings of cryptocurrency exchanges within the country.

Seven exchanges were punished by the regulators for poor security, and two were suspended, including Coincheck.

Keeping their word

Despite the fallout from the hack and the setbacks from lawsuits and the FSA, Coincheck, from March 12, began rolling out a plan to reimburse its users. Additionally, it also resumed partial trading on March 9.

The exchange opened up the withdrawals of some of the major cryptocurrencies and reiterated their intention to continue as a business with many improvements. Their statement read:

“We will solemnly and seriously take the measures we take carefully and will deeply reflect on ourselves and will drastically review our internal control system and management control system and will review the management strategy that thoroughly protects customers.”

A way out

The most recent development in the Coincheck saga has been a proposition from trading platform Monex to buy out Coincheck for what it says will be “billions of yen”.

Monex has offered to acquire a majority stake in Coincheck according to Nikkei Asian Review reports, citing unnamed sources. Monex is valued at around $870 bln and apparently has hopes of getting Coincheck back to full service.

A new way of handling things

The Mt. Gox story is still impacting the cryptocurrency market a number of years on with it rumoured that a sell off a few weeks ago by Mt.  Gox bankruptcy trustee – Nobuaki Kobayashi – may have contributed to the three month downtrend in the cryptocurrency market.

The Coincheck hack, and everything that has followed, while bigger in terms of the money that went missing, has not been felt as much across the market.

The lessons that were learnt from the Mt. Gox hack has surely permeated every sector of the cryptocurrency market, and especially those who are in the business of running exchanges.

Coincheck, as a Japanese exchange, also certainly followed the unfolding of that original monumental hack in 2014, and must have taken some important notes.

It is also important to note that these hacks have nothing to do with security issues within the Blockchain, as journalist Teymoor Nabili points out.

In essence then, the crimes committed are ones of circumstance, and not ones based around a faulty technology. Just like dollar bills are not blamed when banks are robbed, the Blockchain and its cryptocurrencies are not at fault here; although professor Steve Hanke, applied economist at Johns Hopkins University, disagrees.

Hacks are, as it stands, part and parcel of the cryptocurrency market place, but they are looking to be worked out. Japan’s involvement as a regulator is positive, ensuring security at exchanges and Coincheck’s decision to take on the hack head on is positive too.

BitPay Raises $40M in Series B Funding to Expand into Emerging Asian Markets

While the price of bitcoin continues to loom around the $7,000 range, Bitcoin payments seem to be holding strong in various parts of the world. In particular, emerging markets in Asia looking to facilitate low-cost payment solutions for cross-border commerce are benefiting from cryptocurrency transactions.

This has become apparent as BitPay, the largest global blockchain payment provider, just closed its $40 million extended Series B funding round. Notable new investors include Menlo Ventures, along with a number of investors based in Asia like Capital Nine, an Asian fintech corporation. Other participants from the region include Christopher Klaus, the founder of Internet Security Systems (ISS), and Alvin Liu, co-founder of Tencent.

To date, BitPay has raised a total of over $70 million in capital. In 2014, BitPay raised $30 million in its Series A round from investors including Index Ventures, Founders Fund, Felicis Ventures, RRE Ventures and Sir Richard Branson.  

“BitPay had a record 2017 as we processed over $1 billion in bitcoin payments. Since then, we’ve brought on new investors who can help BitPay scale globally to meet customer demand,” said Stephen Pair, CEO of BitPay. “Our goals include key hires in engineering and regulatory licensing, as well as expansion into emerging markets in Asia — one of BitPay’s fastest-growing regions for transactions and wallet adoption.”

Aquiline Capital Partners initially led the Series B round but extended it due to increased investor demand.

“We were only planning to raise a $30 million round, but due to high demand, we extended the round to $40 million in January. Interestingly enough, this was also during the same time the price of bitcoin started to drop,” BitPay’s chief commercial officer, Sonny Singh, told Bitcoin Magazine. “Moreover, this was also the first time Menlo Ventures has ever made an institutional crypto investment.”

BitPay now joins the Menlo portfolio alongside leading companies such as Uber, Betterment, Roku, BlueVine and Warby Parker.

“We gravitated towards BitPay because we felt the company had identified a killer use for crypto in facilitating low cost payment solutions for cross-border commerce and B2B payments, which is a massive market poorly served by the existing payment rails,” said Tyler Sosin, a partner at Menlo Ventures, in a statement. “We are impressed with the company’s execution — it has demonstrated extremely efficient growth and a stickiness with merchants and consumers that is the hallmark of many great payment service providers.”

Why BitPay’s Funding Round Is So Impressive

The key factor behind the $70 million in capital raised has to do with the technology. Using Bitcoin as a form of payment, rather than as a trading asset, is revolutionizing B2B payments for cross-border commerce — particularly in Asia.

“Bitcoin’s popularity is spreading rapidly throughout Asia and BitPay has an opportunity to extend its technology solutions across Asia,” said Sam Lin, director of Capital Nine, in a statement. “BitPay’s cross-border payment solution helps businesses pay or receive international payments faster and more economically.”

Last month, BitPay announced a partnership with Bithumb, one of the world’s largest crypto exchanges. BitPay and Bithumb have since launched a blockchain-based, cross-border payment solution to help South Korean businesses pay and receive international payments in a faster and more cost-effective manner than traditional bank wires.

Bitcoin and Bitcoin Cash payments dramatically reduce the friction, cost and time of cross-border business-to-business payments. Businesses that select the BitPay solution pay a fee of 1 percent per transaction and receive the cross-border confirmation in one business day. The average bank wire to or from South Korea could take three to five business days and could cost approximately 4 percent, depending on the foreign exchange rates and each bank’s wire rates.

Moreover, the security behind Bitcoin payments is also impressive, as all transactions are recorded on the blockchain. This notion appealed to one of BitPay’s newest investors, the renowned security expert Christopher Klaus. Klaus founded Internet Security Systems (ISS) and turned it into one of the first large internet security companies, which was sold to IBM for $1.3 billion in 2006.

“Security is extremely important to the blockchain network and BitPay,” said Klaus, in a statement. “I have been watching the cryptocurrency space and believe BitPay is able to disrupt the financial services worldwide through payment processing and cross-border payments in large part because of the security built into blockchain.”

As a result of the technology provided by BitPay, hundreds of thousands of businesses around the world are now able to accept bitcoin payments. Popular brands like Microsoft, Newegg, Namecheap, Gyft, Takeaway.com and Virgin Galactic use BitPay. The BitPay Wallet consumer adoption is also growing, with a monthly average of more than $3 billion in transactions. And as more attention is focused on bitcoin as a form of payment, rather than an asset for trading, its value could increase dramatically in terms of revolutionizing payment systems.