Jan 20: South Korea’s Reported Date to Ban Anonymous Crypto Trading

Korea won bitcoin cryptocurrency trading
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The South Korean government will reportedly enforce new rules banning the use of anonymous cryptocurrency trading accounts from January 20h.

According to Korean news agency Yonhap, the government is turning up its scrutiny on the burgeoning local cryptocurrency market to curb speculative investments in cryptocurrencies. Citing anonymous financial industry sources, the report also points to accompanying guidelines that will mandate exchanges to comply with heightened anti-money laundering norms.

The Korean government announced its intention to implement curbs among the country’s crypto trading market last week after concerns about “high losses due to excessive volatility.”

“Officials share the view that virtual currency trading is overheating irrationally … and we can no longer overlook this abnormal speculative situation,” an excerpt from the government’s statement added.

The new rules will only allow deposits and withdrawals to traders with matching account names at their banks and cryptocurrency exchanges. New anonymous ‘virtual accounts’ will also see a complete ban as a part of the government’s agenda to mandate and strengthen KYC (know-your-customer) rules in the industry.

Such is Korea’s cryptocurrency mania among retail investors, new adopters and everyday citizens that Prime Minister Lee Nak-yon called it a “pathological phenomenon” in late November.

The reported date to ban anonymous trading comes within a month of Korean authorities conducting onsite inspections of multiple cryptocurrency exchanges following the mid-December hack of Seoul-based exchange Youbit.

While Korean authorities haven’t banned cryptocurrency trading outright, one senior government official confirmed regulators will “consider” the shutdown of cryptocurrency exchanges, if necessary, in the future. The suggestion of an outright ban was first proposed by Korea’s Ministry of Justice in early December, although such crippling measures is reportedly certain to meet opposition from other legislators.

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The Cream of the Crypto Crop: 10 Best Performing Assets in 2017

With 2017 now firmly in the rearview mirror, it is time to take stock of the best-performing digital currencies of the year. Bitcoin grabbed plenty headlines on its way to a brief stop at $20,000, but in terms of percentage gains, it doesn’t even crack the top 10.

Older altcoins like Dash posted impressive gains, reaching a 13,900% return at its mid-December all-time high. Dash’s price retreated somewhat, ending the year with a 9,265% gain to capture fifth place in the rankings. Likewise, Ethereum had a banner year, settling in at number six with gains of 9,162%. Litecoin, one of the oldest altcoins, closed the year with a 5,045% gain and took the number nine spot.

Newer coins also fared extremely well, with NEM and Ardor taking number two and three, respectively. Stellar, Binance Coin, OmiseGo and Golem round out the top ten. Bitcoin took fourteenth place with a 1,318% increase.

2017's Biggest Cryptoassets Ranked by Performance

Making more than a Ripple

Ripple, the centralized bank-focused digital currency, claimed the gold medal with a staggering 36,018% return over the past year. A $1,000 investment in Bitcoin on January 1, 2017 would have been worth $13,180 at the end of the year. That same $1,000 invested in Ripple would be worth an eye-popping $360,018.

While Ripple had good growth in the second quarter, the true surge happened in the last weeks of December, which saw the currency take the number two spot by market cap away from Ethereum. Though Bitcoin has seen the majority of headlines this past year, it cannot begin to compare with Ripple’s price performance.

Bitcoin Versus 2017's Biggest Cryptocurrency Gainer

What about 2018?

With the total cryptocurrency market cap hitting a record high of $673 bln today, there is no sign that 2017’s rally is coming to an end anytime soon. Digital currency enthusiast and journalist Max Keiser believes the total digital currency market cap will reach $5 trln or more, with Bitcoin itself hitting $100,000. Keiser argues that Bitcoin’s path to six figures is based on its status as digital gold. He argues that other currencies are better suited to focus on payments:

“Dash is emerging as the crypto payment rail while Bitcoin asserts itself as Gold 2.0. I suggest those frustrated by the Bitcoin scaling debate to embrace Dash for payments and leave Bitcoin Core alone to continue working on Gold 2.0.”

Famed stock picker Ronnie Moas is also optimistic about Bitcoin, believing the digital currency will see prices in excess of $28,000:

“The number (of Bitcoin available) is a lot lower than what people think it is. A lot of the Bitcoin has been lost, some of it hasn’t been mined and then you have a lot of people like myself that just won’t sell their Bitcoin at any price.”

And what of altcoins? Bitcoin’s so-called “dominance” factor is currently only 37.5%, which is near all-time lows. The Bitcoin dominance metric is a measure of how much of the total cryptocurrency market cap is “dominated” by Bitcoin. Bitcoin’s current market cap of $250 bln is divided by the $673 bln market cap of all cryptocurrencies combined. This nets the Bitcoin dominance percentage – 37.2% at press time. As recently as a year ago, Bitcoin’s dominance exceeded 90%.

Keep an Eye Out for These Bitcoin Tech Trends in 2018

In many ways, 2017 was Bitcoin’s best year yet. Most obviously, increased adoption made the pioneering cryptocurrency’s exchange rate skyrocket from under $1000 to well over 10 times that value.

But from a tech perspective, things seem to be just getting started: 2018 promises to be the year that a number of highly anticipated projects are either launched or adopted.

Here’s a brief overview of some of the most promising upcoming technological developments to keep an eye on in the new year.

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Cheaper Transactions with Segregated Witness and a New Address Format

Segregated Witness (SegWit) was one of Bitcoin’s biggest — if not the biggest — protocol upgrade to date. Activated in August 2017, it fixed the long-standing malleability bug, in turn better enabling second-layer protocols. Additionally, SegWit replaced Bitcoin’s block size limit with a block weight limit, allowing for increased transactions throughout the network, thereby lowering fees per transaction.

However, adoption of the upgrade has been off to a relatively slow start. While some wallets and services are utilizing the added block space offered by SegWit, many others are not yet doing so. This means that, while Bitcoin is technically capable of supporting between two and four megabytes worth of transactions per ten minutes, it barely exceeds 1.1 megabytes.

This is set to change in 2018.

For one, the Bitcoin Core wallet interface will allow users to accept and send SegWit transactions. Bitcoin Core 0.16, scheduled for May 2018 (though this may be moved forward), will most likely realize this through a new address format known as “bech32,” which also has some technical advantages that limit risks and mistakes (for example, those caused by typos).

“To spend coins from the P2SH format currently used for SegWit, users need to reveal a redeem script in the transaction,” Bitcoin Core and Blockstream developer Dr. Pieter Wuille, who also co-designed the bech32 address format, told Bitcoin Magazine.

“With native SegWit outputs this is no longer necessary, which means transactions take up less data. Recipients of SegWit transactions will be able to spend these coins at a lower cost.”

Perhaps even more importantly, several major Bitcoin services — like Coinbase — plan to upgrade to SegWit in 2018 as well. Since such services account for a large chunk of all transactions on the Bitcoin network, this could significantly decrease network congestion, thereby decreasing average transaction fees and confirmation times, even for those who do not use these services.

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The Lightning Network Rolling Out on Bitcoin’s Mainnet

While further SegWit adoption should provide immediate relief of fee pressure and confirmation times, truly meaningful long-term scalability will likely be achieved with second-layer solutions built on top of Bitcoin’s blockchain.

One of the most highly anticipated solutions in this regard — especially for lower value transactions — is the lightning network. This overlay network, first proposed by Joseph Poon and Tadge Dryja in 2015, promises to enable near-free transactions and instant confirmations, all while leveraging Bitcoin’s security.

The solution has been under active development for about two years now, with major efforts by ACINQ, Blockstream and Lightning Labs. Progress on the scaling layer has been significant all throughout 2017, with early software releases of different but compatible software implementations, useable wallets interfaces and test transactions happening both on Bitcoin’s testnet and even on Bitcoin’s mainnet on a regular basis now.

“I’d say we have solved the main technical problems and have a relatively good idea on how to improve on the current system,” Christian Decker, lightning developer at Blockstream, told Bitcoin Magazine. “One last hurdle that’s worth mentioning is the network topology: We’d like to steer the network formation to be as decentralized as possible.”

Given the current state of development, adoption of the lightning network should only increase throughout 2018 — not just among developers, but increasingly among end users as well.

“Integration and testing will be the next major step forward,” Lightning Labs CEO Elizabeth Stark agreed, noting: “Some exchanges and wallets are already working on it.”

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Increased Privacy Through TumbleBit and ZeroLink

While it is sometimes misrepresented as such, Bitcoin is not really private right now. All transactions are included in the public blockchain for anyone to see, and transaction data analysis can reveal a lot about who owns what, who transacts with whom and more. While there are solutions available to increase privacy right now — like straightforward bitcoin mixers — these usually have significant drawbacks: They often require trusted parties or have privacy leaks.

This situation could be improved significantly in 2018. Two of the most promising projects in this domain — TumbleBit and ZeroLink — are both getting close to mainnet deployment.

TumbleBit was first proposed in 2016 by a group of researchers led by Ethan Heilman. It is essentially a coin-mixing protocol that uses a tumbler to create payment channels from all participants to all participants in a single mixing session. Everyone effectively receives different bitcoins than what they started with, breaking the trail of ownership for all. And importantly, TumbleBit utilizes clever cryptographic tricks to ensure that the tumbler can’t establish a link between users either.

An initial implementation of the TumbleBit protocol was coded by NBitcoin developer Nicolas Dorier in early 2017. His work was picked up by Ádám Ficsór as well as other developers, and blockchain platform Stratis announced it would implement the technology in its upcoming Breeze wallet, which also supports Bitcoin, by March 2018. Recently, in mid- December of 2017, Stratis released TumbleBit integration in this wallet in beta.

The other promising solution, ZeroLink, is an older concept: it was first proposed (not under the same name) by Bitcoin Core contributor and Blockstream CTO Gregory Maxwell, back in 2013. Not unlike TumbleBit, ZeroLink utilizes a central server to connect all users but without being able to link their transactions. As opposed to TumbleBit, however, it creates a single (CoinJoin) transaction between all participants, which makes the solution significantly cheaper.

This idea seemed to have been forgotten for some years until Ficsór (indeed, the same Ficsór that worked on TumbleBit) rediscovered it earlier this year. He switched his efforts from TumbleBit to a new ZeroLink project and has since finished an initial ZeroLink implementation.

Ficsór recently ran some tests with his ZeroLink implementation, and while results showed that his implementation needs improvement, Ficsór considers it likely that it will be properly usable within months.

“I could throw it out in the open right now and let people mix,” he told Bitcoin Magazine. “There is no risk of money loss at any point during the mix, and many mixing rounds were executing correctly. It is just some users would encounter some bugs I am not comfortable with fixing on the fly.”

sidechain2018.jpg

More Sidechains, More Adoption

Sidechains are alternative blockchains but with coins pegged one-to-one to specific bitcoins. This allows users to effectively “move” bitcoins to chains that operate under entirely different rules and means that Bitcoin and all its sidechains only use the “original” 21 million coins embedded in the Bitcoin protocol. A sidechain could then, for example, allow for faster confirmations, or more privacy, or extended smart contract capabilities, or just about anything else that altcoins are used for today.

The concept was first proposed by Blockstream CEO Dr. Adam Back and others back in 2014; it formed the basis around which Blockstream was first founded. Blockstream itself also launched the Liquid sidechain, which allows for instant transactions between — in particular — Bitcoin exchanges. Liquid is currently still in beta but could see its 1.0 release in 2018.

Another highly anticipated sidechain that has been in development for some time is RSK. RSK is set to enable support of Turing-complete smart contracts, hence bringing the flexibility of Ethereum to Bitcoin. RSK is currently in closed beta, with RSK Labs cofounder Sergio Demian Lerner suggesting a public release could follow soon.

Further, Bloq scientist Paul Sztorc recently finished a rough implementation of his drivechain project. Where both Liquid and RSK for now apply a “federated” model, where the sidechain is secured by a group of semi-trusted “gatekeepers,” drivechains would be secured by bitcoin miners.

If drivechains are deployed in 2018, the first iteration of such a sidechain could well be “Bitcoin Extended:” essentially a “big block” version of Bitcoin to allow for more transaction throughput. That said, reception of the proposal on the Bitcoin development mailing list and within Bitcoin’s development community has been mixed so far. Since drivechains do need a soft-fork protocol upgrade, the contention does make the future of drivechains a bit more uncertain.

“Miners could activate drivechains tomorrow, but they often outsource their understanding of ‘what software is good’,” Sztorc told Bitcoin Magazine. “So they’ll either have to decide for themselves that it is good, or it would have to make it into a Bitcoin release.”

schnorr2018.jpg

A Schnorr Signatures Proposal

Schnorr signatures, named after its inventor Claus-Peter Schnorr, are considered by many cryptographers to be the best type cryptographic signatures in the field. They offer a strong level of correctness, do not suffer from malleability, are relatively fast to verify and enable useful features, thanks to their mathematical properties. Now, with the activation of Segregated Witness, it could be relatively easy to implement Schnorr signatures on the Bitcoin protocol.

Perhaps the biggest advantage of the Schnorr signature algorithm is that multiple signatures can be aggregated into a single signature. In the context of Bitcoin, this means that one signature can prove ownership of multiple Bitcoin addresses (really, “inputs”). Since many transactions send coins from multiple inputs, having to include only one signature per transaction should significantly benefit Bitcoin’s scalability. Analysis based on historical transactions suggest it would save an average of 25 percent per transaction, which would increase Bitcoin’s maximum transaction capacity by about 33 percent.

Further on, Schnorr signatures could enable even more. For example, with Schnorr, it should also be possible to aggregate different signatures from a multi-signature transaction, which require multiple signatures to spend the same input. This could, in turn, make CoinJoin a cheaper alternative to regular transactions for participants, thereby incentivizing a more private-use Bitcoin. Eventually the mathematical properties of Schnorr signatures could even enable more advanced applications, such as smart contracts utilizing “Scriptless Scripts.”

Speaking to Bitcoin Magazine, Wuille confirmed that there will probably be a concrete Bitcoin Improvement Proposal for Schnorr signatures in 2018.

“We might, as a first step, propose an upgrade to support Schnorr signatures without aggregation,” he said. “This would be a bit more straightforward to implement and already offers benefits. Then a proposal to add aggregation would follow later.”

Whether Schnorr signatures will already be adopted and used on Bitcoin’s mainnet is harder to predict. It will require a soft fork protocol upgrade, and much depends on the peer review and testing process.

Cryptocurrency Use in Illicit Activity ‘Small’ Compared to USD Volume: US Treasury Official

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In December, the U.S. Senate Judiciary held a full panel hearing focusing on a bill designed to modernise anti-money laundering (AML) laws, which included looking at the role that digital currencies play.

The hearing on Bill S1241: Modernizing AML Laws to Combat Money Laundering and Terrorist Financing took place, chaired by Chuck Grassley, a senior U.S. Senator from Iowa, and the current chairman of the Judiciary Committee of the 115th Congress.

Opening the hearing, Grassley said that the introduction of S1241 is designed to give law enforcement the tools it requires to do its job, stating that:

This bill will modernize our AML laws by providing new tools, modernizing methods, and closing loopholes to make sure that law enforcement can prevent, identify, and prosecute those who break the law.

According to a study conducted by the Tax Justice Network, the U.S. is one of the easiest places in the world for terrorists, human traffickers, and corrupt foreign politicians to hide illicit money, said Senator Dianne Feinstein at the hearing, who is backing the bill, adding that:

The bill is intended to address a number of gaps in current law. It is the product of years of work and it builds on the recommendations included in a bipartisan report titled ‘The Buck Stops Here: Improving United States Anti-Money Laundering Practice.’

The hearing, which heard from seven witnesses over two panels, focused on the threat that money laundering, terrorist financing, and other forms of illicit financing pose to the national security of the U.S. and the integrity of the U.S. and international financial systems.

Kenneth Blanco, deputy attorney general of the criminal division at the U.S. Department of Justice, said that as economies and financial systems become increasingly global, so too do criminal organisations.

He said:

Transnational criminal organizations, kleptocrats, cybercriminal groups, terrorists, drug cartels, and alien smugglers alike must find ways to disguise the origins of the proceeds of their crimes so that they can use the profits without jeopardizing their source.

According to the UN Office on Drugs and Crime, it estimates that annual illicit proceeds total more than $2 trillion globally. Some of the money laundering threats that Blanco highlights include illicit cash, trade-based money laundering, illicit use of banks, prepaid access cards, and digital currencies.

The use of cryptocurrencies enables criminals to conduct illicit transactions because they offer potential anonymity, which enables them to move their criminal proceeds between countries, states Blanco. In his opinion, though, some countries have limited AML controls.

As an example, he cites the Drug Enforcement Administration’s (DEA) 2017 National Drug Threat Assessment, which found that China-based firms manufacturing goods used in trade-based money laundering schemes often prefer to accept payment in bitcoin because it can be used to anonymously transfer value overseas, thereby circumventing China’s capital controls. However, many would argue that bitcoin is in fact pseudo-anonymous.

Matthew Allen, acting assistant director of the Homeland Security Investigative Programs and U.S. Immigration and Customs Enforcement, explained that in November 2016 HSI special agents investigated and seized $1.2 million in cash from Utah resident Aaron Shamo, who led a Xanax and fentanyl pill production organization. He then proceeded to sell his illicit products via the dark web where an investigation led to the identity of his digital currency wallet address. According to Allen, agents were able to seize Shamo’s bitcoins, valued at $2.5 million.

Yet, despite this, Jennifer Fowler, deputy assistant secretary for terrorist financing and financial crimes at the U.S. Department of the Treasury, claims that the U.S. dollar continues to remain a popular currency for illicit commerce and money laundering. She adds, though, that the Treasury is continually monitoring the use and development of new payment technologies, such as digital currencies.

She said:

Although virtual currencies are used for illicit transactions, the volume is small compared to the volume of illicit activity through traditional financial services.

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Putin Adviser Says ‘CryptoRuble’ Will Circumvent Sanctions, Government Remains Divided

At a recent government meeting, Sergei Glazyev, economic adviser to President Putin, said the ‘CryptoRuble’ could help alleviate the pressure of Western sanctions, The Financial Times reported Monday. However, there is still no unified official stance from the Russian government on the question of issuing a national digital currency.

The Russian CryptoRuble is essentially a digital ruble — a government-issued digital currency accepted as legal tender.

According to FT, Glazyev stated that a government-controlled cryptocurrency like the CryptoRuble would help Russia disregard Western sanctions:

“This instrument suits us very well for sensitive activity on behalf of the state. We can settle accounts with our counterparties all over the world with no regard for sanctions.”

A divided front

Glazyev’s positive stance on the CryptoRuble is the latest position in the ongoing back and forth on the topic within the Russian government.

According to Russian news agency TASS, during a Dec. 28 meeting on legislation for digital currencies in Russia, government officials spoke negatively about the CryptoRuble.

Both the Deputy Minister of Finance Alexey Moiseev and first Deputy Governor of Russia’s Central Bank, Olga Skorobogatova, stated that they did not see a need for issuing a national digital currency.

However, in June 2017 at the St. Petersburg International Economic Forum, Skorobogatova held the opposite position, saying:

“We will definitely get to a virtual national currency, we’ve already started working on it.”

Not a new question

The Russian government has been publicly discussing the idea of a government-issued digital currency as legal tender as far back as 2015. Originally, Qiwi, a publicly traded Russian payment service provider, initiated the idea for a Russian national cryptocurrency called ‘BitRuble.’

The Russian State Duma has an official working group in place that looks at cryptocurrency risks and regulations. Though there have been reports about possible outright cryptocurrency bans in Russia in the past, the government’s official stance remains unclear, leaning toward regulation of digital currency use.

Cardano Blockchain’s First Use Case: Proof of University Diplomas in Greece

Greek graduates may soon be able to prove their qualifications by way of a blockchain.

GRNET, the national research and education network of Greece, is working on a pilot project with blockchain research and development company IOHK to verify student diplomas on Cardano, a blockchain that launched in September.

The project is notable because it is the first official use case of Cardano, a proof-of-stake-based cryptocurrency and soon-to-be smart contract platform currently under development by IOHK.

The GRNET app will be built on Enterprise Cardano, a private or permissioned ledger version of Cardano. Unlike a public blockchain, where anyone can join in and participate, a private blockchain allows only a restricted set of users to validate block transactions.

So far, three Greek universities are participating in the project. While IOHK is providing the decentralized database, GRNET is providing the web front end and support and will bring together other universities participating beyond the pilot.

Funding for the project comes in part from Horizon 2020, a European program for research and innovation. Development of the prototype is already under way, Aggelos Kiayias, IOHK’s chief scientist, told Bitcoin Magazine.    

Why Diplomas?

Given IOHK’s deep ties with academia, it is no surprise to find the company working on a project that involves universities. But why diplomas?

Putting diplomas on a blockchain takes the paperwork out of the process and makes it easy and simple to check if someone holds a degree.

Typically, when a student graduates, they receive a paper copy of a diploma signed by the dean and co-signed the university’s registrar. All of the students’ transcripts and records are stored in the university’s centralized database.

To confirm that a graduate has the degree they claim to have, an employer has to check the official diploma or call the university. The labor-intensive process makes it too easy for unqualified applicants to slip under the radar.

Putting documents and records on the blockchain eliminates opportunity for fraud in that it allows graduates and universities to “issue a proof that a qualification exists that is undeniable,” said Kiayias. “This is a point of reference that can be agreed [on] by everyone.”

Cryptographic Proof

But to protect student privacy, instead of putting an entire diploma on the blockchain, GRNET plans to put only a cryptographic hash of a diploma on the blockchain.

Digital documents are easy to alter in ways that are undetectable to the human eye. But as long as the digital version shown to an employer hashes to the same output as what is stored on the blockchain, that proves the document is the original, unaltered version.

“We cannot put any plaintext on the blockchain, as diplomas and transcripts are personal information. We only put hashes; we may put entire diplomas and transcripts, but they will always be encrypted,” Panos Louridas, GRNET consultant and associate professor at Athens University of Economics and Business, explained to Bitcoin Magazine in an email.

This is not the first effort to store diplomas on the blockchain. In October, MIT announced its own pilot project to verify digital diplomas using the blockchain.   

But Louridas claims the GRNET pilot is different from prior projects in that it stores the entire chain of verification steps on the blockchain. Each step would be recorded as its own immutable transaction on a separate block in the blockchain.  

“You don’t really need a blockchain to store diplomas: a simple system with some digital signatures by the host institution would do,” he said. “We want to be able to record that somebody has asked for proof of a degree, that the proof has been granted, that the proof has been forwarded to a verifier, and that the verifier can verify that the degree is valid, and nobody can dispute any of the above steps.”

The three Greek universities taking part in the pilot include Aristotle University of Thessaloniki, Democritus University of Thrace and Athens University of Economics and Business.

Move Over, Winklevoss Twins: There Could Be 200 Bitcoin Billionaires

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Gemini co-founders Cameron and Tyler Winklevoss grabbed headlines last month when the value of their publicized bitcoin holdings surpassed $1 billion, making them the first “verified” bitcoin billionaires. However, blockchain data indicates that there could be as many as 200 bitcoin billionaires who have kept their holdings a secret to maintain their privacy.

That’s according to an MSN Money report, which cites an unnamed source at blockchain data aggregation website BitInfoCharts.

“A rep for BitInfoCharts, who wished to remain anonymous because of security concerns, told MONEY in an email that, given Bitcoin’s current overall market capitalization and that most people hold Bitcoin at multiple addresses, there may actually be as many as 200 Bitcoin billionaires, and possibly no fewer than 35,” the report said.

Two hundred would seem to be an extremely high estimate, given that bitcoin’s market cap is currently $235 billion, but 35 seems quite plausible.

As demonstrated by the site’s “Rich List,” there are six individual addresses that hold more than $1 billion worth of bitcoins. One address has been identified as belonging to cryptocurrency exchange Bitfinex, while the other address owners are unknown but may belong to other exchanges, custodial services, or hedge funds.

bitcoin billionairesSource: BitInfoCharts

However, most bitcoin users spread their holdings across multiple addresses, and many newer bitcoin wallets automatically generate new addresses every time the user selects “receive” in the client. Wallet explorers can link together addresses belonging to the same wallet, but careful users can keep their funds in several wallets that do not interact with one another, concealing the fact that they share an owner.

It has been well-publicized that bitcoin creator Satoshi Nakamoto most likely owned addresses containing nearly 1 million BTC, worth more than $13 billion at current exchange rates. Altogether, 149 addresses contain at least $100 million in bitcoin. Assuming Satoshi is a single person and he or she retains access to these wallets — which many people doubt — they would rank among the top 100 richest people in the world, according to the Bloomberg Billionaires Index.

Believe it or not, though, Satoshi’s wealth has been eclipsed by that of another cryptocurrency project founder. Chris Larsen, a co-founder of fintech startup Ripple, is currently worth more than $37.3 billion thanks to his 5.19 billion XRP in personal holdings and 17 percent stake in the company, according to a Forbes report. This would make him the 21st-richest person in the world, were he included in the Bloomberg index.

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Ether Hits New Record Price High Over $900 Following Month of Strong Growth

Ether (ETH), the native currency of the Ethereum platform and the third largest cryptocurrency by market cap, reached a new all-time high today, trading at $914 earlier this morning. At press time Ether was trading at an average of $889 and boasting a 16.26 percent increase in price in the past 24 hours.

In the past month, the price has seen over 100 percent growth, increasing from around $440 on Dec. 1, 2017 to today’s highs.

Ethereum Charts

Ether’s price had been fluctuating between $200-$400 since May 2017. The altcoin’s steady upward growth started in mid-December 2017, and the coin hit its previous record high of almost $880 on Dec.19, according to coinmarketcap.com.

Ethereum Charts

The third-largest cryptocurrency has seen astonishing growth this year, its market cap growing from $698 mln to today’s $86 bln, a 12,000 percent increase. On Jan. 1, 2017 the price of Ether was $8.

Ethereum Charts

Today’s price peak took place amidst increased ETH trading volumes, notably in Asia. At press time, Singapore-based exchange Coinbene was in the lead, boasting 24-hour trading volumes of $600 mln, almost 11 percent of overall Ether trading volumes. Hong Kong/Tokyo-based exchange Binance is also seeing a notable trading volume of almost $360 mln, with South Korea-based Bithumb close behind with 24-hour volumes around $340 mln at press time.

Meanwhile, the entire cryptocurrency market is seeing growth today, with most of the top 20 altcoins showing 24-hour increases, several around 30 percent and one as much as 83 percent. Bitcoin (BTC) is showing a humble 4.25 percent price increase, and BTC dominance hit an all-time low today of 35.9 percent.

Stellar Price Soars 33% on OKEx Listing, Up 165% in 7 Days

Bitcoin price all-time high
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The stellar price soared by 33 percent on Tuesday following its addition to cryptocurrency exchange OKEx.

Stellar Price Leaps by 33 Percent

It’s been a good month for projects founded by Jed McCaleb. The developer’s former project — ripple — returned the best performance of any cryptocurrency in 2017, and the token’s price has increased by nearly 1,000 percent since the beginning of December.

Meanwhile, stellar — McCaleb’s current project — has quietly surged to the eighth spot in the market cap rankings with a total valuation of just over $10 billion. In the past week, the stellar price has more than doubled, from $0.22 on Dec. 26 to $0.56 on Jan. 2, and the rally was capped off by 33 percent leap on Tuesday.

stellar priceSource: CoinMarketCap

The majority of XLM trading is concentrated in BTC trading pairs, and volume is fairly evenly distributed between Binance, Bittrex, and Poloniex. The stellar price, likewise, is fairly steady across these exchanges, and the spread between BTC and USDT pairs is just two percent.

stellar priceSource: CoinMarketCap

Rally Tied to OKEx Listing

The stellar price rally appears to be tied to its recent addition to Hong Kong-based cryptocurrency exchange OKEx, which currently ranks as the fifth-highest volume exchange. OKEx announced it would list stellar on Dec. 28, and the price began to shoot up shortly after the XLM market opened the next day.

Trading volume has been thin so far — OKEx has processed just $1.4 million worth of XLM/BTC volume during the past 24 hours — but it will likely increase as more investors return from holiday vacations and become aware of the new XLM market.

Aside from its addition to OKEx, stellar has also benefited from the recent announcement of a partnership with cryptocurrency payment processing service Pundi X that both increases access to XLM in Indonesia and could potentially lead to increased usage of stellar as a settlement tool for international trade involving the rupiah.

Write to Josiah Wilmoth at josiah.wilmoth(at)cryptocoinsnews.com.

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David Stockman Says Cryptocurrency Investors Are “Stupid Speculators”

President Ronald Reagan’s Former Director of the Office of Management David Stockman has told CNBC’s Futures Now in an interview that investors in the cryptocurrency market are “stupid speculators” and will suffer a “spectacular crash.”

Stockman stated:

“It’s basically a class of really stupid speculators who have convinced themselves that trees grow to the sky. It will burn out in a spectacular crash. All of these latter-day speculators will have their hands burned to a crisp, and they will learn the proper lesson.”

Weak argument

Over the past few months, Stockman has also expressed his bearish stance on the global stock market and predicted a “gigantic, horrendous storm” to hit stocks. Essentially, Stockman has predicted literally every asset and cryptocurrency in the global market to fall in value in an indefinite period, making his prediction and argument significantly weak.

Economists like Stockman and Paul Krugman have continuously failed to provide compelling arguments as to why investment in the cryptocurrency market and crypto assets such as Bitcoin and Ethereum are “stupid.” Stockman and Krugman have stated that Bitcoin is a bubble and that cryptocurrencies do not have underlying value or intrinsic value.

However, as Billionaire Investor Mark Cuban explained, the lack of intrinsic value is true for any asset and currency in the market. Even fiat currencies that are fully controlled by governments in terms of supply and circulation also do not have intrinsic value, as their valuation depends on the market and the demand from investors. If businesses, individuals and investors decide not to utilize the US dollar, its value will also inevitably fall.

At the Vanity Fair New Establishment Summit 2017, Cuban noted:

“It is interesting because there are a lot of assets which their value is just based on supply and demand. Most stocks, there is no intrinsic value because you have no true ownership rights and no voting rights. You just have the ability to buy and sell those stocks. Bitcoin is the same thing. Its value is based on supply demand. I have bought some through an ETN based on a Swedish exchange.”

It is relatively easy to condemn an asset class or a particular stock with basic arguments like the lack of intrinsic value and speculation in the market. But, it is difficult to provide specific reasons as to why assets are overvalued and are caught up in short-term bubbles.

Moreover, it is not possible to generalize investors in the cryptocurrency market as speculators. Many investors in the cryptocurrency market could understand the technology behind decentralized currencies like Bitcoin and their potential to challenge multi-trillion markets like the offshore banking and gold markets, which is sufficient to justify their investment in the sector.

Cryptocurrencies are not bubbles

While it is possible for Bitcoin and cryptocurrencies to experience short-term bubbles, cryptocurrencies in general are not bubbles. The cryptocurrency market is one of the liquid markets in the world and Bitcoin, the most valuable cryptocurrency in the market, is already more liquid than the most liquid stock on earth in Apple, with a $12 bln daily trading volume.

Cryptocurrencies also experience major corrections several times a month, and their values fall by nearly 30 percent on a regular basis, before recovering. Corrections prevent short-term bubbles from forming, as speculators drop off and the market solidifies.

Stockman also claimed that cryptocurrencies are not real money because transactions are not stable. Transactions on leading public Blockchains like Bitcoin, Ethereum and Litecoin are processed on a stable network with a well-structured fee system and consensus protocol algorithm.

“I have no idea. I mean it could double or triple from here or it could fall to zero. But the point is that it’s not real money because real money for transactions has to be stable,” Stockman added.