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Spectre And Meltdown Madness: What It Means For Ethereum

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To anyone who talks in terms of a cryptocurrency bubble, consider the following fun facts. In the short period of a few days following the bombshell announcement of Meltdown and Spectre, crypto prices responded in the following manner:

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Bitcoin +18%

ETH +41%

Litecoin +30%

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In my view, this is clear evidence of a market that is responding rationally to information coming from responsible sources. To appreciate what all the noise is about you must appreciate what Meltdown and Spectre are and why they present a danger to the big companies providing cloud storage for the corporate world.

Once this is clear, then you will better appreciate why Ether’s 41%+ short-term price spike left the others in the dust. But first lets dig into the Meltdown and Spectre situation.

The Secret Got Out

 On January 3 the secret about a new class of security vulnerabilities leaked out to the public. Not only was this seriously bad news but the leak also gave hackers advanced notice before anyone could begin to fix the twin problems.

The degree of seriousness is in the fact that almost all major microprocessor chips are vulnerable. This opens the door to hackers stealing information from personal as well as cloud services.

Researchers claim that Meltdown can be fixed with a patch. Shortly thereafter about every major player announced their patch. But there are two issues here. Will the patches fully solve they problem?

Casting A Cloud Over The Cloud

When a corporation becomes a cloud customer, even the largest share machines with other customers. This is the basic flaw in the centralized structure of cloud storage. Contrast this with the decentralized structure of blockchain technology and you begin to appreciate the force behind the sudden price spike in cryptocurrencies that we highlighted above.

Even though security tools and protocols are designed to separate customers date, the recently discovered Meltdown and Spectre flaws still leave serious vulnerabilities.

Meltdown, hackers could rent space on a cloud service, just like any other business customer. Once they were on the service, the flaw would allow them to grab information like passwords from other customers.

Secondly, reports on cloud services like Amazon, Google and Microsoft claim that it creates as much as 30% slower computation speeds. That clearly won’t make for happy customers.

Jerky NetFlix

Virtually everyone reviewing the situation believes individual computer users are the least vulnerable. That may be true. Hackers are in the hunt for the biggest prize and that would be the big three cloud companies. But how do you think families are going to react if their Netflix stalls and buffers every few minutes?

In the final analysis, the Meltdown flaw affects virtually every computer chip fabricated by Intel in use today. You are talking about 90% of the Internet and business world. But Meltdown is just one flaw.

Spectre is the other flaw and this one is the more insidious of the two. There is no known fix. Intel, AMD and others have claimed how complex a project it would be for hackers to breech the Spectre vulnerability. That is pretty hollow comfort. After all, hasn’t the FBI security been breeched. Those guys were supposed to be airtight.

Boom Days For Blockchain

In so many ways, last year marked a tipping point in the spread and acceptance of blockchain technology. The uses for Bitcoin are probably best gauged by its record $20,000 price in December. For Ethereum, it may have been marked by the formation of the Enterprise Ethereum Alliance (EEA) in February and rise to over 300 members at year-end.

No sooner has 2018 begun that the Meltdown and Spectre flaws created unexpected excitement for investors in cryptocurrencies. If I were a software salesman out of work, I would be sending my resume to every crypto company offering to peddle their blockchain. It could be the easiest job since selling web design services in 1995.

The Ethereum platform with its smart contracts is not the only crypto capable of addressing this newly uncovered opportunity created by Meltdown and Spectre. You can safely bet this will attract many players and for good reason, today’s blockchain technology is a long way from fast enough for mass adoption. Blockchain security may be a step or two better in it present form than cloud storage, but it has its security issues as well.

Building the Ethereum Moat

 EEA founder Jeremy Millar is clearly a brand ambassador for Ethereum. He believes that CEOs hear the chatter about blockchain and are pre sold not having a clear picture what can be accomplished or the money saved using this technology. The important thing is for IT departments to have a respected brand to attach to their recommendations.

The EEA seeks to connect and inform and through this pioneering process spread the gospel of Ethereum. So far this is beginning to build a brand franchise for Ethereum.

The EEA is the largest blockchain body and is committed to using open-source Ethereum technology for enterprise blockchain solutions. EEA expects to see great advances in these areas in 2018 with Ethereum technologies.

It also helps when Wall Street banks uncover the potential for billions in savings on the trading desks through the applications of the Ethereum platform.

So, if you though the last year held plenty of excitement, the Meltdown and Spectre flaws promise to make this year every bit as much fun.

Featured image courtesy of Shutterstock.

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 76 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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7 Comments

7 Comments

  1. Mister.Ticot

    January 8, 2018 at 11:06 pm

    It’s nice to have this kind of clever analysis here; still I don’t know what are spectre and meltdown 😀

    • incog13

      January 9, 2018 at 1:22 am

      How is Ethereum immune to these vulnerabilities that affect so many processors? Technical details would be nice.

  2. Thitzun

    January 9, 2018 at 1:48 am

    What are Spectre and Meltdown ?

  3. sparrowfahrenheit

    January 9, 2018 at 3:16 am

    James Bond fought Spectre. Don’t you guys know anything? Geeze…

  4. sparrowfahrenheit

    January 9, 2018 at 3:18 am

    Actually, its the “MINIX” system built into the subsystem of the hardware that concerns me. It has access to all of the programs on your machine -and can be accessed by the likes of entities like the NSA. If only we had open source hardware as well as software. Blockchain is great for revitalizing our rights to privacy.

  5. Cg4447

    January 9, 2018 at 6:51 pm

    I think its time the world starts noticing the potential of the SAFE network (Maidsafe), it has greater potential to solve these problems than Spectre or Meltdown.

  6. propMaster

    January 9, 2018 at 6:52 pm

    Typo in the article: ‘date’ should be ‘data’ in “Even though security tools and protocols are designed to separate customers date, the recently discovered Meltdown and Spectre flaws still leave serious vulnerabilities.”

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Analysis

Long-Term Cryptocurrency Analysis: Correction Deepens but Leaders Remain Stable

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As the major cryptocurrencies got hit hard this week, losing around 20% on average, the long-term picture in the segment got close to an entry point for investors. The overbought readings that developed during the late-April rally are now cleared and although the short-term trends are still clearly negative, we still expect the coins to resume the recovery. With that in mind, long-term investors could start accumulating the relatively stronger coins.

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On a negative note, even the leaders violated key support levels during this week’s selloff, but the secular long-term trends are not yet in danger. The prior leaders Ethereum, EOS, and IOTA are still in the center of attention, as we expect them to form a bottom soon. Bitcoin and the other relatively weak coins, like Litecoin, Monero, Dash, and NEO are still lagging the form a technical perspective, but they are also well above the support levels that would indicate an end of the secular bull market.

BTC/USD, Daily Chart Analysis

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Bitcoin is below the key $7650-$7800 support level and it remains the biggest drag on the market, despite a brief period of relative strength this week. The upper boundary of the base pattern that we identified in April is found near $6150, with a weaker zone around $6500, and with the short-term trend clearly being negative, the latter might be tested before a bottom forms. Further resistance is ahead at $8400, $8700, and between $9000 and $9200, and traders and investors still shouldn’t enter positions here.

ETH/USD, Daily Chart Analysis

Ethereum is testing the $555-$575 support zone after violating the $625-$645 range, with the declining short-term pattern being intact. A bottom near the $500 would still keep the recovery intact, but the correction low might already be in, and investors could already add to their holdings here. Further resistance zones are ahead between $735 and $780 and near $845, while support is found near $450.

(more…)

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 257 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin

John McAfee Just Made Some Bold Predictions for Bitcoin, Bitcoin Private

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Technologist and crypto bull John McAfee has made a series of eyebrow-raising predictions concerning bitcoin and bitcoin private. While McAfee is no stranger to gutsy calls, his new forecast sees bitcoin prices doubling in a matter of weeks. And yes, the forecast came after the Wednesday price collapse.

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McAfee Raises the Stakes on Bullish Bets

In a Thursday tweet, McAfee predicted the market will “turn” before June 12, which was the original date of the planned summit between U.S. President Donald Trump and Kim Jong-un of North Korea. McAfee’s algorithm expects a Korea deal to get signed on that day even as Trump signaled on Thursday for the cancellation of the meeting.

According to the post, McAfee expects bitcoin to surpass $15,000 in June before dipping again in July. Bitcoin bottomed below $7,300 on Thursday. It was last seen trading at $7,563.

Bitcoin private, the so-called meta currency that ‘merge-forked’ from bitcoin and Zclassic, is expected to hit $200  by the end of July. At the time of writing, BTCP was trading at $25.61, having gained more than 33% over the past 24 hours.

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BTCP entered circulation in early March as a fork from Zclassic, which itself forked from bitcoin. Bitcoin private is therefore seen as a ‘fork of a fork of a fork.’

McAfee also expects EOS to jump to $32 by the end of July from its current level of $12.48. EOS has skyrocketed to the No. 5 spot on the market cap rankings with a total value of $11 billion.

Institutional Demand

Earlier this week, McAfee heralded the arrival of institutional money to the cryptocurrency market, arguing that it will spark the next leg of the rally.

“Institutional investors are preparing to enter the cryptocurrency market with a vengeance” he tweeted Monday. “They are generally long term investors and will be pumping billions into the market. Expect the top ten coins to go through the roof fairly quickly. The bulk of alt coins will soon follow.”

Digital currency exchange Coinbase has expressed the same opinion and has launched a suite of products to ease institutional money’s transition to crypto.

Crypto analyst Tom Lee has also appealed to institutional demand to justify his bullish outlook on bitcoin in the face of multiple declines. In a recent interview with CNBC, Lee said institutional interest in crypto has only just begun and that demand will continue to grow once regulatory uncertainties are ironed out.

Lee maintains a price target of $25,000 for bitcoin.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 417 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Bitcoin

Bitcoin’s Plunge Has Not Shaken Tom Lee

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Bitcoin’s latest technical breakdown hasn’t affected Tom Lee’s bullish outlook on the digital currency. The head of research at Fundstrat Global Advisors is standing by his target of $25,000 by year’s end.

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Typical Volatility

In an email conversation with CNBC, Lee said the latest drop in market prices can be attributed to “typical market volatility” rather than any new underlying risks facing digital assets. He also identified three factors that will lead bitcoin to $25,000.

The first factor is cost of production, which Lee identified as anywhere between $6,000 and $8,000 during the most recent slide. This means bitcoin is still worth more than its cost of production.

Growing interest from institutional traders will also keep the market rallying for the foreseeable future. Banks and other financial institutions are still feeling their way into the crypto market and are looking for regulatory guidance on how to move forward.

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In a Tuesday interview with CNBC’s “Futures Now,” Lee issued the following statement:

“I think institutional investors have gained a lot of interest, and they haven’t really come into crypto yet because there is still some regulatory uncertainty. But that sort of ultimate allocation into crypto as an asset class is going to be a powerful reason why bitcoin rallies.”

Lee also reminded investors just how quickly the crypto market can change. A historical analysis reveals that the entirety of bitcoin’s gains in any given year can be attributed to ten days. Without those days, bitcoin values are down 25% annually.

“So as miserable as it feels holding bitcoin at $8,000, the move from $8,000 to $25,000 will happen in a handful of days,” he said.

BTC/USD Price Levels

Bitcoin prices bottomed at $7,289.35 on Thursday, their lowest in about six weeks. The cryptocurrency has declined nearly 10% over the past week.

At last check, BTC/USD had recovered around $7,508 for a total market cap of $128.3 billion. Selling pressure brought more volume to the market, with total turnover in bitcoin approaching $7 billion.

With the latest skid, bitcoin is down more than 40% this year.

The market cap for all cryptocurrencies bottomed at $318.8 billion on Thursday but has since recovered to around $333 billion. The market is down nearly $60 billion from its Sunday high.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 417 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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