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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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4.3 stars on average, based on 21 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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Altcoins

Cryptocurrency Market Enters Corrective Phase as Majors Retreat from Recent Highs

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The cryptocurrency market declined across the board Thursday, as bitcoin, Ethereum and the rest of the major altcoins retreated from recent highs.

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Crypto Market Backpedals

After peaking above $518 billion on Saturday, the market capitalization for all cryptocurrencies has fallen to $469 billion, based on latest data from CoinMarketCap. That represents a decline of more than 9%. Trade volume across all digital assets approached $24 billion over the past 24 hours.

The latest drop in total coin value seems to have coincided with broader uptake in bitcoin, the world’s most popular cryptocurrency both in terms of market cap and trade volume. Bitcoin now accounts for more than 39% of the total market,  a near seven-point increase over last month’s lows.

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Bitcoin made a strong move above $11,000 on Wednesday, eventually hitting a three-week high of $11,329. As we wrote Wednesday, bitcoin in particular seems to be benefiting from a myriad of market forces ranging from favorable regulations to improved investor sentiment.

At the time of writing, the cryptocurrency was worth $10,901.

Other major cryptos were also down at the start of Thursday trading, with Ethereum slipping 3.6% to $864.83. Ripple’s XRP token declined 2.7% to $1.04, while bitcoin cash fell 4.3% to $1,336.50.

Even Litecoin, a currency that has witnessed a 50% surge this week, fell more than 3% to $219.43.

Paul Singer Calls Cryptocurrencies a Huge Scam

Elliot Management, a multi-billion-dollar hedge fund headed by Paul Singer, recently came out with a report calling cryptocurrencies “one of the most brilliant scams in history.” It added that “FOMO (fear of missing out) has solidly trumped WTHIT (what the hell is this??).”

In the cryptocurrency world, talk is incredibly cheap, and arguments from authority don’t hold much credence. Although Elliott dedicated three pages to cryptocurrencies, there doesn’t seem to be a strong argument against cryptocurrencies. (Calling cryptos “nothing except the marketing power of inventors, financiers and others who love the idea of buying a black box…” is not an argument.)

That being said, the fund’s comments may have resonated with speculators who are already on the fence about re-entering the market. After all, the daily news headlines play a huge role in shaping investor sentiment, regardless of whether those headlines are true. This has been demonstrated time and time again by regulatory developments in nations such as South Korea and India.

As Singer’s comments clearly show, there’s still plenty of FUD (fear, uncertainty and doubt) driving the cryptocurrency market. This is unlikely to change soon even as bitcoin and the technology that underlies it enjoys greater mainstream adoption.

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 161 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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Analysis

Technical Analysis: Altcoins Lead Markets Lower as Bitcoin Still Looks Strong

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All of the largest digital currencies are in the red today, following heavy overnight selling, a bounce in European trading, and another round of losses around the US market open. Ethereum is still in the worst short-term shape among the giants of the segment, and that’s in line with the slightly delayed cycle of the coin that we have been monitoring.

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The technical divergence between the leaders of the market and the laggards yesterday is still dominant with the 6 coins that spearhead the rally, BTC, LTC, NEO, Dash, Monero, and ETC, are still in much more bullish setups than the rest of the majors.

Bitcoin is also well below its recent rally highs after breaking down under the key $11,300 level, and a test of the $10,000 support now looks likely, while a move to the $9000-$9200 zone would still keep the rising trend intact.


BTC/USD, 4-Hour Chart Analysis

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The overbought short-term momentum readings are being cleared, and despite the slightly bearish volume patterns, we expect the coin to continue its new bullish cycle after the correction, with targets above $11,300 ahead at $13,000 and $14,250.

ETH/USD, 4-Hour Chart Analysis

Ethereum is now trading below the key $845 level as the correction continues, as we expected, and the coin remains stuck in the dominant declining trend, for now. We still expect a breakout in the coming weeks, but a test of the $740 level is possible before another rally. Further support below that is at $625 and $575 and we don’t expect a new low in the coin, so investors could still accumulate the coin near the main levels.

(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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4.7 stars on average, based on 107 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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Analysis

Crypto Update: Monero Tests Rally High as Majors Pull Back

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The segment had a bearish Asian session, as a wave of selling hit the major coins following the US close that carried the market more than 5% lower. The still present short-term overbought readings that we noted yesterday likely played a part in the move, as the strong post-crash rally made the market slightly stretched.

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As the coins followed stocks lower during the volatility-driven crash two weeks ago, yesterday’s late-day decline on Wall Street might also have driven the dip in the segment. Amid the decline, several coins are showing relative strength, most notably Monero and Dash, which already have been in encouraging setups.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin is hovering around the $11,000 level today in European trading, with the $11,300 support/resistance level being in focus. The short-term momentum indicators still not reached neutral territory and that might mean that further consolidation is ahead for the most valuable currency. Support below is found at $10,000 and between $9000 and $9200, while resistance is still ahead at $13,000.

Monero remains one of the strongest candidates for another leg higher in the coming days, as the coin quickly recovered from the overnight sell-off and it is still trading back in the short-term consolidation pattern, below the $335 resistance that it tested already today. With the coin clearly being in an uptrend, a rally towards $400 is likely in the coming weeks, while support levels are at $300, $280, and $240.

XMR/USDT, 4-Hour Chart Analysis

Losses Across the Board among Altcoins

DASH/USD, 4-Hour Chart Analysis

Not surprisingly, Litecoin, NEO, and Dash continue to outperform the broader market from a technical perspective, as correlations remain muted, still pointing to an intact short-term uptrend. ETC, the early leader of the rally is also holding up above the previous consolidation zone, with the $32-$34 zone also providing support for the coin.

Ethereum, Ripple, Bitcoin Cash, Cardano, EOS, and IOTA are still the laggards among the majors, as they continue to trade in the short-term correction that started last week. That said, the price action in the segment is still consistent with a new bullish cycle, and we expect the crucial support levels to hold.

Stay tuned for our detailed technical analysis later on today.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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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4.7 stars on average, based on 107 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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