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This Anonymous Cryptocurrency Has Privacy Advocates Talking

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Monero is an anonymous crypto-currency known for being preferred by dark net’s largest marketplaces, where drugs and illicit goods are sold. Darknet marketplaces were made popular by Ross Ulbricht’s Silk Road, which landed him a lifetime in prison.

The newest cryptocurrency craze preys upon modern privacy concerns. It cites how big banks, corporations, and governments keep tabs on everything in the marketing materials. This is very much similar to Bitcoin’s early marketing. Unlike Bitcoin, which has a 21 million market cap, Monero has none. It was forked from Bytecoin.

“There is no safe place to conduct private transactions,” a marketing video for the crypto-currency says. “Until now. Meet Monero. It’s private untraceable currency, only you control and are responsible for your funds.”

monero

The currency takes advantage of an arbitrage created by Bitcoin’s transparent network, where funds are sent on an open network, which has even caused concern among suits from the world’s foremost corporations, who lament just how transparent Bitcoin truly is.

There have been noted vulnerabilities in Monero in the past. Security firm MWR recently publicized a vulnerability in Monero, which might allow people to steal Monero from third-party digital wallets. An attacker must fool a Monero user into visiting a web page to initiate the attack first, however. MWR disclosed the vulnerability to the developers of leading Monero wallet, SimpleWallet. The issues was fixed in a software update.

Monero’s big break came earlier this summer when AlphaBay, a large online market for drugs and other illicit goods, announced the platform would support the digital currency starting September 1. AlphaBay remains online and accepting orders until this day, including in Monero.

Monero, unlike other crypto-currencies, was built from the ground up based on a protocol called CryptoNote described in a 2012 whitepaper written by Nicholas van Saberhagen, a presumed pseudonym. Many other crypto-currencies merely copy and paste bitcoins code base. 

Monero creates unique addresses for all transactions using a private “viewkey” so only the receiver has access to full transaction info. Monero “mixes” coins also, jumbling similar sized transactions with each other.

When AlphaBay announced Monero integration, Monero trading was at about $40 million USD. Monero’s market cap grew in the wake of the announcement, reaching $60 million the following day. Currently, the market capitalization sits around $100 million. At one point, it reached more than a $200 million market cap.

Monero runs on the CryptoNight proof-of-work algorithm. Designed to work with ordinary PC CPUs, there are no special purpose devices for mining devices currently available. The CryptoNight can only be CPU-mined for the time being.

A sign of how popular Monero has become: MoneroMarket recently opened, which represents the first XMR only darknet marketplace. Although, its not been easy for founders:

MoneroMarket is NOT associate in any way with Oasis. We have put lots of efforts to bring a new market that accept exclusively XMR and it’s actually a nightmare. We keep reading messages saying we are LE, we keep reading messages we are Oasis, we keep reading messages we are a scam, we keep reading shit about us.

MoneroMarket’s main goal was to create a simple to use darknet marketplace using only Monero thanks to its privacy advantages. Monero is not the only cryptocurrency which markets total privacy. Another option, one that’s quite popular actually, is Dash.

Monero functions with the consensus protocol called Proof of Work Anonymous, which is very much like bitcoin’s consensus algorithm, but with further anonymizing processes.

Some complaints lobbied against Monero are its instamine and unfair distribution in coins, as catalogued here on BitcoinTalk. Others include backhanded and troll-like marketing tactics by the Monero Marketing team in a concerted mis-information campaign.

Nonetheless, in appealing to the hardcore privacy advocates, Monero and crypto-currencies like it have carved out a niche left coin-less after revelations about Bitcoin’s true transparent nature trickled down to the mal-informed.

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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5 stars on average, based on 1 rated postsJustin O'Connell is the founder of financial technology focused CryptographicAsset.com. Justin organized the launch of the largest Bitcoin ATM hardware and software provider in the world at the historical Hotel del Coronado in southern California. His works appear in the U.S.'s third largest weekly, the San Diego Reader, VICE and elsewhere.




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6 Comments

6 Comments

  1. fluffypony

    October 10, 2016 at 10:44 pm

    If you’re relying on Bitcointalk for your facts you’re going to have a bad time.

    Monero has no instamine, no unfair distribution, and it has no marketing team…

  2. JmGx

    October 11, 2016 at 3:30 am

    Zero research was conducted in writing this article, apparently.

  3. Stefanos Ioannou

    October 11, 2016 at 6:19 am

    I won’t go through all the inaccurate information. But Monero instamine? Where did you get this? Gossip magazine?

  4. DarknetMoonero

    October 11, 2016 at 6:33 am

    many facts are wrong. Some parts are total jibberish.

  5. xmr_eric

    October 11, 2016 at 7:05 am

    XMR had no instamine.

  6. Spencer Rhodes

    October 11, 2016 at 3:02 pm

    This is a terribly misinformed piece. I was going to point out a couple of blatantly incorrect statements, but it looks like a few others have already beat me to it. Are you intentionally spreading misinformation about Monero or did you do this out of ignorance. I can understand the latter, actually. There has been a deluge of negative blog coverage directed toward Monero lately, ranging from subtle misrepresentation to outright lies. Do some diligent research and consider writing another piece on the subject.

    There was no pre-mine/insta-mine with Monero. That was Bytecoin (approx. 80% of supply) and also Dash to a lesser degree.

    Getting you facts from forum jabberheads on Bitcointalk or Reddit is convenient perhaps, but you should do some due diligence in fact checking those ‘facts’.

    Read up on how the Monero code handles transactions as well. I think you’ll find it quite interesting. A ‘mixer’ would be a very reductive description for it.

    The third party wallet vulnerability was just that, a vulnerability within this party wallets. There was never any vulnerability with a proper CLI wallet built from the source code. The Monero development team implemented code to address the third party wallet issue before the news was released to the public. Anyone who is serious about security would not use a third party wallet service anyway.

    There is a huge unrealized market demand for truly anonymous transaction for which Monero offers a technically viable solution. This demand is currently hidden within bitcoin’s very large shadow. As you mentioned, Bitcoin cannot offer true anonymity. It would be very foolish to use Bitcoin for discreet transactions, such as those done through any sort of darknet exchange, yet Bitcoin is still the most common currency used for this purpose. It may take a couple of high profile cases of darknet exchanges and/or their users being tracked down and prosecuted by law enforcement thanks to any of these emerging blockchain tracking services before the rest of the undergoing market realizes the risk they are taking in using Bitcoin, but it will happen sooner or later. At that point Bitcoin will cough up its entire market share of discreet transactions to whichever cryptocurrency offers the best alternative, and right now that is Monero.

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Analysis

Crypto Update: Ripple Leads Selloff After Weekend Consolidation

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Sellers are back in full force in the cryptocurrency segment as Ripple retraced a large chunk of last week’s surge Monday in late trading. The coin dragged the whole market lower, with Bitcoin, Ethereum, and all of the major altcoins registering significant losses. The 5-10% decline and the almost 20% plunge of XRP hurt the total market cap of the coins badly, which fell by more than $15 billion off the weekend levels to around $210 billion.

The fact that most of the coins failed to extend the gains from last week, leaving the bearish long-term technical setups intact, is a negative for the coming weeks, with especially Bitcoin’s relative weakness being worrying for bulls. While there is still hope that a leadership might develop, with the likes of Monero Dash, Stellar, and Ripple being in short-term uptrends, given the long-term segment-wide downtrend, traders should still be cautious with new positions even in the technically stronger coins.

XRP/USDT, 4-Hour Chart Analysis

Ripple has already been testing the $0.42-$0.46 zone as we expected following the quiet weekend period, and volatility is expected to remain elevated, with the steep short-term uptrend line also being found near the current price level. The coin has to hold up above the key zone to confirm a longer-term trend change, but for now, the weakness in the rest of the market makes the move suspicious.

With that in mind, traders should still not enter full positions in the coin, even as the short-term overbought momentum readings are almost cleared. Further support below $0.42 is found near $0.3750 and $0.35, while resistance is ahead near $0.51, $0.54, and $0.57.

BTC/USD, 4-Hour Chart Analysis

Bitcoin fell back below $6500 amid the broad selloff, and the most valuable coin is close to the weak rising short-term trendline yet again. While a short-term sell signal hasn’t been triggered, a sustained move below $6275 would be a bearish sign and would make another test of the key long-term zone near $5850 likely again. Further resistance zones are now ahead near $6750 and $7000 while weaker support is also found near the $6000 price level.

Altcoins Still Mixed but Bulls Need to Show Strength Soon

ETH/USD, 4-Hour Chart Analysis

Ethereum failed to hold above the key $235 support/resistance level after reaching up to the zone near $260 during last week’s rally and the coin is close to triggering another short-term sell signal in our trend model. ETH is trading right at the short-term uptrend line, and with all the major declining trendlines being left intact by the rally, a move towards $200 is likely with a possible test of the bear market low near $170 as well.

LTC/USD, 4-Hour Chart Analysis

Litecoin remained relative weak during the rally, never triggering a buy signal, and the coin is now testing the $0.56 level and the weak short-term uptrend line as well. A clear move below those would mean a sell signal for LTC and with the long-term trend clearly being bearish, a dip below $50 would be likely afterwards. Further support is found near $51, while resistance is ahead near $59 and $64.

While some of the stronger coins are still showing stability as we mentioned above, the relatively weaker currencies haven’t been able to gather strength, and IOTA, NEO, Ethereum Classic, and EOS are still looking negative from a technical perspective.

IOT/USD, 4-Hour Chart Analysis

Although IOTA managed to avoid a test of the August lows, last week’s failed move makes a break below $0.50 likely in the coming weeks, as the steep long-term downtrend remains intact. A quick move above last week’s highs would be a bullish sign, but for now, sellers are still clearly in control of the market.

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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4.6 stars on average, based on 353 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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BlockState Interview Part One: Institutional Investment Framework Story

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The mainstream media narrative has shown an uncompromisingly negative bias towards institutional crypto investment of late and it only seemed fair that we got in touch with some people who have professional expertise in the field.

BlockState is a platform that aims to deliver a modular blockchain-based legal and technological infrastructure for financial institutions which combats the low interest and return rates offered by traditional asset classes.

We spoke to the three co-founders: Paul Claudius, Michael Weber and Samuel Brack regarding the nature of the project. In addition to how they met and how it all started, their current status, and their plans for the future.

BlockState in Brief

On their website, the BlockChain team states that their intention is to provide “a technological and legal bridge between blockchain technology and financial markets.”.

It is an infrastructural platform upon which organisations within these sectors build or inform their own solutions – and is unashamedly focused towards providing products for the institutional investment crowd.

On the One Hand…

When asked about the ethics, technological approach and modus operandi of BlockState, Managing Director Paul Claudius was eager to provide a comprehensive, dichotomised summary.

“On the one hand we are creating the basis for institutional investors to access the digital assets markets.

“Investment banks can’t simply open a wallet on their phone and start buying crypto-assets. They need a range of services and processes in place to make sure that they abide by regulation and their internal requirements.”

The BlockState consensus is that there are insufficient frameworks in place to mitigate the obstacles faced by companies unfamiliar with the many intricacies of the crypto-space at present.

This is not to mention the prohibitive nature of the past progression of technological and regulatory standards, which are largely non-standardized.

… And On the Other

The ‘other hand’ to which Paul refers to is the lack of blockchain or cryptocurrency integration at product or service levels within the institutional market.

For this reason: BlockState posits the second half of its service as an offering to:

“help institutions leverage blockchain to improve their existing processes… helping them tokenize financial products and using smart contracts to govern their execution… [to] save massive amount of resources while making their systems more transparent and efficient.”

In theory all transactions will be immutably recorded on the blockchain, which will ensure that all parties involved can access this data and that all transactions will be processed quickly.

Performance can distinguish a winning cryptocurrency from a useless dud.

The Three Musketeers

In addition to Paul Claudius, we got the opportunity to speak to fellow founding members Michael Weber and Samuel Brack.

Paul specialises in Strategy and Business Development, whilst Michael’s role is to take the lead on Product Development and Project Management duties. Their specialisms are Strategy and Business Development, and Product Development / Project Management (respectively).

Samuel Brack is the cryptocurrency brains of the operation and performs something of a hands-on position, donning the title of Chief Technology Officer. He sits in a more hands-on position, acting as Chief Technology Officer (CTO) for BlockState.

Before BlockState

Paul recalls that the executive leadership team had “all already knew each other” before the BlockState project even began.

Whilst he and Michael Weber had made acquaintance whilst studying together at the ESPC Europe business school, Michael had met up with Samuel Brack as they were co-founding partners on a prior blockchain based project entitled ‘Goodcoins’.

Whilst they have sold their stake in Goodcoins since, Samuel at least considers his time on the project to have equipped him a knowledge which has been brought forth to BlockState.

Beginners Luck?

On a more personal level: Paul Claudius described his first interaction with the world of cryptocurrency as being the moment in 2012 in which a friend had recommended Bitcoin to him as a potential investment.

He has not disclosed exactly how much Bitcoin he purchased in 2012 but if story is true, considering the token’s contemporary value of $13: Paul would have made a profit of a whopping 51614.53% on his investment. No matter the amount invested.

Products, Pains and Peers

Michael Weber (product lead and project management professional) broke down the trio of primary services / product lines that BlockChain focuses on as being “asset management, dept capital, and derivatives” – with a perceived overlap between the three.

This is as well as the ability for tailoring packages for clients from these tested specialisms.

If these products names appear distinctive yet simple, then you would be correct. Of course, this is one of the main objectives of marketing – however it does not help a company to distinguish itself from its peers.

“While most focus on very specific needs, our infrastructure integrates solutions at every level of the financial product lifecycle, from issuance to reporting always with a view to improving current products on the market.”

This isn’t an easy task however, with obstacles to full-automation rearing their heads alongside undesirably long payment clearance times,

“Some of the major pain points specific to the asset management and derivatives markets and resource consuming operations are settlement and clearing, which can take up to 30 days… with manual processes like getting signatures and manual transactions.”

With a Little Help From My Friends

The three musketeers of BlockState with whom we have already spoken are supposed to possess their own unique-yet-compatible inventories of skills and experience. If the team has any luck it will prove a winning combination.

Three men cannot rule an empire alone however and as the popular idiom goes: successful leaders fill the gaps in their expertise by surrounding themselves with knowledgeable advisors. Following this, BlockState boast a roster of advisors who may just fit the bill for now.

They include (according to Paul):

  • “Patrick Storchenegger, co-founder of the Ethereum Foundation in Zug, is our advisor on legal questions. He brings years of experience from blockchain, capital market law and international tax and business consultancy…
  • “Andrea Voinea, who helped to structure the first Gold Exchange Traded Fund, is a seasoned professional from the asset management market…
  • “Ludwig Schrittenloher, who spent nearly six years at Credit Suisse, offers a breadth of knowledge in DCM and structuring…
  • “[and] Martin Schröder, currently a Director in an investment firm, is an expert in derivatives and also very knowledgeable in capital markets and structuring.”

Estimated Time of ETN

Looking not to the past or present, but forward to what the future may hold for BlockState (or at least, what they plan to happen), we asked Paul Claudius some closing questions in an attempt to reach some conclusions on what may come next…

“At the end of September, we will launch the CTF15 Exchange Traded Note, and it will also be listed on a major European Stock Exchange – to be announced soon…”

An Exchange Traded Note (or ETN) is “a type of unsecured, unsubordinated debt security”

Final Words

Perhaps more exciting even is the fact that the team are currently in the process of preparing the launch of an ‘Equity Token Sale’, issued as part of the company’s equity in a public sale.

According to Paul, it will be “one of the first companies ever to tokenize their equity in a fully regulated and compliant manner, driving the adoption of security tokenization in the financial space.”

Paul, Simon and Michael parted our discussion by asking to remind readers of a forthcoming event at which all three will be attending: the Delta Summit in Malta, which takes place from October 3rd to the 5th.

Stay tuned for the second part of this interview coming soon: in which the team will deliver their commentary on recent news, the present situation; and future predictions on the market and industry.

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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Crypto Exchanges: Looking For Guaranteed Results

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The word guaranteed is never to be used anywhere investment advice is offered.  So please think of my use of the term as just one person’s opinion. But after doing some weekend reading, I think there should be a way to achieve extraordinary gains that are virtually assured for a very long time.

Back in the glory days of the dotcom period the wisdom of the time was simply stated: invest in the plumbing. That included names like Cisco and Intel.  These were the folks that facilitated high speed traffic on the Internet. Even after the dotcom bubble burst, the plumbers continued to rake in the dough.

Fast forward to 2018, why should we not follow the same logic? Please don’t ask why I didn’t ask this question long ago. Here is what caught my attention.

There is a new study out prepared by The Status Group that makes some incredible projections for the immediate future.  Here are their headline making forecasts.

  • We expect crypto trading volume growth of +50% through 2019, and a 9% CAGR through 2028
  • Crypto trading volume is set to overtake U.S. Corporate Debt trading volume this year, and is on track to be ~10% of U.S. Equity trading volume
  • We estimate exchange trading fee growth of 50%+ this year, from $2.1B last year to well over $3B in 2018
  • The top 20 exchanges account for over 75% of total crypto market trading volume
  • BTC is the base pair for ~1/3 of global crypto volume, USDT 22%, ETH 12%

Always Be Cautious of Forecasts

With no disrespect meant, are the forecasters at The Status Group really serious?  Well, 2019 isn’t that far off so we will know soon enough. But the point is, how do we get involved in the growth of trading rather than pure speculation on crypto prices?

Take the case of the two largest players: Bitmex and Binance.  Over the past 30 days, the two exchanges have traded over $125 billion in value.  That is just in the last month or $1.5 trillion annually. This is only the top two.  If the five largest were included, the monthly total rapidly approaches $200 billion.

Bitmex stands out from a recent article titled: Bitmex Co-Founder is the Youngest British Self-Made Billionaire. Brilliant ideas and hard work deserve and that is why Ben Delo, Samuel Reed and Arthur Hayes are billionaires. But try to buy into Bitmex, good luck.

But there is #2 Binance (BNB) whose token can be traded on the Binance exchange. According to ICOMarks, the market cap of BNB is just a little over $1.1 billion. Back in January, BNB reached $22 but has since tumbled to just $10 -marking a drop of roughly 60%.

Putting that into perspective, that is just a bit less than the average crypto has done this year. But before you doze off, consider this. Changpeng Zhao, BNB founder, just reported second quarter profits of $200 million.  That amounts to 2,757% over the $7.5 million earned in the first quarter.

In other words, BNB’s market cap is equal to just five times the profits in the first six months. If BNB were listed on the New York Stock Exchange and received an average valuation, it would sell for about 23 times earnings.  There may be many reasons why the value of BNB is so low but if it continues to generate such sizable profits, somebody is going to take notice.

As we noted, there are probably lots of reasons why the asset value has fallen nearly as much as the average crypto this year.  This is where I would love to hear from you. Just like back in the post dotcom days, the plumbing companies made the most money.

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 107 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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