Bitcoin to rocket to $4000 as blockchain infrastructure sets agenda for cryptocurrencies

ANALYSTS say the cryptocurrency Bitcoin could hit values of $4000 within the year after a new player entered the market.

  

The introduction of Litecoin,

another electronic online currency is adding to investor appetite as the rolling out of blockchain infrastructure gets set to revolutionize the future of the financial sector. Bitcoin has been making gains since April and is rallying in London has risen over 33 percent days, according to the Coindesk bitcoin price index. It comes after Price Waterhouse Coopers (PWC) and the World Economic Forum looked at how cryptocurrencies can be aided by distributed ledger technologies.

Bitcoin is leading the cryptocurrency market

It is better than currency because you don't have to be in the same place and of course for large transactions currency can be inconvenient

Bill gates

Global regulatory challenges continue to affect the market with a test case before The US Securities and Exchange Commission (SEC) throwing up some new challenges. A bitcoin exchange-traded fund (ETF) proposed by Cameron and Tyler Winklevoss was declined by the US sector watchdog as Donald Trump looks at deregulating markets. However, the sector is gaining appeal, particularly in Japan, which legalized cryptocurrency as a payment method recently and is

Helping to get the yen involved.

France invented a cryptocurrency dispenser

Aurelien Menant, founder, and CEO of Gatecoin, a regulated blockchain assets exchange based in Hong Kong says confidence is strong in Asia. Meanwhile, Microsoft founder and philanthropist Bill Gates is keen on distributed ledger technology. He said: "Bitcoin is exciting because it shows how cheap it can be, it is better than currency because you don't have to be in the same place and of course for large transactions currency can be inconvenient.” bitcoin was created in 2009 and has a current Market Capitalization of $29,753,633,028.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

State of Palestine mulling crypto-currency of its own

Palestinian officials are planning to launch their own crypto-currency

for use in the State of Palestine. The move will see the country become one of the first to adopt a crypto-currency as the national currency. This will also be the first time the state will have its own, singular official currency since citizens currently use the euro, US dollar, Israeli shekel, and Jordanian dinar. The Palestinian Monetary Authority (PMA) said the move was designed to safeguard against interference from Israel, as the PMA has no control over the money supply being used in the country. Azzam Shawwa, head of the PMA, referring to the new currency,

he said:

That is something we would like to see. It will be called the Palestinian pound.

The biggest reason Palestine is considering a digital currency is that it owns no money-printing facilities of its own, and thus has to get them from elsewhere. Shawwa said that getting the money from abroad would be

an issue:

If we print currency, to get it into the country you would always need clearance from the Israelis and that could be an obstacle. So that is why we don't want to go into it.

Bitcoin, the flagship crypto-currency, has been increasing in value in waves according to one analyst. The first wave was when it was adopted by tech enthusiasts, the second wave, which we are currently in, refers to growth in the value spurred on by investors. with the third wave expected to be when it becomes more accessible to the public. It's at this stage that the technology is more mature, which would allow countries to begin implementing their own digital currencies.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

  

The Cryptocurrency Ecosystem: A New Benchmark Study

It is clear by now to even the most hardened skeptic that cryptocurrency, the class of assets of which bitcoin is the paradigm, is much more than a passing fad. Yes, the field may once have been too closely associated with survivalists, cranks, and bit players in the story of the founding of Facebook, but as of April 2017, by which time the combined market value of all such currencies was $27 billion, writing off the whole field looked very much like a form of blindness.

It isn’t merely that $27 billion is an impressively big number (though it is). It is that along the way to this size, the industry has generated new ways of doing business and thinking about doing business which is in turn, proving themselves. Cryptocurrency isn’t a fad: it’s an ecosystem.

Accordingly, a little more than nine years after the publication of the landmark paper by Satoshi Nakamoto, Cambridge Centre for Alternative Finance has issued its “first global cryptocurrency benchmarking study.” It offers the public “an empirical picture of the current state of this still maturing industry.”

The graph below illustrates the dramatic growth of the industry in little more than one year, from

February 2016 through March 2017.

Bitcoin retains its dominance,

though there are significant challenges included in the yellow space at the bottom of that graph. The most important of these challenges is Ether (ETH), “the native cryptocurrency of the Ethereum network,” as the Centre’s report says.

Ninety-eight percent of the “participating exchanges, wallets, and payment companies” surveyed supported bitcoin. Ether came in a distant second place by that metric, at 33%. Litecoin (LTC) came in third, at 26%. Some key points in the report concern the exchanges sector of the industry. This sector has the highest number of operating entities in the broader industry and the highest employment numbers. It also shows significant geographical dispersion. As to that dispersion, the authors of this study collected data from 51 exchanges in 27 countries. They observe that the countries include “all world regions.” Europe has the largest sheer number of exchanges followed by the Asia-Pacific area: but North America, Latin America, the Middle East and Africa – all have exchanges.

Large and Small Exchanges

The likelihood that a cryptocurrency exchange will “hold a formal government license” is inversely related to its size. The smaller are licensed entities, the larger tend not to be.  In geographical terms, the Asia-Pacific region has upheld its reputation for laissez-faire. Eighty-five percent of cryptocurrency exchanges in that region have no license. On the other hand, a full 78% of exchanges in North America have “a formal government license or authorization.”

The study also looked into the distribution of the (traditional) currencies supported by the cryptocurrency exchanges. The graph above illustrates the result of that inquiry. The U.S. dollar is dominant, and the “other” figure is high because of many small exchanges “service local markets and make cryptocurrencies more available in many countries,” they naturally specialize in their local currencies.

There have been scandals and failures among the centralized exchanges, and a priori one might have expected those events to generate an exodus to peer-to-peer exchanges.  Yet there has been no such exodus. Only 2 of the 51 exchanges surveyed might be described as P2P. One of the problems with running a small cryptocurrency exchange is that it can be difficult to obtain or maintain banking relationships. Larger exchanges “have this risk factor under control,” the report says.

Wallets and Miners

The humbly named “wallets” for such currencies are also a critical part of the ecosystem and a focus of the report. It observes that they have “evolved from simple software programs … to sophisticated applications that offer a variety of technical features and additional services that go beyond the simple storage of cryptocurrency.” More than four-fifths of wallet providers (81%) are based either in North America or in Europe, which seems high since on 61% of wallet users are in one of those two areas.

Finally, in their concluding observation, the authors of the report say that they expect that as block awards decrease the cryptocurrency miners will have to use innovative economic incentives “in order to continue providing hashing power to secure the system,” powering a new security-driven direction in its evolution.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Cryptocurrencies like the Bitcoin are starting to reach a broad mainstream audience

and they’re here to stay. There are now more than 400 cryptocurrencies in circulation, worth more than $75billion. Some businesses in New Zealand already accept Bitcoin as payment, although cryptocurrencies can be very volatile so it’s a pain as a buyer or seller continuously adjusting prices in Bitcoin rather than just setting prices in New Zealand dollars. This problem has highlighted the need for an NZD cryptocurrency token, which can be traded with all the benefits of Bitcoin, but has the same value as a New Zealand dollar.

New Zealand cryptocurrency exchange Cryptopia recently launched the 'NZed' (Code NZDT), the first cryptocurrency token tethered to the New Zealand dollar. The move came after several speakers at The Blockchain NZ conference, including Xero's Grant Anderson, raised the need for Kiwis to have a crypto-based New Zealand dollar that could be traded with most of the benefits of cryptocurrencies like Bitcoin. The Cryptopia developer team created the new currency then, and within eight hours had ordered on the exchange for more than $40,000 NZDT.  

Currently, total tokens available are limited to $100,000 NZDT, an amount Cryptopia can easily back from retained funds. Cryptopia CEO Rob Dawson says “while that's not enough liquidity to allow widespread adoption, it gets the ball rolling with a challenge to government, and to the broader industry that blockchain technologies and cryptocurrencies are here to stay”. “Right now, we can only accept cash deposits for tokens from overseas clients, although pending regulatory confirmation we expect to be able to offer the full service to Kiwis shortly.”

“We need to get moving if we want to establish New Zealand as a global leader in this space,” says Dawson. Australia is starting to eye the industry, recently announcing the removal of a sales tax in the 2017 Federal Budget that has hindered the cryptocurrency trade there until now. “Historically, New Zealand has led the world in financial innovation, for instance with the world-first introduction of eftpos in the 90s,” adds Dawson. “We think Kiwis are great at adopting new technologies so New Zealand makes a great test market.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Adylkuzz Cryptocurrency Mining
Malware Spreading for Weeks Via EternalBlue/DoublePulsar

Attackers spread a Massive Ransomware attack worldwide

On Friday, May 12, attackers spread a massive ransomware attack worldwide using the EternalBlue exploit to rapidly propagate the malware over corporate LANs and wireless networks. EternalBlue, originally exposed on April 14 as part of the Shadow Brokers dump of NSA hacking tools, leverages a vulnerability (MS17-010) in Microsoft Server Message Block (SMB) on TCP port 445 to discover vulnerable computers on a network and laterally spread malicious payloads of the attacker’s choice. This particular attack also appeared to use an NSA backdoor called DoublePulsar to actually install the ransomware known as WannaCry.

Over the subsequent weekend, however, we discovered another very large-scale attack using both EternalBlue and DoublePulsar to install the cryptocurrency miner Adylkuzz. Initial statistics suggest that this attack may be larger in scale than WannaCry: because this attack shuts down SMB networking to prevent further infections with other malware (including the WannaCry worm) via that same vulnerability, it may have in fact limited the spread of last week’s WannaCry infection.

Symptoms of this attack include loss of access to shared Windows resources and degradation of PC and server performance. Several large organizations reported network issues this morning that were originally attributed to the WannaCry campaign. However, because of the lack of ransom notices, we now believe that these problems might be associated with Adylkuzz activity. However, it should be noted that the Adylkuzz campaign significantly predates the WannaCry attack, beginning at least on May 2 and possibly as early as April 24. This attack is ongoing and, while less flashy than WannaCry, is nonetheless quite large and potentially quite disruptive.

The Discovery

In the course of researching the WannaCry campaign, we exposed a lab machine vulnerable to the EternalBlue attack. While we expected to see WannaCry, the lab machine was actually infected with an unexpected and less noisy guest: the cryptocurrency miner Adylkuzz. We repeated the operation several times with the same result: within 20 minutes of exposing a vulnerable machine to the open web, it was enrolled in an Adylkuzz mining botnet.

The attack is launched from several virtual private servers which are massively scanning the Internet on TCP port 445 for potential targets. Upon successful exploitation via EternalBlue, machines are infected with DoublePulsar. The DoublePulsar backdoor then downloads and runs Adylkuzz from another host. Once running, Adylkuzz will first stop any potential instances of itself already running and block SMB communication to avoid further infection. It then determines the public IP address of the victim and download the mining instructions, crypto miner, and cleanup tools.

It appears that at any given time there are multiple Adylkuzz command and control (C&C) servers hosting the crypto miner binaries and mining instructions. In this attack, Adylkuzz is being used to mine Monero cryptocurrency. Similar to Bitcoin but with enhanced anonymity capabilities, Monero recently saw a surge in activity after it was adopted by the AlphaBay darknet market, described by law enforcement authorities as “a major underground website known to sell drugs, stolen credit cards and counterfeit items.” Like other cryptocurrencies, Monero increases market capitalization through the process of mining. This process is computationally intensive but rewards miners with funds in the mined currency, currently 7.58 Moneros or roughly $205 at current exchange rates.

One of several Monero addresses associated with this attack is shown in Figure 4. The hash rate shows the relative speed with which the specific associated instance of the botnet is mining Moneros, while the total paid shows the amount paid to this particular address for mining activities. In this case, just over $22,000 was paid out before the mining associated with this address ceased. Looking at the mining payments per day associated with a single Adylkuzz address, we can see the increased payment activity beginning on April 24 when this attack began. We believe that the sudden drop that occurred on May 11 indicates when the actors switched to a new mining user address (Figure 5). By regularly switching addresses, we believe that the actors are attempting to avoid having too many Moneros paid to a single address.

Statistics and payment history for a second payment address are shown in Figure 6. This address has had just over $7,000 paid to date. A third address shows a higher hash rate and a current payment total of over $14,000. We have currently identified over 20 hosts setup to scan and attack, and are aware of more than a dozen active Adylkuzz C&C servers. We also expect that there are many more Monero mining payment addresses and Adylkuzz C&C servers associated with this activity.

Conclusion

Like last week’s WannaCry campaign, this attack makes use of leaked NSA hacking tools and leverages a patched vulnerability in Microsoft Windows networking. The Adylkuzz campaign, in fact, predates WannaCry by many days. For organizations running legacy versions of Windows or who have not implemented the SMB patch that Microsoft released last month, PCs and servers will remain vulnerable to this type of attack. Whether they involve ransomware, cryptocurrency miners, or any other type of malware, these attacks are potentially quite disruptive and costly. Two major campaigns have now employed the attack tools and vulnerability; we expect others will follow and recommend that organizations and individuals patch their machines as soon as possible.

Acknowledgments

We want to thank:

• Our friends at Trend Micro for input allowing us to add more IOCs
• Cloudflare and Choopa for their immediate action upon notification.
• @benkow_ for several inputs.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Distributed financial technology firm Ripple

is on the verge of locking up billions of dollars worth of its native XRP cryptocurrency inside dozens of smart contracts designed to hold value in escrow until a certain time, or certain conditions are met. The move to voluntarily freeze its own assets in escrow contracts is designed to combat fears that Ripple might flood its booming market with some of the $16bn worth of cryptocurrency it currently stores and that resulted from holding large amounts of its own currency that hasn't been made available to the public.

Specifically, the San Francisco firm has promised to lock-up 88% of those funds, or about $14bn worth, in a series of smart contracts that briefly make 1bn XRP available each month for a period of at least four-and-a-half years. Revealed today exclusively to CoinDesk, Ripple hopes the self-inflicted freezing of funds will give XRP owners and aspiring owners a sense of certainty that the market will not suddenly be flooded with the currency, potentially lowering the price. While Ripple CEO Brad Garlinghouse argued in an interview with CoinDesk that flooding the market would be irrational, and go against his firm's own self-interest, he added that it was time to move the tokens to the smart contracts and remove the element of trust altogether.

Garlinghouse said:

"We want to make sure that the Ripple Consensus Ledger is the most robust, and that XRP is the most liquid, and I think this is a very positive step towards that."

Currently, Ripple’s market cap is listed on most tracking sites as about $11bn, based on 38.3bn XRP in circulation. But unlike other cryptocurrencies including bitcoin and ethereum, not all the cryptocurrency is in circulation. In fact, according to Ripple’s own numbers the company owns almost twice the amount in circulation, or 61bn XRP.

A sense of security

   To help give potential future XRP owners

the certainty that the market won't be flooded with this trove of cryptocurrency, Ripple built 55 smart contracts using its own escrow feature released for public used in March, each holding 1 billion XRP and expiring on the first day of every month for a period of 54 months. As each contract expires, the cryptocurrency will briefly become available for Ripple to use as it sees fit.

Historically, Garlinghouse said funds have been spent at a rate of about 300m XRP per month for the past 18 months to incentivize market makers to offer tighter spreads for payments, methods he describes as Ripple being "good stewards" of the nascent XRP economy. For example, he says funds have also been sold to institutional investors to help raise additional capital above the $93m already raised to help pay for engineers that oversee the open-source code base. Then, at the end of the month whatever XRP is unused will be added to the end of the escrow queue in the form of an additional month-long contract, starting the process all over.

A specific timeframe for implementation has not been revealed, but Garlinghouse expects the process to be completed by the end of this year. Head of research at Ripple investor Blockchain Capital, Spencer Bogart, said that if the contracts are safely implemented they could positively impact XRP user perception. "The fact that Ripple owns the majority of outstanding XRP and could potentially flood the market with supply has historically discouraged investors from evaluating XRP any further," he told CoinDesk. "Properly implemented cryptographic escrow with sufficiently limited supply would go a long way toward alleviating that particular fear." Blockchain Capital does not currently have a stake in XRP, he said, but does own equity in the company.

More than speculation

Collectively, the total number of XRP in existence is worth about the same as the entire bitcoin market cap, elevating the stakes far beyond just cryptocurrency speculation in its own right. In addition to the cryptocurrency's explosive growth over the past few months, the company that wants to make it easier for banks to send each other cross-border payments has continued to grow the number of its partners. With the help of Germany’s former Minster of Defense who is an advisor to Ripple, the company has been increasingly engaging global customers. For example, the firm recently added 10 new financial firms to its network and completed a pilot with 47 global banks.

While Garlinghouse said the banks weren't among the XRP owners concerned about Ripple flooding the market with currency, he does believe that the more stable sense among open-source developers of liquidity being released into the wild could result in increased activity among the community. In the end, the result could, in fact, trickle down to the banks as the end users, he said. The increased liquidity being created by the cryptocurrency safely entering the market could, in turn, make it easier for a larger number of banks to conduct transactions without negatively impacting the price of doing so.

Garlinghouse concluded:

"I think increasingly, the market has realized that if we have a bank using us for messaging and settlements, there’s an opportunity to also introduce them to how they can lower their liquidity costs by leveraging a liquidity solution enabled through XRP."

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Referred to as the 'honey badger of money'

(after a famous viral video), bitcoin enthusiasts may find this comparison particularly apt of late. Since the beginning of the year, the network's value has nearly doubled – even while the community continues to be mired in debate. Market observers so far have offered a wide range of reasons for this uptick, though not all of them are good, with increasing prices causing concerns that the industry as a whole is entering a speculative bubble.

Supply and demand

Still, not everyone believes the boost is due to speculation. Redwood City Ventures founder Sean Walsh, for example, sent CoinDesk a bullet-pointed email summarizing the various global developments that could be contributing to the bitcoin price surge. He believes developments in South Korea, Japan, Russia, and China have all contributed. The price surge, according to Walsh, is simply supply and demand.

"Bitcoin is dramatically more scarce than most people realize, especially in the context of its total addressable market of nearly 3 billion internet-connected adults," he continued. Walsh framed the situation simply as one where the cryptocurrency is seeing increased demand, which looks to only increase in the future: "Once the global race to own bitcoin commences, the tiny supply of new bitcoins (just 54,000 new coins per month) will be completely overrun by demand,"

he said, adding:

“There just aren't anywhere near enough coins to go around, and pre-existing holders will grasp ever more tightly into this surging market, as perennially dictated by human nature.”

Tensions subsiding

Still, to those following day-to-day technical developments, it might seem odd that the digital currency's price has seen such an upswing amid its scaling debate and a stalled upgrade known as SegWit. Kristov Atlas, a security engineer at wallet and data firm Blockchain, for example, wasn't able to find technical reasons for the uptick in demand.

He told CoinDesk

"I don't see how the price increase could relate to tech changes; no big changes in long term projects like Lightning lately, and the block size stalemate is still status quo."

"It must be something outside bitcoin that investors have changed their minds about," he suggested. While developers, admittedly, might not be experts on economic market conditions, those that have been in the industry for a while are perhaps more aware of how technical developments could contribute to bitcoin’s price. When asked, some argued the state of the technology could have something to do with the recent increase, though, perhaps in surprising way.

For example, bitcoin’s block size debate took a weird turn a couple of months ago, when discussions about the possibility of forking bitcoin into two networks reappeared. This time around, some miners and developers suggested the idea of destroying the chain that didn't follow along with the majority of hashing power.

This has yet to happen, though, and worries about such an event happening have since died down. Some wonder if this could have given the price boost. "I think part of the rally is due to increased confidence that the risk of a contentious hard fork has all but evaporated," Reddit moderator BashCo said. Yet some expect to see a 'correction', where the price dips to a more reasonable place.

The emotion factor

The idea that raised tensions contribute to price swings fits with bitcoin developer and Nakamoto Institute director of research, Daniel Krawisz's view that the price has more to do with emotions. "The price of bitcoin never makes sense and it doesn’t have very much to do with the tech," he said. "It’s about emotion. It’s about greed." Krawisz also sees the price more aligned with bitcoin's original value proposition of giving users more control, rather than more granular tech additions or debates. “It’s not the new features of bitcoin that matter. What matters are the old features? People keep moving into bitcoin because it's a better alternative than their own national currency,”

he said, adding:

"Bitcoin doesn't really need new features, because it's already better."

Though, perhaps echoing other developer's sentiments about a reduction in fear, Krawisz went on to argue that the increase in demand probably has to do with bitcoin's apparent stability, since it’s been around for a long time compared with many cryptocurrencies. "It's the same reason that people always get into bitcoin now as ever," he concluded.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Bitcoin plunges $200 after cyber attackers demand ransom using the digital currency

• Bitcoin fell from a record high after Friday's WannaCry cyberattack.
• The digital currency hit an all-time high of $1,848.75 Thursday and on Monday traded near $1,676.42.
• Analysts also pointed to increased Chinese selling.

Alan Zibluk – Markethive Founding Member

Watch the WannaCry bitcoin
ransom trickle in

The malware that's locked up hundreds of thousands of computers has netted roughly $70,000 so far. Why the WannaCry cyber attack is so bad and so avoidable

The WannaCry ransomware made on average $23,333 a day.

Monday was its most successful payday. In just four days, the WannaCry ransomware reeled in enough money to buy 8,750 servings of avocado toast (or maybe a modest house, if you're into that sort of thing). And now the ransom has doubled. The global ransomware plague started infecting computers on Friday, abusing an exploit discovered by the NSA that was leaked to the public by the Shadow Brokers hacker group. It breached computers through phishing emails and then spread through networks using a Server Messaging Block vulnerability on outdated Windows computers.

Before it was accidentally (and only temporarily) shut down, WannaCry had locked down more than 200,000 computers in more than 150 countries, affecting banks, universities, and hospitals, with a demand that the targets pay $300 worth of bitcoins by May 20. On Tuesday, the ransom doubled from $300 to $600, and the tally of WannaCry victims had reached more than 374,000 computers. In the last 72 hours, more than 261 people have decided they would rather pay the ransom than lose their important files forever, according to trackers analyzing the three known bitcoin wallets. (You can track the amount yourself here.) A majority of the payments came on Monday, just hours before the first deadline passed and the ransom rose.

In total, the hackers behind WannaCry made $69,535 by Tuesday morning, as payments continued to flow in. While the original ransomware has been slowed down, patched variations of the malware — pointing to the same bitcoin wallets — have appeared, this time without a kill switch. If every ransom ends up being paid, the hackers could make more than $1 billion from the breach. One risk analysis firm estimates that WannaCry could cost the world's economy $4 billion in damages and losses. It's unclear who is behind the massive attack, but researchers have found clues in the code linking the ransomware to North Korea.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member

Amid a flurry of negative publicity for bitcoin,

technology advocates are trying to distance themselves from the digital currency as part of a bid to protect the perception of more enterprise-facing blockchain initiatives. The change of public positioning follows an uptick in ransomware attacks using bitcoin as the medium of payment, the most recent of which (after causing major disruption within the UK's National Health Service and elsewhere) has sparked a global conversation.

At a briefing for congressional staff on Tuesday covering the potential uses of blockchain technology in the US healthcare system, the Chamber of Digital Commerce and a panel of other blockchain specialists acknowledged that the ransomware issue is again opening old wounds caused by the technology's association with illicit uses of bitcoin and cryptocurrencies.

In response, panelists sought to draw clear lines between the two technologies. "A lot of these initial attacks have been on healthcare systems and healthcare companies. This has come onto our radar because the ransomware is asking for the ransom in bitcoin," Perianne Boring, president of the Digital Chamber of Commerce, told an audience of roughly 70 healthcare and technology-focused staffers from congressional offices.

Elsewhere, the panelists sought to categorize bitcoin as merely "one application" of blockchain technology. Srinivas Attili, senior vice president and partner at IBM Global Business Services,

told attendees:

"Blockchain [gets] a lot of bad rap because of bitcoin, in my view. Bitcoin is just one application of blockchain, and you can have hundreds of applications of blockchain."

Blockchain good, bitcoin bad

Just how much regulatory attention is being aimed at bitcoin in the wake of the incidents is unclear, though a member of Congress introduced a bill Tuesday ordering the Department of Homeland Security to conduct a threat assessment regarding the use of virtual currencies by terrorists and criminals. It's happened before, so advocates worry bitcoin's bad press will rub off on the blockchain.

Attili drew the comparison to Amazon being just one among a countless number of businesses built on the HTTP protocol and highlighted Hyperledger as a promising blockchain technology suite that he believes is isolated from any nefarious activity associated with cryptocurrencies. "It's built for business. There's no concept of cryptocurrencies on Hyperledger," he said. Yet, Micah Winkelspecht, chief executive of Gem, a blockchain solutions company, did defend bitcoin, asserting that it's serving a legitimate use as a means of exchanging value.

Winkelspecht said:

"Bitcoin is to those types of attacks as the dollar is to the drug trade. Just because the dollar exists doesn't mean that it's the cause of the drug trade. Bitcoin is just a tool that these criminals are using because it is a good form of exchanging value. It's actually serving a really good purpose as an exchange of value. They are leveraging it as a tool."

"Blaming bitcoin for ransomware would be like blaming the Federal Reserve for any illicit transaction that happens in cash," Boring added.

Recasting the narrative

Still, the damage dealt by the ransomware attacks, compounded by past black eyes like Mt Gox and Silk Road, may cut deeper than many in the cryptocurrency community may wish to recognize. Congressional staffers speaking privately after the event said the concept of blockchain must be, to all intents and purposes, disassociated from bitcoin to gain serious traction in the legislative arena. Boring tried to flip the narrative by saying that, instead of blaming bitcoin for the attacks, there should be a greater focus on the potential of blockchain to protect against ransomware and other cyber attacks in the future.

She said:

"I would even argue that when we talk about protecting our healthcare systems or other systems that might be vulnerable to ransomware or other types of cyberattacks, that blockchain technology could be the silver bullet to protecting our infrastructure."

Winkelspecht concurred, arguing that blockchain could provide a better, more secure way to store data as hackers become more sophisticated in the future. "Before we used to see attacks that were more DDoS – they were attacks on infrastructure trying to bring systems down," he said. "Now we're starting to see more infiltration. They’re basically putting a ransom on data because that data is so valuable and they know that people will pay to unlock it."

Winkelspecht predicted that the next phase of cyber attacks will be "data integrity" attacks that involve breaking into a system and actually altering existing data in a way that "tricks" downstream systems. "Those are the most dangerous and potentially the most costly types of attacks because you may not know it's happening for literally years," he explained. The immutability of blockchain technologies, though, could be the only true line of defense against such intrusions,

he said adding:

"One of the things that blockchains can provide is an immutable proof of data integrity. We can guarantee beyond a shadow of a doubt that data has not been modified or changed.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk – Markethive Founding Member