Blockchain bandit stole 45000 ETH by guessing private keys View in browser

"Money is the most important good in a market economy. It is therefore most important that this good be created, priced, and distributed by market actors, not by a coercive monopoly. Fiat is antithetical to a market economy, and the thing which should be most quickly expunged.” ~ Erik Voorhees, CEO of ShapeShift

Market State

The crypto market was making steady gains last week up until the Bitfinex and Tether news dragged down the market. The New York Attorney General’s office accused Bitfinex, crypto exchange of hiding the loss of $850 million funds and used its Tether reserves to cover up. Following the news the market experienced a significant drop, the overall crypto market lost $10.7 billion within a few hours. Bitfinex responded that $850M hasn’t been lost, but seized and safeguarded. Bitfinex is actively working on to get the funds released and it’s just a temporary situation.

Previously Tether has been criticized for not having enough funds to back the stablecoin. This incident showed that Tether actually had reserves. Bitfinex took a less than $700 million loan from its affiliate company Tether and in exchange for collateral Bitfinex offered shares of Bitfinex. The prices have dropped violently in response to the Tether news. Bitcoin was down from $5520 to $5190 within a few minutes. The market has digested the news and slowly recovering from it. Currently Bitcoin is trading at $5160. Ether is down by 9% to $156 since last week. Though Tether has had a bad reputation it still contributed to the crypto industry as it provides stability against volatile cryptos.

Check the latest Bitcoin Price
Quiz of the week

What is the smallest unit of Litecoin?

  1. Photons
  2. Microlitecoins
  3. Litoshis

Scroll down to see the answer at the end of the newsletter.

Top stories of the week
Bitfinex Used Tether Reserves to Cover Missing $850 Million

The New York Attorney General’s (NYAG) office has sued iFinex Inc., the company that operates Bitfinex crypto exchange and issues the Tether stablecoin. NYAG alleged that iFinex Inc. lost $850 million of customer funds and never disclosed it to investors. Instead the exchange used $700 million from Tether reserves to cover its losses and keep up with customer withdrawals on its platform. Following the news, $165 million worth of Bitcoins have been withdrawn from the exchange within 12 hours. Az iFinex Inc. responded that NYAG’s allegations are full of falsehoods. $850 million funds are not lost, but in fact iFinex Inc’s payment processor, the Panama-based Crypto Capital has the funds. According to the filing, Crypto Capital Corp. told Bitfinex the funds were "seized by governmental authorities in Portugal, Poland, and the United States" but the NYAG says Bitfinex doesn't believe that is true. “We are and have been actively working to exercise our rights and remedies and get those funds released. Sadly, the New York Attorney General’s office seems to be intent on undermining those efforts to the detriment of our customers,” the company said in a statement.” 

Vitalik’s Proposal To Boost Ethereum’s Future Staking Rewards

Ethereum’s co-founder Vitalik Buterin has proposed a higher staking reward for validators who would secure the upcoming Proof-of-Stake (PoS) version of Ethereum blockchain. Ethereum is working on to switch from Proof-of-Work (PoW) algorithm to Proof-of-Stake algorithm. PoW systems rely on miners to secure the network, whereas in PoS systems the network security depends on validators, who stake their own funds to validate blocks and transactions. In order to secure the network and incentivize more people to participate in the staking Vitalik proposed a new reward scheme. The new scheme would reward the validators based on the total amount of Ether locked up in staking. If a small amount of Ether is staked the reward scheme would increase the reward to encourage more people to stake and lock up their Ether. The proposal is by no means set in stone, but if it is accepted it could greatly increase the value of the Ethereum staking industry.  

Brave Browser’s Ads Rewards Go Live

Brave, a privacy focused web browser, has launched its Brave Reward service where users get paid in BAT tokens for viewing ads. BAT stands for Basic Attention Token, which is built into the Brave browser. With the latest version of Brave browser users can now choose to view ads while using the internet. Users will be presented with ad offers in the form of notifications, which they can view or ignore. Users are then rewarded 70% of the ad revenue for their attention, the remaining 30% goes to Brave. Brave users have full control over their privacy, the browser doesn’t leak the user’s data from their device. Currently users can only earn BAT tokens, which they can donate to their favourite content creators. Spending or withdrawing BAT will take a while as Brave is working on to build their KYC solution according to Brendan Eich, the CEO of Brave. Brave Ads service is available today in the US, Canada, France, Germany, and the UK.

Blockchain Bandit Stole 45000 ETH By Guessing Private Keys

Security researchers from US based firm, Independent Security Evaluators (ISE), have accidentally discovered a Blockchain Bandit who managed to steal 45000 ETH by guessing weak private keys. Ethereum uses 256 bit encryption, which means the chances of guessing the same private key is 1 in 2^256. It is like asking someone to guess which atom I picked from the number of all atoms in the universe. Still the researchers were able to find 735 weak Ether private keys that were actually used on the blockchain. Researches noticed that 12 of those addresses were emptied and the funds went to the same address and no money was coming back out. Researchers sent a dollar worth of Ether to the weak private key generated addresses and the money was instantly transferred to the Bandit’s address. According to the researchers the private keys were guessable because of the code errors in random key generators or people used weak password when creating Brainwallet.

Gab Forks Brave Browser And Adds Bitcoin Lightning

Free speech advocate, social media site Gab is creating its own version of Brave web browser using Brave browser’s open source code. Gab has launched its browser plug-in called Dissenter, which was banned from Google and Mozilla. In response, Gab is creating its own browser which will integrate Bitcoin payments powered by Lightning network instead of Basic Attention Token and will keep the best parts of Brave browser. The new Dissenter browser will have Brave browser’s ad blocking feature along with the guarantee of free speech. Brave browser is not happy about the new fork of Brave. According to the CEO of Gab, Andrew Torba “The entire point of open source is to allow others to build upon an existing codebase and add more value. Brave itself is a fork of the Google Chromium project.”

Samsung Invests $2.9 Million in Ledger

Samsung has invested $2.9 million into crypto hardware wallet manufacturer Ledger. Samsung is working on its own blockchain based on Ethereum blockchain. According to Eric Larcheveque, the founder of Ledger, the investment had taken place but didn’t provide further information. He also tweeted “There will be continued demand for hardware wallets but to support a crypto revolution based personal sovereignity to all, the smartphone will play a central role.” There has been a rumour going around in the crypto industry that Samsung is testing Samsung coin on top of Ethereum. However according to Samsung executives there is a discussion going on about Samsung coin, so the creation of Samsung tokens are still unclear. 

Tweet of the week
Meme of the week
Crypto word of the week

BrainWallet is a type of wallet that allows users to store cryptocurrencies in their minds by memorizing a passphrase. To create a brainwallet, users enter a passphrase into a private key generator software. The passphrase is then hashed to generate a private key and crypto wallet address pair.

Quiz answer

What is the smallest unit of Litecoin?

The correct answer is “C”.

Like Bitcoin, Litecoin is divisible down to 8 decimal places. This means 0.00000001 LTC is the smallest amount of Litecoin, which is called “Litoshi”.  1 LTC = 100000000 Litoshi.

Thank you for reading :) 

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