AMD: Cryptocurrency mining won’t be a ‘long-term growth driver’ (AMD) – Business Insider

Reuters/Arnd Wiegmann

AMD released itsquarterly earnings after the bell Tuesday and the stock took off.

A beat on earnings and revenue, coupled with a higher than expected forecast for the rest of the year, sent AMD's stock up about 8%.

In the earnings call following the company's release, Lisa Su, CEO of AMD, said something surprising.

"Relative to cryptocurrency, we have seen some elevated demand," Su said. "But it's important to say we didn't have cryptocurrency in our forecast, and we're not looking at it as a long-term growth driver. But we'll certainly continue to watch the developments around the blockchain technologies as they go forward."

Su said that despite a boost in graphics processing unit sales due to increased demand from cryptocurrency miners, the company wouldn't focus on the exploding market.

Cryptocurrencies like bitcoin and Ethereum have grown by headline-setting margins this year. Miners are those who lend their often specially-built computers to the cryptocurrency networks to help with complex computing required to verify payments on the platforms. Miners have been buying up lots of GPUs recently in an attempt to make their computers faster and grab a larger portion of the growing cryptocurrencies.

"If you look at GPUs across the world, the inventory in the channel is actually quite lean. And so we're working on replenishing that inventory," Su said. "Our priority, though, really is on our core market, which is the gaming market."

Nvidia, AMD's biggest competitor, is taking the opposite approach. The company is developing a mining specific chip that directly addresses the growing market. A product page for an unreleased Nvidia-based card says a mining-specific chip can increase the hash rate by 36% compared to other general purpose cards.

Cryptocurrencies are notoriously volatile, with hundred dollar moves in the price of Bitcoin the norm, rather than the exception. The currencies have generally been increasing in value but the volatility could greatly affect demand for GPUs as interest wanes with declines prices.

Su addressed this concern, saying that AMD is "doing quite a bit to make sure that [it] protects against any downside as it relates to cryptocurrency," which could also be a reason AMD isn't developing a mining specific card. "We're ensuring that we're not over-calling the demand," Su added.

AMD is up 34.66% this year.

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AMD: Cryptocurrency mining won't be a 'long-term growth driver' (AMD) - Business Insider

Cryptocurrency exchanges could be subject to SEC regulation, too – FT Alphaville (registration)


FT Alphaville (registration)
Cryptocurrency exchanges could be subject to SEC regulation, too
FT Alphaville (registration)
You've probably heard the news about DAO tokens by now: The SEC says they should be regulated securities, and will probably end up regulating other digital coins, too. (At question is whether each digital coin passes the SEC's Howey test, which we ...
What's Next for Cryptocurrencies After Regulators Weigh InBloomberg
The SEC has finally weighed in on the crypto-token frenzy, and nobody's going to jailyetQuartz
SEC Report Finds Cryptocurrency Markets Trade To Federal Securities LawsInternational Business Times
ZDNet -CoinDesk -Finance Magnates
all 79 news articles »

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Cryptocurrency exchanges could be subject to SEC regulation, too - FT Alphaville (registration)

US cryptocurrency crackdown could boost capital raising in Europe – Financial News (subscription)


Financial News (subscription)
US cryptocurrency crackdown could boost capital raising in Europe
Financial News (subscription)
European capital raisings in cryptocurrencies could surge after the US financial watchdog said it would crack down on the unregulated practice, dubbed by some as 'the Wild West'. The US Securities and Exchange Commission said in a report yesterday that ...

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US cryptocurrency crackdown could boost capital raising in Europe - Financial News (subscription)

How Secure is Your Cryptocurrency Portfolio? – Finance Magnates

Many investors and cryptocurrency users consider Bitcoin, and other digital assets, the future of finance. But as they become increasingly popular, they are more likely to be targeted by cybercriminals.

There are many reasons why these virtual currencies have gained acceptance in the trading and financial industries. Most importantly, there is no need for third-party intermediaries. Blockchain, the technology underpinning the system, enables users to send and receive funds instantly without the intervention of a middleman.

No government or central bank controls cryptocurrencies, as they are totally decentralized. Despite this, several governments around the world, most notably Japan, have recognized Bitcoin as a legal method of payment. Russia banned Bitcoin in 2014, but the country now seems to be reconsidering its position on regulation, according to Alexey Moiseev, the Deputy Finance Minister of the Russian Federation.

Haim Toledano, a specialist on the capital market and decentralization technologies explains that the lack of regulation and the current uncertain legal status of cryptocurrencies presents a golden opportunity for cybercriminals. Numerous authorities are aiming to regulate the use of Bitcoin, Ethereum and other digital currencies and develop legal frameworks to protect users. In the meantime, however, cybercriminals continue to exploit the unwary.

According to Tyler Moore, Assistant Professor of Cyber Security at the University of Tulsas Tandy School of Computer Science, it is difficult to protect Bitcoin owners from hackers: I am sceptical theres going to be any technological silver bullet thats going to solve security breach problems. No technology, cryptocurrency, or financial mechanism can be made safe from hacks.

The U.S. Department of Homeland Security funded a study conducted by Moore, showing that between 2009 and March 2015, 33% of operational Bitcoin exchanges were hacked. There are several ways to protect your cryptocurrency accounts from cybercriminals. Haim Toledano recommends the best steps to take

Taking these steps will protect you from cyberattacks to a certain extent, but serious cryptocurrency traders should stay up to date with emerging threats by regularly visiting specialist online forums.

Its impossible to guarantee total protection of your digital assets, but this shouldnt deter you from entering the exciting world of cryptocurrency trading. Just make sure to take the necessary precautions to safeguard your portfolio.

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How Secure is Your Cryptocurrency Portfolio? - Finance Magnates

7 Cryptocurrency Predictions From the Experts – Fortune

Fortune convened some top cryptocurrency entrepreneurs, venture capitalists, bankers, and others to chat about the future of digital money at Fortunes Brainstorm Tech conference in Aspen, Colo. last week. A select group met at the Aspen Institute for a breakfast roundtable discussion on Wednesday morning.

Headliners on the panel included Balaji Srinivasan , CEO and cofounder of 21.co, a cryptocurrency startup that has raised more in traditional VC funding than almost other one. Another was Peter Smith, CEO and cofounder of Blockchain, a U.K.-based cryptocurrency wallet company that recently raised $40 million from GV , the venture capital arm of Alphabet , parent company of Google ( goog ) . And Kathleen Breitman, CEO and cofounder of Tezos, a blockchain startup that this year raised more than $200 million in an initial coin offering, or ICO, and which counts celeb investor Tim Draper among its backers.

The crew of experts weighed in on everything from the longevity of Bitcoin, the original cryptocurrency and blockchain, or cryptographically secured public ledger, to the latest trend of hosting so-called token sales to fund projects, especially on Ethereum , a rival blockchain to Bitcoins, to the future of a decentralized web. Here are some of the predictions we heard.

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Most people who are enthusiastic about cryptocurrency appear to agree that Bitcoin and its newer rival Ethereum have staying power, though they may be more bullish on one versus the other. "In terms of 5 to 10 years, Bitcoin and Ether will be around I bet," Balaji Srinivasan told the room of more than 70 people.

Peter Smith said his company, Blockchain, which was early to Bitcoin, has only just started to warm up to newcomer Ethereum. In contrast, Mike Cagney, CEO and cofounder of SoFi, a personal finance company, said during a separate session on the main stage that he was hotter on the latter technology .

Bitcoin "has some purpose but its application for commercial transaction is limited right now," Cagney said. "The blockchain and Ethereum, on the other hand, have absolutely fascinating infrastructure applications, he continued, mentioning the possibility to overhaul title insurance, which involves policies related to real estate, as one example.

Bitcoin and Ethereum may have stolen the show at this point, but the innovation wont end there. Expect more winners on the horizon.

Kathleen Breitman is hopeful that Tezos, her own blockchain bet, will fill a niche that solves problems with extant blockchains. In particular, she and her projects developers are designing Tezos to automatically push software updates out to the network, thus, in theory, avoiding the divisive feuding over upgrades that has wracked systems like Bitcoin over the past few years.

No one can say how many tokens and coins and blockchain protocols will eventually win out, but the experts seem to think theres room for a multitude. "Its likely that another one or two dominant ones we havent seen yet in the market," Smith projected. "Another really dominant coin could come out this year or next year.

For the time being, token sales might seem like a fantastic way to raise a lot of money quickly and with few questions asked. Will this lead to riches for some? Undoubtedlyindeed, it already has. And rip-offs for others? Almost certainly.

Smith said he presumes that market manipulation and insider dealing is rampant among purveyors of initial coin offerings. Were cautious about it in the short term, Smith said of his company. But you have to temper that with the idea that every new technology is going to be like that in the beginning.

Brad Garlinghouse, CEO of Ripple and a former executive at Yahoo , voiced his less forgiving concerns about the sector on a separate panel. Heavily regulated markets are typically heavily regulated for a reason, he said. Frauds are happening, people are going to jail.

The days of making a pilgrimage to the homes of the holders of purse strings are coming to an end. In a world where anyone can participate as an investor online, physical location matters much less.

It used to be you had to come to Silicon Valley, walk up Sand Hill Road, network with individuals, Srinivasan said about entrepreneurs seeking funding, often strolling up a strip to the west of Palo Alto that long has been associated with venture capital firms. ICOs change all that.

Projects are already getting funded this Kickstarter-like new way. Breitman said she that when she set up Tezos token sale, she aimed to get as many people who wanted to participate in the ecosystem to contribute. The company raised more than $200 million to date and, according to her, more than 30,000 Tezos wallets have been opened.

Elena Kvochko, chief information officer of the security division at Barclays, said that her bank has had talks with regulators about Bitcoin, blockchains, and their ilk. The rule-sticklers appear to be open to the idea as long as know your customer laws are obeyed, although its still early days.

Meanwhile, as governments settle on sets of rules of the road, countries like Switzerland, Singapore, and Estonia are jostling to develop frameworks that easily accommodate the new technology, Srinivasan said. Theyre seeking to displace geographic incumbents and become hubs for a new wave of business financing. If youre a U.S. person or business, you have a good deal to be concerned about, Smith said.

Breitman added that until the rules are agreed upon, its best to be transparent about what one is doing.

As cryptocurrency prices fluctuate wildly, speculators have been having a field day. However, theres reason to believe the markets will become more stable, as Bitcoin gradually has over the past couple of years (despite its still big price swings), Smith said.

In order for these computer coins to catch on big-time, they need a use-case that beats traditional money. Ideally, this ought to be better than merely buying drugs, as Jeff John Roberts, Fortune reporter and the sessions moderator, noted.

Srinivasan proposed one possible scenario. Imagine that all your waking hours are spent in the Matrix, he said, referring to a virtual reality in which everyone is enmeshed in the future. As people from all over the world meet and interact, they will need a medium of exchange. To transact, you cant just hand over a dollar bill, Srinivasan said. You need an international currency for that.

It might take a while but theres going to be more of a need to transact across borders than there is today, he said.

Whenever a consumer swipes or dips a credit card, payment processors charge a fee.

Nicko van Someren, chief technology officer of the Linux Foundation, pointed out that the fee companies like Visa or Mastercard charge exceeds the cost to clear or settle transactions. These businesses can potentially process transactions quicker and cheaper, he contended.

One potential outcome of the adoption of alternate systems, like Bitcoin, is to provide companies with the impetus to improve their services. Bitcoin is good because it will make banks move toward the real cost of handling these transactions, van Someren said. (By extension, in Ethereum's case, one could imagine upstart companies built on it forcing giants like Amazon , Facebook , or Dropbox to reconsider or improve their respective offerings.)

Smith, meanwhile, was less optimistic about incumbents ability to adapt to such change. I dont think be lot of room for banks to simply adjust their price models, he said.

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7 Cryptocurrency Predictions From the Experts - Fortune

Start Your Hedging: LedgerX to Begin Trading Cryptocurrency Derivatives – CoinDesk

For the first time ever, the U.S. Commodity Futures Trading Commission (CFTC) has given permission to a private company to exchange and clear any number of cryptocurrency derivatives.

After three years of work, New York-based startup LedgerX was today granted a rare derivatives clearing organization (DCO) license allowing it to clear and custody financial instruments backed by bitcoin, ether and any number of blockchain-based cryptocurrencies.

The instruments, designed to mitigate investment risk, are the latest signal that the cryptocurrency markets are maturing, with the total value of the asset class crossing $115bn earlier this year.

But the guidance from the agency in charge of ensuring the integrity of all futures and swaps markets in the US could have bigger implications than just letting a single company finally open for business.

LedgerX co-founder and CEO Paul Chou told CoinDesk:

"It means a lot, not just for the industry, but globally, because the CFTC will set the example of what a well-licensed clearinghouse and exchange based around digital currencies will look like."

As part of the DCO license, LedgerX will be required to surveil the institutional investors it works with and create increased transparency about those customers for the regulatory agency. Eligible participants include broker dealers, banks, futures commission merchants, qualified commodity pools and qualified high net worth investors.

With the granting of this license, these groups will now be able to enter into complex contracts with one another, with values derived from the underlying cryptographic asset.

As a result, Chou believes the creation of these assets will mark a pivotal moment for cryptocurrency markets, giving investors more sophisticated ways to hedge, and possibly, helping to stabilize long-volatile cryptocurrency prices.

"We have a lot of in-progress talks with customers that are looking to work with retail customers that want to buy derivatives on bitcoin, binaries, all these exotic options," he said.

Though frequently described as a bitcoin exchange and clearinghouse, LedgerX's license did not require an overly broad definition of cryptocurrency. Rather, the permission is open to any of a series of instruments derived from the cryptographic primitives used to build a number of protocols.

Similar to how G5 currencies are typically viewed as safe investments due to their relative stability, Chou imagines three to five cryptocurrencies will be deemed "viable" candidates for the exchange and clearinghouse, based on market capitalization and functionality.

Initial coin offering (ICO) tokens sold to raise funds will not likely be considered for inclusion on LedgerX, given their gray area between CFTC-regulated commodities and SEC regulated securities.

Rather than of having to reapply for each currency and each derivative contract LedgerX will "self-certify" that the new opportunity is compliant.

"Instead of evaluating different governments," as with the case of a G5 currency, said Chou. "Youll be evaluating different technologies or approaches underneath these digital currencies."

The CFTC decision comes at a time when many in the cryptocurrency industry have been anxiously awaiting clear guidance including other regulators.

In March, another lengthy cryptocurrency regulatory application was refused by the Securities and Exchange Commission (SEC), citing among other things, a lack of "surveillance-sharing agreements," and a requirement that "markets must be regulated."

Currently under review by the SEC, the application would let Tyler and Cameron Winklevoss list a bitcoin-tied exchange-traded fund (ETF) on the BATS BTX Excahnge.

Given LedgerX's lengthy requirements to report on its customers and the regulatory body's history of co-regulating certain instruments, Chou believes today's decision could provide just the answer the SEC, and other agencies in Asia and Europe have been waiting for.

"I think the CFTC will set an example both for other regulators here in the U.S., but also globally as well," he said.

After years of working and waiting, progress had been moving swiftly leading up to today's news.

It was just earlier this month that the CFTC formally registered LedgerX as a swap execution facility (SEF) after operating with a temporary license for about two years, making the New York-based firm only the second cryptocurrency outfit to be regulated under the provision.

A close observer of the developing story might have even found a clue to the story back in May, when LedgerX announced it had raised an $11.4 million Series B led by Miami International Holdings and Huiyin Blockchain Venture Investments.

It turns out, the money for the startup that had already raised a $1.5 million seed round and an undisclosed Series A was intended to meet capital requirements implemented by the Dodd-Frank Act. In order to ensure agreements can be fulfilled in case of an emergency, the act requires that a DCO hold operating costs to run its business for a year.

Going as far back as September 2015, former CFTC commissioner Mark Wetjen has been sitting on the board of LedgerX parent company Ledger Holdings, and since January 2016, Chou has served on the CFTC technology advisory committee.

In a statement, Wetjen said:

"These are exciting times to have a new digital asset class emerge. I hope that the effort LedgerX put forward in the U.S. can set the stage for a global approach to this new digital asset class."

By moving the trading and settling of cryptocurrency assets into one, heavily observed operation, Chou expects he'll be able to generate revenue from an entirely new source: data analytics to an unprecedented depth.

In addition to charging other exchanges for his service, Chou expects the CFTC's heavy surveillance requirements will result in cryptocurrency markets data that can be cross-referenced with points from previously existing data sets.

When the platform formally launches later this year, these services and more will only be available to accredited investors. But, Chou described his business model as "multi-stage," eventually serving those who were previously unable to afford such services.

"At first we're going to target a lot of institutional customers that want to invest in this asset class," said Chou, who added:

"Then later, pretty much everybody."

Flames on hot rod via Michael del Castillo

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [emailprotected].

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Start Your Hedging: LedgerX to Begin Trading Cryptocurrency Derivatives - CoinDesk

Incredible New Cryptocurrency Introducing BlancoCoin! – Daily Reckoning

Get in now, folks. This ones hot and moving fast!

For a limited time you can buy the newest, rarest, most sought-after cryptocurrency to hit the markets since at least 20 minutes ago.

Thats right.

Im proud to present, finally, after literally minutes of thought and hard work BlancoCoin!

There are only four in existence.

Three Im keeping for myself.

The other one Im ready to break into 4.2 million equally sized pieces and sell to you.

Now, heres the thing. Theres no set price.

Yes, all 4.2 million units of the ONE BlancoCoin Im selling today will go to the highest bidder.

Call now. Or use our kind-of secure and completely incomprehensible trading platform!

Its OK if you dont understand it.

What counts is you show everyone how smart, innovative and outside-the-box you are and just blindly buy BlancoCoin now and bid it up to the sky.

Remember, trying to spend BlancoCoin is pointless. Its an investment in your future!

Hi, this is the REAL Ray Blanco.

What you just read above is preposterous nonsense. We both know it.

But sadly, thats how the cryptocurrency storys playing out right now. Its a farce.

Lots of good folks are throwing their hard-earned money after cryptocurrencies.

As a tech researcher and writer, Ive seen this before. Internet stocks. 3-D printing stocks. Virtual reality. Immunotherapy.

You can ride frenzy for huge gains, sure. Huge gains, after all, come from all kinds of ideas.

Just like my readers could (right now) be up 731% on a driverless tech play, 208% on an off-the-radar chipmaker, 218% on a breakthrough pharma company, 296% on a life-extension tech company I mean, the list goes on.

The thing is those arent fundraising events, which is what most of the cryptocurrency market boils down to.

The gains I list above are from real things, products, sales and deliverables.

The cryptocurrency game doesnt work like that. If its new, its hot. If its complicated, people want it more. Heres what I mean

You know what an IPO is, right?

It stands for initial public offering.

Thats when companies go public, big banks make tons of money and regular folks get their butts kicked and lose money.

If you like those, youre going to love ICOs. Those are initial coin offerings.

An ICO is essentially the same as an IPO but for cryptocurrencies!

Now you can get you butt handed to you and lose a bunch of money WITHOUT big banks being involved.

Now, heres the best part. You can invest in an ICO without there being a real, live cryptocurrency behind it.

You know who makes all the money in that case? The people behind the ICO, thats who.

Not you. Want to make real money? Launch your own cryptocurrency.

My point: Cryptocurrencies are a vomit comet of volatility.

Volatilitys fine. Its your friend if you know how to use it in your favor when you trade.

But volatile markets driven by speculation and a get rich quick approach are recipes for disaster.

Thats the thing about hysteria, bloodthirsty speculation and investing mania.

No one listens. No one cares. Chasing the story is all that matters. Shiny objects have a way of doing that to peoples thinking.

Then the bottom falls out, folks get smashed and everyone says, Next time well be more careful.

Humans are funny like that. Because were NEVER smarter the next time.

My point is, please try to keep your head while all those around you are losing theirs.

If youre throwing money at ICOs and cryptocurrencies, youre likely blinded by greed right now.

Case in point if you had even an inkling of interest in my BlancoCoin farce above, youre EXACTLY the person I want to reach today.

Step back a second, take a deep breath and think clearly before you buy a cryptocurrency.

Do you know what youre getting into?

Are you prepared to feel the joy and the pain the excitement and the night-sweat fear sometimes several times a day?

If not, I recommend you stick to the real tech you can explain on a napkin.

There could be 731% (or more) in gains waiting for you. My readers are living proof.

To a bright future,

Ray Blanco for The Daily Reckoning

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Incredible New Cryptocurrency Introducing BlancoCoin! - Daily Reckoning

When Putin Met Buterin: Russia may use cryptocurrency to propel its economy – Crypto Insider (press release) (blog)

On the sidelines of the International Economic Forum in St Petersburg, President Putin and Ethereum founder Vitalik Buterin met briefly and discussed the direct application of blockchain technology in Russian businesses and particularly banking systems which we may see in the coming years.

The implementation of virtual currencies such as Ethereum in the nation has the potential of improving the economy with faster and safer online transactions. In addition to this Etheruem offers services of smart contracts which can speed up businesses by removing intermediaries including trade deals, currency contracts, insurance contracts, and property rights. Investment in such technology could provide a powerful enhancement to a nations economy.

Vlad Martynov, adviser for The Ethereum Foundation, says:

Blockchain may have the same effect on businesses that the emergence on the internet once had it would change business models, and eliminate intermediaries such as escrow agents and clerks, if Russia implements it first, it will gain similar advantages to those the Western countries did at the start of the internet age.

Russia has been pursuing technologies that havent already been claimed by the other great powers the West, China or Japan in order to diminish the dependency on oil. In 2007, Russia set up and invested in a large-scale nanotechnology company, Rosnano. However it did not provide the breakthrough they were hoping for, nor did it find relevant projects to invest in.

Last year, a new project developing a hyperloop train received high investment, in prospect to create a train which rides through a tube in speeds of over 700 miles per hour. But this project got caught up in acourt case which involved a Silicon Valley startups founders as well as claims of financial mismanagement.

Cryptocurrency appears to be Russias new investment in innovative technology. The value of Ethereum surged when its investor confidence increased, due to this newly sparked interest. Over the past year, the value of one Ethereum has seen growth from $10 to around $350, an almost 3,500% increase.

The Central Bank of Russia has begun testing a number of digital currency pilots toward the development of a national digital currency. This comes after a procession of banning and unbanning cryptocurrencies in the country, which initially regarded them as money surrogates. It was even considered to condemn people to prison for using digital currency. This year, however, this idea was dropped and the attitude reversed as banks and the government are endorsing the blockchain with new laws being developed. In fact, the Bank of Russia is interested in developing a national cryptocurrency of its own.

Russia may therefore be the first nation with cryptocurrency. Olga Skorobogatova, deputy chief of Bank of Russia, stated:

Regulators of all countries agree that its time to develop national cryptocurrencies, this is the future. Every country will decide on specific time frames. After our pilot projects, we will understand what system we could use in our case for our national currency.

Whichever country becomes the first to nationally embrace this blooming technology can gain a significant economic advantage over the rest of the world just as Britain did with the invention of the railway, or as the US did with the mass-production of cars.

The romance between Russia and cryptocurrency is one the world will be watching as it develops.

Picture from Wikimedia Commons.

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When thieves strike, cryptocurrency investors tremble – CBS News

Cryptocurrency Ethereum has emerged from the shadow of its better-known rival Bitcoin thanks to its skyrocketing price -- that has also made it a tempting target for hackers.

Thieves earlier this month stole $10 million from an electronic wallet provide by Coindash, a company that specializes in the kind of blockchain technology used in digital currencies. Another $32 million recently went missing after hackers exploited a vulnerability in an e-wallet from startup Parity.

The price of Ethereum slumped following news of the heists, tumbling more than 15 percent from $258.52 on July 18 to $218.82 on Friday, according to CoinMarket Cap.

Coindash, which was using a so-called initial coin offering to raise funds, plans to compensate victims of the hack. To help stabilize the price of Ethereum, it will also offer bonuses to anyone who holds it for at least six months. According to Parity, there were three accounts compromised in the attack and that the thief is attempting to launder the money through exchanges.

"If anything, it makes people more aware of the pitfalls of coding," said Luis Cuende, CEO of Aragon, an Ethereum-based corporate management tool, adding that the underlying code that powers the cryptocurrency wasn't affected by the attack.

The concept behind Ethereum was initially described by computer programmer Vitalik Buterin in 2013 based on his research on Bitcoin. A year later he joined forces with another programmer to create Ethereum, now the second-most popular cryptocurrency after Bitcoin.

New investors in Ethereum may not be aware of the risks of losing their funds to hackers, said Simon Yu, CEO of CakeCodes, which offers cryptocurrency rewards to computer game players. He said accounts should be secured with private keys whose combinations are known only to the account holders.

Cryptocurrencies have long been dogged by concerns about their security, particularly after the collapse of Bitcoin exchange Mt. Gox in 2014. The company's former CEO, Mark Karpales, is currently on trial in Japan, where the corporation was based, on embezzlement and data manipulation charges. Karpales has blamed the company's collapse on hackers.

South Korea's largest Ethereum and Bitcoin exchange was breached in late June in a theft estimated at 1.2 billion won ($1.07 million). A Pennsylvania man also recently confessed to stealing $40 million worth of Bitcoin.

Despite the risks, investors continue to have faith in digital currencies even as their prices fluctuate wildly. Ethereum, which started the year valued at $8.17, has in a matter of months soared 2,600 percent. Over the same period, Bitcoin prices have surged from $1,027 to $2,638, a gain of more than 150 percent.

The S&P 500, the stock market index most closely tracked by professional money managers, has this year posted a gain of 10.3 percent.

2017 CBS Interactive Inc.. All Rights Reserved.

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When thieves strike, cryptocurrency investors tremble - CBS News

Decentralisation mooted for African cryptocurrency – IT-Online

While some sceptics may have misgivings about the technology, cryptocurrency and blockchain has disrupted financial services and will probably be around for a lot longer. This is the view of Heinrich Springhorn, business analyst at MobileData, who says: There is some instability due to a hearing in Japan regarding a bitcoin exchange that was shut down due to suspected embezzlement. However, this does not take away from the potential of what cryptocurrency, and essentially the blockchain, can mean to transacting worldwide. This realisation can make a real difference for operations in Africa, he says. MobileDatas standpoint is that to apply this methodology in Africa and transact more freely, companies must be willing to participate in a decentralised model of transacting. One of the biggest set-backs at the moment is that there are only a small number of stock and service providers worldwide that accept cryptocurrency such as Bitcoin, and it is still far away from becoming main stream, Springhorn says. If a cryptocurrency should become mainstream, the potential exists that it could cause instability in financial enterprises. The reason for this is that the banking institutions will lose their locus of control over currencies and consumers will transact outside of their control. The decentralised nature of cryptocurrency means the reality facing markets is that there is no intermediary with the power to limit any fraud or embezzlement. This means there is no way for the assets to be seized in these cases, Springhorn explains. The companys assessment of the market is that for widespread adoption of this model to occur in Africa it will require a mechanism for on-the-fly exchanging of the cryptocurrency to a value of the fiat money. This is on the basis that services and stock providers do not accept cryptocurrencies as payment. If the service and stock providers do accept cryptocurrency as payment, then the transaction engine used will write an entry into the decentralised ledger and the transaction will go through the blockchain. In addition, there are socio-economic concerns with regards to cryptocurrency, as many end-users do not have access to the technology needed to transact with cryptocurrency,Springhorn adds.

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Launch Dates for These New Cryptocurrency ITOs Have Been Announced – Investopedia


Investopedia
Launch Dates for These New Cryptocurrency ITOs Have Been Announced
Investopedia
OpenLedger has released the dates for the Initial Token Offerings (ITO) of four different projectsOCASH, eDev.one, GetGame and Apptradebeing built on its platform. In June, Denmark based Open Ledger Aps received a seed funding of $1.6 million ...

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Launch Dates for These New Cryptocurrency ITOs Have Been Announced - Investopedia

Bitcoin is booming because a split in the cryptocurrency has been narrowly averted – Quartz

Bitcoin has risen as much as 28% over the past 24 hours, driven by news that an imminent split in the cryptocurrency has been narrowly averted. The price of bitcoin nearly hit $3,000 late on July 20, within spitting distance of its all-time high, set last month.

The remarkable rally took place as bitcoins miners coalesced around one of several competing proposals that would increase the number of transactions that can be processed on the network. The issue has gained urgency in recent months, because one of the measures, known as Bitcoin Improvement Proposal 148 (BIP 148), would lead to a split in the cryptocurrency on Aug. 1 if implemented.

The price rallied as bitcoins miners began broadcasting their support for a less radical proposal, BIP 91, in increasing numbers yesterday. This proposal avoids the so-called hard fork by stopping short of altering the hard-coded limit on transaction capacities that is the bone of contention within the bitcoin world, while offering slightly enlarged transaction capacity.

The threshold for activating BIP 91 is 80% of all the processing power on the bitcoin network. That was achieved in the early hours of July 21. Currently 97% of the processing power on the network, which is largely controlled by miners, is voting in favor of BIP 91.

But its not settled yet. Although enough miners have signaled support for their preferred proposala process akin to broadcasting a preference over the networkenough of them must now run the software that implements this proposal within the next two and a half days. Failure to maintain a simple majority of the processing power, also called the hash rate, would mean BIP 91 does not activate. This would put the bitcoin world back at square one, with just a week to go before the potentially destabilizing hard fork on Aug. 1.

There are also still signs that the fundamental disagreement that led to this showdowna civil war, as some call itis far from resolved. The fight is between bitcoins miners and the influential programmers who contribute to bitcoins open-source code, known as the core developers. The core devs say bitcoin is at risk of being controlled by a cartel of miners who, by virtue of their huge investments in processing power, are able to dictate what changes are made to the codeanathema to bitcoins decentralized founding ethos. But the miners, and other heavy users, like payment processors, point out that the bitcoin network could be abandoned if it doesnt enlarge its limited capacity soon.

The architect of BIP 91, James Hilliard, a miner himself, told industry publication CoinDesk: This is where mining centralization makes things easier, because I can just message everybody on WeChat and help them if needed. That may be so, but it wont comfort the parts of the bitcoin world concerned with centralization of the cryptocurrency, even if the current fix to bitcoins problems goes according to plan.

Read next: Bitcoins civil war threatens to blow up the cryptocurrency itself

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Bitcoin is booming because a split in the cryptocurrency has been narrowly averted - Quartz

New Virtual Reality Cryptocurrency Gets $2.1 in Funding – Investopedia


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New Virtual Reality Cryptocurrency Gets $2.1 in Funding
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As the cryptocurrency world expands, it's difficult to say exactly how many other industries it will impact. Nonetheless, one industry that has already been affected by the expanding digital currency realm is gaming. As mining operations have ...

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ECB President: Cryptocurrency Price Boom Having Limited Effect on Economy – CoinDesk

The president of the European Central Bank (ECB) has issued remarks addressing the rising interest in cryptocurrencies as an asset class.

In a letter to members of the European parliament this week, Mario Draghi built on statements made during a May hearing, in which he first discussed financial innovation, including the "rapid pace of development" in digital ledger(DLT) and related technologies. At the time, he cautioned that care must be taken so that fintech, including blockchain and DLT, does not disrupt the financial system.

Published this week, the new letter builds on this commentary, addressing more directly the rise in cryptocurrency prices so far in 2017. Driven by big gains in bitcoin and ether, the value of the total supply of all cryptocurrencies is now $93bn, down slightly from an all-time high of $115bn earlier this year.

Still, in the face of this increase, Draghi used the opportunity to restate his belief that cryptocurrencies still havea limited impact on the financial system.

Draghi wrote:

"Although the market capitalisation of [virtual currency schemes] has increased since the publication of these reports, there is no evidence to suggest that the connection of VCS to the real economy has strengthened significantly."

Citing past research from the ECB, Draghi indicated he still believes there could be a "build-up of risks" due to the use of cryptocurrencies, which may necessitate an international regulatory response.

Still, for now, he said the ECB would likely take steps to continue to monitor the ecosystem, tracking the "number, structure and scope" of public blockchain tokens.

"An increase in the usage of [virtual currency schemes] is conceivable. It is thus important to monitor the take-up of VCS from a financial stability perspective," he said.

For more on how the ECB is approaching blockchain and cryptocurrencies, read our most recent interview.

ECB DLT Lead: Central Banks Won't Compete on Blockchain Tech

Mario Draghi image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [emailprotected].

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ECB President: Cryptocurrency Price Boom Having Limited Effect on Economy - CoinDesk

Cryptocurrency Gets Its Biggest Test Yet – Fortune

In the coming months a startup based in Waterloo, Ontario, is set to kick off a grand monetary experiment, one that will put to the test a new model for business that could prove to be either the webs next great economic engine, or a multibillion-dollar bubble thats as combustible as the Hindenburg.

The concept at stake is cryptocurrency , a form of digital money that exists independent of traditional banks or governments. Over the past few months, the market for cryptocurrencies has rocketed to more than $100 billion (and fallen back to $60 billion) amid extreme enthusiasm and volatility. So-called token sales, or initial coin offerings , also known as ICOs , have raised hundreds of millions of dollars, creating substantial fortunes out of little more than ones, zeros, and pitches. The movements critics compare it to the tulip-bulb manias of centuries past and say it will end the same way.

Advocates, however, believe cryptocurrencies could represent an important way for tech companies to raise cash. Instead of users trading their time, attention, and energy for free services, while a few supermassive landlord corporations reap all the profits (hello, Facebook ( fb ) ), cryptocurrencies could enable participants to be remunerated for their contributions on the platforms, with yet-to-be-invented moneys. Imagine users getting paid by the like.

So far, while their nominal value has soared, cryptocurrencies have mostly been a vehicle for speculators . But in the coming months, for the first time, a mainstream company with an established user base will try its hand at launching a crypto token to its 15 million monthly active users, potentially multiplying by a factor of five overnight the number of people using digital currency, according to estimates by the Cambridge Center for Alternative Finance . The company is Kik, the maker of a chat app favored by American teens , which intends to mint tokens enabling users to transact through its network.

Kik will join more than a hundred early-stage projectswith names like Brave , Civic, and Tezosin hosting token sales in order to fund themselves . But Kik hopes to be among the first to get people to use the tokens for something other than trading, flipping, or speculating.

Ted Livingston, founder and CEO of Kik, had the idea for a cryptocurrency in the back of his mind in 2014 when he launched Kik Points, a video-game-like in-app virtual money. The company shuttered the pilot program last year, but Livingston was pleased with it: The points traded hands an average of 300,000 times per day, more than three times the average number of transactions per month on Bitcoins network during that time. Kiks customers mostly used the points to buy stickers and smileys, but the company intends its new Kin tokens, the batch of to-be-released computer coins, to enable users to do everything from tipping peers, to ordering pizza, to paying for premium content.

Kik plans to mint a total of 10 trillion Kin tokens, selling a trillion to the public, holding on to 3 trillion for itself, and setting aside 6 trillion for a nonprofit that will manage a rewards program for loyal users. Its a new way to compete, its a new way to monetize, and its potentially a new way to exit as well, Livingston says.

If past ICOs are any indication, Kiks will bring in a substantial sum no matter what. What industry watchers will be eyeing, however, is whether Kin will actually catch on, fueling a mini-economy within and outside the app. If it works, the experiment could signal to the world the viability of the much-hyped and, until now, mostly theoretical token-based business model.

Success will pave the way for other traditional companies to do it, says Jake Brukhman, cofounder of CoinFund, which advises companies, including Kik, on blockchain tech. Indeed, crypto enthusiasts have proposed companies such as Twitter ( twtr ) , Snap ( snap ) , and Reddit as leading candidates for eventual token sales.

Either that, or the movementwhich depends on widespread adoption to justify multibillion-dollar valuationscould implode and leave many aspiring entrepreneurs and investors in the dust. For the Internets next big thing, that would be a little more than Kin, and less than kind.

A version of this article appears in the Aug. 1, 2017 issue of Fortune.

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Cryptocurrency Gets Its Biggest Test Yet - Fortune

What is Cryptocurrency: Everything you Need to Know

What is cryptocurrency: 21st-century unicorn or the money of the future?

This introduction explains the most important thing about cryptocurrencies. After youve read it, youll know more about it than most other humans.

Today cryptocurrencies have become a global phenomenon known to most people. While still somehow geeky and not understood by most people, banks, governments and many companies are aware of its importance.

In 2016, youll have a hard time finding a major bank, a big accounting firm, a prominent software company or a government that did not research cryptocurrencies, publish a paper about it or start a so-called blockchain-project.

Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us. Thomas Carper, US-Senator

But beyond the noise and the press releases the overwhelming majority of people even bankers, consultants, scientists, and developers have a very limited knowledge about cryptocurrencies. They often fail to even understand the basic concepts.

So lets walk through the whole story. What are cryptocurrencies?

Where did cryptocurrency originate?

Why should you learn about cryptocurrency?

And what do you need to know about cryptocurrency?

Few people know, but cryptocurrencies emerged as a side product of another invention. Satoshi Nakamoto, the unknown inventor of Bitcoin, the first and still most important cryptocurrency, never intended to invent a currency.

In his announcement of Bitcoin in late 2008, Satoshi said he developed A Peer-to-Peer Electronic Cash System.

His goal was to invent something; many people failed to create before digital cash.

The single most important part of Satoshis invention was that he found a way to build a decentralized digital cash system. In the nineties, there have been many attempts to create digital money, but they all failed.

After seeing all the centralized attempts fail, Satoshi tried to build a digital cash system without a central entity. Like a Peer-to-Peer network for file sharing.

This decision became the birth of cryptocurrency. They are the missing piece Satoshi found to realize digital cash. The reason why is a bit technical and complex, but if you get it, youll know more about cryptocurrencies than most people do. So, lets try to make it as easy as possible:

To realize digital cash you need a payment network with accounts, balances, and transaction. Thats easy to understand. One major problem every payment network has to solve is to prevent the so-called double spending: to prevent that one entity spends the same amount twice. Usually, this is done by a central server who keeps record about the balances.

In a decentralized network, you dont have this server. So you need every single entity of the network to do this job. Every peer in the network needs to have a list with all transactions to check if future transactions are valid or an attempt to double spend.

But how can these entities keep a consensus about this records?

If the peers of the network disagree about only one single, minor balance, everything is broken. They need an absolute consensus. Usually, you take, again, a central authority to declare the correct state of balances. But how can you achieve consensus without a central authority?

Nobody did know until Satoshi emerged out of nowhere. In fact, nobody believed it was even possible.

Satoshi proved it was. His major innovation was to achieve consensus without a central authority. Cryptocurrencies are a part of this solution the part that made the solution thrilling, fascinating and helped it to roll over the world.

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If you take away all the noise around cryptocurrencies and reduce it to a simple definition, you find it to be just limited entries in a database no one can change without fulfilling specific conditions. This may seem ordinary, but, believe it or not: this is exactly how you can define a currency.

Take the money on your bank account: What is it more than entries in a database that can only be changed under specific conditions? You can even take physical coins and notes: What are they else than limited entries in a public physical database that can only be changed if you match the condition than you physically own the coins and notes? Money is all about a verified entry in some kind of database of accounts, balances, and transactions.

How miners create coins and confirm transactions

Lets have a look at the mechanism ruling the databases of cryptocurrencies. A cryptocurrency like Bitcoin consists of a network of peers. Every peer has a record of the complete history of all transactions and thus of the balance of every account.

A transaction is a file that says, Bob gives X Bitcoin to Alice and is signed by Bobs private key. Its basic public key cryptography, nothing special at all. After signed, a transaction is broadcasted in the network, sent from one peer to every other peer. This is basic p2p-technology. Nothing special at all, again.

The transaction is known almost immediately by the whole network. But only after a specific amount of time it gets confirmed.

Confirmation is a critical concept in cryptocurrencies. You could say that cryptocurrencies are all about confirmation.

As long as a transaction is unconfirmed, it is pending and can be forged. When a transaction is confirmed, it is set in stone. It is no longer forgeable, it cant be reversed, it is part of an immutable record of historical transactions: of the so-called blockchain.

Only miners can confirm transactions. This is their job in a cryptocurrency-network. They take transactions, stamp them as legit and spread them in the network. After a transaction is confirmed by a miner, every node has to add it to its database. It has become part of the blockchain.

For this job, the miners get rewarded with a token of the cryptocurrency, for example with Bitcoins. Since the miners activity is the single most important part of cryptocurrency-system we should stay for a moment and take a deeper look on it.

Principally everybody can be a miner. Since a decentralized network has no authority to delegate this task, a cryptocurrency needs some kind of mechanism to prevent one ruling party from abusing it. Imagine someone creates thousands of peers and spreads forged transactions. The system would break immediately.

So, Satoshi set the rule that the miners need to invest some work of their computers to qualify for this task. In fact, they have to find a hash a product of a cryptographic function that connects the new block with its predecessor. This is called the Proof-of-Work. In Bitcoin, it is based on the SHA 256 Hash algorithm.

You dont need to understand details about SHA 256. Its only important you know that it can be the basis of a cryptologic puzzle the miners compete to solve. After finding a solution, a miner can build a block and add it to the blockchain. As an incentive, he has the right to add a so-called coinbase transaction that gives him a specific number of Bitcoins. This is the only way to create valid Bitcoins.

Bitcoins can only be created ifminers solve a cryptographic puzzle. Since the difficulty of this puzzle increases with the amount of computer power the whole miners invest, there is only a specific amount of cryptocurrency token than can be created in a given amount of time. This is part of the consensus no peer in the network can break.

If you really think about it, Bitcoin, as a decentralized network of peers which keep a consensus about accounts and balances, is more a currency than the numbers you see in your bank account. What are these numbers more than entries in a database a database which can be changed by people you dont see and by rules you dont know?

It is that narrative of human development under which we now have other fights to fight, and I would say in the realm of Bitcoin it is mainly the separation of money and state.

Erik Voorhees,cryptocurrency entrepreneur

Basically, cryptocurrencies are entries about token in decentralized consensus-databases. They are called CRYPTOcurrencies because the consensus-keeping process is secured by strong cryptography. Cryptocurrencies are built on cryptography. They are not secured by people or by trust, but by math. It is more probable that an asteroid falls on your house than that a bitcoin address is compromised.

Describing the properties of cryptocurrencies we need to separate between transactional and monetary properties. While most cryptocurrencies share a common set of properties, they are not carved in stone.

1.) Irreversible: After confirmation, a transaction cant be reversed. By nobody. And nobody means nobody. Not you, not your bank, not the president of the United States, not Satoshi, not your miner. Nobody. If you send money, you send it. Period. No one can help you, if you sent your funds to a scammer or if a hacker stole them from your computer. There is no safety net.

2.) Pseudonymous: Neither transactions nor accounts are connected to real world identities. You receive Bitcoins on so-called addresses, which are randomly seeming chains of around 30 characters. While it is usually possible to analyze the transaction flow, it is not necessarily possible to connect the real world identity of users with those addresses.

3.) Fast and global: Transaction are propagated nearly instantly in the network and are confirmed in a couple of minutes. Since they happen in a global network of computers they are completely indifferent of your physical location. It doesnt matter if I send Bitcoin to my neighbour or to someone on the other side of the world.

4.) Secure: Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency. Strong cryptography and the magic of big numbers makes it impossible to break this scheme. A Bitcoin address is more secure than Fort Knox.

5.) Permissionless: You dont have to ask anybody to use cryptocurrency. Its just a software that everybody can download for free. After you installed it, you can receive and send Bitcoins or other cryptocurrencies. No one can prevent you. There is no gatekeeper.

1.) Controlled supply: Most cryptocurrencies limit the supply of the tokens. In Bitcoin, the supply decreases in time and will reach its final number somewhere in around 2140. All cryptocurrencies control the supply of the token by a schedule written in the code. This means the monetary supply of a cryptocurrency in every given moment in the future can roughly be calculated today. There is no surprise.

2.) No debt but bearer: The Fiat-money on your bank account is created by debt, and the numbers, you see on your ledger represent nothing but debts. Its a system of IOU. Cryptocurrencies dont represent debts. They just represent themselves. They are money as hard as coins of gold.

To understand the revolutionary impact of cryptocurrencies you need to consider both properties. Bitcoin as a permissionless, irreversible and pseudonymous means of payment is an attack on the control of banks and governments over the monetary transactions of their citizens. You cant hinder someone to use Bitcoin, you cant prohibit someone to accept a payment, you cant undo a transaction.

As money with a limited, controlled supply that is not changeable by a government, a bank or any other central institution, cryptocurrencies attack the scope of the monetary policy. They take away the control central banks take on inflation or deflation by manipulating the monetary supply.

While its still fairly new and unstable relative to the gold standard, cryptocurrency is definitely gaining traction and will most certainly have more normalized uses in the next few years. Right now, in particular, its increasing in popularity with the post-election market uncertainty. The key will be in making it easy for large-scale adoption (as with anything involving crypto) including developing safeguards and protections for buyers / investors. I expect that within two years, well be in a place where people can shove their money under the virtual mattress through cryptocurrency, and theyll know that wherever they go, that money will be there. Sarah Granger, Author, and Speaker.

Mostly due to its revolutionary properties cryptocurrencies have become a success their inventor, Satoshi Nakamoto, didnt dare to dream ofit. While every other attempt to create a digital cash system didnt attract a critical mass of users, Bitcoin had something that provoked enthusiasm and fascination. Sometimes it feels more like religion than technology.

Cryptocurrencies are digital gold. Sound money that is secure from political influence. Money that promises to preserve and increase its value over time. Cryptocurrencies are also a fast and comfortable means of payment with a worldwide scope, and they are private and anonymous enough to serve as a means of payment for black markets and any other outlawed economic activity.

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Don’t Look Now, but Cryptocurrency Ethereum Is Crashing …

When investors think of unstoppable trends, marijuana stocks might rightly come to mind. But in terms of percentage returns, nothing has even come close to cryptocurrency ethereum, which has risen by right around 2,270% for the year, as of July 17, 2017. By comparison, it's taken the S&P 500 roughly 35 years to log a return of about 2,000%.

Ethereum's massive gains, and that of its bigger rival bitcoin, are primarily the result of a weaker dollar and growing media and investor interest in cryptocurrencies.

Image source: Getty Images.

For instance, earlier this year, we witnessed Japan make bitcoin a legal form of tender, as long as it complies with the country's anti-money laundering regulations. This nod of confidence comes with a growing list of retailers and service providers, such as Overstock.comand Microsoft, that in some way accept bitcoin as payment.Even select marijuana dispensaries have turned to cryptocurrencies as a bridge between consumers with debit and credit cards and financial institutions that want nothing to do with the cannabis industry.

Weakness in the U.S. dollar, which recently hit a 10-month low, has also fueled buying in digital currencies. Though a weaker domestic currency helps drum up interest in exports, domestic investors typically dislike dollar declines. A devaluation in the dollar usually means investors will seek out a better store of value, which traditionally has been gold. Gold is a finite resource, and thus its scarcity provides the perception of safety and value to investors. However, mined cryptocurrencies like bitcoin also have a finite limit (21 million coins in bitcoin's case), offering the perception of scarcity and value.

The fact that these currencies aren't backed by the government, and that the public still doesn't understand them very well, has also arguably fueled interest and momentum.

But as the old proverb goes, "What goes up must come down."

Image source: Getty Images.

Following what was a better-than-5,000% run higher in a matter of months at one point, ethereum has seen its value crash in recent weeks. Since touching an all-time high of $407.10 back on June 12, ethereum has given back more than half of its value.As of 7:15 p.m. EDT on July 17, it was going for less than $189 per coin, and it had dipped as low as $130.26 during this past weekend. From peak to trough, we're talking about a 68% loss in value in less than five weeks, or more than $20 billion in market cap erased.

What on earth is going on, you ask? Some of this recent drop could be nothing more than simple profit-taking. Keep in mind that we're talking about an asset that appreciated by around 5,000% at one point this year. Considering how few businesses accept ethereum as payment, investors would have been foolish not to lock in some of their gains. But profit-taking is far from the only reason ethereum has been taken to the woodshed over the past month.

Another issue concerns the uncertain future of bitcoin. On Aug. 1, bitcoin is set to undergo a software update. The issue at hand is that those who are responsible for the upkeep of bitcoin behind the scenes have split into two factions, and are thus planning to adopt two separate and competing software updates. According to Bloomberg, these factions are debating whether bitcoin should evolve as a currency to serve more mainstream applications or remain as a libertarian test to monetary theory.

Though the incentive to reach a consensus and calm investors is obviously high, there remains a very real risk that bitcoin could subsequently split into two separate cryptocurrencies if a consensus is not reached. This instability has carried over to ethereum, which is regarded by some pundits to have a better underlying technology and broader use than bitcoin.

Finally, as CNBC pointed out, start-ups could be behind the recent plunge in ethereum. Sky-high returns have allowed start-ups the opportunity to cash in their ethereum coins for an equivalent amount of U.S. dollars, thus increasing selling pressure on the cryptocurrency.

Image source: Getty Images.

Perhaps the biggest issue yet to be decided with cryptocurrencies like ethereum and bitcoin is whether decentralization is a friend or foe.

In one sense, decentralization is a great thing. Having numerous miners across the globe effectively keeps these cryptocurrencies from succumbing to the will of cyberattacks. If there was a central network behind bitcoin, as an example, it could become an easy target for criminals.

Then again, a lack of centralization on cryptocurrency trading exchanges is arguably bad news. Competing exchanges and a lack of trade centralization are what drive volatility and reduce the uptake of these currencies by businesses.

In short, there's a lot left to be hashed out in the coming weeks for bitcoin and cryptocurrencies in general. While they represent an alluring alternative for consumers who dislike the traditional monetary system, use options are still pretty limited, and translating cryptocurrencies into U.S. dollars often has a lag time that can result in losses for investors and businesses. There are numerous issues that need to be tackled before ethereum, bitcoin, or any cryptocurrency for that matter, really has a shot at thriving over the long run. For the time being, I suggest sticking with a tried-and-true wealth creator like the stock market and keeping cryptocurrencies like ethereum out of your investment portfolio.

Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Sean Williams has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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How Do You Get Rich Off of a New Cryptocurrency? – Investopedia


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Cryptocurrencies have been the most exciting financial topic of 2017 for many investors, and with good reason. Bitcoin jumped in price, reaching highs of more than $3,000 earlier this year. Ethereum and Ripple, the second- and third-largest digital ...

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Hackers steal $34 million in second Ethereum cryptocurrency theft this week – PC Gamer

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One of the most popular cryptocurrencies in the world is drawing increased attention from hackers, or at least that has been the case this week. For the second time in a span of just three days, hackers have been able to make off with millions of dollars worth of Ethereum, leaving vigilante white hat hackers scrambling to prevent further theft.

In this latest robbery, the hacking group (or individual hacker, we don't know yet) exploited a vulnerability in Parity, a digital wallet service where cryptocurrency miners can store their Ethereum. In doing so, the hackers were able to swipe over 153,000 Ether worth approximately $34 million from three separate multi-signature Ethereum wallets, according to the most recent estimates.

Following the latest heist, Parity founder Gavin Wood issued a critical security notice to users.

"A vulnerability in Parity Wallet's variant of the standard multi-sig contract has been found," Wood wrote. He goes on to advise users to "immediately move assets contained in the multi-sig wallet to a secure address."

In the meantime, white hat hackers have been able to siphon some 377,015 Ether worth more than $85 million to prevent further loss.

"White hat group(s) were made aware of a vulnerability in a specific version of a commonly used multi-sig contract. This vulnerability was trivial to execute, so they took the necessary action to drain every vulnerable multi-sig they could find as quickly as possible," the White Hat Group stated on Reddit.

Those funds will be issued back to their owners after the group is able to create another multi-sig for each individual with the same settings as before, minus the vulnerability that made theft possible in the first place.

This is not the only black eye for cryptocurrencies, or even the only theft this week. Back on Monday, hackers made off with an estimated $10.3 million in Ethereum currency from CoinDash. In that instance, it is believed the culprits simply replaced the legitimate Ethereum wallet address listed on CoinDesk with one that belonged to them.

There are several other examples of thieves stealing large amounts of cryptocurrencies, as Gizmodo points out. Back in June of last year, hackers stole $53 million cryptocurrency from venture capital fund Decentralized Autonomous Organization. And then there was the situation in which $450 million of Bitcoin vanished from trading hub Mt. Gox a few years ago.

Despite the risks, mining for cryptocurrency continues be popular, much to the detriment of PC gaming. If and when things ever settle down, it will likely be due to plummeting values rather than the fear of theft.

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Hackers steal $34 million in second Ethereum cryptocurrency theft this week - PC Gamer