Posts by FarerScary

    Total Value of Bitcoin Sent to Darknet Markets Increased by 70% in 2018: Report


    During last year the value of Bitcoin (BTC) sent to darknet markets increased by 70 percent, according to a Chainalysis report published on Jan. 18.

    The Chainalysis report points out that darknet activity is relatively not influenced by Bitcoin’s price action and does not necessarily drop when the price drops. According to the data contained in the report, in 2018 the relationship between the value of darknet market transactions and Bitcoin’s market performance was inverse.

    Over the course of 2018, the total value sent to darknet markets saw a notable 70 percent increase, while total Bitcoin economic transaction value dropped throughout the year.

    Value of BTC Sent to darknet markets and BTC Market Performance

    Value of BTC Sent to darknet markets and BTC Market Performance. Source: Chainalysis

    According to Chainalysis data, the total dollar value of darknet market transactions has been steadily rising since 2011. The value peaked in 2017 at $707 million and decreased approximately 14 percent to $603 million in 2018. According to the report, the decrease in value from 2017 to 2018 is attributable to the closure of popular darknet market Alphabay in mid-2017, which reportedly saw darknet market activity fall by 60 percent.

    Value of BTC in USD & share of BTC economic value sent to darknet markets

    Value of BTC in USD & share of BTC economic value sent to darknet markets. Source: Chainalysis

    Furthermore, after Alphabay’s closure, various other markets reportedly have taken its place, creating what the report dubs is “the whack-a-mole problem with darknet markets.” This lead to another phase of steady increase in the value of such transactions in 2018. The report also notes:

    “There’s some evidence that darknet activity even increases after closures.”

    Still, according to Chainalysis data, even in 2017, the portion of Bitcoin commercial transactions sent to darknet markets was just a fraction of one percent, after having peaked in 2012 at over 6 percent. Since its peak in 2012, the share of Bitcoin transactions sent to darknet markets has been mostly steadily decreasing.

    As Cointelegraph reported in December last year, Cypherpunks co-founder Timothy C. May, who died of natural causes about one month ago, forecasted in his Crypto Anarchist Manifesto that “crypto anarchy will allow national secrets to be traded freely and will allow illicit and stolen materials to be traded.”

    In a dedicated analysis published in March 2018, Cointelegraph reported data from various sources pointing out that cash, and specifically United States dollars, remain the preferred method of payment for illicit goods and services. The report stated that while half of Bitcoin has at some stage been used for illegal purchases, a whopping 90 percent of U.S. dollar bills hold traces of cocaine.

    In October 2014, the founder of the darknet market search engine Grams declared that “the darknet was created mainly to fight the tyranny of governments” before concluding:

    “Darknet promotes freedoms, not criminal acts.”


    Former Governor of French Central Bank Joins Board of Directors of Blockchain Firm Setl


    British blockchain technology group Setl has hired former governor of the French central bank Christian Noyer as a member of its board of directors. The new appointment was confirmed in a blog post published on Jan. 17.

    Founded in 2015, Setl is a financial company with a focus on blockchain technology. Setl has built a blockchain-based infrastructure for institutional payments and settlements, with a reported capacity of over 1 billion transactions per day.

    According to the most recent announcement, Noyer has joined the board of directors of Setl, bringing a “wealth of experience in the financial, regulatory, economic management and central banking world.”

    Noyer’s professional experience includes serving as Vice President of the European Central Bank, Governor of the Banque de France between November 2003 and October 2015, as well as service at the Treasury in the French Ministry of the Economy and Finance.

    Previously, Setl’s board of directors was joined by such heavyweights as former non-executive member of the Court of the Bank of England Sir David Walker, former Senior Information Risk Owner of the United Kingdom Foreign and Commonwealth Office Martin Clements, and former Bank of England Deputy Governor Rachel Lomax.

    Another prominent hire in the crypto industry took place Jan. 16, when cryptocurrency exchange ErisX revealed that it had appointed Joseph Lubin, the founder of blockchain tech company ConsenSys and co-founder of cryptocurrency Ethereum (ETH), to its board of directors.

    In December, blockchain startup Civic appointed Apple veteran Phillip Shoemaker as executive director of, its decentralized identity platform.


    Binance Declines to Confirm Locations for Reported Crypto-Fiat Exchange


    Major crypto exchange Binance plans to expand to eight new countries in 2019, according to a report from crypto outlet The Block, Jan. 17. Following the report, a Binance spokesperson has declined to confirm six of the alleged locations in comments to Cointelegraph today, Jan. 18.

    Just a day after the major cryptocurrency exchange launched its new European-focused platform for fiat-crypto trading in Jersey, The Block published a report that included a screenshot of a spreadsheet allegedly outlining all the locations for Binance’s fiat-crypto exchanges that are already-launched, intended and under consideration.

    In addition to Uganda — which launched in October — and just-live Jersey, the Block listed Singapore, Malta, South Korea, Liechtenstein, Argentina, Russia, Turkey and Bermuda — a total of eight prospective fiat platforms across four continents.

    A Binance representative told Cointelegraph the exchange could only confirm Singapore and Malta — both listed in the report as being slated for launch in 2019. Five further countries had been listed as “intended,” and the last, Bermuda, as being under consideration.

    In response to the report, the Binance spokesperson suggested The Block may have “made the spreadsheet themselves,” as it was “definitely not from us.”

    As reported, Binance announced it would be starting private beta testing for a crypto-fiat exchange in Singapore last September. In June, the exchange had opened a bank account in Malta, paving the way for the introduction of fiat-crypto pairs, and detailed plans in September to launch a security tokens trading platform on the island.

    Notably, last August Binance itself announced it would be launching a fiat-to-crypto exchange in Liechtenstein — with support for Swiss francs (CHF) and Euros (EUR) — notwithstanding the company representative’s refusal to confirm The Block’s claims.

    As Cointelegraph reported in September, the CEO and founder of Binance, Changpeng Zhao (CZ), revealed that the company intends to launch five to ten fiat-to-crypto exchanges — two per continent — within one year, without specifying the exact locations.

    Binance is the currently the world’s second largest crypto exchange by 24-hour adjusted trading volume, seeing almost ~$570 million in trades on the day to press time.


    Thai Stock Exchange Plans to Launch a Token Trading Platform


    The Stock Exchange of Thailand (SET) is looking to capitalize on investor interest in cryptos by offering a new digital assets exchange.

    According to a report from Bangkok Post on Thursday, the SET is planning to apply for a license from the country’s Ministry of Finance to operate the platform.

    The move comes as the exchange looks to capture the growing investor demand for cryptos, Pattera Dilokrungthirapop, vice-chairwoman of the SET board of governors, said in the report.

    The stock exchange will work to have a sound technical system in place for the offering, as well as a digital wallet for token storage, with the aim being to launch this year.

    Pattera, who is also chairwoman of the Association of Securities Companies, added that securities company members of the SET already plan to apply to become brokers and dealers to trade on the new exchange.

    In May of last year, the SET launched a crowdfunding marketplace built on blockchain technology. The service, dubbed LiVE, uses blockchain to enable peer-to-peer trading in an effort to help startups access new capital from investors, including those drawn from the venture capital and institutional investor worlds.

    Last week, the finance ministry granted digital asset business licenses to four firms: Bitcoin Exchange, Bitkub Online, Satang Corporation (Satang Pro), and Coins TH Co. Two other firms, Cash2coin and Southeast Asia Digital Exchange (SEADEX), were denied the license, while a third application from Coin Asset is still under consideration.

    While the ministry grants the licenses, the country’s Securities and Exchange Commission actually regulates crypto businesses in the country under the “Emergency Decree on Digital Asset Businesses B.E. 2561 (2018).”

    Thailand first announced its crypto licensing rules in July of last year, with 20 crypto firms applying for the license within a month. The rules require projects that intend to offer crypto services to gain approval from the SEC before starting operations.

    SET image via Shutterstock


    Grayscale's Newest Crypto Investment Trust Will Hold Stellar Lumens


    Grayscale Investments, the digital asset management firm operating under the Digital Currency Group umbrella, is adding support for Stellar lumens with a new investment product.

    The company announced Thursday that it was launching the Stellar Lumens Trust, a “single-asset investment product” which exposes investors to lumens (XLM), the native asset of the Stellar network. Grayscale already offers single-asset trusts for a number of other cryptocurrencies, including bitcoin, bitcoin cash, ethereum, ethereum classic, zen, litecoin, XRP and zcash.

    The Stellar blockchain was built as a low-cost payment network, Grayscale noted in a press release, with the goal of providing impoverished communities with access to financial services. Founded by Jed McCaleb, the Stellar project has notably attracted the interest of IBM, which is building a cross-border payment rail on top of the network.

    In a statement, Grayscale managing director Michael Sonnenshein noted that “the launch of this product will expand our coverage of the digital asset universe.”

    The company “will continue to provide investors access to established blockchain projects with substantial traction and resources,” he said.

    Grayscale’s announcement comes on the heels of it reassuring existing customers that an investment vehicle for another of these established blockchain projects, ethereum classic, was not in any danger after a prolonged 51 percent attack on the network.

    Stellar founder Jed McCaleb at Consensus 2018 image via CoinDesk archives.


    You Can Now Buy Bitcoin at Some Grocery Stores in the US


    The crypto curious will soon be able to dip their toes into bitcoin while grocery shopping.

    Bitcoin ATM company Coinme is partnering with coins-to-cash converter Coinstar to allow bitcoin purchases through Coinstar kiosks in a number of U.S. states, the companies announced Thursday.

    At launch, only customers at certain Safeway or Albertsons stores in California, Texas and Washington state will be able to purchase bitcoin through the kiosks, though there are “plans to extend this offering to additional U.S. markets and retailers following a successful launch,” a press release said.

    Coinme cofounder and CEO Neil Bergquist said the new partnership would provide consumers “a convenient and easy way to buy bitcoin” while going about their daily lives.

    This in turn should make it easier for consumers to “participate in this dynamic new economy,” he added.

    In a separate statement, Coinstar CEO Jim Gaherity similarly highlighted the anticipated ease consumers with which should be able to buy bitcoin with, saying:

    “Coinstar is always looking for new ways to offer value to our consumers when they visit our kiosks, and Coinme’s innovative delivery mechanism along with Coinstar’s flexible platform makes it possible for consumers to easily purchase Bitcoin with cash.”

    Coins (the metal kind) not accepted

    Though Coinstar kiosks are primarily known for converting coins into cash, Amazon gift cards or other equivalent balances, Thursday’s press release noted that at present, “coins cannot be used for bitcoin transactions.”

    The kiosks will only accept U.S. dollar bills, with a $2,500 limit.

    To purchase bitcoin, users would have to input their phone number to the kiosk and insert their paper bills.

    They would then receive a code, which the customer would be able to use to redeem bitcoin by creating a Coinme account online.

    Coinstar image via Ijon / Wikimedia Commons


    MIT, Stanford Researchers to Fund New 'Globally Scalable' Cryptocurrency, 'Unit-e'


    A group of researchers from top United States universities have announced the launch of a “globally scalable decentralized payments network,” according to a press release published today, Jan. 17.

    The development of the cryptocurrency, dubbed “Unit-e,” is being funded by Distributed Technologies Research (DTR) — a non-profit organization based in Switzerland, whose official launch was also announced today in the press release.

    DTR includes researchers from seven major U.S. universities, including the Massachusetts Institute of Technology (MIT), Stanford University and the University of California, Berkeley, as Bloomberg reports.

    The organization reportedly received backing from blockchain investment fund Pantera Capital.

    According to the press release, the core team developing Unit-e is based in Berlin and consists of “open-source and distributed systems engineers.”

    Joey Krug, a member of the DTR Foundation Council and Co-Chief Investment Officer at Pantera Capital, claimed that “a lack of scalability is holding back cryptocurrency adoption.”

    As Bloomberg reports, DTR is planning to launch Unit-e in the second half of this year. The organization told reporters their goal for the cryptocurrency’s processing time is 10,000 transactions per second.

    On Dec. 23, the capacity of the Bitcoin (BTC) Lightning Network (LN) surpassed $2 million in transactions, with node channels that support LN able to facilitate 496.8 BTC. With that, the number of channels connecting nodes has also significantly grown for the first time for the past two months, totaling 14,352 unique channels by late 2018.

    In October 2018, post-trade financial services firm Depository Trust & Clearing Corporation published a study that found that blockchain technology is scalable enough to support day to day volumes of U.S. equity markets.


    Bitcoin Price Volatility Is Down 98% Year-on-Year


    Bitcoin price volatility has crashed in the last 12 months as the bear market killed off the speculative frenzy.

    Daily volatility, the spread between the price high and price low, stood at $61 yesterday – down a hefty 98 percent from the figure of $3,468 observed on Jan. 16, 2018 – according to CoinMarketCap data. Meanwhile, bitcoin’s price is also down 74 percent year-on-year. Generally, with a sharp drop in price, volatility in dollar terms tends to fall in parallel.

    Notably, volatility was extremely high in percentage terms 12 months ago. The trading range was 26 percent on Jan. 16, 2018, indicating that the crypto market frenzy was at its peak.

    Volatility, however, subsided as the year progressed: dropping from $973 in the first quarter to $345, $245 and $195, in the following quarters, respectively. Meanwhile, in percentage terms, average daily volatility fell from 9.14 percent to 3.6 percent over 2018.

    This year has begun on a much more calm note. Daily volatility has remained largely below $200 and hit a 2.5-month low of $45.17 on Jan. 12. Many consider the slide in volatility a sign of speculative froth leaving the market and the cryptocurrency nearing a bottom.

    It is worth noting that an extended period of low volatility usually ends up paving way for a big move. Therefore, BTC could soon violate the six-day-long trading range of $3,500 to $3,700.

    Moreover, a range breakdown looks likely as the long-term technical charts are biased toward the bears. As of writing, BTC is changing hands at $3,585 on Bitstamp.

    Weekly chart

    As seen above, BTC fell 13 percent last week, reinforcing the bearish view put forward by the descending 10-week moving average, currently at $3,919.

    The outlook remains bearish as long as BTC is held below the 10-week MA.

    4-hour and daily chart

    BTC has created a neutral diamond pattern on the 4-hour chart. The prospects of BTC breaking the $3,700-$3,500 range to the downside would rise significantly if the diamond is breached on the lower side.

    The relative strength index (RSI) is biased bearish at 41. So, there is plenty scope for a sell-off post-breakdown.

    Put simply, the prospects of BTC breaching the $3,700-$3,500 range to the downside would rise significantly if the diamond breakdown is confirmed.


    • BTC is more likely to see a downside break of the $3,700-$3,500 range.
    • $4,000 would be back on the table if BTC defies the bearish setup on the long term charts with a move above $3,700.

    Disclosure: The author holds no cryptocurrency assets at the time of writing.

    Bitcoin image via Shutterstock; price charts by Trading View


    Barclays and Clearmatics Call on Coders to Help Blockchains Talk to Each Other


    U.K. bank Barclays and London-based startup Clearmatics are inviting coders to come up with ways to connect ethereum with made-for-enterprise blockchains such as Hyperledger Fabric.

    The interoperability challenge is being hosted by Clearmatics and will use a template involving its open-source interoperability protocol, Ion. The hackathon will take place at the Barclays Rise fintech hub in London on February 5 and 6.

    The importance of addressing interoperability between major enterprise blockchain platforms is reflected by the big names involved: a panel of judges will feature representatives from megabanks Barclays, UBS, HSBC and Santander. (The prizes for the teams that come up with the most impressive solutions have not yet been announced.)

    The consulting giant EY will be observing the event and will produce a report based on the findings (a role played by Deloitte in the last Barclays DerivHack.)

    In an exclusive interview with CoinDesk, Dr. Lee Braine of Barclays’ chief technology office said:

    “We would like to gain a greater understanding of the challenges and potential solutions for interoperability between different distributed ledgers. Such interoperability can be complex and this hackathon will permit the industry to experiment with the Ion protocol and also provide feedback to the open source project.”

    Stepping back, the enterprise blockchain world has been reduced to about four prominent industry platforms. There are ethereum variants like Quorum, developed by JPMorgan; the Hyperledger family of protocols; R3’s Corda; and the Digital Asset platform.

    Unless they can be made to talk to each other, these new systems risk recreating the insular silos they were supposed to replace, undermining the business case for blockchain as an efficiency booster and lubricator of trade. For example, a currency running on ethereum can’t easily be swapped for a stock or bond tracked on Hyperledger without a way for each chain to verify the transaction on the other. On the other hand, a monolithic blockchain would undercut the purported benefit of decentralization.

    Sara Feenan, business development manager at Clearmatics pointed out that a single governing system “really creates a single point of failure and a single point of trust. Nor do we want something that is a coin or a token and have to exchange it at some point during the journey.”

    In particular, she said, interoperability between Hyperledger Fabric and ethereum variants is important, not only because of the weight Fabric carries in the enterprise space, but also thanks to the growing ties between the Enterprise Ethereum Alliance (EEA) and the Hyperleder Foundation.

    “We [Clearmatics] are members of the EEA and there is now this narrative of Hyperledger and EEA becoming associate members of one another at the end of last year,” Feenan said.

    Braine said Barclays will submit a team of its own engineers to address the challenge, but they will take a slightly different tack by attempting to use Ion for interoperability between ethereum and Corda.

    Ion the prize

    Clearmatics, which is the technology provider to the Utility Settlement Coin consortium of banks, has previously shown how its Ion protocol can foster interoperability.

    In May of last year, Ion helped a blockchain-based derivative to be originated on ethereum-based Clearmatics and settled on the Axoni blockchain, which is also a fork of ethereum.

    Chris Chung, blockchain engineer at Clearmatics, said the “grand vision for Ion is interoperability with everything,” adding that research into interoperation with Hyperledger Fabric started late last year.

    The USC project, which aims to create a central bank digital currency (CBDC), is also an important driver, said Chung, adding:

    “We want to ensure that USC does reach the broadest kind of possible applications of the target settlement. This puts a lot of weight on Ion as the interoperability framework to widen the gateway to access of USC.”

    Interoperability solutions would facilitate so-called atomic swaps – cross-chain transactions where either both sides of the trade are completed at the same time, or neither is. Braine envisioned the tech being applied first to relatively simple financial products like foreign exchange (FX) trades before taking on “incremental complexity.”

    “Starting with perhaps an FX payment versus payment (PvP) with two different currencies, I can imagine the next steps,” he said. This could then lead to delivery-versus-payment (DvP) – where a non-cash asset such as a security is exchanged for money.

    “As many have highlighted in the past, existing domestic payment systems are quite efficient; the real value of these types of protocols comes when you have more complex products that benefit from atomic swaps because you are then able to achieve the faster settlement with reduced risk,” said Braine.

    Driving home the need for blockchains to talk to each other, John Whelan, head of digital investment banking at Santander, compared that to the way that enterprises work with multiple operating systems today.

    “There is no doubt we will live in an environment where we will have multiple operating systems, if you want to use that analogy,” he said. “And those operating systems will need to be interoperable with each other just like they are today, whether it’s Android versus Windows versus MacOS etc.”

    Barclays image via Shutterstock


    Crypto Markets Experience Moderate Growth, Bitcoin Holds Above $3,600


    Wednesday, Jan. 16 — Cryptocurrency markets are mostly green today, according to Coin360 data. Most of the top 20 coins by market capitalization are up over the last 24 hours, with Bitcoin (BTC) holding firmly above the $3,600 mark.

    Market visualization from Coin360

    Bitcoin has stayed above the $3,600 threshold during the day, while its highest price point over the last 24 hours was $3,707. At press time, the leading cryptocurrency is trading at around $3,644, having gained 0.65 percent on the day.

    Bitcoin 7-day price chart. Source: Cointelegraph Price Index

    Ripple (XRP) is slightly up as well, currently trading at around $0.33, up by 0.86 percent over the 24 hour period. The altcoin has not registered significant price fluctuations today, generally staying near the $0.33 mark.

    Ripple 7-day price chart. Source: Cointelegraph Price Index

    Ethereum’s (ETH), currently the third largest crypto by market cap, has outperformed BTC and XRP by growing by 1.45 percent on the day. The coin is trading at around $122 at press time. On its weekly chart, Ethereum’s lowest price point was $115.16 on Jan. 13, while the weekly peak was reached on Jan. 10, at the $151.94 mark.

    As Cointelegraph reported yesterday, Ethereum’s Constantinople hard fork is facing another delay over a newly discovered security vulnerability allowing a reentrancy attack. A reentrancy vulnerability allows a potential attacker to steal cryptocurrency from a smart contract on the network by repeatedly requesting funds from it while feeding it false data about the malicious actor’s actual ETH balance.

    Ethereum 7-day price chart. Source: Cointelegraph Price Index

    According to CoinMarketCap’s data, 18 out of the top 20 virtual currencies by market capitalization have seen gains ranging from 0.57 to 4.55 percent over the last 24 hours.

    Binance Coin (BNB) is the biggest winner, up over 4.5 percent to trade at $6.18 at press time. The only coins that are down among the top 20 are stablecoins USD Coin (USDC) and Tether (USDT), having lost 0.04 and 0.41 percent on the day respectively.

    The combined market cap of all cryptocurrencies is now at around $122 billion, down from its intraweekly high of about $123.3 billion.

    7-day total market capitalization chart. Source: CoinMarketCap

    According to a survey by Credit Karma published Jan. 15, crypto investors in the United States who sold their Bitcoin holdings have lost a total of $1.7 billion. A slight majority of Americans — 53 percent — plan to report their Bitcoin losses for the purpose of tax deductions, while 19 percent are still undecided. The survey also found that 35 percent of the participants that sold their crypto at a loss will not report their losses on their tax returns.

    Earlier today, Cointelegraph reported that Russian Prime Minister Dmitry Medvedev claimed in a speech at the Gaidar forum that the massive 2018 bear market is not a reason to bury crypto, stressing that all social and economic phenomena have both a bright side and a dark side to them.