We’re in one of the biggest thefts in history. “How further can we ask ourselves?
On Friday, shortly before my actual work, I looked again at the current course developments. In the morning I had read the crypto classic “Why do markets crash” again (always a good literature, if you can’t see the willow anymore because of all the cops, I’ll discuss it here) and thought accordingly, the past would repeat itself, when BTC easily and ETH extremely fell.
In the course of the day one learned what made the ether course tremble in particular – and how a stone thrown into the water made waves elsewhere was also the Bitcoin course affected by it. What happened is now known – there was a huge theft, which transferred about sixty million dollars from the DAO’s find into a Child DAO (which was often referred to as DARK DAO).
As a DAO Token Holder (albeit belonging more to the phytoplankton than to the whales) I also lost money and accordingly this historical exploit of an implementation error in the Smart Contracts also concerns me.
How do I feel about that Bitcoin code?
Of Bitcoin code course this may be due to my phytoplankton status, but more than the lost money I am due to the discussion DAOn (It’s Sunday, good weather and today we have apricot dumplings). So forgive me this pun). According to onlinebetrug the Bitcoin code situation is tricky. A lot of money has now been removed from the DAO, and it is perfectly understandable that people should become emotional here. These emotions also explain the many irrational and personal accusations against the DAO and the currently preferred solution regarding the Soft Fork and the Hard Fork. Nevertheless, I have my problems with both sides.
Also Bitcoin code crypto money spoils the character
In their rage that a lot of money was lost, the suspicion that the coup was an inside Bitcoin code job became great. I’m not in a position to make a final judgment here (yes, I admit that I have a bias as a slockit fanboy), but generally, excuse me, it’s affectionate when someone (as read on Facebook) assumes an inside job just because the people at https://www.forexaktuell.com/en/bitcoin-code-scam/ are talking about a thief and not gender-appropriately about a*R thief*_In.
One may like to discuss about genetic masculinum on the one hand and gender-fair language on the other, but in this context it is of little use as a suspicion.
But also other positions become silly: Someone on Twitter has presented the theft in all seriousness indirectly as something positive. As already said I am in the Fanboy camp, but you don’t have to call it white what is black.
A lot of money has been stolen here, there is nothing positive about it! One can only try to limit the damage – as many heads behind the DAO are currently doing.
Like so often when it comes to money (and unfortunately it doesn’t really matter whether we’re dealing with big banks or the crypto world), people become closed within the law, forgive me, assholes.
So a letter claiming to have been written by the thieves talked about the fact that the robbery was possible and therefore legal – the Dmart Contracts is the legal basis, therefore it is perfectly ok to exploit the gap.
Well. How am I supposed to say… if someone with a pram stands at the foot of a long staircase and asks me for help, I do not point out that there is no legal text that obliges me to help her – I simply help.
Another example? Some time ago white hatcher Ryan Castellucci could show that brain wallets are unsafe. He actually came across the private keys of some users, so he had their accounts (and Bitcoin) in his hands.
He didn’t even have the opportunity – unlike the DAO, by the way – to contact the bagholders directly. Unlike you know who, he didn’t plunder the accounts, but initiated some back and forth transactions to hopefully tell the owners that something is not completely kosher with their account. He also pointed this out in a lecture at Def Con.
I am saddened that there are actually people who think that everything that is legal is ok. Unfortunately, this brings us to another point, this time in our own camp…
What the Fork!?
Ethereum and slock.it are now discussing more than just that besides the Soft Fork, which wants to prevent ether transactions from the DAO, they want to create a Hard Fork, which wants to prevent ether transactions from the DAO.
Tuur Demeester (author of the original English article) is an independent investor and editor-in-chief of Adamant Research. Adamant Research was founded in early 2015 and offers a monthly newsletter service. Here you can find a report about “How do I position myself in the Bitcoin Rally”.
2015 was another “roller coaster year” for Bitcoin news
There was a remarkable development in infrastructure, hot debates about scalability and many companies and institutions that came to the Bitcoin news. In addition, there was a small crash below the 150 US dollar mark, which was quickly compensated by a rapid upswing to 500 US dollars. Let’s first look back at the highs and lows of the past Bitcoin news and then discuss what the year 2016 will bring us.
Here is my view of the history of Bitcoin formula:
This is the prehistory of Bitcoin formula as a currency in which there was hardly a price for the tokens created by software. There were numerous technical discussions and the core developers plugged a big weakness in the Bitcoin formula source code.
2011: The first bubble and great joy in experimentation
The first Bitcoin exchanges fought for new users and the Bitcoin exchange Mt Gox emerged as the clear winner of the battle. Silk Road and BitPay are founded and Bitcoin experiences its first bubble with a jump from $1 to $30.
2012: Gambling, Speculation and Leverages
At the beginning of the year there were some big Bitcoin thefts and the market demanded better and safer Bitcoin wallets.
The lack of interest in the Bitcoin prize was offset by leverage (Bitcoinica), gambling (Satoshi Dice), various Altcoins (Litecoin) and Bitcoin Mining (Butterfly Labs).
2013: The Mining Boom
After several Bitcoin death advertisements in well-known newspapers, Bitcoin returned with a full rally in spring.
News of huge profits from early entrants caused a sensation and the mining boom was not long in coming due to the development of hardware specifically designed for mining.
The boom was underpinned by further gains in the last two months of the year as the price of a BTC jumped to over $1,000 an ounce. Mining difficulty rose from 20 to 90,000 Th/s this year.
2014: Altcoin side jumps
Given the enormous potential of the digital currency, more than $300 million has already been invested in Bitcoin start-ups in 2014 – four times as high as last year.
But not all sectors of the Bitcoin business were doing so well: speculative exuberance, overzealous mining-hardware manufacturers and the ever-increasing difficulty made Bitcoin mining fly. The results were delivery cancellations, deliveries of no longer profitable hardware and a number of insolvent start-ups (Tuur Demeester also burned some money here).
In view of the falling Bitcoin price and mining overcapacity, initial suspicions were spread that Bitcoin was too rigid, that a boring brand embodied the mining network too inefficient.
In response, Altcoins mushroomed like mushrooms that supposedly could fix all these problems…or made no promises at all, such as Dogecoin. Bitcoin investors jumped on the bandwagon of Altcoins to diversify their portfolio and minimize their risk. For some it will have been the right decision because in 2014 there were several Altcoin bubbles.
In a representative crypto study, the British market research institute D-CYFOR asked 1002 adult Britons about Bitcoin and crypto currencies.
According to the survey, 93 percent have heard of Bitcoin at least once before. That is an increase by 13 per cent in the comparison to the past November. Thus the level of knowledge about Bitcoin has reached a new high.
Britons don’t want a central Bitcoin formula
More than half of the respondents (56 percent) stated according to onlinebetrug that they would not invest despite regulation of Bitcoin formula crypto currencies by the government. One third, on the other hand, would “rather” invest if the Bitcoin formula market were regulated.
In addition, the study shows that the majority (60 percent) would not support a coin issued by the Bank of England (BoE), which would be linked to Sterling. Millenials, on the other hand, are the only age group that would support a crypto currency issued by the BoE.
British pessimistic about Bitcoin’s future according to crypto study
The optimism about the value of Bitcoin has not changed compared to January 2018. 39 percent of the respondents are still optimistic. However, this figure has decreased by 15 percent compared to November 2018.
Six out of ten Britons (61 percent) are skeptical about the Bitcoin development for the next six months: 32 percent believe that Bitcoin will lose value in the next half year. The other 29 percent believe that the largest crypto currency in terms of market capitalisation will collapse and become worthless. Also here no change resulted to the study in January. However one must stress that an increase of the values resulted in the comparison from 47 to 61 per cent.
British not yet satisfied with Bitcoin trader sales
D-CYFOR also asked about the experiences of Bitcoin trader. Almost one in four (24 percent) Bitcoin trader who tried to sell Bitcoin found the fees too high. 10 percent said it took a long time to sell Bitcoin and in the meantime the value fluctuated widely. A third thought the sale was an easy process, while 16 per cent did not yet try to sell Bitcoin.
Half of the surveyed Bitcoin investors wanted to keep their investment shorter than a year. Nearly a quarter (24 percent) want to stay invested for more than five years and 28 percent of the respondents said they didn’t know yet.
50 percent of Bitcoin investors would not invest in another crypto currency. The other 50 percent would invest their money in Ethereum (20 percent), Bitcoin Cash (14 percent), Ripple (6 percent) and Litecoin (5 percent).
Finally, the study shows that a majority still considers real estate (45 percent) to be the best investment for long-term investment. This is followed by 20 percent who invest their money in a bank and 14 percent who invest in shares and bonds. A further 13 percent put the money aside for pensions. Six per cent invest in gold and only two per cent invest in crypto currencies such as Bitcoin.
The BIS concludes that, despite their cross-border structure, crypto currencies are not immune to market reactions to national regulatory news. The BIS identifies three key challenges for international regulatory efforts.
The first is to clarify responsibilities
“First, in order to effectively address regulatory issues and achieve technology-neutral regulation, regulators need to clarify crypto currency-related activities from a legal and security-related market perspective, according to economic benefits and not according to the technology used. In this context, the boundaries between national regulators may need to be redrawn in order to clarify responsibilities”.
International coordination of the authorities is the second challenge facing the regulators. This has already proved its worth in the fight against money laundering and should also be the approach to cryptoregulation:
“[…] although markets are currently rather segmented, cross-border spillovers can occur in response to regulatory events. […] It has already been noted that coordination improves the effectiveness of AML standards, with authorities trying to treat similar products and services uniformly according to their functional and risk profile in all jurisdictions.”.
New regulatory boundaries
“Dirty child” Bitcoin could sully financial systems. Finally, the BIS points out that new cryptofinancial products will increase the macroeconomic impact of digital assets. The more points of contact there are between the crypto and the conventional financial economy, the greater the danger for the latter that a loss of confidence in Bitcoin & Co. could also affect them:
“Novel crypto products such as crypto funds and derivatives on crypto currencies and crypto assets create additional links to the financial system. A loss of public confidence in crypto-asset markets could lead to distrust of the broader financial system and its supervisory authorities. […] While crypto-assets therefore do not pose a global risk to financial stability at this point, it is important to remain vigilant, monitor developments and respond to potential threats.”
The fact that a damaged trust in the conventional financial system was one of the main reasons for the emergence of Bitcoin is generously ignored here. It is not for nothing that most crypto currencies are referred to as systems that largely manage without the “trust” factor. Apart from the trust in cryptography.
ABOUT CHRISTOPHER KLEE
Christopher KleeChristopher Klee studied Literature, Media and Computer Science at the University of Konstanz. Since 2017, Christopher has been working on the technical and political effects of the cryptoeconomy.