Friday, July 17, 2020

Can blockchain restore trust in technology?


If Bitcoin succeeds in the way its developers and entrepreneurs hope, it will be the biggest change in technology infrastructure since the mass adoption of the Internet more than 20 years ago. But will ordinary users be open or resistant to that kind of change?

Lee Rainie of the Pew Research Centre studies public attitudes to technology and has been responsible for more than 650 reports based on Pew surveys of people's online and Internet usage. So how does he see the prospects for Bitcoin and blockchain entering the mainstream?

"We live in an environment where people's trust in each other and in institutions is declining, particularly in the developed world," Rainie says, "and so blockchain has been held out as a really interesting alternative way to rebuild trust, using technology as the centrepiece of mediating interactions between people …Some of the most interesting applications of blockchain are not about cryptocurrency, they're about trusted systems of documentation and smart contracts."

If that promise could attract users by mitigating their fears about trust, Rainie does not go so far as to suggest that technology could solve all the problems: "this can't just be done by technology. You can't flip a switch and all of a sudden trust is restored and systems operate beautifully. You need human actors to design those systems, monitor those systems, explain those systems."

In terms of mass adoption, Rainie says that it may not be a question of waiting for the 'killer app' that will act as a tipping point for wide acceptance of the technology: "it possibly won't be sort of a big bang moment where all of a sudden a critical mass of people are using it. And then the rest of the world says, 'oh, we've got to get on board'. It might be more evolutionary."

It could be that adoption will first happen at an industrial level – more 'behind the scenes' – in sectors like supply chain and the financial markets.

Then, unlike the Internet, where users are aware of the technology, people may not even realise that they're using blockchain: "there will be ways in which people's finances absolutely are underpinned by blockchain technology. There are ways in which their interactions with government agencies, when they want to get a national identity card for their newborn child – now, that's going to be probably a blockchain system. But if you ask them in a survey, 'are you a blockchain user?' they might not say yes."

If blockchain isn't adopted by a 'pull' factor of attraction, it could be nudged forward by reservations about the tech giants, and the whole 'surveillance capitalism' model of targeted advertising and data collection.

Pew's latest research didn't poll the public, but instead was one of a series of studies that Rainie has ordered as Director of Internet and Technology Research, soliciting views about the future of technology from almost 700 experts, whom the report describes at "'technology innovators, developers, business and policy leaders, researchers and activists". The study found that the experts "very explicitly invoked how blockchain can be a restorative to people having confidence that their data were treated well and that their interactions with other people were being chronicled and mediated in a responsible way, that there were fewer opportunities for bad actors to step into the middle of the process."

In that respect then, Pew is reporting an optimistic view of the prospects for blockchain among a wide range of people who should be well placed to predict the future. On the other hand, it seems the experts themselves aren't too confident about their own powers of prediction. Rainie investigated that in a previous study: "one of the things that we asked in years gone by was whether these experts themselves felt confident about what the new big thing in technology was going to be five or 10 or 15 years into the future. And the vast majority said no."

FBI called to probe Twitter amid fears of future hacks


The FBI is leading an investigation into the July 15 Twitter hack, in which 31 high-profile Twitter accounts were compromised by a hacker and used to promote a digital currency investment scam.

According to Reuters, U.S. lawmakers that are concerned about future attacks on Twitter prompted the FBI's investigation.

"While this scheme appears financially motivated…imagine if these bad actors had a different intent to use powerful voices to spread disinformation to potentially interfere with our elections, disrupt the stock market, or upset our international relations," said U.S. Senator Ed Markey.

The hacker had the ability to take over any Twitter account, yet, used their power to promote a digital currency scam. The scam consisted of the hacker telling the millions of followers of the compromised accounts to send them digital currency, promising to send them double the amount that they were being sent.

However, it was a scam—the attacker did not send double the amount of digital currency to any of the individuals who participated. The attacker currently has a total of 7.411 BTC across the three wallet addresses they used to scam others (address 1, address 2, and address 3).

Timeline of attack
The hacker's first account takeover occurred at 2:16 p.m. EST when the hackers compromised @AngeloBTC, a well-known BitMEX trader's Twitter account.

In their first account takeover, the hackers requested that AngeloBTC's 150,000 followers send him a direct message, and send 0.1 BTC so that they could join his private Telegram group. However, there was no private Telegram group, and sender's got scammed out of their money.

Shortly afterward, the attacker began targeting Twitter accounts associated with well-known companies, executives, and celebrities, such as Apple, Jeff Bezos, and Kanye West.

Ultimately, the hacker was able to broadcast their digital currency investment scam to tens of millions of users and rake in more than $100,000.

We got lucky
We were honestly lucky that all the hackers did was promote a digital currency scam. Imagine if they used the compromised accounts, such as that of former U.S. President Barack Obama, or former Vice President Joe Biden, to start some sort of political conflict in which a foreign country retaliated.

When you consider all of the things the hacker could have done with the power that they had, it becomes concerning and alarming that they were able to breach Twitter in a way that gave them this power. That being said, it makes sense that the FBI is investigating Twitter, because if this were to happen again who knows what would happen.

Saturday, July 4, 2020

Japan’s blockchain industry grows by 30% in 2020


Japan's blockchain industry has been growing rapidly in 2020 despite the economic struggles and the global pandemic. A new report by one of the country's largest digital currency companies revealed that the sector has grown by over 30% since 2019.

Japan has been a trailblazer in the blockchain industry for years, being one of the first countries to formulate and implement a regulatory framework for the industry. Its blockchain-friendly approach has led to a rapid growth of the industry, a new report now shows.

In the past year, the industry has grown by 30%, the report by the Monex Crypto Bank showed. The bank is a subsidiary of the Monex Group, the operator of Coincheck exchange which it acquired in 2018.

The report revealed that as of May this year, there were 430 blockchain companies in Japan. This is a 30.7% rise from the 329 companies reported in July last year.

64% of these companies focus primarily on blockchain technology, the report showed, with the rest being involved in a secondary capacity. The report further revealed that blockchain technology is not limited to startups, with 193 of the companies being labeled as large corporations. Of these, over half focus primarily on blockchain technology.

Moreover, there are 31 publicly-listed companies in Japan that are pursuing blockchain technology.

On the available blockchain products, the study found that finance had the highest share, accounting for 19% of the 422 active products. Entertainment accounts for 10%, with service, infrastructure, real estate and retail all accounting for less than 3%.

The digital currency exchange and mining sectors are still the biggest in the industry, the report notes. However, the gaming sector is quickly rising to prominence, using blockchain to change the experience for both the operators and the gamers.

While the Japanese blockchain and digital currency exchange industry has come a long way, it still faces challenges that have hindered its growth. Hacks and data breaches have been one of its biggest threats.

Police in China detaining digital currency OTC traders: report


China's fight against digital currency trading has now turned to the over-the-counter trading sector. Police in the country have been detaining OTC traders and platform operators to assist them with investigations. The most renowned is Zhao Dong, one of China's most prolific traders and a prominent investor in Bitfinex.

Dong was detained this week, with reports about his detention first emerging on local social media channels on Thursday. Local blockchain news outlets picked up on the reports, with some claiming that he was detained in Hangzhou while others claimed he was in Yancheng.

Following the widespread rumors, Dong's OTC digital currency OTC lending company RenrenBit took to social media to shed more light. In a statement on Weibo, RenrenBit revealed that the police had detained Dong upon arrival in China from Japan in late June. He was actively assisting the police in digital currency anti-money laundering investigations, the company claimed.

RenrenBit also revealed that Dong wasn't the only digital currency trader the police had detained. It claimed that in June, police had detained an entire OTC team working in Beijing. However, it clarified that it was just detention and that none of the traders were under arrest.

Matthew Graham, the CEO of Beijing-based blockchain investor Sino Global Capital confirmed the detention on Twitter.

A source with knowledge on the matter however revealed that Dong's detention isn't a targeted attack at him. It's part of a bigger effort by the government to stamp out OTC trading in China, claiming that it's being used to launder money.

The source, who spoke to CoinDesk, claimed that police in China have increased their scrutiny over OTC platforms since last month. This scrutiny has led to the detention of an unnamed number of OTC trading desks to assist in money laundering investigations.

The detention of Zhao Dong is however the most high-profile one yet. Dong is one of China's most renowned traders.  He is also reportedly an investor in Bitfinex, playing a big role in its $1 billion UNUS SED LEO token initial exchange offering. As Sino Global's Graham explained, in the Western world, it's the equivalent of detaining one of the Winklevoss twins.

The detentions follow the freezing of over 4,000 bank accounts belonging to digital currency OTC traders. As CoinGeek reported, authorities in Guangdong province froze the accounts claiming they were connected to digital currency money laundering..