Wallet
Reality show is casting crypto users locked out of their wallets
The casting director specifically asks crypto users if they’re willing to use all remaining attempts to access their funds in front of the camera.
A casting call for a cable network series may offer crypto users at the end of their rope a way to access tokens locked away — or at least show viewers some of the options available to them.
In a LinkedIn post from last month, casting director Jessica Jorgensen called on crypto users who have forgotten their passwords — and presumably their seed phrases — or lost their private keys to wallets with the clock ticking. The series offers consultations from cryptocurrency and cybersecurity experts to help users recover access to their funds.
However, it seems participants must be prepared to lose access to their coins if the attempted recovery is not successful. Jorgensen specifically asks users to mention how many passwords they have remaining before their accounts are locked, and if they’re willing to use the remaining attempts with the help of experts.
There are many ways to lose one’s crypto holdings. One April 2020 study from digital research firm Cane Island suggested that there would never be more than 14 million Bitcoin (BTC) in circulation given the incidents of users losing keys, accidentally throwing away hardware containing wallets, sending crypto to the wrong address, or failing to make arrangements to pass on their holdings after death.
Related: Crypto Exchange QuadrigaCX Missing $145 Mln After Death of Founder
One of the more famous — and expensive — examples of lost coins include the case of San Francisco-based programmer Stefan Thomas, who lost the password to access his IronKey hard drive with 7,002 BTC, or $243 million at the time of publication. Thomas reportedly still has two attempts to guess the correct password before the hard drive’s contents are seemingly irreversibly encrypted.
Some other cases of recovered crypto stem from early in Bitcoin’s history, i.e. from 2010 to 2011, when the coin was worth pennies and sometimes given as prizes for online games and contests. In January, one Redditor claimed to have found private keys to more than $4 million in BTC obtained before 2012 on an older model Dell computer.
However, as Bitcoin’s and many other tokens’ prices have increased significantly in the last few years, users are seemingly more careful about storing their seed phrases, passwords, and keys. Paper wallets still exist, but many users rely on metal plates to engrave their seed phrases or private keys, as well as hardware wallets like Trezor and Ledger for cold storage. In addition, storing tokens on exchanges — while they may be vulnerable to hacks and intervention from local governments — give crypto users recourse with the platform's operators should they forget passwords.
Finance Redefined: The $500 million bet on ETH 2.0 making waves! June 24-July 1
We don’t know the identity of the whale that’s deposited a half billion into Ethereum, but a look at the chain tells us a whole lot about them.
Whales can be bashful and clever creatures, but when you manage to catch one in action it’s a sight to behold — consider, for instance, the single entity responsible for depositing 100k ETH into the Eth 2.0 deposit contract from 133 different addresses last week.
Deposits into the ETH 2.0 staking contract have been picking up as of late, with 100k ETH pouring into the Eth 2 deposit contract on a single day last week. It caught the attention of the crypto space and, like most stories about on-chain activity, looking at the actual transactions and associated accounts can shed light on what went down. In this case, it seems the 100k ETH influx can be traced back to a single Ethereum address and a wallet that is responsible for funnelling upwards of 258k ETH ($541.8 million at 2100 per ETH) into the deposit contract.
Searching for the mega whale who is mega bullish ETH and Eth 2.0
Given the relatively steady increase the deposit contract has seen since launching in December, it is likely a single entity was behind last week's unexpected surge. But can we prove it? Can it be reasonably shown that a single entity was behind the 100k ETH worth of deposits?
Unfortunately, actually finding the transactions and addresses on-chain was not a quick "first page of Etherscan" find.
In hopes of getting a quick win, the first place we checked was the largest total deposits made by a single address to the deposit contact. While this strategy did find one address that had recently deposited some 12,800 ETH across 400 transactions to the deposit contract, unfortunately, it was not the address of interest, as the date of the transactions (June 20, 2021) is a couple days too early and the amount is only ~13% of the total 100k ETH, even though “only ~13%” in this case is still over $26.8 million (at $2100 per ETH). It is clear that if the 100k ETH had come from a single entity, they were more discreet than a straight 100k YOLO deposit from one address.
A deeper analysis was required, so we downloaded the transactions to the deposit contract from Etherscan for June 22, 2021 and uploaded them into Excel. The data was clear.
From the data pulled for June 22, 2021, there were 1163 addresses that deposited a total of 32 ETH into the deposit contract, 133 addresses that deposited 800 ETH into the deposit contract, and 11 other addresses that deposited other various multiples of 32 ETH.
For those unfamiliar, ETH 2.0 is the protocol change Ethereum has been planning since launch that will transition Ethereum from a proof of work to a proof of stake network. Proof of stake validators will secure the network and receive ETH for doing so. One validator starts off as 32 ETH and is currently acquired by sending 32 ETH to a deposit contract on Ethereum mainnet, the current proof of work chain.
Depositing is a one way bridge since the full amount of ETH including any interest earned is not accessible until the network merge, which is currently unlikely to happen until late 2022.
With the same total deposit amount of 800 ETH on the same day from 133 addresses, our confidence grew that the 100k ETH had in fact come from a single address. To confirm this, there had to be some similarity between the addresses. Sure enough, a quick look revealed that each address was funded by a common address.
Eureka! A whale sighting.
The picture of our whale was starting to become more clear. Let's take a high level look at how they executed their operation:
- In each of the new addresses, 800 ETH was deposited into the deposit contract - 25 deposits of 32 ETH. The remaining 10 ETH was sent to cover gas costs and once the deposits had finished the leftover ~9.86 ETH in each address was sent to a common address. These funds were eventually sent to the deposit contract.
- They laid the foundation for their plan with a casual 100k ETH transaction ($210 million at $2100 per ETH) on June 16th. In a juxtaposition for such a large amount, the transaction was in no rush to go through, taking 1 minute and 41 seconds to confirm. The ‘somewhere between standard and fast’ gas price channels some serious, “Well, I don’t want to over pay for this transaction” vibes that, while understandable for most plankton using Ethereum, is more surprising coming from such a behemoth of a whale.
- Using the 100k ETH in the new wallet they funded 133 fresh wallets over an 8-minute span, each with 810 ETH for a total of 107,730 ETH.
Looking at the address that was funded with the 100k ETH, they have seen over 258k ETH ($541.8 million at 2100 per ETH) flow through it according to Nansen. Without clicking through to every address, it appears that all of the ETH flowing through this address has been funnelled into the deposit contract in a similar manner to what is described above - starting with a 90,000 ETH transaction on May 21st and a 49,990 ETH transaction on June 14th.
The address is also showing no signs of slowing down. While writing this piece, the address was funded twice more for 6119 ETH and 792 ETH. Based on their seeming Michael Saylor “sell the office furniture” mentality, this is almost surely destined for the deposit contract.
Looking at the 100k ETH transaction, it was funded from an OG Ethereum address who had immediately received the funds before that from an address that Nansen shows as having received 100% of its 302k ETH from a wallet Nansen has tagged as crypto-lender Celsius.
The OG address in question has transactions going back to September 2016 and looking at their early ERC-20 transactions is a trip down r/ethtrader memory lane including SPANK, KIN, FUN, OMG (airdropped - still haven’t sold 💎🙌) and lots of SAI. They also receive regular deposits of BOND from a contract that Nansen has labeled as vesting indicating they are an early team member or investor.
Their total activity according to Nansen is massive, seeing 1.72 million ETH flow in and out. There are only so many OGs with this kind of cash and conviction in Ethereum, and it doesn’t look like they’re going anywhere anytime soon.
Blockchain.com introduces username-based crypto transactions
The new integration enables Blockchain.com users to send funds to major wallets by typing a readable domain.
Major crypto wallet provider Blockchain.com is integrating with Unstoppable Domains to simplify sending crypto funds for its customers.
Unstoppable Domains announced Thursday that it had integrated native support for Blockchain.com, enabling that latter's 32 million verified users to send funds with a username instead of a full-length crypto wallet address.
The initiative aims to remove the risk of human error when sending funds, simplifying transactions between Blockchain.com users and more than 50 other wallets and exchanges supported by Unstoppable Domains, including Coinbase wallet, MyEtherWallet and others.
The integration allows users to send cryptocurrencies like Bitcoin (BTC) and Ether (ETH) using a readable recipient’s domain instead of a 25-to-42-digit alphanumeric wallet address. This way, users will be protected from associated typos or miscopies.
“With our integration with Blockchain.com, an 'invalid address' message will pop up if the address is not linked to a wallet,” Unstoppable Domains founder and CEO Matthew Gould told Cointelegraph.
Gould said that there is no specific character length for a domain wallet address. “We only recommend you pick a domain that’s easy to read and remember. It could be your first and last name, your nickname, the name of your business,” he noted.
Related: Unstoppable Domains’ .crypto websites now available via Brave browser
The news comes amid Unstoppable Domains hitting a major milestone, with the company selling more than one million domain names that are minted as nonfungible tokens (NFTs) on the Ethereum blockchain. Alongside sending and receiving funds, these NFT domains with a .crypto extension are used to create decentralized websites to publish content and access Web3.
Scammers mail out fake hardware wallets to victims of Ledger data breach
Ledger customers have reported receiving fake replacement devices in the mail, designed to phish private security information.
The consequences of Ledger's major data breach continue to be felt almost a year later. One contributor to the r/ledgerwallet forum on Reddit, writing under the tag “u/jjrand” and self-identified as one of those affected by the breach, has posted images of what appears to be a fake Ledger Nano X wallet received in the mail.
Wrapped in seemingly authentic packaging, the device nonetheless included several tell-tale signs that sparked the contributor's suspicion. Most jarringly, the package came together with a poorly written letter claiming to be signed by Ledger CEO Pascal Gauthier, telling its recipient:
“For security purposes we have sent you a new device you must switch to a new device to stay safe. There is a manual inside your new box you can read that to learn how to set up your new device. For this reason, we have changed our device structure. We now guarantee that this kinda breach will never happen again.”
Aside from the letter, u/jirand also received a fake manual, enclosing instructions regarding how to use the device and, crucially, asking that the user enter their private Ledger recovery phrase to connect their cryptocurrency wallet to the new hardware. On the basis of further images showing the device's circuit board uploaded to Reddit, security researcher Mike Grover told BleepingComputer that the fake device was tampered with:
“This seems to be a simply flash drive strapped on to the Ledger with the purpose to be for some sort of malware delivery. All of the components are on the other side, so I can't confirm if it is JUST a storage device, but [...] judging by the very novice soldering work, it's probably just an off the shelf mini flash drive removed from its casing.”
Gover highlighted a section of the back of the device showing the flash drive implant, noting that “those 4 wires piggyback the same connections for the USB port of the Ledger.”
On the basis of Gover and BleepingComputer's analysis, it appears that the heist is designed to intercept the user's entered recovery phrase in order to reroute the details to a device controlled by the scammers, which they can then use to steal the associated cryptocurrency holdings.
Related: Ledger data leak: A ‘simple mistake’ exposed 270K crypto wallet buyers
In an online post dated May 10 but not cited by u/jirand, Ledger had already warned customers against the fake letter and device, stating that:
"The fake user guide in the Nano's box asks the user to connect the device to a computer. To initialize the device, the user is then asked to enter his 24 words in a fake Ledger Live application. This is a scam. Do not connect the device to your computer and never share your 24 words. Ledger will never ask you to share your 24-word recovery phrase."
While the warning is included as part of Ledger's online list of phishing campaigns of which the company is aware, it is not clear whether the company has reached out to users directly, especially those whose leaked details may leave them more susceptible to falling for the ruse.
Cointelegraph has reached out to Ledger for comment and will update this article with further information regarding this issue.
As previously reported, other consequences of the data leak have included Ledger users receiving emails from extortionists threatening physical violence or other criminal attacks. The original data breach had occurred in June and July 2020 and included 1,075,382 email addresses from users subscribed to the Ledger newsletter. It notably also involved the leak of personal information (including home addresses) associated with 272,853 hardware wallet orders.
Wallet provider Ledger raises $380M to welcome DeFi ecosystem
Now valued at $1.5 billion, Ledger aims add new products to its hardware and software wallet portfolio.
Following a dramatic increase in its revenues in the first quarter, the cryptocurrency security and infrastructure company Ledger completed a new fundraising round led by 10T Holdings.
Known for its Ledger Nano S and Nano X hardware wallets, Ledger announced the completion of a $380 million Series C fundraising round, which gave the company a valuation of $1.5 billion.
Ledger’s Series B round investors Cathay Innovation, Draper Associates, Draper Dragon, Draper Esprit, DCG, Wicklow Capital attended the new fundraising. Tekne Capital, Uphold Ventures, Felix Capital, Inherent, Financière Agache (Groupe Arnault) and iAngels Technologies were the new investors.
Ledger CEO Pascal Gauthier said the Series C investment round would transform Ledger from a digital asset security company to a secure gateway to the entire digital asset ecosystem. “This industry is fast becoming mainstream and reshaping the entire financial sector and beyond,” he added.
Ledger will use the $380 million for developing new products and adding decentralized finance solutions to Ledger Live, the company’s wallet software. The company is also looking to strengthen its Ledger Enterprise Solutions, a cloud-based digital asset custody service.
As digital assets are becoming more mainstream, Ledger expects the assets held on its products will grow in volume, the announcement reads. The company wants to position itself as a secure gateway to the ecosystem as it diversifies to include nonfungible tokens, real estate and other blockchain-based forms of value.
Thanks to the bull market earlier this year, Ledger saw a 500% surge in revenues in the first quarter of 2021. The company hired former eToro and Opera leads, and it is still looking to expand its workforce.
Ledger experienced a major data breach in December 2020 that caused a leak of over 270,000 Ledger customers’ personal information. According to the report, the leak also included 1 million emails of Ledger wallet owners and customers that were signed up to the company’s newsletter service.
Forecasting Bitcoin price using quantitative models, Part 3
To understand where the value of Bitcoin is headed, we need to study the adoption rate of cryptocurrencies in the world.
This is Part Three of a multipart series that aims to answer the following question: What is the “fundamental value” of Bitcoin? Part One is about the value of scarcity, Part Two — the market moves in bubbles, Part Three — the rate of adoption, and Part Four — the hash rate and the estimated price of Bitcoin.
The rate of adoption
If more and more people desire a certain good, and the same amount of units are in circulation, the price will obviously have a tendency to rise. It’s the supply-and-demand rule that governs any market in the world.
If one year, a hailstorm destroys the tomato crop and there are fewer edible tomatoes than expected, it makes sense for the price of tomatoes on the market to rise, considering that the demand has remained the same. However, imagine for a moment that suddenly, people want to buy tomatoes much more than in previous years. The demand goes up and the availability of tomatoes goes down, therefore the price will go up a lot more than in the former case.
Demand can grow due to two factors: participants are stable and the amount of requests increases or the amount of requests is stable but the number of participants increases. Even a combination of these two is possible
In the example that follows, we’ve only assumed that the number of participants goes up for the same amount of goods. So, on the one hand, we have Satoshi Nakamoto who defined that Bitcoin (BTC) must become increasingly scarce over time, and on the other, there is a possible boost in the price of Bitcoin coming from new people who progressively enter the market.
It is therefore a question of studying the adoption rate of cryptocurrencies in the world’s markets to understand where the value of Bitcoin is headed and, overall, where the cryptocurrency asset class can go in the future.
The growth in the number of wallets is not exactly exponential, but close to it. In order to predict its growth in the future, you need to use a “power law” function that is able to best estimate its curvature. To do this, first we put the graph in logarithmic scale, then calculate the function that best approximates it.
Though the function does not consider any potential future increases based on a rise in interest that could manifest in 2021 following an unexpected growth in Bitcoin, this exercise is used to estimate the growth over time in the number of wallets.
To estimate the growth in the value of Bitcoin using the number of wallets in circulation, we’ll need to estimate the average amount contained in each individual wallet using a fairly simple function:
Bitcoin capitalization / Number of wallets
Now, we have an estimate of the Bitcoin value each wallet has on average. However, the data tells a completely different story: 70% of wallets have 0.01 BTC or less, while 2% of wallets own over 95% of Bitcoin in circulation, and the exchanges own about 7%.
These reports help us understand the enormous growth potential of Bitcoin in the future, as those who own a large part obviously do not sell it since they know Bitcoin and its potential well. Those who have 0.01 BTC or less will be tempted to buy more, and of course, there are always new wallets opening every month.
However, by taking the average, we can highlight an average value expressed in U.S. dollars of the content of these wallets:
Since the average of these deposits is conditioned by the value of Bitcoin’s price, to best estimate a “range” of prices where Bitcoin could go, the red dotted line represents the tenth percentile of U.S.-dollar deposited wallets; while the dashed blue line represents the 90th percentile. This “range” allows us to frame what the entire capitalization of Bitcoin should be over time, based on the estimated adoption rate of Bitcoin.
This estimate doesn’t consider several factors that could make it very prudent. For institutional investors entering the market, the average amount per wallet could go much higher than the blue band identified in the example.
Obviously, these estimates should be taken as an intellectual attempt to understand the dynamics of Bitcoin, and absolutely cannot be considered a suggestion or advice on behalf of the authors.
This graph shows that a goal of reaching a trillion in capitalization, or $1 trillion, is far from impossible, especially if interest in Bitcoin continues to rise in the coming months.
Similar growth is also estimated by the makers of the rainbow chart:
This graph is very useful because it summarizes the presumed growth rate of Bitcoin’s value and its bubble trend following each halving.
Clearly, there is no guarantee that Bitcoin will continue to move with this logic, but it is important to note that it could do so in order for one to make objective, reasonable investment decisions according to these assumptions as well.
This article was co-authored by Ruggero Bertelli and Daniele Bernardi.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Ruggero Bertelli is a professor of financial intermediaries economics at the University of Siena. He teaches banking management, credit risk management and financial risk management. Bertelli is a board member of Euregio Minibond, an Italian fund specializing in regional SME bonds, and a board member and vice president of Italian bank Prader Bank. He is also an asset management, risk management and asset allocation adviser for institutional investors. As a behavioral finance scholar, Bertelli is involved in national financial education programs. In December 2020, he published La Collina dei Ciliegi, a book about behavioral finance and the crisis of financial markets.
Daniele Bernardi is a serial entrepreneur constantly searching for innovation. He is the founder of Diaman, a group dedicated to the development of profitable investment strategies that recently successfully issued the PHI Token, a digital currency with the goal of merging traditional finance with crypto assets. Bernardi’s work is oriented toward mathematical models development, which simplifies investors’ and family offices’ decision-making processes for risk reduction. Bernardi is also the chairman of investors’ magazine Italia SRL and Diaman Tech SRL, and is the CEO of asset management firm Diaman Partners. In addition, he is the manager of a crypto hedge fund. He is the author of The Genesis of Crypto Assets, a book about crypto assets. He was recognized as an “inventor” by the European Patent Office for his European and Russian patent related to the mobile payments field.
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Major Philippine e-wallet GCash eyes crypto trading
One of the most popular e-wallets in the Philippines, GCash, is considering a potential move into crypto following the example of PayPal, Venmo and others.
GCash, a major digital wallet in the Philippines, is reportedly considering introducing crypto trading services.
GCash CEO and president Martha Sazon announced that the firm is looking at offering users the ability to buy, sell and store cryptocurrencies like Bitcoin (BTC) on its platform.
In a Monday interview with The Philippine Star, Sazon said that GCash is exploring cryptocurrency trading in order to keep up with financial innovation. “While we may be considered a disruptor now, it is important in this digital age that we should be mindful of all types of disruptions out there. It’s important to know what the trends are, whether locally and globally and crypto is part of that,” she said.
Sazon said that firm is looking at potential integration options and related partnerships, through which it could introduce crypto trading. “Just like in any introductions, you need a platform, a working business model, a partner, so as soon as those are satisfied, perhaps,” Sazon said.
GCash is one of the most popular electronic wallet platforms in the Philippines, with at least 40% of Filipinos having a GCash account, according to Sazon. The platform is operated by financial services company Mynt, a subsidiary of Globe Telecom, which operates the largest mobile network in the Philippines.
The firm’s potential move into the cryptocurrency industry follows significant growth on the platform, with GCash’s user base spiking over 20% from 33 million to 40 million customers in February. “We will continue to innovate and provide relevant and accessible financial services for all,” Sazon noted.
Should GCash adopt crypto services on its platform, the firm would follow similar moves by some of the world’s largest digital wallet and payment service providers like PayPal, Square, Venmo and Revolut. PayPal rolled out its first crypto services last year when it started allowing United States residents to buy, sell and hold cryptocurrencies.
PayPal users will be able to withdraw crypto to external wallets
Prior to Wednesday’s decision, PayPal users weren’t allowed to move their holdings off the platform.
PayPal’s embrace of cryptocurrencies appears to be growing after the payments provider revealed that it will allow users to withdraw their digital assets to third-party wallets.
The news, which was reported by Reuters Wednesday afternoon, comes just seven months after PayPal first enabled crypto purchases on its platform. At the time, the decision was heralded as a major milestone in mainstream recognition of digital assets.
The Wednesday announcement means PayPal users will be able to send their cryptocurrencies to other wallets instead of just holding it on PayPal or selling it into fiat currency for withdrawal. However, neither Reuters nor PayPal has specified when the crypto withdrawal feature would be supported. If it’s anything like PayPal’s decision to enable cryptocurrency purchases last fall, the initial rollout of third-party wallets could be gradual and location-based.
PayPal’s embrace of crypto appears to be rooted in a clearly defined strategy that sees digital-asset use cases growing rapidly over time. As Cointelegraph previously reported, CEO Dan Schulman believes we will see a “tremendous decline in the use of cash” over the next decade, adding:
“All form factors of payment will collapse into the mobile phone. Credit cards as a form factor will go away, and you will use your phone because a phone can add much more value than just tapping your credit card.”
Earlier this month, Schulman also indicated that PayPal’s crypto business was already paying dividends for the company. “We’ve got a tremendous amount of really great results going on tactically with our crypto efforts,” he said.
Dutch Central Bank Revokes Strict Verification Rules for Crypto Exchanges
The cryptocurrency industry in the Netherlands has won a small but significant battle. The country’s central bank has canceled some excessive verification procedures that it imposed on crypto service providers last fall. The move comes after a local exchange took the matter to court. DNB Takes a Step Back on Unlawful KYC Requirements De Nederlandsche […]