There’s one lesson to be learned from this week in the crypto world: blockchain and cryptocurrencies have a bright future. The good news began with four young blockchain entrepreneurs making the latest Forbes list. Meanwhile, in Russia, Gazprom Neft and Raiffeisen Bank collaborated to successfully test new blockchain-backed banking technology.
However, it wasn’t all sunshine and rainbows. Despite supporting blockchain in general, Chinese authorities have again shown their intolerance of cryptocurrencies. Crypto mining farms are the government’s latest target.
Last week also saw two big crypto cyberattacks. Ransomware wrought havoc with Malaysian media giant Media Prima, while hackers hit AurumCoin with a 51 percent attack.
New kids on the block(chain)
The crypto market’s extended bear run has spooked many involved in the industry. However, the new Forbes 30-Under-30 list is a solid indicator that cryptocurrency and blockchain are here to stay. The new faces on the list include four young blockchain entrepreneurs aged between 25 and 28.
Olaoluwa Osuntokun (25) is the creator of the Lightning protocol, which aims to increase Bitcoin’s transaction speed. He has raised more than $2.5 million for his Bitcoin blockchain solution.
Nader Al-Naji (26) has raised more than $133 million for his USD-pegged stablecoin: Basis. His coin aims to replace central banks in countries with high fiat devaluation, such as Venezuela and Zimbabwe. Basis differs from other stablecoins in that its USD peg is algorithmically “adjusted.” When needed, the algorithm automatically increases or decreases the supply of Basis. This eliminates the need for USD reserves to back Basis.
JB Rubinovitz (26) is tackling a huge social problem with cryptocurrency and blockchain technology. Her solution – Bail Bloc – uses cryptocurrency mining to raise bail for people who can’t afford it. This has the potential to dramatically lower the number of detainees awaiting trial. Currently, in the United States, around 60 percent of people in detention stay there purely because they can’t afford to pay bail.
The oldest on the list, Hunter Horsley (28), is the CEO of Bitwise Asset Management, a cryptocurrency index fund based in San Francisco. His fund maintains four cryptocurrency indices that are used by over 600 multi-family offices.
The success of these four blockchain entrepreneurs indicates that cryptocurrency and blockchain are quickly becoming mainstream.
Blockchain tested in the Russian banking sector
Another indicator of blockchain’s bright future has emerged from the world’s largest country. Russian oil giant Gazprom Neft this week partnered with Raiffeisen Bank International to successfully issue a bank guarantee using blockchain.
Usually, the bank needs to release a guarantee through its internal system. Only after release will the bank notify its client. Blockchain changes this. Thanks to the distributed ledger, all partners can track the release process, making it more efficient and transparent.
Four major companies participated in this significant blockchain test. Raiffeisen advised Gazprom Neft during the process, while Priorbank (from Belarus) issued a bank guarantee via blockchain on behalf of the Belarusian Mozyr Oil Refinery.
Raiffeisen is not new to the blockchain industry. The bank has already tested the issuance of electronic mortgages using the Masterchain blockchain platform.
Chinese authorities shut down cryptocurrency mining farms
Once again, all eyes in the crypto world turned to China this week. After banning cryptocurrencies, Chinese authorities are now imposing stricter rules on crypto mining companies.
On November 5, local authorities suspended cryptocurrency mining in Xinjiang and Guizhou provinces. During their tax inspections, authorities shut off power to mining farms in the regions. This cost the farms an estimated $143,700 per day.
According to authorities, the raid was meant to examine records of the farms’ tax, funds, and customer data. During the raids, mining companies were “asked” to sign a binding agreement. All inspected farms will need to implement higher standards in accordance with government regulations. In addition, the farms agreed not to deliver services to any customers who don’t follow these rules.
Reports have confirmed that Chinese authorities have finished their tax inspection. However, they still haven’t disclosed whether the mining farms have regained their power.
Crypto ransomware: the new threat on the horizon
Cryptocurrency ransomware has been an issue for a long time. This week, it made major headlines.
Malaysian media giant Media Prima Berhad is the latest big company to suffer from a major cyberattack. Hackers recently penetrated Media Prima’s network and are now holding it ransom for 1,000 BTC, worth approximately US$6 million.
Recent ransomware cases show that this kind of crime can be very profitable. Hackers are choosing their targets carefully, and aren’t afraid to hit the biggest players. The Port of San Diego is one such high-profile victim. It has taken the ransomware attack so seriously that the FBI, the U.S. Coast Guard, and Homeland Security are all investigating.
Ransomware hackers also recently hit the Professional Golfers Association of America (PGA). The PGA borrowed a line from the U.S. government in its response, declaring that “there are no negotiations with the crypto terrorists.”
51 percent attack hits AurumCoin
Despite the recent spate of crypto ransomware attacks, there’s a bigger threat out there: the 51 percent attack. AurumCoin (AU) is the latest major victim. This week, hackers hit AU with a 51 percent attack on Australian crypto exchange Cryptopia. The attack caused losses estimated at US$550,000.
AurumCoin’s creators blame Cryptopia for the attack and say they’re not responsible, as AU is an open-source distributed currency.
AurumCoin is pegged to the price of 24-carat gold. According to the coin’s creators, each AU coin is backed by 0.75 grams of gold stored in secure vaults worldwide. AurumCoin has operated on its own blockchain since 2014 and has a small hard cap of 300,000 coins.
It was this small market cap that made AU an easy target. The hacker just needed to send 15,752.26 AU to Cryptopia. He sold the AU, and just after the completion of the sale used his superior hash power to reverse the transaction.