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Blockchain Bites: Bitcoin’s Steep Sell-Off, Pornhub’s Crypto Payments, Twitter’s Latest Hack

Pornhub will accept BTC and LTC payments, a nonprofit wants Coinbase to be more transparent and credit default swaps are coming to the Ethereum blockchain.

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Pornhub will accept BTC and LTC payments, a nonprofit is calling upon Coinbase to be more transparent and credit default swaps are coming to the Ethereum blockchain. 

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top shelf

Porn payments
Pornhub, the popular adult entertainment site, has added bitcoin (BTC) and litecoin (LTC) payment options for its Pornhub Premium product. The company is an example of legal, though untraditional, online businesses struggling with centralized payment processors: PayPal has blocked payments to the site without explanation, CoinDesk’s EU News Editor Daniel Palmer reports. The company has accepted verge (XVG) since 2018, and has recently added support for dollar-linked stablecoin tether (USDT). 

Crypto for taxes
People and businesses in the Swiss canton of Zug, home to “Crypto Valley,” will be able to pay their taxes in bitcoin (BTC) or ether (ETH) beginning next February. Authorities have partnered with the Zug-based crypto broker and custodian Bitcoin Suisse, which will convert cryptocurrency payments into Swiss francs and hand them over to the tax office. The canton will accept tax payments up to 100,000 CHF (around $109,000) in those cryptos, though no partial payment will be accepted. In a statement Thursday, Zug Finance Director Heinz Tannler said the move would help to normalize the use of cryptocurrencies in everyday life.

Another Twitter hack
Prime Minister Narendra Modi of India has become the latest victim of a Twitter hack meant to siphon cryptocurrency from unsuspecting users. A Twitter account of Modi’s personal website known as the Prime Minister’s National Relief Fund (PMNRF) was hacked and began soliciting 2.5 million followers to donate to the relief fund using cryptocurrency, the Nikkei Asian Review reported and Twitter confirmed. The social media giant is “not aware of additional accounts being impacted,” a Twitter representative said. Modi’s hack follows a high-profile breach that compromised several accounts, including those of U.S. Democratic Presidential nominee Joe Biden, Tesla’s Elon Musk, Kanye West and CoinDesk. The alleged perpetrators of that attack have been apprehended.

Full disclosure
The Electronic Frontier Foundation (EFF) is calling upon Coinbase to release regular transparency reports related to the government and law enforcement requests for information it receives. In a Wednesday blog post, the digital advocacy nonprofit said financial data is one of the “most sensitive types of information” a user produces. The way Coinbase responds to government requests could “have a huge impact on what types of speech thrive online,” CoinDesk’s Sebastian Sinclair reports. In June, Coinbase initiated procurement deals with the Drug Enforcement Administration and the Internal Revenue Service (IRS), for its investigations tool called “Coinbase Analytics,” which traces transactions conducted across the exchange ecosystem. 

COVID-19 relief
The Congressional Blockchain Caucus is urging President Donald Trump and other federal officials to adopt blockchain solutions to boost COVID-19 relief efforts. In a Wednesday letter, lawmakers said blockchain technology can help identify and authenticate individuals set to receive government benefits, streamline supply chains and create a registry of medical professionals. They further cited blockchain’s strong encryption mechanism that protects sensitive data. The U.S. government’s response to a pandemic has been a case study in governmental inefficiency, with states duking it out over critical supplies. Last April, 11 representatives signed a letter calling on the U.S Treasury Department to consider blockchain and distributed ledger technologies (DLT) in streamlining the distribution of stimulus funds to citizens across the nation.

Quick bites

At stake

Tether financialization
Credit default swaps (CDS), known for their role in the 2008 recession, have come to the Ethereum blockchain. Derivatives exchange Opium has introduced CDS for the dollar-linked stablecoin tether (USDT), providing insurance to buyers in case Tether, the issuer of the stablecoin, defaults. 

Tether, a key component of the crypto marketplace and fifth largest cryptocurrency by market capitalization, claims a 1-to-1 backing with U.S. dollars. This is often contested.

Tether revealed in April 2019 that only 74% of USDT was backed by “cash and cash equivalents.” The firm later said USDT was once again fully backed in a November 2019 retort to an academic paper that blamed the stablecoin for the 2017 bitcoin bubble. 

Further, the firm behind the stablecoin is under investigation by the New York Attorney General’s office for alleged misappropriation of funds.

Opium’s CDS product finally lets the controversial crypto’s critics and defenders “put their money where their mouths are,” CoinDesk’s Will Foxley reports. 

A CDS is a “transfer of the insurance from people who know and are confident to people who’d like to be insured. Derivatives are just about transferring the risk. Some people would like to have the risk and get paid, some people would like to pay to get rid of risk,” Opium founder Andrey Belyakov said.

The new CDS tethered to USDT can be customized to pay out under different scenarios, such as the stablecoin falling under a preset value, said Aave founder Stani Kulechov, who is advising Opium.

In this case, a sharp drop in USDT’s price from the usual $1 is used as a proxy for Tether turning out to be insolvent. So if the token fell to 70 cents, the writer of the contract would pay the buyer 30 cents at maturity.

Investors don’t need to hold USDT to purchase this coverage. They can use CDS to bet against the asset, while those who trust Tether to honor its obligations can earn a premium for standing ready to cover defaults.

Paolo Ardoino, chief technology officer at Tether, said through a spokesman: “Tether is solvent. Therefore, this solution is not really interesting to us or our community.”

Market intel

Steep pullback
Bitcoin (BTC) pulled back about $403 to $10,838 early Thursday, deepening a two-day sell-off that pushed the largest cryptocurrency to its lowest point in a month. CoinDesk’s Omkar Godbole previously reported an influx of 92,000 BTC on Wednesday – the biggest-single day rise in 37 days – could deepen bitcoin’s descent. “Inflows surged as people rushed to sell at near $12,000,” Philip Gradwell, chief economist at Chainalysis, tweeted early Thursday. There’s evidence exchanges have not fully absorbed this selloff, hinting at a lack of buyers, which could lead to a profound drop in price. 

Ether options
Ether option contracts listed on Deribit, the largest crypto options exchange, rose to a record high of $507 million on Tuesday. This is possibly due to yield farming, the act of putting crypto holdings to work on decentralized applications to earn more crypto, Godbole reports. Open positions in ether options have surged by 45% from $349 million to $507 million over the past five days and nearly doubled since the end of July, while the total value locked (TVL) in the DeFi applications has surged by over 20% to $8.65 billion in the past five days. 

Tech pod

Hypothetical attack
A recently disclosed vulnerability in popular Trezor and KeepKey hardware wallets would have allowed attackers to hold users’ cryptocurrency for ransom without going anywhere near the device, CoinDesk’s Colin Harper reports. ShiftCrypto, the Swiss company that manufactures the BitBox hardware wallet, has disclosed a potential man-in-the middle ransom attack vector that leverages the two wallet’s optional passphrase feature users can use to unlock their device in lieu of a PIN. Trezor has issued a patch, KeepKey has delayed taking action, though it has not been suggested the hypothetical attack has been carried out. 

Op-ed

DeFi, meet CeFi.
Author of “The Business Blockchain,” William Mougayar thinks centralized finance and decentralized finance should link up for each other’s benefit. “CeFi” will bring users and expertise to DeFi – which will struggle to grow beyond its pen of hardcore users – but must begin thinking like wholesalers and hurry to “pick the DeFi products they want to build on top of,” he writes. “The CeFi market potential is staring DeFi in the face. If CeFi exchanges want to start looking more like full-service financial services institutions, they need to become DeFi’s best distribution channels.”

Podcast corner

Policy shift?
Luke Gromen, founder of the Forest for the Trees consulting firm, joins The Breakdown to discuss his thoughts on Jerome Powell’s Jackson Hole address last week. Is this really a change in policy?

Who won #CryptoTwitter?

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Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Source: https://www.coindesk.com/blockchain-bites-bitcoin-pornhub-twitter-hack

Blockchain

Indian Olympic Medal Winners to Get Free Bitcoin (BTC) and Ethereum (ETH)

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The cryptocurrency platform Bitbns intends to open a systematic investment plan (SIP) in digital assets for Indian athletes who win medals at the ongoing Tokyo Olympics. The exchange will reportedly grant around $2,700 in crypto for gold medal winners.

‘Faster, Higher, Stronger’ And Earn Crypto

The Economic Times reported that Indian athletes at the Olympic Games could receive cryptocurrencies as a gift if they manage to win a medal at the tournament in Tokyo.

The trading venue that will reportedly provide the offer is Bitbns. The first athletes that can get cryptocurrency exposure for free are the winners Mirabai Chanu and PV Sindhu. The former won a silver medal in 49 kg women’s weightlifting while the latter acquired bronze in the women’s singles badminton at the Tokyo Olympics.

Bitbns plans to roll out a SIP account and grant nearly $2,700 in digital assets for Olympic champions, $1,350 for silver medal winners, and $675 for bronze medalists. It will transfer the amount into their accounts, and after completing the Know Your Customer (KYC) norms, the athletes will have exposure to cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).

The trading venue explained that it would structure the SIP for a 3-5 year period, and thus the medal winners will be able to generate profits in the long term through Bitbns. Gaurav Dahake – the Chief Executive Officer at the platform – noted:


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“Bitcoin and Ethereum have been the best-performing assets in the last decade, and have given exceptional returns and we aim to get our winners indulge in this rewarding journey.”

Indians Love Cryptocurrencies

According to a recent research, Indian residents increased their digital asset investments from $200 million in 2020 to $40 billion for the first six months of this year, indicating that their appetite for cryptocurrencies surged significantly.

What is even more impressive is that Indians, who are well-known gold admirers, started switching their investment strategies from the precious metal to virtual currencies. A local investor explained:

“I would rather put my money in crypto than gold. Crypto is more transparent than gold or assets and yields higher returns in a shorter period of time.”

The survey added that the number of people who trade cryptocurrencies in India is 15 million. It significantly surpasses a well-developed country such as the UK, for example, where 2.3 million individuals have entered the market. Sandeep Goenka – the co-founder of the platform ZebPay – revealed the reasons why the second-most populated country saw this massive increase:

“They find it easier to invest in crypto than gold because the process is so much simpler. You go online, you can buy crypto, you don’t have to verify it, unlike gold.”

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Source: https://cryptopotato.com/indian-olympic-medal-winners-to-get-free-bitcoin-btc-and-ethereum-eth/

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Blockchain

Coinbase halts Bitcoin SV trading after yet another 51% attack

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Bitcoin SV is in trouble once again after Coinbase announced that it will be halting BSV trading on the platform. This update came on the back of a string of attacks the network has been facing since late June. As per the announcement made by the exchange,

“Due to the 51% attack that has occurred on BSV today we are stopping all BSV trading.”

Bitcoin SV was the target of a massive 51% attack early on Tuesday, an attack which was called “the largest since launch” by Blockchair developer Nikita Zhavoronkov. He further claimed on Twitter that the reorganization was 100 blocks deep and wiped out 570k transactions.

The attack was first brought to the community’s notice by CoinMetrics’ Lucas Nuzzi. Arguing that “some serious hashing power” was unleashed on the network early on Tuesday, he revealed that up to three versions of the chain were being mined simultaneously across pools.

Coinmetrics later confirmed that the firm’s own blockchain security monitoring tool FARUM identified the attack.

The Bitcoin Association also confirmed the incident on Twitter, recommending node operators to mark the fraudulent chain as invalid. It’s worth noting, however, that at the time of writing, the Association had released yet another statement on the same.

It said,

“…. believes that this is the same attacker that previously initiated block re-organisation attacks against the BSV network on June 24 and July 1, 6 & 9, 2021.”

Coinbase’s action made waves in the community. However, such steps are perhaps routine for the network now. In the past, BSV has been dropped by top exchanges like Gemini and Binance. It also saw several exchanges block withdrawals and deposits for the asset as liquidity providers suspended access to the token’s liquidity. This was preceded by more attacks in the last week of June and the first week of July.

As far as Coinbase is concerned, the exchange is yet to reveal when it might restart trading services for Bitcoin SV. With many in the community at sixes and sevens, it’s unlikely it’s going to be anytime soon.

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Source: https://ambcrypto.com/coinbase-halts-bitcoin-sv-trading-after-yet-another-51-attack

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Looking To Pull An El Salvador, Spain Considers Bill To Allow Mortgage Payments In Crypto

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Looking To Pull An El Salvador, Spain Considers Bill To Allow Mortgage Payments In Crypto

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Cryptocurrency and blockchain are becoming quite mainstream as of this year and it’s likely that just about any financial transaction will be able to be completed via the use of crypto in the next few years. Of course, there are bodies pushing against the integration given the lack of regulations and the fact that it could help finance illicit acts.

However, the crypto wave is continuing to grow despite all of the recent adversity. And, according to Spanish paper 20 Minutos, Spain could begin to allow persons to pay their mortgages with crypto pretty soon.

The publication reports that Spanish lawmakers are perusing a proposal that would see to the above. The Digital transformation Law, as it’s called, would make it so that crypto and blockchain become legitimized, while tax incentives are being considered for institutions keen on working under the artificial intelligence umbrella, which would include blockchain tech.

Spain’s incumbent People’s Party is intent on having the country’s banking infrastructure catch up to the times in terms of tech and will promote the use of digital currencies, as well as various other transformative technologies. The proposal suggests that the country’s whole mortgage system should undergo reform, in addition to having crypto payments possible.

El Salvador Took The Lead

This comes on the back of El Salvador’s move to accept bitcoin as legal tender. The Central American nation is very pro-crypto in such regard and it appears they have set the stage for other countries to naturalize digital assets, so to speak.

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Where Spain is concerned, the current proposal advises that banks use blockchain as a means of operating the mortgage system while making use of smart contracts for insurance.

“Introduction into the mortgage system – it also proposes that banks use Blockchain technology to manage mortgages, insurance and speed up compensation – it proposes to extend it to insurance policies, with ‘smart contracts’ with conditions depending on the procedures to be followed, the verification processes and potential incidents.“

El Salvador making bitcoin legal tender was a huge move and we aren’t yet to see the full scope, although the country’s population stands at just 6.5 million so they aren’t expected to have that great of an impact on a worldwide scale. Spain is a different case, however.

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Source: https://zycrypto.com/looking-to-pull-an-el-salvador-spain-considers-bill-to-allow-mortgage-payments-in-crypto/

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