GM, BMW Back Blockchain Data Sharing For Self-Driving Cars
GM, BMW Back Blockchain Data Sharing For Self-Driving Cars
GM, BMW Back Blockchain Data Sharing For Self-Driving Cars
Ripple Co-Founder Donates $25 Million in XRP to US University
Crypto Market Capitalization Hits 5-Month High Above $185 Billion
Is It Time for a Blockchain Brexit?
Bitcoin Creator and Superagent: What You Should Know About Craig Wright
An overview of one of the most controversial figures in the crypto community.
Recently, it was revealed that Craig Steven Wright, one of the most controversial figures in the crypto community, had filed 114 blockchain patents since 2017. He also quit Twitter, where he would often publish his opinions on anonymity (bad), Bitcoin SV (the real Bitcoin) and other cryptocurrencies (also bad).
He is also known for arguing that he is actually Satoshi Nakamoto, the original creator of Bitcoin. Here’s the complete list of things you should know about Wright.
He was born in October 1970 in Australia, according to registration papers of one of his many companies. As per a Business Insider article citing his now-edited LinkedIn profile, Wright graduated from Brisbane’s Padua Catholic College in 1987. In the early 1990s, he worked as a sauce cook, “having trained in French cuisine,” and spent three years working with a catering company.
Wright was reportedly studying at the University of Queensland while working as a chef. He initially attended engineering classes, but switched to computer science in his fourth year.
In 1996, as per his earlier LinkedIn bio, he began working at Ozemail, where he was “managing a bunch of engineers,” thus starting his eventful career in tech. However, according to a 2007 Computerworld article, he began working in IT when he joined K-Mart in 1985 — which would have been even before he finished high school.
In April 1997, Wright says he joined the Australian Stock Exchange, maintaining security and firewalls. In November the same year, he launched a company called DeMorgan, described as “a pre-IPO Australian listed company focused on alternative currency, next generation banking and reputational and educational products with a focus on security and creating a simple user experience.”
In fact, up until July 2015, Morgan was the CEO of about 15 companies. As the Guardian points out, in the space of a week, he resigned as director from Cloudcroft Pty Ltd, Coin-Exch Pty Ltd, Daso Pty Ltd, Demorgan Holdings Pty Ltd, Demorgan Ltd, Denariuz, Ezas Pty Ltd, Integyrz Pty Ltd, Misfit Games Pty Ltd, Interconnected Research Pty Ltd, Zuhl Pty Ltd and Pholus Pty Ltd, and remained the director of just three companies: Hotwire Preemptive Intelligence Pty Ltd, Panopticrypt Pty Ltd and Hotwire PE Employee Share Plan Pty Ltd. Currently, his LinkedIn only features a startup called nChain, where he has allegedly been working as a “chief scientist” since June 2015.
Wright seems to be a man of libertarian views. According to the Cypherpunk mailing list archive, in September 1996, Wright wrote that he had developed cancer during his years at university and took a loan to pay for medical treatment because the health insurance didn’t cover it. He then mentioned that he served in the military and worked at a gas station “even though I am an engineer,” adding:
“So why and for what reason should I have to pay several 10’s of thousands each year to support others. I have never taken help from the government, I do not feel I should have to pay as well. And what am I paying for…to protect the status quo. I believe that there is more than enough help for ppl available. They just need to get off their butts and work.”
In sum, Wright’s biography seems to be considerably replete and busy — or, at least, he portrays it that way. On top of having two PhDs, Wright wields numerous certifications in computer forensics and information technology (IT). In February, he published two Medium articles in which he claimed to have worked as an “agent of influence” in Venezuela and Colombia. Picturing himself as a James Bond-esque character fighting terrorism and evil, Wright says he was “shot twice” during the operation. Also, at some point, he claims that he “was a pastor once.”
According to his story, the Australian entrepreneur came back from South America to witness Bitcoin — which he created (more about that below) — being used on the darknet.
“I discovered the creation I had given birth to, something I designed to bring light was being used for all the worst reasons. Not only drugs, but people. Anonymity is a curse. Nothing good comes of it.”
Wright become a known figure in crypto community after media reports linking his identity to Satoshi Nakamoto, the pseudonymous creator of Bitcoin, surfaced in late 2015. Previously, in 2014, one of his few reported links to cryptocurrencies was that he tried launching the world’s first Bitcoin bank.
Thus, in December 2015, Wired and Gizmodo reported within hours of each other that the Australian computer scientist and entrepreneur might be the creator of the world’s largest cryptocurrency.
The Wired story claimed that Wright “either invented bitcoin or is a brilliant hoaxer who very badly wants us to believe he did.” It was based on documents and emails that were purportedly leaked by “an anonymous source close to Wright” to an independent security researcher Gwern Branwen, who co-wrote the article with Wired author Andy Greenberg.
Similarly, Gizmodo ran a story that featured documents allegedly obtained by a hacker who accessed Wright’s email accounts, claiming that Satoshi Nakamoto was a joint pseudonym for Craig Steven Wright and his friend, computer forensics analyst and cybersecurity specialist David Kleiman, who died in 2013.
Moreover, on the same day the articles were published, Australian Federal Police (AFP) raided Wright’s house in the Sydney suburb of Gordon. However, the AFP clarified that the operation was not related to the Bitcoin claims.
A substantial part of the evidence presented in the reports — along with Wright’s previous claims — was soon proved false. First, Wright’s company Cloudcroft had declared to have two supercomputers, one of which allegedly produced by computer manufacturer SGI. However, SGI soon clarified that “Cloudcroft has never been an SGI customer and SGI has no relationship with Cloudcroft CEO Craig Steven Wright.”
Further, Wright had listed two PhDs on his LinkedIn page, including one from Charles Sturt University. Eventually, Forbes contacted the university and found out that it hadn’t granted Wright any PhDs, although it gave him three master’s degrees in networking and systems administration, management (IT), and information systems security. Wright was, however, awarded with a doctorate degree by Charles Sturt University later in 2017.
Also, a technical analysis of two PGP public keys attributed to Wright, but also linked to Satoshi Nakamoto, showed that they were created more recently than the documents in which they were featured.
Finally, a number of posts in Wright’s now-deleted blog that seemed to portray him as a person who was directly involved in Bitcoin’s creation had been backdated or edited; the archived versions of the posts from 2013 show none of those breadcrumbs that Wright could have planted to mislead the media into thinking he is Satoshi.
After the aforementioned stories went live, Wright promptly took down his social media accounts and disappeared for several months. On May 2, 2016, he came back (he now lives in London, United Kingdom, according to his LinkedIn profile) and publicly declared that he is the creator of Bitcoin. Later on in the same month, Wright published a sentimental apology piece where he refused to publish the proof of access to one of the earliest Bitcoin keys, saying he doesn’t have the “courage” do it.
However, Wright still claims to be the pseudonymous Bitcoin creator. Just last month, the entrepreneur filed two near-identical comment letters to the United States Commodity Futures Trading Commission (CFTC) in which he again declared that he is Satoshi. The documents were submitted in response to the agency’s request for industry input and feedback on Ethereum’s (ETH) mechanics and market.
Specifically, Wright wrote that he worked “under the pseudonym of Satoshi Nakamoto,” and “completed a project […] started in 1997 that was filed with the Australian government in part under an AusIndustry project registered with the Dept. of Innovation as BlackNet.”
BlackNet — an alleged precursor to Bitcoin — was submitted to the Australian government in 2001, according to one of Wright’s tweets (he deleted his Twitter profile earlier this month).
On Reddit, user Skoopitup argued that the BlackNet paper that Wright supposedly submitted in 2001 largely copied the official Bitcoin white paper (published October 2008), which notably contained significant corrections to an earlier draft that had been shared by Satoshi earlier in August 2008.
In his remaining comments to the CFTC, Wright wrote:
“The amount of misunderstanding and fallacious information that has been propagated concerning bitcoin […] has resulted in my choice to start to become more public. The system I created was designed in part to end fraud as best as that can be done with any technology. The lack of understanding […] has resulted in […] a dissemination of old scams.”
The Australian entrepreneur still hasn’t signed a message with the key associated with Bitcoin’s genesis block, which could be seen as strong evidence of him actually being Satoshi Nakamoto.
The BCH network performs hard forks as part of scheduled protocol upgrades. The fork scheduled for Nov. 15, 2018, however, was disrupted by a competing proposal that was not compatible with the original roadmap. As a result, the BCH community was split into three fractions: Bitcoin ABC, Bitcoin Unlimited and Bitcoin SV.
Craig Wright lead the Bitcoin SV team, whose goal was to restore “the original Satoshi protocol” by changing the current BCH structure. Specifically, that involved entirely overwriting the network scripts of Bitcoin ABC and increasing the block size of BCH from 32MB to a maximum of 128MB in order to increase network capacity and scale. Bitcoin SV’s cryptocurrency design was made by Wright’s nChain company.
At some point, after Jihan Wu, co-founder of major crypto miner and manufacturer Bitmain, who supported the Bitcoin ABC team, accused Wright of being a Blockstream spy and a “fake Satoshi.” In response, the computer scientist entered a verbal fight. Specifically, Wright tagged Roger Ver — another ABC proponent — and Bitmain with bankruptcy threats and accusations of being engaged in Silk Road machinations and child pornography.
Even though Bitcoin ABC essentially won the so-called “hash wars” and secured the original BCH ticker, Bitcoin SV lives on. In late February, Bitcoin SV’s value rose 20 percent, driving it into the top-10 largest cryptocurrencies by market cap. As of press time, Bitcoin SV is the 12th-largest token, with a market cap of $1.5 million, according to CoinMarketCap.
According to the publication Hard Fork, the World Intellectual Property Organization (WIPO) has published 155 patents applications filed by Wright — all of which were submitted through his company nChain. Thirty-five of those were published this year. The earliest document date relates to Aug. 31, 2017.
The majority of those applications mention blockchain. Specifically, Hard Fork writes, the term “blockchain” was used 114 times in patent titles. “Cryptocurrency,” in turn, is only featured six times, while “Bitcoin” is not mentioned at all.
Wright has written about his patents quest via Twitter (which has been deleted). According to the screenshots cited by Hard Fork, Wright decided to file his patents in Europe because it was “harder”:
“Once we have the EU, we have the PCT [Patent Cooperation Treaty] in the USA. The US is simpler.”
The Patent Cooperation Treaty has been signed by 152 countries. After filing one international patent application under the PCT, applicants can get simultaneously protection for their inventions in many countries.
As per Bloomberg, business-wise blockchain patents “are an essential ingredient for companies looking to reshape the financial services industry or spawn profitable cryptocurrency-related businesses.” Basically, such patents help companies attract investment, protect property rights and collect monopoly profits from other companies using their inventions.
It’s been argued that Wright is filing patents without the intent of actually using them, but instead to demand large payouts from companies which happen to use similar technologies in their line of work. As Marc Kaufman, an attorney who co-chairs the Blockchain Intellectual Property Council at the U.S. Chamber of Digital Commerce, told Fortune:
“His tactics and activities have all the marks of being a patent assertion entity or what’s pejoratively known as a troll. I’m not aware of his companies having any products.”
In February 2018, the estate of David Kleiman — Wright’s associate and computer forensics expert who died in April 2013 seemingly of natural causes related to complications from a MRSA infection — brought the suit against Wright to the U.S. District Court of the Southern District of Florida. The estate is represented by Ira Kleiman, David’s brother.
According to court documents that surfaced on Reddit, the plaintiff claims that Wright stole hundreds of thousands of BTC, worth over $5 billion dollars at the time, from David Kleiman’s estate. The statement by the plaintiff alleges that Wright recognized that Kleiman’s friends and family were initially unaware of the wealth he accumulated.
Specifically, the statement reads, Wright “forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him. Craig backdated these contracts and forged Dave’s signature on them.”
Wright contacted Kleiman’s estate after his associate’s death and disclosed that he and David had worked together to develop blockchain and Bitcoin, according to the plaintiff.
In December 2018, new documents were published online, indicating that the court had rejected repeated requests from the nChain chief scientist to dismiss the lawsuit.
In an amended lawsuit supported by Judge Beth Bloom, a figure of 300,000 BTC ($1.5 billion as of press time) was now circulating.
“The Court finds that Plaintiffs have sufficiently alleged a claim for conversion,” the court document confirms, continuing:
“The Amended Complaint alleges that Defendant converted at least 300,000 bitcoins upon Dave’s death and transferred them to various international trusts, which was an unauthorized act that deprived the Plaintiffs of the bitcoins therein. Accordingly, Plaintiffs’ claim for conversion […] survives Defendant’s Motion to Dismiss.”
Specifically, the court demanded “all documents, communications, and agreements that support his [Jeff’s] personal theory that Dave Kleiman is Satoshi Nakamoto.” In a 2018 interview with Bloomberg, Garzik suggested that Dave Kleiman was the original creator of Bitcoin.
After some of the aforementioned inconsistencies related to Wright’s claim that he is Satoshi surfaced, the crypto community became increasingly skeptical about the Australian computer scientist. However, some of his claims in regard to other cryptocurrencies certainly didn’t help.
In January 2019, for instance, he called Andreas Antonopoulos, author of the book “Mastering Bitcoin,” a “shitcoin expert.” In February this year, Wright told CNBC Africa’s Ran Neuner in a rather rude form that he knows how to deanonymize and destroy privacy coins Zcash and Monero, which he apparently is going to do “sometime this year”:
“If you have a privacy coin, I will show you that it is basically as private as running through Times Square with your pants around your ankles.”
In October 2017, in a now-deleted tweet, Wright argued that the Lightning Network was “oversold.”
“Given he makes so many non-sequiturs and mistakes, why is this fraud allowed to speak at this conference?”
In response, Wright tweeted: “Oh well…. looks like I broke Vitalek… 🙂 He is a twig.. must remember to be gentle next time ….”
Last week, the Australian entrepreneur deleted his Twitter page after removing over 10,000 tweets.
On March 17, not long before erasing his presence on the social media outlet, Wright tweeted that he will be “taking action aggressively to remove any site that is in error or makes false claims,” referring to people calling him a fraud, among other things.
“You do not have a right to lies under ‘free speech’ nor harassment, nor libel and slander,” he wrote. “If an error is reported in a malicious context concerning me, expect to be living in a barrel when we finish with you.”
Tron’s Justin Sun Hints at ‘Official’ Collaboration With Ethereum This Year
Tron founder Justin Sun hinted at a possible official partnership with Ethereum in a recent interview.
Tron (TRX) founder and CEO Justin Sun claimed that he thinks the Tron ecosystem will “officially collaborate” with Ethereum (ETH) this year. Sun made his comments during an interview on The Crypto Chick podcast on April 6.
More precisely, Sun said that he thinks “even within this year we will see Tron even collaborate, officially collaborate, with Ethereum.” In response to a question on Ethereum co-founder Vitalik Buterin’s recent tweets about Tron, Sun stated that he thinks “competition brings a better product.” Sun also added:
“I think in the future we will even collaborate with lots of Ethereum developers and also the enterprises built on Ethereum before to make the industry better.”
Sun also announced that a second layer scalability solution for Tron, which he claims will increase transaction throughput at least 100 times and dramatically decrease fees, will be deployed in Q2 2019. Sun had recently tweeted about the solution — dubbed Sun Network — but had evidently refrained from naming a launch date.
During the podcast, Sun also noted that the Tron-based version of stablecoin Tether (USDT) is set to launch on April 9. Sun argued that the Tron-based version of the stalwart stablecoin will permit cheaper and faster transactions than the Bitcoin (BTC)-based Omni protocol USDT.
On Friday, Radar, the startup behind decentralized exchange Radar Relay, which raised $10 million last year, announced that it will release new developer tools for the blockchain scalability tool Lightning Network.
Hodler’s Digest, April 1–7: Top Stories, Price Movements, Quotes and FUD of the Week
This week, PayPal ventured into blockchain for the first time, and Coinbase turns to cross-border payments.
Global online payments firm PayPal has invested in startup Cambridge Blockchain, a firm that focuses on leveraging the tech in order to give users more control over their digital identities. The investment, whose amount is undisclosed, is part of an extension to a Series A funding round that had raised an initial $7 million in May 2018. The United States Securities and Exchange Commission (SEC) has stated that Cambridge Blockchain raised a total of $3.5 million in new equity since May 2018. Cambridge Blockchain has notably joined major players such as Microsoft, IBM, Mastercard, and Accenture to collaborate under the canopy of a non-profit organization dubbed the Decentralized Identity Foundation.
Staff at the U.S. SEC have published a framework that will help market participants figure out if a digital asset is deemed to be an investment contract, and therefore a security. The framework is not a rule, regulation, or statement of the U.S. Commission, but is the work of two of the SEC’s commissioners: Bill Hinman, director of the SEC’s Division of Corporation Finance and Valerie Szczepanik, Senior Advisor for Digital Assets and Innovation — also known as the “crypto czar.” The framework focuses on the economic reality of the transaction itself and “what character the instrument is given in commerce by the terms of the offer, the plan of distribution, and the economic inducements held out to the prospect.”
Major U.S. crypto exchange and wallet Coinbase stated this week that it has expanded into cross-border payments. The entity’s development means that Coinbase customers can now transfer funds to any other user with a Coinbase account globally using both (XRP) and the exchange’s stablecoin USDCoin (USDC) with no fee. Coinbase also made the news again this week when it announced that the insurance coverage for its hot wallet crypto holdings is covering a $255 million limit through a Lloyd’s of London-registered broker. According to Coinbase’s chief information security officer, the coverage focuses on protecting theft by hacking, a high risk consumer lost scenario.
The deputy governor of the State Bank of Pakistan (SBP), Jameel Ahmad, said this week that the institution plans to issue their own digital currency by 2025. A statement was made during a speech about the launch of Electronic Money Institutions, when Ahmad noted that the central bank is already working on their central bank digital currency (CBDC) as a way to financial inclusion and efficiency and combat corruption. According to Ahmad, the CBDC will only be deployed in 2030. As previously reported, Pakistan is in the process of implementing new cryptocurrency regulations in an effort to improve its track record fighting financial crime.
Bloomberg reported this week that the recent cryptocurrency market jump could be linked to algorithmic trading. The trading method uses automated software to detect trends and determine when trades should be made, and Bloomberg states that the industry has seen 17 new algo or quantitative funds launched since September. According to Bloomberg’s data, algo funds reported gains of between 3 and 10% per month during the past crypto winter, while crypto funds lost a total of around 72% during the same time.
The crypto markets are still trading high at the end of the week, with Bitcoin at $5,158, Ethereum around $168 and Ripple at $0.36. Total market cap is around $180 billion.
The top three altcoin gainers of the week are EZOOW, Cryptrust and Luna Coin. The top three altcoin losers of the week are Sharpe Platform Token, Guaranteed Ethurance Token and dietbitcoin.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
“In today’s economy, there is less and less time to build trust in the way it happened in the past. To fight cancer, to balance renewable energy, to trace the authenticity of goods, actors must be able to trust one another without meeting face-to-face. And how can we achieve this? Of course, with the help of blockchain.”
Mariya Gabriel, European Commissioner for Digital Economy and Society
“All indications that we have — whether it be fundamentals, technicals, the quantitative analysis we do — all suggest that we probably have at least started to put in the bottoming process.”
Brian Kelly, founder and CEO of digital currency investment firm BKCM LLC
“As soon as there is news about [CBDC issuance] the people in crypto get excited and say, see it’s becoming mainstream […] but if you look carefully about what they want to do, if and when they’re going to do it, it’s not going to be blockchain, it’s not going to be crypto […] it’s going to be on a single ledger, secured.”
Nouriel Roubini, American economist and notorious crypto critic
“Shorts are liquidated, there were short squeezes, more people jumped onto the hype, and a lot of news media always look for a trigger to cause big drops and big rises. I would say more than half the time they are just trying to match news to something that it did not necessarily need news to happen.”
Tone Vays, Bitcoin analyst
“We are poised to achieve ten thousand times their capacity.”
“Blockchain has the potential to virtually exclude loss, distortion, or forgery of vital log data in all aviation sectors where certificates are issued and controlled.”
Brian Kelly, the founder and CEO of digital currency investment firm BKCM LLC, has predicted that Bitcoin’s next target price is going to be $6,000. Speaking in an interview with CNBC, Kelly stated that $6,000 was a reasonable price point, his comments coming in the aftermath of this week’s price surge that saw Bitcoin’s price jump by over 15 percent to reach over $5,000 for the first time since November 2018. Kelly put forward the idea that the influx of institutional investors is one of the reasons behind the price upswing.
Big Four audit firm Ernst & Young (EY), which is working with now-defunct Canadian crypto exchange QuadrigaCX, said this week that the exchange should be placed in bankruptcy rather than being restructured. The exchange had been undergoing legal proceedings since it reportedly lost access to its cold wallet holdings after the unexpected death of its founder, Gerald Cotten, in December 2018. In EY’s new report, they propose that the ongoing restructuring process should be shifted to an alternative bankruptcy process. The benefits of shifting to proceedings under the BIA, the report argues, include the fact that bankruptcy “would allow for the potential sale of assets, including but not limited to Quadriga’s operating platform.”
Ethereum-based (ETH) prediction market Augur currently has a design flaw attack, according to research made by crypto exchange Binance. The attack mentioned in the report involves a controversial market that bets on the price of ETH at the end of March, but has a discrepancy over the actual ending time of the contract versus the title. According to the research, this discrepancy could cause the contract to be deemed invalid, dividing the contributions to give back to users at one third of their value. Binance notes that this flaw could be taken advantage of by bad actors: an Augur executive has already said that the next Augur upgrade will work towards a solution.
Canadian police have frozen assets of the founders of blockchain consulting firm Vanbex, which raised $22 million in an alleged fraudulent initial coin offering (ICO). According to Canadian court documents, Vanbex founders Kevin Hobbs and Lisa Cheng were operating a shell company that developed no usable products, and had used the money in the ICO on property and cars for themselves. Vanbex’s founder Cheng told Cointelegraph in a statement that the firm “knows with certainty that false claims by a former contractor have created files with several government agencies” as part of her denial of the Canadian courts’ allegations.
The 2011 Mt. Gox hack remains the largest cryptocurrency hack of all time. In light of the recent guilty verdict for Mark Karpeles, the defunct exchange’s ex-CEO, Cointelegraph looks at how much has changed (and not changed) in the aftermath for those affected by Mt. Gox.
Cointelegraph examines the recently publicized phenomenon of college students reportedly mining cryptocurrencies in their rooms. Who pays for the bills? How much money can they actually earn? Cointelegraph answers those questions and more.
Speak Out: Discussing Recent Events In Crypto
What’s new in crypto? Reply!
We try our best to cover everything in crypto, but we also believe our subscribers got something more for us! Share news from your favorite projects and communities right in the comments below. We’ll share the top comment in our social networks next Monday. Reply!
Bitcoin at Most Overbought Level Since Record Bull Run: Bloomberg Analyst
Bitcoin is at its most overbought level since its record highs in December 2017, Bloomberg analyst Mike McGlone claims.
Per the report, Bitcoin’s GTI Global Strength Indicator shows that the coin has not been this overbought since its price neared its record peak of $20,000. Bloomberg also claims that similar patterns in the past have heralded multi-week long downturns.
Bitcoin’s GTI Global Strength Indicator. Source: Bloomberg
According to McGlone, recent market market growth occurred because of long-term price compression and low volatility, which caused the price to be “released from the cage.” McGlone stated that he expects a similar downturn period to follow the recent growth:
“Now it’s a question of duration and I suspect when you have such a massive bubble, you’ll always have an overhang of people who need to sell.”
The article also quotes David Tawil, president of crypto hedge fund ProChain Capital, who reportedly expects the market to continue its downward trend. While he admits that “it’s nice to see a positive move as opposed to a negative move,” he notes that it is not comforting:
“Certainly, an investor would much rather see a gradual rise with constant floors in terms of downside being established, as opposed to a very, very quick run-up. It could easily be easy come, easy go.”
McGlone’s and Tawil’s analysis appear to contrast with that of Fundstrat Global Advisors co-founder Thomas Lee. As Cointelegraph reported yesterday, according to Lee, Bitcoin is back in a bullish trend. Lee pointed out that BTC has now broken over its 200-day-moving-average.
Additionally, trade and author Peter Brandt seemingly disagreed with McGlone, having tweeted on April 5 that he wouldn’t be surprised if Bitcoin was to enter another parabolic phase.
Bitcoin Climbs Over $5,100 as Top Cryptos See Solid Gains
Most of the top 20 cryptocurrencies are seeing moderate to notable gains on the day by press time, as Bitcoin climbs over the $5,100 mark.
Market visualization courtesy of Coin360
Bitcoin’s price has seen a gain of two and a half percent on the day, trading at around $5,156 by press time, according to CoinMarketCap. Looking at its weekly chart, the current price is a solid 20% higher than $4,095, the price at which Bitcoin started the week.
Bitcoin 7-day price chart. Source: CoinMarketCap
Bloomberg analyst Mike McGlone claimed earlier this week that Bitcoin is at its most overbought level since its record highs in December 2017. Also, leading United States derivative market CME Group pointed out that its Bitcoin futures reported record trading volumes on April 4.
Ethereum (ETH) is holding onto its position as the largest altcoin by market cap, which is currently at about $17.7 billion. The second-largest altcoin, Ripple (XRP), has a market cap of about $15 billion by press time.
ETH is up by 2.12% over the last 24 hours. At press time, ETH is trading around $168, after having started the day at $163. On its weekly chart, ETH has seen its value increase by almost 19%.
Ethereum 7-day price chart. Source: CoinMarketCap
Second-largest altcoin Ripple has gained one and a half percent over the 24 hours to press time, and is currently trading at around $0.36. Looking at the coin’s weekly chart, its current price is over 16% higher than the price at which it started the week.
Ripple 7-day price chart. Source: CoinMarketCap
Among the top 20 cryptocurrencies, the one reporting the most notable gains is Ethereum Classic (ETC), which is up over 20% on the day to press time.
Bitcoin Cash (BCH) has also seen notable daily growth, up 11% to press time. On the week, BCH has seen massive growth of 91%.
The total market cap of all cryptocurrencies reached $180 billion today, which is almost 25% higher than $144.3 billion, the value it saw one week ago.
G20 to Establish Crypto AML and Counter-Terrorism Financing Regulations in June: Report
G20 member countries will reportedly meet to discuss international cryptocurrency anti-money laundering regulation in June in Fukuoka, Japan.
G20 member countries will meet to discuss international cryptocurrency Anti-Money Laundering (AML) regulation on June 8 and 9 in Fukuoka, Japan. The news was revealed in a report from local news outlet Kyodo on April 4.
Per the report, and in accordance with official plans, G20 central bank governors and finance ministers will take part in the meeting. The event will be focused on establishing a framework to combat crypto-enabled money laundering and terrorism financing.
Further, according to the Kyodo, it is expected that “it was revealed” on April 4 that the countries are expected to reach an agreement over new regulations during this meeting. The report states that the main aim is anti-anonymity. Namely, the group is reportedly looking to establish stricter identification of individuals transacting in crypto at the moment of transaction, to keep asset flow transparent.
As Cointelegraph reported in December last year, the G20 countries have already called for “a taxation system for cross-border electronic payment services” as well as regulation to combat money laundering. It has been reported at the time that the member countries, which then gathered in Argentina, would consider the issue during this year’s meeting “when Japan will be the president of the summit.”
Luck of the Draw: New Binance Launchpad Lottery Structure Divides Critics
The world’s leading crypto exchange and token offering platform turns to a lottery-style structure.
Despite the changing attitude toward altcoins and initial coin offerings (ICO) on the whole, Launchpad — the token offering platform developed by the world’s leading cryptocurrency exchange Binance — is selling out of its offerings in a matter of minutes. With the firm now concluding a series of sold-out token launches, the company divided opinions when it announced changes to the structure of its platform. Cointelegraph takes a look at the changes to the service, along with the latest Binance token offering news and developments.
The company had previously used a first-come, first-served system that resulted in long waiting lists and some investors missing out on tokens. According to the press release, the company will now use a lottery-style format for its future token sales on Launchpad.
As per the press release, the new system will focus around a lottery ticket initiative in which service users will be able to claim a maximum of five tickets by holding a certain amount of Binance Coin (BNB) over the 20-day period preceding the lottery. Users are allocated one ticket per 100 BNB held, up until the maximum of five tickets is reached. The minimum amount of 100 BNB necessary to take part in the lottery currently sets the investment threshold at $1,700. According to the company, users will be able to choose how many tickets they want to enter into the lottery 24 hours before the winners are selected. The maximum number is chosen based on their BNB holdings over the 20 day period prior to the lottery event.
It appears that the change in format stems from a multitude of factors, varying from customer demand to efforts to make the process more fair. Although the company did not specify what specific demands customers had requested, or whether or not they were experiencing a change in clientele, a spokesperson for Binance Launchpad spoke to Cointelegraph about the rationale behind the changes:
“In a fast-changing world, we listen, learn and adapt. We created a new lottery format for Binance Launchpad because we are prioritizing for fairness, transparency and a better user experience.”
Despite increased investor skepticism of the usefulness of ICOs in general, Binance claims to be experiencing an increase in its token sale participants, citing figures released by founder and CEO Changpeng Zhao (aka CZ):
“if you look at the number of participants CZ has publicly announced on his Twitter, the demand is actually growing for Launchpad with each session. For example, 39,003 people participated in the recent Launchpad token sale, whereas only 19,860 people participated in the token sale prior.”
Although the figures appear to suggest that Binance’s appeal for ICOs is undimmed, the changes to Launchpad’s format drew sharp criticism from members of the crypto community, with many saying that the changes would price out small investors. Investors and crypto enthusiasts alike took to Twitter to voice their concerns over what implications the new format could have:
— Binance (@binance) March 24, 2019
I think I will no more participate in #TokenSales on Binance Launchpad, unless Binance remove the new rules.
— @cryptospa [Accumulating STEEM] (@cryptospa1) March 24, 2019
One complain tho, minimum BNB holding balance is about worth $1500 and tbvh @cz_binance ,that’s more than entrie portfolio of 75% of people in crypto.
— Ravi (@hodlorr) March 24, 2019
As it became clear that the new format was experiencing a mixed reception at best, CZ engaged with a number of Twitter users to try to gauge what might be more palatable to the widest range of potential investors:
Will address some of the questions/concerns/feedback in this thread.
Our new Launchpad model is not set in stone. It’s the result of multiple detailed discussions over the weekend, while considering all angles. We will consider suggestions and will make certain tweaks. https://t.co/2wfeyZUyZH
— CZ Binance (@cz_binance) March 24, 2019
In the thread, CZ addressed the most commonly mentioned issues and suggestions, stating that the “Launchpad model is not set in stone. It’s the result of multiple detailed discussions over the weekend, while considering all angles. We will consider suggestions and will make certain tweaks.”
The main concerns fall into two categories. The first issue that critics were swift to point out is that the proposed system appeared to favor “whales” — i.e. individuals or entities that hold a large number of cryptocurrency — and was in danger of pricing out smaller investors unable to hold 100 BNB. CZ pointed out that, while it would be possible to lower the threshold, this would consequently reduce the percentage chance of winning and could result in dissatisfaction with the service. Many critics suggested a “magic number” of 50 BNB. While CZ admitted that the threshold could potentially be a mistake, he did stress that the core demand remained very high for Launchpad and that limiting the minimum amount does not represent a quick solution to the problem.
The second issue concerned whales creating several accounts in order to gain additional tickets, thereby maximizing their chances of being selected. In addition to information in the press release stating that all due diligence and Know Your Customer (KYC) measures would still apply as usual, CZ stated that all measures to prevent this from happening were both strong and already in place:
Feedback 2, whales creating more accounts
There is strong KYC and anti-fake KYC measures in place already, which we think should be adequate to address the problem.
— CZ Binance (@cz_binance) March 24, 2019
The CEO also made sure to point out that people should only take part in Launchpad token sales if they are in a financially stable position and can factor in the losses that they may potentially suffer. Likewise, in the press release announcing the changes published on March 24, the company stated that entry into the lottery does not guarantee winning and that fluctuations of BNB’s price were likely:
“BNB price will fluctuate during the 20 day period. If BNB price drops, it is entirely possible the drop in BNB price will outweigh any gains made by the new token. That is first assuming you win in the lottery draw. Further, the new token being sold is not guaranteed to increase in price. It may drop in price. There are significant risks. You are responsible for your own decisions.”
When Cointelegraph questioned a spokesperson for Binance Launchpad about whether the platform was experiencing a shift toward larger investors, the company declined to comment but gave a short response regarding criticism of the new format:
“As CZ tweeted recently about Launchpad, we take suggestions into careful consideration, and will make certain adjustments based on the feedback we receive.”
In recent months Binance Launchpad completed a number of high-profile token sales. Demand is clearly high for coin launches, with many of the token sales completed in a matter of minutes. Most recently, the company completed a $4 million sale of Celer Network (CELR) tokens. Celer Network is a layer-2 scaling platform that works to enable off-chain transactions for payment transactions and off-chain smart contracts.
All 597,014,925 CELR tokens were sold in a single session that lasted 17 minutes and 35 seconds. As with previous token sales, Binance only accepts payment via BNB. At press time, each CELR token is worth 0.001051 BNB, equating to $0.020181.
On Feb. 25, Binance Launchpad completed the sale of Fetch.AI (FET) tokens, reaching a total of $6 million, with over 69 million tokens sold. According to a tweet published by CZ, the sale was completed in just 22 seconds.
Fetch.AI is a project that seeks to establish an “economic internet” by combining machine learning, multi-agent systems, intelligent smart contracts, distributed ledger technology and artificial intelligence. FET’s initial coin offering was set to close once the $6 million hard cap was reached or on March 3. According to a tweet published by CZ, the sale was oversubscribed, leading to a bottleneck on the exchange:
“24000 people pre-signed the User Agreement, 19860 people successfully submitted a buy order, 2758 people got a piece. The first 22 seconds.”
As per a Binance blog post published on Feb. 25, the tokens were, in fact, sold to participants in less than 11 minutes and 14 seconds. The extension in the initially reported time is allegedly the result of taking into account the processing time for submitted buy orders.
At the time of the launch, 1 FET token was sold at 0.00858400 BNB, equating to $0.0818, at a BNB-USD exchange rate of $9.53, as of Feb. 26. Participant token purchases were capped at $3,000, with a minimum investment threshold of $20.
Binance also concluded the sale of Tron-based BitTorrent token (BTT) on Jan. 28, bringing in a total of $7.1 million dollars and a total sale of 50 billion tokens in less than 15 minutes. BitTorrent is a peer-to-peer file-sharing platform that allows service users to share files such as music or videos via the internet.
Unlike the sale of the FET and CELR tokens, the BTT launch consisted of two simultaneous sessions, with one for buyers purchasing with BNB and another for buyers using Tron (TRX). According to information posted on the Binance website, each token was priced at $0.00012 at press time.
Tron CEO and founder Justin Sun confirmed the successful sale of the tokens in a tweet after the launch had been completed:
“It is official: In the BNB session, all 23.76 billion BTT were sold to token sale participants within 13 minutes and 25 seconds. Meanwhile, in the Tron session, all 35.64 billion BTT were sold within 14 minutes and 41 seconds.”
Despite the success of the sale and its seemingly short duration, CZ tweeted that the launch could have concluded much faster were it not for some unexpected technical issues relating to the sheer level of demand for the product:
“Both sessions concluded. Took about 18 minutes, due to a system issue, would have taken 18 seconds otherwise. Demand was astronomical.”
With several lucrative ICOs under its belt, Binance Launchpad’s success has not gone unnoticed. Singapore-based cryptocurrency exchange Huobi Global announced on March 20 the launch of its own platform for prerelease token sales in a blog post.
The platform, officially named Huobi Prime, will give investors the change to access new altcoins before they appear publicly on the most prominent exchanges. The services will be powered by Huobi Token. According to Leon Li, founder and CEO of Huobi Group, the new service stems from customer demand and has been designed “from the ground up to be a more innovative, direct and responsive way to access up and coming new tokens.”
According to information published in the Medium post, all coins purchased through Huobi Prime are immediately deposited into users accounts. The company also states that a “rigorous screening and selection process” has been put in place, citing the importance of a progressive business model, financial backing, community support, reputation, technical innovation and expertise in aspiring projects.
Listings on Huobi Prime were initially set to involve three 30-minute rounds of coin offerings, however, the company announced a change to 5-minute rounds of active trading with 5-minute breaks in an April 3 press release. The first two rounds will have a similar structure in that a certain amount of discounted tokens will be made available to users on a first-come, first served basis.The ratio will be 20 percent of total supply in the first round and 30 percent in the second. The biggest shake up to the existing structure is the allocation of the remaining 50 percent of discounted tokens in the third round. The company explains in the press release that this will benefit users who have not reached their cap in the preceding rounds:
“Users who have not exhausted their personal cap and place limit buy orders in the third round will receive at least some portion of the tokens they ordered via adjusted system matching. Orders must be placed at the highest buy price in order to be filled partially and the amount filled will be positively correlated to the size of the order.”
While the group states that Huobi Prime is open to all types of investor, the blog post states that individual purchases cannot surpass a $1,000 USD equivalent in Huobi Tokens.
In order to take part in future token sales, users need a verified account and an average monthly holding of at least 500 Huobi Tokens. The company said that the limit was put in place to try to strike a balance between larger- and smaller-scale investors, in addition to ensuring legitimate usership.
Huobi Prime reported that the company’s inaugural launch of TOP token on March 26 enjoyed high demand and that all 1.5 billion tokens were sold:
“Our inaugural launch was met with enormous demand, with 3,764 users buying 1.5 billion TOP Tokens using Huobi Token (HT). The total supply of TOP tokens offered was sold out for all three rounds of trading, with the first round selling out of available tokens in 7 seconds, the second round in 5 seconds, and the third in 7 seconds.”
Regarding the fresh competition from companies attempting to launch their own coin offering platforms, Binance Launchpad remained optimistic, stating that they are confident its products and user experience will guarantee high standards:
“Many IEOs are popping up on other exchanges, so we anticipate new formats and systems. Binance Launchpad will always uphold the highest standards for token launches; we select the highest quality projects and seek to provide the best user experience.”
The next coin launch on Huobi Prime will take place on April 16.
Even at $30, Bitcoin Was More Exciting Than Poker
Returns on Crypto Assets: The Hidden Message
‘Free’ Money: How Students Mine Cryptocurrency in Their Dorm Rooms
Crypto mining seems popular among students, but does this “free” money thing really work?
Last month, reports surfaced on crypto mining research conducted by tech conglomerate Cisco with the following headline: “College kids are using campus electricity to mine crypto.”
Indeed, many students don’t have to worry about paying power bills, as per their university housing contracts, which tend to cover electricity expenses. That “free” power allows them to host cost-efficient mining rigs, where the only expense is the actual hardware. It almost seems too good to be true: Mining students receive a passive income, which can potentially cover the purchase of a few textbooks — or even pay for the whole semester and more.
However, there’s a catch: No electricity is actually free, and someone ultimately has to pay the price.
Cisco’s security researchers investigated cryptocurrency mining activity across various industry verticals. The research was carried out with the company’s cloud security platform Umbrella, which monitors clients’ network connections to screen malicious activity, allegedly revealing incidents of crypto mining.
According to the findings, university campuses are the second-biggest miners of virtual currency across industry verticals at 22 percent, second only to the energy and utilities sector, with about 34 percent.
As Cointelegraph reported, miner revenues began to wane in 2018 (the last full year for statistics), thanks to the crypto winter and its attendant price drop. That made mining less profitable. But hash rates have continued to increase, indicating that the global mining pool continues to grow, even as individual miners come and go.
Cisco threat researcher Austin McBride explained the trend to PCMag, saying that “you leave [the mining rig] running in your dorm room for four years, you walk out of college with a big chunk of change.”
While running mining rigs in dorm rooms, students purportedly avoid electricity costs associated with cryptocurrency mining profitability, said McBride, adding:
“Mining difficulty for a lot of coins is very high right now — which means it costs more for electricity and internet than the profit you can produce from mining those coins. If you don’t have to pay for those costs, then you are in a really good spot for making money on the university’s dime.”
Cointelegraph reached out to Cisco and Cisco Umbrella to clarify which campuses were monitored, but has yet to receive a response.
A similar report was conducted earlier in March 2018, when cyber attack monitoring firm Vectra found out that both intentional cryptocurrency mining and cryptojacking was becoming more prevalent on college campuses than in any other industry.
As per Vectra, universities are not able to monitor their networks as closely as large corporations with high-budget IT departments, “at best [advising] students on how to protect themselves and the university by installing operating system patches and creating awareness of phishing emails, suspicious websites and web ads.”
Students who take advantage of this “free power,” in turn, are “simply being opportunistic as the value of cryptocurrencies surged over the past year,” Vectra’s blog post stated. Matt Walmsley, Europe, Middle East and Africa director at Vectra, told Cointelegraph that, while the scope of their research was international, he cannot disclose which universities participated in the study:
“The data was provided by from education establishments around the world on the understanding that any identifying information would remain anonymous.”
Therefore, while it is difficult to pinpoint the hot spots for college virtual currency mining on the map, the phenomenon seems to be quite popular overall. According to the 2019 Vectra report issued earlier this year, “cryptocurrency mining has surged in popularity with students and criminals, particularly among universities with large student populations.”
One of the main things about mining in university housing conditions is that it has to be discreet — otherwise, the wardens might hear the noise and start investigating. Mark D’Aria, founder and CEO of Bitpro, a New York-based installation and mining operation management firm, told Cointelegraph:
“I suspect the vast majority of mining from college campuses isn’t from what you would think of as mining ‘rigs’ — those giant machines with multiple GPUs [graphics processing units], purpose built for mining. ASICs [application-specific integrated circuits] are also certainly going to be extremely rare simply because they’re so loud and hot that no one is going to tolerate them in their dorm room for very long. The student is going to need to explain that, and he’s not going to get away with it for long.”
Instead, most of the mining seems to be coming from students’ old-fashioned PCs, the Bitpro CEO suggested. Notably, casual machines could provide their owners with a moderate income even during the current, bearish market. Given that additional electricity-related expenses are covered by a third-party, of course. According to D’Aria:
“A gaming rig with a single high end GPU could produce maybe $1/day. But even a run of the mill laptop could produce a few cents as well. The important thing to recognize is that even though $1/day is small — if you don’t have to pay for electricity, there’s no reason for someone with a gaming rig or reasonably powerful laptop *not* to mine. It’s literally free money.”
Moreover, generating cryptocurrency with a computer does not necessarily require substantial technical skills and knowledge. “It’s extremely easy to do with services such as NiceHash [a crypto cloud mining marketplace], which can be set to automatically mine when you’re not using your PC like a screen saver,” D’Aria added.
Indeed, Tom (a pseudonym to maintain confidentiality), a University of Mississippi pharmaceutical sciences student, told Cointelegraph that he used NiceHash with his gaming PC to mine Bitcoin for about two months, but soon decided to abandon the idea because of the continuously high workload and rising GPU prices:
“I was able to make about $120 USD if the price of bitcoin had stayed at $15,000. With bitcoin currently around $4,000 USD it may be profitable, considering I was getting free electricity. However, because of the strain on the system, plus the overinflated prices of GPUs, I wouldn’t do it anymore.”
Tom specified that, being a resident advisor in the dormitory, he was able to make inroads with the local maintenance assistant. That allowed him to make sure that his floor had sufficient air conditioning to host a miner:
“It would be impossible to tell if I had my PC on all the time, especially since it was a huge, 11- story building.”
Tom’s room felt chilly during the winter months, so additional heat was actually useful. He said, “I just used my computer instead of a space heater.”
However, sometimes, mining students get exposed. Ken (a pseudonym to maintain confidentiality), an Arizona State University undergraduate who studies applied physics, showed Cointelegraph a screenshot of an alleged email from a university staff member. In it, Ken was being informed that the security team “has detected a coin miner program” on two of his devices.
“We would like you to either uninstall the programs, or run a virus scan in the event that you were unaware of these programs, as this is indicative of malware on your devices,” it stated.
Ken indeed was using NiceHash at the time, as he confirmed to Cointelegraph. After consulting with fellow miners on the r/BitcoinMining subreddit, he decided to use a virtual private network (VPN) whenever he was mining, saying: “I already had one, and I made sure that it turned on startup and the internet kill switch was active so they couldn’t track me.”
However, once Ken had managed to mine “a couple of hundred dollars,” NiceHash was hacked, and the student lost a large percentage of his funds, as he hadn’t yet moved them to a private wallet.
Chris Partridge is a computing security graduate from the Rochester Institute of Technology (RIT), who also mined cryptocurrency during his time in college, starting in 2015 and continuing until mid-2016. “I was curious about Bitcoin and that seemed like a good way to learn,” he told Cointelegraph. His setup was a bit more advanced compared with Tom and Ken, as he used “a couple” of Antminers, a BFL Monarch and a Prospero X1. Consequently, the amount of heat produced by his equipment was significantly higher:
“None of them [the mining rigs] were remotely current-gen even at the time, and all of them were heavily underclocked/undervolted/modded to be cooler and quieter. Living up in Rochester [New York), where it was freezing all the time, we had our window open 24/7 (even during blizzards!) and the miners pointed out into it, or else it became too hot in our living areas very quickly. It was a bit of a strain for my roommate and I, but he was a good sport about things.”
Partridge said that he was never caught in the act, despite a couple of room checks that occurred due to unrelated reasons. “Nobody seemed to care,” he said. “Especially since it was a very small operation — I suppose I came off as a bit eccentric, but no further investigation was prompted.”
Even though it wasn’t a profit-focused endeavor for the former RIT student, he walked away with around 0.4 BTC, which he then sold for a hefty sum of $6,000. The earnings came at just the right time: Partridge needed cash that would carry him through to an internship. After spending the money on general living expenses for a few months, he even had some left over for nonessential shopping:
“I also bought a Roomba, because if there’s anything I’m going to spend profits from magic internet money on, it’s a Roomba.”
There are even larger success stories: Marco Streng, co-founder and CEO of Genesis Mining, a large cloud mining company whose farms are located across several countries, claims that he essentially started his business out of a dorm room back in 2013. He declined to specify which university he went to, however, saying that it’s “the same anywhere in the world.”
“There was this kind of sauna atmosphere in my 10-13 square meter room, and the noise was really loud,” he told Cointelegraph. “We tried to mitigate it by putting some pillows over the miner and put it closer to the window to cool it down.”
Streng said that, while the uproar was attracting attention, his neighbors didn’t seem disturbed. “I mean, I found it annoying, but it was a trade-off for me,” he added. “I was excited, passionate, and there was an economical aspect — it created some money.”
Around 2014, Streng realized that the local student community had started to actively set up their own mining rigs across campus. “The rumour was spreading, so it [mining] got some traction,” he recalled. “The electricity bill of the student dorm went up quite significantly.”
When crypto market began growing and Streng’s activity became increasingly profitable, he realized that he could run “a few thousand of those machines,” establishing a mining operation on an industrial scale.
“That lead to the creation of Genesis Mining, one of the largest mining companies,” Streng told Cointelegraph. “I’m really happy that I did that in my dorm and found that opportunity. Otherwise, it would never have come this far.”
While no university seems to have a specific policy in regard to cryptocurrency mining on its premises, in January of 2018, Stanford University issued a public warning against crypto mining on campus, arguing that school resources “must not be used for personal financial gain.” The warning also cited the university’s chief information security officer:
“Cryptocurrency mining is most lucrative when computing costs are minimized, which unfortunately has led to compromised systems, misused university computing equipment, and personally owned mining devices using campus power.”
Indeed, many universities seem to prohibit the use of their resources for personal financial gain — including the ones observed in this article. RIT’s code of conduct for computer use, for instance, states the following:
“No member of the RIT community may use an RIT computing account or any communications equipment that is owned or maintained by RIT to run a business or commercial service or to advertise for a commercial organization or endeavor. […] Consistent with other specific policies, members of the RIT community should not waste university resources or use them for personal benefit or for the benefit of a non-university entity.”
However, not having specific rulesets for cryptocurrency mining might actually induce tax problems for educational institutions who (unwillingly or not) host such activity on their premises. As Selva Ozelli, international tax attorney and CPA, told Cointelegraph:
“Given that electricity is usually included in a student’s tuition or rent, Universities would need to set policy as to whether they will allow cryptocurrency mining on campus premises or not or whether students should be charged extra for electrical expenses relating to cryptocurrency mining. If Universities do not set proper policy in this regard, they could subject themselves to tax problems. Because section 4, Q&A-8 of Notice 2014-21 states that cryptocurrency mining which is treated as a service activity should be treated as ordinary income in the year it is mined, and the expenses of mining — including electrical charges — deducted as incurred based on the matching of income and expenses.”
From an ethical point of view, the situation is also quite complex, and opinions vary even among those who benefited from mining on campus.
“I pay to have the room and since no explicit details in my contract punished overuse of electricity I figured I was fine, especially since I would have had to use a space heater anyway because students couldn’t control the temperatures in their own rooms,” said Tom from the University of Mississippi, denying that he was in the wrong for setting up a mining rig in his room.
Rochester Institute of Technology’s Partridge was more critical. “I don’t believe it’s ethical to mine at scale on college campuses,” he told Cointelegraph. “The electricity being ‘free’ to me isn’t the same as the electricity being free, unfortunately.” The former RIT student recalled that he burned around $200 while mining in his dormarty, “assuming they get pretty solid commercial electrical rates.” He continued:
“Most people who claim that mining on campuses is ethical don’t take into account an important second variable: this is not without risk. Student housing isn’t designed to accommodate large quantities of electronic equipment, and couldn’t suppress or otherwise contain electrical fires – that could easily lead to massive property damage and loss of life.”
Streng, the Genesis Mining CEO, believes that, while students can contribute to the decentralized network via mining, they shouldn’t exploit the resources of their universities and inform the local administration, if possible. “I think it’s great if a student wants to do it [mine in his/her room] and is excited about it,” he said. “But of course they have to pay their bills.” He continued:
“The new side-effect of the whole cryptocurrency idea is that someone living in a small room can turn electricity to money. There are many institutional setups — not only in education — when someone is paying for the electricity of a specific area, while residents have to pay a flat contribution no matter how much electricity they consume. I think those providers should be aware of these possibilities now and that people can make use of them. They should respect that and draft it into their agreements.”
Therefore, if universities continue to largely overlook mining on their premises, the phenomenon is likely to stay, allowing students to at least earn some beer money.
“I can’t imagine any college student is going to turn down $30/month or even $5/month,” said D’Aria of Bitpro. “Even though they’re dealing with small amounts on an individual basis, dorm room mining is introducing cryptocurrencies to a whole generation of young adults. It doesn’t take them long to figure out how easy and useful it is to use something like Ethereum to split the cost of a 12 pack of natty ice — particularly when there’s no credit card statement their parents can keep an eye on.”