sidechains

Lack of scalability has been one of the biggest problems of blockchain technology since the release of Bitcoin back in 2009. Slow transaction speeds, high fees, and congestion have become major stumbling blocks, but sidechains may offer a solution. 

In this piece, we cover everything you need to know about sidechains, from the basic definition to the evolution of this technology to potential applications for blockchains. 

We not only discuss why sidechains are important from a technical perspective but also why they are an integral part of driving real-world uses of blockchain technology.

Sidechains, Explained in Simple Terms

Think of it this way. A blockchain can be compared to a highway for vehicles. While one lane may be enough for a steady flow of cars, it probably can’t support a surge of hundreds of thousands of vehicles. 

If there are thousands of cars on the highway, it’s likely to result in slower travel times and increased congestion.

The best way to solve this is by creating a better infrastructure for travel. 

Now, apply this concept to blockchain technology. The intent of any blockchain is to be able to easily send and store all user data (for example, transactional data of cryptocurrencies, data for dapps and smart contracts, and more). 

The biggest issue, however, is that each blockchain has traditionally been reliant upon one lane of traffic – the mainchain. 

By creating multiple roads that connect to the main road, we can create a more efficient transportation system. Similarly, this concept can be used in blockchains. 

Sidechains are mechanisms that allow for data processes to take place off the mainchain, all while being connected to the mainchain if needed. Just as a car can travel back and forth from the main road to a side road, so can data between a blockchain’s mainchain and its sidechains.

sidechains 2
Credit: CryptoIQ

The difficult part is moving assets (like bitcoin) from the mainchain to a sidechain securely, while proving the bitcoin is yours.

Done correctly, however, it’s theortically possible to make faster transactions via a sidechain, or even swap bitcoin to ether without using an exchange.

Why Are Sidechains Needed?

At first, blockchains didn’t technically have a major infrastructure issue. However, as traffic increased, we began to see these issues become more apparent. 

Take the Ethereum blockchain, for example. As more people started using CryptoKitties and other dapps, network fees increased.  Scalability problems became more obvious.

Similar to roads during rush hour traffic, blockchains were (and still are) mostly unprepared to deal with an increase in users and transactions during peak usage times. This became particularly obvious in December 2017. 

More People Using Blockchain = More Congestion

Around December 2017, we saw a range of factors expose the scaling problem of blockchains:

First, more people were buying cryptocurrencies due to a bull market. 

Second, new dapps that used large amounts of data were arriving on the scene. 

Third, there was a rapid increase in the number of initial coin offerings (ICOs) that utilized existing blockchains to issue new tokens. 

All of this culminated in record highs for blockchain transaction fees. Blockchain project teams certainly knew that this problem could happen but didn’t necessarily know the extent of the impact. 

Ethereum transaction fees

That’s why research has been going on to develop a variety of scalability solutions. Sidechains have been discussed for quite some time but weren’t yet capable of providing the solution that was needed at that time.

Although we haven’t seen congestion like December 2017 since, blockchains need to prepare for the future.

For instance, projects have to consider how another bull market could once again expose scalability issues. 

Additionally, we should consider the potential for new blockchain innovations (beyond just cryptocurrencies). These will require larger amounts of data, potentially beyond the limits of mainchain technology. Sidechains are one proposed solution to expand the types of apps that blockchains are capable of running.

Why Haven’t Sidechains Been Adopted Sooner?

In blockchain technology, all sorts of advancements have been made only in the last couple of years. So why do some integrations (i.e. addition of sidechains) take longer than others? This is a valid question. 

The best answer is that implementing newer technologies comes with big risk. Look at blockchain platforms like Ethereum and EOS. Not only do they feature their own native cryptocurrency but they also support dapps and tokens from other projects. 

By not considering all of the current and future risks of making a big change like sidechain integration, any given blockchain risks not only its own project but also hundreds or thousands of others.

In theory, sidechains can ensure much greater scalability without risking the security of the mainchain. In reality, this hasn’t yet been 100% proven. 

The “Scalability Trilemma”

Ethereum founder, Vitalik Buterin, summed things up when he outlined the “scalability trilemma.”

vitalik buterin scalability

The trilemma points to three things key to blockchain technology: security, decentralization, and scalability.

Most solutions can improve one or two of those things, but usually at the expense of one of the others. In other words, if you want scalability, you probably have to sacrifice security and/or decentralization.

This is the case with sidechains.

Sidechains have been notoriously difficult to implement because they rely upon SPV (simplified payment verification proofs). With SPV proofs, it’s possible to prove ownership of funds when sending from a sidechain to the main chain. 

However, without SPV proofs, there is a possibility that, when users or miners move their money back to the main chain, they could take more cryptocurrency funds than they really own in some scenarios. 

According to some research, SPV proofs are also subject to a few different types of attacks, which creates a potential security risk for the entire blockchain. This is why, “trusted sidechains”, which are more centralized sidechains run by a few blockchain companies, have dominated sidechain implementation as of 2018. 

Since the goal of most blockchain project teams is to move towards a more decentralized system, relying upon a trusted/centralized sidechain would run counter to their core principles. 

At the same time, scalability is also a top priority. Still, development teams have been reluctant to accept an either-or scenario where scalability is achieved by sacrificing decentralization.

Progress in Sidechain Technology

The discussion of how to make blockchain technology more scalable has been going on since 2012. 

Sidechain-specific research has been going on since around 2014. For the most part, sidechains remain in the research and development phase even in 2018. 

This is because researchers have felt that the technology still lacks certain key components needed for real-world implementation. However, this has begun to change just in the past year or so. 

In October 2017, Aggelos Kiayias, chief scientist at IOHK, made a technical breakthrough that could help propel sidechains into the next stages of adoption. In a scientific paper called “Non-Interactive Proofs of Proof-of-Work”, Kiayias explains the increasing importance “to be able to efficiently handle multiple blockchains by the same client and reliably transfer assets between them.” 

In this research, Kiayias outlines the world’s first Proof of Proof-of-Work. The research shows that this proposed design could use SPV proofs that are able to prevent many of the normal attacks. 

From a security standpoint, Kiayias’ work is a major milestone for not only the adoption of greater scalability within one blockchain but also across multiple blockchains.

Bitcoin, Ethereum, EOS: Cross-Blockchain Communication

In the paper, Kiayias describes an ICO which distributes tokens issued on one blockchain but allows paying for them using coins in another blockchain. 

Essentially, using this research to build a real-world application could allow for the possibility of cross-chain communication. 

For instance, in the future, we could see interoperability between different blockchain networks (i.e. Bitcoin and Ethereum, EOS and NEO, or a variety of other combinations).

This is one of several ongoing efforts by around the globe to research how to improve the performance of sidechains. Here are some more important examples.

3 Projects Focused on Sidechain Deployment

Liquid

Blockstream Liquid side chain

Developed by Blockstream, this project was actually the first commercial sidechain on the market. It has already been implemented by a few different cryptocurrency exchanges. With Liquid, every transaction uses real bitcoin, pegged via a sidechain to the Bitcoin blockchain. This solution also ensures that users are always dealing with real, verifiable assets. 

This project uses a federated sidechain – a private blockchain with different features, capabilities, and benefits than the main Bitcoin blockchain. 

According to the Liquid website, Liquid will never be as decentralized as Bitcoin. However, it is designed to remove control from any single party, geographic location, or political jurisdiction. 

It also allows for increased privacy via the “confidential transactions” feature, which hides transaction amounts from everyone except for the parties directly involved in the transaction itself.

Plasma

This is a solution that uses a series of smart contracts that run on top of the Ethereum blockchain. Plasma’s goal is to scale Ethereum to be able to handle millions (or even billions) of transactions per second, compared to the current amount of only 10-15. 

This is possible because Plasma eliminates the need for every node on the network to verify all transactions as they occur.

Altcoin.io is one decentralized exchange that has created its own Plasma-like sidechain architecture to ensure that transactions are trustless and secure, but still extremely fast. 

Projects like Ethereum and OmiseGO are driving the research, development, and implementation of Plasma as a scalability solution. Ethereum’s Vitalik Buterin said in May 2018, 

“So if you get a 100x from Sharding and a 100x from Plasma, those two basically give you a 10,000x scalability gain, which basically means blockchains will be powerful enough to handle most applications most people are trying to do with them.”

Rootstock

rootstock

What sets Rootstock (RSK) apart from many other proposed solutions is that it is a drivechain/sidechain hybrid two-way peg designed to port Ethereum’s smart contract functionality to Bitcoin without impacting the main blockchain whatsoever. This is a significant project because it would be the first project to bring any sort of smart contract functionality to the Bitcoin blockchain.

In 2017, crypto security expert Sergio Demian Lerner released information about Lumino, which is a compatible version of the Lightning Network built on top of Rootstock.

During this process, Lerner introduced a new protocol called the Lumino Transaction Compression Protocol (LTCP), which forms the transaction layer to the Lumino network. The purpose of LTCP is to create far smaller bitcoin transactions to enable as many as 100 transactions to be processed by the network every second. That’s six 6-to-33 times higher than Bitcoin’s 2018 transaction limits. 

For those concerned with potential privacy concerns, Lerner suggested in 2017 that users could add greater privacy to transactions by techniques like creating new accounts with each transaction or using tumbling services to obfuscate (hide) the origin of their coins.

Future Possibilities for Sidechain Technology

The possibilities for sidechain implementation are continuously increasing with research advancements. Sidechain technology is not just important from a technical perspective. It can enable blockchains to achieve more transactions per second while also reducing transaction fees. 

Furthermore, it is one of the most vital components to driving blockchain capabilities far past what is currently possible today. When we look at decentralized applications in 2018, many are still quite rudimentary. 

A good comparison is to think of blockchain in 2018 kind of like internet connectivity in the early 2000s. 

It was still much better than the 1990s, for example. Still, there was a lot to be desired. Back then, there were no easily-accessible mobile technologies (i.e. 5G networks), so devices couldn’t connect from anywhere. 

Connection speeds were also significantly slower. Similarly, blockchains in 2018 are limited in what their services they can do. However, through the proper implementation of sidechain and other scalability solutions, any given blockchain could potentially run numerous types of advanced applications (for example, AI, IoT, and more) that require large amounts of data. 

This could empower applications that are merely concepts in 2018 as well as future applications that aren’t even in the theoretical stages yet.

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bitcoin hack how to avoid

A small Canadian bitcoin exchange, MapleChange, was reportedly hacked in the early hours of Sunday morning, which they blamed on a “bug.” 

The little-known exchange says it is in “the process of a thorough investigation,” but “they cannot refund anything.”

In other words, if you trusted your money to MapleChange, you may not get that money back.

Maplechange hack

Hack or Exit Scam?

The suspicious nature of the announcement didn’t go unnoticed by commentators. Joseph Young, a contributor to Forbes and CoinTelegraph, called it an “exit scam.” 

Exit scam defined: An exit-scam is a shady technique in the crypto universe whereby a small, unregulated company lures money from people (usually through an exchange or an initial coin offering, ICO) before stealing it and removing all trace of the company.

The red flag came when MapleChange deleted all its social media accounts, an unnecessary move when depositors were desperate for more information.

While the speculation continues over the hack, we thought it best to put together three ways to make sure you never lose your money in an exchange hack or scam.

1. Don’t Keep Your Cryptocurrency on an Exchange, Period

All the biggest bitcoin hacks in recent history have taken place on an exchange. The Mt. Gox hack in 2014 was, of course, the most high-profile. $450 million was stolen by hackers before the exchange went bankrupt. At least four exchanges have been hacked this year alone.

Crypto exchanges are a prominent target for attackers, simply because they hold so much cryptocurrency. Many have security weaknesses that can be easily exploited. Many others are not regulated or protected by the governing authorities.

But most importantly, if you trust your crypto to an exchange, you have no control over those cryptocurrencies. It is entirely at the risk of the exchange and the safety precautions they have taken.

Instead, you should move your bitcoin or crypto off the exchange and into your own, personal cold storage.

Cold storage means keeping your cryptocurrencies offline, so they can’t be hacked. The best option is a specialized hardware device (Ledger or Trezor) are the best-known options.

ledger nano cold storage bitcoin wallet plugged into a laptop

Further reading: What is Cold Storage for Bitcoin?

2. Criteria for Choosing an Exchange: Reputation, Regulation, Insurance

Of course, we can’t stay clear of exchanges entirely. We need them to buy and sell cryptocurrency. But before you transfer any money, do your due diligence and research.

The first step is looking at reputation. Some quick research on MapleChange, for example, would have turned up very little information – a warning sign for investors.

On the other hand, trusting a major, high-profile exchange such as Coinbase or Gemini, while not 100% safe, is a more sensible solution. These giant exchanges are better regulated and have superior security features.

The likes of Coinbase and Gemini also go to great lengths to verify its users, which vastly reduces the likelihood of fraud or security breach.

Some exchanges are now fully insured, too. Gemini recently announced insurance coverage for its exchange and custody services. If you keep your money at Gemini, it is protected should the worst happen. 

Further reading: Cryptocurrency Insurance: What is it? (And Do You Need It?)

3. Holding Money on an Exchange? Choose One with Cold Storage

Sometimes, of course, holding money on an exchange can’t be avoided. If you are trading regularly, you may need quick, instant access to your money on an exchange.

If that’s the case, be sure the exchange keeps 95% or more of funds in cold storage. Cold storage keeps crypto offline and significantly more secure from hackers.

This advice was echoed by Binance founder, Changpeng Zhao, on Twitter in the wake of the MapleChange attack.

CZ binance cold storage advice

Coinbase, for example, holds 98% of all funds in cold storage. The remaining 2% are insured, so the risk of losing your money is much lower.

Conclusion

You’ll probably hear a lot about bitcoin’s safety and security in the wake of this hack. But it’s important to remember that bitcoin and its underlying system, blockchain, has never been hacked.

Hacking and theft only occurs through weak exchanges and poorly maintained wallets. In other words, storing your bitcoin safely is the most important decision you can make.

To sum up, always keep your cryptocurrencies offline, in cold storage, ideally on a hardware device you own, not an exchange. If you do use an exchange, ensure it is reputable, regulated, insured, and offers cold storage options.

Stay safe out there.

Note: this article was edited on 29th October. A previous version claimed that $6 million was stolen in the hack before the exchange in question re-opened communications and confirmed otherwise.

Further reading: 8 Cryptocurrency Best Practices (Keep Your Crypto Safe!)

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blockchain island Malta

When the market-leading cryptocurrency exchange Binance announced in March it was moving its operations to the Mediterranean island of Malta, it made the industry sit up and take notice. The move raised a multitude of questions and a few proverbial eyebrows.

What makes Malta an attractive hub for cryptocurrency companies?

Why would a major exchange such as Binance go through the arduous process of setting up shop in such a seemingly isolated place at the other side of the world?

Does Malta make special exemptions and concessions for crypto-based firms operating on the island?

What’s the deal?

Binance Moves its Operations to Malta

binance malta blockchain island

Malta was once primarily known more for its stunning natural features such as its dominating cliff faces, its crystal blue waters and its world-class dive spots. These days it is becoming known as Blockchain Island and the home of major crypto exchanges, investment firms, and blockchain tech startups, with Binance leading the exodus from Asia and beyond.

Chased Out of China

Although originally founded in China, Binance has since become locked in legal disputes across not only its homeland but also in Japan and Hong Kong.

As crypto regulations tighten across Southeast Asia for exchanges as well as ICO projects, Binance was one of seven crypto-based firms that received a warning letter from the Securities and Futures Commission in Hong Kong not to trade digital assets.

Regulatory crypto crackdowns across Asia fueled Binance’s decision to seek pastures new. The crypto exchange decided to move their whole operation to Malta. And they also suggested that others should follow suit, which they did. When first announcing their move, Binance CEO Changpeng Zhao made a statement on his Twitter feed that said:

“Malta is very progressive when it comes to crypto and fintech. We think it is a good place for other crypto businesses to look into as well.”

 

Binance CEO cz tweet about Malta

The following message from the Maltese prime Minister Joseph Muscat on his Twitter account welcoming Binance gives a fascinating insight into the difference in attitude between Blockchain Island and the current restrictive crypto climate across Asia.

Malta prime minister tweet Binance

Other Crypto Companies Now Operating in Malta

When a company as large and integral to the crypto industry such as Binance moves its operations to Malta and encourages others to do the same, that’s exactly what happens.

Other massive crypto exchanges such as Bittrex and OKEx are also running some or all of their operations out of Malta. The list of blockchain-related companies continues to rise as crypto investment firms such as Neufund and Coinvest have also made the move.

From blockchain startups to ICO platforms Malta is now a melting pot of crypto-related businesses such as Decentralized Ventures, STASIS, Loci Nexus, the non-profit organization Bitmalta, nChain and the Maltese crypto startup Learning Machine, just to name a handful.

Malta - blockchain island

Why Does Malta Appeal to Crypto Companies?

The obvious reason why so many crypto companies are making Malta their home is largely due to the favorable digital currency regulations on the island. On June 4, 2018, Malta became the first nation to create official regulations for crypto operators.

The Maltese parliament passed three bills that established clear and concise regulatory framework for cryptocurrencies, blockchain technology and distributed ledger technology (DLT). The three Maltese crypto regulatory bills are as follows:

Malta Digital Innovation Authority Act (MDIA Act)

This act was created to establish the Malta Digital Innovation Authority and can certify DLT platforms. This law is in place to focus largely on internal governance and to outline the Authority’s responsibilities to certify distributed ledger platforms to ensure authenticity and the legal compliance of those wishing to make use of a DLT.

Innovative Technology Arrangement and Services Act (ITAS Act)

This bill is used to set up crypto exchanges and other crypto companies. It’s called the Innovative Arrangement and Services Act (ITAS Act) and is also primarily created to deal with DLT certification and platforms.

Virtual Financial Assets Act (VFA Act)

The third and final bill of this three-pronged attack focuses on regulating ICO projects, wallet providers and exchanges. The Virtual Financial Assets Act (VFA Act) was created to establish a regulatory regime that can keep the crypto industry in Malta in check.

The most interesting factor in regards to the three bills is they can be applied to a wide range of industries and technologies and are not necessarily anchored directly to the crypto or financial sector in Malta.

“We Understood Early on That the Serious Operators Wanted Legal Certainty”

When talking about new regulations, the Junior Minister of Financial Services, Digital Economy and Innovation, Silvio Schembri said:

Malta representative“When we started looking into what was needed for the blockchain industry to flourish, we understood early on that the serious operators wanted legal certainty. As of now, operators are functioning in jurisdictions of legal uncertainty. Operators fear that one day a government in that particular legislation will tell them they aren’t within the law – even though there are currently very few laws in place. This is creating legal uncertainty and we wanted to change this

 

Clear, concise, common sense and straightforward thinking are the foundations of Malta’s cryptocurrency regulations and the main reason why this picture-perfect Mediterranean island is now the most desirable destination in the world for all manner of crypto-related businesses.

A “Calculated Risk”

Maltese Prime Minister Joseph Muscat admits that its new laws are a “calculated risk” by fast-tracking blockchain companies and removing bureaucracy. For the moment, however, it appears to be paying off.

Is Malta the Future Epicenter for Cryptocurrency in Europe?

A recent report by a blockchain investment company called Fabric Ventures has shown a massive shift in worldwide ICO token sales. Europe is now leading the world in crypto-asset token sales with $4.1 billion in 2018, which vastly dwarfs Asia with $2.6 billion and the USA with a total of $2.3 billion.

As Europe leads the way for crypto and blockchain technology adoption, could Malta become the future epicenter for blockchain and cryptocurrency in Europe, which ultimately means the world?

Malta might be one of the tiniest nations in Europe, but small things can sometimes cast a big shadow. With a growing reputation as the world’s first blockchain island, easy-to-follow regulations and a welcoming attitude that doesn’t just accept blockchain and crypto, but actually encourages them, it’s no wonder that megalodon crypto exchanges Binance has made Malta its home.

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Bitcoin stable vs tech stocks

How many times have you heard the bitcoin is too volatile? Too dangerous to invest in? Well, over the last 20 days, bitcoin has proven more stable than Netflix, Amazon, and Nvidia stocks. 

Bitcoin is only slightly more volatile than Apple – the largest company on the planet, and the Nasdaq 100 index as a whole.

The data, reported in Market Watch, refers to the 20-day historical volatility (HV). The measure is used by traders and investors to identify particularly volatile assets.

Bitcoin’s 20-day HV is at 31.5% as of October 22nd. Compare that to Amazon’s 35%, Nvidia’s 40%, and Netflix’s 52%.

Asset20-day historical volatility
Netflix52%
Nvidia40%
Amazon35%
Bitcoin31.5%
Apple29.3%
Nasdaq 10024%

Stock Market Correction at Play

Admittedly, the Nasdaq is now in correction mode (down 10% from its high), so tech stocks are fluctuating more than usual. At the same time, bitcoin has settled in a small range with low volume.

We should also point out that bitcoin’s 20-day HV is rarely so mellow. In January, when bitcoin prices slipped from their $20,000 highs, the 20-day HV hit 140%.

Fast forward to today and bitcoin volume is approaching yearly lows. With lower volume comes less explosive market movements. Many have suggested this quiet period is one of consolidation for bitcoin, a time of indecision which some investors are using to build their positions.

Bitcoin’s Relationship with Stocks

Bitcoin’s recent stability means it could theoretically provide an alternative to stocks during volatile market movements.

However, bitcoin isn’t yet acting as the “store of value” it has often been touted as during a stock market decline. If that were the case, we’d see a large spike in bitcoin volumes as the tech stocks fluctuate. 

We’re not seeing that. Instead, traders are still turning to traditional “safe havens” like gold.

That may change in the future as Wall Street giants like Fidelity and J.P. Morgan slowly build infrastructure around bitcoin. With more institutional access to cryptocurrency markets on the way, we are more likely to see this dynamic come into play.

For now, take heart in the fact that your money is more stable in bitcoin right now than Amazon stock. 

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nouriel roubini

Welcome to the weekend, folks. Grab a coffee and let’s recap the biggest news stories of the week in cryptocurrency and blockchain.

“The Mother and Father of All Bubbles”

“Dr. Doom” Nouriel Roubini is a New York economist who famously predicted the 2008 financial crisis.

Now he’s turning his attention to cryptocurrency, calling it the “mother and father of all scams and bubbles” in a statement made to US Congress.

His meandering statement also takes on blockchain, referring to it as a “glorified spreadsheet.”

Nouriel Roubini’s soundbites are damning and headline-grabbing. But they often ring hollow when we investigate it further. Here are some of the things he got wrong:

1. “Paying $55 dollars of transaction costs to buy a $2 coffee cup is obviously never going to lead Bitcoin to become a transaction currency.”

Roubini is referring to December 22nd, 2017 when the bitcoin transaction cost briefly hit $55. However, this was the peak of bitcoin mania. To use this as a broad statement on transaction fees is misleading.

In the last three months, the bitcoin transaction price has barely peaked above a dollar. And we recently saw one investor move 29,999 bitcoins (worth $194 million) with a transaction fee of just $0.1.

bitcoin transaction fees

Congestion and scalability is, undoubtedly, bitcoin’s largest challenge, but Roubini is sensationalizing the facts based on one day in bitcoin’s ten-year history.

2. Blockchain is “no better than a spreadsheet or database”

Actually, it’s significantly, objectively better.

A spreadsheet or database is almost always controlled by one person or entity. It can be manipulated and falsified. It can be easily hacked or stolen because there is usually one point of failure.

A blockchain is a spreadsheet that lives on thousands of computers all at once. It’s updated in real-time. It’s not owned or controlled by any one person, which means it can’t be hacked or manipulated (because the entire community would see it happen and refuse to accept it).

I say it’s objectively better because the bitcoin blockchain has never been hacked. (Only things built to interact with it, like exchanges, have been compromised).

3. Bitcoin has “now gone bust”

Actually, bitcoin has suffered much larger percentage drops in price and survived.

The first bitcoin crash in 2011 wiped out 93% of value. The second took 70% off the price. The third took 83%.

bitcoin-selloff-crashes

2018’s 65% decline might have involved a much higher market capitalization, but big percentage falls in bitcoin is nothing we haven’t seen before. 

Bitcoin recovered from every previous crash without “going bust.” To say bitcoin has gone bust this time around is to underestimate the strength of the community, not to mention all the institutional support slowly building around it.

4. Bitcoin’s “only real use has been to facilitate illegal activities such as drug transactions, tax evasion, avoidance of capital controls, or money laundering”

What about the people in Venezuela using bitcoin to free themselves from 1,000,000% inflation in fiat currency?

How about the Cypriots that used bitcoin when the government confiscated the money in their bank accounts?

Of course, bitcoin has been used for drugs and money laundering. But bitcoin has also empowered people, which is perhaps its most important use-case so far.

Bitcoin’s Spike, Tether’s Decline

Bitcoin recorded a rapid 10% spike on Monday. At the same time, the world’s largest stablecoin, Tether, fell from its $1 peg to as low as $0.85.

Tether is under renewed criticism that its tokens are not fully backed by real dollar reserves. The skepticism intensified on Monday after crypto exchange Bitfinex was rumored to be on thin ice financially.

Both Tether and Bitfinex are run by the same CEO, so concerns about Bitfinex lead to worries over Tether’s solvency.

Read more: What is Tether? The Controversial Stablecoin?

0x Listed on Coinbase, Price Soars 70%

0x (ZRX) became the first ERC-20 token to be listed on Coinbase this week. 0x is a promising decentralized exchange platform that powers the exchange of tokens, loans, gaming items, and just about anything else.

0x coinbase

ZRX is available to those using Coinbase’s premium service, Coinbase Pro.

The price of ZRX soared 70% on the news but fell back 15% later in the week. The project’s founder and CEO urged caution on the price, saying: “This is probably a good time to remind everyone that 0x is a highly experimental technology that is built on top of another piece of highly experimental technology.”

0x founder tweet

Weekend Reading

Ethereum eBook – We released our second deep-dive eBook this week: Absolutely Everything You Need To Know About Ethereum. It’s completely free to download (no email address required).

8 Cryptocurrency Best Practices – From safe storage to backups, this guide teaches you how to keep your crypto safe.

Do You Need Cryptocurrency Insurance? – If you own crypto, it’s probably not insured. Crypto exchange Gemini is trying to change that, but what else can you do to stay safe?

That’s all for this weekend. We’ll see you back here bright and early on Monday morning.

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