Ledger secures $75m for crypto security

The demand for secure crypto storage is almost as high as the demand for the assets themselves. Only a few companies at the moment are offering solid secure offline storage devices for cryptocurrencies and they are selling out like hot cakes. Ledger is one such company and it has just secured its second round of investments which will go into research and development and up-scaling operations.

In a press release on the company blog yesterday Paris based Ledger announced that Series B of funding has now been completed with 75 million USD secured in investments. The first round of investments was held in March 2017 where $7 million was raised. Leading the way was London based capital markets firm Draper Esprit whose CEO Simon Cook said;

“Blockchain, as evidenced by crypto assets, is a truly revolutionary technology. Security will be paramount to its success and we believe that Ledger has built the world’s best security platform to manage private keys for all blockchain and crypto asset applications. This is a global company for a global industry and we have built an international syndicate through the Draper Network to support the team in their huge ambition.”

A number of other venture capitalist partners added to the stash which included Draper Associates, Draper Dragon and Boost VC, as well as FirstMark Capital, Cathay Innovation, and Korelya Capital.

Eric Larchevêque, Ledger CEO, was pleased with the outcome;

“We initially designed our Ledger hardware wallet as an enabler for the blockchain revolution. Three years later and with this Series B, we are reaching a significant milestone in our path to build a technological giant in the promising space of cryptocurrencies. These funds will be used to keep investing significantly in R&D while scaling our operations and deploying our teams globally. I am delighted to bring on board Draper Esprit and a truly global group of investors who will support the company as it grows rapidly.”

Further services are in the pipeline including the Ledger Vault which aims to enable banks, funds and offices to secure and manage their crypto assets. The company has sold over a million hardware wallets around the world and demand is at an all-time high. They have currently sold out and have a pre-order notice on the website for the next batch on March 26.

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Crypto markets are no stranger to volatility however this past week has been particularly painful. The total market capacity of all cryptocurrencies fell from $740 billion to $420 billion in just four days, a brutal drop of over 40%. At the time of writing markets appear to be showing signs of recovery and are on the way back up again with over a hundred billion dollars added back since yesterday.

Speculation on the cause of the crash is rife but it would be more pertinent to simply look at historical charts to see if there is a pattern. It turns out that this has occurred every January since 2014. In what appears to be a natural cycle in the markets the price of Bitcoin and its siblings has dropped significantly at this time of year for the past five years at least (source: Coinmarketcap.com).

This year’s market slump has been amplified by the fact that Bitcoin and cryptocurrencies are now household names, covered by mainstream media, which is adept at disseminating fear, uncertainty and doubt. Big names such as Reuters, CNBC and Bloomberg have repeatedly got things wrong about outright crypto bans in South Korea which simply haven’t happened (yet). FUD has fueled the fires and panic selling from largely inexperienced and new participants to cryptocurrencies has created a wave of fear over the entire market collapsing. As one famous investor once said; “be fearful when others are greedy and be greedy when others are fearful.”

Crypto is not going to die, markets are cyclical and need to correct on occasion, and January is as good a month as any. There are a number of possibilities for this; firstly we need to look towards Asia where a large proportion of digital currency trading occurs. Chinese Lunar New Year is typically a time when millions of people have time off work to travel back home to visit family. They need fiat for this so some profit taking and a selloff is expected.

Other factors such as the approach of the end of the tax year when people need to get their financial houses in order could also contribute. Additionally there have been other big influences such as the expiration of the first ever Bitcoin futures contracts this week. All could and probably have affected market sentiment and price action.

Waves of new traders feeding off unsubstantiated Facebook groups and Tweeter feeds trying to make a quick buck have added to the volatility. FUD (fear, uncertainty, doubt) and FOMO (fear of missing out) have created unnatural spikes in altcoin charts and coins come in and out of favour on a shill or a whim. Only when it is realized that crypto has not collapsed and markets do go down as well as to the moon will things settle down. We are still at the emergent stage of what is gearing up to be a mushrooming market and a technological life changer, there is no need to panic!

All cryptocurrencies have taken a battering during the Asian trading session today as a huge selloff has commenced. Fears have escalated over further clampdowns in China and possible restriction in South Korea. The markets have fallen over 36% in the past week and total market capacity at the time of writing was just over $500 billion, down from $830 billion two weeks ago.

Reports have emerged of another crackdown in China, this time on domestic crypto traders and their methods of accessing digital currencies. In its usual authoritarian style the government plans to block access to local and overseas crypto exchanges and prevent peer-to-peer trading. It is not the first time China has clamped down on crypto with a ban on exchanges in September and recent restrictions on power usage for mining operations. Mining factories and crypto exchanges have left China for friendlier countries such as Hong Kong and Japan.

Bitcoin has declined from $14,500 this time last week to just over $11,000 today representing a drop of almost 25% in seven days. Looking at the month it has fallen over 45% and many chart analysts predict it could go as low as $8,000 before showing any sign of recovery.

Ethereum has also fallen from its all-time high of $1,425 last week to just over $1,000 today. A more optimistic view can be seen on the three month chart where ETH is still around 200% up on its trading price of $300 back in early November. Ethereum has performed exceptionally well as many altcoin trades can now be made in ETH instead of BTC which is slower and costlier.

The bloodbath has continued with all other coins and Ripple has taken the biggest beating with a 70% drop from its record peak of $3.80 to $1.20 today. Litecoin has also continued its downward slide from a high of $375 this time last month. The coin has dropped over 50% in a month to $185 where it trades today. Bitcoin Cash which has been holding a $2,500 level for a couple of weeks has dropped down below $2,000 again and even NEO which had a record high of $195 a couple days ago has lost a lot of its gains and fallen back to $135.

Markets have recovered from Chinese clampdowns before and they are all still way up on prices three months ago. Panic selling and FUD seems to be fueling this current slide so those hodling may be inclined to buy the dips and stock up on their favourite cryptos.

Cryptocurrencies by their nature are secure and encrypted however the vehicles we use to store them are still very vulnerable.  Users of digital wallet provider BlackWallet found this out the hard way at the weekend when the web server was hacked resulting in the theft of their stash.

BlackWallet is used to store Stellar Lumens, the 9th most popular cryptocurrency at the moment. Over $450,000 in the altcoin was lifted from wallets on the server in a domain name service attack. The hackers stole almost 670,000 Lumens by spoofing the domain name and redirecting users to their own site. This could then inject code into wallets containing more than 20 XLM to send the tokens to the attacker’s wallet.

The coin was then removed from the BlackWallet website and sent to Bittrex where it was converted into another cryptocurrency and probably moved again. The attack shows how vulnerable web hosts are and that although the wallets themselves remained cryptographically secure, they were still compromised.

The BlackWallet team and other holders of Stellar Lumens took to social media to warn users not to enter their credentials into the rogue domain at blackwallet.co. However for many it was too late and empty wallets were they only thing they found. The owner of the website took to Reddit to post the following message and apology;

“I am the creator of Blackwallet. Blackwallet was compromised today, after someone accessed my hosting provider account. He then changed the dns settings to those of its fraudulent website (which was a copy of blackwallet). I’ve contacted both SDF and Bittrex to ask them to block the bittrex’s account of the hacker. I’ve contacted my hosting provider to disable my account and my websites. I am sincerely sorry about this and hope that we will get the funds back. I am in talks with my hosting provider to get as much information about the hacker and will see what can be done with it.”

Stellar Lumens is a payments based blockchain infrastructure that exists to facilitate cross-asset transfers of value. It is currently trading at $0.54 after a peak of $0.92 a couple of weeks ago. XLM has been touted as one to watch in 2018 providing you don’t store it at BlackWallet. Hacks and crypto thefts only emphasize the importance of security and storing your coins on hardware wallets.

Part of the appeal of Bitcoin is its finite nature and the fact that there will only ever be 21 million of them. This notion has undoubtedly fueled its meteoric price rise of over 1700% in 2017 from around $800 this time last year to over $14,000 at the end of the year. Traders and speculators wanted a slice of the action in what has been the hottest market since the dot com boom in the nineties.

When the first Bitcoin was mined in 2009 by Satoshi Nakamoto there was a long path ahead but it is unlikely that whoever he is envisioned the explosive growth and almost rampant demand there would be for the digital asset in the latter half of 2017. As of January 13 80% of the crypto currency has now been created leaving only a fifth of the entire supply to be mined.

When the circulating supply ticker hit 16,800,000 less than 20% of all the Bitcoin’s ever created remained. The supply cap is hardcoded into the software and cannot be changed, only 4.2 million Bitcoins are left to come which could have a large influence on the demand and price of the world’s most popular cryptocurrency.

Some speculate that the code can be broken but many believe that Nakamoto cracked one of the hardest computational equations known to computer science; the Byzantine General’s Problem. By using a proof-of-work protocol attacking the network becomes costly and time consuming and mining the block increases in complexity with every new one that is added.

At the moment 12.5 Bitcoin’s are awarded to miners for every block added, and as written in the protocol the reward is halved every four years so in two years’ time they will only get 6.25 BTC. It continues to half until it reaches zero in the year 2140 when all of the Bitcoin’s will have been mined. Mining hardware and technology will need to improve to continue the operation in a profitable way.

One concern is that a few whales are hoarding the majority of Bitcoins making market manipulation a very real possibility. According to reports as much as 40% of the total current supply of Bitcoin is owned by just a thousand people. By collaborating they could easily time sales and manipulate price volatility. Supply and demand are the key factors in markets and this one is more exposed to them than most.

Bitcoin is currently trading at $13,250 down over 30% from its record high of just under $20,000 this time last month. Its total market capacity is $230 billion at the time of writing.

There will always be winners and losers in the crypto race, and while most altcoins are still flying high from levels a couple of months ago, some tend to stand out in the crowd. NEO is one of those coins that has remained bullish when the bears have influenced the rest. Last week saw a huge sell off on the back of FUD and fake news out of South Korea. There was no crypto ban in the Southeast Asian nation despite some leading news agencies reporting so. What actually transpired was a ban on anonymous trading accounts to prevent illegal activities such as money laundering.

Altcoins, which are traded heavily in South Korea, fell across the board last week however NEO remained strong and continued upwards. The Chinese Ethereum as it is often called reached a new record high just a couple of hours ago during the Asian trading session. According to Coinmarketcap, which no longer includes Korean exchanges, it climbed to $176, up over 90% from the $92 it traded for at the start of last week.

NEO has weathered the digital storm and remained in a steady uptrend for the past month; it is often seen as being more stable than many of the other altcoins which are frequently pumped and dumped. NEO is traded primarily on Binance with almost 40% share, followed by Bittrex taking around 12%. Total market capacity sits at just over $10 billion at the time of writing with 24 hour volume at $720 million according to Coinmarketcap.

NEO DevCon
While most new projects still use Ethereum as their primary platform NEO is gaining momentum, especially in China where it already has a number of partners. A developer conference has been planned for the end of January in San Francisco where, according to their website, the community plans to come together;

“With multiple sessions and workshops NEO DevCon is bringing the NEO community together for a 2-day conference full of innovative ideas and projects, featuring many top speakers from the Blockchain space.”

Key speakers will include founder Da Hongfei. Further events have recently taken place in Amsterdam and Shanghai where developers and blockchain experts have lectured on the merits of the NEO Smart Economy. At the time of writing NEO was trading at $156, up over 12% on the day.

Last year Bitcoin forked multiple times but the most successful one was Bitcoin Cash providing a rival chain that caused a rift within the BTC community. This year both versions are forking again and two new blockchains are imminent, with World Bitcoin already arriving.

WBTC has already split from the Bitcoin chain at block 503,888. According to its founders it has been created to solve a number of existing problems with Bitcoin. Anyone that has used it is well aware of the transaction fees and the arduous hours it takes to send or receive. World Bitcoin aims to evolve beyond the current blockchain into something far more efficient;

“We call it World Bitcoin because we want to solve the practical problems in the Bitcoin Network from a global perspective and offer more diverse scenarios of applications,”

By creating blockchain 3.0  the founders want to develop a system characterized by an infinite platform of smart contracts, high concurrency, low fees and blocks with upper limits. According to a WBTC Medium post the team said;

“In such areas as financial services, food security and culture and entertainment, concepts in blockchain technology have already been adopted in real life. Just like “Internet +”, “blockchain +” will have a significant impact on the upgrade of the whole industry and WBTC will spearhead that change.”

In total there will be 2.121 billion WBTC, with 21 million being managed by the WBTC Foundation for marketing, building a global ecosystem, and developing new features. Bitcoin users can get 100 WBTC for 1 Bitcoin.

Bitcoin Candy is the second fork due to split from the Bitcoin Cash chain at block 512,666 where it will continue on its own 8Mb block chain. BCH users will get CDY at a ratio of a thousand per Bitcoin Cash. The vision behind this one is a system resilient to quantum computing which many speculate will break the existing blockchain model. The Bitcoin Candy website states;

“As top technology companies like D-Wave, IBM and Intel are ramping up their investment in quantum computing research and development, the age of quantum computing will probably arrive in five to ten years. As such, ECDSA-based cryptocurrencies will become breakable by quantum computers. The CDY team will focus on experimenting with post-quantum signatures to secure cryptocurrencies.”

Blocks will be created much faster, at a rate of every two minutes and a total supply of 21 billion will be available, 10% of which will be pre-mined as an incentive for early developers and adopters. 2018 is likely to see a lot more forks in the Bitcoin ecosystem which continues to evolve beyond its original and somewhat obsolescent from.

Traders in Asia have a huge influence on cryptocurrency markets. So much so that when news comes out of South Korea of police raids on exchanges and a possible all-out crypto ban the markets take a nose dive.

Two of the largest exchanges in the country and the rest of the world were raided by police and tax inspectors this week. This is not the first time the government has tried to quash the fervor for crypto in the Southeast Asian nation. South Korea is responsible for up to 20% of the global trade in cryptocurrencies so what happens there will have a ripple effect on the markets. Evidence of this can clearly be seen during the Asian trading session this morning as all assets are plummeting as panic selling ensues.

The world’s second largest crypto exchange, Bithumb, was raided this week as staff told reporters that they were asked to disclose paperwork to tax inspectors. Coinone was also targeted in the raids in what appears to be another government fear mongering effort;

“A few officials from the National Tax Service raided our office this week. Local police also have been investigating our company since last year, they think what we do is gambling,” 

Reports have also emerged of banks that offer crypto accounts being raided on accounts of crime prevention. The South Korean government is developing a system that seeks to ban the use of anonymous trading accounts according to local press Yonhap News. Under the measure, only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals, while the issuance of new virtual accounts to cryptocurrency exchanges will be banned.

The government is also seeking to strengthen requirements of local crypto exchanges to prevent money laundering and toughen punishments for crimes related to virtual currency according to reports.

As usual, the media frenzy followed and a selloff has begun during the Asian session this morning. News outlets such as CNBC misreporting that South Korea has banned trading does not help the matter. All cryptos are in the red at the time of writing with Bitcoin falling 25% from $17,500 to just over $13,000. Ethereum and Litecoin are also retracting but Ripple has taken the biggest hit with a 50% drop in less than a week.

Clampdowns in Korea will always happen, trading has not been banned and there is no need to panic. Smart traders will use these opportunities to take advantages of dips in a market that has already seen an explosive growth in the past month, not so smart ones will panic sell.

As the crypto-craze continues, canny companies are clamoring to climb aboard the digital train destined for greater profits. Kodak is the latest company to join the crypto club with announcements of its own blockchain platform and digital currency.

Just a day after we read about Russian owned messaging platform Telegram starting its own cryptocurrency another big name joins the fray. Crypto is currently a hot potato and companies are looking for a slice of the pie by getting onboard with the tech that everyone is talking about. The 130-year-old photo company has been looking for a cash injection since its film revival fell flat, and building a blockchain is as good an idea as any.

New York-based Kodak has announced a partnership with Wenn Digital to develop an image rights platform called KodakOne. This will run in tandem with a new photo-centric virtual currency called KodakCoin. The coin will be designed as a payments platform for photographers to get paid instantly and securely via the blockchain when their photos are sold online. Meanwhile, KodakOne will crawl the internet looking for image copyright violations. The concept is to create an encrypted distributed ledger of rights ownership running on the Ethereum platform using smart contracts.

Kodak chief executive Jeff Clarke had this to say;

“For many in the tech industry, ‘blockchain’ and ‘cryptocurrency’ are hot buzzwords, but for photographers who’ve long struggled to assert control over their work and how it’s used, these buzzwords are the keys to solving what felt like an unsolvable problem,”

The ICO will be launched on January 31 but only open to accredited investors from a few countries including the US, UK, and Canada. It was a good day for Kodak shareholders as the price tripled in the hours after the announcement. According to NASDAQ Stock in the Eastman Kodak Company surged from around $3 to just under $10 in six hours. Currently Kodak stock is up over 190% proving that affiliation with the world’s hottest tech at the moment is great for company coffers.

Whether the company actually needs this technology and has a clear vision for its future or whether it was just an attempt to cash in on the current trend in cryptocurrency remains to be seen. What is guaranteed though is that more companies will follow in the coming weeks and months; crypto fervor is at an all-time high.

This year looks like it will be the year of the blockchain. It seems like everyone now needs to have their own cryptocurrency, and a number of tech companies are already looking into research and development. Chat and messaging platform Telegram is the latest on the list.

The native crypto that Telegram plans would power payments on its chat app and beyond, according to TechCrunch. The website also cited sources claiming that the ‘Telegram Open Network’ (TON) will be a new third generation blockchain with superior capabilities to Bitcoin and Ethereum.

ICO Inbound

A boatload of marketing and a huge ICO is planned to generate the revenue for the project. It is estimated to be in the hundreds of millions of dollars, making it potentially one of the largest ICOs to date. Telegram is a well-established messaging platform with 180 million active monthly users, according to Wikipedia. This would make the ICO stand out from the rest, which has been originated from fresh startups, the majority without a viable product.

According to the report, Telegram is considering raising as much as $500 million in the pre-ICO sale. This would put the potential total token value in the range of $3 billion to $5 billion USD. The pre-sale is a minimum cap on investments, usually at a discount to attract bigger players to the table. A general token sale for retail investors would follow this with no minimum. The public ICO sale usually attracts less as there are a lot of buyers investing smaller amounts; the pre-loading, therefore, is done to generate confidence in the token. The report claims that the pre-sale will require fiat, and a lot of it, and not Bitcoin or Ethereum, as is the case in regular ICOs.

Payment Freedom

A native altcoin would free the Russian-owned chat system from the government or bank-controlled payment systems and allow users to send remittances overseas while bypassing costly transfer fees. An encrypted transfer system would also allow users to send micro-payments privately without incurring credit card fees.

TechCrunch reports having already viewed parts of the whitepaper that reveal that Telegram’s GRAM coin could be integrated directly into the messaging platform. A decentralized platform would create a new cryptocurrency economy inside the app and insulate it from restrictive governments that frequently block social media and messaging services.

The roadmap has a lot to take in with associated services and developments to the standard blockchain model. Telegram could be the first to bring its own crypto to its already established platform but it certainly will not be the last, more tech and social companies are bound to follow.