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Legendary Investor Makes Sudden, ‘Psycho’ Attack On Bitcoin

Bitcoin has divided opinion since it was created a little over a decade ago, with some seeing it as a sort of digital gold, while others dismissing it as a scam or pyramid scheme.

The bitcoin price, up over 200% so far this year after a disastrous 2018, has remained highly volatile, despite some thinking bitcoin has become a safe haven asset, similar to gold.

Now, legendary investor Mark Mobius, who last year founded his own Mobius Capital Partners after some 30 years at Franklin Templeton Investments, has attacked bitcoin and other cryptocurrencies, branding them ‘psycho currencies,’ and predicting their emergence will ultimately push up the price of “real, hard” assets, such as gold.

“I call them psycho currencies, because it’s a matter of faith whether you believe in bitcoin or any of the other cyber-currencies,” Mobius told Bloomberg, a financial newswire.

Earlier this year, Mobius expressed his tacit support of bitcoin and other cryptocurrencies, saying they fulfill “a desire among people around the world to be able to transfer money easily and confidentially,” and he expected them to be “alive and well” in the future.

Mobius, who once branded bitcoin a “real fraud,” appeared to have changed his tune on bitcoin and cryptocurrencies.

However, his latest comments suggest Mobius’ belief in bitcoin and cryptocurrencies extends only as far as their emergence will boost the price of gold.

“I think with the rise of [bitcoin], there’s going to be a demand for real, hard assets, and that includes gold,” he added.

Gold has recently hit a six-year high due to a sharp rise in expectations of a U.S. and global recession, looser monetary policy from the U.S. Federal Reserve and other major central banks, and the escalating U.S. China trade war.

Earlier this month, some bitcoin and cryptocurrency traders and investors excitedly proclaimed bitcoin a so-called safe haven asset, declaring it had joined the likes of gold as a refuge from rocky or uncertain markets.

However, a sudden, sharp fall in the bitcoin price as global markets continued to slide put paid to hopes bitcoin had become a safe haven asset.

Meanwhile, Mobius said investors should be “buying [gold] at any level,” pointing to dovish moves from many of the world’s biggest central banks, including the European Central Bank and the Fed.

“Gold’s long-term prospect is up, up and up, and the reason why I say that is money supply is up, up and up,” Mobius said.

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I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com. Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.

Source: Legendary Investor Makes Sudden, ‘Psycho’ Attack On Bitcoin

Bill Harris, former PayPal CEO, discusses his op-ed on why he thinks bitcoin is a scam. »

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Former PayPal CEO Bill Harris Reveals Why He Thinks Bitcoin Is The Biggest Scam In History | CNBC

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The Large Bitcoin Collider Is Generating Trillions of Keys and Breaking Into Wallets – VICE

Since we first published this article, major security flaws in the Large Bitcoin Collider client have come to light. Check out our follow-up reporting on these issues here.

For nearly a year, a group of cryptography enthusiasts has been pooling their resources on a quixotic quest to brute-force crack one of bitcoin’s cryptographic algorithms for creating wallet addresses. This is thought to be impossible today, but if they succeed, at least one element of bitcoin’s cryptography will be instantly obsolete.

It’s probably due to the scope of the challenge that the project is called the Large Bitcoin Collider, after the Large Hadron Collider, the world’s largest particle accelerator. But instead of new physics, the Large Bitcoin Collider is hunting cryptographic collisions—essentially proving that a supposedly unique and random string of numbers can be duplicated. More on collisions and their ramifications for bitcoin later, but along the way the LBC is using its computing power to try and bust open bitcoin wallets owned by other people, and potentially taking the coins inside.

Read More: The Great Physical Bitcoin Robbery

The basics are this: bitcoin addresses containing funds can be accessed by private keys, which are generated at the same time as the address. Technically, a number of private keys could work with any given address, but you’d need a huge amount of computing power to brute force your way through enough possibilities to find any of them. The LBC attempts to accomplish this by recruiting the computing power of anyone who’s willing to download and run their software.

Finding a private key that works with an existing wallet is a fast-and-loose version of “cracking,” and gives the attacker access to all the funds inside. But when someone in the LBC pool finds a working private key, do they get to keep the coins?

“In principle yes, although there is a process defined where—if someone appears with an alternate key—the pool members consider him the owner of the address,” “Rico,” the pseudonymous lead of LBC, told me in an email. He would only tell me that he’s a computer programmer “past his 40s,” who lives in Europe.

As for the legality of all this, LBC advises participants with a rather laissez-faire attitude.

“Depending on your jurisdiction, this may be considered theft and is therefore illegal,” the site’s FAQ states. “However, there are many jusrisdictions [sic] where you could perfectly legally claim 5-10% of the value found. So you should consider if you want 100% and become a criminal or if you get 10% and still be a law abiding citizen.”

The LBC has been working for just under a year. So far, Rico claims, the project has generated over 3,000 trillion private keys and checked them against existing bitcoin addresses to see if they work, and has found three that do and contain bitcoin. They’ve found over 30 private keys in total, some of which are for so-called “puzzle” addresses that are suspected to have been generated as easy bait for crackers.

“This project has been called many things: Impossible, illegal, pointless, cool, etc.”

Cracking wallets may seem malicious on the surface—and if an LBC participant knowingly steals funds, it might just be—but it also has research value. Bitcoin security researcher Ryan Castellucci has done work cracking wallets as a proof-of-concept in order to model attacker behaviour and defend against it.

“The thing that disappoints me about this is that they’re only checking addresses that have a balance instead of all addresses that have ever been used,” he said in an interview over the phone. “For research, it’s much more interesting to check all addresses that have ever been used, because that will show you if there’ve been weak addresses created in the past and if they’ve been cleaned out by attackers.”

But cracking wallets is just one part of the LBC’s mission. The other is to find a genuine cryptographic collision, which would mean it’s possible to generate inputs that, when put through the bitcoin address hashing algorithm, generate an identical pair. If it were ever to happen, bitcoin would have to use a new cryptographic algorithm for addresses. This would be similar to Google creating a collision with the once-popular SHA-1 cryptographic algorithm, which ended its usefulness for good.

Read More: I Broke Bitcoin

“Finding a P2PKH-collision [one cryptographic method of creating bitcoin addresses] would probably mean the end of P2PKH but not bitcoin,” Rico explained, regarding the ramifications of finding a collision. “Bitcoin would evolve with new address types. Most certainly it wouldn’t ‘die’ because of this.”

Castellucci also urged caution when it comes to getting all riled up about the LBC’s search for a cryptographic collision in bitcoin.

“To effectively find [a collision], you would have to find some way to generate [keys] much, much faster than is currently known to be possible,” he said. “Unless they find some sort of breakthrough in cracking techniques, the brute force strategy they’re using poses no threat to anybody’s bitcoin.”

“Someone could play the lottery three weeks in a row and win every time,” he explained. “That theoretically could happen, but it’s safe to assume it won’t.” Castellucci isn’t alone in this belief. Others, on the /r/bitcoin subreddit for example, have been much less kind and called the LBC “pointless.” But that hasn’t deterred Rico.

“Since it’s inception [around] 8 months ago, this project has been called many things: Impossible, illegal, pointless, cool, etc.,” Rico wrote.

“I think there is more waiting to be uncovered by the LBC—including a collision,” he continued. “So with that in mind we really do not care much about what ‘someone on Reddit’ said.”

Motherboard is nominated for three Webby Awards for Best Science YouTube Channel , Best Drama , Best Tech/Science Podcast . Please vote for us!

Source: The Large Bitcoin Collider Is Generating Trillions of Keys and Breaking Into Wallets – VICE

Warren Buffett: ‘Gambling Device Bitcoin Hasn’t Produced Anything’

Turns out 88-year-old Warren Buffett isn’t warming up to crypto after all. Speaking at what’s been dubbed the “Woodstock of Capitalism”, the billionaire investor told shareholders in Berkshire Hathaway how he really feels about bitcoin. His company’s annual shareholder event is being held in Omaha today, and he just couldn’t resist lamenting the digital currency that he just doesn’t understand. Buffett reportedly stated:

“It’s a gambling device… there’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything.”

At least Buffett didn’t call it “rat poison squared” like he did last year. His partner in crime, Charlie Munger, reportedly once compared crypto trading to “dementia.” Buffett’s shareholders probably come to Omaha just to hear what he’ll say next about the crypto revolution taking the economy by storm.

bitcoin

The bitcoin price is barreling for $5,700. | Source: CoinMarketCap

BITCOIN ‘ISN’T AN INVESTMENT’

Buffett didn’t stop there. He went on to insult investors who not only have benefitted from the peer-to-peer nature of bitcoin but he also suggested that it’s not an investment at all. Tell that to the 100-million strong crypto community, many of whom have seen their portfolios balloon since the bitcoin price hit a new 2019 high this week. Buffett is digging his own grave, so to speak, saying:

“It doesn’t do anything. It just sits there. It’s like a seashell or something, and that is not an investment to me.”

Bitcoin’s market cap is now $101 billion; it’s increased from $89 billion in the past two weeks or so. If that’s a seashell, then take us to the beach so we can start collecting them.

berkshire hathaway

Berkshire Hathaway shares are underperforming the S&P 500 year-to-date. | Source: Yahoo Finance

WARREN BUFFETT’S BUTTON ICO

He went on to seemingly poke fun at ICOs next because he couldn’t possibly mean bitcoin when he says:

“I’ll tear off a button here. What I’ll have here is a little token…I’ll offer it to you for $1000, and I’ll see if I can get the price up to $2000 by the end of the day… But the button has one use and it’s a very limited use.”

Hmm, let’s see. Bitcoin is a store of value that rivals gold. It is a peer-to-peer digital currency that gives migrants a way to send money to their families faster and cheaper than any money-transfer service without the blockchain can do. And it’s decentralized, so it’s not subject to the whims of any central bank or government that turns on the printing press and causes inflation.

IMF to crypto: “please be gentle with our house of cards” https://www.cnbc.com/2019/04/11/cryptocurrencies-fintech-clearly-shaking-the-system-imfs-lagarde.html 

Cryptocurrencies are ‘clearly shaking the system,’ IMF’s Lagarde says

IMF Managing Director Christine Lagarde said Wednesday that new technologies like digital assets and cryptocurrencies are having a clear impact on the banking sector.

cnbc.com

Whether he realizes it or not, Buffett is spreading FUD about bitcoin and the blockchain, saying:

“Blockchain…is very big, but it didn’t need bitcoin. J.P. Morgan, of course, came out with their own cryptocurrency.”

Blockchain pioneer Wences Casares once said that people who fail to recognize the value of bitcoin but believe in blockchain tech demonstrate an “ignorance for how the system works.” We’ll leave Warren with Wences’ words of wisdom:

“Blockchain doesn’t exist without bitcoin…If you were to remove the bitcoin, miners would disappear and so would the blockchain.”

Source: Warren Buffett: ‘Gambling Device Bitcoin Hasn’t Produced Anything’

Bank Of England Governor Might Open Opportunity For Ripple Tech, Says That Payments Across Borders Should Be Indistinguishable From Those Across The Street

The Governor of the Bank of England, Mark Carney, has vowed to transform the central bank in preparation for the upcoming “fourth industrial revolution.”

Speaking at the Innovate Finance Global Summit, Carney said that he would focus on encouraging innovation among fintech startup, and making climate change and Artificial Intelligence (AI) priorities.

Carney stressed on the emerging digital economy, which many developing nations are preparing for by embracing blockchain technology and decentralized systems.

The Governor of the Bank of England, Mark Carney, has vowed to transform the central bank in preparation for the upcoming “fourth industrial revolution.”

Speaking at the Innovate Finance Global Summit, Carney said that he would focus on encouraging innovation among fintech startup, and making climate change and Artificial Intelligence (AI) priorities.

Carney stressed on the emerging digital economy, which many developing nations are preparing for by embracing blockchain technology and decentralized systems.

The second great wave of globalisation is cresting. The Fourth Industrial Revolution is just beginning. And a new economy is emerging. That new economy requires a new finance. A new finance to serve the digital economy, a new finance to support the major transitions underway across the globe, and a new finance to increase the financial sector’s resilience.

Carney also spoke of the changing nature of the way we exchange value,

Consumers and businesses increasingly expect transactions to be settled in real time, checkout to become an historical anomaly, and payments across borders to be indistinguishable from those across the street.

Though Ripple is not mentioned by name, the kind of solutions that Ripple offers is a partial answer for the kind of upgrade that Carney speaks of. The cross-border solutions that Ripple provides has been warmly welcomed by banks across the world.

Earlier this year, the World Economic Forum released a report that showed over 40 central banks across the world were conducting research and/or implementing blockchain solutions. Certainly there is a lot to be gained by established entities adopting the technology, IMF Managing Director, Christine Lagarde, has also said that “cryptocurrencies clearly shake the world.”

Abhimanyu Krishnan
About Abhimanyu Krishnan

Abhimanyu is an engineer on paper but a writer by living. To him, the most celebratory aspect of blockchain technology is its democratic nature. While he’s hodling, he can be found reading a good book or making the local dogs howl with the sound of his guitar playing.

Source: Bank Of England Governor Might Open Opportunity For Ripple Tech, Says That Payments Across Borders Should Be Indistinguishable From Those Across The Street

European Central Bank Just Showed Why Bitcoin is Better

The European Central Bank (ECB), the central bank for the Eurozone, is unwittingly boosting the case for cryptocurrency adoption, the community believes – and that’s exactly the last thing they want to be doing. This comes after they said they could always create money, and the crypto community was quick to reply with accusations of scamming.

The bank had started a Twitter thread under the hashtag #AskECB, and Twitter user @Gianluca844 took the chance to ask, “Where did you get the money for the [quantitative easing]?” The bank replied:

Quantitative easing (QE), also known as large-scale asset purchases, is an expansionary monetary policy whereby a central bank, which is the ECB in this case, buys predetermined amounts of government bonds or other financial assets in order to stimulate the economy and increase liquidity.

This operation started in 2015 and was finished by the end of 2018, during which the ECB has spent EUR 2.6 trillion (USD 3 trillion), buying up mostly government but also corporate debt, asset-backed securities and covered bonds, at a pace of EUR 1.3 million a minute, according to Reuters. That equates to roughly 7,600 euros (BTC 2.23) for every person in the currency bloc.

The cryptocurrency community took issue with the reply, with many tweeting gifs of the Bitconnect Ponzi scheme, which has since its downfall become synonymous with shady doings.

“Central banks are marketing bitcoin better than we can,” replied Twitter user @zackvoell, while user @wiz has more to say: “The world is now opening their eyes to your scam of robbing people of their purchasing power by endlessly printing bank notes on worthless paper. The global economy will implement a new Bitcoin standard to opt-out of your scam and prevent further theft by central banks.”

Source: European Central Bank Just Showed Why Bitcoin is Better

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