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$3.6B in Bitcoin vanishes in ‘hack’ along with owners of South African crypto platform

Around 69,000 Bitcoin has vanished from a South African investment platform along with two brothers who owned the crypto firm.

Although the facts are yet to be proven in court, if it turns to be an exit scam rather than a hack, it would be the biggest in history according to Bloomberg. There were warning signs for investors either way, with users reportedly promised returns of up to 10% a day.

AfriCrypt was founded in 2019 and operated by brothers Ameer and Raees Cajee. It had reportedly amassed around 54 billion rands worth of BTC, or $3.6 billion USD at the time, when it sent a message to investors on April 13 claiming the platform had been hacked.

The firm said it would halt operations while it began the process of “attempting to retrieve stolen funds and compromised information.”

South African law firm Hanekom Attorneys, which has taken the case on behalf of affected users, said suspicions were aroused as the message included the warning that: “clients may proceed the legal route, but we ask clients to please acknowledge that this will only delay the recovery process.”

“We were immediately suspicious as the announcement implored investors not to take legal action,” Hanekom Attorneys said. The law firm also claimed that “Africrypt employees lost access to the back-end platforms seven days before the alleged hack.”

Hanekom Attorneys alleges that the brothers transferred the 69,000 BTC — which is now worth $2.2 billion after the recent price tumble — from AfriCrypt’s accounts and client wallets, and subjected the funds “to various dark web tumblers and mixers, resulting in severe fragmentation” to make the funds untraceable.

The brothers have been unreachable, with calls going directly to voicemail, while the AfriCrypt website is also down. The law firm has reported the case to an elite unit of the national police dubbed the “Hawks.”

South Africa’s Gauteng South High Court has granted a provisional liquidation order against the Cajee brothers, and they have been given until July 19 2021 to respond to the order.

Related: Scams are driving South African authorities to regulate crypto trading

According to African online crypto news outlet BitcoinKe, AfriCrypt drew in clients by targeting high net worth investors and urging them to refer their friends, while also offering returns of up to 10% daily.

The eye watering daily return puts the 10% monthly return promised to users of South African crypto Ponzi scheme Mirror Trading International (MTI) into the shade.

MTI has been described as the biggest Ponzi-scheme the country had ever seen, pulling in 23,000 BTC from investors ($774 million at today’s prices) with MTI’s CEO, Johann Steynberg reportedly fleeing to Brazil to escape punishment when the firm was placed under provisional liquidation in 2020.

$3.6B in Bitcoin vanishes in \’hack\’ along with owners of South African crypto platform

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Bitcoin derivatives data shows pro traders ignored today’s $41K pump

Sometimes all Bitcoin (BTC) needs to pump 10% is a positive remark from someone like Elon Musk.

The Tesla CEO has been pointed to as the culprit for the recent downturn after the company’s May 12 announcement explaining that it would no longer accept Bitcoin payments due to environmental concerns. Musk followed up by saying that he was looking into other cryptocurrencies that required 99% less energy consumption. 

However, on June 13, the situation reversed as Musk reassured the public that Tesla did not sell any additional Bitcoin. The post also said that the electric-car producer would resume taking BTC payments as soon as its Bitcoin mining relied on a minimum of 50% clean energy.

In bear markets, top traders act with caution

While retail investors and algorithmic trading bots jump into action as soon as bullish or bearish signals and news flash, top traders tend to act more with more caution. Those who have been around the crypto markets long enough know that positive news might end up being ignored or severely downplayed in bear markets.

On the other hand, even potentially negative news seems to have little to no impact during bull runs. For example, on Sept. 26, 2020, Kucoin was hacked for $150 million. The following week, on Oct. 1, the United States Commodity Futures Trading Commission charged BitMEX for operating an unregistered trading platform and violating Anti-Money Laundering regulations.

Two weeks later, police reportedly questioned the founder of OKEx, forcing the exchange to suspend crypto withdrawals. Had this series of negative news happened while Bitcoin was flat or in a bearish phase, the price would have undoubtedly have stalled during a bear market.

Bitcoin price at Coinbase in USD, Sept. 2020. Source: TradingView

As shown above, Bitcoin barely had any negative impact in late September and October 2020. In fact, by the end of November 2020, Bitcoin was up 74% in two months. This is the main reason why top traders tend to ignore positive news during bear markets and vice-versa.

The 3-month futures premium is neutral

A futures contract seller will usually demand a price premium to regular spot exchanges. This situation is not exclusive to crypto markets and happens in every derivatives market because in addition to the exchange liquidity risk, the seller is postponing settlement and this results in a higher price.

The 3-month futures premium (basis rate) usually trades at a 5% to 15% annualized premium in healthy markets. When futures are trading below the regular spot exchange price, it signals a short-term bearish sentiment.

Huobi 3-month Bitcoin futures basis. Source: Skew

As shown above, the future basis has been below 11% since May 20 and flirting with bearish territory on multiple occasions as it tested 5%. The current level indicates a neutral position from top traders.

The options skew is no longer signaling fear

The 25% delta skew compares similar call (buy) and put (sell) options side-by-side. It will turn positive when the protective put options premium is higher than similar risk call options.

The opposite holds when market makers are bullish and this causes the 25% delta skew indicator to enter the negative range.

Deribit Bitcoin options 25% delta skew. Source: laevitas.ch

The above chart confirms that top traders, including arbitrage desks and market markers, are currently uncomfortable with Bitcoin price as the neutral-to-bearish put options premium is higher. However, the current 7% positive skew is far from the 20% exaggerated fear seen in late May.

Derivatives markets show no evidence of top traders getting excited about the recent $40,000 hike. On the bright side, there is room for leverage buyers to mount positions. Stronger upswings usually occur when investors are least expecting, and the current scenario seems to be a perfect example.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin derivatives data shows pro traders ignored today’s $41K pump

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What algorithm is adopted to protect the security of Blockchain?

What algorithm is adopted to protect the security of Blockchain

If you have been following cryptocurrency over the last decade, you must have heard the word “Blockchain”,  the record-keeping methodology behind the Bitcoin network. Blockchain technology is basically a distributed database that keeps a continuous rising list of protected records from external emendation. Approximately 5% of the world population use this technology. But, is blockchain completely secure? Well, this can be estimated by evaluating the workings of a blockchain platform. This article will look into essential aspects of blockchain that make it an efficient and safe platform for digital transactions. 

Table of contents 

  • How does a blockchain network work?
  • Algorithm to protect blockchain security:
  • Private and public key
  • Hashing
  • Peer-to-peer network
  • Zero-knowledge proof
  • Closing thought

How does a blockchain network work?

The blockchain network dwells across a system of nodes. When new transactions happen, the blockchain is ascertained across this distributed system before these new transactions can be incorporated as the following blocks on the chain. Hence, the alliance of nodes is needed to put that block into the blockchain. Each block keeps collections of unique transactions and the outcomes of any blockchain executables.  The blockchain platform is trustable because an exact copy of the series, showing every transaction, is attached to the entire network. If somebody tries to cheat the system, they can be identified easily. 

However, sometimes a few things can go wrong in other areas of a blockchain-based application resulting in loss and compromise. For instance, weak access controls, inadequate communication security, certificate management protections, and loose key. For this reason, blockchain uses several algorithms to increase security and provide each user with a safe environment for carrying out transactions.

Algorithms used to protect the blockchain security:

  • Private and public keys

Blockchain technology makes use of asymmetric cryptography for securing transactions among users. In such networks, each user acquires a private and public key. These keys are created with random strings of numbers that are cryptographically linked. No user can surmise another user’s private key by looking at their public key. All users have an address that is emanated from the public key by utilizing a hash function. These addresses are used for sending and receiving investments on the blockchain, I.e. cryptocurrency. Users can view previous transactions and activities on the blockchain as blockchain networks are shared with all parties.

Users’ identities are kept hidden; Senders and receivers of prior transactions are embodied and implied by their addresses; 

This strategy prevents  a malevolent user from observing a specific address’s past transactions  to disclose information.

Private keys protect users’ identities and keep them secure through digital signatures. Private keys let users access personal wallets and funds on the blockchain; this adds a layer of identity authentication. Whenever individuals send money to other users, they should submit a digital signature produced and provided with the private key. This procedure prevents the theft of funds.

Before building transactions into blocks, blockchains hash every transaction. Hash pointers tie each block to its forebear by carrying a hash of the data in the previous block. Hence, a change made in any transaction will generate a completely different hash, which will then modify the hashes of all successive blocks. To produce a modification across the blockchain, around 51% of the system would have to agree to it. This process is termed a “51% attack.”

However, different blockchains employ different cryptography algorithms. The Bitcoin blockchain utilizes the SHA256 algorithm, which generates a 32-byte hash. Litecoin and Dogecoin both use Scrypt. It is one of the lighter and faster cryptography algorithms.

  • Peer-to-peer network    

In big corporations, an enormous amount of users’ personal data is stocked on solitary devices, which increases the risk of losing data if the system got hacked, mishandled, or lost. Blockchain intends to eliminate this dependence on a central authority. To accomplish this, blockchain works in a way where nodes in a blockchain system can affirm the legitimacy of a transaction instead of a third party.

Transactions between clients like sending and accepting digital money are conveyed to each node in the network. Nodes ensure credibility of transaction, before it gets documented as a block on the blockchain and check past transactions of the sender to make sure he/she didn’t double-spend or spend a more extensive amount of funds than they acquire.

Later on, agreement protocols like verification of work and confirmation of stake are sent by miners. These protocols permit nodes to arrive at an agreement state on the order and sum of transactions. When a transaction gets checked, it is distributed as a block on the blockchain. Users’ protection is expanded through the decentralized nature of blockchain, and no need for a central authority.

  • Zero-knowledge proofs

Zero-knowledge proof is a Consensual decision-making process in which one party confirms to another party that data is credible. In this process, the “prover” does not disclose any data about the transaction. This can be achieved through detailed cryptographic techniques. This maintains the decentralized nature of blockchain while reducing transparency; zero-knowledge proofs reflect nothing regarding a transaction except its validity.

Closing Thought

Through the combined use of different algorithms, blockchains are able to fulfil high degrees of security as a distributed system. However, these fields of knowledge must be appropriately assigned. By understanding the algorithm, a user can become a blockchain expert. A careful symmetry between security and decentralization is essential for building a dependable and effective cryptocurrency network. 

To learn more about Blockchain technology and become a Blockchain expert, check out various courses as well as certifications available with Blockchain Council.

What algorithm is adopted to protect the security of Blockchain?

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A Quick Guide On How To Start Crypto Trading

A Quick Guide on How to Start Crypto Trading

Are you wondering how to start crypto trading? This article enlists essential steps that will help you kick off your crypto trading learning journey.

Table of Contents 

  • What is Crypto Trading?
  • How it Differs from Forex Trading?
  • Steps on How to Start Trading Cryptocurrencies
  • Concluding Lines 

What is Crypto Trading?

Interest in crypto trading has been increased over the past few years because cryptocurrencies are extremely volatile assets, and they can give you much higher returns than traditional investments.

We can define Cryptocurrency trading as the act of speculating on cryptocurrency price via buying and selling the underlying coins through an exchange. 

As crypto trading gets more mainstream attention, newer players have entered the market and are looking to learn trading techniques. 

If you are one of those, who want to learn about trading and the crypto market, you can enroll in a cryptocurrency certification course and become a Certified Cryptocurrency Trader. 

How it Differs from Forex Trading?

Forex trading is the exchange of currency into another currency for multiple reasons. It is also known as Forex or foreign exchange(FX). In other words, it is a network that allows buyers and sellers to transfer currency with one another at an agreed value. 

The major difference between these two trading approaches is that Crypto trading is more volatile as the markets can fluctuate enormously. Moreover, compared to the cryptocurrency market, forex markets have higher liquidity as a result of a long history of activity. 

Steps on How to Start Trading Cryptocurrencies

Let’s explore how to start crypto trading. 

Choose Crypto Exchange Platform to Trade on

At present, there are a number of popular crypto exchanges available that can be utilized. If you are wondering what exchanges are, please note that the portals which connect our world to the crypto-worlds are exchanges. 

Since each exchange has different terms of services, therefore it is advised to perform a lot of research and go through several reviews. Before selecting an exchange platform, make sure that the exchange is available in your area. For instance, Coinbase, one of the most popular exchange platforms, is not available in India. Apart from this, check the reputation of the exchange. For example, are people happy with their services, is it ever hacked, how secure it is? Most importantly, check for exchange rates. Different exchanges have their own exchange rates, which may vary. If you find satisfactory results, you can finalize one. 

Some of the most popular crypto exchange platforms are:

  • Coinbase
  • Coinmama
  • BitFlyer
  • Poloniex
  • Cash App and others.

Choose a Crypto Wallet

Crypto wallets are tools that allow you to store and send crypto coins. These are of various types. Let’s explore. 

  • Hot and Cold Wallets

Internet connectivity defines a wallet in terms of hot or cold. Hot wallets are connected to the Internet and thus are less secure and pose more risks but are user-friendly. Cold wallets, on the other hand, are stored offline and don’t require internet connectivity, thus leading to improved security and less risk. Hot wallets are more likely to be used for daily transactions, and cold wallets for more long-term holdings. 

  • Hardware wallets

Hardware wallets are hardware devices that individually handle public addresses and keys. It looks like a USB with an OLED screen and side buttons. It is a battery-less device and can be connected to a PC and accessed by native desktop apps. They are more secure than hot wallets and user-friendlier than paper wallets but less than web and desktop wallets. The most popular hardware wallets are Ledger Nano S and Trezor.

  • Other Wallets

You can also choose Mobile Wallets such as Coinomi and Mycelium, Desktop Wallets such as Exodus, Bitcoin Core, Electrum, or Web Wallets which can be non-hosted wallets such as MyEtherWallet or MetaMask or hosted wallets Binance, Coinbase, and others.

Keep Track on Crypto-Related News

Once you have finalized a crypto exchange platform and a perfect crypto wallet, all you need to do is keep track of crypto-related news before making any investments. To study the asset, one of the best tools for this research is Coinmarketcap. It is a price-tracking website for crypto assets where you can find information on every coin, such as capitalization, supply, trade volume, and other valuable insights. 

Concluding Lines 

Hope this article has helped you in providing a complete understanding of how to start trading cryptocurrencies. If you want to gain a deeper insight into cryptocurrency trading and investing strategies, you can check out the best cryptocurrency certification courses offered by Blockchain Council and become a Certified Cryptocurrency Trader. 

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.  

A Quick Guide On How To Start Crypto Trading

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Will Bitcoin Reach All-Time High of $100K in 2021?

Will Bitcoin Reach All-Time High of $100K in 2021

Are you a Crypto enthusiast? Wondering whether BTC will beat all records and reach $100k this year or not? Well, you have landed on the right page. This article talks about the history of Bitcoin, from where it all started, reasons that accelerated its price, and finally analyzing whether BTC could really hit $100K

Table of Contents 

  • From Where It All Started: The Rise of Bitcoin
  • Reasons That Accelerated Bitcoin’s Price
  • Could Bitcoin really hit $100K?
  • Concluding Lines 

From Where It All Started: The Rise of Bitcoin

Bitcoin, the first-ever example of decentralized digital currency, came into existence in 2009 under the pseudonym of Satoshi Nakamoto. Initially, in January 2009, the Bitcoin network was introduced with the release of the first open-source bitcoin client and the issuance of the first bitcoins, with Satoshi Nakamoto mining the first block of bitcoins ever. The first price rise happened in July 2010, when the value of a single bitcoin rose to $0.08, and the next year in 2011, its price rose from $1 in April. After two years, in January 2013, it was seen that BitPay exceeded 10,000 transactions, and in November 2017, the price surged to $10k. Since its introduction, Bitcoin(BTC) has seen significant ups and downs. In 2018, Bitcoin saw the most critical crash to $3,200, but next year in 2019, its price stayed above US $3,190. After its lowest drop in this year, in mid-June, the price rose to the US $10,000, and again in December 2019, the same price fell to the US $7,112.73.  

However, the end of 2020 and the first quarter of 2021 indicates a remarkable rise in Bitcoin’s price. In December 2020, BTC touched $10K. In January 2021, Bitcoin price rose to $40K, and on 16 February, the price further surged to $50,000, recording an all-time high. And finally, on 13 March 2021, it was announced that the price of Bitcoin rose to $60,065, and hours later, the price crossed $61,000 to set a new all-time high of $61,556.59. 

Looking for the best cryptocurrency certification courses? Get started today with Blockchain Council. 

Reasons That Accelerated Bitcoin’s Price

As Bitcoin has surpassed all records of the past and has unexpectedly crossed USD 60,000, it brings a question to everybody’s mind as to why BTC exploded. Here are some of the reasons for the accelerated BTC’s price. 

Global COVID-19 Pandemic 

Most people looked at bitcoin as a way to protect themselves from the looming economic downturn brought about by the spread of global coronavirus. Institutional investors such as Microstrategy, Tesla, Square Corp, and many others shifted their cash holdings to BTC, claiming that it was a good store of value against inflation.

Consider as ‘Digital Gold’

Although Microsoft founder Bill Gates has warned investors against risky cryptocurrency, and United States Treasury Secretary Janet Yellen mentioned it as inefficient for actually carrying out transactions and is extremely speculative, cryptocurrency enthusiasts are considering BTC for investment purposes and as a payment system. Bitcoin is drawing a worldwide audience, and few consider it as ‘digital gold,’ considering the fact that it has many of the same properties as gold and acts as a globally recognized store of wealth.

Bringing Better Trust

In the beginning, Bitcoin was surrounded by various questions, such as is it secured? Can it be hacked? Is decentralization a truly workable solution? Will halving destroy the system and so on. And finally, after a decade, BTC has proved that it is secured, non-hackable, and built on a reliable technology(Blockchain) that does not break in any sense. 

The emergence of Financial Institutions

As Bitcoin is now being associated with more institutional investors and with giant financial institutions like Paypal, Visa, JP Morgan, etc., more retail investors are interested in purchasing Bitcoin now more than ever. 

Highest Liquidity

Apart from the reasons mentioned above, another crucial reason for its upsurging is that it has the highest liquidity in the crypto space. The higher the liquidity ratio, the easier it is to sell a cryptocurrency at market price.

Could Bitcoin really hit $100K?

As Bitcoin shows no sign of slowing down, everyone is wondering whether BTC will achieve $100k in 2021 or not? Prediction is tough, especially if it’s about the future. But after looking at the features of the past data, we can get some idea about what the feature would look like. Bitcoin has moved closer to $100,000 than it is to $0. The latest advances in the field of Bitcoin are evidence that it is on its way to becoming a mainstream asset class. Blockchain Experts and analysts believe that if this trend continues, it wouldn’t be a surprise that BTC might hit $100k by the end of 2021.

Concluding Lines 

From the above discussion, it is clear that the Bitcoin era has begun and it will continue to make a revolution in the years to come. 

If you are planning to invest in Bitcoin, it is crucial that you know trading strategies very well and performs your own research before making any investment decisions. 

If you want to get started as a Certified Cryptocurrency Trader, get enrolled in Blockchain Council now!

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.

Will Bitcoin Reach All-Time High of $100K in 2021?

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