Thursday,

6. 21/06/2019 10:12
Craig Wright Offers New Details on Bitcoin Trust at Heart of Billion-Dollar Lawsuit

New details have emerged in the ongoing lawsuit in the U.S. filed last year against Craig S. Wright, the technologist who claims to be the pseudonymous creator of bitcoin, Satoshi Nakamoto.

A redacted declaration filing from Kleiman v. Wright surfaced today, which details Wright’s purported ownership and the trustee scheme of the Tulip Trust, which supposedly holds over one million bitcoin. According to the filing, access to the holdings of the trust requires participation of all trustees, at least one of whom he hasn’t been in contact for several years.

The court document was originally filed on May 8, and also points to the existence of a second Tulip Trust, known as Tulip Trust II. 

Days before the document was filed, a federal court ordered Wright to disclose his bitcoin addresses in the ongoing lawsuit. Wright is being sued by Ira Kleiman on behalf of the estate of his brother, the late Dave Kleiman. The nChain chief scientist is accused of scheming to “seize Dave’s bitcoins and his rights to certain intellectual property associated with the bitcoin technology.”

Kleiman is seeking half of the 1.1 million bitcoins the two are said to have mined together, or its “fair market value,” as well as compensation for infringement of intellectual property. The initial complaint did not seek to ascertain whether Wright is the person behind the Nakamoto identity, stating that “it is unclear whether Craig, Dave and/or both created Bitcoin.”

According to the declaration released Thursday, the Tulip Trust consolidated the bitcoin Wright mined and purchased between 2009 and 2011. 

The trust first came to public attention through a leaked document on December 9, 2015. Allegedly written in 2011 by Dave Kleiman, a forensic computer investigator and author, the document describes a trust fund containing exactly 1,100,111 bitcoin, “to be managed by at least three people but not more than seven at any time.” The document also declares the bitcoin holding is to be returned to Craig Wright on January 1, 2020.

These new developments come amid an ongoing mediation process, which as of June 18 has yielded no results — in the words of the mediator, as reported by attorney Stephen Palley, “we are at an impasse.”

As it stands, Wright is due for deposition in Florida on June 28.

Trust details

According to Wright’s court declaration, seven trustees were named, including Craig Wright, David Kleiman, and Ms. Uyen Nguyen — whom Wright claimed he has had no contact with since 2016. That said, Kleiman was the initial, and sole, trustee before others were appointed.

Panopticrypt Pty Ltd, an Australian entity now in liquidation was also named alongside an unnamed Seychelles entity and CO1N Ltd., a U.K. entity liquidated in 2017.

“The contacts at CO1N were Dave Kleiman and Ms Nguyen, who was terminated as director on June 1, 2016. Presently, there is no one other than myself who was a contact for this entity.” Nguyen was allegedly terminated as director of CO1N in June 2016.

The final trustee listed is “the holder of PGP key IDs, which is Satoshi Nakamoto,” with Craig Wright parenthetically related.

In the past, Wright has said that the trust is encrypted using a a method called Shamir’s Secret Sharing Algorithm. The only way to access them, he’s said, is to accrue the collective private keys in order to decrypt it.

Wright complied with the directive pursuant to a court order to produce bitcoin holdings for all bitcoin Wright mined prior to December 31, 2013. The filings were subsequently sealed. 

The Tulip Trust II was settled in 2014 in Seychelles with Equator Consultants listed as a trustee. Wright and his wife Ramona Watts are the primary beneficiaries. The holdings of this second trust are unknown.

Wright also hinted at an inaccessible trove of bitcoin mined between 2011 and 2013 by staff at HighSecured and Signia Enterprises under his direction, to be held on behalf of the original Tulip Trust. Wright alleges the principles of HighSecured were arrested in 2015.

Wright has claimed in the past the Tulip Trust is currently inaccessible. In the court document Wright said:

“Access to the encrypted file that contains the public addresses and their associated private keys to the Bitcoin that I mined, requires myself and combination of trustees reference in Tulip Trust I to unlock based on Shamir scheme.”

Dave Kleiman passed away in 2013. Last December, the court denied Wright’s attempt to dismiss the lawsuit, saying that he “converted at least 300,000 bitcoins upon Dave’s death and transferred them to various international trusts.”

7. 20/06/2019 10:05
Will Facebook’s Libra Be an On-Ramp or Dead End for Crypto?

Facebook’s announcement that it would create a stablecoin on a blockchain means more as a competitive answer to WeChat and Alipay’s payment services than it does to the crypto industry, according to AngelList co-founder Naval Ravikant.

Ravikant told CoinDesk via email:

“I don’t think it means much for crypto because it’s not really (sovereign-resistant) crypto.”

The immediate question for the crypto industry following the announcement of Facebook’s ambitious Libra project was whether this new token will lead more users into the broader world of cryptocurrency or insulate them from other projects. That is, will someone who becomes a Libra user be more likely to one day hold bitcoin, ether, EOS or other crypto assets?

For his part, Ravikant sees a way Libra could meet a need, noting that it could lower the cost of global payments, but, he added, “I struggle to see why it needs to be on a blockchain other than for PR / Marketing.”

The Asian consumer payments giants Tencent (parent of WeChat) and Alibaba (parent of Alipay) seem to agree: They say they won’t be following Facebook’s lead into cryptocurrency development.

That said, most of the industry sounds upbeat following the news that the fifth largest company in the world by market capitalization, Facebook, is leading a slew of financial giants (such as Visa, PayPal and Stripe) into the blockchain universe.

For example, Fred Wilson, a partner at Union Square Ventures, one of the founding members of the Libra Association, wrote on his blog:

“So as we think about the potential drivers for mainstream crypto adoption, a simple, fully-collateralized, cryptocurrency used inside the world’s largest applications, touching hundreds of millions or billions of consumers, is perhaps the most promising one.”

In fact, others pointed to specific mechanisms by which individuals might find their way into crypto in a world where Libra becomes a common way of transacting value.

“It’s good news for exchanges and good news for crypto because you’ll have a lot more vetted users,” Avivah Litan, an analyst at Gartner, told CoinDesk. She foresaw exchanges as being a major source for attaining Libra in the early days. “So now when you’re signing up for Libra you’re going to see more cryptos as well.”

People who already have access to financial services will be motivated to find ways to get crypto in order to get better deals, Kyle Samani of Multicoin Capital told CoinDesk.

“The value prop is clear: discounts through merchant partners like Uber and Lyft and Spotify (and many more to be announced),” Samani told CoinDesk via email. For the unbanked, it’s the chance to use a currency that’s potentially more stable than their country’s national currency.

Preston Byrne, an attorney at Byrne & Storm and an early entrepreneur in the world of permissioned blockchains, told CoinDesk he foresees Libra being helpful at a high level so long as the network is not built in a walled-off way.

“As long as it requires people who are hooking into the ecosystem to use things that are otherwise good for cryptocurrency, then it’s good for cryptocurrency,” Byrne said.

Joey Krug, Augur’s creator and an investment officer at Pantera Capital – one of the industry’s largest crypto investors – pointed to one way the infrastructure has already committed to play nice with the rest of the industry.

“Libra has stated the underlying network will have pseudonymous addresses just like any other crypto network, which means exchanges can list Libra, effectively making it an on-ramp to all of crypto,” Krug told CoinDesk.

Byrne did note that Facebook and its partners could use their clout to crowd out other cryptocurrencies, if they wanted to. For her part, Arianna Simpson, founder of Autonomous Partners and a former Facebook employee, does not see an existential threat to bitcoin in Libra.

“Other cryptocurrencies – Stellar and Ripple come to mind – are much more likely to have their raison d’être called into question,” she wrote in a note to her limited partners, which was shared with CoinDesk.

In fact, on bitcoin, Samani offered another tantalizing bit of speculation. He argued that with interest rates on sovereign bonds moving so widely into negative territory, the Libra reserve is going to have a hard time finding extremely conservative investments with an upside.

Samani said:

“I would expect the Libra Association to maintain some of its reserves in permissionless cryptocurrencies like BTC. So that’s one path, though it’s not confirmed.”

Big does not always win

If Facebook is able to convince the world that crypto works, Libra itself will have to work. And that’s no sure thing.

Industry insiders were quick to recall the many headline-grabbing tech products that never caught on.

That said, the general response seems to be excitement about Facebook and its partners potentially educating billions of people about public-private keys, payments without intermediaries and money on the internet.

But there were a lot of notes of caution, particularly about whether or not Facebook could really lead users to use its new blockchain.

Joel Monegro of Placeholder, a prominent New York City-based venture fund, compared it to the earliest iterations of the Microsoft Network, which was basically Microsoft’s attempt to create its own proprietary internet.

Monegro told CoinDesk via email:

“Libra is to Facebook what MSN was to Microsoft. They sense the opportunity, but are missing the point.”

Similarly, CoinFund founder Jake Brukhman rattled off a list of major failures by other tech giants. Though generally optimistic about Libra’s potential to benefit the whole market, Brukhman cautioned that “people also tend to get excited and underestimate how hard it is to launch successful products even as established exceptional companies.”

For example, he mentioned Amazon’s Fire Phone. Additionally, Google has had a cascade of failed creations. In social media alone, it failed with Orkut, Buzz, Wave and Google Plus. Apple’s self-driving car product was stillborn.

But Albert Wenger, also of Union Square Ventures, wrote on his blog about how critical a wide distribution network has been at key moments of technological expansion. He too drew an example from Microsoft: the introduction of Internet Explorer (IE) to all Windows users in 1995.

IE drove tremendous adoption of the internet. But, as Wenger wrote, “It is useful to remember that Microsoft was not the primary beneficiary of the web.”

But is it my giant?

The 53 co-authors of “The Libra Blockchain” white paper said the blockchain was built to offer “a new global currency — the Libra coin.” Currencies are money’s consumer application, but will be Libra be consumer-friendly?

William Quigley was a co-founder of the company that created tether, the original stablecoin, and he’s now the CEO of WAX, a startup organized around digital property rights. He thinks Libra will save people money on almost everything they buy.

“It’s probably 1.5 percent of global GDP is just eaten up in currency conversions,” Quigley estimated. “I think that’s a big part of what Facebook is looking at.”

Others aren’t betting against the world’s entrenched financial institutions, however.

As Tyler Cowen, one of the globe’s most influential economists, wrote on his blog: “Have banks ever lost a political battle of this kind?”

If any coalition could uproot those channels, it may be the group of extremely powerful companies Facebook has assembled. But that sheer size could pose another danger to the masses.

“It comes with the risks of centralized pain points and vulnerabilities,” ConsenSys founder Joseph Lubin told CoinDesk. “Data silos enable incumbents to maintain pricing power, and also come with the risks of data breaches, privacy, and security issues – problems that many have already begun to associate with Facebook.”

Maya Zehavi, a blockchain consultant and entrepreneur, offered similar concerns. While Facebook theoretically won’t control the Libra blockchain, earlier iterations of the company have been known to wreak havoc on startups that build businesses dependent on Facebook platforms. Just ask Zynga.

At this very early date, Zehavi said Libra looks like a “closed loop.”

“If you want to make an investment or if you want to run a product today, you need to be able to run a node, a full node,” she said. “You need to have the infrastructure in place to be a part of that network.” Plus, there’s the cost.

Founding members of the Libra Association have paid $10 million each for the privilege of running a node, though there are plans to ultimately open node membership to anyone. (Founding members also get a return on their investment in the form of interest generated by the Libra reserve’s potentially vast pool of coin-backing assets.)

Still, Quigley, the tether creator, thinks the 10 years of crypto history to date should be the main framework for evaluating Facebook’s Tuesday announcement. Several people CoinDesk spoke to made some version of his same point:

“Every time a new cryptocurrency has been created it has been additive to the overall crypto experience.”

8. 18/06/2019 14:58
3 Reasons Bitcoin Is Rallying Above $9K

Bitcoin rose above $9,000 over the weekend, taking cumulative year-to-date gains to more than 150 percent.

The leading cryptocurrency by market value clocked a 13-month high of $9,391 on Bitstamp on Sunday and was last seen trading at $9,200, representing 22 percent gains on last Monday’s low of $7,524.

Cryptocurrency market experts and investors are associating the sharp price gains seen over the last six days with a number of factors, the most prominent being Facebook’s coming foray into cryptocurrencies.

Facebook to launch ‘GlobalCoin’

The social media giant is set to unveil its very own stablecoin, reportedly called GlobalCoin on Tuesday, June 17, with a launch to follow in 2020.

The project has reportedly already secured the backing of over a dozen companies and is seen boosting the pace of widespread cryptocurrency adoption by many including Barry Silbert, the founder and chief executive of Digital Currency Group.

Meanwhile, Spencer Bogart, General Partner at Blockchain Capital, believes Facebook’s crypto effort is among the most bullish external tailwinds for bitcoin in 2019/2020, as it will ease the friction in acquiring digital assets by creating a circular economy.

Further, there is a consensus in the investor community that Facebook’s crypto will create awareness that a private, non-central bank issued currency can exist, leading to increased adoption of bitcoin and other cryptocurrencies.

The hype garnered by GlobalCoin likely put a bid under the cryptocurrency over the weekend. That, however, makes BTC vulnerable to “sell the fact” trading following the expected white paper launch on Tuesday.

Binance.com bars US customers

Binance.com, the world’s largest cryptocurrency by trading volume, updated its terms of use on June 14 to exclude all users in the U.S.

The announcement led to a sharp sell-off in Binance’s very own native asset, Binance Coin (BNB). The price of BNB fell 12.8 percent to 25,209 satoshis (a satoshi being 0.00000001 of a BTC) on Friday, and hit a one-month low of 34,906 satoshis on Sunday.

The slide indicates that investors have rotated money out of BNB and possibly into bitcoin, pushing the top cryptocurrency higher, as discussed by Alex Kruger – a prominent Fundamental & Technical Analyst.

Litecoin approaches ‘halving’ event

The upcoming litecoin (LTC) halving, set to trigger on August 5, 2019, will cut the reward gained from mining the cryptocurrency by half, meaning LTC will become a more scarce asset overall.

”Halvings’ as they are known, typically result in an overall boost in value for the crypto markets, as the assets themselves become harder to obtain and therefore increase in value.

Litecoin has already rallied 353 percent this year and may have added fuel to the ongoing bitcoin’s price rally. It is worth noting that litecoin led the broader markets higher in the first quarter, with 100 percent gains over the period.

What next?

As noted earlier, bitcoin may see a pullback following Facebook’s announcement on Tuesday. The long duration charts, however, indicate that corrections, if any, could be short-lived.

Weekly and monthly charts

Bitcoin jumped 17.57 percent last week (above left), invalidating the bearish view put forward by the previous week’s close below $8,000.

Further, the 5- and 10-week moving averages are trending north, indicating a bullish setup, while Chaikin money flow is reporting the strongest buying pressure since December with an above-0.32 reading.

The bullish case looks stronger if we take into account the falling channel breakout on the monthly chart (above right).

As a result, BTC could rise to $10,000 over the next few weeks. In the short-term, a price pullback cannot be ruled out.

Daily chart

BTC printed 13-month highs above $9,300 on Sunday but failed to close above $9,097 – the high of the bearish outside reversal candle created on May 30.

Another failure to secure a UTC close above $9,097 may trigger profit taking on long positions, leading to a price pullback to the 200-hour moving average (MA), currently at $8,300.

9. 17/06/2019 06:57
Above $9.3K: Bitcoin’s Price Prints 13-Month High

The price of bitcoin (BTC) hit a 13-month high above $9,300 on Sunday.

The leading cryptocurrency by market capitalization rose to $9,381 at  05:55 UTC – the highest price since May 10, 2018, according to CoinDesk’s Bitcoin Price Index.

BTC was last seen trading at $9,250 representing 6.4 percent gains on the day. On a month-to-date basis, the cryptocurrency is up 8 percent.

More than $19 billion worth of bitcoin has been traded across cryptocurrency exchanges in the last 24 hours, according to Messari data. Meanwhile, major exchanges included in the calculation of Bitwise’s “real” bitcoin trading volume are currently reporting the 24-hour volume figure at $867,697,751.

With the price rise, Bitcoin’s dominance rate, or its share of the total cryptocurrency market, has ticked higher to 57.1 percent from lows near 55 percent see on Friday.

The bitcoin price rally is boding well for the broader market. At press time, litecoin is up 2.3 percent on a 24-hour basis. Names like ethereum’s ether token, XRP and bitcoin cash are up 4 percent, according to CoinMarketCap.

Meanwhile, EOS is the best performing top 10 cryptocurrency of the past 24 hours with 7 .4 percent gains.

However, on a seven-day basis, litecoin is leading the top 10 cryptocurrencies with 18.29 percent gains followed by bitcoin, which has appreciated by 17.20 percent.

Looking forward, BTC may rise further toward the next major resistance at $10,000, as long-term technical studies are biased bullish. For instance, bitcoin’s 50- and 100-candle moving averages on the three-day chart look set to produce a bullish crossover – a sign of bull market momentum. Back in October 2015, the same cross marked the start of a long-term bull market.

Notably, with a move to 13-month highs, the cryptocurrency has retraced nearly 38.2 percent of the sell-off from December 2017 highs to December 2018 lows, as seen in the chart below.

Weekly chart

BTC’s sharp rise from $7,500 to levels above $9,300 has invalidated the bearish doji reversal confirmed by last Sunday’s UTC close below $8,000. As a result, the path of least resistance is to the higher side and prices could cross the 38.2 percent Fibonacci retracement hurdle of $9,442.

However, a minor pullback to $8,000 could be seen before a break above $9,442, as the bearish divergence of daily trading volumes discussed on Friday is still valid. Further, the widely tracked relative strength index is reporting overbought conditions with an above-70 print on the hourly and 4-hour charts.

10. 15/06/2019 20:46
Jack Dorsey Hints at How Square Crypto May Support Bitcoin’s Code

After revealing that his payments firm Square is building a small team to help with bitcoin and cryptocurrency development back in March, CEO Jack Dorsey has revealed more details about the project – even though it’s still early days.

In an interview with The Next Web, Dorsey, who is also CEO of Twitter, confirmed that he’d recently hired former Google director Steve Lee to lead the team. Dorsey said that he’d interviewed “tens of candidates” for the post before arriving at Lee as his choice.

The new hire will take responsibility for building the remainder of the team, as well as defining its future path, he said. Square is currently eyeing a maximum of five engineers and one designer, who will likely work on a single project rather than many.

That’s because Dorsey aims to “make some step changes to various aspects of the ecosystem, versus an iteration,” he said.

While one would expect devs, the choice of a designer comes as something of a surprise in such a early stage project. Dorsey put this down to the need for the need to make cryptocurrencies more accessible, as well as providing education on the technology.

Joking that the team doesn’t want any “jerks,” Dorsey also said that it’s important any candidates must have good technical abilities.

“We want to see significant open-source contributions to various projects. Bitcoin Core is a great example of that, but there’s others, too,” he said.

As for its particular role in the crypto ecosystem, he explained that Square Crypto might conduct “grungy, but meaningful” code reviews in order to speed up development. While there are plenty of devs helping out on cryptocurrency projects, few are working on checking the correctness of the code, Dorsey said – changing that could give a “huge boost” to the space.

Outside that, there’s need for work to improve efficiency and security. “There’s still a number of big flaws within the Bitcoin community right now,” Dorsey told TNW.

The CEO also indicated that he wants to keep the role of Square in the mechanics of the team to a minimum, ruling out cheap stock options in favor of optional bitcoin salaries in order to build a desire to better “serve the community.”

The work carried out by the team should also be open to the public. While it’s not set in stone yet, Dorsey suggested Square Crypto could operate like a traditional open-source project.

Aside from the more general development work of the crypto team, Square is eyeing bitcoin technology in its products too. Back in February, Dorsey announced during an interview with podcaster Stephan Livera that there are plans to integrate the lightning network – a still early-stage bitcoin payments tech – with Square’s Cash app.

 

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