Is the Bull Market Reigniting?- Weekly news 34/2021

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Bitcoin’s price has once again broken the threshold of $50 000 dollars. Despite a temporary cooldown below that level, many crypto hobbyists and experts see this as a sign of new bull markets commencing. If the markets follow the same pattern as before, we can expect quite a rumble by the end of the year. While risks are always present, it’s never too late to invest in bitcoin.

This week we will, as usual, inspect some of the most interesting twists and turns in the crypto world. Payment card giant Visa recently made a rather peculiar purchase of over a hundred thousand dollars for a digital picture. While the item’s value is largely only based on the whims of collectors, Visa motivates the decision with the revolution of NFT technology.

Among other news we will talk about China’s national digital currency, which has leaped forward while authorities clamp down crypto operators in the country. Additionally we have warnings about crypto scams in Google’s app store, and the story of a Swedish drug dealer with many similarities to the Finnish Douppikauppa case.

Last week’s news can be read here.

Visa invests in CryptoPunk NFT

Payment card giant Visa announced on Monday that it had bought a so called CryptoPunk, an NFT-based avatar, with 49.5 ether equaling nearly $150 000 dollars. Cuy Sheffield, head of crypto at Visa, commented the purchase by asserting that NFTs will play an important part in future commerce, social media and entertainment.

NFT, or non-fungible token, refers to a blockchain-based item such as a picture, audio file or video. With the help of blockchain, these files can have scarcity and a verified owner.

CryptoPunks in turn are small digital pictures of different human characters utilizing NFT technology. They are one of the first applications of the technology having gained wider publicity and popularity among collectors.

Soon after announcing the purchase, Visa also published its own report regarding the future of NFT assets. The report confirms the company shares Sheffield’s stance, and believes these blockchain-based tokens have a huge potential in sports and entertainment industries.

Visa’s purchase may pave the way for a new rise of the NFT scene. Those believing in the potential of NFT think the technology can, for instance, solve several questions related to copyright issues.

Visa’s NFT purchase is a further step into the crypto world.

Digital yuan used in domestic markets for the first time

China’s central bank digital currency has been used for the first time in the country’s domestic markets. The digital version of the country’s official currency also known as digital renminbi or e-CNY was used to pay for storage space fees in the city of Dalian.

According to a report by China Securities Journal, the payment occurred instantly, effectively and without transaction fees. Also earlier pilots have reportedly succeeded in their aim to enhance China’s economy.

China also intends to give foreigners the opportunity to try out the digital yuan in Beijing’s upcoming winter olympics next year. Visitors will be able to use the digital currency without needing to open a local bank account.

China has in recent years ramped up its efforts to take the country’s digital economy under government control. Aside from launching the digital yuan, the state has actively tried to curb crypto operators and prohibit non-governmental activity related to the industry.

China has recently restricted Bitcoin operators while promoting its own digital currency.

Poly Network hacker returned remaining funds

Decentralized finance service Poly Network recently fell victim to a major hack. In a somewhat surprising twist, the anonymous hacker – or hackers – returned most of the funds last week. Now the hacker has reportedly returned the remaining funds, amounting to roughly $141 million dollars worth of cryptocurrency.

The hack on Poly Network occurred on the 10th of August, which resulted in the loss of around $600 million dollars worth of crypto. The case is regarded as one of the biggest attacks on decentralized finance, with the hacker also citing it as a wild adventure for both parties involved.

Soon after the attack, the hacker returned most of the stolen cryptocurrencies on own initiative. However, he threatened to delay returning a part due to Tether’s activity. Tether had frozen around $33 million dollars worth of USDT right after the hack became evident.

“In my selfish view, the story is tainted by the locked USDT. It would have been a perfect example of building trust between anonymous ‘adversaries’ by leveraging the power of smart contract,” the hacker commented.

While many hackers have malicious intentions, this case turned out to be a so called white hat.

Rapper publishes blockchain-based OnlyFans competitor

Online content platform service OnlyFans announced last week that it will ban all sexually explicit content. The site was earlier one of the most popular ways for amateur adult entertainment producers to sell content.  

The decision of OnlyFans received mixed reactions from users. Some applauded the decision, while others condemned it. One source of critique was American rapper Tyga, who had earlier sold additional content to fans on the page. Now Tyga has announced plans to launch a competing service working on top of the Ethereum blockchain.

The service dubbed Myystar is meant to improve both the security of content creators and users. With the help of the Ethereum platform, the site allows content producers to sell different forms of material as unique NFTs.

Myystar is set to be published in October, when OnlyFan’s new rules will come into effect. Myystar is already accepting preliminary subscriptions to the service. It remains to be seen how well the blockchain-based system will fare compared to the giant OnlyFans.

Tyga’s competing content platform is set to launch in October.

Fake crypto apps in Google Play

The Google Play application store includes several fraudulent crypto apps, reveals a new study by cyber security firm Trend Micro.

Trend Micro discovered eight Android apps that deceive downloaders with illegitimate monthly fees. Some of the apps charge users for cloud mining services which do not actually exists. Others in turn claim to provide cloud services in return for users watching commercials.

 Micro Trend names BitFunds, Bitcoin Miner, Daily Bitcoin Rewards, Crypto Holic, MineBit Pro, Bitcoin 2021 and Ethereum — Pool Mining Cloud among the deceitful apps. Additionally the Bitcoin wallet Bitcoin — Pool Mining Cloud Wallet was mentioned.

Google has already delisted the apps discovered by Micro Trend from its store. However, Micro Trend warns that Google Play still includes at least 120 different false apps, some of which have been downloaded over 100 000 times.

Users of different crypto apps are strongly encouraged to examine the apps before downloading to ensure they are not scams. The growing popularity of cryptocurrencies also inevitably leads to more attempted scams. Internal inspections by Google Play and similar app stores may be insufficient and allow several false apps to pass through.

Several fraudulent apps have been found in Google’s Play Store.

Sweden pays bitcoins to drug dealer

The government of Sweden will have to pay $1.5 million dollars worth of bitcoins to a convicted drug dealer. The drug dealer had sold drugs for bitcoins online and earned roughly 36 bitcoins before his arrest and incarceration. Now the state is obliged to return most of this sum.

The ruling is based on the formulation of the court’s verdict. The sentence was given two year ago, when the value of bitcoins was significantly lower than now. However, the sentence only notes the value based on Swedish kronas. Therefore the state will now have to pay the difference between the original settlement and the current value of bitcoins to the convict.

According to legal experts, the government of Sweden would have avoided this situation by selling the bitcoins immediately after their confiscation. Alternatively, the prosecutor’s demands could have been formulated in terms of bitcoins instead of kronas, as 3 of the 36 bitcoins now suffice for the original sum.

The situation is strongly reminiscent of Finland’s Douppikauppa case. In 2017, Lasse Kärkkäinen was sentenced to 10 years in prison after administering online drug site Douppikauppa. The court also ruled that Kärkkäinen’s bitcoins used on the site should be seized. In the years since, the value of these bitcoins has risen with millions. 

Kärkkäinen’s defense has argued that a part of the confiscated bitcoins should be returned, as their value has multiplied from what it was at the time of the original verdict.

Swedish officials settle their first debt in Bitcoin
Sweden has been forced to return a Bitcoin treasure trove to a convict.

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