Digital Currency Weekly Recap 2-21-2016
Lisk to Partner with ShapeShift for ICO
Lisk has recently announced its intent to conduct an initial coin offering (ICO) of 85 million LISK in partnership with well-known digital currency exchange ShapeShift. The ICO is scheduled to begin on Monday, February 22, and will continue through March 21, 2016. The new sidechain platform is expected to launch in the latter part of March, and is expected to provide an open source platform that facilitates development of customized blockchains and decentralized applications.
Brain Wallet Security Deficiencies Confirmed by Researchers
Researchers have released two new security papers highlighting disturbing weaknesses in so-called Bitcoin brain wallets. For a time, many saw the brain wallets as a perfect way to address the inherent problems many users experience with their Bitcoin private keys - namely, the difficulty involved in memorizing the complex passwords. Using the SHA256 algorithm, the new brain wallets were able to use passwords that they could actually remember.
In The Bitcoin Brain Drain: A Short Paper on the Use and Abuse of Bitcoin Brain Wallets and Speed Optimizations in Bitcoin Key Recovery Attacks, researcher Ryan Castellucci and others detail how they were able to crack the passwords used in brain wallets, due to their lack of cryptographic randomness. Worse, Castellucci’s method for cracking these passwords is not only fast but cost-effective enough to prove enticing to hackers: for only $56, a hacker could check a trillion unique passwords.
No Timetable for China’s Launch of its Own Cryptocurrency
A month ago, China’s Central Bank announced its intent to launch a Chinese digital currency. Last Sunday, the world learned that there is no concrete target date for achieving that goal. In an interview with the magazine Caixin Weekly, central bank governor Zhou Xiaochuan confirmed that the People’s Bank of China will continue to emphasize control over any issued digital currency, and stressed that the PBC believes that cryptocurrencies need to be managed in the same way as fiat currencies.
The governor also noted that the PBC was committed to relying on the principles agreed to by other central banks around the world, and that his country would not be the first to adopt its own digital currency. The interview also covered issues like anonymity, blockchain transaction limitations, and his belief that digital money will inevitably supplant paper currency.
ECB Contemplates Elimination of 500-Euro Note
This week, the president of the European Central Bank (ECB) confirmed that discussions are underway to consider removing all 500-euro bills from circulation. European Parliament lawmakers were told of the proposal, which central bank spokesmen claim has “nothing to do with reducing cash.” Many in the euro zone might disagree, however, given the note’s popularity among savers who prefer to hoard cash.
The ECB has cited concerns over criminals’ use of the note - even as officials suggest that savers and other citizens can simply use the 200-euro note instead of the larger denomination. The suggested removal of the note has elicited concern in some circles, largely due to the sheer volume of the currency currently in existence. The 500-euro note makes up roughly thirty percent of the more than one trillion euro cash that currently exists within the euro zone.
The news comes in the midst of a growing debate about eliminating large denominations of physical cash in a number of countries, including the United States. With increased attention on the benefits of digital currencies – whether state-imposed or decentralized, some are casting this latest news as indications that a war on cash is looming on the horizon.
Kraken: Mt Gox Liquidation Enjoying ‘Significant Progress’
According to claim details provided by Kraken at a Tokyo creditors meeting related to the Mt. Gox court-ordered liquidation, the exchange has made ‘significant progress’ in its efforts to process creditor claims. For more than a year, Kraken has been working with the trustee assigned by the Tokyo district court to handle creditor claims related to the Mt. Gox affair. To date, 9,863 Bitcoin claims have been filed for consideration, and 80% of them have been received.