Bitcoin Weekly 2016 August 10: Bitfinex trading coming back online, App Store fake Bitcoin apps, Kim Dotcom …

Bitfinex is big news this week, especially after the hack last week, and the company has begun reporting that it expects to bring most of its trading platform back online along with deposits. The iTunes App Store is still having troubles with fake Bitcoin apps appearing—Apple has been removing those last discovered and reported but new ones have arrived recently.

Kim Dotcom from Megaupload fame has also been tweeting a lot more about the upcoming resurrection of the platform and how it will provide bitcoin microtransactions for uploaders sharing files. Although details on how this will work are slim.

As for the market, it has been over a week since Bitfinex went offline, an exchange that represented over 50 percent of the total trade volume of BTC for USD. At the time, this had a notable effect on current Bitcoin market value and the price is only now beginning to recover. Currently the BTC market value is rising and sits at $597.32 USD (according to BitcoinAverage.com). Analysis charts at Cryptocompare.com show the market dipped down to the $570 range on August 3, which then rose to the $590 range around August 6. The price saw a recent pop up near $600 again within the past 24 hours.

Screenshot of CryptoCompare BTC-USD prices for the past week showing recovery from market drop after Bitfinex hack. https://www.cryptocompare.com/coins/btc/charts/USD

Screenshot of CryptoCompare BTC-USD prices for the past week showing recovery from market drop after Bitfinex hack. https://www.cryptocompare.com/coins/btc/charts/USD

Bitfinex hack aftermath and restoration of service

Last week, Bitfinex (BTXNA, Inc.), one of Bitcoin’s biggest exchanges by volume, suffered a hack that led to a massive loss of bitcoins. The thieves stole approximately 119,756 bitcoins, valued over $65.6 million USD. After the hack, Bitfinex immediately shut down trading on its platform and has only slowly begun to open its doors again.

In response to the hack, and the loss of bitcoins, Bitfinex proposed an obviously unpopular “socialized losses,” which would take 36 percent of the balance of all present customers’ bitcoin wallets. At the same time, Bitfinex intends to compensate its customers with special exchange tokens using the Omni protocol with the shortcode “BFX” in the amount taken. The details and terms of this token can be read on the site.

Needless to say, customers of Bitfinex who had bitcoin balances on the exchange were not pleased with this result.

According to an update posted today, Bitfinex intends to start opening up most trading and withdrawals, including for the new BTX tokens:

Today, August 10th, 2016, at 16:00:00 UTC we will be enabling additional platform features as we continue to restore service after the incident on August 2nd. Exchange trading will be enabled for all currencies and pairs, while deposits and withdrawals will be enabled for BTC, ETC, ETH, and USD – with LTC and Tether to follow shortly thereafter. Exchange trading will also be enabled for the BFX token on pairs BFXUSD and BFXBTC. We are working on tokenizing BFX via the Omni Layer to allow withdrawals for the BFX token, but we are still working out some protocol level details. Please note that U.S. residents will only be able to sell—not buy—BFX tokens at this time.

The company has also invalidated any deposit addresses created before August 9 19:00 UTC for all cryptocurrencies (with the exception of Tether USDT). As a result, customers need to update deposit addresses in order to interact with Bitfinex.

trojan horse virus malware

photo credit: marsmet548 via photopin cc

Trojan Bitcoin wallets continue to wash up on Apple App Store’s shore

Last week, the Bitcoin community (and consumers in general) found warning that fake Bitcoin apps began appearing in Apple Inc.’s iTunes App Store. At the time, Bitcoin wallet developer Breadwallet put out the warning (as its app was also one that was faked) and set out details on how to get fake apps removed from iTunes—many of the fakes have been removed since then.

However, more fake apps continue to arrive.

Tuesday, a warning went up on Reddit about a wallet named “Bitcoin Wallet by Bit Coin” on iTunes, it was swiftly taken down. The same day yet-another-fake Breadwallet app appeared (warning posted by breadwallet_dan the original representative to warn everyone of these fake apps) listed as “Breadwallet – bitcoin wallet™ by Bitcoin Wallet.”

When downloading Bitcoin wallets do not trust apps posted in app markets, instead: Go to the website of the app developer, use a link from the official website to the app market and install from there. Currently this is the best defense that any consumer has against fake apps being uploaded to Apple’s App Store or Google Play.

To the company’s credit, Apple is working to remove the counterfeit Bitcoin apps from its marketplace. However, whatever enhanced screening processes or methods that Apple intends to implement have not started working quite yet.

A photo of Kim Dotcom taken from a video where he speaks about bringing Bitcoin into the mainstream via Twitter.

A photo of Kim Dotcom taken from a video where he speaks about bringing Bitcoin into the mainstream via Twitter.

Kim Dotcom’s interest in adding Bitcoin to Megapload (2.0?) increases

Famed (or infamous) entrepreneur Kim Dotcom has been showing an increased interest in Bitcoin recently with a series of announcements involving his claimed highly-secure cloud sharing upload site Megaupload 2.0. Dotcom is famous for running a cloud upload service called Megaupload Ltd. that was dismantled by the United States government in 2012 over copyright law concerns (in spite of it being headquartered in Hong Kong).

Dotcom is no stranger to Bitcoin, especially because of the cryptocurrency’s capability to enable greater privacy and security for users and its function as a non-traditional payment mechanism when other payments dry up.

Dotcom is also no stranger to controversy and not just from what befell his company Megaupload. His history is riddled with extravagant claims and bold moves. Even recently he published a video on Twitter where he claims to have invented two-factor authentication (2FA), Internet connectivity for cars and cloud storage… None of these things are readily connected to Dotcom, although Megaupload and Mega (the immediate successor to Megaupload) both make extensive use of cloud storage.

According to Dotcom, Megaupload 2.0 will link uploads to bitcoin microtransactions, allowing users to pay and get paid for sharing content.

Seeing the history that Megaupload has—having been taken apart by governments over copyright concerns—the new Megaupload may be tempting fate by offering money (in the form of bitcoins) for people sharing uploads. If the new Megaupload houses illegally distributed copyrighted content that is then shared and pays out bitcoin, it will provide a very strong incentive for what happened in 2012 to happen again.

So far, Dotcom may has given little detail as to how this will work out, but he is certainly talkative about it.

The new Megaupload site is expected to launch January 2017.

Featured image credit: via reddit member huevos_de_acero
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Kyt Dotson
Kyt Dotson

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