Cryptospace Spotlight 2022 #2 (9 Jan 2022)
e-CNY on pilot at 11 locations, Bitcoin is 13 years old, Paypal is going to have own stablecoin and Signal pushed out beta crypto payment feature!
In China, a pilot model of e-CNY mobile wallet for China’s digital yuan, has gone live. Individual users in China can download a version of the app to try out “personal wallet opening and management. As well as “e-CNY exchange and circulation services. To download the trial app (available on iOS and Android app stores in China) and activate the wallet, users must be physically located in one of 11 locations: Shenzhen, Suzhou, Xiong’an, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian and the Winter Olympics area. [more]
India’s central bank has created a dedicated department for fintech challenges, which includes a pair at their doorstep: framing cryptocurrency regulations and a central bank digital currency (CBDC). [more]
Hong Kong crypto exchange, Coinsuper, has reportedly stopped all withdrawal requests, according to reports. Five clients reportedly filed police complaints after token withdrawals were apparently halted. [more]
A South Korean presidential candidate will be accepting cryptocurrency donations for his 2022 campaign. He will issue NFTs to donors as receipts. [more]
Technology & Industry
Bitcoin is 13 years old after its Gensis block was mined on 3 Jan 2009 by Satoshi Nakamoto, and the crypto community is celebrating Bitcoin becoming a teenager. [more]
JPMorgan's research analysts see potential for tokenization within financial services as transactions speeds in crypto become more competitive with traditional finance networks. [more]
The dominant position enjoyed by Ethereum in decentralized finance will increasingly be challenged by other blockchain protocols until a scaling solution for the network is implemented next year, according to analysts at JPMorgan [more]
Paypal is looking into launching its own stablecoin as the company grows its crypto business, a company spokesman confirmed. [more]
Signal had included a beta “payments” feature to let its users send MobileCoin around the globe.[more]
Kazakhstan's internet shutdown takes out 18% of global Bitcoin production. [more]
Polygon is built for crypto games, but Sunflower Farmers’ sudden surge in players is spiking gas fees and slowing transactions. [more]
The attacker exploited a vulnerability in the Tinyman pools’ contract code that allowed them to receive the same token twice after a burn rather than two different tokens. This was to their advantage because it allowed the attacker to extract twice as much gobtc instead of a mix of gobtc and ALGO tokens. Since gobtc is much more valuable than ALGO, this allowed the attacker to make a significant profit and drain approximately $3 million in gobtc and goeth from the Tinyman pool over multiple transactions.
While apologizing for the entire event, Tinyman assured that all affected users will be reimbursed and that the team is currently working on compensation plans. However, it also mentioned that they could not obstruct any kind of transaction on the blockchain due to the permissionless nature of the contracts.
In a bid to control the intensity of the damage, Tinyman urged liquidity providers to pull out all their liquidity from all the protocol-related contracts. In addition to that, all liquidity routes in the web app were blocked and were replaced with warning signs to protect the community.
A group of academics from the University of California, Santa Barbara, has demonstrated what it calls a "scalable technique" to vet smart contracts and mitigate state-inconsistency bugs, discovering 47 zero-day vulnerabilities on the Ethereum blockchain in the process. [more]
These vulnerabilities in the code could result in hefty losses, as evidenced by hacks aimed at the DAO and more recently, MonoX, where adversaries exploited loopholes to illicitly siphon funds, a scenario that could have catastrophic consequences given the burgeoning adoption of smart contracts over the past few years.
The total number of jurisdictions with an absolute ban or severe restrictions on crypto has more than doubled over the past three years, and there are few signs that this trend is slowing down. [more]
SUERF's publication indicated that "Bitcoin raised the attention for the potential of distributed ledger technology (DLT), it fails to deliver on its promises but comes at high costs." and "It is unfitted and inefficient as a means of payment but used extensively for illicit activities." There are also "growing concerns on Bitcoin’s climate footprint have now led to calls of some authorities to address or even ban essential elements of Bitcoin’s technology." [more]
TLDR: The publication concluded that "doubts on the sustainability of Bitcoin and the related social costs does not mean that DLT, blockchain and decentralised finance have no merits as innovative technological approaches. What remains unclear is if crypto coins other than stablecoins (or non-fungible tokens representing ownership of some other assets) can represent a meaningful investment asset. In the case of Bitcoin these doubts are particularly strong because of Bitcoin’s reliance on the inefficient proof-of work concept and its poor performance as means of payment."
SUERF is the abbreviation of the Association’s original name "Société Universitaire Européenne de Recherches Financières". SUERF is a non-profit association established on 25 November 1963 in Louveciennes, France, by a group of academics and bankers from France, the United Kingdom, the Netherlands and Belgium. SUERF’s focus is on the analysis, discussion and understanding of financial markets and institutions, the monetary economy, the conduct of regulation, supervision and monetary policy, and related issues.
Former Commodity Futures Trading Commission (CFTC) Chairman Chris Giancarlo called the Biden administration’s approach to the crypto industry as a “highly defensive and reactionary,” in remarks at the American Enterprise Institute. [more]