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Blockchain.com Introduces Institutional Investment Platform

UK-based crypto data supplier and cryptocurrency wallet Blockchain.com has recently launched a comprehensive institutional platform Blockchain Principal Strategies (BPS), according to a blog post today, June 28.

Blockchain.com claims the new platform will provide secure and “unparalleled” access to markets, services, and research for institutions, family businesses, and retail investors. Blockchain.com co-founder Peter Smith commented that the new institutional grade platform aims to provide maximum security while investing:

“BPS provides clients the opportunity to invest in digital assets with the same peace of mind and security that has become synonymous with the Blockchain name.”

BPS offers a number of trading and research tools, such as an over-the-counter (OTC) trading desk, a smart Order Management System (OMS), custom portfolio view, risk metrics, as well as access to a research team that staffs Garrick Hileman, the University of Cambridge’s first “cryptocurrency academic,” hired by Blockchain.com in May this year. The OTC services through BPS will be managed by a team of experts from Goldman Sachs, JP Morgan,and UBS.

Previously known as Blockchain.info, Blockchain.com tweeted today that their URL has changed:

“http://Blockchain.info  has moved You may have noticed that all of http://blockchain.info ’s URLs have now been redirected to http://blockchain.com , but don’t worry, this isn’t goodbye to .info forever, it’s just see you elsewhere!”

Launched in 2011, Blockchain.com is now one of the most popular crypto wallets with more than 25 million registered wallets and $200 billion worth of assets transacted in 140 countries. Originally launched as a data supplier for Bitcoin (BTC) transactions, the firm now offers a crypto wallet for Bitcoin, Bitcoin Cash (BCH), and Ethereum (ETH).

Earlier this year Blockchain.com announced the launch of Bitcoin trading for 22 states in the U.S. According to Blockchain.com’s statement, they will continued adding new services for U.S. users, such as trading services in ETH and BCH.

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Crypto Wallet Startup Blockchain Launches Institutional Platform

Crypto wallet startup Blockchain has unveiled a new service platform focused squarely on the institutional market.

Blockchain Principal Strategies (BPS) aims to provide investors and institutions with “unparalleled and tailored access to markets, research and services on the most trusted digital asset platform worldwide,” the company said in a blog post.

The new platform seeks to help investors gain exposure to crypto assets using an over-the-counter (OTC) trading desk. The trading desk, Blockchain says, features a “best-in-class matchmaker and direct counterparty to clients, executing trades and managing associated risk,” according to the post.

BPS also offers trading “across major currencies and digital asset pairs,” though it is unclear which specific trading pairs it is offering at this time. The company will also roll out additional products later this summer.

Blockchain chief executive and co-founder Peter Smith said in a statement that “BPS provides clients the opportunity to invest in digital assets with the same peace of mind and security that has become synonymous with the Blockchain name.”

“Launching BPS is the first step in our longer-term strategy to execute on that vision. In addition to the BPS platform itself, we will also offer educational and networking opportunities with hopes of creating a broader, well-informed community around digital currencies moving forward,” Breanne Madigan, the company’s head of institutional sales and strategy, said in a statement.

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Blockchain.com Hires Author of First Cambridge Crypto Course to Head New Research Team

Cryptocurrency data resource and wallet provider Blockchain.com announced it had hired a Cambridge academic as its new head of research May 16.

In a blog post, Blockchain.com revealed that Garrick Hileman, author of multiple cryptocurrency research publications, would “lead a new research arm aimed elevating block chain (sic) technology to its full potential.”

The move marks the second high-profile hire for the company in weeks, April seeing ex-Goldman Sachs executive Breanne Madigan join as head of institutional sales and strategy.

While the career pivot seems a natural progression for Hileman, who also developed Cambridge University’s first cryptocurrency course, he stands out among academics and economists alike in his bullish views on Bitcoin and cryptocurrency.

Speaking to Business Insider following the appointment, Hileman said he was surprised that figures such as Nouriel Roubini and Paul Krugman “have a hard time seeing the technology.”

“Some of them don’t have the best track record for understanding technology, to be frank,” he told the publication.

“Paul Krugman famously thought the internet wasn’t all that more significant than a fax machine. I’m not sure I would have a lot of success helping them understand the significance of this technology as a new platform, as something that in some ways can be compared to the internet.”

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The Blockchain Data Problem Is Bigger Than You Think

A straightforward data point – the total supply of bitcoin hit 17 million.

But as with most things in crypto, it wasn’t so simple.

Every 10 minutes or so, miners find a block of transactions and the network adds 12.5 new bitcoin to the total supply as a reward for the finders. And each reward has been logged on the blockchain since bitcoin launched in early 2009.

As such, it seemed like a number – a milestone – the industry could trust.

But as some celebrated once the mark was hit on bitcoin data provider Blockchain’s website, others took to Twitter to rain on their parade.

Jameson Lopp, Casa engineer and the creator of Satoshi.info, another public-facing bitcoin data site, tweeted:

“Today I’ve learned that a lot of data sources are incorrectly reporting the total bitcoin supply. We haven’t actually hit 17 million BTC yet.”

Lopp’s contention was that Blockchain.info, one of the most popular and highly-regarded sources for blockchain network data, among others, had not accounted for instances in which bitcoin miners, due to bugs and other causes, did not claim their full block reward.

Unfortunately, these discrepancies in the total bitcoin supply metric are not the exception, but part of a larger problem that stems from the “opaque” methodologies these blockchain data analysis providers use, according to Greg Cipolaro, the CEO of Digital Asset Research (DAR), a firm that provides blockchain analysis to clients.

As such, DAR went on a mission to figure out Blockchain’s methods for what it calls “one of the longest standing mysteries in the cryptocurrency community” – bitcoin’s estimated transaction value. In the company’s report on the subject, published recently, DAR said Blockchain over-estimated transaction values from October to February 2017 and has mostly underestimated them since then.

Executives from Blockchain were not available for interview before press time.

But it’s not only Blockchain. Cipolaro cited CoinMarketCap’s January removal (without warning) of South Korean exchange data from its price index. Since cryptocurrency prices on South Korean exchanges have tended to be higher, the eviction made it appear that the crypto markets were crashing.

Panic selling ensued, setting off what Cipolaro called “a mini-flash crash.”

In fairness, though, price indices always involve subjective decisions. That is true not only of cryptocurrencies but also the stock market. Yet without insight into how price and other metrics are arrived at, the cryptocurrency community could suffer. Accurate data is extremely important for investors, traders, users, developers, academics, journalists – basically everyone.

A multi-layer problem 

Still, many people who depend on public blockchain data don’t realize how flawed some of this data is.

Offering a grim outlook on the broad state of blockchain analysis today, Stefan Richter, a computer scientist who co-founded data provider BitcoinPrivacy, told CoinDesk:

“There are, of course, software bugs in probably every explorer around.”

And Cipolaro echoed that, saying, “This is not something you would notice unless you spent your days looking at it.”

Luckily, some industry enthusiasts have noticed.

Lopp, for one, is a cryptocurrency data hound. He pointed to bitcoin node count, a figure often cited as a measure of the network’s decentralization and health, as a particularly finicky metric.

“I often hear folks say that there are only 10,000 bitcoin nodes,” Lopp said. But the source of that figure, Bitnodes, “only counts reachable nodes that accept incoming connections.”

Addy Yeow, the creator of Bitnodes, confirmed that the site only counts “listening” nodes.

As such, the total number of nodes could be far higher, according to both Lopp. Indeed, one estimate puts listening and non-listening nodes at nearly 140,000.

And while Yeow agrees, he cautions that adding non-listening nodes to the metric would require making major assumptions. He explained that data sources that count non-listening nodes are actually taking part in a guessing game. Nodes that aren’t listening could still be connected, but behind a firewall, for example. Alternatively, they could have changed IP addresses, or the could have disconnected entirely.

The analysis providers that take into account non-listening nodes use a formula which takes into account the number of days nodes have been non-listening in an effort to count them, but the more unseen-but-connected nodes they capture, the more disconnected nodes they erroneously include.

Getting there

Due to the issues with public data sets, many blockchain data professionals avoid using them and instead use data they calculate internally whenever possible.

Chainalysis, a firm that analyzes blockchain data for clients including the U.S. Internal Revenue Service (IRS), is certainly skeptical. Kimberley Grauer, Chainalysis’ chief economist, said she prefers to use internal data because, “I know where the errors are; I know where the vulnerabilities are.” DAR’s Cipolaro echoed that, telling CoinDesk the company runs its own code, gleaning data from its own bitcoin node.

Still, despite their shortcomings, Cipolaro has high praise for the free sites that make bitcoin data available to the public.

“They provide a good source of high-quality information,” he said.

And it’s obvious these companies are trying. When a bug in Blockchain’s web service made it appear (incorrectly) that bitcoin founder Satoshi Nakamoto had moved some coins, the company fixed the problem.

Certain issues should be easy to fix. Grauer pointed out that block explorers often neglect to note time zones, and they don’t all use the same one. While that’s not strictly wrong, it causes confusion.

“Just compare blockchain.info to btc.com!” Grauer said. (We did: block 520672 was either mined at 23:18 on April 30 or 03:18 on May 1. There’s no hint of what time zone either site is using.)

Other data sets won’t be as easy to clean up. While the bitcoin blockchain may be fully public for all to see, the complicated way in which transactions are performed means measuring their value can be quite the challenge. Even DAR does not claim its new method is perfectly accurate.

“This will not likely be the last improvement we make,” the company said in its report.

For the time being, the community will need to remember the old Russian proverb, repurposed by cypherpunks:

“Don’t trust, verify.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Blockchain Acquires Startup for San Francisco Expansion

London-based cryptocurrency wallet and data provider Blockchain will open an office in San Francisco, the company announced on Wednesday.

The decision follows its recent acquisition of the team from software company Tsukemen, also formerly based in the Bay Area of California. The office will be staffed with several previous Tsukemen employees, with the company’s former CEO and co-founder, Thianh Lu, at its helm.

Likewise, Fred Cheng and Chris Arriola, two former software engineers at the company, will join the office to assist with Blockchain’s software and mobile application development projects.

Tsukemen’s Min Wei will also join Blockchain’s West Coast office as part of its strategy and partnerships team.

Blockchain CEO and co-founder Peter Smith indicated that the opening of the office is part of the company’s larger expansion efforts, which have most recently included the hiring of former Goldman Sachs executive Breanne Madigan and lawyer Marco Santori for the roles of institutional sales and strategy lead, and president and chief legal officer, respectively.

Smith remarked:

“With such a capable group at its helm, I know that our West Coast office will be instrumental in helping us scale operations and continue building best-in-class products to serve our customers.”

As for the Tsukemen team, Lu explained that joining the San Francisco office will support its longtime objectives.

“Making products has always driven our team, and there is no better place to continue building great and innovative technology than at Blockchain,” he said in the statement.

One of the the oldest startups in the industry, Blockchain is headquartered in London and has additional offices in New York and Luxembourg.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Blockchain Taps Former Goldman Exec for Institutional Investor Push

Blockchain, a cryptocurrency wallet and data provider based in San Francisco, has hired a former Goldman Sachs executive as head of institutional sales and strategy.

Signaling that the firm is ramping up its business with hedge funds and other large investors, the new hire, Breanne Madigan, previously served as head of institutional wealth services at Goldman Sachs, where she oversaw relationships with funds managing total assets of $1.49 trillion.

While Blockchain has barely discussed its work with large investors in the past, Peter Smith, the firm’s co-founder and CEO, told CoinDesk: “We have a lot of family office, hedge fund investors.”

Smith further directed CoinDesk to a website login page branded “Blockchain Principle Strategies,” though he did not provide login credentials.

Madigan told CoinDesk on Monday that she saw her new role as “helping more traditional investors gain unparalleled access to the future of finance,” adding that she has worked with “many of the largest and best-known hedge funds” in the past.

Blockchain provides online cryptocurrency wallets, allowing users to buy, sell or hold digital assets. The firm operates in 140 countries and has provided 24 million wallets.

The company plans to triple its headcount in 2018, according to a statement, while Smith added that that includes “hiring people with specialized skill sets for institutional investors and family offices.”

However, Blockchain may find that the competition to serve large cryptocurrency investors will heat up in the coming months.

A person familiar with the matter told CoinDesk that Barclays is talking to clients about opening a cryptocurrency trading desk. The source said that no concrete plans were in place, adding that most or all major banks are likely exploring the same possibility.

“These banks are trying to respond to client demand,” Smith said. “There’s really strong demand from clients.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Blockchain.info CEO: Central Banks Will Hold Crypto In Reserve In 2018

In 2018 central banks will hold cryptocurrency, alongside gold and foreign currencies, according to the CEO of Blockchain.info, Peter Smith.

Speaking in a short interview on CNBC’s Coin Rush segment, Smith forecast that next year would see the first such incorporations of crypto into traditional financial institutions, saying:

“I think this year will be the first year we start to see central banks start to hold digital currencies as part of their balance sheet.”

2018 will be the year that central banks hold digital currencies: Blockchain CEO from CNBC.

Bitcoin’s rapid rise this year, from around $1,000 in January to $20,000 this week, has attracted the attention of banks, governments and regulators globally. In some markets banks specifically have adopted varying and sometimes polarizing, views on the cryptocurrency’s future.

While South Korea’s Shinhan announced it would become the first major bank to offer customers Bitcoin wallets and storage, the Governor of Denmark’s central bank this week described Bitcoin as “deadly” and urged citizens to stay away from it.  

As a trend, Smith continued, central banks would likely begin to issue their own branded digital assets “either late this year or early next year.” Multiple governments, including Russia’s, are considering issuing a national digital currency, and Dubai has already officially decided to do so.

During the interview, when quizzed about the likelihood of a “major hack” occurring in the crypto space in the future, Smith said that since it had been around five months since the last major hack, the ecosystem was “due for one in the next month or two.” Speaking of his own company, he told CNBC:

“We’ve been one of the biggest targets for a long time; it keeps you busy.”

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Senior VP Says eBay “Seriously Considering” Bitcoin Integration

eBay, the $39 billion e-commerce platform, is seriously considering integrating Bitcoin into its platform as a payment method. In an interview with Yahoo Finance, eBay Americas senior vice president Scott Cutler stated that eBay is “seriously considering” integrating Bitcoin.

Power of Bitcoin

Throughout the past 12 months, the stock price of Overstock has increased by over 130 percent, triggered by the company’s involvement in various Bitcoin and Blockchain technology ventures. Several major conglomerates such as Japan’s GMO have also experienced a rapid increase in their stock values subsequent to their integration of Bitcoin.

It has become increasingly challenging for large-scale conglomerates and financial service providers to dismiss Bitcoin, because of its exponential increase in value and user base. Currently, the total market valuation of Bitcoin and other cryptocurrencies exceeds $500 billion. As such, major banks like Goldman Sachs have started taking steps toward embracing the digital currency also, with Goldman agreeing to clear Bitcoin futures on behalf of their clients.

Cutler noted during the interview with Yahoo Finance “we’re not quite there yet.” Despite this, eBay is apparently demonstrating its optimism towards the digital currency. The company is also effectively showing the public that they are following the latest trends in finance.

High merchant fees

According to Bitcoin Fees, a transaction fee predictor on Earn.com, the fastest and cheapest transaction fee is currently 360 satoshis / byte or $13 per transaction. Granted, the transaction fee of Bitcoin depends on the size of the mempool. But, the size of the Bitcoin mempool has consistently remained above 110 million bytes over the past few days.

Moreover, casual users and newcomers will not continuously check the size of the Bitcoin mempool to come up with the optimal satoshis per byte-based fee to pay merchants on eBay. Without sufficient scaling and lower fees, users on eBay will likely not pay for items with a fee of over $10.

Already, Steam has temporarily disabled its integration of Bitcoin due to the increasing complaints about high fees from its clients. The merchant and e-commerce adoption rate of Bitcoin have slumped in regions outside of Japan.

Given the current state of the Bitcoin Blockchain, it is likely that e-commerce platforms like eBay will only integrate Bitcoin once secondary layer solutions are ready for integration, such as Lightning Network. It is important to note that second-layer scaling needs Segregated Witness (SegWit) to operate, and the adoption rate of SegWit remains below 10 percent.

Transaction Percentage

The adoption rate of SegWit could increase by large margins in early 2018, upon the integration of SegWit by Coinbase and Blockchain.info, two of the global market’s largest Bitcoin wallet platforms.

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Blockchain.info Launches Bitcoin Cash Support, Users Cry For SegWit

Popular Bitcoin wallet provider Blockchain.info has announced it has now given “full support” to Bitcoin Cash (BCH).

In a blog post today, Blockchain confirmed that a Bitcoin fork, Bitcoin Cash, had become one of its wallet’s main currencies alongside Bitcoin (BTC) and Ethereum (ETH).

“In November, we revealed our plan to deliver on the growing demand we’ve seen for Bitcoin Cash,” the post explains.

“Starting today, we’re supporting Bitcoin Cash with full functionality through the same web wallet[.]”

Blockchain.info’s initial run with BCH saw users gain the ability to ‘unlock’ duplicate balances earmarked on the fork date Aug. 1. Now, trading in and out has the same setup as with the wallet’s other two supported coins.

No mobile support is yet available, but it’s promised to appear by the end of Q1 2018.

BCH meanwhile remains a contentious topic, with its principle advocate Roger Ver continuing to cause controversy with comments aimed at casting doubt on the reputation of BTC.

An appearance by Ver on CNBC this week spurred criticism from prominent personalities including Max Keiser, who hit back at what he called “borderline fraud” BCH and the network’s choice of Ver as a Bitcoin spokesman.

Blockchain.info has also faced a backlash from some sources over its prioritizing BCH features while so far failing to implement SegWit for its transactions.

The issue came to light again following the latest announcement, with venture capitalist Alan Silbert and others openly asking CEO Peter Smith why the technology had not yet appeared in his wallet.

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Major Wallet Vulnerability Revealed As User Barely Reclaims 9 BTC

An anonymous Pastebin user claimed to have discovered evidence that some Bitcoin wallet software can generate private keys that can be easily identified and hacked.

The reveal comes after another person has made a Reddit post describing how they lost nine BTC due to a transaction error on the Blockchain.info wallet service.

The Pastebin user, however, didn’t reveal the specific wallet software that can be possibly affected and whether the software vulnerability is intentional or just a simple coding error.

According to the anonymous user, several users of Blockchain.info platform are already aware of the vulnerability and have ‘played’ with the chain by sending small amounts of Bitcoins to the addresses corresponding to the private keys generated by the malicious software.

“If you peer into the Blockchain, you will find that people have ‘played’ with the chain by sending small amounts of Bitcoins to addresses corresponding to private keys generated using Sha256… It’s quite obvious these were _meant_ to be found. It turns out there are a lot of these addresses. (Keep looking and you will easily find some.)  This is nothing new and has been known to the Bitcoin community for a while.”

How the user discovered the malicious software

According to the Pastebin user, he used several pieces of publicly available data on the Blockchain to determine if they could have been used to create wallets. He utilized block hashes for every block since the Genesis Block, Merkle roots from every block, common words and phrases that have been hashed a number of times, and eventually started testing all the Bitcoin addresses.

He also downloaded a complete index of all Bitcoin addresses that were listed publicly on Blockchain and began to discover keys that could have a few bits associated with them. In his experiments, he discovered more than 40 Bitcoin addresses that were used at certain points over the past seven years as of November 2017 to send Bitcoin.

The Pastebin user has also suspected that some third-party wallet custodial service like gambling site, mining pool or a straight-up web wallet could have malicious code in their backend that can generate private keys based on public addresses.

As of press time, the Blockchain.info user has confirmed that the funds have been returned:

“The nine BTC have been returned, the person found my Reddit post & reached out to me this morning. He wants to remain anonymous however he has found an issue with Blockchain.info and is currently working with them to resolve the issue.”