Cryptocurrency prices were on the rise this past week and we’ve done some analysis to help you make sense of the movement. Amidst this volatility, we saw Stronghold announce a partnership with IBM to launch a new stablecoin on Stellar’s network that is FDIC insured, a first in the space.
As the market matures, blockchain research and development is picking up steam in major universities, driving innovation for the future health of the industry. Speaking of education, congress got serious about understanding this week, holding two full hearings to discuss the technology and how best to understand and make use of it.
In some less savory news, cryptomining malware continues to grow as a popular and profitable way for hackers to make use of your computing resources, but we have some help for you.
Featured stories by Nadav Avital, Colin Harper, Andrew Rossow and Bitcoin Schmitcoin.
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Previously, Schmitcoin had discussed the strong possibility for a retest of the low volume spring, noted that the market was beginning the early stages of an inverted head-and-shoulders (H/S) reversal (sometimes called a head-and-shoulders bottom). A couple days ago, shortly after testing the left shoulder of the head-and-shoulders reversal (H/S), the market reacted strongly and bitcoin’s price jumped several hundred dollars.
Both the candle spread and volume were quite high over the daily candles that set the stage for this jump. High volume and large spread following a low volume spring hint toward a potential accumulation characteristic called a “Jump Across the Creek” (JAC). In a trading-range sense, the whole purpose of an accumulation trading range (TR) is to shake out all the sellers so that an asset can be pushed to higher price levels. One characteristic to keep an eye out for: JACs often retrace up to 50% of their movement in a TR characteristic called a “Back Up to the Edge of the Creek” (BUEC). This serves to not only test seller interest but also traps sellers to provide liquidity for the next leg up. The BUEC is a great risk-to-reward for those looking to enter long on the rally.
Stronghold, a cryptocurrency trading platform housed by Stellar, is launching a stablecoin on its parent network’s blockchain in collaboration with IBM. Stronghold USD will be backed with “one-to-one U.S. dollars per coin,” according to an official press release, and held in an account with Nevada-based Prime Trust, the same trust company that banks for the stablecoin TrueUSD. The stablecoin is also purportedly protected by FDIC Insurance, and unlike Tether, Stronghold USD is audited, but the identity of the auditing firm has not been revealed.
The Massachusetts Institute of Technology (MIT) features the oldest and perhaps best-known university-sponsored blockchain development lab in the world. Since 2015, the MIT Media Lab’s Digital Currency Initiative has brought together some of the space's leading independent developers with MIT faculty to extend the development of such applications as the Lightning Network.
Halfway into 2018, some of the world's top universities are joining MIT and vetting initiatives of their own. Stanford's now month-old blockchain R&D lab was launched with a bit of a jump start. Co-directors Dan Boneh and David Mazières have three years of blockchain-focused research and academic papers to set the lab into motion. Both directors are computer science professors at Stanford and have taught courses on blockchain technology since 2015. As these labs begin operating in the background of academia, these professors can take the work they've done in the classroom and work toward tangible developments.
On July 18, 2018, Congress held two full hearings to take a closer look at why and how digital assets, including cryptocurrencies, are impacting U.S. marketplaces. Some might find it odd to see the House Committee on Agriculture represented at a hearing on digital assets and their related technologies. But Chairman Michael Conaway explained that they have a vested interest in shaping and constructing the definition of a security because it directly impacts the definition of a commodity. Working in tandem, both Chairman Conaway and Ranking Member Collin Peterson identified five main goals for clarifying blockchain industry regulation:
- Promoting a safe, efficient and transparent tokens market;
- Proper regulation doesn’t always mean intrusive regulation;
- Identifying whether tokens are securities;
- Parsing through whether our current laws are appropriate to apply; and
- Ensuring enough oversight to help the space grow responsibly.
At the end of the hearings, Congress seemed to be very receptive to the idea of this new technology, but it is still concerned about ensuring that it is properly regulated where appropriate.
The latest fad in hacking these days is cryptomining, which takes the typically unobtrusive activity and allows nefarious actors to hijack your computer and make a lot of money fast. With the sheer number of cryptocurrencies available to mine, it is becoming a popular choice for attackers. The technique essentially involves an attacker taking advantage of another person’s computer and using its CPU power to mine for cryptocurrency. If the malware is configured to consume a large percentage of CPU power, it can prevent the CPU from doing other tasks and effectively deny the user access to the machine and its application.