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Big, greedy Ethereum whales account for 33 percent of cryptocurrency’s supply

Big, greedy Ethereum whales account for 33 percent of cryptocurrency’s supply

Ethereum ETH whales account for just 7 percent of transaction activity in the market – but they control a third of the cryptocurrency’s entire circulating supply.
That’s according to a new study by Chainanalysis which found that although these whales don’t have a sizeable impact on Ether’s price, their large sell-offs do make the market more volatile on a daily basis.

For context, whales are defined as the top 500 cryptocurrencies excluding services, who keep their coins off exchanges.
As of May 1, 2019, Chainalaysis’ research showed that out of the top 500 holders, 124 were services and the remaining 376 were individual whales, which controlled 33 percent of the circulating supply in 2019. This, however, represented a decrease in comparison to 2016 when they controlled 47 percent of the market.  
Graph via ChainalysisThe study shows that whales consistently hold 25 to 40 percent of Ether’s circulating supply, but only account for between 5 and 18 percent of economic transaction volume.
This is largely attributed to the fact that most whales (approximately 60 percent) hold on to their coins or refrain from trading with exchanges on a regular basis. 
Most whales aren’t trading. Graph via Chainanalysis.As past of its study, Chainanalysis also explored the possible correlation between Bitcoin‘s and Ether’s price.
The firm used a VAR model, a method commonly used in financial time series analysis, and looked at the impact on Ether’s price and intraday volatility by focusing on Bitcoin‘s price and the activity caused by whales sending funds to and receiving funds from exchanges.
The analysis focused on the period of 2016 to 2019, and tackled three assumptions:

Ether prices follow Bitcoin prices. On average, a 1-percent increase in Bitcoin prices yesterday leads to a 1.1-percent increase in Ether prices today. The firm found, just like previous studies have suggested, that there is no statistically significant impact of Bitcoin prices on Ether’s intraday volatility.

Funds sent impact volatility but not price. Funds sent to exchanges by whales don’t directly impact Ether price but do contribute to price volatility. On average, a whale that sent $1 million worth of Ether two days ago leads to a 0.1 unit increase in intraday volatility today, which is relatively small considering values of intraday volatility range from 0.02 minimum to 417 maximum.‍

Funds received have no impact. Funds that whales receive from exchanges don’t impact Ether’s prices, nor intraday volatility.
Overall, Chainanlysis’ findings fall in line with the literature on stock market prices, and volatility.
In any case, Chainanlysis draws a positive spin on this noting, it’s “certainly encouraging that the cryptocurrency market is behaving in a way that is consistent with stock market fundamentals.”
“Although it seems that concerns about the impact of whales on market prices have been overstated, there are still important caveats to our research. We cannot rule out the possibility that whales can impact price changes within single days based on outlier events. Our research analyzed the general impact of flows from Ether whales, and did not exclusively look at the impact of outlier events,” it adds.
If the cryptocurrency market operating in a similar way to the traditional stock market is a good thing or not, that’s entirely up for discussion.
But, perhaps it’s a sign that things are really maturing?

Published May 16, 2019 — 13:36 UTC

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Cryptocurrency

Hackers made $32K in 7 weeks by fixing bugs in cryptocurrency projects

Hackers made $32K in 7 weeks by fixing bugs in cryptocurrency projects

In the past seven weeks, white hat hackers earned at least $32,150 by fixing security flaws in popular cryptocurrency and blockchain platforms like TRON, Brave, EOS and Coinbase.
According to data reviewed by Hard Fork, 15 blockchain-related firms have paid rewards to security researchers between March 28 and May 16, split across 30 publicly-released bug reports.

Omise, the software firm behind cryptocurrency OmiseGo, fielded the most fixes (six). Blockchain-powered prediction market Augur disclosed three reports, as did Brave Software, makers of the Brave browser, which features its own native token.

Projects adjust their HackerOne rewards to the severity the discovered security flaws. Whilst the majority of Omise’s reports were only worth around $100 each, other payments in the past seven weeks were much higher.
Block.one, the firm behind the EOS “blockchain,” rewarded one hacker with $10,000 for a single fix, as did budding network Aeternity.
TRON also paid $3,100 to the researcher who realized the network was susceptible to being flooded with malicious smart contracts, which would have brought its blockchain to a screeching halt.
The amount of hackers who prefer to fix security issues seems to be remaining steady — but sometimes they can make off with much bigger amounts exploiting vulnerabilities themselves.
Indeed, cryptocurrency exchange Binance revealed attackers had successfully stolen 7,000 BTC (then $40 million, now $55 million) from its own wallets last week.
Coincidentally, Binance runs its own bug bounty program with a maximum reward of $100,000 for the most critical of vulnerabilities. The Binance hacker remains at large.

Published May 20, 2019 — 15:21 UTC

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ABN AMRO signs on Accenture and ING Bank for its blockchain inventory platform

ABN AMRO signs on Accenture and ING Bank for its blockchain inventory platform

Despite abandoning plans to build its own Bitcoin wallet, ABN AMRO is not quite done with blockchain tech.
The Dutch banking giant has announced plans to launch a decentralized trade inventory platform in collaboration with Accenture and ING Bank, according to a press release (spotted by CoinDesk).

Codenamed Forcefield, the project will employ Internet-of-Things (IoT) devices to provide “real-time insight into trade inventories.” ABN AMRO claims the platform’s monitoring features “will lead to more secure physical handling processes and a reduction of costs.”
Upon launch, the project will focus on “refined metals,” but “functionality will be expanded across other dry bulk commodities” in the future.
In addition to ING and Accenture, a number of other companies – including Anglo American, CMST International, Hartree Partners, Macquarie, Mercuria, and OCBC Bank – have also signed a memorandum of understanding to join Forcefield.
Back in January, ABN AMRO teased plans to develop its own cryptocurrency wallet, called Wallie. But as Hard Fork reported, the bank has now ditched Wallie as cryptocurrencies are still “too risky.”
“We have approached all the people who have shown interest,” ABN AMRO press officer Jarco de Swart told Hard Fork. “We have concluded that cryptocurrencies because of their unregulated nature are at the moment too risky assets [sic] for our clients to invest in.”
ABN AMRO and ING are hardly the only banks looking to get in on the blockchain hype. Indeed, leading banks – including Barclays and HSBC – reportedly poured $50 million into a blockchain-based digital cash system, expected to launch in 2020.

Published May 20, 2019 — 15:00 UTC

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