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Encryption debate is a top focus at Five Eyes meeting – CyberScoop

As the Five Eyes intelligence alliance meets in Ottawa this week, Australian officials are heading to Canada with encryption as a top priority.

Australias attorney general, George Brandis, published a memo this weekend detailing a plan to seek greater legal powers against encrypted data in the meeting with representatives of the United Kingdom, Canada, New Zealand and the United States.

As Australias priority issue, I will raise the need to address ongoing challenges posed by terrorists and criminals using encryption, Brandis, who also serves in Australias Senate, said in a statement. These discussions will focus on the need to cooperate with service providers to ensure reasonable assistance is provided to law enforcement and security agencies.

Some of the biggest tech companies in the world, including Apple and Facebook, have adopted strong encryption for their products. The mainstreaming of encryption helped spark an international debate famously referred to as the problem ofgoing dark by then-FBI Director James Comey in 2014 that continues to this day. The most famous fight took place when Apple and the FBI faced off over iPhone encryption following the San Bernardino terrorist attack in 2015.

Just last month, Facebook quietly upgraded its secret conversations featuretoenable encrypted communications between two people on multiple devices. The same company owns WhatsApp, the popular encrypted messaging app. Apple CEO Tim Cook has taken center stage in promoting encryption, while Facebook CEO Mark Zuckerberg has taken a quieter but supportive public position.

Top officials in the United States and United Kingdom have called for backdoors into encrypted data.U.K. Home Secretary Amber Rudd called WhatsApp completely unacceptable in March followingthe Westminster attack. Donald Trump called for a boycott of Apple following the San Bernardino attack. The presidenthasnt publicly commented on the issue since, but U.S. law enforcement and intelligence officials have repeatedly called for greater access.

Australias plans attracted immediate criticism including from Human Rights Watch, an American human rights nonprofit, whichwarnedagainst a dangerous strategy that will subvert the rights and cybersecurity of all internet users.

Encryption protects billions of ordinary people worldwide from criminals and authoritarian regimes, Cynthia Wong, senior internet researcher at Human Rights Watch, said in a statement. Agencies charged with protecting national security shouldnt be trying to undermine a cornerstone of security in the digital age.

Brandiss Five Eyes statement follows numerous government comments in Australian media warning against the security threats encryption poses and floating the idea of changing laws to force tech and telecommunications firms to decrypt data.

The Australian senator said that over 40 percent of counterterrorism investigations now intercept encrypted communications, a trend that will within a short number of years reach 100 percent.

This problem is going to degrade if not destroy our capacity to gather and act upon intelligence unless its addressed, he said.

Across Europe, the debate is heating upwith talk including encryption backdoors, expanded government authority and greater offensive hacking to achieve access.The Investigatory Powers Act in the U.K. grants the governmentauthority to force tech firms togive access to encrypted data but the exact parameters remain unclear.

One of the things the U.K. bill does is what may be an authorization to command companies to either not include encryption or to modify in some way the encryption they use in their products, Ross Schulman, the co-director of the cybersecurity initiative at New Americas Open Technology Institute, told CyberScoop last month. There is some debate about the actual extent of the powers. Its not entirely clear how far some of the escape hatches extend.

The encryption debate, also known as the crypto wars, has been grabbing headlines for the last three years since Edward Snowden gave thousands of documents on Five Eyes global surveillance to journalists. The larger debate extends back several decades, however, to President Bill Clintons administration, when Vice President Al Gore, heavily promoted a technology dubbed the Clipper Chip, which was intended to allowa backdoor into American products. It rapidly collapsed fortechnical, commercial and security reasons, accordingto many of the worlds top cryptography experts.

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Fanciful Bitcoin Banknotes Show How Digital Currency Might Look in the Real World – NBCNews.com

Jun.27.2017 / 2:08 PM ET

Bitcoin isnt like traditional currencies, and not just because it doesnt exist as actual coins or paper banknotes.

Unlike traditional currencies like the dollar or euro, Bitcoin isnt controlled by a single government or central bank. Instead, every transaction involving the popular cryptocurrency is logged in a computerized public ledger called a blockchain. This collection of receipts is maintained on millions of devices around the world in individual collections called blocks. Each time theres a transaction involving Bitcoin, an anonymous data fingerprint appears in a block recording the exchange.

This key innovation is the basis for "Block Bills," a collection of paper banknotes that bring the virtual payment system into the real world. As works of art, the whimsical bills have no monetary value. But they provide a map to the inner workings of the Bitcoin systemand they have a subtle beauty all their own.

In some way, the project is a loose data visualization, but I mainly wanted to make the bills be interesting on their own as artworks, says Matthias Drfelt, the Los Angeles-based artist who made the notes.

Each of the 64 bills in the collection represents a single block in the blockchain ledgers. The colors vary according to the volume of transactions. A less colorful bill represents low volume, while a more color bill represents high volume.

In some way, the project is a loose data visualization, but I mainly wanted to make the bills be interesting on their own as artworks.

At the bottom of each bill is a white bar with symbols that represent the specific address of the Bitcoin. On the left is a series of dots that encode the history of all the transactions. The timestamp at the bottom-right corner of each bill indicates the moment when that block of transactions was created.

Lastly, the centers of the bills feature an indistinct image of a human being or imaginary creature. The idea here, Drfelt says, was to create something that reflects all the supposed privacy and anonymity connotations that Bitcoin has."

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Bitcoin exchange operator tied to hacks gets five-and-a-half years US prison – Reuters

NEW YORK A Florida man was sentenced on Tuesday to 5-1/2 years in prison after pleading guilty to operating an illegal bitcoin exchange suspected of laundering money for hackers and linked to a data breach at JPMorgan Chase & Co.

Anthony Murgio, 33, of Tampa, pleaded guilty on Jan. 9 to three conspiracy counts, including bank fraud and operating an unlicensed money transmitting business. The sentence was roughly half as long as prosecutors had sought.

Murgio and co-conspirators were accused of processing millions of dollars from 2013 to 2015 into the virtual currency bitcoin through the unlicensed exchange Coin.mx.

Prosecutors said many transactions were conducted by victims of ransomware, a malicious software that locks up data unless people pay "ransom" to unlock it. Cyber criminals often demand ransom paid in bitcoin.

The alleged schemes also involved the takeover of a since-liquidated New Jersey credit union to shield their activity.

"Mr. Murgio led an effort based on ambition and greed," and constructed on a "pyramid of lies," U.S. District Judge Alison Nathan in Manhattan said during the sentencing hearing.

Murgio unsuccessfully fought back tears and lost his composure several times in expressing "enormous regret" for his crimes, which the judge credited as genuine.

"I am wiser today than when the case began, and I am sorry for all the damage I caused to so many people," Murgio said. "Believing what I was doing was OK did not make it OK."

Nathan cited Murgio's generosity to friends and support to his family in imposing a term below the 10 to 12-1/2 years recommended by prosecutors and federal guidelines.

Murgio's lawyer Brian Klein said he was pleased with the reduction, after telling the judge that Murgio had taken responsibility for his "grievous decisionmaking."

In contrast, Assistant U.S. Attorney Eun Choi faulted Murgio's dealings with ransomware victims, saying: "He exploited their desperation to personally profit from them."

A hearing on restitution and forfeiture was set for Sept. 1.

Murgio's father, Michael, pleaded guilty last October to an obstruction charge tied to the credit union.

Nine people have been criminally charged following an investigation into the JPMorgan breach, which exposed more than 83 million accounts.

Prosecutors said Coin.mx was owned by Gery Shalon, who pleaded not guilty to U.S. charges after being extradited last June from Israel.

In March, a jury in Manhattan convicted Florida software engineer Yuri Lebedev and New Jersey pastor Trevon Gross of scheming to conceal Coin.mx's activities from banks and regulators. They have yet to be sentenced.

The case is U.S. v. Murgio et al, U.S. District Court, Southern District of New York, No. 15-cr-00769.

BlackRock , the world's biggest asset manager, on Tuesday said it would buy a software company that helps businesses invest their cash, marking its second investment in a technology firm this month.

The world of financial technology - also known as "fintech" involves lots of buzzwords, jargon and often obscure terminology.

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Would you give bitcoin as a wedding gift? – MarketWatch

Forget dish sets and kitchen appliances, some couples are putting bitcoin on their wedding registries.

Some tech-savvy wedding-goers are gifting the digital currency to new couples, as its value surges to new highs. Like purchasing a stock or bond, buying bitcoin is all going well an investment in the future. Sounds crazy, right? Bitcoin is notoriously volatile. But if you got married in 2011 your $100 Bitcoin gift would be worth more than $238,000 today.

While people are giving bitcoin, there hasnt been a tipping point. Honeyfund, a honeymoon registry that allows guests to give cash rather than gifts, has seen more than a dozen customers donate in bitcoin, said chief executive officer and co-founder Sara Margulis. In recent years, more than a dozen customers have chosen to route donations to the site from bitcoin wallets. Zola, a wedding registry website, has had just two cash funds created for bitcoins since 2013, a spokeswoman said.

Business Insider editor Emily Cohn tweeted that the currency was given to her and her husband at their wedding and ultimately proved to be the best gift we got. Her husband Ben Eisen, a former MarketWatch reporter, wrote about the experience in The Wall Street Journal in 2016, noting that one bitcoin had been worth $230 around their wedding in September and had jumped to $430 by the end of the year. As of June 26, less than a year later, it is worth $2,383.

The unpredictable nature of the currency that paid off so well for this couple also means the gift may not be the best choice for the average wedding couple, said Neeraj Agrawal, a spokesman for bitcoin advocacy group Coin Center. Because it is so volatile and has a learning curve, use your best judgment on whether or not the happy couple would genuinely appreciate a cryptocurrency gift, he said.

If you do decide to gift in bitcoin, the same etiquette would apply to the currency that applies to cash gifts, Agrawal said, spending an appropriate amount fo money and accompanying it with a card. People should spend anywhere from $50 to $250 on a wedding gift depending on their relationship to the bride and groom, said etiquette expert Jacqueline Whitmore. Thats 0.02141 to 0.10719 in bitcoin at its current value. Friends of marrying couples give an average of $99, according to a study from American Express, and family members gift an average of $127.

Others wedding industry experts say bitcoin is about as common as gold coins from a pirate ship. That is, theyve never been asked to add it to their wedding gift registries. A spokeswoman for MyRegistry.com said theres no evidence any of the 153 million gifts added to their system since it began in 2005 were for Bitcoin.

I would expect it to pop more as millennials come into the wedding age, Honeyfunds Margulis said. Its something you will do if your friends and family are already into bitcoin not something most couples would do.

Thats another rule when gifting Bitcoin: Make sure to gift it only to people who are ready to dive into cryptocurrencies, Agrawal said. Though Eisen and Cohn are thrilled with their wedding gift and how much its grown, others may end up forgetting about the digital present and leave it wrapped up online. Avoid using a wedding gift as an opportunity to proselytize a technology you personally believe in, but the recipient could not care less about, Agrawal said.

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Silk Road Bitcoin Felon Aims to Help the Industry He Corrupted – Investopedia

The burgeoning cryptocurrency industry has already drawn some charismatic and distinctive personalities to the forefront. One of the earliest important people within the world of Bitcoin is now preparing to make a comeback. Charlie Shrem was a Bitcoin pioneer, having founded a startup called BitInstant in 2011. BitInstant was a crucial early transaction facillitator, although it fell by the wayside in 2013. Shrem eventually went to federal prison after pleading guilty to involvement with a customer who acquired Bitcoins for resale purposes on the underground market called Silk Road. Now, months after his release, Shrem has plans to help to further strengthen the industry which has already grown so fast.

Besides his work with BitInstant, Shrem was an important early figure in the history of Bitcoin because of his widespread advocacy for the cryptocurrency. A 2013 GQ profile on the emergent currency featured Shrem, and he figured prominently in a documentary called The Rise and Rise of Bitcoin. According to a profile by Fortune, Shrem spoke frequently at industry conferences and co-founded an organization called the Bitcoin Foundation for the purposes of advocating on behalf of the digital currency.

In the Fortune profile, the author indicates that Shrem "claims he's no longer operating mainly for himself and instead wants to use his talents to strengthen the crypto-community." It's true that Shrem's work with Bitcoin made him a millionaire before sending him to prison. What will he do now?

Shrem has set his sights, at least in part, on working with Dash, one of the more recent additions to the cryptocurrency line-up as well as one of its fastest-growing members. Shrem proposed the creation of a prepaid debit card onto which users could load Dash coins. Those coins would be converted into dollars or other currency to be used at any business which accepts debit cards. Shrem's card is the first that could be used in the United States.

Shrem has also reportedly joined the startup Jaxx as head of business and community development. Jaxx aims to create digital wallets allowing users to hold multiple currencies. Founded by Anthony Di Iorio, co-founder of Ethereum, Jaxx looks to be at the forefront of a new wave in cryptocurrencies: when various blockchain networks can all communicate and partner with one another. These so-called "parachains" could help to propel the industry even further, bringing cryptocurrencies even more into the mainstream and allowing for extreme ease of transacting and exchanging between currencies. In this way, Shrem may have a hand in continuing to develop the cryptocurrency world as it looks ahead to the future.

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Could TenX Make Cryptocurrency More Usable In the Real World? – Investopedia

TenX has big plans to change the world of cryptocurrencies. How will they do it? One word: liquidity. An ongoing issue plaguing the digital currency landscape is the question of how to make use of virtual money in real-world spending applications. Generally speaking, only the top few cryptocurrencies see a large enough trading volume and liquidity in order to be viable in this way and on a large scale. TenX, a startup which recently earned $34 million in seven minutes with their initial coin offering, or ICO, believes that they have a solution.

The startup, a 2017 graduate of Paypal's incubator program and based in Singapore, has prepared a debit card to facilitate the spending of blockchain assets in the real world. A report by Bitcoinist outlines some of the technology behind the card. On the front end, the card will use a payment system, and on the back, it will use COMIT. This protocol allows disparate blockchains, such as Bitcoin and Ethereum, to communicate and interact with one another without having to generate a common token between them. Theoretically, this will speed up transaction times and allow for real-world applications that would not have previously been possible.

Beyond the debit card, TenX has also reportedly developed an app for iOS and Android which will assist in the process of introducing the TenX currency, called PAY, into the real world. Inc.com reports that the app will act as both a wallet and as a decentralized, fee-free exchange. Beyond that, the app will also include a debit/credit card functionality as well. It seems that TenX may be preparing both digital credit cards as well as tangible plastic cards for use. In either case, the user would theoretically be able to make use of the card at any brick and mortar store where they would use a standard credit card. To further facilitate these transactions, TenX has provided for the card to convert the digital currency which is stored within it into the local fiat currency, allowing for global use. This last point in particular is especially helpful, as a barrier to spending virtual currency in the past has been the necessity to convert it into local currency, adding a timestaking additional step and potential fees.

For the time being, TenX's platform supports Dash, Bitcoin, and Ethereum, among other lesser-known currencies. The company has ties with Ethereum, as Vitalik Buterin, the founder of the latter, is an official advisor to TenX. The app is fully functional and ready for distribution into the broader world. More and more talk is emerging about cryptocurrency debit cards as a possible way of linking the virtual with the tangible. TenX hopes to lead the charge in bringing cryptocurrency spending into stores across the globe.

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Illinois Is Venezuela and the Solution Is Cryptocurrency – Observer

The reason Im so much fun at parties is that my idea of a good time is to lecture everyone on cryptocurrency. I can pretty much talk bitcoin and blockchain with Hamiltonian fervor all night.

Ever since I began writing about cryptocurrency in general in 2013I believe this story I wrote for Esquire in fall of that year was the first ever mainstream media mention of Ripple (on whose board I now sit) I have been making one point to anyone who will endure my what is cryptocurrency lecture. People are all wrong about the difference between cryptocurrency and real money.

By real money, people invariably mean fiat currency issued by a government. To counter the argument that real money is somehow safer than crypto Ive pointed to Argentinas 40 percentinflation rate, or the Weimar Republic, and its famous wheelbarrows full of money to buy a loaf of bread (which was arguably intentional as Germany sought to repay Treaty of Versailles debt with devalued deutsche marks). And of course the world has watched in horror as Venezuela has devalued the bolivar to the point of meaninglessness.

These are not hypothetical examples. If you think this is all futurist theoretical BS, read up on the devastating effect hyperinflation is having as it transforms what was once South Americas most promising economy into a hellish nightmare in which people are eating their pets. Governments constantly, reliably, invariably and maddeningly ruin their own currencies by giving in to the temptation to overprint it. The beauty of bitcoin is that, like gold, the entire supply of it that will ever exist on earth (21 million coins), is known about, finite, and will never increase.

Still, as powerful as these examples aresome from recent second-world countries and others from past first-world countriesthey do not vividly resonate with Americans. That makes perfect sense. The U.S. dollar, after all, has been so reliable that the very countries I am criticizing, like Argentina and Venezuela, turn to the greenback and use it as a shadow currency to store value as their own money fails.

Even when we see American commodities change dramatically in price, like we witnessed with gasoline in 2008 when it reached $4.11 in July and fell to $1.84 in January, people dont readily seem to connect that its not just gasoline fluctuating but American money fluctuating. If my $10 bought 4 gallons of gas on October 1 and two gallons of gas on November 1, gas doubled in price just as the buying power of the American dollar was cut in half. Its the same thing. (Not precisely the same, actually, but close enough for the point Im making.)

So what Ive been searching for in these years of evangelizing and explaining the revolutionary power of cryptocurrencyincluding bitcoin, ethereum, ripple, litecoin, this new one BAT that Im interested in and othersto transform basically everything, are examples that will resonate without sounding like Im talking about 1930s Germany or the struggles of the second world. These last few weeks, I think Ive got what I need. And it comes heartbreakingly from my home state.

Illinois faces financial distress thats unprecedented for any American state. Without a budget for two years and sitting on top of over $15 billion in unpaid bills, the state is, to use a phrase that State Comptroller Susana Mendoza borrowed from Bonfire, hemorrhaging money as the states spending obligations have exceeded receipts by an average of over $600 million per month over the past year.

While the United States Constitution prevents a state from declaring bankruptcy the way places like Detroit and Orange County have, the situation is so dire that the Tribunes prestige columnist, John Kass, is only partially kidding when he calls for the state to be divided up between its five Midwestern neighbors.

Again, this is not just wonky penciling. The people of Illinois are being crushed by the burden imposed by a state that cannot pay its bills. The Chicago Public Schools, for example, must now pay 9 percent on its adjustable bonds because they are rated as junk. S&P is warning of a negative credit spiral and threatened to lower its rating even further if the state cannot hammer out a budget by July 1, which is less than a week away.

In other words, a bridge that used to cost $100 million to build because thats what it cost to borrow the money from bondholders, now might cost $150 million. Just as we saw in the gasoline example, anytime something costs more US dollars for the exact same product, you can look at it as the cost of a bridge going up, or you can look at it as the value of a dollar falling.

Thats why I believe in cryptocurrency.

Illinois cannot print its own money. I dont know what theyre going to do to crawl out of this mess. But there is no denying that all governments, including the United States, have manipulated their money supplies for political ends. And thats why I am so bullish on the future of cryptocurrency.

This isnt about whether bitcoin will soar to $5,000 or sink to $500. I think either is possible and equally likely, and Im not looking to give investment advice. All Im saying is that I trust currencies that are cryptographically enshrined and limited by the hard realities of math, at least as much as I trust human beings who are subject to the allure of popularity and other shiny objects.

The best book about cryptocurrency is Digital Gold by Nathaniel Popper. And the parts of it that most moved me occurred when he described how this incredibly complicated and novel technology actually affected human lives. One of the early innovators of the bitcoin ecosystem was Wences Casares, who founded Xapo and a bunch of other crypto-friendly fintech startups. When Casares was growing up in Patagonia in the early 80s, the Argentinian government was messing with its currency to disastrous effect. First, they issued a new peso, exchangeable for 10,000 of the old peso. When that failed, they rolled out something called the austral, which was worth 1,000 new pesos (ie, 10 million of the currency that had been in use two years earlier). The inflation rate was more than 1,000 percent a year. Casares describes his mother carrying two grocery bags filled with moneyher wages. He and his sisters rushed with her to the store to buy what they could because the market employed people who did nothing but walk the aisles all day repricing items.

These math-based moneys from the future have a lot of user-unfriendliness and even getting money into and out of accounts can be a customer service hassle. But bagfuls of nearly worthless cash are not an unimaginable reality for millions of people on the planet. Thats the human reason Im willing to continue to bore people with cryptoevangelism.

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Cryptocurrency ICO vs Cryptocurrency Pre-ICO The Merkle – The Merkle

The world of cryptocurrency ICOs has been on fire as of late. In most cases, these ICOs cause quite a bit of strain on the Ethereum network, which is anything but enjoyable. It now appears a lot of projects are running so-called pre-ICO token sales as well. This allows teams to collect even more money, while investors get cheaper tokens.

The concept of a cryptocurrency ICO has been documented quite a few times already. In fact, we have a whole series on this particular market phenomenon, which covers most of the information people need to know. Although investing in a cryptocurrency ICO can be quite lucrative, it is taking longer for tokens to get listed on decent exchanges. This causes a lot of users to get quite nervous about their investment, which is understandable.

This brings us to how cryptocurrency ICOs are currently developing. The money is raised a lot quicker compared to how much time it takes to sort out technical issues, refunds, and getting listed on exchanges. To a lot of people, this makes no sense, especially when projects raise over $10m during their ICO. Surely they could use that money to speed up the listing process and make investors a lot happier? Unfortunately, that is not how things work right now.

Contrary to what most people expect, there is a lot more to getting listed on an exchange than just paying a fee. Especially where ERC20 tokens are concerned, as smart contracts need to be audited by a third party. This causes some delays, which means some investors will panic sell on smaller exchanges as a way to minimize losses. If this trend keeps up, a lot of ICO projects will go under well below they even get a listing on Bittrex or Poloniex. That is very unfortunate, to say the least.

This brings us to a somewhat newer phenomenon, which is known as a pre-ICO token sale. As the name suggests, a pre-ICO allows investors to buy tokens before the official crowdsale begins. In most cases, these pre-ICOs raise a much smaller amount of money, and offer tokens at a lower price with a substantial bonus. More specifically, finding a pre-ICO with a bonus of 40% or more compared to the ICO price is not all that uncommon.

It is worth noting a pre-ICO often uses a very different smart contract compared to the actual ICO itself. This is done to separate funds and ensure these is no confusion. However, it can also create some uncertainty regarding how much money has been raised in total. Since the pre-ICO numbers are not included in the actual ICO numbers, there can be some sort of a discrepancy. Plus, it also means there may be far more tokens issued than people initially assume.

When a project launches a pre-ICO token sale, they need to do their due diligence. Being transparent about the money raised and the number of tokens issued is of the utmost importance. Onenegative side effect of pre-ICOs is how early investors often sell at ICO prices once a token hits an exchange. In doing so, they still make a very big profit and cripple the tokens price in the process. A pre-ICO is an amazing investment opportunity for a quick buck, but it can hurt the projects appeal and credibility when large amounts of tokens are sold at bottom prices.

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Bitcoin Bull Novogratz Unfazed as Cyberattacks Resume Globally – Bloomberg

Michael Novogratz says cryptocurrencies could be worth north of $5 trillion in five years -- if the industry can come out of the shadows.

The Nasdaq got to $5.4 trillion in 1999, why couldnt it be as big? the former hedge fund manager said in an interview, referring the Nasdaq Composite Index. Theres so much human capital and real money being poured into the space and were at the takeoff point.

To get there, though, companies need to develop sound business principles to satisfy regulators and lend legitimacy to the budding industry, one of Wall Streets biggest bitcoin bulls said Tuesday at the CB Insights Future of Fintech conference in New York.

Thats proving an uphill battle amid Bitcoins growing reputation as a currency favored by black marketeers and hackers. The industry took another reputational hit Tuesday after a cyberattack spread around the world, disabling computers and demanding users pay $300 in cryptocurrency to unlock them. It follows the WannaCry hack in May.

While bitcoin was little changed at $2,339.66 as of 2 p.m. in New York, some chipmakers whose products are used in mining the cryptocurrency also retreated. The PureFunds ISE Cyber Security ETF, known as HACK, erased earlier gains to trade little changed.

Bitcoin, the biggest cryptocurrency, is up more than 140 percent this year, and ether, the digital asset based on the ethereum blockchain, has surged to about $240 from just $8 at the beginning of the year. The cyberattack comes after questions about the sustainability of this years rally and the scaleability of the digital assets had already been dragging down prices.

The recent selloff has shrunk cryptocurrencies total market cap to about $90 billion from a high of over $110 billion, according to Coinmarketcap.com.

For more on the latest cyberattack hitting port operators.

Novogratz said he took some profits on his bitcoin and ether holdings as prices surged, but still has 10 percent of his net worth invested in the sector, including blockchain-based assets he bought in fundraising mechanisms known as initial coin offerings. Hes looking to add more ether if it falls between $200 and $150, and more bitcoin if it falls to $2,000.

Bitcoin could become a viable store of wealth, similar to gold, while ethereum could be the platform underpinning the Googles and Facebooks of the future, while money transfers to securities settlement will probably be done using blockchaintechnology, he said.

Novogratz, who has spoken about investments in bitcoin since 2013 andformerly managed Fortress Investment Group LLCs liquid strategies business, has been one of the most prominent supporters of cryptocurrencies on Wall Street.

Companies need to develop sound business principles to satisfy regulators and lend legitimacy to the budding industry, he said.

"Pay your taxes, because nobody in that space pays taxes. Its a bunch of libertarians," he said, adding he thought a core group of developers have good intentions. "There really is a revolutionary spirit amongst the guys that are building this system."

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What is the Biggest Security Threat to Ripple Cryptocurrency? – Investopedia

Ripple may be the latest craze in the cryptocurrency world. Although its price still lags far behind Ethereum and Bitcoin, it has nonetheless gained 3800% in recent months, catapulting it to the number 3 spot on the list of over 100 cryptocurrencies with regard to market capitalization. What's more important, perhaps, is the technology that Ripple offers aside from its currency. The Ripple blockchain protocol has gained recognition by more than 60 major financial institutions around the world, with the National Bank of Abu Dhabi one of the latest to incorporate it into its practices. Ripple has, in this way, broken a barrier that virtually no other cryptocurrency has, by finding a way to integrate itself within the broader financial world. To some, this spells a new way for the future of the digital currency industry. To others, though, Ripple has some significant security weaknesses. What could bring down this rising star?

A recent report by Technology Review discusses how Ripple has made use of a "small world" philosophy. According to this way of thinking, virtually anyone in the world can be connected to anyone else via approximately six steps. "Strangers" can thus be connected to one another via a few intermediary people, all of whom know each other in some capacity. For Ripple, this idea holds for transferring money: Ripple users establish connections with other users that they trust, and then funds are transferred along a chain to reach the ultimate recipient in a transaction.

Within Ripple, if a user has connections to two other users, the amounts of funds entrusted to each will likely vary, while the total transferred is kept constant in order to generate liquidity. Each user has an incentive to act as the intermediary, as he or she receives a small payment for the role. With this protocol, Ripple allows users to move funds quickly and for much less money in transaction fees than many other methods of money transfer. This has popularized the system with many banks that would have otherwise not been interested in a cryptocurrency.

The openness with which the Ripple network operates has, on the other hand, also allowed for vulnerabilities to develop. Researchers at Purdue University have found that, although the core of the network remains highly liquid, that the structure also allows for attacks on certain nodes within the network to cripple some users' access to funds. In fact, some 50,000 wallets may be immediately at risk if such an attack were to occur. However, the researchers suggest that the fact that they have been able to detect weaknesses in Ripple's system is actually a good thing, as the conventional world of banking often lacks transparency in this regard. Having identified those weaknesses, Ripple's developers may be able to work to correct them.

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