Category Archives: Cryptocurrency
Cryptocurrency – Simple English Wikipedia, the free …
A cryptocurrency is a medium of exchange, that is designed to work like a currency. Usually, cryptocurrencies use features found in strong cryptography, such as digital signatures to secure financial transactions, control the creation of additional units, and verify the transfer of assets.[1][2][3] The first of them were created to be independent of a government-issued currency.
Cryptocurrencies use decentralized control[4] as opposed to centralized electronic money and central banking systems.[5] The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain [6], that serves as a public financial transaction database.[7][8]Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency.[9] Since then, over 4,000 altcoin (alternative coin) variants of bitcoin have been created.
In many cases, cryptocurrencies cannot be converted to real currencies; it is only possible to convert them to other cryptocurrencies, or to use them to buy things. Some cryptocurrencies can be converted to real currrencies: They usually have a high volatility, and using them carries a high risk.[10] They are also a target for so-called Pump-and-Dump-Attacks.[11] They act like a big distributed economic system: As they are not issued or controlled by central banks, their value is difficult to influence: For this reason, they cannot really take the place of a stable currency.[12]
Cryptocurrencies are prone to speculation, which makes buliding a system of more or less stable exchange rates very difficult.[13] Another problem is the inequality of distribution: Many cryptocurrencires are held by only few people. As an example: about 1.000 people hold half of the total amount of bitcoins in the world. This means that if any of these persons starts using their cryptocurrency, this has an effect on the exchange rate. It also means that these people have a great influence on the value of the currency, and are able to change its value easily.[14] The currency itself only documents ownership changes. Exchange rates of cryptocurrencies are established outside the system. Exchange rates are issued by brokers and traders; their indication is no guarantee that the currency is traded at the value proposed. In itself, the unit of cryptocurrency has no value.
In contrast to cyptocurrencies, real currencies are issued and controlled by central banks. Certain econnomic phenomena such as inflation or deflation may change the value (and exchange rate) of a currency. The people who own units of the currency have no direct influence on its value.
According to Jan Lansky, a cryptocurrency is a system that meets six conditions:[15]
In March 2018, the word "cryptocurrency" was added to the Merriam-Webster Dictionary.[16]
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How To Create Your Own Cryptocurrency – fastcompany.com
When you look at the complexities that go into making a physical dollar bill its plain to see why most people dont start trying to print a new form of currency every day, but making a new digital currency is surprisingly easy for someone with even basic coding skills. But coding isnt the only step to getting your digital currency off the ground. Here are the five steps you should follow according to the makers of three cryptocurrencies.
When you think about creating a new digital currency its easy to assume the first step would be to begin coding your coin, but thats the wrong place to start, according to Chris Ellis, a London entrepreneur and a community activist at Feathercoin.
The first step is to find a community and build a currency around them rather than building a currency and expecting everyone to show up, Ellis says. It has to be sensitive to their needs and be relevant to their cultural heritage and background.
Feathercoin was created by Peter Bushnell in April 2013. Bushnell left his job as head of IT at Oxford Universitys Brasenose College because he wanted to start his own currency that put people at the center. This was in response to what he saw as a lack of community involvement and inclusiveness by the existing cryptocurrencies, such as Bitcoin, on the popular cryptocurrency site bitcointalk.org.
Though he had not met Bushnell at the time, Ellis, who had been actively promoting and educating people on cryptocurrencies since last March, shared the sense of alienation and seclusion found on Bitcoin forums.
These forums were very tech focused and not very welcoming to newcomers or minority groups which are often served better by smaller teams, Ellis says. The forums did not make it easy for people to get involved in the development of the coin. Many people on these forums take a backseat and speculate on the price rather than actively getting involved.
Ellis found the cryptocurrency community activism he was looking for in Feathercoin, whose technical development he says benefits greatly from its community activism approach.
For Feathercoin we were a group of crypto enthusiasts, some of whom were new to the scene but who felt shut out from the rest of the space, Ellis says. Everyone at Feathercoin feels its important to demonstrate how a devoted group of people can establish a stable currency, he says. By working together a community of dedicated crypto enthusiasts are much better able to find and address vulnerabilities and security threats, like the 51% attack, which the community of coders at Feathercoin have successfully built protections against.
Building such protections and nurturing the development of your currency give your coin legitimacy and trust in the eyes of the public, something that is hard to do if those involved in the currency are passive spectators looking out for their own interests.
Surprisingly, every single currency developer I spoke with said the same thing: Coding your cryptocurrency is usually the least time-intensive part of the process. Thats because virtually every cryptocurrency on the market today is based on the open source code of Bitcoin or Litecoin that is available on GitHub.
The creation itself does not take long. It is maybe only a day, says Peter Otterbach, one of the creators of Coino, which bills itself as the fastest cryptocurrency on the market with a maximum transaction time of only 50 seconds. To start coding you just need to know about C++ to build your own features in it.
The length of time could be a little longer than a day, however, according to Kolin Evans, developer of the Quark cryptocurrency. In coding the most complex steps may be related to how complex you plan to have the individual parameters of the blockchain, Evans says. For example, many currencies just use the Litecoin code and copy it, but with Quark there was a whole new Hash algorithmthat is to say, its separate from both Bitcoin and Litecoinso this aspect if you were to change it would certainly be the most difficult. And time consuming. In this case coding a cryptocurrency could take months. However, Evans notes that if a developer is just reusing code from GitHub and changing some simple parameters, thats something a competent coder could do in literally 30 minutes.
But just because anyone with some C++ skills can make their own cryptocurrency doesnt mean that there will be as many currencies as, say, iOS apps one day. Feathercoin is in fact a fork of Litecoin, says Ellis. It began with the minimum number of parameter changes because we felt the most important feature of a currency was survivability.
However, the Feathcoin team noticed that a few of the currencies that came before didnt last very long because they included a novel feature set which would gain short-term speculative hype but then the team often werent able to follow through on the stewardship of the project longer term and the project would fail. In other words, the developers of those coins that failed probably wanted to make some cheddar on some quick coin creation and didnt want to work at developing the currency for the long runsomething which doomed them from the start.
You have a duty of care at the development end in terms of bug fixing and ensuring the promise made at launch but you also have a duty to educate people of the risks and give them what they need to secure their wealth, Ellis says. If you cant do that, no one is going to stick around to use your coin, and the mining of it will drop off as quickly as downloads did of the first Doodle Jump knockoffs.
Once youve developed your coin you need to spread the word so people start mining it, which raises awareness of its existence and hopefully begins to gain some value in the eyes of its miners and users. This is where makers of cryptocurrencies need to stop thinking like coders and instead look into how human beings put trust (and value) in things.
A good start is half the way there and so this involves building trust, expressing your vision and intentions to miners, who have the hardware you need, and getting them on board with the opportunity ahead, Feathercoins Ellis explains. You have to be honest and respect peoples expectations and their tolerance of risk, which many people overestimate.
Overselling your coin will backfire. Including novel feature sets just to try and stand out will not work either. The market is there to test your grit and determination. You need a group of loyal miners committed to the cause who will process your payments even during slumps in price because they believe in the eventual outcome. Its about good communication and team building.
Many coins have failed because they undervalue the soft stuff. They think that throwing technology at a problem will make it disappear. Central banks think throwing money at problems does the same; the world has never worked this way. You have to be good at knowing what work needs to be done and be prepared to do the jobs nobody else wants to do.
Lets says youve made it this far. Youve conceptualized a good cryptocurrency and brought the right team together to code and nurture it along its way. Youve spread the news around the cryptocurrency forums and theres a healthy dose of miners actively working to grow your currency. The next step is marketing your currency so all the people mining it have a place to spend it. This is no small feat. After all, you need to convince individuals and merchants that these digital bits youve created hold value and can be traded for things, just like traditional, trusted money.
Its a process of confidence building, Ellis says. It takes good stewardship and time to work out what you really believe and stand for. People will buy in to your motives more than your actions, so once you feel confident you then have to start talking about your currency to friends, merchants, on Internet forums and on social media.
The people behind Coino agree. To start the marketing you need to find the exact target group, Peter Otterbach says. At first you can just start at the cryptocurrency market itself because the people there know about coins and you see the first reactions. After that it gets more difficult. You need to convince people who mostly dont even know what a cryptocurrency is, so you have to get the currency accepted as a payment solution in online shops to get their attention.
I would add its not just about educating them with facts, Ellis notes, its about inspiring them to learn and discover the advantages for themselves. Money is a ledger, it is a tool that people will use as a way of achieving their goals and satisfying their needs. Understanding that will take you a long way in your marketing efforts.
Ellis says that merchant adoption is similar to miner adoption, its just a matter of understanding their different outlooks. Different stakeholder, same rules. The difference is that miners have a speculative sentiment and merchants are conservative. He notes that merchants have three principal aims: to make money, to save money, and to increase their awareness. If you can bring them customers and increase their sales while reducing their payment fees, the rest is a matter of persistence and making it as easy as possible to get them started.
The last step in your cryptocurrency journey is, according to pundits and conventional wisdom, world domination by your coin. But given that in over 5,000 years no single currency has dominated the globe, its very unlikelyno matter what Silicon Valley Bitcoin enthusiasts saythat any one cryptocurrency ever will.
Besides, global cryptocurrency domination doesnt have to be the goal, Ellis says. Currencies can be local, indeed we think of Feathercoin as a local currency that can serve a global market.
And therein may lie the true market for the burgeoning field of cryptocurrency: hyper-local currencies for certain neighborhoods, cities, events, venues, and groups of people that are built around a community of like-minded consumers allowing them to trade freely, quickly, and securely for goods and services that are important in their lives instead of having to rely on the central banks and larger markets to tell them what arbitrary item, be it a copper coin or a plastic dollar, holds value.
Indeed, in a market where cryptocurrency use is defined by neighborhood boundaries or group memberships there is no need for any one cryptocurrency to win. Theres room for them allexcept maybe the ones with memes.
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How To Create Your Own Cryptocurrency - fastcompany.com
Cryptocurrency price plunge worse than bursting of dotcom …
Cryptocurrency prices that reached dizzying heights in late 2017 and into 2018 have plunged back to earth this year, bolstering the arguments of skeptics that the scorching hot market for digital money was an economic bubble due to burst.
According to Bloomberg News, the MVIS CryptoCompare Digital Assets 10 Index has fallen 80 percent from its January high -- worse than the Nasdaq Composite index's 78 percent peak-to-trough plunge following the dotcom-stock bust in 2000.
Bitcoin, the most widely used cryptocurrency, started the year priced above $17,000. It recently changed hands on $6,261, a drop of more than 60 percent, according to CoinDesk.Rival cryptocurrency ethereum recently traded at $173.25, down nearly 90 percent from its January high of $1,414.90. The total value of the top 100 cryptocurrencies tracked by CoinMarketCap, once nearly a trillion dollars, was pegged most recently at $188.5 billion, near its all-time low of $187 billion.
To be sure, fans of cryptocurrency have claimed that, much like the early Internet, digital money is an idea that will catch on eventually. They also note that prices have rebounded from steep sell-offs in the past. Indeed, there likely are bitcoin holders still in the black from the 1,500 percent price increase they experienced in 2017.
Bitcoin, which was first proposed by a person or persons who used the pseudonym Satoshi Nakamoto in 2009, has gained popularity among some investors as an alternative to conventional, or "fiat," currency. The digital version is "mined" electronically by solving complicated mathematical equations. Converting cryptocurrency into "real" money can be tricky since it isn't widely accepted.
Some of the leading figures in the investing world, including Warren Buffett, who likened bitcoin to "rat poison," and JPMorgan Chase CEO Jamie Dimon, have urged investors to avoid the cryptocurrency market. The view, however, isn't unanimous on Wall Street.
In a recent interview with CNBC, Mohamed El-Erian of Allianz Capital noted that the underlying blockchain technology behind cryptocurrencies, has some long-term potential and that bitcoin itself could be a buy if it falls below $5,000.
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Iran, North Korea and Venezuela turning to cryptocurrency …
Countries including Iran (leader Hassan Rouhani left), North Korea (Kim Jong-un center) and Venezuela (Nicolas Maduro) are turning to cryptocurrencies to circumvent U.S. sanctions
America's rivals are increasingly turning to bitcoin-style cryptocurrencies after their economies were brought to their knees thanks to crippling U.S. sanctions, experts have warned.
Iran, North Korea, Russia and Venezuela are all investing in the technology in an attempt to counter American economic might and an expert says these nations are forming alliances through the technology.
A form of digital money, cryptocurrency uses encryption to secure transactions and control the creation of new units. It uses cryptography, a form of secret coding originating from the Second World War, to process transactions securely. Its major appeal is it is untraceable.
U.S. sanctions work by placing bans on dealings and transactions with persons, nations and companies.
These prohibitions are often enforced with the help of mainstream financial institutions.
But cryptocurrencies do not operate within this established system. In fact, bitcoin and other cryptocurrencies were invented in part to sidestep the existing regulated financial system.
This means nations like Iran using or controlling such a currency would allow it to bypass certain measures, such as a ban on buying U.S. dollars or even facilitate arms deals.
In May, the United States pulled out of a deal to lift sanctions against Iran in return for curbs on its nuclear program a plan President Donald Trump has repeatedly blasted.
HACKER STEALS CRYPTOCURRENCY FROM MYETHERWALLET USERS
Soon after, Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, spoke about cryptocurrencies as a way for countries to avoid U.S. dollar transactions - as well as a possible replacement of the SWIFT international payment system.
And Alireza Daliri, a senior science and technology official of Iran's Presidential Office, said: We are trying to prepare the grounds to use a domestic digital currency in the country.
This currency would facilitate the transfer of money (to and from) anywhere in the world.
It can help us at the time of sanctions.
Darren Parkin, editorial director of cryptocurrency news website Coin Rivet, described how the adoption of cryptocurrencies is helping to push economic alliances between these states.
He pointed to the example of Iran and Russia working together to overcome the sanctions that affect them both.
He told Fox News: The problem the U.S. has is if they are dealing with fiat currency (currency that a government has declared to be legal tender) they can monitor the effect of the sanctions.
BITCOIN IS LEADING TO A HUGE UPSWING IN MONEY LAUNDERING, NEW RESEARCH SAYS
But if countries use cryptocurrency they have fallen below the radar of what the U.S. can see.
They're being pushed underground.
Venezuela also reportedly received help from Moscow when it was hit with sanctions, leading to food shortages, soaring prices, a healthcare collapse and a crime spree.
In February the South American nation launched a new cryptocurrency called petro that Nicolas Maduro, the socialist leader of Venezuela, described as 'kryptonite' against the power of the U.S. government.
An anonymous executive at a Russian state bank claims the Kremlin oversaw the creation of the petro after President Vladimir Putin signed off on it last year.
In February Venezuela launched a new cryptocurrency called petro; an anonymous executive at a Russian state bank claims the Kremlin oversaw the creation of the petro after Putin (pictured) signed off on it last year(AP)
The source told Time: People close to Putin, they told him this is how to avoid the sanctions.
This is how the whole thing started.
Last month Vladimir Gutenev, the first deputy head of the economic policy committee of the State Duma, said Russia should conduct transactions in cryptocurrencies linked to the value of gold to frustrate U.S. attempts to thwart deals on Russian weaponry and civilian goods.
"And Im sure that this will be a very interesting option for China, India, and other states as well," he added.
Meanwhile, Priscilla Moriuchi, a former NSA cybersecurity official, told The Hill North Korea earns an estimated $15 million to $200 million by mining and selling cryptocurrencies.
Pyongyang's army of hackers is also believed to have stolen cryptocurrency from organizations and individuals throughout the world.
As if states opposed to the U.S. exploiting cryptocurrency was not concerning enough, analysts have warned bitcoin and other cryptocurrencies are already being used to secretly move cash between sympathizers and terror cells throughout the world.
Nikita Malik, the author of a recent report by the UK-based Henry Jackson Society about online extremism called Terror In The Dark, said: The authorities must move urgently to increase their knowledge of terrorists activities in cyberspace and their use of technologies such as bitcoin.
By fundraising and making financial transactions online, terrorists and other criminals can avoid interference from financial regulators or other third parties who might otherwise take steps to prevent their operations.
Regulation in this area has to move carefully if we are to balance liberties with guarding against threats to our security but the time has come to deny extremists the space they need online to plan fresh atrocities.
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SEC halts trading in two cryptocurrency products, citing …
NEW YORK (Reuters) - The U.S. Securities and Exchange Commission said on Sunday it was immediately suspending trading in two investment products that track cryptocurrencies, citing confusion in the markets over whether the products are exchange-traded funds (ETFs).
FILE PHOTO - High-end graphic cards are installed in a cryptocurrency mining computer at a computer mall in Hong Kong, China January 29, 2018. REUTERS/Bobby Yip/File Photo
The SEC said in a statement that trading in Bitcoin Tracker One and Ether Tracker One would be halted in the United States until at least Sept. 20.
The products promise to track the price of the cryptocurrencies, less fees. They are both listed on a Nasdaq Inc (NDAQ.O) exchange in Stockholm, but trade over the counter in transactions that occur off exchanges within the United States.
It appears ... that there is a lack of current, consistent and accurate information, the SEC said in a notice posted on its website. Application materials submitted to enable the offer and sale of these financial products in the United States, as well as certain trading websites, characterize them as Exchange Traded Funds.
The issuer of Bitcoin Tracker One and Ether Tracker One, XBT Provider AB SE0010296574.ST and its parent company, did not immediately respond to emailed requests for comment. Nasdaq declined to comment.
The SEC has taken a strict stance against letting ETFs tracking bitcoin and other cryptocurrencies come to market.
But investment firms have been pushing other types of investments that attempt to make it as easy to trade cryptocurrencies as a regular stock.
Those products are sometimes called ETFs, but that term generally refers to a different and often more stringently regulated product. Some industry experts, including the largest ETF provider BlackRock Inc (BLK.N), have called for regulators to standardize the terms used to describe ETFs and other kinds of investment products.
Virtual currency, including bitcoin and ether, can be used to move money around the world quickly and with relative anonymity, without the need for a central authority, such as a bank or government. A fund holding the currency could attract more investors and push its price higher.
Reporting by Trevor Hunnicutt; Editing by Peter Cooney and Will Dunham
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Cryptocurrency "miners," utilities look for ways to get along …
Electric producers aren't sure whether cryptocurrency "miners" are friend or foe.
The miners, who use powerful computers to generate bitcoin, ethereum and other cryptocurrencies by solving complex computational problems, are power hogs that can bring new sources of revenue for energy producers. But that revenue generally comes at a price: millions of dollars of investment in new power stations and lines.
For their part, utilities hesitate to commit those funds for fear the bottom will fall out of the cryptocurrency market, leaving them stuck with the bill for facilities no longer in use.
"Getting power companies to take cryptocurrency mining seriously has been a struggle," said JohnPaul Baric, chief executive of the MiningStore, which makes cryptocurrency mining technology. "Mining is still in its early days, and power companies say they aren't sure of its longevity."
It's not as if the power companies don't want the additional revenue. But in the case of Grant County in Washington State, more than 100 cryptocurrency miners are requesting power. Combined, they are asking for 1,700 megawatts of new power -- that's the equivalent of two nuclear power plants, or 1.5 times the power needs of the city of Seattle. Grant PUD's average electric load is about 600 megawatts.
"We, like any other utility, aren't set up to handle that kind of new demand," said Kevin Nordt, general manager for the Grant County Public Utility District, known as Grant PUD. "Trying to get that kind of infrastructure built would take many, many years and require millions if not billions of dollars in investment. There's a lot of risk involved because it's an nascent industry with a lot of unknown variables."
Cryptocurrency miners use large numbers of computer servers which use massive amounts of electricity -- to solve complex mathematical puzzles needed to create virtual currencies like bitcoin and ethereum. Bitcoin miners alone use more power than the entire country of Ireland. There are more than 2,000 different types of cryptocurrencies.
Grant PUD's popularity with cryptocurrency miners stems in part from its low price for electricity generated from power plants on the Columbia River, Baric said. Electrical expenses are often the highest costs for cryptocurrency miners.
"We are the most power-intensive business ever we use crazy amounts of power," Baric said. "Electricity costs matter."
The average cost of electricity in the U.S. is about 12 cents per kilowatt-hour. But Grant PUD sells its electricity for only 1 to 2 cents a kilowatt-hour, Baric said. Grant PUD is a nonprofit, community-owned hydropower utility based in Moses Lake, Washington, about three hours southwest of Seattle. Its power generation facilities cover 2,800 square miles.
Because of the intense demand, Grant PUD temporarily stopped accepting cryptocurrency mining customers so that it could develop new policies around the industry. The PUD decided to create a new customer class called the "evolving industry" class. The class wasn't meant only for cryptocurrency, but for any other radical, disruptive type technology that may take shape in the future, Nordt said.
The evolving industry class would price in the risk associated with creating new infrastructure for an industry without a long track record, he said.
"We needed to look at this differently," he said. "We don't know how regulatory and other issues are going to break for mining."
Miners, in the meantime, are also suggesting ways they can be of benefit to utilities. One example is for miners to use a utility's "peak load" capabilities that often sit idle. Most utilities build their facilities so they have capacity even for those very hot days in July and August, when everyone is running their air conditioners.
The miners could use that unused peak load capabilities throughout the year and stop mining when the utility needed the extra electricity on those hot summer days. Baric sells products that would automatically shut down the mining operations when the peak load was used.
"The actual physical mining units would just sit there idle and the staff would have the day off," Baric said. "The miners would know for those four or five hours on that hot July day, they will be disconnected."
Miners are also happy to take extra, unused electricity off the hands of producers, Baric said. Utilities inevitably create more energy than they use and generally allow that power to be burned off. Miners are instead willing to buy that access energy which is a benefit to producers, he said.
"Years ago people wondered if the internet would stay around, but suggesting that today would seems silly," Baric said. "That's the way it is with cryptocurrency; it's brand knew and people don't yet understand it yet. But it's here to stay."
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Cryptocurrency "miners," utilities look for ways to get along ...
Cryptocurrency: Virtual money, real power, and the fight …
Driving into the small town of Wenatchee, Washington, about three hours east of Seattle, a sign welcomes you to the "Apple Capital of the World." But not far from the abundant orchards, a very different industry is taking root. As unlikely as it may seem, this rural community has become a hub for cryptocurrency mining.
"Cryptocurrency justified the expense to build something that no one would otherwise build," said entrepreneur David Carlson, as rows upon rows of computer servers whirred away at the facility he set up here. "These things can run 24/7 making cryptocurrency."
He has big plans for his business, even if some Wenatchee residents don't like it.
"We want to grow ten times larger than we are now, and we can do it here, or we can do it somewhere, but we're going to do it," Carlson said.
Bitcoin is the best known, but it's just one of many digital forms of currency. These cryptocurrencies are decentralized; rather than being processed through banks, transactions are verified and recorded by individual users. Encrypted technology called blockchain keeps the transactions secure.
Bitcoin hit a highof over $19,700 in December 2017, though it's worth much less, about $6,300, today. Despite the volatility, rising values have fueled a whole new industry and legions of enthusiasts. At a recent cryptocurrency conference in Atlantic City, thousands gathered to explore new ideas and opportunities in the field.
"So I live off of bitcoin," said Kenn Bosak, who hosts "Pure Blockchain Wealth" on YouTube. "It pays my rent. I book my flights with cheapair.com. They accept bitcoin, Dash, all kinds of cryptocurrencies. I book my rooms with BitPay with my Visa card. My Lyft drivers accepts BitPay, that's bitcoin. So I'm all in. I use bitcoin in every aspect of my life."
Unlike dollars or other conventional currencies, cryptocurrency like bitcoin isn't issued by a government. It's created through a process called mining, which is leading to a virtual gold rush around the world.
Every time someone uses cryptocurrency to pay for something, it sets off a flurry of invisible activity. Computer servers, which can be located anywhere in the world, work to verify and process the transaction, racing to authenticate the exchange of digital money through complex transactions.
For doing this work, the machines (and their owners) are rewarded with new cryptocurrency. With a sufficient number of powerful computers, it can be a lucrative business.
That's what David Carlson's company, Giga Watt, is busy doing at his facility in Wenatchee. He started with just a few small machines, but with the help of investors, he's scaled up significantly. Now his rooms full of computer servers work feverishly to mine cryptocurrency around the clock.
David Carlson shows CBS News' Errol Barnett his cryptocurrency mining operation in Wenatchee, Washington.
CBS News
Each of the small machines makes roughly $1,500 worth of bitcoin every year, though the amount of profit fluctuates every day. As Carlson showed CBS News correspondent Errol Barnett around, the site hummed with the sound of giant industrial cooling fans.
"Every one of these things is like a thousand-watt hair dryer. So there will be a thousand of those hairdryers in this spot. So that's quite a lot of heat. Don't try it at home," Carlson said.
"This entire wall is the future, according to you," Barnett said.
"Yeah. The future of money right here," Carlson replied.
He plans to have 22 of his pods completed by the end of the year and all that computer power sucks up a huge amount of electricity.
"Our pods use one and a half megawatts, which is typically associated with, like, 600 homes," he said.
Powering his operation would cost a fortune most places, but Wenatchee has a competitive advantage: the Columbia River. Dams on the river generate cheap hydroelectric power, which has drawn crypto mining enthusiasts to this corner of the country.
Steve Wright, the general manager of the Chelan County public utility, says it has long been an economic engine for the region. "What we have seen more recently are industries like cryptocurrency that have come to the region for the same reasons that aluminum came here. Low-cost, reliable electricity," he said.
Dams on the Columbia River provide cheap power to the Pacific Northwest.
CBS News
But even here, there are limits.
"We have requests for service that would double the usage here in the county, and we're trying to figure out, you know, how are we going to deal with that, and what the implications would be for the people who live here," Wright said.
Because access to cheap power is key, crypto miners are racing to set up shop anywhere in the world they can find low rates. Cold climates are also preferred, to help reduce cooling costs.
But this tech boom is not without problems. Among the issues: the droning noise of all that equipment. The hum reverberates far beyond the walls. And some of the operations have sprung up in a decidedly makeshift fashion.
"Would you want to live next to one of these?" said Andrew Wendell, customer service director for the utility. "Not just the aesthetics, but also the noise. There's a lot of noise. They really do belong in an industrial setting."
He continues, "And it gives us a bit of a concern, because, quite literally, you could have a tractor trailer come in and load this thing up and move it out, literally overnight. And so it just begs the question, from a utility who is providing and building the infrastructure to support these, how long is our investment? When we build those, we are building for 40, 50, 60 years. This doesn't look like that long term."
Not only is he worried about miners abandoning Wenatchee and leaving behind expensive new power connections there are also safety concerns. Some mining setups push the infrastructure to the breaking point.
Industrial fans are needed to cool the rows of supercomputers that mine for cryptocurrency.
CBS News
Wendell shows us an example. "What we have here is a standard residential home, but this shed, about 10 by 10 here, off to the side with the fence, that's full of cryptocurrency mining operations."
He holds up the remnants of a frayed and melted underground electrical cable.
"This plastic insulation breaks down because there's so much heat?" Barnett asks.
"There's so much heat. It can't dissipate the heat. So the insulation breaks down, and then the cables go phase to phase. And when they go phase to phase, they combust. They arc and they can start a fire. And that's what happened [here], is a fire started," Wendell said. "The bottom line is, is that when you mix the cryptocurrency mining with traditional residential load, if you don't have things built and designed appropriately, you're going to have some problems."
He adds, "In this part of the country, a wildfire can spread and burn literally hundreds of homes. So we take that very seriously."
While some in Wenatchee are excited about the economic potential of cryptocurrency mining, many others are concerned about its massive power consumption and other risks.
"Nobody wants a fire, you know, like their apartment complex burning down, because someone is mining bitcoin," one resident said.
Some admit they don't fully understand it. "It's just going to drain our power, and that's really all I know," a local woman told us.
Facing overwhelming demand for power from cryptocurrency miners and increasing concern from the community, the utility placed a moratorium on new mining requests until they could agree on a solution. Local miners were not happy.
"They went overboard with their moratorium. It was kinda crazy for 'em to say, 'No, you can't do that. We're we're shutting everything down in the in the entire county,'" said Matt McColm. He was planning to set up a mining operation in his insurance office to generate some extra money for his 12-year-old son's college fund. He'd already ordered the equipment on Amazon. But now he'll have to move it all to a site a few hours away in Oregon instead.
"What you've got is is you've got is several large players that kind of salted the earth for everyone else. They're literally consuming large sections of our town and edging out the small ones," McColm said. "It's kinda rough, because I'd rather develop here locally... and put the money here in Wenatchee."
Earlier this month, the utility held a public hearing for input on the moratorium and the future of cryptocurrency mining in Wenatchee.
Some locals stood up to voice complaints about what the industry is doing to their town. "I read a lot about what bitcoin operators want, and what bitcoin is doing for them. I'm not hearing that it's doing anything much for us. This is a take, take, take, not a give," one woman said.
Others made the case to encourage business development, like the man who said, "I'd ask you guys to consider the very small operations that are existing right here in town. A large rate increase would drastically affect our business, putting some of us out."
Much of the concern about cryptocurrency mining is its volatility. With prices soaring one day and crashing the next, many worry the entire market could collapse. But advocates say they are missing the big picture a growing industry that's about more than just mining.
Malachi Salcido, another large-scale miner, says the rise of supercomputing, using specialized hardware and cheap power, can also enable things like artificial intelligence.
"And so it helps you to understand why in the world would you build a 30, 40-year asset for something that's only nine years old? I didn't. I built it for a new technology that will have many current and future iterations that we don't yet fully understand," he said.
He believes his investment will pay off, even if cryptocurrency fizzles.
"The demand internationally for power and networking for computing space is rising so rapidly that I'm very comfortable there will be demand for our location, even if crypto doesn't become the market it could."
Salcido, a Wenatchee native, wants to see his hometown benefit from the new industry. But for now, he must expand elsewhere.
"Our strategic goal is 500 megawatts within the next 5 years, and 5 to 10 percent of the global network. We are currently negotiating developments in northern Idaho, northern Oregon, and northern central California. Our choice is whether or not they happen here," he said.
A moratorium may stem the flood of miners arriving in Wenatchee, but it won't stop them from seeking out cheap power wherever they can find it.
In June, a cryptocurrency mining company called Coinmint took over a massive former Alcoa aluminum plant near the small town of Massena, in upstate New York. Coinmint is investing $700 million to turn it into a bitcoin mining behemoth. Once complete, it could be the largest in the world.
Aerial view of a former Alcoa aluminum plant near Massena, in update New York, which is being turned into a massive bitcoin mining facility.
CBS News
Back in Wenatchee, the only question for Dave Carlson is not whether to grow, but where.
"Cryptocurrency justified the expense to build something that no one would otherwise build," he said. "Supercomputing, A.I. can be the new export."
"So you're confident that you will grow, you're just concerned that it will be elsewhere because Wenatchee blinked at a critical moment?" Barnett asked.
Carlson agreed. "That's exactly right."
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Pornhub Now Accepts PumaPay Cryptocurrency
PornHub now accepts an open source blockchain-based payment solution called PumaPay.
Developed by Cyprus-based blockchain company Decentralized Vision, PumaPay offers a "PullPayment protocol," which it says allows for transactions that have never been possible on the blockchain until now. That includes recurring payments and pay-per-use transactions.
"PumaPay's technological solution, the PullPayment protocol, reverses the mechanics of a transaction, enabling merchants to 'pull' crypto funds from their customers' account," PumaPay CEO Yoav Dror explained in a statement. "With PumaPay, merchants avoid the drawbacks of the current banking systems, such as high transaction costs, the insecurity of chargebacks (reverse transactions) and associated fines, and the lack of customer anonymity."
In other words, with PumaPay, you can set up a recurring Pornhub Premium payment to ensure you'll never lose access to the HD, on-demand porn streaming service.
Besides PumaPay, Pornhub's list of accepted cryptocurrencies also includes Verge, Tron, and ZenCash.
"As one of the most viewed websites in the world with over 90 million daily visitors, it is our duty to stay at the forefront of innovation and ensure the privacy of our users," Pornhub VP Corey Price said in a statement. "As decentralized payment systems continue to grow in popularity, cryptocurrencies are especially viable in the adult entertainment industry because they incorporate more anonymity tools than traditional tender."
Meanwhile, Pornhub recently started offering a free VPN service so you can keep your porn-browsing activities private. The service, VPNhub, is available on iOS and Android. Last year, Pornhub officially switched to HTTPS, so you can access the site over an encrypted channel.
NK hackers target Mac users with trojan cryptocurrency app …
The first malware for Mac systems developed by infamous North Korean hacking group Lazarus has been discovered.
Researchers have fingered the Lazarus group for the destructive attack on Sony Pictures in 2014, as well as more recent financially-motivatedattacks on South Korean cryptocurrency exchanges, a spate of targeted ransomware attacks on corporations in the US and Europe, and multiple raids on banks through the industrys SWIFT system.
All of those attacks have targeted Windows systems, however researchers at Kaspersky Lab have found the groups first known malware targeting Apple macOS computers in the form of a hidden software updater for a seemingly bonafide app aimed at cryptocurrency traders called Celas Trade Pro.
But software was fake and the company behind it appears to have been bogus too, according to Kaspersky researchers.
The macOS malware was discovered while the company was investigating a breach at an unnamed Asian cryptocurrency exchange that its researchers believe was compromised by one of Lazarus malware tools called Fallchill, a remote access tool that US-CERT has filed under its investigation into North Koreas Hidden Cobra hacking activity.
Using a trojanized software updater for an application relevant to cryptocurrency trading was a notable difference to fake Flash Player updates spread through malicious ads aimed at the masses.
In this case, the hackers appear to have only wanted to snag people keen on installing cryptocurrency trading software, in this case Celas Trade Pro from a company claiming to be Celas LLC.
Including malicious code into distributed software and putting that on a website would be too obvious. Instead, the attackers went for a more elaborate scheme: the trojan code was pushed out in the form of an update for a trading application, Kaspersky Lab researchers note.
Celas Trade Pro didnt display malicious behavior and looked like a genuine cryptocurrency trading program developed by Celas, and was seemingly verified with a legitimate-looking digital certificate.
However the researchers found that the macOS installer includes a module that persists after a reboot and contacts a remote server to install more malware.
The malicious Celas Mac software was offered alongside a Windows executable that displayed the same behavior as the Mac malware. The site also flagged a Linux update was coming soon.
The fact that [the attackers] developed malware to infect macOS users in addition to Windows users and most likely even created an entirely fake software company and software product in order to be able to deliver this malware undetected by security solutions, means that they see potentially big profits in the whole operation, and we should definitely expect more such cases in the near future, Vitaly Kamluk of Kaspersky Lab said in a statement.
For macOS users this case is a wakeup call, especially if they use their Macs to perform operations with cryptocurrencies.
Read more: Olympic Destroyer destructive malware targets EU bio-weapons research groups
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NK hackers target Mac users with trojan cryptocurrency app ...