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What happened in crypto this weekend?

  • November 13, 2023
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  • Category: BitCoin, Blockchain, Cryptocurrency, Investments
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A Bitcoin dev unveiled a decentralized file hosting service for the blockchain, while $27 million was stolen from a Binance-linked hot wallet.

Bitcoin gets a decentralized file-hosting service

A Bitcoin developer has introduced a new decentralized file hosting solution that offers an alternative fee model to existing solutions that have run into “computational overhead” issues.

On Nov. 12, Robin Linus — a developer at Bitcoin zero-knowledge proofs creator ZeroSync — published the “BitStream: Decentralized File Hosting Incentivised via Bitcoin Payments” white paper.

Linus explained that Bitcoin-based atomic swaps for files would enable the open market for content hosting in which anyone can “monetize their excess bandwidth and data storage capacities.”

Decentralized file hosting networks are alternatives to centralized solutions like Google Cloud, Microsoft OneDrive and Dropbox. It typically involves splicing data into tiny pieces and storing it on nodes linked to a subset of computers or nodes.

BitStream is looking to offer a better revenue model than existing solutions with a decentralized structure, Linus said.

He pointed out a flaw in the file hosting service used by the decentralized social media platform Nostr, claiming that its fee model burdens the network.

“Users are paying to upload their data, so servers are not paid per download. If a server fulfills too many download requests from various users, then the server can become overwhelmed from the bandwidth costs outweighing their earnings.”

Linus argues that a pay-to-download approach will instead enable a server’s revenue to scale while the social media platform grows which he claimed would create a “balanced and profitable ecosystem.”

Compatible payment systems like the Lightning Network, Ecash, and other systems that support hash-timelock contracts will be able to implement BitStream, Linus noted.

Last month, Linus also launched BitVM, a Bitcoin-based virtual machine that aims to scale Bitcoin.

$27M in stablecoins drained in alleged hack

A cryptocurrency wallet tied to Binance allegedly lost $27 million in Tether (USDT) on Nov. 11, according to on-chain analyst ZachXBT.

The crypto sleuth isn’t sure if it was a planned hack but noted the recipient wasted no time transferring USDT to Ether (ETH) and then transferring to noncustodial exchanges like FixedFloat and ChangeNow before bridging the funds to Bitcoin (BTC) via THORChain.

The recipient transferred $2.7 million to 10 new addresses within eight minutes of the alleged exploit, according to Etherscan. The first transfer was made in less than two minutes.

ZachXBT noted the alleged victim’s address is linked to the Binance deployer.

Etherscan data also shows the alleged victim received $26 million from “Binance 16” — one of Binance’s hot wallets — on Nov. 5.

Onlookers such as X (Twitter) user “Cashyol” pondered if a Binance team member was hacked or if Binance’s systems were compromised.

Others noted the alleged victim put themselves in a vulnerable position by storing $27 million worth of USDT in a hot wallet.

“When will people learn??? $27M in a hot wallet??? This is crazy,” wrote “SmartecVitalik,” a representative for Ethereum layer 2 scaling solution Starknet.

Ransomware attack forces bank to use USBs for trading

The Industrial and Commercial Bank of China (ICBC) suffered a ransomware attack on Nov. 9 which prevented it from clearing swathes of United States Treasury trades in its typical fashion, instead forcing it to use USBs.

The operational change was part of an effort to limit the damage done by cybercrime organization Lockbit, Bloomberg reported on Nov. 11. Lockbit confirmed it was the perpetrator behind the ICBC attack, according to Reuters.

“Yes we confirm,” a Lockbit representative said when asked if it breached ICBC’s systems.

The incident impacted ICBC’s United States unit, according to Bloomberg.

Ransomware groups like Lockbit continue to instill fear in many large banks worldwide, said Marcus Murray, the founder of Swedish cybersecurity firm Truesec.

Related: Bitcoin needs Ethereum VM to reach its full potential — Web3 exec

“This is a true shock to large banks around the world,” Murray added.

“The ICBC hack will make large banks around the globe race to improve their defenses, starting today.”

ICBC said it has been improving its cybersecurity practices over the last few months to combat ransomware attacks.

Blockchain analytics firm Chainalysis said $449 million was paid to ransom attackers over the first six months of 2023, up 62.4% from the same timeframe in 2022.

Other news

MicroStrategy co-founder Michael Saylor thinks Bitcoin demand could grow up to 10 times by the end of 2024. He claimed the Bitcoin halving would play a big role in its price surge and described the next 12 months as Bitcoin’s “coming out party” as it heads out into the real world.

BlackRock argued the U.S. Securities and Exchange Commission doesn’t have any legitimate reason to treat spot-crypto and crypto-futures exchange-traded fund applications differently. The $9 trillion asset manager made its point in its Nov. 9 19b-4 application for a spot Ether ETF called the “iShares Ethereum Trust.”

Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?

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