Blockchain Bites: China's Commitment, Sanctions Evasion and a Look at Bitcoin's Core

Dial-up daydreams, Zoom alternatives and how blockchain is lending a helping hand during the coronavirus crisis.

AccessTimeIconApr 7, 2020 at 4:34 p.m. UTC
Updated Sep 14, 2021 at 8:26 a.m. UTC

Experts are aligned in thinking the Democratic People's Republic of Korea is using a billion-dollar cryptocurrency war chest to bust sanctions.

The pieces of the puzzle are falling into place, said Priscilla Moriuchi, head of nation-state research at Recorded Future, regarding the Hermit Kingdom's crypto-funded, trade-based, money-laundering networks. While the complete picture is still obscure, it appears North Korea is able to fund off the radar ship-to-ship transfers using freshly minted cryptocurrency it earns from exchange and ransomeware attacks, among other means.

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Top Shelf

Sanctions evasion
The Democratic People's Republic of Korea's $1.5 billion cryptocurrency war chest is likely used to evade import and export sanctions, experts agree. Evidence documenting this cross-border movement is still mounting, though one reliable way for the DPRK to circumvent sanctions involves ship-to-ship transfers, the process of moving cargo from one ship to another in the open sea rather than at a port. The nation’s increased crypto-jacking activity, or using malicious bots to surreptitiously mine cryptocurrencies mean that these also points in this direction, as “newly mined cryptocurrency can be used to facilitate sanctions-evasion activity,” a U.N. report reads.

China's commitments
“The People’s Bank of China (PBoC) will undoubtedly further its research and development of the national digital currency with enhanced top-down design,” the bank said in at a high-level conference. The unequivocal language used indicates a firmer stance on the project than before.

Teddy Fusaro, chief operating officer at Bitwise Asset Management, argues China is winning the misinformation war. After reeling from a novel coronavirus outbreak, the regional superpower is now exercising soft power, and authoritarian means, to rewrite the outbreak narrative.

Core code
The privacy and scaling upgrade Schnorr/Taproot bitcoin code update is moving closer to its implementation. The update will allow for a number heretofore impossible projects, by bundling together several different proposed technologies. Alyssa Hertig, CoinDesk contributor, breaks down what these changes are and what they mean for bitcoin’s future.

Regulatory hurdles
Risk-averse German banks are unwilling to take on crypto firms as clients, despite regulation and guidance from the nation’s Federal Financial Supervisory Authority. “There is no legal reason why banks wouldn’t offer bank accounts but they are hesitant because they don’t understand the business,” said Matthias Winter, partner at Eversheds Sutherland Germany, a firm working directly with German regulators on how the law should be enforced.

Alternatives are presenting themselves. Coinhouse, an exchange, has become the first crypto company to be registered with the Financial Markets Authority (AMF). The registration means Coinhouse now has a shot at getting banking services in France, which could give the firm cheaper services than the German bank it currently works with.

Helping hand
Helperbit, a blockchain-based disaster management platform, has raised approximately $31,800 in bitcoin donations to help defray the cost of building emergency medical centers in Italy. “We are happy to have turned the received donations into a tangible aid. We are excited to have received so much help from the bitcoin community," said the president of the Colli Albani Committee, Bruno Pietrosanti.

Blockchain can help for more than just donations, the World Economic Forum says. According to a recently published paper, distributed ledgers and digitization can help supply chains survive crises like COVID-19.

Movers & shakers
Marco Santori, controversial co-author of the "Simple Agreement for Future Tokens" (SAFT) regulatory framework, is going to Kraken’s growing legal team as chief legal officer.

Dial-up daydreams
"Why does it suddenly feel like 1999 on the internet?" Ask Tanya Basu and Karen Hao of MIT Technology Review. “The coronavirus pandemic has turned back the clock to a kinder time on the web, before the novelty of virtual connection wore off,” they write.

Private Messaging

A to Zoom alternatives
Video conferencing app Zoom has become popular by necessity, growing 200 fold since December, despite existing security practices that were found wanting. Reports of Zoombooming and a wanton disregard for personal data have many in the crypto space looking for alternatives to host video chats with colleagues and family members. CoinDesk’s security reporter Ben Powers identifies Jitsi and Whereby as strongly encrypted alternatives.

Careless Whisper
The blockchain-based messaging app Whisper pushed out a code update sacrificing privacy for scalability, reports Decrypt.

Market Intel

Notch in the ether
Ether, the native cryptocurrency of the Ethereum network, has recorded its biggest daily gain in over 20 days. Industry experts said the rise can likely be attributed to growing confidence in a planned system-wide upgrade known as Eth 2.0, slated for July 2020, which promises higher transaction throughput and a new security model under proof-of-stake (PoS).

Up 3 percent, bitcoin left the S&P 500 behind in a year-to-date recovery. Bitcoin clocked a 3.5-week high of $7,459 early on Tuesday, meaning the cryptocurrency was up 4.2 percent from the yearly opening price of $7,160. Since then prices have fallen back slightly, though the cryptocurrency is still ahead of Wall Street’s equity index, which is still down 17.5 percent for the year, despite a notable rally.


Halving report
In May of 2020, bitcoin is expected to undergo its third “halving,” a programmed supply reduction that has in the past coincided with a strong run-up in the bitcoin price. In this paper, we explain what the bitcoin halving is, why it matters and why the market is so focused on this event.

The Breakdown

Emerson Spartz, coder, serial entrepreneur, and creator of a crowdsourced document tracking COVID-19’s second order effects, joins NLW on the latest episode of The Breakdown podcast to discuss how to hold onto your creative spark during the crisis and leverage the internet for the public good.




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