NEO-Bug: „No theft of tokens possible“

On the weekend a message of a bug at NEO-Nodes made the rounds. The NEO bug discovered by the Chinese software giant Tencent is supposed to make it potentially possible for attackers to withdraw crypto currencies from wallets of NEO node operators. NEO co-founder Erik Zhang now gave the all-clear – at least in part.

On December 1, Tencent Security on the Chinese social media platform Weibo announced the discovery of a bug in the NEO block chain. Accordingly, the operators of NEO nodes expose themselves to crypto-piracy if they use the standard configuration.

This is what the Tencent announcement says about the Bitcoin formula:

„The monitoring of the famous Bitcoin formula blockchain project NEO […] revealed the risk of remote piracy. When a user starts the Bitcoin formula with the default configuration and opens the wallet, the digital currency can be stolen remotely.“

Tencent recommends three things to the node operators:

1. update of the NEO client to the latest version

2. not using the RPC function and changing the BindAddress in the configuration file to

3. if not: change RPC port, enable HTTPS-based JSON RPC interface and adjust firewall policies accordingly

So far, so FUD. What, in contrast to the Tencent warning, did not make the round so fast was the answer from NEO co-founder Erik Zhang, who was only a few hours away.

Erik Zhang: „Normal“ Bitcoin trader are not affected

Zhang is trying to reassure the mean NEO-Hodler: ht-scam/ „Normal Bitcoin trader don’t have to worry because the RPC function is disabled by default. RPC can only be accessed via the NEO-CLI client. Since this is a command line program, technically inexperienced users do not run the risk of opening the door to hackers through careless configuration adjustments. Zhang closes:

„In summary, there is no danger of remote piracy for the conventional NEO user“.

Since Zhang does not deny the security gap, one can assume that operators of NEO nodes are in danger of being robbed. It is probably for this reason that Zhang points to the bounty program that NEO launched this year under the name „NEO Vulnerability Bounty Program“. Anyone who finds a relevant and above all unknown NEO bug is entitled to a reward from NEO.

The guidelines of the Bounty Program state:

„If vulnerabilities are published before NEO repairs or publishes them, the reward is void.“

Tencent will therefore not be able to claim a reward for discovering the NEO bug.

Debt worries

Market observers have been pointing to the accumulation of China’s debt for some time now. Rines and Haley also talked about the risks that such a development entails for the country and on a global level:

„Eight years of expansive fiscal policy have pushed China into an enormous mountain of debt. China’s debt ratio is currently 225% (Debt/GDP). China owns corporate bonds with a default risk of 2.4tn US dollars.“

Rines also said „if the Brexit slows down the European economy, trade with China will also stall, which in turn would mean new debt for China“.

„That would be a shock not only to China but to the Bitcoin trader,“ Haley said

Chen Zhao, co-director of Brandywine Bitcoin trader Global says the political reactions were „quick and determined“. While some economists warn against China’s growing debt burden, Zhao says concerns about China’s debt and the risks associated with it are exaggerated and fuelled.

Zhao says that debt in developing countries arises primarily from the need to convert savings into investments. Since China has a very high savings rate, such leverage is inevitable, Zhao says.

Potential shift of the crypto trader

While legitimate efforts to resolve the crypto trader situation can lead to a fundamental change in policy, the Brexit could lead to a fundamental departure from the crypto trader globalization we have been living for 30 years.

If such a change were to occur, it would have a major impact on China, which has benefited enormously from globalisation to date.

Further headwinds in the big economy paired with growing uncertainty and a drift away from globalisation could also provide strong backwinds for the Bitcoin course in the future.


„Economically speaking and in view of the brexit, China has lost a strong supporter in the European free trade zone. Investments in the UK are now becoming less attractive for Chian. They granted the country access to the free trade zone. Probably some investments will now be put on hold.“

PwC senior manager: Bitcoin works as a means of payment

Bitcoin has the potential to shape completely new payment methods and methods. Roland Stadler, Senior Manager and Data & Analytics Specialist at PwC Switzerland, is certain of this. In an article on PwC’s website, he shows how crypto currencies work as means of payment, how utility and security tokens differ from each other and why not only the blockchain but also Bitcoin is relevant for the future.

Crypto currencies are a thorn in the side of many representatives of the traditional economy, whether states, central banks or traditional financial service providers. The technology behind the blockchain, on the other hand, is regarded by all these players as innovative and potentially profitable. It is precisely this argumentation that is often heard: Blockchain good, Bitcoin – goes like this. Apple co-founder Steve Wozniak was one of the few who turned the tables and claimed that the blockchain was developing into a bubble – while he was convinced of the Bitcoin.

Bitcoin news as universal means of payment, the remaining tokens rather not

Even Roland Stadler, Senior Manager of PricewaterhouseCoopers (PwC) in Switzerland, cannot understand why the Old Economy is courting the Blockchain and frowning on the Bitcoin news. In his report „Blockchain, but not Bitcoin. Really? the rhetorical question of whether the Bitcoin news didn’t deserve to be rated better.

It starts with a definition of the terms „crypto currencies“ and „digital assets“ – most crypto assets are not currencies. Only Bitcoin and a few other crypto currencies are actually used as means of payment and as a payment network. Bitcoin has been working without problems for almost 10 years, has never been hacked and – in contrast to many fiat currencies – is deflationary.

Most other digital assets can be divided into utility tokens and security tokens. Stadler describes utility tokens as fuel for a particular blockchain ecosystem. As such, he names, for example, Ether, which would be needed to run an application on the Ethereum platform. Security tokens, on the other hand, represent securities in digital form and are used almost exclusively for crowdfunding. Meanwhile, neither utility nor security tokens were suitable as universal means of payment.

Stadler: Blockchain, but not Bitcoin formula. Really?

So while you can trade and speculate with all listed crypto assets, only the true crypto currencies are suitable for actual use. Utility and security tokens, which he sees as „venture capital,“ Stadler, on the other hand, sees the effects of the blockchain hype. Only Bitcoin formula continues to work as a means of payment – and quite well. Range, speed and transaction costs of the Bitcoin formula are not challenged by any other financial network.

„Small to large amounts can be transferred worldwide within minutes. No other financial network is currently able to do this. A retailer can receive payments directly to his tablet or POS system without the help of a service provider. In international trade, where traditional payment transactions sometimes incur very high transaction fees, Bitcoin can bring a considerable cost advantage with fees in the centime range,“ says Bitcoin, the report says. The Lightning Network’s scaling solution also holds out a lot of hope.

The bottom line is that Stadler criticizes the promise „Blockchain, but not Bitcoin“ because he still does not see a blockchain application that is more suitable as a means of payment than Bitcoin. The development of smart contracts can have many effects in the future, but is still in its infancy. The current ICO hype, on the other hand, should be viewed with caution.

Ebay: Sale of crypto currencies without a license?

The online platform Ebay apparently offers unlicensed crypto currencies for sale, including unambiguous scams and coins whose offer prices are out of proportion to the current market rate. Those responsible seem to be aware of this problem and have taken steps, but it remains to be seen how effective they are.

Ebay, the world’s largest online marketplace, seems to have a massive problem with regulating the products offered on its platform. For example, crypto currencies are set as goods and offered for sale completely unchecked. This is done in various ways, for example by offering paper wallets or vouchers that can subsequently be exchanged for crypto currencies. In total, several such offers are made daily which clearly promise the purchase of crypto currencies via the Ebay platform.

This Bitcoin code is not only cumbersome and confusing, but could also prove problematic

In Germany, it is not permitted to conduct commercial financial services business without being in possession of a corresponding licence. A corresponding licence is issued by the Federal Financial Supervisory Authority (BaFin) and can cost a six-figure euro amount, depending on the scope of the financial services to be offered. If this license is missing, it is not permitted to sell financial products commercially. This constitutes a criminal offence under Section 54 of the German Banking Act (KWG):

Apart from the fact that the pure offering and selling of Bitcoin code crypto currencies is not permitted without a corresponding license, the offered products generally lack any substance. For example, various crypto currencies are offered at a price that far exceeds the current market value of the coin, as can be seen in the image section. The Ebays format also does not allow to take into account the hourly fluctuating price adjustments of the respective crypto currencies. In addition, it also happens that quite obvious scams and non-existent crypto currencies are offered for sale in order to take advantage of the ignorance of potential crypto users in a clearly fraudulent intention.

Finally, the question of Ebay’s role in this Bitcoin code story inevitably arises

Since these illegal and morally highly questionable offers are still left undisturbed, this suggests that the platform is at least finding it difficult to regulate the abuse of its own online marketplace for illegal Bitcoin code purposes. Important basic principles such as the know-your-customer approach (KYC) are violated in this way. It is also possible that the platform may be misused for Bitcoin code money laundering purposes.

Ebay provided evasive answers to the repeated questions of blockchain developer and BTC-ECHO reader Michael Padilla. It could be heard, for example, that the employees would not be able to check everything, that necessary filters had already been installed or that crypto currencies are currently simply very popular. However, Ebay does not seem to have found an effective antidote against the illegal trading of crypto currencies via its platform.

Get to work – especially as the Bitcoin price rises!

The recent dramatic rise in the share price has raised hopes for a future bull market. But is the price really the only interesting thing about crypto currencies?

The recent jump in Bitcoin’s share price gives rise to renewed hope for a stronger Bitcoin share price. Understandably: the sour cucumber period since the beginning of May, in which the Bitcoin share price only oscillated between downward and sideways movements, was interrupted. That’s fantastic, but it doesn’t hide the fact that we’re not over the mountain yet. In the weekly chart, the Bitcoin price is still below the moving average of the last twenty weeks, which is a reasonable estimate of the bull and bear market. Likewise, Bitcoin’s trading volume is still as low as it has not been for a year:

Between the beginning of May and the end of June, the Bitcoin price lost over forty percent. To make up for this, it needs more than a pump induced by BlackRock, the possibly coming ETF or other reasons. Even though over 20 percent in two days is incredibly impressive, the price would still have to rise thirty percent even now.

What can we learn from the Bitcoin profit review?

I don’t want to complain. It’s more about the Bitcoin profit review: How can this upward trend be used meaningfully? A look back at the past will help here. 2018 was by no means the first bear market. In 2011 and 2014 there have been equally drastic moments for the community. Even then, many lost a lot of money. Especially in 2014 a long bear market began. It took several years for the Bitcoin profit review market to recover. Crypto currencies that were in the top 10 in 2014 are now unknown. Megacoin, once ranked tenth in terms of market capitalisation, is currently ranked 925th.

But the scene didn’t sleep or just complain about losses – Bitcoin was still used. Bitcoinstad Arnhem, founded in May 2014 during the „Bear Market“, continues to exist and is a showcase of Bitcoin’s use. Ethereum, whose white paper was published at the end of 2013, was also launched in the bear market, more precisely in July 2015. Joseph Poon published the White Paper on the Lightning Network at the beginning of 2016.

Of course, trading was also done at that time, but by no means exclusively. The bear market and also the slowly recovering market was therefore a fruitful time. The focus was on technical use cases and real use.

How can a secure connection to a real asset be realized in the sense of a Bitcoin profit scam?

Layer 2 solutions, stablecoins and decentralized stock exchanges: the tech trends of 2018
Even before the recent jump in the Bitcoin profit scam, a lot of positive things were happening – in the technical area. A few months ago I criticized that more recent projects have too much focus on announcements and partnerships. In the meantime, there is again a lot of interesting things to see in the Bitcoin profit scam ecosystem:

The Lightning Network, Bitcoin’s Layer 2 solution, is Bitcoin’s answer to the scaling problem. We have reported elsewhere about the extremely busy developer scene around the off-chain solution. According to Lightning’s 1ML monitor, capacity has now increased to 80 Bitcoin, a 200 percent increase over the last month. Behind Lightning or similar solutions like COMIT or Plasma is much more than a scaling solution. It is extremely important that projects not only develop new crypto currencies, but also advance the application layer.

Decentralized stock exchanges have not only caused a stir with the latest statement by Vitalik Buterin. The fact that Binance, one of the largest crypto exchanges, wants to set up a DEX shows how important this technology is perceived. Strictly speaking, centralized exchanges are a single point of failure. Even if the latest Bancor drama shows that there is still a lot to be done, decentralized exchanges will shape the trading and investor landscape in the crypto sector – especially in connection with the Lightning Network and Atomic Swaps.

Stable coins such as tether have led to many controversies. Nevertheless, stable coins, crypto currencies whose value is firmly linked to an underlying, are an interesting concept. Stablecoins can create a safe haven for decentralized stock exchanges without the possibility of exchanging them in Fiat, where digital assets can be temporarily transferred. Technologically, there is even more at stake.

All these trends have one thing in common: they are accompanied by a few „Lambo“ calls. The mood has cooled down in a positive way. The crypto-ecosystem is to be developed within the framework of various projects – one catchword is therefore #BUILDL.

Bitcoin is a good keyword: how would you present your role next to Bitcoin?

While this kind of governance is more or less unique in the crypto world, criticism is sometimes expressed: people who want to run master nodes have to put aside a security of 1000 DASH. The critics believe that the fate of DASH would be in the hands of the rich.

What do you think about these concerns?

As much as one can understand such concerns: This reserve is a security reserve, a collateral reserve. Without this, an attacker could set up a large master node network at very low cost – and not only take control of DASH governance, but corrupt the anonymity and fungibility of the crypto currency. This security of 1000 DASH guarantees a decentralized network.

At this point I would also like to emphasize that our roadmap provides a concept called „Masternode Shares“, a concept that should ultimately allow everyone to participate in the network.

DASH on the market

In addition to DASH, there are other crypto currencies that focus on anonymity. Two months ago, Monero has grown drastically in terms of market capital. Recently, a strongly sponsored network called ZCash has been dancing in the round for anonymity. How do you position yourselves in this competition?

On the one hand, DASH’s primary focus is to offer the user a great user experience. Anonymity is only one of many features. Other projects that only focus on anonymity don’t have the whole picture in mind and often push anonymity in favor of usability.

DASH tries to realize anonymity in such a way that the use of mobile devices is not a problem. In addition, anonymity is deliberately kept optional – donations, for example, could be deliberately kept transparent so that DASH and Bitcoin can be used under certain conditions desired by the user.

DASH’s goal is to be a digital counterpart to cash for everyday transactions. That’s why we focus on solutions that can be used in everyday applications. In contrast, Bitcoin seems to be more of a valuable object like gold – which is why people often talk about digital gold.

By focusing on the aspect of „digital cash“ (DASH does not stand for digital cash for nothing), we want to expand DASH’s position as a crypto currency for smaller, more frequent transactions.

DASH Evolution – the future of payments
We are approaching the end of the interview. Can you tell us something about the future plans under the heading „DASH Evolution“?

Oh, we have a lot to do! DASH Evolution is supposed to be the big milestone of development. We are working to make this milestone the future of payment systems.

Evolution will be a user-friendly, decentralized system that includes a web wallet for normal, non-technical consumers. Users will be able to pay as easily as with PayPal – without having to relinquish control over privacy or the money itself.

Sellers will benefit from the fact that the integration of a payment option via DASH can be integrated into an online shop with just a few lines of code. This will enable merchants to address the target group using DASH almost immediately.

Users and dealers will be brought together in a marketplace integrated in the wallet. In a nutshell – Evolution will offer a smooth user experience with regard to the purchasing process and correspond to the best practices of the large payments industry.

It’s always nice to see how enthusiastic people are about a demonstration of Evolution – in that respect Dash will also knock out the big marketplace!