Many argue that in 2017 the traditional financial system faced the cryptocurrency revolution. You can also draw an analogy with the popularity of political forces, ideas which are directed against establishment, including financial elites. Thus the established order of things has faced a number of threats and is in deep crisis.
However, the word "revolution" implies a certain amount of radicalism in the context of the system changes. Some experts believe that bitcoin and the cryptocurrency industry seek to destroy a financial system based on the centralized control of Central banks, that is — to make a "coup". Is it really so?
Despite the view of some respected economists and researchers, the cryptocurrency industry is a natural evolution of existing standards due to technological progress of the last forty years. Decentralization is a more effective model of organization of all processes, including in the financial sector.
It is worth noting that the American economist, trader and author of the theory of "Black Swan," Nicholas Nassim Taleb, studying the persistence of centralized and decentralized systems to stress, in his book "Anthropist" found that the latter are much more efcient react to even the most minor crisis factor. In turn, centralized systems ignore minor stress, thus accumulating them in one major crisis, which usually destroys the system.
For example, Central banks in many countries often save large financial firms from bankruptcy, thus prolonging the life of a "terminally ill". Such a situation has repeatedly been at the heart of many stock crises. So what do the Central banks in the conditions of economic collapse? Increase emissions, increasing inflation and following inefficient management model.
Decentralization is's antifragile process that does not accumulate crises and solves problems as they arrive. The concept of "anthropoi" allows decentralized systems to strengthen the results of each stress.
Thus a financial system based on the blockchain with a clearly defined issue of monetary units is a natural transition from inefficient centralized system, unable to cope with the crises to an effective decentralized system that uses crises for its own improvement.
Speaking about the benefits of the technology and its prospects, it cannot be denied that on the cryptocurrency market, as in any industry, which in the early days, there are enormous speculation. In 2017, we witnessed an amazing growth of bitcoin and its "brothers" and hard dumps, organized strong players to cash in on newcomers and the alarmists.
The lack of a legal framework in most countries has led to cryptocurrency "fever", a kind of "kleptomania". Obviously where the big money, there are those who would like to steal, take this obsession of millions of people.
Below, specific examples presents the most acute problems of the industry, requiring a decision in 2018.
Fraud MyBtgWallet
On the night of 14 November, the attackers have devastated thousands of custom purses and stole more than $5 million because of the vulnerability BTG wallet MyBtgWallet.
Amid impressive growth rate of the Bitcoin Gold in anticipation of the launch of the main system by a large number of bitcoin holders wanted to obtain the result of hard forks BTG coins at a high price. This opportunity provided MyBtgWallet after entering the led-phrase from BTC-wallet.
Despite the fact that MyBtgWallet was posted on the official project website Bitcoin Gold, as a reliable, it is assumed that the attackers initially gained access to the led-phrases and used it to empty the bitcoin wallets of users.
Some of the victims formed a group to negotiate with the team of Bitcoin Gold, committed to the work of the third party and confirm the reliability of BTG-purse, but the problem had not been resolved by diplomatic means. At the moment, the user group is preparing lawsuits against the members of the team, accusing them of negligence and possible complicity.
This case clearly demonstrates what the consequences can take input led-phrase from BTC-wallet immediately after the network launch the next fork in order to as soon as possible to fork the coin. Sometimes the pursuit of "easy money" is turning into a disaster.
Recommended that the team use BTG MyBtgWallet? Yes. However, in the absence of a clear regulatory framework it is difficult to say, do the project any responsibility. In any case, users are unlikely to return the funds if the attackers are found.
Scheme PlexCoin
In early December, the Commission on securities and stock exchanges of the USA has seized the account of a resident of Canada Dominique Lacroix and his company PlexCorps, which was charged with the implementation of fraudulent schemes under the guise of ICO, which promised investors a 13-fold profit in less than a month.
Soon, Lacroix was sentenced to two months imprisonment and a fine of $10 000 only for contempt of court and a further fine of $100 000 because he has not suspended sales PlexCoin after restraining orders and raised $15 million from "insufficiently informed" investors.
Despite the fact that stunning rally to happen in the cryptocurrency industry almost every week, users should objectively assess the potential project before investing, rather than relying on marketing gimmicks and not supported by the technology promises.
The project website did not contain any information about sponsors or the team. Moreover, in the period of the presale white paper was generally not available, and users could not get acquainted with the technical details. It is also worth noting that the sensitive domain was hiding all information about the company conducting the ICO.
In addition, the moderators of the project page on Facebook was deleted the comments, if users are asked uncomfortable questions.
These factors were initially to alert the user, however, the desire to 13-fold profit has eclipsed common sense, and the pursuit of "easy money" again turned against investors.
Hacking ICO project CoinDash
The ICO market has experienced a boom in 2017, its market capitalization reached almost $5 billion, Many believe the primary offer of coins of the evolutionary way of raising funds, but others do not agree, because most projects do not have even a prototype of the technology they intend to implement.
At ICO there are a number of advantages but also significant shortcomings, however, no one will dispute the fact that the ICO projects have become a major target for hackers in 2017.
In terms of "cryptocurrency fever" project sought to begin fundraising as soon as possible, while Amateur investors are willing to invest millions of dollars on pure enthusiasm, without going into technological details.
But, even if the investor is a sober assessment of the potential of the project and decided on the basis of the technological background, if the project team really intends to carry out promised not to cheat gullible people, funds can be stolen by a third party hackers.
Thus in the pursuit of raising funds in 2017, many projects have neglected the necessary security measures, putting at risk not only their reputation, but also the millions of dollars that could be spent on the development is really necessary and useful technology.
The Israeli project CoinDash lost $7.5 million during the ICO due to the fact that hackers have posted a fake address to send Ethereum on the official website of the project. It is worth noting that the attackers soon fell back 10 000 ETH, however, the time course Ethereum was only $290.
Experts expect that in 2018 there will be introduced new standards for the ICO, and the project will demonstrate prototypes before the fundraiser and to pay more attention to security issues. After all, when hackers steal investors ' funds, collective claims are brought not against the immediate attackers, but against the representatives of the project.
Thus the disregard for the safety lead many projects in the courts, and the litigation may drag on for years. And what was supposed to be a quick attraction of significant funds that will result in expensive legal conflict and irreparable reputational damage.
Referral pyramids
Prominent representatives of industry and end users have repeatedly accused the project BitConnect in the organization of a financial pyramid on the basis of extensive referral program. We emphasize that ForkLog no evidence that the project is a financial pyramid, but readers should understand how cryptocurrency projects can potentially use the referral links in order to deceive investors.
Projects, promising certain daily, weekly or monthly Deposit bonuses bitcoin can use the deposits of new investors attracted in the framework of a tiered system of referral links, for payments to earlier investors.
In such cases, the project promoters are likely to classify information about the nature of the bonuses. In addition, such a project is usually a commercial enterprise with an opaque ownership structure with Bank accounts in offshore zones.
However, many users are willing to invest in such projects, even if they understand that the risk of becoming a part of a Ponzi scheme is over 90%. All depends on the degree of adventurism in the blood, but it discreditied cryptocurrency industry in General. In this regard, we should not support opaque projects even under the condition that they generate fabulous profit.
Epidemic WannaCry
This post has received a 0.09 % upvote from @drotto thanks to: @serfis.