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5 Secret Ways Hackers Can Use Blockchain To Hack The Unhackable

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Blockchain is one of the hottest technologies out there and is transforming every industry you can think of. Whether it is finance or healthcare, digital marketing, real estate or supply chain, you will find it everywhere. Blockchain’s exponential rise to the top has forced even the top Universities around the world to take it seriously. Many universities have already started offering courses in Blockchain technologies.

Some of the advantages of blockchain technologies include:

  • More control with users
  • Reliability
  • Transparency
  • Lower transaction costs
  • Faster transaction

Blockchain technology gives complete control to users and enable them to control all their transactions. Thanks to its decentralized nature, there is no central point and risk of central point failure. This makes blockchain networks safer because it can withstand malicious attacks in a much better way. What’s more, blockchain transactions can take a few minutes to complete and cost much less because of no third-party involvement in the process.

Despite all these advantages and being counted amongst the top future technologies, there is still a long way to go before its wider adoption. Many businesses are still reluctant to implement blockchain technologies because of its bad reputation. The technology has frequently been associated with dark web, which is the main reason behind its poor reputation. When a technology did not get user acceptance and goes mainstream, it usually ends up in the wrong hands and this is exactly what is happening with blockchain.

In this article, you will learn about five dangerous ways in which cybercriminals use to break into unbreakable.

  1. Typosquatting

In typosquatting, cyber criminals will create fake websites for the sole purpose of collecting user data. Users are redirected to a website that looks like a crypto exchange. As soon as the user type in their username and passwords, this will give hackers the information needed to get inside cybersecurity wallet. Netherland and London authorities have arrested six individuals in an $27 million typosquatting scam showing that these types of crimes are already happening and will surely grow in the future, especially with no prevention methods in place to block them.

  1. Sybil Attack

Just like DDoS attacks, Sybil attack sends a barrage of requests from fake IDs to trigger system crash. When the server receives so many fake requests, this blocks out legitimate requests. Many businesses adopt proof of work algorithms to cope up with Sybil attack threat, which has made it very expensive for hackers to launch such type of attacks. Although, there is no successful Sybil attack on any popular cryptocurrency yet but we cannot count out the possibility of these attacks in future especially considering that hackers are always looking for new ways to target businesses.

  1. 51 Percent Attack

The lack of centralized authority in blockchain system means that if a user can gain a majority, he or she can wrest the control. This gives them powers to rewrite transaction history and use double spend. Transaction are removed when goods are received, which allows the token to be reused, which lead to double spend.

In January 2019, one popular

cryptocurrency known as Ethereum Classic came under a 51 percent attack. The hacker successfully got away by carrying double spend on Coinbase. The value of the attack was $1.1 million. The hacker did not stop there and launched another 51 percent attack targeting another cryptocurrency exchange called Gate.io but returned half the money. All these incidents showed that individuals and groups can misuse the authority especially when they are in majority in a blockchain system.

  1. Routing Attack

Even though, tracking transactions in a blockchain system is not easy because there is no trace of blockchain transaction, but it still requires support from internet service providers. Cyber criminals can sit in the middle and intercept data sent to internet service providers, which is then distributed amongst a network of nodes or computers in the form of different partitions.

 The worst part, your network will continue to function properly. This means that you will not know that your data is being intercepted. Hackers perform many fraudulent financial transactions comprised of millions of dollars. Due to this, legitimate transactions are rejected, and fake ones are approved.

The decentralized nature might force you to believe that blockchain systems are more secure and reduce the risk of infiltration, but the fact is that it only three nodes are responsible for almost 60% of blockchain transaction. In short, this means that cyber attackers can hijack 20% of bitcoin transactions just by partitioning a single node.

  1. Phishing

We all are familiar with phishing attack because it is one of the most popular phishing techniques hackers use to make money online. Phishing attacks are usually disguised inside an email. An email will be sent to the target with a malicious link or malicious file. When a user clicks on the link or download the file, the computer get infected as malicious code starts to execute.

Two Israeli cyber attackers have been arrested in June this year for stealing more than $100 million through a phishing scam that lasted for more than three years. The hackers used an advanced tactic to trick investors through websites that looked like popular crypto exchanges. This made them believe that they are trading with popular crypto currency exchanges, but they are playing in the hands of Israeli hackers.

Conclusion

If you believe that blockchain systems are hacker-proof, then you are wrong because that is not the case. Just like your network, systems and databases, your blockchain systems can be intruded especially if the cyber criminals have the time, resources and are willing to put in the effort. To ensure that these attacks don’t affect your business, it is important to take cybersecurity measures. At the end of the day, it all comes down to investors, crypto currency exchanges and user’s behavior.

How do you use blockchain technology to your advantage or protect against blockchain based attacks? Let us know in the comments section below.

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Chrysler Building Owner Sells Stake in Zurich Property for ERC-20 Tokens and Cash

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The new owner of the Chrysler Building is selling a property worth $135 million to a blockchain real-estate company, taking a fifth of the purchase price in tokenized securities.

New York-based RFR Holdings, which purchased the Chrysler Building in a joint agreement in March 2019, agreed to sell its majority stake in a commercial property in Zurich to BrickMark, a Switzerland-based real estate agency.

Announced Wednesday, BrickMark said roughly 20 percent of the purchase price will be paid in the firm’s BMT security token.

The deal gives BrickMark 80 percent of the building, with the option to purchase RFR’s remaining share until September. The purchase price has not been disclosed, but the value of the token share is believed to be in the tens of millions of euros.

According to BrickMark CEO Stephan Rind, it is the largest-ever real estate deal involving digital tokens. “There has never been a token-based real estate transaction of this magnitude. We are implementing what was once no more than a concept in the real estate industry,” he said.

The property is situated on the downtown street of Bahnhofstrasse (pictured), where rent per square meter is commonly between $13,000 to $15,000 a year, making it one of the most expensive shopping districts in the world. In 2014, Swatch Group purchased a nearby property for a reported $409 million.

One of the largest real estate purchases to involve cryptocurrency was the sale of a mansion just outside of San Francisco to a Chinse millionaire for 500 bitcoin, approximately $4 million at the April 2018 exchange rate.

BrickMark’s ethereum-based tokens are hybrid digital securities – tokenized perpetual bonds that will be backed by property in the BrickMark portfolio (for now, just this one building). BMT’s price represents the property’s net asset value performance and tokens will confer voting rights to holders.

Under the deal, RFR will lead redevelopment plans to expand the Zurich property’s rentable space sixfold, increasing annual revenue and, therefore, the value of the token.

Expansion ahead

With the Bahnhofstrasse deal completed, BrickMark plans to expand its portfolio. The firm plans to finalize a financing round worth €50 million ($55.7 million) and begin acquiring other high-value commercial properties in Europe and North America. More tokens will be issued in line

with new real estate acquisitions, enabling more investors to participate without diluting those held by existing holders.

Currently, there are only a handful of entities holding BMT tokens. Although restricted for the time being to qualified investors, there are plans under evaluation that would allow BrickMark to offer BMT tokens to retail investors through a European-regulated security token offering (STO).

According to its website, BrickMark has a €1 billion ($1.1 billion) worth of property assets. Issuing digital securities makes the investable real estate market, worth approximately $80 trillion, more accessible to institutions, the company believes.

“Only 3 percent [of investable real estate] is available for investors through public listed real estate companies or real estate-backed bonds or funds structures,” Rind said in a call Wednesday, highlighting that only a 5-percent fraction is ever traded on an annual basis. “We think digital securities and tokens are able to unlock these tremendous values and also give people, on a worldwide basis, access to properties that have [to now] been privileged.”

“Unlocking the value of the remaining USD 76 trillion is probably the biggest addressable market opportunity in the world,” Rind told CoinDesk.

Nascent industry

Other entities have also recognized the disruptive potential for blockchain in real estate. The tZERO security token platform and the Tezos Foundation signed an agreement to tokenize $643 million of U.K. real estate back in October 2019. Another real estate startup, known as AssetBlock, launched a commercial property trading platform on the Algorand blockchain in September.

That said, previous initiatives have failed to meet the high expectation. One high-profile venture between technology startup Fluidity and broker-dealer Propellr was quietly shelved last summer because “it didn’t have sufficient institutional appetite.”

Discussing the Bahnhofstrasse deal, Dr Alexander Koblischek, managing director of RFR Germany, said: “We gladly accepted the Brickmark tokens as part of the purchase price. We assume that digital financial instruments will also significantly gain in importance in the real estate sector in the future.”

“The current transaction may have an icebreaker function for the sector in terms of its volume and institutional character,” Koblischek said.

EDIT (Jan. 16, 16:01 UTC): A previous version of this article said the BMT token did not confer voting rights and that BrickMark managed a property portfolio worth $15bn. These statements have since been corrected.


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Former CFTC Officials Ramp Up Push for Digital Dollar With Accenture Partnership

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Former Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo, former LabCFTC Director Daniel Gorfine and investor Charles Giancarlo want to take the dollar digital – and they’re not waiting for the Federal Reserve.

The three are forming the Digital Dollar Foundation, working with Accenture to design and push for a potential U.S. central bank digital currency (CBDC).

The new not-for-profit organization has a multi-part plan to first create potential designs and proposals; convene economists, lawyers, academics, technologists and others to evaluate these designs; and create a framework for testing the new system, all with the goal of making dollar transactions as seamless as a text message.

The idea isn’t new: The former CFTC officials called for using a blockchain platform to support a digital dollar since an opinion piece in the Wall Street Journal last October. Essentially, a non-governmental group would run the project, with support from the Federal Reserve and other stakeholders. 

An analog reserve currency does not serve modern users, Giancarlo, the former CFTC chairman, said in a statement Thursday. 

“A digital dollar would help future-proof the greenback and allow individuals and global enterprises to make payments in dollars irrespective of space and time,” he said. 

The proposed digital dollar would be a tokenized form of the U.S. currency, which would work with other existing Fed liabilities but act as a digital settlement medium. 

The digital dollar would “meet the demands of the new digital world and a cheaper, faster and more inclusive global financial system,” Giancarlo said. 

Accenture will act as the chief architect and technology partner on the project. 

In a statement, Accenture global blockchain lead and managing partner David Treat said the firm would bring together some of the stakeholders to combine both real-world experience and new technological abilities to drive the project.

Giancarlo said Accenture has worked with a number of central banks, including the Bank of Canada, the Monetary Authority of Singapore and the European Central Bank, to innovate around existing systems.

In particular, he highlighted the firm’s work with Sweden’s Riksbank on designing the ekrona.

Treat told CoinDesk via a spokesperson that Accenture has already invested heavily in the space, particularly with regard to CBDC and “the inherent value use cases. CBDCs can also support other digital ledger-based projects, he said.

“As an example, the ability to directly exchange a CBDC for a tokenized security will have profound effects on global capital markets,” he said.

Supporting the dollar

To begin with, the foundation will hold meetings, roundtable discussions and open forums to look into different approaches to creating a digital dollar.

“Core governmental interests,” including support for existing Fed projects, will also be considered, the press release noted.

This initial effort will culminate in a set of principles, which will then be compared to stakeholder needs and the practical requirements for a CBDC, as well as evaluated for U.S. legal compliance, the release said.

Fed buy-in is key: The digital dollar would have to be backed by the U.S. central bank, unlike most existing cryptocurrencies and dollar-pegged stablecoins.

Notably, the Digital Dollar Foundation’s proposals would look to preserve the existing financial system, not replace or otherwise supersede it, according to the press release.

As such, it is likely to take into account, if not outright coordinate with, the FedNow project, the Fed’s real-time payment system. While rumors that the central bank would develop its own digital payment rails have persisted for years, the entity only formally announced the effort last year.

To date, it

does not appear as though FedNow will utilize a blockchain, though the project is in an early stage.

Still, what is clear is Fed governors and Chairman Jerome Powell are aware of the technology, and are at least evaluating the potential use of a blockchain to support the system.

U.S. congressmen French Hill (R-Ark.) and Bill Foster (D-Ill.) have even weighed into the debate, asking Powell whether using a blockchain-based CBDC was feasible or worth the effort.

Powell has so far responded that while the Fed is looking into the matter, he doesn’t yet see if there will be any significant benefit to pursuing monetary policy with a CBDC.

Gorfine, who previously ran the CFTC’s financial technology initiative in LabCFTC, told CoinDesk via email that a number of issues must be worked out before a U.S. CBDC can be issued, including legal, economic, privacy, security and technology concerns.

“These are some of the issues we intend to explore and we will do so with a broad range of stakeholders through a phased approach that may include actual or proposed pilots,” he said. “Ultimately, a digital dollar would need to be issued by the Fed, and our goal is to advance a framework for potential, practical steps that could support such an effort.”

Global needs

Thursday’s announcement comes amid growing rumors that China may soon be ready to launch its own central bank digital currency. The full details and scope of China’s project are unknown, though it appears possible that the country could try to take on the U.S. dollar’s dominance of the global financial system.

It remains to be seen whether a digital renminbi could take on the dollar in dominating the global financial system. Jerry Brito, executive director at industry think tank Coin Center, argued in a blog post the renminbi’s fundamentals will not change just because it is placed on a blockchain, and therefore a Chinese CBDC poses no threat to the U.S. dollar.

Still, former senior U.S. government officials and academics have considered the possibility that nations like North Korea could use a digital renminbi to bypass sanctions while hostile actors target the aging infrastructure supporting remittances today, like the SWIFT Network.

Other nations are also looking to issue their own CBDCs. The Marshall Islands is perhaps one of the most advanced, announcing last year it would issue the Marshallese sovereign in two stages: first, a private pre-sale to gauge liquidity, followed by the public issuance sometime within the next two years.

Private groups are also looking to serve the declared need for a global, scalable means of transmission, most famously the Libra stablecoin project, which social media giant Facebook announced in June as an effort to create an international payment system specifically targeting un- or underbanked individuals.

The new digital dollar envisioned by Giancarlo and Gorfine would fulfill the same niche, but act more simply as just the 21st century dollar, however.

“It must … reduce costs, foster security, improve transparency and serve as an effective digital settlement medium nationally and internationally to make the dollar a better currency for all of its global users,” the press release said.

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JPMorgan Spinoff Launches its own Hybrid Blockchain for Smart Contracts

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Kadena is one of the JPMorgan spinoffs focusing on blockchain technology. The company unveiled its public chain earlier this week, and launched a wallet service to boot.

Kadena is a public chain primarily built for smart contracts.

KADENA IS A PUBLIC BLOCKCHAIN AFTER ALL 

These contracts will be interoperable between its public chain and private chain aspects.

It is evident that big banks are also betting big on blockchain infrastructure for a wide variety of use cases.

This chain aims to be scalable and offer proof-of-work alternatives to secure the network as a whole.

This new ecosystem also consists of a wallet known as Chainweaver.

That wallet is now integrated with the Cosmos Network, allowing for interoperability between

different distributed ledger systems.

When everything is said and done, all of the services should be fully up and running by late March 2020. 

It is rather interesting to see this chain being public, as that is not what most people expected.

Even so, it has its own smart contact language, known as Pact.

This will allow third parties to develop services and products on the ecosystem in the future.

The hybrid DLT model will process 750 transactions per second, albeit the exact numbers might be slightly different.

More competition in this space is never a bad thing, albeit it remains to be seen how well Kadena’s system works.

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