<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



Wormhole Portal, a platform that helps users transfer cryptocurrency between the Solana and Ethereum blockchains, said Wednesday afternoon a hacker had stolen more than $325 million worth of tokens in what experts call one of the biggest hacks ever in the booming $192 billion decentralized finance space—an area regulators seem keen to crack down on after a slew of high-profile heists.



<h2 class="wp-block-heading">KEY FACTS</h2>



Blockchain platform Wormhole, which launched last August and holds roughly $1 billion in deposited funds, notified users of a possible hack on Twitter at about 4 p.m. ET Wednesday,&nbsp;<a href="https://twitter.com/wormholecrypto/status/1488976115750383626?s=20&amp;t=Iw5TGKo9Cp8f6gfWDIqPUA" target="_blank" rel="noreferrer noopener">saying</a>&nbsp;its network was down for maintenance as the firm looked into a potential attack.



About an hour later, Wormhole&nbsp;<a href="https://twitter.com/wormholecrypto/status/1489001949881978883?s=20&amp;t=Iw5TGKo9Cp8f6gfWDIqPUA" target="_blank" rel="noreferrer noopener">said</a>&nbsp;its network had been exploited and claimed about 120,000 tokens of a cryptocurrency known as wrapped ether, which tracks the value of the world&#8217;s second-largest cryptocurrency, ether, had been stolen, representing some $325 million in value.



In a message embedded onto the Ethereum blockchain, Wormhole offered the attacker a $10 million bounty to return the funds,&nbsp;<a href="https://www.elliptic.co/blog/325-million-stolen-from-wormhole-defi-service" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to blockchain analytics company Elliptic, which called the Wednesday incident the fourth largest cryptocurrency hack ever.



Wormhole did not immediately respond to&nbsp;Forbes&#8217;&nbsp;request for comment, but it&nbsp;<a href="https://twitter.com/wormholecrypto/status/1489036273012682753?s=20&amp;t=kLVkos0r2-xt_Zrq1PFiiA" target="_blank" rel="noreferrer noopener">said</a>&nbsp;shortly before 7 p.m. that the network&#8217;s vulnerability had been &#8220;patched&#8221;; it&#8217;s still unclear who the alleged hacker is and how Wormhole users may have been affected by the heist.



Soon after the attack, analysts at blockchain security firm CertiK said the hack represented the largest-ever attack on the Solana network and an &#8220;unfortunate reality&#8221; for the booming decentralized finance space, which has heated up among investors alongside the broader cryptocurrency industry over the past year, despite a growing number of similar hacks.



Even though the space only started gaining traction in 2020, there have been more than $2 billion in direct losses suffered by decentralized finance services due to hacks and exploits, according to Elliptic on Wednesday.



<h2 class="wp-block-heading">BIG NUMBER</h2>



$192 billion. That’s the current market value of all decentralized finance tokens, according to cryptodata&nbsp;<a href="https://defillama.com/" target="_blank" rel="noreferrer noopener">website</a>&nbsp;DeFi Llama. The figure shot past $250 billion for the first time ever in December but has since fallen amid a&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2022/01/10/looking-ugly-crypto-market-crash-intensifies-after-300-billion-sell-off-how-low-can-bitcoin-prices-go/">broader</a>&nbsp;cryptocurrency market sell-off.



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



Securities and Exchange Commission Chairman Gary Gensler has repeatedly said the decentralized finance industry, also known as DeFi, deserves more government scrutiny. Such platforms largely sidestep traditional intermediaries like central banks and exchanges for financial services and instead rely on blockchains and cryptocurrencies to process transactions. Gensler has said the practices can implicate securities, commodities and banking laws, and last year&nbsp;<a href="https://www.sec.gov/news/public-statement/gensler-aspen-security-forum-2021-08-03" target="_blank" rel="noreferrer noopener">called</a>&nbsp;on Congress to ramp up its authority over the cryptocurrency industry, which he likened to the “Wild West.”&nbsp;



<h2 class="wp-block-heading">TANGENT</h2>



In August, hackers&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2021/08/10/more-than-600-million-stolen-in-ethereum-and-other-cryptocurrencies-marking-one-of-cryptos-biggest-hacks-ever/?sh=70c80e727f62">breached</a>&nbsp;blockchain-based platform Poly Network and extracted more than $600 million in cryptocurrencies, marking DeFi&#8217;s biggest hack ever. Those funds were&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2021/08/12/hacker-finally-returns-nearly-all-600-million-stolen-in-ethereum-other-tokens-after-major-crypto-heist/?sh=5cd80c6c19cb">eventually</a>&nbsp;returned.



<h2 class="wp-block-heading">FURTHER READING</h2>



<a href="https://www.forbes.com/sites/jonathanponciano/2021/08/12/hacker-finally-returns-nearly-all-600-million-stolen-in-ethereum-other-tokens-after-major-crypto-heist/?sh=5cd80c6c19cb">Hacker Returns Nearly All $600 Million Stolen In Ethereum, Other Tokens After Major Crypto Heist</a> (Forbes)



By Jonathan Ponciano, Forbes Staff

Business fund investor planning for investment in crisis

Solana’s Biggest Hack Ever: $325 Million In Crypto Allegedly Stolen From $1 Billion Decentralized Finance Platform

<p id="h-startups-are-supposed-to-specialize-but-opensea-s-founders-thrived-by-building-a-wide-open-market-for-creating-and-trading-all-manner-of-nfts-whether-art-music-or-gaming-now-that-they-re-centimillionaires-and-poised-to-become-billionaires-they-have-other-worries-competitors-fraudsters-and-the-next-crypto-crash">Startups are supposed to specialize, but OpenSea’s founders thrived by building a wide-open market for creating and trading all manner of NFTs, whether art, music or gaming. Now that they’re centimillionaires and poised to become billionaires, they have other worries: competitors, fraudsters and the next crypto crash.&nbsp;



In March 2020, as Covid-19 began to spread, OpenSea founders Devin Finzer and Alex Atallah held a gut-check phone call. Their five-person startup had built a platform on which users could create, buy and sell all sorts of nonfungible tokens (NFTs)—computer files used to track ownership of unique digital assets like art and music on a ledger known as a blockchain. Yet 26 months after going live, they had just 4,000 active users doing $1.1 million in transactions a month, which translated (given OpenSea’s 2.5% sales commission) to a paltry $28,000 in monthly revenue. The NFT market had a “dead feeling,” recalls CTO Atallah, who conducted his side of the call from the basement of his parents’ Colorado home, where he had gone to work as New York locked down. Ominously, Rare Bits, a direct and better-funded competitor, had just announced it was folding. The pair set a do-or-die goal of doubling business by the end of the year—and met it in September.&nbsp;



Finally, in February 2021, the NFT market roused from hibernation—and went crazy. In July, OpenSea processed $350 million in NFT trades. That same month, in a round led by Andreessen Horowitz, it raised $100 million in venture capital at a $1.5 billion valuation. In August, as NFT hype (and FOMO) reached a fever pitch, volume spiked tenfold to&nbsp;<a href="https://dune.xyz/rchen8/opensea" target="_blank" rel="noreferrer noopener">$3.4 billion</a>—an $85 million commission windfall for OpenSea in a month when it likely burned less than $5 million on expenses. Although transactions have since retreated to around $2 billion a month, the platform now has 1.8 million active users and a dominant share of the market. It’s up to 70 employees and is scouting for dozens more, including much-needed customer service reps.&nbsp;



Recently, there’s been talk of another round of venture investment at a valuation that could reach $10 billion. With a 19% ownership stake each, CEO Finzer, 31, and Atallah, 29, are centimillionaires on the cusp of becoming crypto’s newest billionaires.&nbsp;



Yet Atallah was humble as he chatted in November at a restaurant in New York’s kitschy new Margaritaville Resort Times Square, sitting near its 32-foot Statue of Liberty replica, which hoists a cocktail instead of a torch. He was there for the third annual&nbsp;<a href="https://www.nft.nyc/" target="_blank" rel="noreferrer noopener">NFT.NYC</a>&nbsp;convention, which boas­ted 5,500 registrants with 3,000 on the waiting list. Young enthusiasts prowled the hotel wearing&nbsp;<a href="https://opensea.io/collection/boredapeyachtclub" target="_blank" rel="noreferrer noopener">Bored Ape Yacht Club</a>&nbsp;sweatshirts—a tribute to a collection of 10,000 simian NFTs whose owners treat it as a social club as much as a collectible or investment.&nbsp;



You might say humility was at the heart of Finzer and Atallah’s successful strategy. Some advisors had urged them to specialize in an NFT niche—say, art, gaming or music. But they opted to build a category-agnostic platform because they didn’t think they were prescient enough to predict which NFT types would catch on.&nbsp;



Beyond casting a wide net, Finzer says, OpenSea has thrived simply by “being in the right place at the right time” and listening to users about what they want. The platform tracks NFTs on ethereum and other blockchains, and all purchases are made in crypto. Sellers can opt for a fixed-price or auction format. Artists can reserve a percentage of each resale price. Ultimately, Finzer sees the NFT ownership verification model working for anything from concert tickets to real estate—he’s just not sure what will succeed when. “I’ve always had a pretty gray view of the future,” he says.&nbsp;



Despite its sudden success, OpenSea faces big and varied risks—from fraud and another NFT market bust to new competition. In October, Coinbase, the nation’s largest crypto exchange and an original investor in OpenSea, announced it will launch its own NFT peer-to-peer marketplace. Within weeks, Coinbase had 2.5 million sign-ups for its waiting list, and CEO Brian Armstrong was predicting the new business “could be as big or bigger” than its core crypto trading business.&nbsp;



OpenSea’s open-market approach heightens the risk of counterfeits, scams and fraud—just ask Amazon or eBay. For example, a scammer can copy an image of someone else’s art and sell it as an NFT on OpenSea. Finzer says the site is working on an automated way to spot fakes and has moderators who investigate suspicious offerings. Still, people can present problems too. In September, Finzer&nbsp;<a href="https://opensea.io/blog/announcements/employee-information-use-at-opensea/" target="_blank" rel="noreferrer noopener">requested the resignation</a>&nbsp;of OpenSea’s head of product after Twitter users&nbsp;<a href="https://twitter.com/0xZuwu/status/1437921263394115584" target="_blank" rel="noreferrer noopener">discovered</a>&nbsp;a crypto wallet linked to that executive was buying NFTs shortly before they appeared on the price-moving OpenSea home­page—in other words, he was allegedly frontrunning his own employer’s decisions.&nbsp;



While they come across as humble, OpenSea’s founders are hardly low on ambition. Raised in the Bay Area by a physician mom and a software engineer dad, Finzer says he was “devastated” to be rejected by Harvard, Stanford, Princeton and Yale. (He settled for Brown.) After a short stint as a Pinterest software engineer, he cofounded his first startup, Claimdog, in 2015 and sold it to Credit Karma a year later.&nbsp;



As a kid, Atallah, the Colorado-born son of Iranian immigrants, made spreadsheets to compare the attributes of everything from birds to brow­sers. After graduating from Stanford, he worked as a programmer before teaming up with Finzer. In January 2018 they entered the Y Combinator startup accelerator with an idea for paying users crypto to share their Wi-Fi hotspots. But at that point, CryptoKitties—the cartoonish virtual cats whose ownership records were digitally inscribed on the ethereum blockchain—had captured the public imagination. “It was the first time people who didn’t really care about crypto were suddenly getting interested in it for reasons other than flipping a coin. I thought that was really powerful,” Atallah says. They quickly pivoted to OpenSea and later moved their operation to New York City.&nbsp;



Much like Beanie Babies, their cloth-and-stuffing ancestors, CryptoKitties turned out to be duds as investment-grade collectibles—the supply was too great to make most of them worth much. After spiking in early 2018, interest in both crypto and NFTs went into hibernation.&nbsp;https://view.ceros.com/forbes/sidebar-2-3-1?heightOverride=741



What awakened the market in early 2021 wasn’t OpenSea’s doing. Instead, platforms like the billionaire Winklevoss twins’ Nifty Gateway&nbsp;<a href="https://www.forbes.com/sites/michaeldelcastillo/2021/04/05/revenge-of-the-winklevii-facebook-winklevoss-bitcoin-nft-billionaire-revenge/?sh=4c2e24a01572">captured attention</a>&nbsp;with curated, high-quality art. Last March, Christie’s auctioned the NFT for digital artist Beeple’s “Everydays: The First 5000 Days”&nbsp;for $69 million, the third-highest price ever paid for work by a living artist.&nbsp;



As NFTs fetched eye-popping prices, more and more ordinary folks decided they too wanted to become creators, collectors or speculators—and turned to OpenSea, with its anyone-can-be-an-artist ethos, built-in secondary market and handy features. For instance, the site has an advanced filtering system so users can find NFTs with the rarest—and theoretically most valuable—attributes. (Only 46 Bored Apes have solid-gold fur, and they command a hefty premium.) When a new NFT is created and recorded on ethereum, the site automatically spawns a webpage displaying it—a nice feature as NFTs became a status symbol, with people sharing their OpenSea pages and changing their Twitter profile pictures to an NFT they own. “It became this circular feedback loop, driven by envy and desire. And OpenSea really captured that market,” observes Richard Chen, a partner at VC firm 1Confirmation and an early OpenSea investor.&nbsp;



Dani, 27, a former fashion designer living in Georgia, has turned a $17,000 investment in NFTs like the World of Women into a portfolio worth $715,000. AJ, a 37-year-old former gaming company CEO from North Carolina, put less than $10,000 into NFTs and now values his digital assets at $1.3 million. He recently convinced his gastroenterologist brother to start buying NFTs. The brother, in turn, hooked his own buddies. “They’re pretty much doing colonoscopies and then checking their phones for new NFT drops,” AJ says.&nbsp;



Sounds like a bubble, all right, raising the question of how OpenSea will fare when it bursts. Responds Finzer: “We have a large amount of padding in case we need to weather a winter.” 



<a href="https://www.forbes.com/sites/jeffkauflin/"></a>By Jeff Kauflin, Forbes Staff

Non-fungible token art.

What Every Crypto Buyer Should Know About OpenSea, The King Of The NFT Market

TOPLINE Tanzania became the latest country to signal its support for digital assets this weekend as its president instructed financial authorities to prepare for widespread use of cryptocurrencies, elevating bitcoin prices further after El Salvador <a href="https://www.forbes.com/sites/roberthart/2021/06/09/el-salvador-makes-history-as-worlds-first-country-to-make-bitcoin-legal-tender/?sh=5313aaa7eaa3">became the first country</a> to make bitcoin legal tender last week and Elon Musk outlined <a href="https://www.forbes.com/sites/jonathanponciano/2021/06/13/musk-denies-bitcoin-pump-and-dump-and-says-tesla-will-resume-transactions-once-this-mining-goal-is-reached/?sh=60560104aa2a">plans</a> for Tesla to resume accepting bitcoin as a form of payment. 



<h3 class="wp-block-heading" id="h-key-facts">KEY FACTS</h3>



President Samia Suluhu Hassan&nbsp;<a href="https://www.cityam.com/bitcoin-closes-in-on-40000-as-elon-musk-and-tanzania-give-the-markets-a-lift/" target="_blank" rel="noreferrer noopener">called</a>&nbsp;on the Tanzanian Central Bank Sunday to begin “working on” facilitating widespread use of cryptocurrencies in the East African nation.&nbsp;



While many in Tanzania have not yet embraced decentralized finance, Hassan&nbsp;<a href="https://twitter.com/Benji_Fernandes/status/1404105080157126657?s=20" target="_blank" rel="noreferrer noopener">said</a>&nbsp;the Central Bank should “be ready for the changes and not be caught unprepared.”



Hassan is one of the most senior politicians to signal support for digital assets since El Salvador&nbsp;<a href="https://www.forbes.com/sites/roberthart/2021/06/09/el-salvador-makes-history-as-worlds-first-country-to-make-bitcoin-legal-tender/?sh=5313aaa7eaa3">voted</a>&nbsp;to adopt bitcoin as legal tender last week and helped give the flagging market a boost.



The announcement helped bitcoin gain nearly 10% in 24 hours, nearly reaching $40,000 a token Monday morning.



The token was also buoyed on by <a href="https://www.forbes.com/sites/jonathanponciano/2021/06/13/musk-denies-bitcoin-pump-and-dump-and-says-tesla-will-resume-transactions-once-this-mining-goal-is-reached/?sh=60560104aa2a">news</a> that Tesla would resume its use of bitcoin when there is proof the asset is obtained using around 50% clean energy.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Our President tells the Bank Of Tanzania to learn more about Cryptocurrencies 🙌🏽 <a href="https://t.co/UfstRm1ktw">pic.twitter.com/UfstRm1ktw</a>&mdash; Benjamin Fernandes 🇹🇿 (@Benji_Fernandes) <a href="https://twitter.com/Benji_Fernandes/status/1404105080157126657?ref_src=twsrc%5Etfw">June 13, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h3 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h3>



There is growing popular support for bitcoin adoption in Nigeria that also gained momentum over the weekend. Russell Okung, an NFL player of Nigerian descent,&nbsp;<a href="https://bitcoinmagazine.com/culture/bitcoin-letter-to-nigeria-government" target="_blank" rel="noreferrer noopener">penned</a>&nbsp;an open letter to the Nigerian president imploring the country to adopt a Bitcoin standard so as to avoid “falling behind.” Twitter and Square CEO Jack Dorsey, one of the most high profile crypto enthusiasts,&nbsp;<a href="https://finance.yahoo.com/news/jack-dorsey-tweets-support-nigerian-121200414.html" target="_blank" rel="noreferrer noopener">tweeted</a>&nbsp;his support of the idea a number of times over the weekend.&nbsp;



<h3 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h3>



While reaching its highest point in several weeks, bitcoin, along with the wider crypto market, is still recovering from a tailspin that rapidly&nbsp;<a href="https://www.forbes.com/sites/roberthart/2021/05/19/leading-crypto-exchanges-down-as-bitcoin-and-ether-plummet/?sh=17aad93154ee">wiped</a>&nbsp;over $700 billion from the market’s value. This slump was primarily induced by Tesla&nbsp;<a href="https://www.forbes.com/sites/joewalsh/2021/05/12/tesla-will-stop-accepting-bitcoin-as-payment-due-to-environmental-worries-musk-says/?sh=fa7a9ca6e9ff">announcing</a>&nbsp;it would no longer accept bitcoin due to environmental concerns and China&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2021/05/18/china-bans-banks-from-crypto-business-saying-speculative-trading-seriously-infringing-on-financial-order/?sh=455a4d677898">cracking</a>&nbsp;down on the assets. Support from the likes of El Salvador, alongside other countries and banks that may begin to&nbsp;<a href="https://www.cnbc.com/2021/06/08/bitcoin-2021-el-salvador-adoption-could-be-huge-for-cryptocurrency.html" target="_blank" rel="noreferrer noopener">adopt</a>&nbsp;bitcoin, or other cryptocurrency tokens, the market has slowly started to recover, though remains volatile. Beyond Tanzania, lawmakers in a number of Latin American countries have&nbsp;<a href="https://cointelegraph.com/news/latin-lawmakers-don-lazer-eyes-on-twitter-in-support-of-bitcoin" target="_blank" rel="noreferrer noopener">expressed</a>&nbsp;at least a casual interest in following El Salvador’s footsteps, including Brazil and Panama.&nbsp;



<h3 class="wp-block-heading" id="h-further-reading">FURTHER READING</h3>



<a href="https://www.forbes.com/sites/roberthart/2021/06/09/el-salvador-makes-history-as-worlds-first-country-to-make-bitcoin-legal-tender/?sh=5313aaa7eaa3">El Salvador Makes History As World’s First Country To Make Bitcoin Legal Tender</a>&nbsp;(Forbes)



<a href="https://cointelegraph.com/news/tanzanian-president-urges-central-bank-to-prepare-for-crypto" target="_blank" rel="noreferrer noopener">Tanzanian president urges central bank to prepare for crypto</a> (Coin Telegraph)



By Robert Hart, Forbes Staff

TANZANIA-POLITICS-SWEARING-IN-CEREMONY

Tanzania Considers Crypto—And Boosts Bitcoin—As Nations Line Up Behind El Salvador To Embrace Decentralized Finance

It’s everyone’s dream to get paid to do nothing. Bitcoin miner Layer1 is turning that dream into reality — having figured out how to make money even when its machines are turned off.&nbsp;



Layer1 is a cryptocurrency startup backed by the likes of billionaire&nbsp;<a href="https://www.forbes.com/profile/peter-thiel/#20734ccc533a">Peter Thiel</a>. In recent months, out in the hardscrabble land of west Texas,&nbsp;<a href="https://www.forbes.com/sites/christopherhelman/2020/02/28/why-is-this-peter-thiel-backed-startup-mining-bitcoin-in-west-texas/#57cf2dc55174">the company has been busy</a>&nbsp;erecting steel boxes (think shipping containers) stuffed chockablock with high-end processors submerged inside cooling baths of mineral oil. Why west Texas? Beause thanks to a glut of natural gas and a forest of wind turbines, power there is among the cheapest in the world — which is what you need for crypto.&nbsp;



“Mining Bitcoin is about converting electricity into money,” says Alex Liegl, CEO and co-founder. By this fall Layer1 will have dozens of these boxes churning around the clock to transform 100 megawatts into a stream of Bitcoin. Liegl says their average cost of production is about $1,000 per coin — equating to a 90% profit margin at current BTC price of $9,100.&nbsp;



So it’s odd how excited Liegl is about the prospect of having to shut down his Bitcoin miners this summer.&nbsp;



Already this year west Texas has seen a string of 100-degree days. But the real heat and humidity don’t hit until August, which is when the Texas power grid strains under the load of every air conditioning unit in the state going full blast. During an intense week in 2019, wholesale electricity prices in the grid region managed by the Electricity Reliability Council of Texas (ERCOT) soared from about $120 per megawatthour to peak out at $9,000 per mwh. It was only the third time in history that Texas power hit that level. And although the peak pricing only lasted an hour or so, that’s enough to generate big profits. Analyst Hugh Wynne at research outfit SSR figures that Texas power generators make about 15% of annual revenues during the peak 1% of hours (whereas in more temperate California grid generators only get 3% of revs from the top 1%).



Turns out that running a phalanx of Bitcoin miners is a great way to arbitrage those peaks. Layer1 has entered into so-called “demand response” contracts whereby at a minute’s notice they will shut down all their machines and instead allow their 100 mw load to flow onto the grid. “We act as an insurance underwriter for the energy grid,” says Liegl, 27. “If there is an insufficiency of supply we can shut down.” The best part, they get paid whether a grid emergeny occurs or not. Just for their willingness to shut in Bitcoin production, Layer1 collects an annual premium equating to $19 per megawatthour of their expected power demand — or about $17 million. Given Layer1’s roughly $25 per mwh long-term contracted costs, this gets their all-in power price down 75% to less than 1 cent per kwh (just 10% of what residential customers pay).&nbsp;



It may seem like grid operators are paying Layer1 a lot for something that might not even happen, especially with coronavirus reducing electricity demand, but it makes total sense, says&nbsp;<a href="https://uh.edu/uh-energy/about-uh-energy/energy-fellows/blog-posts/ed-hirs/index.php" target="_blank" rel="noreferrer noopener">Ed Hirs</a>, a lecturer in energy economics at the University of Houston and research fellow at consultancy BDO: “It’s a lot cheaper option than building a whole new power plant or battery system just to keep it on standby.”&nbsp;



And although this may be a new concept for cryptocurrency miners, it’s been done before. Two decades ago industrialist Charles Hurwitz bought up power-hogging aluminum smelters in the Pacific Northwest and&nbsp;<a href="https://www.forbes.com/forbes/2001/0402/053.html#34cccc1d3da9">made more money reselling electricity</a>&nbsp;than making metal. “It used to be called load management,” says Dan Delurey, a consultant with&nbsp;<a href="http://www.wedgemere.com/team/" target="_blank" rel="noreferrer noopener">Wedgemere Group</a>. “In old commercial buildings you might still find telephone wires connected to air conditioning systems so that grid operators could send a signal to shut off.” More recently we’ve seen companies install radio-based devices to control hot water heaters and lighting systems. Indeed, grid management is a hot enough area that in 2017 Italy’s power giant Enel bought Boston-based Enernoc for $250 million and Itron&nbsp;<a href="https://www.forbes.com/companies/itron" target="_blank" rel="noreferrer noopener">ITRI</a>&nbsp;bought Comverge for $100 million. What’s emerged are entities, like Layer1, that Delurey calls the “prosumer” — producing consumer.&nbsp;



As for Layer1, Liegl says his next step is to vertically integrate into financial products, including Bitcoin derivatives and more. “We are building an in-house energy trading division to leverage this into being a virtual power plant.”&nbsp;



His message to any pikers still trying to mine cryptocurrencies from their bedroom PC or even via cloud services: “I can’t think of something more irrational at this point. It’s like if I wanted to dig a hole in my backyard and try to get oil out of the ground.”&nbsp;



&#8211;<a href="https://www.forbes.com/sites/christopherhelman/">Christopher Helman</a>, Forbes Staff, <a href="https://www.forbes.com/energy">Energy</a>

gettyimages-1130794858-170667a

How This Billionaire-Backed Crypto Startup Gets Paid To Not Mine Bitcoin

Yele Bademosi is passionate about helping his home continent of Africa. Born into a missionary home in Ibadan, Nigeria, Bademosi’s mother and father used to deliver medical services and bibles to the Yoruba tribes-people in the forests surrounding&nbsp;his home-town, often going from hut to hut. When he and his sisters were old enough, they helped. “That is my earliest memory in terms of thinking about how to give back,” he says, “But as I grew older, I changed my views to thinking about, how do you actually help people at scale?”&nbsp;



Last year, Bademosi became a director at the venture capital arm of the world’s largest cryptocurrency exchange Binance, which trades $1.5 billion in crypto assets each day. And today he is excited because he’s launching Bundle, one of six African startups the Malta-based crypto exchange is now funding, and the first it launched. The startup is being run by Africans in an effort to get Africans to use cryptocurrency, not as an investment vehicle, but as a global means of exchange. Bundle is essentially a social payments app, similar to Venmo or Square’s Cash App.



It lets users send, receive and spend bitcoin, ether, and Nigerian naira with little more than the recipient’s phone number. Unlike Square though, Bundle will also let users spend Binance coin (BNB), the exchange’s native cryptocurrency, which has been doled out to loyal and active traders using its crypto exchange. In the near future they’ll be able to spend and (more importantly) save Binance U.S. dollars (BUSD), stablecoins backed by U.S. dollars and regulated in the United States.



Bundle joins numerous tech giants working on ventures in Africa. Facebook <a href="https://www.forbes.com/sites/michaeldelcastillo/2020/04/16/libra-compromises-undermine-original-facebook-promise/#41334dc02737">intends</a> to co-launch a cryptocurrency targeting the unbanked and Square’s founder Jack Dorsey recently announced plans to immigrate to the continent. “Regardless of your geography, you should have access to the best financial services. And unfortunately, your geography today defines the quality of financial services that you have,” says Bademosi, who is also Bundle’s CEO. “The same way the internet created freedom of information, I think blockchains create freedom of quality of financial services.”



Born in 1991, the only boy among five sisters, Bademosi always knew entrepreneurship was in his future. Perhaps rebelling from his bossy sisters, he knew he didn’t want to work for others. Bademosi’s first experience with a computer was at an internet cafe. As a child, he’d walk up a flight of stairs to the second floor of his local shopping center, push open a sliding door and frantically scan for cheat codes to his favorite computer games in 30-minute chunks, before his money ran out.



It wasn’t until 2007, when Bademosi was 16-years-old, that he finally got his first computer, an Acer Aspire One Series his parents got for him when he started classes at Lansdowne College, a preparatory school for University, similar to a high-school, in Westminster, England. For the first time, he had unlimited online access and an outlet to focus his burgeoning interests. By the time he graduated two years later, the 6’ 6” Bademosi had not only competed on the school’s football and basketball teams, but studied biology, chemistry, psychology and mathematics. “There&#8217;s a huge difference between what you learn in college in a structured environment and what you can learn online,” he says. “It felt like what I imagined the Enlightenment period felt like for people who lived when the printing press was first available.”&nbsp;



Growing up in Nigeria, he says, meant that students who did well in school were pushed into the sciences. When his youngest sister decided to go into economics, or what he called “liberal-type accounting,” he was in shock. In spite of his entrepreneurial aspirations, he knew he would be expected to either to become a medical doctor like his father, an engineer or an architect. He hated physics though, so passed on engineering, and architecture was out because as he put it, “I couldn&#8217;t draw straight lines.” His father convinced him that even if he didn’t end up practicing medicine,&nbsp;the University of London’s accelerated three-year program meant he’d have extra time afterwards to find a path of his own, and he enrolled in 2009.



In his first year of medical school his father died of kidney-failure. His father’s death gave him the courage to rebel. He had always found that he was more interested in computers than medicine so he dropped out of medical school with plans to build apps for Apple’s OS.&nbsp;After a few unsuccessful months building a social media app Bademosi flew back to Nigeria.



<figure class="wp-block-image"><img decoding="async" src="https://specials-images.forbesimg.com/imageserve/5ea0b91d8c2caa0006e71892/960x0.jpg?fit=scale" alt="Yele Bademosi, Bundle"/><figcaption>Bademosi works in his company&#8217;s office.&nbsp;BINANCE / YUSUF</figcaption></figure>



There he got a job as manager of Starta, devoted to helping African companies get off the ground by providing education, tools, and networking opportunities. After developing a taste for helping startups get off the ground, Bademosi founded his own angel investing firm called Mircotraction. His venture had well connected backers: Nigerian energy and real estate tycoon, Tunde Folawiyo; the CEO of Y-Combinator, Michael Siebel, and Google’s head of ecosystem for sub-Saharan Africa, Andy Volk.



Lagos-based Microtraction is now among the most active investors in Western Africa, having funded 15 companies, including 54gene, an African genomics research startup that recently attracted $15 million from Adjuvant Capital, Y-Combinator and others.



Bademosi had learned about bitcoin in college but it wasn’t until 2017 after he read a book called Master Switch by Columbia professor Tim Wu, that he began to see blockchain as a way to let networks of individuals compete against the likes of Facebook, Amazon, Google, and Apple using a shared technology infrastructure. “We’re not there yet,” he says. ‘But I believe that blockchain and decentralized technologies can open up the internet again, and create a new playing field that new entrants could play on.”



While the jump from medicine to blockchain may seem big , Bademosi sees them as strongly related. “The similarity really is the fact that you have individual organisms, whether that&#8217;s a cell or a human or a computer, acting in their own best interests towards what&#8217;s still a common goal, and there are a bunch of rules they all have to obey.”



Just a few months after founding Microtraction in August 2017, Bademosi bought his first bitcoin and as its price fluctuated wildly he became hooked on crypto asset investing. That led him to Binance, which was, founded in China, and is now doing business from Malta. In November 2018, Binance published a ten-point <a rel="noreferrer noopener" href="https://medium.com/@benjaminrameau/10-reasons-why-binance-labs-is-fully-committed-to-africa-3aeaaa32fe9e" target="_blank">thesis</a> on why it was dedicated to the continent and launched a subsidiary in Uganda. Number four on Binance’s list was Bademosi’s childhood mantra: scalability. 



“For me, blockchains are as big as the internet,” says Bademosi. “And can you imagine Bill Gates or Larry Page or, Mark, Zuckerberg coming to Africa less than one year after the company was started?” He was impressed. So much so, that by January 2019, he had pitched his vision for what Binance should be doing in Africa and instead of taking him up on his advice, the company hired him, making him the first director at Binance Labs focused on investing in Africa-based blockchain startups and leading the Africa chapter of the organization’s incubation program.



So far Binance Labs has invested in five African startups, one from South Africa, one from Kenya, one from Ghana and three from Nigeria, all serving different aspects of the content’s growing crypto economy. Notably, Lagos-based Yellow Card is a way to buy bitcoin even without a bank via local agents, and Flutterwave is the same fiat-to-crypto bridge that lets Binance customers buy cryptocurrency with naira.



<figure class="wp-block-image"><img decoding="async" src="https://specials-images.forbesimg.com/imageserve/5ea0b97cbed92b0006690434/960x0.jpg?fit=scale" alt="Bundle team"/><figcaption>Bundle backend engineer Kenny Shittu (left) meets with blockchain engineer Oluchi Enebeli, user experience designer Ugo Ifezue, backend engineer Seyi Ajonibode and operations associate Chinny Eze at Bundle&#8217;s offices on March 9, 2020   BUNDLE / YUSUF</figcaption></figure>



Binance and its new Bundle have Western competitors in Africa. Facebook’s Libra has its sights set on banking the unbanked. Another potential competitor using cryptocurrency to serve the unbanked is Akon, the Senegalese-American musician whose Akoin project announced recently that it would be the exclusive currency of the Mwale Medical Technology City in Kenya.&nbsp;“Our goal is for akoin to be the official currency of the continent,” says Akon.



To give an idea of the total market up for grabs here, even if the average account holder might only own a fraction of what Western banks require to open an account, the World Bank estimates that 1.7 billion adults around the world are without such access. Fifty-seven percent of adults in sub-Saharan African, or about 350 million people, don’t have bank accounts, according to the World Bank. To help close that gap nearly&nbsp;$700 million was invested in fintech in Africa last year, according to media firm WeeTracker.&nbsp;Of the 1.2 billion people living in Africa, Bademosi estimates only 1.4 million are already using crypto.&nbsp;



In two weeks Bundle expects to add BUSD, a stablecoin pegged to the U.S. dollar, created by blockchain startup Paxos, regulated by the New York Department of Financial Services, and spendable anywhere in the world. One possible financial product that could eventually be offered using this technology would be what amounts to a savings account denominated in U.S. dollars for people living in Nigeria, and eventually other African nations. Instead of Nigerians losing 12% to inflation at current rates by keeping their cash in a savings account, they could be paid interest denominated in U.S. dollars for funds held in custody elsewhere. “Being able to save in stablecoins and earn interest per annum is huge,” says Bademosi. “And we can offer that up to anyone anywhere.”



Users will also be able to cash in and cash out using local fiat currencies. Longer term plans include a physical debit card and the ability to purchase U.S. stocks, Nigerian mutual funds and agriculture debt, and unspecified incentive programs designed to jumpstart the cryptocurrency economy in Africa, according to internal documents provided to&nbsp;Forbes. The documents compare Bundle to Mosaic, the internet browser invented by Marc Andreessen, and credited for weaving together the previously esoteric processes required to use the internet into a single, intuitive browser.&nbsp;



In September 2019, Bundle quietly raised $450,000 from Binance, Pave Investments and other African investors. “We believe Bundle can become one of the key projects that will support Binance&#8217;s mission of scaling the adoption of crypto on the continent,” says Binance CEO Changpeng Zhao (CZ). To help do that, Bundle will be free at launch, with plans to eventually charge 0.5% to 2% per transaction on all short term trades and 3% of assets under management on yearly gains, for longer-term investing. While the finer details of how that works have yet to be announced, we can look to Binance for some intriguing clues.&nbsp;



After creating BNB in July 2017, the asset has grown to a total market value of $2.2 billion, making it the eighth largest crypto-asset according to&nbsp;CoinMarketCap.com, the widely used cryptocurrency markets site Binance recently acquired for a&nbsp;<a href="https://www.forbes.com/sites/billybambrough/2020/03/31/bitcoin-and-crypto-world-rocked-by-massive-400-million-binance-bid-for-coinmarketcap-report/#34f2d302247f">reported</a>&nbsp;$400 million. But it’s the way Binance uses that asset, which users acquire in exchange for making transactions on-site, that Bundle perhaps has the most to learn from.&nbsp;



Binance’s users are allowed to pay their fees on the site using the same BNB cryptocurrency they are rewarded for being regular users, and a new platform, called LaunchPad, lets users raise capital via initial coin offerings (ICOs) also payable in BNB, establishing what cryptocurrency news site CoinDesk <a rel="noreferrer noopener" href="https://www.coindesk.com/the-unbelievable-brilliance-of-binance" target="_blank">called</a> “a virtuous cycle by which its users were incentivized to stay within its platform.” Bademosi, it would seem, has learned his lessons well, a promising sign for the future. “Bundle does an excellent job of putting fiat and crypto side by side,” he says. “And then nudging the user to use some of these digital currencies or assets in innovative ways.”



&#8211;<a href="https://www.forbes.com/sites/michaeldelcastillo/">Michael del Castillo,</a>Forbes Staff, <a href="https://www.forbes.com/crypto-blockchain">Crypto &amp; Blockchain</a>

960×0

Binance Spinoff Aims To Be Bitcoin-Powered Venmo Of Africa

Bitcoin

Bitcoin’s Guardian Angel: Inside Coinbase Billionaire Brian Armstrong’s Plan To Make Crypto Safe For All

There is something admirable about those who buck the trend,
and with a deep commitment to a cause beyond just profit.



Daniel Kibel is one such example. He wants to build the
biggest trading company in Africa, but in an era when most businesses are going
online to make profit, Kibel has gone offline. 



He says he wanted to help people make smarter investments, so in 2012, he founded CM Trading, a brokerage firm helping people invest on various trading platforms, from cryptocurrencies to commodities. 



Soon after, he discovered word-of-mouth is king. While other trading companies were investing hugely in online advertising, CM Trading went offline. 



READ MORE | <a href="https://www.forbesafrica.com/economy/2018/12/12/deals-dollars-and-developments-on-the-african-continent/" target="_blank" rel="noreferrer noopener" aria-label="Deals, Dollars and Developments On The African Continent (opens in a new tab)">Deals, Dollars and Developments On The African Continent</a>



“We were simply being recommended by our business referrers
in South Africa and then all around the southern African area. Since then, we
have added online advertising, but still word-of-mouth is our largest business
generator,” Kibel says.



It has paid off. In just six years, CM Trading has grown to
operate in Africa, the Middle East and Asia; employs 140 full-time staff and
many part-time staff and was named the best performing broker in Africa by
Africa Investor in 2017. 



“The most important path to success is through learning. The
market in Africa has changed drastically over the last few years – so we need
to constantly evolve and constantly do better&#8230; We saw a gap in the market.
All the foreign brokerages were trying to impose their own way of working onto
South Africa. To us, it was clear, you needed to understand the country, to
understand the people and give them a different experience,” he says.



Kibel spent more than a decade as an employee in the
industry until he decided to build a business of his own. 



“It seemed like the natural progression and the right time.
My partner and I began working together in 2001 and have held various senior
management positions at some of the largest online financial trading
companies.”



The good thing is Kibel has always wanted to be an
entrepreneur. 



Partnerships are one of the biggest cornerstones of a
successful business, he says.&nbsp; 



READ MORE | <a href="https://www.forbesafrica.com/investment-guide/2018/12/24/cryptocurrency-simplified-by-market-leader/" target="_blank" rel="noreferrer noopener" aria-label="Cryptocurrency for Africans (opens in a new tab)">Cryptocurrency for Africans</a>



“We work with partners everywhere and we listen to them –
let them lead us rather than the other way around&#8230;” 



Kibel has also faced difficulties in the business that
steeled him for future growth. 



“Being owed money and not being paid, not having enough cash
to pay the bills but, somehow, getting through numerous sleepless nights.
Otherwise, running a business is very often putting out fires.” 



Hard work and good relationships helped them keep their
doors open. 



“To make sure we succeed, we keep up with reporting. You
have to know your numbers at all times,” he emphasizes. 



He has also made some mistakes. 



“I think sometimes we can be so engrossed in day-to-day work – we don’t always see the wood for the trees. Because we are so busy, we may have taken our eyes off the ball regarding certain trends. We were late into the crypto market, for example. 



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We really work hard and for us, this is personal – so sometimes I may have been too involved in the small details rather than looking at things on the macro level.” </blockquote>



Kibel says his biggest lesson from 2018 has been to always
listen to his instincts. 



“When I get a gut feeling about someone I should act
immediately, and not say ‘ok, let’s give this a chance’. There were a few deals
and activities with people that didn’t sit right from day one&nbsp; and, more often than not, my fears on the
scruples of these individuals were proven correct.” 



When adversity and doubt knock on the door, Kibel advises
entrepreneurs to always act through their moral compass. 



“I truly believe that even in the most difficult moments,
this moral compass pushes us in the right direction&#8230; 



“There is always doubt, but assuming things have been
thought through properly and the right feeling is there, you have to jump in
the water. Even if it is really cold at first,” he says. 



Cold or hot, this entrepreneur isn’t about to give up.

Kibel

How this brokerage firm makes its money through word-of-mouth

Cryptocurrencies stolen from exchanges and scammed from investors surged more than 400 percent in 2018 to around $1.7 billion, according to a report from U.S.-based cyber security firm CipherTrace released on Tuesday. 



Of the $1.7 billion, the report, which looks at criminal activity in the digital currency market, said $950 million constituted thefts from cryptocurrency exchanges and infrastructure services such as wallets, up nearly 260 percent from $266 million in 2017.



Korea and Japan were home to most of the thefts from exchanges, or 58 percent, throughout 2018.



The numbers on crypto theft surprised many observers given the price declines in digital currencies in 2018. The market capitalization with more than 1,600 digital currencies was $112 billion in January, 2019, down more than 80 percent from its peak a year earlier.



READ MORE | <a href="https://www.forbesafrica.com/current-affairs/2018/12/14/bitcoin-ransoms-just-are-not-what-they-used-to-be/" target="_blank" rel="noreferrer noopener" aria-label="Bitcoin Ransoms Just Are Not What They Used to Be (opens in a new tab)">Bitcoin Ransoms Just Are Not What They Used to Be</a>



In addition to those thefts, the research found that investors and exchange users lost about $725 million in cryptocurrency in 2018 to exit scams such as fraudulent initial coin offerings, phony exchange hacks, and Ponzi schemes.



In 2017, the exit scams totaled just $56 million, according to CipherTrace.



“These numbers only represent the loot from crypto crimes that CipherTrace can validate; we have little doubt that the true number of crypto asset losses is much larger,” the cybersecurity firm said in the report.



Whereas in the first three quarters, thefts by hackers dominated the crypto crime scene, the fourth quarter was mostly about inside jobs or fraud, CipherTrace said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">We have been seeing new types of crimes that involve money laundering</blockquote>



said Dave Jevans, chief executive officer of CipherTrace, told Reuters in an interview.



Jevans is also the chairman of the Anti-Phishing Working Group, a global organization that aims to help solve cyber crime.



Snapchat weighs permanent snaps



“So we have seen in 2018 a lot more exit scams where companies disappear and steal people’s money. There’s huge increase in that,” he added.



Jevans noted that in all likelihood the bulk of the $1.7 billion in stolen and scammed cryptocurrencies has already been laundered.



“These bad actors are clearly flocking to jurisdictions with weak AML (anti-money laundering) and know-your-customer (KYC) regimes, because in our Q3 report we published the results of research showing 97 percent of criminal bitcoin flows into unregulated cryptocurrency exchanges,” the CipherTrace report said. -Reuters



-Gertrude Chavez-Dreyfuss

File: Crypto Losses Near $700 Billion In Worst Week Since Bubble Burst

Cryptocurrency Thefts, Scams Hit $1.7 Billion in 2018: Report

Give me bitcoin or your life. Seriously?



<hr class="wp-block-separator"/>



The people behind a rash of bomb threats made across the United States and Canada on Thursday demanded a $20,000 ransom to be paid in bitcoin. Authorities said none of the threats &#8211; emailed to hundreds of businesses, public offices and schools &#8211; appeared credible.



Frankly, the perpetrators would have been better off asking for Turkish lira.



Bitcoin and other cryptocurrencies have long been a favorite ransom tender for cyber criminals thanks to the currencies’ anonymous nature. U.S. cyber security firm Chainalysis estimates that from 2012 through 2017, global ransom payments using bitcoin totaled at least $31 million.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="750" height="490" src="https://www.forbesafrica.com/wp-content/uploads/2018/12/bitcoin.png" alt="" class="wp-image-38139" srcset="https://cms.forbesafrica.com/wp-content/uploads/2018/12/bitcoin.png 750w, https://cms.forbesafrica.com/wp-content/uploads/2018/12/bitcoin-300x196.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2018/12/bitcoin-600x392.png 600w" sizes="(max-width: 750px) 100vw, 750px" /></figure>



Anonymity aside, of course, the big appeal was an incredible run-up in bitcoin’s value over that time. It shot from $5 a coin at the start of 2012 to nearly $20,000 at this time last year, according to data from Bitstamp, one of the larger bitcoin exchanges.



Today? Not so hot.



Bitcoin on Thursday was trading at around $3,250, down more than 80 percent from its record high. In the last three months alone it has plunged 50 percent.



Even the currencies of some crisis-hit economies like Turkey have done better: The lira is up 30 percent since August. -Reuters



<ul class="wp-block-list"><li>Gertrude Chavez-Dreyfus and Anna Irrera</li></ul>



READ MORE |&nbsp;<a href="https://www.forbesafrica.com/investment/2018/12/10/cryptopia-in-crisis-joe-lubins-ethereum-experiment-is-a-mess-how-long-will-he-prop-it-up/">Cryptopia In Crisis: Joe Lubin’s Ethereum Experiment Is A Mess. How Long Will He Prop It Up?</a>



<a href="https://www.forbesafrica.com/focus/2018/01/17/bitcoin-mining-uses-much-power-ireland-heres-thats-not-problem/">Bitcoin Mining Uses As Much Power As Ireland. Here’s Why That’s Not A Problem</a>



<a href="https://www.forbesafrica.com/current-affairs/2017/12/11/actually-okay-completely-ignore-bitcoins-1400-rally/" target="_blank" rel="noreferrer noopener" aria-label="It’s Actually Okay To Completely Ignore Bitcoin’s 1,400% Rally (opens in a new tab)">It’s Actually Okay To Completely Ignore Bitcoin’s 1,400% Rally</a>

Tag: Cryptocurrencies

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