This year started with a hack worth hundreds of millions of dollars. Northcrypto’s selection is expanding, while Coinmotion brought out a debit card to its users. There is news about Bitcoin adoption in Russia and India. Bitcoin investors rushed to help Freedom Convoy’s when GoFundMe shut down their funding. Cardano’s network has become very active.
Wormhole hack caused losses of more than $300 million
Let’s start with last week’s biggest fuss – the hacking of the Wormhole protocol. What happened?
Wormhole is a popular token bridge between Ethereum and Solana. It enables the transfer of Ether (ETH) to the Solana platform, which can be then used in DeFi apps. When ETH is transferred to Solana, the corresponding amount of wrapped ETH (WETH) is created.
The Wormhole Bridge is controlled by smart contracts. They ensure that WETH tokens can only be issued if ETH is locked at the other side of the bridge. This is where the hacker hit.
The video below from CTO Larsson explains what happened.
The hacker hit the smart contract on Solana’s end. He managed to create 120,000 Wrapped ETH tokens. He then traded 40,000 of these on the Solana platform and moved 80,000 across the bridge back to the Ethereum network as Ether (ETH).
This hack was worth about $320 million. It is one of the largest in the history of DeFi.
The causes could theoretically have been catastrophic. Every WETH token could have become worthless on the Solana platform. This would have affected not only individual traders but also DeFi applications, where collateral would suddenly become zero.
The situation was eventually saved by Jump Trading, a VC firm that owns the Wormhole development company. It deposited all 120,000 Ethers stolen by a hacker back into Wormhole!
.@JumpCryptoHQ believes in a multichain future and that @WormholeCrypto is essential infrastructure. That’s why we replaced 120k ETH to make community members whole and support Wormhole now as it continues to develop.
— jump_crypto (@jump_) February 3, 2022
This is the second major token bridge hack in six months. Anyone who follows the industry surely remembers the Poly Network hack that took place in late August. It was worth 600 million dollars.
The difference between these events is that the Poly Network hacker agreed to return the funds quickly. This is not the case with Wormhole – at least for the time being.
Northcrypto selection and Coinmotion Debit Card
Northcrypto and Coinmotion are Nordic platforms for buying, selling, and storing cryptocurrencies. They are known as reliable and easy-to-use. Both are also constantly developing their service in terms of new features and offerings.
Let’s start with Northcrypto. They expanded the cryptocurrency selection with two new tokens last week: Polygon (MATIC) and USD Coin (USDC). With these additions, Northcrypto has seven different cryptocurrencies available: Ethereum, Bitcoin, Litecoin, Chainlink, Aave, and the new entrants.
At the same time, Northcrypto has revamped the look of its front page in a more modern direction. In the near future, updates will also be done on other pages.
Northcrypto also announced it has added two-factor authentication. This is an excellent reform. To enable 2FA, click the user icon in the main menu, then choose Account Details.
Next, let’s share news from Coinmotion’s end. The long-awaited debit card is now available to all Coinmotion customers in the following countries: Austria, Belgium, Finland, France, Germany, Ireland, Netherlands, Spain, Sweden, and the UK. This is a Mastercard prepaid debit card that operates worldwide in almost 30 million purchase locations.
To order a card, click Services in the main menu and select Cards. Then follow the instructions to apply for a card.
The popularity of crypto debit cards has grown dramatically in recent years. In Nordic countries, the most popular option is probably Crypto.com’s Visa, which works with the same idea as Coinmotion’s card. It allows you to spend euros from your account. Bitcoins (or other cryptocurrencies) must therefore first be sold in euros.
We strongly recommend the aforementioned services, especially for new investors. You’ll find comprehensive user guides in both Northcrypto and Coinmotion from Bitcoinsentralen.
KPGM, Russia, and India
Let’s check some news related to the adoption of cryptocurrencies. Let’s start with Canada.
KPMG is globally one of the largest companies in auditing and business consulting. It has 1,500 employees in Finland alone, and its customer base includes about half of the listed companies in the Helsinki stock exchange. KPMG is not a publicly listed company, and each country’s representative is its own brand.
This week’s news relates to KPMG’s Canadian company. It announced yesterday that it will invest in Bitcoin and Ethereum.
We have just completed an allocation of cryptoassets to our corporate treasury, our firm’s first of its kind investment in the asset class. This includes Bitcoin and Ethereum tokens, and carbon offsets to maintain a net-zero carbon transaction: https://t.co/32hsKbnGuC
— KPMG Canada (@KPMG_Canada) February 7, 2022
KPMG did not announce the exact amount of the investment. It might also be a marketing stunt to bring KPMG to the attention of companies interested in crypto. Regardless of the amount, this will bring more legitimacy to cryptocurrencies as an investment.
We also have some news from Russia. At the end of January, there was news that the country’s central bank would like to ban cryptos. After this, the Minister of Finance intervened and even President Putin said that the country had a competitive advantage in Bitcoin mining.
It now appears that Russia is clearly moving in the direction of regulation. According to recent estimates, the Russians own more than $200 billion worth of cryptocurrencies.
Russia nears plans to regulate its local crypto valued at $214 billion https://t.co/CcAb6557Q1
— FORTUNE (@FortuneMagazine) February 7, 2022
Russia is one of the world’s largest countries in Bitcoin mining. There is a huge amount of cheap energy available, as well as a cool climate, which is a great combination for Bitcoin miners. There has also been increasing speculation in recent weeks as to whether the Russian state has invested in Bitcoin through its central bank.
The third news relates to India, which has been banning cryptocurrencies at least once a year for the past five years. A week ago, we finally got some positive news. India has recognized cryptocurrencies as investments and ordered capital gains to be taxed.
India took a step towards legalising crypto with a 30% tax on crypto income, but experts think the new tax may drive away retail investors.
By @amitoj https://t.co/YRqHKhn6yA
— CoinDesk (@CoinDesk) February 1, 2022
India’s decision could have a significant impact on the whole sector in the future. Along with China, it is the most populous country on the planet, with the rapid adoption of cryptocurrencies. There are hundreds of millions of potential Bitcoin investors in India.
The Reserve Bank of India also announced that it would launch its own digital currency next year. The CBDC race is slowly starting to heat up at a global level.
GoFundMe shuts down Freedom Convoy funding
Truckers demonstrating in Canada have become a global news topic. Freedom Convoy has also inspired similar protests in other countries.
Freedom Convoy has not had a direct connection to cryptocurrencies. However, that changed on Friday when the popular fundraising service GoFundMe closed the account of Freedom Convoy. It had already raised 10 million Canadian dollars or about 9 million US dollars.
As news of what happened spread, Bitcoin enthusiasts intervened and created fundraising for Freedom Convoy through Tallycoin. It aims to collect 2.1 billion Satoshi’s, which is 21 Bitcoins. This is about $930,000 at the current price.
It’s a tough goal, but it’s already halfway there. There are thousands of donors. Jesse Powell, the founder of the Kraken exchange, joined them over the weekend. He donated 100 million Satoshi’s, which is one bitcoin.
I'm in. https://t.co/wEOequ5hfX
— Jesse Powell (@jespow) February 7, 2022
The case has prompted many westerners to re-think the value of Bitcoin in a new way. After all, a frequently used saying is that Bitcoin has no value for someone living in a modern democracy. Now the censorship-free payment system suddenly begins to show its worth in western countries as well.
Some readers may also remember the Wikileaks case, which is substantially related to Bitcoin’s history. PayPal cut off Wikileaks funding in December 2010, and Bitcoin was raised by PC Magazine as a solution to the problem. At the same time, Bitcoin received global attention, which was one trigger for Satoshi Nakamoto’s exit from the public.
Cardano’s network in heavy use
Last week, we reported on Solana’s problems with network capacity. This time it is Cardano’s turn. Its blockchain has almost a 100% load at the moment. You can check out the up-to-date statistics here.
The reason for this is the growth of the Cardano ecosystem, especially at the beginning of 2022. Smart contracts for the Cardano platform were not ready until autumn 2021, and the development of Dapps has progressed slowly so far. One reason for this is the limited capacity of the Cardano blockchain.
Cardano is only capable of about 150,000 transactions per day, which is less than Bitcoin’s equivalent. However, it should be noted that a Cardano transaction may include several payments. When you consider the situation at the level of the payments, we are talking about 450,000 transfers per day.
Transaction volumes are also growing strongly in the longer term.
Following a series of major upgrades and hard forks, transactions on Cardano underwent exponential growth over the past 18 months.
Learn more about these upgrades and why Cardano is seeing this growth in activity: https://t.co/QZcJS5wL8G pic.twitter.com/8JAUEi9WzH
— Kraken Exchange (@krakenfx) February 3, 2022
A big reason for Cardano’s load is SundaeSwap, which was launched in January. This is the first functioning decentralized exchange on the Cardano platform. There have been problems with SundaeSwap’s transactions for a couple of weeks now.
Cardano’s scaling issues will be solved in the Hydra update which is to be released at the end of 2022. The name Hydra comes from Greek mythology and means a serpentine with nine heads. With the upgrade, each Cardano staking pool can create its own Hydra head, which can handle up to 1,000 transactions per second. This would allow Cardano to scale up to 1-2 million transactions per second in theory.
Cardano’s heavy use is also reflected in a new record in the number of wallets: Cardano blockchain now has three million unique ADA wallets. The number has grown by half a million in just a couple of months.