<ul class="summary-list"><li><keyword id="12004262" type="UNKNOWN" weightage="60" keywordseo="Crypto-Mining" source="Orion">Crypto mining</keyword> is one way to acquire more digital currencies when the market is down. </li><li>Miners are essential to <keyword id="2721952" type="PERSON" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> because they help maintain blockchains and record transactions.</li></ul>The <a href="https://www.businessinsider.com/category/cryptocurrencies">cryptocurrency</a> boom of 2021 attracted interest from people looking for how to profit from the nascent asset class. Apart from buying tokens directly, crypto mining remains one of the most viable ways to amass digital currencies and participate in their upside. In practice, miners' computers compete by solving complex mathematical equations that help verify digital currency transactions and update the shared ledger called the <a href="https://www.businessinsider.com/what-is-blockchain-2016-10">blockchain</a>. Their reward for solving these problems is a share of the <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword> that's associated with the blockchain they are part of. Since crypto was designed to be decentralized, meaning that no single intermediary owns the transaction data, miners are essential to keeping the crypto ecosystem alive. But mining is not without roadblocks. The environmental impact of its <a href="https://www.businessinsider.com/energy-consumption-of-nft-cryptocurrency-mining-and-sustainable-alternatives-2021-7">electricity usage</a> is a persistent concern. In 2021, miners fled China after the government <a href="https://markets.businessinsider.com/news/currencies/bitcoin-crypto-mining-china-crackdown-difficulty-2021-07">banned mining</a> in some provinces. And, the <a href="https://markets.businessinsider.com/news/currencies/crypto-amendment-infrastrucutre-bill-tax-regulation-cryptocurrency-reporting-irs-2021-8">infrastructure bill</a> that proposed more stringent tax-reporting requirements for miners showed that more regulatory firestorms could come. Additionally, mining is not a golden ticket to crypto riches. Payouts vary and are subject to the volatility that's synonymous with this budding asset class. Equipment and electricity costs can also bite off any earnings. Despite these hurdles, crypto mining could continue to grow as digital currencies stretch further into the mainstream. The global market-research firm <a href="https://www.prnewswire.com/news-releases/-2-80-billion-growth-expected-in-cryptocurrency-mining-hardware-market--5-72-yoy-growth-in-2020-amid-covid-19-spread--apac-to-notice-maximum-growth--technavio-301283942.html#:~:text=The%20global%20cryptocurrency%20mining%20hardware%20market%20is%20expected%20to%20grow,7%25%20during%202020%2D2024.&amp;text=The%20COVID%2D19%20pandemic%20has,uncertain%20price%20scenario%20for%20cryptocurrency.&amp;text=Such%20initiatives%20are%20expected%20to,COVID%2D19%20on%20the%20market.">Technavio</a> estimated that the market for ASIC hardware and graphic processing units (GPUs) will grow by $2.80 billion at a compounded annual rate of over 7% from 2020-2024.Insider has interviewed several miners who explained their processes from start to finish. We learned how they initially <a href="https://businessinsider.com/crypto-investing-best-books-list-recommendations-bitcoin-blockchain-ethereum-strategy-2021-7">got smart on cryptocurrencies</a>, the specific equipment they got started with, how they manage electricity costs, the amount of crypto they earn as rewards for maintaining the blockchain, and much more. <h2><keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">Bitcoin</keyword></h2>Mining the world's most popular cryptocurrency is one way to earn it at a potentially lower cost while participating in its upside.The practice may conjure up images of long LED-lit rows of computers, similar to the high-frequency trading systems that are out of the financial reach of most retail investors. But these facilities do not represent the full spectrum of bitcoin mining. Insider has interviewed mining experts who run the gamut, from the founder of a company with facilities in three states to a TikToker who went viral for his $875 mini rig. Read more:<ul><li><a href="https://www.businessinsider.com/bitcoin-mining-gpu-miner-explains-how-he-scaled-2022-4?r=mining-lp">Mining $140 worth of bitcoin a month: A miner explains how he started by using his work computer and then scaling to a GPU rig. He also shares the software he used to increase hash rates.</a></li><li><a href="https://www.businessinsider.com/how-to-mine-bitcoin-with-gpu-tiny-apartment-2022-4?r=mining-lp">A 19-year-old receives about $887 worth of bitcoin a month by mining in his tiny studio apartment. He explains how he uses a GPU mining rig — and shares 2 additional miners with lower barriers to entry.</a></li><li><a href="https://www.businessinsider.com/how-to-mine-bitcoin-miner-electricity-equipment-costs-profitability-pool-2021-7?r=mining-lp">How to mine bitcoin: The founder of a mining farm breaks down the costs of electricity and equipment, how to pool, and the profits he earns in the process</a> </li><li><a href="https://www.businessinsider.com/how-to-mine-bitcoin-tips-profitable-lightning-network-node-crypto-2021-8?r=mining-lp">A key bitcoin lightning network developer shares how he makes $4,500 a month just in fees from running a node. He and 3 other crypto experts lay out how to run profitable nodes.</a></li><li><a href="https://www.businessinsider.com/mini-bitcoin-mining-rig-why-miners-buy-trading-pros-cons-2021-7?r=mining-lp">An $875 mini bitcoin-mining rig is viral on TikTok. The video's creator told us 3 reasons why it's an appealing alternative for crypto traders, and explained its limitations.</a></li></ul><h2><keyword id="11896271" type="UNKNOWN" weightage="60" keywordseo="Ether" source="Orion">Ether</keyword> </h2>The second-largest crypto by market cap recently underwent a software upgrade called the <a href="https://www.businessinsider.com/ethereum-london-upgrade-explained-profit-from-ether-price-rally-volatility-2021-8">London hard fork</a> that contained five <keyword id="2810876" type="PERSON" weightage="60" keywordseo="ethereum" source="Orion">Ethereum</keyword> Improvement Proposals, or code changes. The most important one for miners was arguably EIP-1559, which mandated a minimum base fee that all users must pay to execute their transactions. Under the new system, these fees will be burned from the network instead of being rewarded to miners. In short, the upgrade means that ether miners, whose revenues had <a href="https://www.theblockcrypto.com/linked/113234/ethereum-miner-revenue-higher-than-bitcoins-for-third-month-running">surpassed</a> that of bitcoin miners, will be paid less. We're tracking the unfolding impact of this new development, as well as how ether miners continue to earn passive income. Read more:<ul><li><a href="https://www.businessinsider.com/how-to-mine-ethereum-at-home-rewards-graphics-cards-costs-2022-4?r=mining-lp">A 25-year-old receives about $1,118 a month mining ethereum out of his house. He breaks down the graphics cards he bought, how much he paid, and key lessons learned.</a></li><li><a href="https://www.businessinsider.com/how-to-mine-ethereum-costs-rewards-using-host-eip-1559-2021-8?r=mining-lp">How to mine ethereum: A 25-year-old who pays $42 a month in exchange for half an ether monthly explains how he does it — and an expert breaks down the effect of the blockchain's recent upgrade on miners</a></li><li><a href="https://www.businessinsider.com/how-to-mine-ethereum-costs-electricity-rewards-potential-revenues-metnick-2021-8">How to mine ether for maximum profits: The CEO of a company that operates 7 mining farms breaks down how to pick the right equipment and manage electricity costs for optimal gains</a></li></ul><h2>Other altcoins: Doge and helium</h2>Altcoin mining has become a hobby for people like <a href="https://www.businessinsider.com/how-to-mine-dogecoin-miner-breaks-down-process-costs-rig-2021-7">Dason Thomas</a>, who became interested after seeing TikTok videos of others and recognizing mining as an avenue to build wealth. Thomas' equipment includes 12 Antminer l3+'s that mine scrypt algorithms, a type of cryptography used in hashing various altcoins including <keyword id="1985091" type="PERSON" weightage="60" keywordseo="dogecoin" source="Orion">dogecoin</keyword> and litecoin. He also has a mini dogecoin miner that he bought for $699. This relatively cheap entry point illustrates how easy it can be to get started earning cryptos without buying them directly.Read more:<ul><li><a href="https://www.businessinsider.com/how-to-mine-shiba-inu-for-free-any-old-laptop-2021-11">How to mine shiba inu for free: A college student used his old laptop to download software that rakes in the crypto daily</a></li><li><a href="https://www.businessinsider.com/how-to-mine-dogecoin-miner-breaks-down-process-costs-rig-2021-7?r=mining-lp">How to mine doge: An 18-year-old TikTok influencer shares his process for earning crypto without directly buying via a $700 rig — and explains how it works for other altcoins including litecoin</a></li><li><a href="https://www.businessinsider.com/helium-mining-setup-tips-profit-potential-how-to-maximize-gains-2021-7?r=mining-lp">Helium mining is surging in popularity as people clamor to get into crypto. A software engineer who bought 100 miners at $350 apiece explains how he set up his system, how much he's earning, and how to maximize gains.</a></li></ul>

How to mine cryptos including bitcoin and ether: Your complete guide to the technical setups, profits, and risks involved

<ul class="summary-list"><li>Cyber hackers on Wednesday returned nearly half of the $600 million they stole from <keyword id="11834434" type="UNKNOWN" weightage="60" keywordseo="poly-network">Poly Network</keyword>.</li><li>The return of funds came amid pleas from the Poly Network for the money back.</li><li>The hackers said they stole the funds "for fun :)" because "cross-chain hacking is hot."</li></ul>Cyber hackers returned nearly half of the $600 million they stole from <keyword id="4164994" type="PERSON" weightage="60" keywordseo="defi">DeFi</keyword> platform Poly Network, in what is considered one of the biggest cryptocurrency heists in history.Around $260 million has been returned as of Wednesday noon, Poly Network said in a <a href="https://twitter.com/PolyNetwork2/status/1425509322126024708">tweet</a>.Of the funds given back, $3.3 million were in ethereum, $256 million in Binance smart chain, and $1 million in polygon, according to the post.The return of funds follows <a href="https://twitter.com/PolyNetwork2/status/1425123153009803267/photo/1">pleas</a> from Poly Network on Tuesday, <a href="https://markets.businessinsider.com/news/currencies/poly-network-hack-defi-crypto-theft-cryptocurrency-hacker-2021-8">asking the hackers</a> for the money back and urging cryptocurrency exchanges and miners to halt tokens from the hacker's wallets."The amount of money you hacked is the biggest in defi history," Poly Network said in a <a href="https://twitter.com/PolyNetwork2/status/1425123153009803267/photo/1">tweet</a> Tuesday, adding that tens of thousands of people were negatively impacted.The hackers responded on Wednesday, saying they were "ready to return" the funds they stole. It is unclear when they plan to return the whole sum.Around $269 million on ethereum and $84 million on polygon remain with the hackers, according to the Poly Network tweet.The hackers said they stole the funds "for fun :)" because "cross-chain hacking is hot," according to a <a href="https://www.linkedin.com/feed/update/urn:li:activity:6831256334344736768/">Q&amp;A session</a> that was embedded in ethereum transactions sent from the account holding the stolen assets.The screenshots of the exchange were obtained by Tom Robinson, cofounder of Elliptic, a blockchain analytics and compliance company."The Poly network is a decent system," the hackers said. "It's one of the most challenging attacks that a hacker can enjoy." The hackers said they took the funds after spotting a bug "to keep it safe."The cyberattack on Poly Network joins a growing number of attacks on the rapidly growing DeFi space.Thus far, DeFi hacks made up over three-quarters of cryptocurrency money seizures this year, according to a <a href="https://ciphertrace.com/cryptocurrency-crime-and-anti-money-laundering-report-august-2021/" target="_blank" rel="noopener">report</a> by intelligence firm Ciphertrace.Read more: <a href="https://www.businessinsider.com/how-to-mine-bitcoin-tips-profitable-lightning-network-node-crypto-2021-8" target="_blank" rel="noopener">A key bitcoin lightning network developer shares how he makes $4,500 a month just in fees from running a node. He and 3 other crypto experts lay out how to run profitable nodes.</a>

Cyber hackers have returned nearly half of the $600 million they stole from DeFi platform Poly Network

A letter to Jamie Dimon - and anyone else still struggling to understand bitcoin and cryptocurrencies

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C0BXZ4AVK5CY&amp;SMLS=1&amp;RW=1355&amp;RH=718#/SearchResult&amp;VBID=2C0BXZ4AVK0UV&amp;SMLS=1&amp;RW=1355&amp;RH=718&amp;POPUPPN=29&amp;POPUPIID=2C0BF1SAIQYHK">REUTERS/Carlos Jasso</a>Bank of International Settlements head Agustin Carstens.</div></div></div><ul><li>The Bank of International Settlements on Sunday said bitcoin is "a poor substitute for the solid institutional backing of money."</li><li>Critics in the crypto world say the report missing the point - bitcoin and other cryptocurrencies are still in development and shouldn't be judged yet.</li><li>Circle CEO calls the report "shallow" and said: "They're not looking at what's actually going on in terms of the real R&amp;D in this space."</li></ul> LONDON - Who's right about bitcoin: the Bank of International Settlements (BIS) or cryptocurrency advocates?The BIS, which is often dubbed the central bank of central banks,<a href="https://www.bis.org/publ/arpdf/ar2018e5.pdf"> released a chapter from its upcoming annual report</a> on Sunday dismissing bitcoin as "a poor substitute for the solid institutional backing of money.""Trust can evaporate at any time because of the fragility of the decentralised consensus through which transactions are recorded," the report said. "Not only does this call into question the finality of individual payments, it also means that a cryptocurrency can simply stop functioning, resulting in a complete loss of value."Moreover, even if trust can be maintained, cryptocurrency technology comes with poor efficiency and vast energy use. Cryptocurrencies cannot scale with transaction demand, are prone to congestion and greatly fluctuate in value."Much was made of the energy usage point. Bloomberg ran a headline stating that <a href="https://www.bloomberg.com/news/articles/2018-06-17/bitcoin-could-break-the-internet-central-banks-overseer-says">bitcoin could "break the internet"</a> if used at a national scale.Energy usage is a serious issue for bitcoin, which requires ever greater levels of computing power to validate transactions on its network. Bitcoin mining currently uses about as much electricity as Switzerland, according to BIS.But crypto advocates say that this - and BIS's other criticisms of bitcoin and cryptocurrencies - misses the point.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">CircleCircle CEO Jeremy Allaire.</div></div></div>"It was a really shallow report," Jeremy Allaire, the CEO of Goldman Sachs-backed crypto company Circle, told Business Insider. "They haven't done much research at all clearly."They're looking back at stuff that's year's old, they're not looking at what's actually going on in terms of the real R&amp;D in this space. It's just really poor research."To bitcoin adherents, bitcoin and other cryptocurrencies are still a work in progress. Yes, its energy usage is an issue but it's one that developers are aware of any trying to solve.One blockchain professional I spoke to on Thursday compared the BIS report to saying the world would be in trouble if a baby was put in charge. Babies tend to grow up before they are given any responsibility and crypto developers are hard at work helping bitcoin and other digital currencies grow up."I don't think many people appreciate just how early stage this technology is," Jamie Burke, the founder and CEO of specialist bitcoin and blockchain VC fund Outlier Ventures, told the Blockchain Alternative Investment Conference in London on Monday.Something like 98% of bitcoin's original code base has been rewritten since it was first created in 2009 and developers around the world continue to work on new ideas, solutions, and technology.Allarie said: "I'm deep, deep in it and I'm a pretty technical person and I cannot keep up. There's so much. I'm not even close. There's just so much activity and so much innovation happening. I've never seen anything like it, it's just happening at such a pace."Matthew Newton, an analyst at eToro, which is a trading platform that supports cryptocurrencies, said: "Cryptocurrencies remain an emerging technology, albeit one that is moving towards the right infrastructure for everyday use."Newton and Allaire both pointed to the bitcoin Lightning Network and other so-called "Layer 2" projects that are built on top of existing cryptocurrencies and allow for greater volumes to be processed without sucking up huge amounts of energy but still ultimately rest on the underlying trust of the bitcoin blockchain.Allaire said: "There's a lot of infrastructure work going on and I think it's really, really key because I think the consensus within the industry is that if we can solve some of those issues in the next year to two years, then we can have products that are actually used by a billion people. That's when this gets to be a lot more interesting."Other solutions are being looked at include ethereum's proof of stake protocol, which would make transaction validation more like a shareholder voting register rather than simply about computational brute force.Newton said: "While it is far from guaranteed that these developers will troubleshoot all of the problems, the fact of the matter is that the work of these talented developers is coming on in leaps and bounds, and we have to be patient to see how things develop over time."<a href="http://www.businessinsider.com/intelligence/future-of-zelle-venmo-and-p2p-payments?IR=T&amp;utm_source=businessinsider&amp;utm_medium=ctgr&amp;utm_term=ctgr_leadgen&amp;utm_content=payments_ctgr_leadgen&amp;utm_campaign=payments_ctgr_leadgen_future-of-zelle"></a> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/trump-pitches-peace-to-kim-jong-un-with-bizarre-hollywood-style-video-2018-6">Trump pitched peace to Kim Jong Un with this Hollywood-style video starring Kim as the leading man</a></h3> <div> </div> </div>

Central bankers claim bitcoin could break the internet - the crypto world thinks they're missing the point

<div class="KonaFilter image-container display-table"><div><div class="image">REUTERS/Antony Njuguna</div></div></div>
A central conceit of Bitcoin evangelists is that the cryptocurrency could be most useful to "the global unbanked."
These are the 575 million individuals in mostly emerging markets who lack access to basic financial services, even a bank account.
It principal, the advocates are correct. The time it takes to process a Bitcoin transaction - about 10 minutes - is far faster than the three days in the regular banking system. It's also usually cheaper. 
But <a href="gsma.com/mobilefordevelopment/wp-content/uploads/2014/02/SOTIR_2013.pdf">a new survey from trade association GSM</a> shows that even the most promising emerging market electronic payments technology, mobile money, has only just begun to break out, meaning it could take years to unseat cash as the payment method of choice in the developing world.
Mobile money can be used for just about anything. You can buy stuff at a grocery store. You can send and receive money to and from friends and relatives. You can pay and tip your taxi driver. And you can buy phone minutes. To upload or withdraw cash, you need only walk to a mobile money agent. 
The granddaddy of mobile money is a service called M-Pesa. Launched in Kenya in 2007, the service was an overnight sensation, and is now used by much the adult population there. Its success is chalked up to close collaboration between the Kenyan government and Safaricom, the unit of Vodafone that operates M-Pesa, that allowed the service to spread. It also began life as a pilot program for microlending, which allowed developers to realize users were tapping the service to send and receive payments instead. After this, there was a huge marketing push.
Here's what the homescreen of M-Pesa looks like:
<div class="KonaFilter image-container"><div class="image">REUTERS/Noor Khamis </div></div>
Here's an M-Pesa stand in downtown Nairobi. This is where you withdraw and deposit money.
<div class="KonaFilter image-container display-table"><div><div class="image">REUTERS/Noor Khamis</div></div></div>
Africa and the Middle East <a href="http://leadership.ng/business/369506/mobile-money-transactions-rise-5-7bn-africa-middle-east">processed $5.7 billion</a> in mobile money volume last year. No other country has come close to Kenya in terms of mobile money adoption. Check out this chart showing volume breakdowns. Eastern Africa dwarfs all other regions. East Asia and Pacific, <a href="http://www.amcham.or.id/nf/features/4510-indonesia-s-booming-mobile-money-market">represented by Indonesia</a>, appears to be the next closest. The rest of Africa barely registers.
<div class="KonaFilter image-container display-table"><div><div class="image"><a href="http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/02/SOTIR_2013.pdf">GSM</a></div></div></div> 
GSM's data data show a strange phenomenon. The number of registered mobile money accounts nearly tripled to 203 million in June 2013 from 71 million in June 2011. And the number of active users - those who made at least one transaction with the last 90 days - nearly doubled from 2012 to 2013. There are now 218 different providers beyond M-Pesa worldwide. 
But of the 203 million registered users, East Africa accounted for 34%, with the vast majority of those being in Kenya. And the number of active mobile money accounts totals just 61 million - barely 30% of total registered users. 
Here's the chart:
<div class="KonaFilter image-container display-table"><div><div class="image"><a href="http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/02/SOTIR_2013.pdf">GSM</a></div></div></div>
"Activating customers remains a challenge for a large number of services," GSM says. "Even when customers are aware of the service, they may not necessarily understand how they would benefit from using it. Using mobile money represents a significant behavioral change in economies where almost all payment transactions are conducted in cash."
In fact, over-the-counter services, where a mobile money agent performs the transactions on behalf of an unregistered walk-in customer, are now the fastest-growing segment of active mobile money users, at a 102% annualized rate, most of it in South Asia. 
These services "offer a compelling value proposition for unbanked customers, a segment where literacy levels are often very low and where people tend to be more suspicious of new technologies." 
Within Kenya, M-Pesa has become so ingrained that competitors have struggled to make inroads, meaning innovation has stalled out.
"Some people have been using M-Pesa for three, four five years, and are reluctant to take on new services," Mustafa Golam, a consultant for Nokia in Kenya, told BI. "There's a lot of technology-phobia - very few people will actually try it because they're happy with M-Pesa."
GSM also found that remittances - another key Bitcoin selling point - remain a "marginal service" among mobile money providers, though more seem to be adding them. Providers said they processed fewer than 50,000 international remittances in the month they were surveyed. "While a large number of providers are interested in launching inter- national remittance, major barriers continue to slow down the uptake of this product," GSM says. Instead, the fastest growing transactions type is bill pay. The largest service overall remains buying more mobile minutes. Here's a breakdown of how mobile money was used in a single month:
<div class="KonaFilter image-container display-table"><div><div class="image"><a href="http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/02/SOTIR_2013.pdf">GSM</a></div></div></div> 
By GSM's reckoning, many citizens of the developing world have only begun orienting their commercial lives around the promise of mobile money. So it's not surprising that Bitcoin's rollout in the developing world has been sluggish. Here's a chart (used with permission) <a href="http://www.coindesk.com/bitcoin-report-q1-2014/">from a new Coindesk report</a> showing the breakdown of Bitcoin vendors by region:
<div class="KonaFilter image-container"><div class="image"><a href="http://www.coindesk.com/bitcoin-report-q1-2014/">Coindesk</a></div></div> 
But as with most Bitcoin proponents, those looking to expand its reach into remain utterly undeterred by any of this. Mainly they argue that the same things holding mobile money back will allow Bitcoin to come in. 
"Countries where there may be 3 mobile money operators with roughly the same number of subscribers, if that's the case, then [mobile money] not used widely," Pelle Braendgaard, the outgoing head of Kipochi, a Bitcoin payments app targeted at developing markets, told BI. "As a user, if I want to send money to anyone, I have to have an account with each of these services, so it's just not very practical."
He also observes smartphone use is steadily increasing - and indeed <a href="http://www.reseauactu.com/11-208418.html?utm_source=twitterfeed&amp;utm_medium=twitter#sthash.mt7l72ce.dpbs">Safaricom now says 67% of mobile phones sold in Kenya are </a><a href="http://www.reseauactu.com/11-208418.html?utm_source=twitterfeed&amp;utm_medium=twitter#sthash.mt7l72ce.dpbs">smartphones</a>. 
What's more, M-Pesa now faces an "innovator's dilemma," in that it's too big and too entrenched to act upon what's on the horizon, Braendgaard continued. 
"It's a transitory solution, it's not a permanent solution," he said. "It's been very effective but it's extremely primitive - it's showing it's age...I don't know how long it will take but I just don't see a particularly large future for it."
Aditya Khurjekar, a former Verizon exec, agrees that services like M-Pesa will prove temporary in the long run. Even if it's not Bitcoin itself, a Bitcoin-like payment "rail" that uses a network of computers to confirm transactions will take over, not just in Africa but everywhere. 
"It is a business model problem," he told BI. "I think what Bitcoin - the cryptocurrency infrastructure, the technology - does is it makes these artificial constraints irrelevant. It doesn't matter geography you're in, whatever the local bank consortium you're in, how quickly they have to settle money, it doesn't really have to follow these artificial constraints."
As with most things Bitcoin, it's simply too early to expect a substantial expansion in emerging markets. M-Pesa caught lightning in a bottle thanks in large part to massive backing from a multinational conglomerate. Given that Bitcoin is premised on doing away with such entities, it will likely have to wait a long time to compete.

Forget Banks: If Bitcoin Is Going To Change The World, Then This Is The Real Competition

<ul class="summary-list"><li><keyword id="11895315" type="UNKNOWN" weightage="60" keywordseo="coinbase" source="Orion">Coinbase</keyword> said funds were stolen from atleast 6,000 customers due to a <keyword id="12224442" type="UNKNOWN" weightage="60" keywordseo="phishing" source="Orion">phishing</keyword> attack that took place between March and May.</li><li>Some customers may have fallen victim to a phishing campaign and turned over their credentials to attackers, a spokesperson told Insider.</li><li>The <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> exchange said it is reimbursing customers for any lost value.</li></ul><a href="https://markets.businessinsider.com/stocks/coin-stock">Coinbase</a> has informed customers about a wave of phishing attacks in which a third-party gained access to accounts on the crypto exchange, leading to funds being stolen from about 6,000 customers."Unfortunately, between March and May 20, 2021, you were a victim of a third-party campaign to gain unauthorized access to the accounts of Coinbase customers and move customer funds off the Coinbase platform," the company wrote, according to a <a href="https://oag.ca.gov/system/files/09-24-2021%20Customer%20Notification.pdf">customer notification</a> seen by Insider on Friday. "At least 6,000 Coinbase customers had funds removed from their accounts, including you."A Coinbase spokesperson told Insider the company's security team found a large-scale phishing campaign that showed "particular success in bypassing the spam filters of certain, older email services."Coinbase said it took immediate action to mitigate the impact of the fraud by working with external partners to remove the sites when identified, and notifying email providers that were impacted."Unfortunately we believe, although cannot conclusively determine, that some Coinbase customers may have fallen victim to the phishing campaign and turned over their Coinbase credentials and the phone numbers verified in their accounts to attackers," the spokesperson added.Third parties first gained access to the email address, password, and phone number of the affected Coinbase customer in order to access to enter their accounts. The company said it wasn't sure how third parties got this access, and that it could have happened either through a phishing attack or another social-engineering technique."We have not found any evidence that these third parties obtained this information from Coinbase itself," the notice said.In order to access a Coinbase account, two-factor authentication is also required. But in this incident, for customers that use SMS texts for authentication, the third party was successful by taking advantage of a flaw in the company's SMS Account Recovery process."Once in your account, the third party was able to transfer your funds to crypto wallets unassociated with Coinbase," the notice said.Coinbase updated its SMS Account Recovery protocol on learning about the attacks, and said it would deposit funds of the same value lost back into customer accounts."We will be depositing funds into your account equal to the value of the currency improperly removed from your account at the time of the incident. Some customers have already been reimbursed -- we will ensure all customers affected receive the full value of what you lost."Read More: <a href="https://www.businessinsider.com/crypto-investing-strategy-lightning-network-layer-two-solutions-galaxy-digital-2021-9" target="_blank" rel="noopener noreferrer">Alex Thorn went from being Fidelity's 'bitcoin viking' to leading Galaxy Digital's research team. He explains why investors shouldn't ignore the lightning network - and which networks are the most undervalued right now</a>

Crypto exchange Coinbase says at least 6,000 customers had funds stolen from their accounts in phishing attack

<ul class="summary-list"><li>A botched upgrade by a <keyword id="11899100" type="UNKNOWN" weightage="60" keywordseo="defi" source="Orion">DeFi</keyword> platform has left around $160 million at risk, according to the network's founder.</li><li>Robert Lescher was imploring users to return any <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> they were sent, or had claimed, after the error.</li><li>Users exploited a bug on the <keyword id="12225212" type="UNKNOWN" weightage="60" keywordseo="compound" source="Orion">Compound</keyword> DeFi platform to drain money from a major pool of assets.</li></ul>It was a very rough weekend for Compound, one of the biggest <keyword id="11899102" type="UNKNOWN" weightage="60" keywordseo="decentralized-finance" source="Orion">decentralized finance</keyword> platforms in the world.A routine network upgrade went badly wrong, ultimately leaving $160 million worth of cryptocurrency at risk in a pool that can be drained by experts who know how to exploit the mistake, according to Compound founder Robert Lescher.Over the weekend, Lescher <a href="https://twitter.com/rleshner/status/1444692458412126215?s=20">was imploring</a> users to return any cryptocurrency they may have received or claimed from the pool. He said more than $30 million had been returned on Sunday. On Thursday, about $90 million worth of tokens was <a href="https://www.businessinsider.com/compound-ceo-asks-users-return-89-million-crypto-after-glitch-2021-10">sent out to users</a> of DeFi protocol Compound by mistake. An upgrade had gone wrong and a glitch was accidentally sending way too much money from a pool of cash called Comptroller.But Compound's woes intensified on Sunday when users realized they could exploit the glitch to drain even more money from Compound's reservoir to the Comptroller pool.A user took advantage of the bug to send $69 million worth of <keyword id="12225213" type="UNKNOWN" weightage="60" keywordseo="comp" source="Orion">Comp</keyword>ound's cryptocurrency, comp, to Comptroller. Some users were then able to withdraw huge amounts of money from the pool.Lescher <a href="https://twitter.com/rleshner/status/1444691282455142400?s=20">tweeted on Sunday</a> that 490,000 comp was at risk, worth around $160 million. Comp was down 6.1% to $318.22 on Monday, according to <a href="https://www.coingecko.com/en/coins/compound">Coingecko</a>.Users exploit major Compound glitchAfter Thursday's mess-up, Compound put in place patches to fix the problem of huge amounts of coins being sent to users. But because of its governance model, any changes take seven days to go through the system.The delay meant the glitch could be exploited. Savvy users could add more money to the Comptroller pool by using a function called "drip()."One user figured this out on Sunday night, <a href="https://etherscan.io/tx/0x02ba168f4d4fc313d095e9f0711447e8b96b26421539bd40be58243cd80a73cd">sending $68.8 million</a> of comp to the pool. After the Compound community realized, users started withdrawing tens of millions from Comptroller. The Block reported that only certain users can drain the pool.Data from blockchain data page <a href="https://etherscan.io/token/0xc00e94cb662c3520282e6f5717214004a7f26888?a=0x3d9819210a31b4961b30ef54be2aed79b9c9cd3b">Etherscan</a> appeared to show heavy activity in the Comptroller pool on Sunday night and into Monday, with money dripping in and flowing out. There was $43.4 million in the pool as of Monday.Crypto expert Banteg said <a href="https://twitter.com/bantg/status/1444685796632670213?s=20">on Twitter</a> that Compound faced the largest loss in a smart contract incident.Read more: <a href="https://www.businessinsider.com/crypto-investing-strategy-lightning-network-layer-two-solutions-galaxy-digital-2021-9">Alex Thorn went from being Fidelity's 'bitcoin viking' to leading Galaxy Digital's research team. He explains why investors shouldn't ignore the lightning network - and which networks are the most undervalued right now</a>Compound boss left begging for money backLescher's initial response to the botched upgrade on Thursday was to threaten those who had been sent too much money, saying users would be reported to the IRS and their details shared online.He <a href="https://twitter.com/rleshner/status/1443759189722116097?s=20">later apologized</a>, saying the threat was a "bone-headed" approach. "I'm trying to do anything I can to help the community get some of its COMP back," he said.Over the weekend, Lescher was thanking users who had returned the money and stepped up his calls for the rest to be returned. Lescher said 117,000 comp, worth around $37 million, had been returned by Sunday.Compound is one of the biggest decentralized finance protocols in the world, and allows users to earn interest on their digital assets. DeFi is the use of crypto technology to create financial systems such as exchanges and lending agreements that don't need middlemen, but instead use self-executing "smart contracts."

A huge glitch on DeFi platform Compound has put $160 million at risk - with the founder begging for the money to be returned

<ul class="summary-list"><li><keyword id="1972612" type="PERSON" weightage="60" keywordseo="Coinbase">Coinbase</keyword> is looking to focus more on institutional clients, company CFO Alesia Haas told CNBC on Wednesday.</li><li>She laid out what institutional firms generally look for when seeking their services.</li></ul><a href="https://markets.businessinsider.com/stocks/coin-stock" target="_blank" rel="noopener">Coinbase</a>, the world's largest <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency">cryptocurrency</keyword> exchange, is looking to focus more on institutional clients, CFO Alesia Haas said on Wednesday."The way that we look at it is where the money is in the world," Haas told <a href="https://www.cnbc.com/video/2021/08/11/watch-cnbcs-full-interview-with-coinbase-cfo-alesia-haas.html">CNBC</a>. "A lot of that money sits in institutional hands, whether that is in pensions or asset managers. So I think we'll shift into more institutional money as we go forward."Haas also laid out what institutional firms generally look for when seeking their services.The first step is usually for cryptocurrency <a href="https://custody.coinbase.com/">custody</a>, a service that Coinbase provides institutional firms so they can have a safe and secure way to store their digital assets, said Haas."They really appreciate our history of investing in security that we have not had a loss due to cyberattacks on our platforms since our inception," she told <a href="https://www.cnbc.com/video/2021/08/11/watch-cnbcs-full-interview-with-coinbase-cfo-alesia-haas.html">CNBC</a>.From there, Haas said it moves into trading, data services, and borrow-lend products, in that order."We're really building deep roots with a lot of our institutional clients across their investing needs in the <keyword id="2721952" type="PERSON" weightage="60" keywordseo="crypto">crypto</keyword> economy," she added. Among its roster of clients are Elon Musk's <keyword id="6360701" type="DEFINITION" weightage="60" keywordseo="spacex">SpaceX</keyword> and <a href="https://markets.businessinsider.com/stocks/tsla-stock?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">Tesla</a>, as well as PNC Bank, Third Point, and WisdomTree, CEO <keyword id="4875827" type="PERSON" weightage="60" keywordseo="brian-armstrong">Brian Armstrong</keyword> revealed on Tuesday during the <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.fool.com%2Fearnings%2Fcall-transcripts%2F2021%2F08%2F10%2Fcoinbase-global-inc-coin-q2-2021-earnings-call-tra%2F">earnings call</a>. Around 10% of the top 100 largest hedge funds by AUM have also onboarded the company's institutional product, he added.The company on Tuesday <a href="https://markets.businessinsider.com/news/stocks/coinbase-stock-price-q2-beat-elon-musk-tesla-spacex-clients-2021-8">posted</a> <a href="https://investor.coinbase.com/news/news-details/2021/Coinbase-Releases-Second-Quarter-2021-Shareholder-Letter/" target="_blank" rel="noopener">second-quarter earnings</a> that crushed analyst expectations, boosted by a volatility-spurred jump in trading volumes. The chart below shows pronounced quarter-over-quarter growth in both retail and institutional activity.<div type="image" title="Coinbase key metrics: institutional vs retail traders" height="179" width="711" msid="85250289" hostid="261"></div>Retail investors, which pay more fees compared to institutional traders, comprised almost 95% of Coinbase's transaction revenue in the quarter.Coinbase's stock rose to as much as 9% to $294 on Wednesday.Read more: <a href="https://www.businessinsider.com/how-to-mine-bitcoin-tips-profitable-lightning-network-node-crypto-2021-8" target="_blank" rel="noopener">A key bitcoin lightning network developer shares how he makes $4,500 a month just in fees from running a node. He and 3 other crypto experts lay out how to run profitable nodes.</a>

Coinbase's CFO says the company is looking to focus more on institutional clients - and lays out what services those firms generally need

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="http://www.flickr.com/photos/100239928@N08/">btckeychain/flickr</a>Litecoin was developed in 2011, when bitcoin was the only cryptocurrency on the market. Now litecoin is one of four digital currencies traded on Coinbase.</div></div></div><ul><li>Litecoin founder Charlie Lee shared his thoughts on the cryptocurrency space in an interview with Business Insider.</li><li>He said he has faith in the future of bitcoin, but believes its success depends on the help of technologies like Lightning Network, or alternative coins like litecoin, to make payment processing faster and less expensive.</li><li>He said bank speculation and mainstream investors aren't a bad thing - it's a sign that cryptocurrencies are being taken seriously. </li><li>Lee also shared his concerns that scam artists could take advantage of investors by talking up new coins.</li></ul> When Charlie Lee first founded litecoin in 2011, cryptocurrencies were a whole different ball game. Bitcoin, the first cryptocurrency ever, was just two years old and saw its price jump from $1 a bitcoin to around $30, before falling back to the single digits by the close of the year.There were few, if any, competing coins - though with a tight knit community of technically savvy engineers leading the charge, there were plenty of people with ideas for how to make bitcoin better.One of those people was Lee, a Google software engineer at the time, who developed litecoin to address the widespread scalability flaws which prevent bitcoin from processing much more than four transactions per second on average.In June, Lee left a four-year stint on the engineering team at Coinbase to focus on developing his brainchild. Since then, litecoin has grown it's market cap from $1.4 billion to $10.5 billion, and its price has soared 650% to $190.70 per coin. Business Insider sat down with Lee to find out more about litecoin, and how the space has changed in the past seven years. Becky Peterson: What makes litecoin different than bitcoin and ethereum?Charlie Lee: I've always known that it would be hard for bitcoin to scale and be the one coin that does everything for everyone. So my vision for litecoin has always been to complement bitcoin - to be the payments currency. Where bitcoin would be digital gold, litecoin would be silver. It's more useful for payments. And bitcoin would be better for store of value.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Charlie LeeCharlie Lee founded the cryptocurrency litecoin in 2011. In December, he sold off all of his digital holdings.</div></div></div>Peterson: Is litecoin on it's own blockchain?Lee: Yes. The difference between litecoin and bitcoin is that litecoin is four times faster. Transactions happen on average every 2.5 minutes versus every 10 minutes on bitcoin.It uses a different proof of work algorithm, so the miners that are mining bitcoin cannot mine litecoin, and vice versa. So it doesn't compete with bitcoin for miners.Peterson: It seems like bitcoin is already not very practical for payments. Do you agree?Lee: Technology like Lightning Network will help, but it won't be able to handle everything. Fees will be higher on bitcoin, even with <a href="https://cointelegraph.com/explained/lightning-network-explained">Lightning Network.</a> So litecoin I think can find its own niche to help address payment fees.Peterson: You spent four years at Coinbase, part of which was as director of engineering. Before that you were a software engineer at Google. In terms of the companies being built around cryptocurrencies, do you think the industry is moving in the right direction?Lee: Right now, most companies in the space are making money from investment and speculation of the currencies - exchanges are likely making a lot of money today. We do see some payment companies, but they've struggled in that aspect quite a bit because bitcoin currently is struggling to figure out how it will be used as payment. I think it will take some more time for tech like Lightning Network to be massively adopted before we'll see more usage of bitcoin and other cryptocurrencies as payment.Peterson: So do you think bitcoin will eventually adapt, or do you think another cryptocurrency will take the lead?Lee: I think bitcoin will be able to adapt. Think of bitcoin as digital gold. Gold is very valuable but people don't use it to buy stuff on a day to day basis. But with bitcoin you can easily convert it, for example, from bitcoin to litecoin and then use litecoin for payment. And there might be some other technology that comes out that makes it even easier.Peterson: Vitalik Buterin, the cofounder of the ethereum blockchain, <a href="http://www.businessinsider.com/ethereum-founder-threatens-to-leave-if-the-crypto-community-doesnt-grow-up-2017-12">has publicly criticized the cryptocurrency community</a> for focusing on making money, rather than "achieving something meaningful for society." Do you agree with his criticism? Lee: Initially most of the bitcoin supporters were crypto anarchists. They were against big governments and banks. But these days people are into crypto because of investment and speculation purposes, and banks are getting involved. I wouldn't say that's bad. It's just going mainstream. It won't be successful if it's only one group of people supporting the movement. I think this is just a natural progression. I don't see anything wrong with that.Peterson: There was some criticism of you at the end of last year in terms of influencing litecoin prices. It seemed to be part of a larger issue with other coins, in terms of how volatile and responsive to media coverage their prices can be.Lee: I think there's a bit too much scam in the space, in terms of people getting in just to get rich quick. It's quite easy for a founder to pump a coin and make it seem like it's the latest and greatest and it will cure world hunger, and the price can go up to $10 billion. And it's easy for whoever did that to cash out. And it will leave a lot of people hanging. A lot of people can lose a lot of money because of this.I'm sad to see this happening all over the place. There's a lot of initial coin offerings (ICOs) that have nothing but a white paper that's full of technical jargon, and they're able to raise $100's of millions of dollars; these coins will likely just go to zero. A lot of people will get hurt. So I am kind of sad to see that. Hopefully things will get sorted out and there will be less of this and more focus on technology and moving the space forward. Get the latest Bitcoin price <a href="http://markets.businessinsider.com/currencies/BTC-USD">here.&gt;&gt;</a> <div id="categorypromo" style="border:1px solid silver; min-height:90px; padding:10px;vertical-align:top;"><a href="http://read.bi/bitcoin-101-free"></a>EXCLUSIVE FREE REPORT: The Bitcoin 101 Report by the Business Insider Intelligence Research Team. <a href="http://read.bi/bitcoin-101-free">Get the Report Now »</a></div> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/german-brothers-make-drone-out-of-bathtub-and-fly-around-in-it-2018-1">2 German brothers made a drone out of their bathtub and flew around in it</a></h3> <div> </div> </div>

The founder of litecoin, a cryptocurrency that has gained 650% in 7 months, told us he's worried about all the scams in the nascent market

<div class="KonaFilter image-container display-table"><div><div class="image on-image">CoinmineCoinmine launched a crypto mining device called Coinmine One.</div></div></div><ul class="summary-list"><li>Coinmine, a startup backed by Coinbase Ventures and other investors, rolled out a new crypto mining device that allows users to mint cryptocurrencies at home.</li><li>The device now allows users to mine Ethereum, Ethereum Classic, Monero, and Zcash, though not yet Bitcoin. </li><li>The launch comes at a time when mining cryptocurrencies at home is difficult to do at scale, in the wake of falling crypto prices and <a href="https://www.businessinsider.com/bitcoin-price-rise-causes-hash-rate-arms-race-2018-2">rising energy costs. </a></li></ul>For $799, you can mine cryptocurrency at home.Launched this week, a new gadget called Coinmine One gets rid of the traditionally cumbersome mining process. Instead of manually assembling multiple computer graphic processors, downloading the software, and setting up a crypto wallet, all you need to do is power up the device, connect it to WIFI, and tap your phone to choose which coin you want to mine. For the initial launch, Coinmine One allows users to mine Ethereum, Ethereum Classic, Monero, and Zcash - but not yet Bitcoin. With further updates, it will support Grin, Dfinity, Filecoin and Bitcoin Lightning, the company said. Unlike most specially-designed, unwieldy mining rigs, the Coinmine One device is smaller, handier, and quieter. The device is the size of a PlayStation video game console with a sleek Apple-esque design and comes pre-assembled. You can simply use a mobile app to control the device, which also doesn't produce roaming sounds when turned on. With a white, transparent cover, it looks like a compact computer case and is powered by an operating system, dubbed MineOS, which updates automatically to support a variety of crypto networks. It also consumes a relatively small amount of electricity at 120 watts per hour, according to the company, The device is aimed at overcoming one of the main challenges in crypto mining - the high barriers for ordinary people to enter, said Farbood Nivi, cofounder and CEO of Coinmine.See also: <a href="https://www.businessinsider.com/wall-street-firms-are-making-bitcoin-more-stable-2018-8">Wall Street has helped eliminate one of bitcoin's biggest problems, and it could fulfill 'Satoshi Nakamoto's original vision'</a>"Crypto is about decentralizing information and money with decentralized computing," he said. "The more you can support the decentralization, the more people can support the decentralizing power, the more secure, powerful, reliable and valuable crypto becomes."Nivi likened the potential impact of Coinmine on the crypto world to the influence that Apple had on the PC industry. "We were like Apple computers back then, an easy way to access the Internet," he said. "Easy to participate. You don't have to be an expert." The device has a power of 29 megahashes per second(MH/s) for Ethereum, 900 hashes per second (H/s) for Monero, and 320 solution per second (Sol/s) for Zcash. To put that into perspective, if turned on for a year, the device can mint an ether, which is the cryptocurrency powering Ethereum, up to three Monero, and half a Zcash, according to Nivi.The company has raised $1.5 million to-date and is backed by Coinbase's venture arm as well as angel investors like Coinbase's chief technology officer Balaji Srinivasan and Tinder's chief product officer Brian Norgard.The new launch comes at a time when it's <a href="https://www.businessinsider.com/bitcoin-price-rise-causes-hash-rate-arms-race-2018-2">harder to turn a profit mining crypto</a>, particularly at home. According to <a href="https://diar.co/volume-2-issue-40/">research firm Diar</a>, bitcoin miners amassed $4.7 billion in revenue in the first three quarters of 2018. But with crypto prices falling and an increase in computing power competing for mining rewards, profitability has dropped. Mining, in general, is a process of solving complicated math problems to get compensated by new coins, like bitcoin or ether. Machines run 24/7 to execute a protocol to resolve those math problems. The first computer, or a group of computers, that solve the problem can receive slices of the currencies in return. In the midst of the cryptocurrency craze, sophisticated investors set up machines at home to mine those digital assets and sell them, in addition to trading cryptos on exchanges. Whether you can make money depends on the efficiency of the mining rig, the cost of electricity, and the price of the cryptocurrency.In bitcoin mining, the industry has been rapidly evolved, with miners using gears equipped with specially designed mining chips, called ASIC, short for application-specific integrated circuit. But even with those advanced kits, it would still be hard for miners to be profitable at scale, according to Silicon Valley venture capitalist Bill Tai, who is also a board member of BitFury, which produces mining hardware."You have to be able to source electricity at scale and at prices of less than 10 cents," he said. According to a report by advisory firm Fundstrat, the breakeven price for bitcoin mining is $7,300, assuming that miners are using the powerful bitcoin miner Antminer S9 ASIC and paying an electricity cost of $0.06. "What's at the heart of the crypto mining industry is a hash rate battle and a low energy consumption battle," said Martin Leblanc, founder and CEO of Nuvoo, a Canadian cryptocurrency mining company.<h2>See also:</h2><ul><li><a href="https://www.businessinsider.com/bitcoin-price-rise-causes-hash-rate-arms-race-2018-2">JPMORGAN: Bitcoin miners are in a hash rate arms race</a></li><li><a href="https://www.businessinsider.com/bitcoin-price-rise-causes-hash-rate-arms-race-2018-2"></a><a href="https://www.businessinsider.com/citigroup-exploring-crypto-digital-asset-receipt-2018-9">Citigroup has created a new, less risky way of investing in crypto - and it may be a game changer for the industry</a><a href="https://www.businessinsider.com/citigroup-exploring-crypto-digital-asset-receipt-2018-9"></a></li><li><a href="https://www.businessinsider.com/bernstein-research-says-crypto-exchanges-are-set-to-rake-in-more-money-than-last-year">Crypto exchanges are set to rake in twice as much money as last year even though bitcoin is down 51%</a></li></ul> Get the latest Bitcoin price <a href="http://markets.businessinsider.com/currencies/BTC-USD">here.&gt;&gt;</a>

A sleek new device that looks like an Xbox lets you mine crypto at home

<div class="KonaFilter image-container display-table"><div><div class="image on-image">CoinbaseDan Romero, VP and general manager at Coinbase</div></div></div> <ul><li>Business Insider checked in with Dan Romero, VP and general manager at Coinbase, to find out what its like trying to grow and scale one of the hottest startups in tech.</li><li>Coinbase, a cryptocurrency exchange, saw $1 billion in profits last year as bitcoin surged in popularity and nearly hit $20,000 in value.</li><li>Now Romero is tasked with building an organization and product that is suited to handle wild consumer demand. That includes implementing technologies like SegWit, a sometimes-controversial technology that aims to improve bitcoin.</li><li>Romero downplayed rumors that Coinbase is seeking a CFO ahead of a prospective IPO, saying instead that he's focused on building a company that could do for cryptocurrency what Google did for search.</li></ul> Coinbase is one of the hottest startups in tech - and with good reason. The cryptocurrency exchange <a href="http://www.businessinsider.com/coinbase-reportedly-made-more-than-1-billion-in-revenues-last-year-2018-1">hit $1 billion in annual revenue</a> as this year's bitcoin mania sent the popular digital coin surging up to almost $20,000, before it came back down. With a reported 10 million customers served on the platform, Coinbase is far and away the most popular exchange in the US. And investors have noticed, giving the six-year-old startup $100 million in capital at a $1.6 billion valuation <a href="http://www.businessinsider.com/coinbase-now-unicorn-valuation-series-d-funding-2017-8">in a funding round last August</a>.But popularity comes at a price, and Coinbase <a href="http://www.businessinsider.com/coinbase-adds-customer-service-phone-line-support-2017-9">has stumbled through the difficult of scaling</a> from a niche product to a real, sustainable business. It was under these circumstances that Dan Romero, a four-year veteran of Coinbase, took on the role of general manager and vice president of the company in January. Romero, who previously ran the startup's business development, is now in charge of growing and scaling both the engineering and product side of Coinbase, as well as its internal operations. Or, in Romero's own words - "the overall customer experience, that's what I wake up every day and focus on," he tells Business Insider.In conversation with Business Insider, Romero <a href="https://www.recode.net/2018/2/21/17037030/coinbase-cfo-ipo-secondary-trading">downplayed a recent Recode report</a> that the company was hiring a CFO to go public - but didn't deny it, either. In a bigger-picture sense, Romero says that Coinbase is trying to build a company that could do for cryptocurrency what Google did for search. Below, find our conversation with Romero, touching on everything from upstart cryptocurrency exchange rivals like Robinhood, to the <a href="http://www.businessinsider.com/explainer-coinbase-is-rolling-out-segwit-bitcoin-update-2018-2">sometimes-controversial SegWit technology</a> that could improve bitcoin, to the future of Coinbase itself. This interview has been edited and condensed for clarity. <h2>With competition growing, Romero says Coinbase is focusing on the mission</h2>Becky Peterson: The competition seems to be growing, with a lot of companies launching cryptocurrency exchanges. How do you define yourself and see the positioning of Coinbase in the long-term compared to other companies in the space?Dan Romero: We are a first mover in the space in terms of building a consumer friendly brand. We are enabling individuals to be able to get into the ecosystem and be able to experiment with digital currency.We've had a lot of challenges around with scaling. We've had a lot of customers come on to the platform in the last year and we're doing everything in our power to make sure we're giving them a great customer experience. It's not where it needs to be today. I think hopefully soon we'll have made significant improvements there.But I think if we shift to long-term, Coinbase is going to be 100% focused on cryptocurrency. Our mission is to build an open financial system for the world. We're not interested in equities or options trading or any of the other kind of traditional financial system products.We're focused on digital currency. Where we will be successful is if customers fundamentally think of us as "the crypto company." That is our focus. So with other folks coming into the market, it's validation that cryptocurrency is more mainstream. But we fundamentally don't view cryptocurrency as a feature. It's our business. If you look at a couple of the more recent entrants into the market, they don't allow you to send and receive digital currency, or they make you jump through significant hoops to do that. And I think that is antithetical to the idea of cryptocurrency to begin with.It's fundamentally something to be used, and you can move it around just like you can more your own files around. So the fact that a service would come in and let you speculate on price but not actually use currencies - in some ways that's actually concerning to me.Peterson: What do you mean? The fact that Coinbase offers payment features and things like that?Romero: Yeah, but I think a great example, there is a competitor that's rolling out today, where if you go to their help section, they don't allow you to send digital currencies to them, and in order to access withdrawals you have to go through multiple hoops and it may take you a week to do that. Peterson: Are you talking about <a href="http://www.businessinsider.com/robinhood-opens-no-commission-bitcoin-and-ethereum-trading-2018-2">Robinhood</a>?Romero: Yeah, I think they're launching today.<h2>Coinbase may be hiring a new CFO to take the company public </h2>Peterson: Back to the business side of things - this week <a href="https://www.recode.net/2018/2/21/17037030/coinbase-cfo-ipo-secondary-trading">Recode reported</a> that Coinbase is looking for a new chief financial officer to help take the company public. Is that true? Romero: We are hiring a bunch of different executives at the company. It's part of the scaling effort. We have a CFO right now. We may or may not be looking for a CFO. But I think the broader story here is that we're trying to scale the company because we're looking to build a lasting company in the space.Peterson: In the case that Coinbase does go public, how do you convince investors that this company has a future?Romero: I think our view is that this is similar to the beginning of the internet. So we're trying to build a Google-like company for the cryptocurrency space. Things like SegWit are a good example, where we need to ensure that we have the latest and greatest in terms of cryptocurrency. That's how we're going to be the cryptocurrency company, that if we do go public at some point in the future, we'll have that narrative. So we will be focused on that as a business, rather than a feature. We think a lot of the developer interest we've seen grow in 2017 is validation of the fact that this is something that will have staying power, rather than a flash in the pan. Peterson: When it comes to new technology like SegWit - how do you perceive the role of Bitcoin Core and the open source foundations behind the cryptocurrencies on your platform? Do you think those foundations will lead innovation on crypto or do you see Coinbase doing R&amp;D?Romero: We are actually trying to increase the amount of contributions we're making at the core protocol level. We have a significant amount of talent that we're trying to hire for, for engineers that would only be working on protocols. So no direct benefit to Coinbase, they would be doing open source development on protocols like bitcoin and ethereum. We have an engineer right now who's working on the Lightning Network. We view this as both beneficial to Coinbase in the long-term because it makes digital currencies more scalable and more accessible for more people. But at the same time, it's us giving back. Because we're obviously a business that benefits from the open source protocols that exist. I think you'll see us continue to hire more people whose sole responsibility will be to work with core developers in multiple digital currency protocols and try to help accomplish roadmaps that those communities have set out. <h2>The company will double headcount to around 500 people this year</h2><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Tina BhatnagarTina Bhatnagar joined Coinbase in January to grow the company's support team.</div></div></div>Peterson: Do you have a headcount or hiring numbers for 2018?Romero: We're effectively doubling the numbers in terms of headcount, from roughly 250 to 500. We wish we could hire faster but it's very hard to hire in San Francisco, New York and London. Peterson: Do you have to do a lot of training or are you mostly hiring people who have experience in crypto?Romero: It's pretty hard to find people with experience in crypto specifically. We've found that a lot of engineers at more traditional software companies are getting pretty interested in cryptocurrency and that those folks are coming into Coinbase and learning on the job. If you're a senior software engineer and you've worked with distributed system or just hard computer science type problems, this is stuff that you can pick up pretty quickly once its your full-time job.Peterson: Is it the same when it comes to hiring executives? You <a href="http://www.businessinsider.com/coinbase-hires-ex-twitter-exec-2018-1">just hired Tina Bhatnagar,</a> who was previously at Twitter. Romero: Cryptocurrency hasn't been around for a long enough period of time, so to hire an executive who can scale a support operation, who also has cryptocurrency experience - I'm not sure that they exist. Tina's a great example. She was dealing with an order of magnitude larger scale support organization, and having her skill set come in - maybe she's earlier on the digital currency learning curve, but that's a sweet spot for us. She's quickly picking it up on the job, and is clearly a talent person. But the nice thing is that she's seen the movie before, in terms of scaling a support organization, so she's able to hit the ground running. In the last month and a half she's done more in some ways than we were able to do before. So it's really great to bring in experienced folks on a variety of different functions. Peterson: Are there any more updates on the roadmap, in terms of major technical changes like <a href="http://www.businessinsider.com/explainer-coinbase-is-rolling-out-segwit-bitcoin-update-2018-2">SegWit</a>?Romero: Nothing specific. At a high level, we're focused on providing customers what they want and what customers continually tell us is that they want high reliability during peak times,. So we're continuing to focus on the scaling of the core infrastructure. I think the other big area for customers is wanting to add new assets.We're going to be slow to do that. We're going to carefully evaluate any new assets we add to the platform, first and foremost from a security angle to make sure we're not adding assets that potentially have a security vulnerability.We are never going to be the brand that adds every asset under the sun first. For us it's about being the most trusted.<h2>CoinBase is betting on SegWit, a technology to improve bitcoin</h2>Peterson: Coinbase announced this week that it's rolling out support for SegWit, <a href="http://www.businessinsider.com/explainer-coinbase-is-rolling-out-segwit-bitcoin-update-2018-2">a software upgrade for bitcoin</a>. How did the update process go? I understand you were testing it for a while. Romero: If you look at social media over the last couple of months you have a lot of feedback saying, "Why hasn't Coinbase implemented SegWit? It took this team two days to update this product. Why can't Coinbase, with all the money and engineers they have, do it in just as quick of a time?"It's a little underestimating the scale that we're operating at.We're holding billions of dollars in customer digital currency. Any change we make to that core business structure has to be thoroughly tested both from the implementation, to make sure it's working, standpoint, but also some serious security considerations.We're a very much a measure twice, cut once culture - and in some cases maybe it's measure three times and cut once.But the upgrade for SegWit was challenging for a couple of reasons. A primary reason is that we have our own proprietary implementation of bitcoin, in terms of the node software we run. Because we operate at a pretty large scale, we need something that can run for all of the transactions and customers that we're dealing with, but separately that also provides additional security benefits to us. So when we have an upgrade like this, we have to actually take it and re-implement it ourselves in some capacity. So I think that is going to inevitably makes it a little slower to make changes. But when we do, you'll know that we've been really thoughtful about doing that.So I think at a hig- level, it's something we've been tracking. And it took us a while to get done but we're quite pleased that it's finally ready to go and it's going to be rolling out to customers in the next few days. Peterson: Besides the impact this will have on the greater bitcoin network, how will SegWit affect Coinbase customers?Romero: The fees aren't determined by Coinbase as much as the network. It's a marketplace. You can only have so many transactions in a given block and if there are a lot of transactions on the network at any given moment, then the fees will naturally increase. So what SegWit does is it allows more transactions to be in the network at any given time. And given how big Coinbase is relative to the network, it means that we aren't consuming any more of the network for customer transactions than we need to be. So we're technically making our infrastructure as efficient as we can.You'll see on Reddit and Twitter, people will say, "Okay, SegWit, great. What about transaction batching?" That's something I think we're going to be considering as well. It's all about prioritization, and for us bitcoin is an area that we're continuing to invest in.Peterson: What's transaction batching?Romero: It's just another technique to efficiently process transactions. It's not an upgrade so much as a best practice when you're at scale.SegWit is a first step in terms of improving the efficiency of our bitcoin infrastructure, and we view it as a benefit for our customers as well as the bitcoin network and community at large that we're updated with the latest and greatest.<h2>Romero says SegWit is about customers, not bitcoin politics </h2>Peterson: Critics of Coinbase have suggested that the company was against SegWit at some point because you were in support of a different upgrade to bitcoin altogether.Romero: That is unequivocally false. We always try to do right by our customers. What it is, is that ultimately we hold a lot of bitcoin on behalf of customers. Those customers, in the case of a fork, want access to those coins, especially if the fork is going to have more of a legitimate developer community behind it. We need to make sure that we're keeping that bitcoin safe, and in the event that there are situations like forks where customers potentially have two different assets, we should let customers choose what to do with those assets. There is a group of people in the world who think that Coinbase should have one very clear political stance, and I think that's just not where we are at this point. We're a neutral platform that is focused on bringing digital currencies to the world more broadly, and not picking favorites or following a political path. <div id="categorypromo" style="border:1px solid silver; min-height:90px; padding:10px;vertical-align:top;"><a href="http://read.bi/bitcoin-101-free"></a>EXCLUSIVE FREE REPORT: The Bitcoin 101 Report by the BI Intelligence Research Team. <a href="http://read.bi/bitcoin-101-free">Get the Report Now »</a></div> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/goldman-sachs-sharmin-mossavar-rahmani-investment-outlook-valuations-inflation-bitcoin-2018-2">Goldman Sachs is telling its multimillionaire clients not to worry about valuations or inflation</a></h3> <div> </div> </div>

You Searched For "bitcoin lightning network" and got 11 results

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