Current State of The Crypto Market (October 13th, 2019)

Hackers:  A victim of a Muhstik Ransomware attack paid in bitcoin to unlock his files just to strike back and hack his hackers. In turn, he released nearly 3,000 decryption keys for other victims, along with free decryption software.  German programmer Tobias Frömel was forced to pay 0.09 BTC after attackers hacked into one of his publicly exposed QNAP Network Attached Storage (NAS) devices and encrypted its files. The ransomware has been named Muhstik due to .muhstik extension affixed on the stolen encrypted data and has been claiming victims for the past few weeks. The ransomware attacks have been a popular way for many hackers to make money, particularly cryptocurrencies. The Muhstik ransomware found success by breaching into users devices with weak passwords by brute-forcing them.  However, what the hackers didn’t expect was that Frömel is going to hack their command and control server, and retrieve decryption keys of 2,858 Muhstik victim.  As of now, the keys are available publicly for free together with Frömel’s decryption software. Besides, software company Emsisoft has made a Muhstik decryptor for Windows users who fell victim to the ransomware.

Key Players:  Adoption is one of the major points of discussion in the Cryptoverse: how much do we need bigger adoption, from whom, how to obtain it, and what effects would growing adoption have on the ecosystem? All these questions are relevant, but the answers – at least for now – remain just theories and possible outcomes.  Jameson Lopp, Chief Technology Officer of crypto security specialist Casa says, “The current system is certainly not perfect and constant issues are bound to make a person feel frustrated. I think that is the main reason someone would start looking into Bitcoin.” Loop goes on to give an example of a first-hand experience with declined credit cards, the reason being that they are not in “the right country.” Another example is a grey or a frowned-upon industry, such as sex or cannabis industries, which are “still mostly locked out of the financial system in America” and which will “start looking for alternatives.”

People, particularly business owners, will find many aspects of the existing banking system disruptive. “Banks are not fun to deal with,” Samson Mow, Chief Strategy Officer at the Canada-based blockchain company Blockstream said. “You can have your account frozen at any time. Even if you’re not touching crypto.” As an example, Mow gave an issue a gaming company, Pixelmatic faced about a year ago, when, despite the submitted paperwork, its account was frozen “just because the bank was backlogged in doing a new KYC checks.”

Banks & Institutions:  Stripe and eBay have followed PayPal in backing out of Facebook’s cryptocurrency, Libra. They confirmed to multiple news outlets that they would pull their support, while Mastercard and Visa have also recently dropped out.  “We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member,” the company said in a statement. “At this time, we are focused on rolling out eBay’s managed payments experience for our customers.”  Another payment powerhouse Stripe released a statement saying “Stripe is supportive of projects that aim to make online commerce more accessible for people around the world, Libra has this potential. We will follow its progress closely and remain open to working with the Libra Association at a later stage.”  The Libra Association is set to hold its first board meeting on Monday.

Adoption: Cryptocurrencies have penetrated mainstream discourse, with references to Bitcoin in mainstream media commonplace, and regulatory developments continually appraised by skeptics, pundits, and proponents alike.  However, the barrier to mainstream crypto adoption is still daunting, and correlates to several hurdles that the industry needs to overcome.  From finally ending the relentless scams and exchange hacks to presenting compelling arguments that convince people of the underlying value proposition, there is significant work ahead. But one of the most overlooked aspects, user-experience, is quickly gathering momentum as one of the foremost efforts to onboard more users to the crypto sphere.  By building more user-friendly, intuitive tools for accessing and using cryptocurrencies, many observers believe that the general understanding and market maturity will follow suit.  At the core of those UX endeavors are wallets, and their ability to abstract away the underlying complexity of cryptocurrencies — bringing with them the much-anticipated mass adoption of the technology.