Coinbase Tackles Identity
It’s been a rough week for digital currency investors.
Prices of many major digital currencies plunged on Tuesday, including both Bitcoin and Ethereum, leaving investors awash in uncertainty about what exactly is happening in this market.
In this week’s digital currency update, we’re going to look at some of the events taking place in this turbulent market.
Coinbase Acquires Digital Identity Systems Startup
On August 15th, Coinbase announced that it had acquired San Francisco-based digital identity startup Distributed Systems.
Before the acquisition, Distributed Systems had already started working on “decentralized identity solutions.”
Now, the startup’s five-person team will join a much bigger family, coming to Coinbase and helping the world’s largest software wallet in its efforts to develop digital identity solutions.
Today, many companies are turning to blockchain as an identity protection solution. Through blockchain, it could be possible to allow individuals to control their digital identities completely, and this means their identities will be kept safe.
This is a huge deal in America and the rest of the world, where identity theft and other forms of online data breaches have spiraled out of control. Americans are still healing from the jarring Equifax data breach, which left nearly half the country at risk. With that wound so fresh, it’s exciting to see digital currency and blockchain companies start to look for solutions.
In a blog post, Coinbase’s identity project manager B. Byrne suggested that blockchain could be used to protect an individual's Social Security number. That said, Coinbase has no immediate plans to deploy any digital identity tools.
AT&T Sued for $224 Million After Crypto Hack
Another big-name company was dragged into the blockchain world this week, and this time being in the spotlight was far from positive.
AT&T is being sued by one of its customers, Michael Terpin, who claimed the company failed to protect his cell phone data, which allowed hackers to steal $24 million worth of digital currency. Terpin was just one person affected by this sweeping digital currency hack.
The lawsuit was filed by Los Angeles litigation firm Greenberg Glusker. In it, Terpin states that AT&T's employees were complicit in SIM swap fraud. SIM swap fraud is when criminals pose as the owners of certain mobile phone numbers and through this are able to convince telecom providers to grant them access to private information through phones.
In these kinds of attacks, the criminals have access to a wide range of content. This includes cryptocurrency wallets.
Terpin states that his account had been hacked not once but twice in seven months, and AT&T did nothing to improve protections despite numerous incidents. Furthermore, Terpin claims that AT&T knew about the incidents and that some of its employees are actively cooperating with hackers in SIM swap frauds. These employees override AT&T's security procedures and give hackers direct access to private information.
Through his lawsuit, Terpin is seeking $23.8 million in damages. He is also seeking $200 million in punitive damages.
Ethereum Co-Founder: Crypto Price Collapse Will Not Constrain Further Growth
On August 15th, Ethereum co-founder and ConsenSys Inc. CEO Joseph Lubin sat down with Bloomberg for an interview.
And what he had to say is pretty relevant to any digital currency investor who weathered the latest digital currency market pullback.
Lubin told Bloomberg that he does not believe the recent collapse in cryptocurrency prices will constrain further growth. Rather, the value surges seen in the past year were just "another bubble." In the world of cryptocurrency, there have been multiple bubbles, and each bubble seems astonishing when it is happening.
Lubin further stated that each of these bubbles has brought about a significant burst of activity. On that note, Lubin stated:
We build more fundamental infrastructure, we see a correction, and the potential gets even more impressive... I absolutely expect that there is a strong correlation between the rise in price and the growth of fundamental infrastructure in the ecosystem and the growth of development in the ecosystem. We are probably two orders of magnitude bigger as a developer community than we were eight or 10 months ago.
Lubin further stated that random price fluctuations are the result of speculative investors who are more focused on hype than the actual infrastructure behind digital assets.
Y Combinator's New China Chief Bullish on Blockchain
In an exciting development for the blockchain space, Y Combinator has just announced a new China division.
Y Combinator is one of the biggest startup incubators in the world. Since its launch in 2005, the company has spawned some of the best-known startups in the world, including Reddit, Dropbox, and Coinbase.
That said, Y Combinator has already had a heavy influence on the blockchain space, and it doesn't look like that influence is stopping anytime soon.
The new head of Y Combinator's China division, Lu Qi, is bullish on the blockchain, stating that the technology will bring long-term benefits to startups.
Lu Qi is the former operating officer at Baidu and will be completely in charge of the new arm of Y Combinator.
This is exciting news for investors. With startup incubators like Y Combinator seriously considering the value of blockchain, it is more likely that the technology will be incorporated into the next wave of seed companies to hit the market — both in the United States and in China.
That's all we have for news updates this week. Best of luck with your investments from the Token Authority research team.