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🎉 Segwit2X Cancelled ☠️ Parity 'Hacked' – Cryptos for the Rest of Us

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Welcome to Cryptos for the Rest of Us, the newsletter that gives you the week's top stories with as l
 

Cryptos for the Rest of Us

November 10 · Issue #1 · View online
Understand this week's cryptocurrency news in 3 minutes

Welcome to Cryptos for the Rest of Us, the newsletter that gives you the week’s top stories with as little jargon as possible. 
I’ve taken the liberty of putting you on this list as we’ve talked about cryptos before or you’re following 12 Startups. I’m still experimenting with this format but if it’s not something you’re interested in just hit unsubscribe and tell me to buy you a beer as an apology 🍻🙏
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Segwit2x Hard Fork Cancelled
What’s the Story?
You may have heard of ‘forks’ in the cryptocurrency space. Forks are updates to the blockchain software that change the way the code works. Hard-forks either a) have community consensus and everybody updates to the new blockchain or b) are contested and the blockchain hard-forks into two branches, effectively creating a new cryptocurrency.
Bitcoin has had a few hard-forks before resulting in Bitcoin Cash and Bitcoin Gold. The newly proposed fork called Segwit2x represented a philosophical divide between two use cases for Bitcoin as a Store of Value and Means of Transaction. Currently, Bitcoin transactions take too long to clear (minutes, not seconds) and the fork was meant to improve this.
Segwit2x was widely expected to happen in the coming week. However, it was announced yesterday that the fork would be cancelled due to lack of consensus after some heavyweights spoke out against it.
What does this Mean?
Previous hard-forks in Bitcoin gave holders of the original coin a version of the new coin too. People saw this as 'free’ money. As a result, money flowed into Bitcoin ahead of the fork, pushing up the price at the expense of other coins. Now that the fork has been cancelled we are already seeing a rotation back into the other currencies with BTC dropping from an all-time-high of USD7,490 and coins like NEO and OMG jumping.
In the long-run, this gives more certainty around Bitcoin’s role as a cryptocurrency with the majority favouring it as a store of value, rather than a means of transaction. Now that the crisis has passed, developers can get back to working on other Bitcoin related projects too.
Parity 'Hacked'
What’s The Story?
Parity is a digital wallet for Ethereum, the second largest cryptocurrency by market cap. Parity is a ‘multi-sig’ wallet that requires multiple parties to sign-off on a transaction, a bit like requiring multiple signatures on cheques to make them valid. As a result, it was very popular with groups running Initial Coin Offerings as it prevented individuals running off with the proceeds.
“I accidentally killed it”
A user managed to trigger a bug in Parity contract code which gave them full ownership of the wallet. In an attempt to reverse the transfer of ownership the user deleted the code, but in doing so deleted a core part of the Parity code. This permanently froze accounts with up to USD150million worth of Ethereum. 
How Did This Happen?
A reddit user explains what happened
What Does This Mean?
This isn’t the first time multi-sig wallets have been compromised. It’s definitely a negative for Ethereum but in the bigger picture, it also weighs on the entire market as investors have to question the safety of these popular wallets.
It’s possible that the Ethereum community engineer a fork to roll back the blockchain to a point before this bug happened,  unfreezing all the locked wallets. It’s been done before after the DAO hack but was highly controversial at the time as it effectively meant a bailout for those affected. It’s not clear whether this will happen.
As ever, the best defense against hacks, bugs, and human error are to diversify – keeping cryptocurrency assets in a mixture of hardware and software wallets. 
Is it a hassle? Sure. 
Is it worth it? Ask the guys who’ve lost millions.
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