Best TruStories of the Week - #3


#1

Let’s dig up those juicy claims and hash them out :slight_smile:


#2

Claim: Bitmain Faces $5 Mln Lawsuit for Allegedly Unauthorized Mining at Clients’ Expense

Crypto mining giant Bitmain is facing a class action lawsuit of $5 million that alleges it mined cryptocurrency for its own benefit on its customers’ devices. The filings were published under docket listings for the North District Court of California, Nov. 19.

Source: https://cointelegraph.com/news/bitmain-faces-5-mln-lawsuit-for-allegedly-unauthorized-mining-at-clients-expense

Evidence/Argument:** there are links to the actual claim that was filed, although only authorized users can enter and view. Also there is a “copy” of said claim anonymously uploaded to an online clipboard space in scribd. It looks and reads like an actual court document.

Options:

Verdict: Pending


#3

Claim: Bitcoin investors may not actually own the digital currency because many courts don’t recognize them as property, legal expert warns.

Source : https://www.dailymail.co.uk/sciencetech/article-6430189/Bitcoin-investors-not-actually-digital-currency.html
https://theconversation.com/you-may-not-actually-own-your-bitcoin-legal-expert-107307

Evidence/Argument: https://jolt.richmond.edu/blockchain-demystified-a-technical-and-legal-introduction-to-distributed-and-centralised-ledgers/

Above paper published by the said legal expert, talks about the applicable laws treating bitcoin as a property, from his research claims that there is a legal uncertainty over the property rights of bitcoin.

From the laws mentioned in the above sources, it does seem there is uncertainty over the property rights. This issue seems to be debatable the more legal experts comment on this the better.

Status : pending, debatable


#4

Claim :
Following 3 claims were made from a blog post on Nov-22, 2018:

  • The Bitcoin network’s hashrate had it’s all time high on August 27th, 2018
  • As of November 22, 2018, the hash rate has dropped by nearly 44% from its all-time high on August 27th, 2018
  • As of November 22, 2018, this is the steepest decline (from Aug27 - Nov21) the hash rate has experienced in bitcoin’s history

Source :

Evidence/Argument:
All numbers used for hashrate represent - number of tera hashes per second

Status :

  • True
  • True
  • False with respect to explanation below

Since the last claim is about the steepness and not just % decrease between two time snapshots, the duration (X-Axis) also needs to be considered. The slope between two points(i.e line joining these two points) is usually the measure of steepness.

Which is more steeper ?
43.86% decrease from Aug-27,2018(61866256 ) to Nov-21,2018(34727437) over the span of 85 days. (Or) 58.2% decrease from Oct-26,2017(12999790) to Nov-11,2017(5426063) over the span of 16 days.

Assuming we don’t need to consider the points in between and find the approximate best fit line, let’s find the slope which is (change in Y)/ (change in X).

(34727437 - 61866256) / 85 = - 319280.22
(5426063 - 12999790)/16 = - 473357.93

More the absolute value of the slope, steeper is the curve and hence the recent decrease in 2018 is not steeper than previous year’s. Hence Falsified.


#5

Great work! Super interesting find. Quick feedback on the story. Every story can be up to 350 characters. Rather than just copying the headline, it’s better to include some of the crucial details. For example, in this case, we can say:

Bitmain is facing a class action lawsuit of $5 million that alleges it mined cryptocurrency for its own benefit on its customers’ devices.

Overall, great work on the analysis and figuring out what needs to be done to validate it. @priyatham can we ping Bitmain and ask them? :slight_smile:


#6

Check out the legal experts responses here: https://twitter.com/isTruStory/status/1066922488100118528 :slight_smile:


#7

Greetings,

Interesting read. I thought about this topic, of digital currency being viewed as property, after reading the following on irs.gov:

The IRS states the following about virtual currency transactions:
Source: https://www.irs.gov/pub/irs-drop/n-14-21.pdf

Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax
principles applicable to property transactions apply to transactions using virtual
currency.

I honestly thought that since the IRS states that, virtual currency, for tax purposes, is viewed as property, then, by default, it’s considered property in all courts. Now, I see the flaw in my logic. Being treated as property, in terms of paying taxes, doesn’t mean the courts, in all given situations, classify digital currencies as property.

Thanks for the post,

Astra Rai


#8

Oops ran a bit long :rofl: Thanks for the feedback!


#9

thanks for digging this up! quick feedback:

Since we’re looking for steepness, we should take the absolute value of the numbers. So in this case, the most recent decrease is actually not steeper, the prior one is steeper.

If the numbers are accurate, then the third claim is actually false!


#10

Claim: Crypto can save the Adult Entertainment Industry lots of money by bypassing traditional credit card fees, banks, processing payments etc.

Source: https://www.coindesk.com/spankchain-eth-crypto-porn-camgirl

So there is a website called “Spankchain” that offers adult entertainment to the masses. Instead of traditional payment (cash) the site is accepting crypto as a form of payment. I can see how this works well with those who are avid users of such sites. Many things to consider and anonymity is the biggest reason. One of the perks of accepting crypto as a payment, is the cam girls don’t have to pay the basic service fee for launching their videos on the site. This will in turn, bring many more “spankgirls” to the website and increase revenue for the company, the girls, and the crypto market. This will rid the middle man “banks” and give less of a headache to the companies as well as the girls who make a fraction from traditional currency.

“Fellow performer Molly Mae Meow, who has been camming for more than six years, said she too makes much more money on SpankChain, which only charges performers 5 percent of their earnings compared to the standard 50 percent across the industry.”

Evidence/Argument: https://www.forbes.com/sites/markhay/2018/10/31/cryptocurrency-finally-takes-off-in-the-porn-industry/#2e0fd0f5629e

“Cryptocurrency systems have a lot to offer the adult industry. Because credit card companies and banks consider porn a high-risk sector, rife with disputed transactions, adult sites pay considerably more in fees and workaround costs to process payments than most industries. VogoV’s materials claim these fees account for up to 13% of the cost of a digital porn purchase, but Maetnyi thinks it can go up to 19%. Crypto systems, argues Najva Sol, vice president of community at SpankChain, offer a clear record of definitive transactions that “mean that no one can consume a performer’s content and demand a fake refund or claim they’ve been frauded.” They also bypass the fees and infrastructure of banks, cards, and payment processors, radically reducing the cost of selling content digitally.”

Status: true - while this is a valid claim, crypto is new to the adult entertainment biz. There are still so many loopholes that have to be configured for things to run smoothly in the ecosystem. Many things haven’t even been touched upon, when digging deep into how tokens will be used within that ecosystem. This is still in “beta version” and has to be tested with various companies to see how things will run. Companies should be aware that this may cost them money if there business plan isn’t fully intact.


#11

Hi @asusarla! Quick feedback. The claim “crypto is taking off in the adult entertainment arena!” would actually get Flagged on TruStory for being too ambiguous. There is no clear definition of what “taking off” means. Different people could interpret this very differently. Some might compare it to the overall adult entertainment market. Others might compare it to dApp market. Some might think 10x growth is considered “taking off”. Others might think 3x growth is considered “taking off”… you get the point.

Moreover, the evidence you posted say “According to recent market research conducted by the porn studio VogoV, as of 2018 about 470 adult video sites, 50 webcam platforms, and 35 sex shops worldwide accept cryptocurrencies (crypto for short) as a form of payment. That may seem like a lot, but relative to the overall size of the sprawling adult industry, it really isn’t.

can you update your claim to be more specific and then find supporting or falsifying evidence?


#12

yes! absolutely! is the point to try our best to falsify our claims?


#13

if they are false, then absolutely. If they are not, then we should also have reasoning and evidence for why it’s true.


#14

Claim: Event-Stream a widely Used NodeJS Module infected by a rouge developer to Steal Bitcoins

Source : https://thehackernews.com/2018/11/nodejs-event-stream-module.html

Event-Stream one of the most popular NPM packages being used by millions of web apps with around 2,000,000 downloads . It’s a widely used #NodeJS module. Rogue open-source developer infected it with a malicious code to steal bitcoin from wallets. Malicious module has been designed to target people using BitPay’s open-source bitcoin wallet app, Copay, a company that incorporated event-stream into its app.

Evidence/Argument: Bitpay has released a statement below confirming it

https://blog.bitpay.com/npm-package-vulnerability-copay/

Status : True


#15

Claim: The Lightning Network’s Total Capacity, Capacity per Channel, and Number of Channels have reached all time high’s in November, and their fastest rate of growth to-date.

Evidence/Argument:

• Despite the crypto sell off, Lightning Network hit a record $2M capacity (meaning $2M in bitcoin was locked up in payment channels on the network)
• In 10 days, the total network capacity has grown by 300% in BTC channel value.

Status: Valid

Source:
https://bitcoinvisuals.com/lightning
https://usethebitcoin.com/lightning-network-expansion-amidst-market-drop/
https://www.ccn.com/2-million-lightning-network-hits-major-milestone-despite-bitcoin-price-decline/
https://1ml.com/

Insider Info:
It is one relatively large holder who wants to support the LN!


#16

Claim: “An NPM package with 2,000,000 weekly downloads had malicious code injected into it. No one knows what the malicious code does yet.”
Evidence/Argument: https://github.com/dominictarr/event-stream/issues/116
Status: https://twitter.com/garybernhardt/status/1067112144330604544
Source: https://twitter.com/garybernhardt/status/1067111872225136640

Related claim: “It seems this was targeting the Bitpay copay package. Possibly to steal from wallets.”
Evidence: https://github.com/bitpay/copay/issues/9346
Status: Valid
Source: https://twitter.com/nullpointr/status/1067125608495357952

Further evidence: https://www.coindesk.com/fake-developer-sneaks-malicious-code-into-bitpays-copay-wallet


#17

Claim: “Aragon liquidated $1.5M of ETH and XMR so they can operate for at least a year without having to worry about the market. They are long Ethereum.” Invalidatable: “Expect other ICOs to do the same soon.”
Evidence/Argument: https://twitter.com/AragonProject/status/1067349803695263750 + https://etherscan.io/tx/0xb7bfbc84a7f7524cf42a8cba01e2c6be5de4b37c1d84162fe39993b408ab24fa
Status: Valid, except for the invalidatable part.
Source: https://twitter.com/lawmaster/status/1067364469993611264


#18

Claim: In 2019, Nasdaq and NYSE plan to introduce a Bitcoin futures market subject to regulatory approval.

Evidence/Argument: https://www.ccn.com/breaking-what-crypto-winter-nasdaq-to-launch-bitcoin-futures-market/; https://ambcrypto.com/bitcoin-btc-futures-contract-by-bakkt-will-change-secs-viewpoint-on-etf-confirms-mike-novogratz/

Status: Confirmed. Although, the claim that it’s a “crypto winter” or that Bitcoin is in bear market could be falsified since I’m not sure that a bear market has been sufficiently defined for Bitcoin.

Sources: https://www.bloomberg.com/news/articles/2018-11-27/nasdaq-is-said-to-pursue-bitcoin-futures-despite-plunging-prices

This is my first TruStory post, so I welcome any feedback!


#19

wow. excellent find! good job @DanielKoff


#20

Great job! This looks good.

One feedback: in this case, the “crypto winter” part is not relevant. The article uses the term in the title just to draw attention, but they don’t specifically make a claim that it’s crypto winter :slight_smile: