Hack Week Leaves One Token Sale to Watch

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Last Week in Crypto Assets

• We have set a finer filter on token sales to watch this week, as you may have noticed. Even after hackers stole around 10 million USD from CoinDash, using a fraudulent Ethereum address, none of the projects due out this week has published its contract in advance or taken advantage of the Ethereum Name Service. CoinDash CEO Alon Muroch says they’ll survive, having raised 6.4 million USD from contributors who had received the legitimate contract address in an email. Filecoin, the one token sale we’re including in this newsletter, is using Coinlist’s new token sale platform, which only accepts funds from accredited investors, as you can read below.
• At least 152,000 ETH (32 million USD) was stolen on Wednesday from as many as three multi-signature wallets provided by Parity Technologies, an Ethereum network browser company. An attacker exploited a vulnerability in the Parity wallet to reset the wallets’ owners. Wallets affected by the hack were held by Edgeless Casino, Swarm City and Aeternity Blockchain. In a postmortem published on Parity’s website, the company says a “greater degree of community ownership over the wallet code” could have prevented the attack.
• Bitcoin’s Bitcoin Improvement Proposal 91 (BIP 91), was activated on Friday after receiving 90 percent of support from Bitcoin miners. This signal is the first step toward a soft-fork Bitcoin upgrade called Segregated Witness (SegWit). Now, 98 percent of miners must signal support for SegWit within a two-week difficulty period. The first iteration of SegWit was released in November; the current iteration is called SegWit2x, also known as the New York Agreement. Segwit2x will remove data from Bitcoin blocks, making them smaller in size and allowing more transactions onto a single block. It is intended to increase Bitcoin’s transaction capacity, which is currently limited to 1MB every 10 minutes.
• The U.S. Department of Justice and Europol on Thursday announced the shuttering of online dark web markets AlphaBay and Hansa, with U.S. Attorney General Jeff Sessions calling it “likely one of the most important criminal cases of the year.” No names of those involved or to be indicted have been released yet.
• The founder of Veritaseum, a peer-to-peer investment banking service that held a token sale in May, said it had been hacked on Monday, “possibly by a group.” The amount allegedly stolen was close to 4.5 million USD.

The Week Ahead in Token Sales

Update, July 25, 11:50 a.m. EST: Filecoin has pushed back its token sale open date from July 27 to August 7.

Looking ahead to the calendar of current and upcoming token sales on Token Tracker, Token Report was tracking two to watch, opening in the next seven days. One was Propy, a platform for real estate transactions, originally set to open on July 25 but today announced it will postpone until the second week of August. The team announced in a Reddit post that it was doing so to program additional security measures in the wake of several wallet hackings last week. That leaves Filecoin, a storage network. Below is a summary of its project, team and terms.

Filecoin
Documentation
Open Date: August 7
Hard cap: —

Filecoin is a decentralized storage network that will turn cloud storage into a market in which miners earn Filecoin tokens by providing storage to clients. In turn, clients can use their tokens to hire miners to store or distribute data. The goal is to incentivize miners to accumulate large amounts of storage to rent out to clients by having miners compete for blocks; mining power will be proportional to the amount of active storage.

Filecoin’s founder Juan Benet estimates that the amount of unused disk storage amounts to “hundreds of exabytes,” with one exabyte equaling a quintillion bytes. The Filecoin network will handle storage and retrieval requests via two markets, the Storage Market and Retrieval Market. Those who have extra storage space can rent their hard drives, single disks, racks and data centers in the platform’s Storage Market; miners with less disk space but high-bandwidth connections can get rewarded for delivering data quickly in the Retrieval Market.

Filecoin is the first project from Coinlist, a funding platform for token sales, and was built by research and development lab Protocol Labs and AngelList, a social network connecting investors and startups. Protocol Labs is also the parent of the Interplanetary File System (IPFS), a peer-to-peer distributed file system.

Filecoin’s token sale will begin on July 27 and run for an unspecified amount of time. It is only accepting registration from accredited investors. Filecoin is currently accepting applications from those who want to become an early Filecoin miner when the network launches.

Team

Coinlist founder, Benet, is the founder and CEO of San Francisco-based Protocol Labs, where he has been engineering protocols and services, including IPFS, since 2014. He was a computer science research assistant while a student at Stanford University before founding Loki Studios in 2010, where he designed and built location-based multiplayer mobile games. Before founding Filecoin, Benet advised tech startups as entrepreneur in residence at StartX, an educational nonprofit accelerator at Stanford, for two years.

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Token Report is an independent financial information service founded by Galen Moore and Peter Vessenes. Galen is a financial journalist with a background in startups, venture capital and launching news sites. Peter is a co-founder of the Bitcoin Foundation, and launched the first VC-backed Bitcoin company in 2011. He is managing director at New Alchemy, a boutique consulting and investment group based in Seattle, Wash., that is making a pre-seed investment in Token Report.​

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