Mosaic constantly monitors a wide range of sources for cryptoasset news and summarizes the most interesting items in a daily newsletter. In addition, we are now providing this weekly roundup which draws together and analyzes our favourite news and features of the week.

Mt. Gox, its trustee, and its former CEO Mark Karpelès

Mark Karpelès (second from right) announcing Mt. Gox’s bankruptcy in 2014. JIJI Press/AFP/Getty Images

Mosaic’s Friday feature of the day was “Mt. Gox and the Surprising Redemption of Bitcoin’s Biggest Villain” by Jen Wieczner (Senior writer @ Fortune Magazine, Wall Street). The article gives a brief overview of the events following Mt. Gox’s bankruptcy in 2014 and the legal proceedings following Karpelès’s arrest in August 2015 on charges of manipulating electronic data related to the internal Mt. Gox account called “Willy Bot”.

The article deals with Karpelès’s attempt to deal with the surge in the bitcoin price following the bankruptcy which, due to Japanese bankruptcy law, would have made him a billionaire and left Mt. Gox creditors without any exposure to any of bitcoin’s subsequent appreciation. Fortune’s feature on Karpelès coincided with news that Mt. Gox’s trustee had transferred over 16,000 BTC, worth around $144m, and 16,000 BCH, worth $21m, from the trustee’s vaults to an unknown address, sparking fears of a large sell-off. According to CryptoGround, which monitors Mt Gox’s remaining wallets, the bitcoins were removed from four separate addresses in increments of approximately 2,000, with 0 BTC remaining in each wallet that the funds were extracted from.

The wallets are under the control of the exchange’s bankruptcy trustee, Nobuaki Kobayashi, a Tokyo lawyer who also revealed in March that he had sold about $400 million of Mt Gox bitcoin and bitcoin cash in September of 2017. Kobayashi is tasked with liquidating the tokens on behalf of Mt Gox’s creditors, most of whom have not recovered their funds after the exchange closed its trading operations in 2014.

2. EIP-999, DNS vulnerabilities, & smart contract bugs

ETC/ETH: started at less than 0.5%, to almost 30% then back to less than 10% in a few months. Source: Alex Van de Sande

Mosaic’s Wednesday feature of the day was “Avoid Evil Twins: every ethereum app pays the price of a chain split” by Alex Van de Sande. He offers his take on the Parity multi-sig wallet fund recovery issue and the Ethereum Improvement Proposal (EIP) 999 (EIP-999). EIP-999 proposes restoring access to funds made inaccessible due to an issue with Parity’s multi-sig wallets. In November a bug in Parity’s multi-sig contract was exploited by an anonymous user who rendered 587 wallets holding 513,774 ETH inaccessible to their owners.

Those in favor of the EIP-999 argue that users of Parity’s multi-sig should regain access to their funds, whilst those against the EIP believe that a hard fork cannot be justified for such an issue. A non-binding coinvote was carried out recently on Etherchain with the results for the question “Do you support EIP 999 — Restore Contract Code at 0x863DF6BFa4469f3ead0bE8f9F2AAE51c91A907b4” being: 39.4% YES; 55.0% NO; 5.6% DON’T CARE.

Van de Sande has released two further articles on the EIP-999; one which explores a way to use the future reduction in ether issuance to deal with issues like this in the future and the other which presents a novel way to prevent chain splits. Alongside the debate over EIP-999, there was news of a DNS vulnerability which allowed hackers to steal funds from MyEtherWallet and a batchOverflow bug in Ethereum token smart contracts — both which exemplified the pressing need for improved security practices and more smart contract-security research within the cryptoasset space.

3. Bitcoin and token pre-sale data science

We at Mosaic are always interested in discovering novel ways to analyze and visualise blockchain data and trends and the following two articles do a great job of doing just that. “Ethereum Presale Dynamics Revisited” by hasufly builds on the research Preston Byre has done on studying bitcoin inflows during the Ethereum presale. Moreover, Dhruv Bansal from Unchained Capital released “Bitcoin Data Science (Pt. 1): HODL Waves” where he studied the transaction history of the Bitcoin blockchain — namely how ownership trends (amount of bitcoin held by a wallet, time said bitcoin is held, etc.) change over time.

In “Ethereum Presale Dynamics Revisited” hasufly argues that the bitcoin inflow chart for the Ethereum presale looks “almost too perfect for an uncoordinated effort of several thousand contributions over two weeks, especially compared to charts from other fundraisers like Kickstarter, Swarm or Tezos ICO”.

This is compared to the more “imperfect’ inflow graphs of other ICOs and online fundraisers (see below).

Inflow chart of “random kickstarter”. Source: Prestonbyre.com

Inflows into Tezos ICO. Source: Prestonbyre.com

The article posits that the shape of the inflow chart for the Ethereum presale chart can be explained by analyzing the strategies of actors likely involved in the crowdsale, such as: ‘speculators’, ‘actual users’, ‘early contributors’, and ‘insiders’. hasufly argues that insider-investing is incentivized in ICOs — and the Ethereum presale in particular — which has created the long-tail risk of insiders of any given ICO controlling larger amounts of the token’s supply than they are known to be.

The diagram is an annotated image of the UTXO age distribution (local price peaks are labelled). The solid white lines trace “HODL waves” — a pattern of newly recent Bitcoin aging into each subsequent band, indicating that its new owners are HODLing. Source: https://blog.unchained-capital.com/bitcoin-data-science-pt-1-hodl-waves-7f3501d53f63

Dhruv Bansal’s article introduces the concept of the “HODL Wave”. Dhruv defines a “HODL Wave” as “when a large amount of Bitcoin transacts on the way up to and through a local price high, becoming recent BTC (1 day — 1 week old), and then slowly ages into each later band as its new owners HODL”. The wave is visualized as a pattern of nested curves. The “HODL Wave” presents a novel way to track behaviour of bitcoin holders over time and we look forward to further work done in the area of bitcoin data science.

End of weekly roundup

We hope you have enjoyed reading about some of our favourite features and news pieces for the week April 23–29. Subscribe to our daily newsletter to stay up-to-date with cryptoasset news. Click here to visit our website.

This article is intended for informational purposes only. The views expressed herein are not and should not be construed as legal or investment advice or recommendations. Recipients of this article should do their own due diligence, considering their specific financial circumstances, investment objectives, and risk tolerance before investing. The individuals contributing to this article have positions in some or all of the assets discussed. This article is neither an offer, nor the solicitation of an offer, to buy or sell any of the assets mentioned herein.