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Bitcoin just misses major exploit – are alts next?

Bitcoin just misses major exploit – are alts next?

 

A bug has just been fixed that could have crashed older versions of Bitcoin Core, potentially bringing the network to its knees.

 

Bitcoin Core 0.16.3 was released on 18 September, patching a bug that could have caused mayhem for bitcoin. The update reads:

 

Security issue CVE-2018-17144: it was discovered that older versions of Bitcoin Core will crash if they try to process a block containing a transaction that attempts to spend the same input twice. Such blocks are invalid, so they can only be created by a miner willing to sacrifice their allowed income for creating a block of at least 12.5 BTC (about $80,000 USD as of this writing). This release eliminates the crash, allowing the software to quietly reject such invalid blocks.

 

This is pretty concerning. By sacrificing a block of coins, a rogue miner could have badly disrupted the network by preventing transactions from completing. The cost of that to the miner would have been around $80,000. That is not a large amount of money to destroy billions of dollars of value, which is what would have happened in the event of an exploit: traders would have sold immediately, crashing the market.

 

In fact, a smart miner could have taken out a leveraged short position on BitMEX, then attacked the network and made many, many times his ‘investment’ back.

 

For now, we can breathe a sigh of relief. Two problems remain:

  1. This was a zero-day exploit that could have destroyed Bitcoin’s utility and crushed its price. It was spotted before harm was done – this time. This particular problem was introduced back in 2017 and quietly sat there for 18 months before it was noticed. Are there other serious exploits that could be discovered by less benign researchers?
  2. Many alts are based on Bitcoin’s code. The same vulnerability is likely present in a large number of them – and now it’s publicly known. Expect an attack on any major alt that doesn’t hustle to fix it really fast.

 

Please update your nodes to 0.16.3 as soon as possible!

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Bakkt 2: the future (of bitcoin)

With apologies for the title, Bakkt – a major new bitcoin infrastructure project that seemingly came out of nowhere in August – has published a second update about what it’s planning to do. TL;DR it’s good stuff for crypto.

 

Early in August, the same week the SEC gave the bitcoin markets a kick in the guts by postponing their decision on the SolidX-VanEck ETF, Bakkt entered the scene with its announcement interview in Fortune magazine. The initiative had been developed under strict secrecy for over a year, for launch in November this year.

 

At a time of pessimism over crypto and uncertainty about an ETF, Bakkt is an exciting proposition. Backed by Microsoft and Starbucks (for their experience with digital payments, not for a way to buy coffee with bitcoin), the intention is to drive bitcoin adoption in both the financial sector and, ultimately, in retail.

 

As the Fortune article explains: ‘This morning Intercontinental Exchange—the trading colossus that owns the New York Stock Exchange and other global marketplaces—announced that it is forming a new company called Bakkt. The new venture, which is expected to launch in November, will offer a federally regulated market for Bitcoin. With the creation of Bakkt, ICE aims to transform Bitcoin into a trusted global currency with broad usage.’

 

Bakkt have gone about their business the right way, quietly building the tech and infrastructure and only announcing it shortly before launch, rather than looking to market vapour. Their updates have not been frequent or numerous. This article is only the second from the project itself, and consequently it’s worth a read. (You can read the first, which is about price discovery, here.)

 

As both the first and second article are at pains to state, physical delivery is a critical part of what Bakkt are doing. This is a vital element of price discovery and creating a more stable, liquid and active market for bitcoin. As a first step, Bakkt are offering bitcoin futures, combining existing financial market infrastructure and regulation with the tech to store bitcoin safely. Among other things, that means they’re not offering leverage. ‘Futures’ in this instance isn’t a paper contract, the kind of Monopoly money that’s shuffled around between traders in vast quantities every day. This is not like precious metals – the futures market for which exceeds the actual quantity of gold and silver many, many times over. Buy a Bakkt bitcoin future and it involves purchasing an actual bitcoin: that demand is passed through to the market.

 

Bakkt’s aim at this point is to serve institutional finance by providing them with the infrastructure they need to buy and sell bitcoin within the necessary regulatory framework. We know that’s something for which financial organisations have been crying out, as they see a new and exciting asset class get away from them.

 

We’ll know more in just a few weeks, but this is a great development for crypto. So, while the ETF would be nice, what Bakkt are doing makes it a little less important.

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Tuesday Inferno market report

More turbulence on the markets – and it’s not over yet.

 

We’ll start with a brief sketch of the last week in the bitcoin markets, and then move on to some of the wider factors in play as we eye the next month or so.

 

Bitcoin hit a local low 10 days ago after the crash from $7,400, bottoming at $6,120 (Bitfinex). Since then it has made two successive higher lows, although yesterday’s was only just higher: $6,170 on 11th, before a mini-rally to just under $6,600, and then another fall to $6,203 a few hours ago, after another surprise $200 drop.

 

Moving out to the one-day chart – our preferred timeframe for the bigger picture – we see BTC is drifting in a neutral-to-bearish way. Volatility is decreasing, as is clear from the size of the swings in price over the past seven or eight months. Zoomed out, the bitcoin chart looks like the path of a bouncing ball, losing energy and momentum every time it touches the $6k floor.

 

For all that, we can’t call whether this bear market will end with a bang or a whimper: a final capitulation and hard rally, or a slow attenuation before price gradually picks up. Almost from day to day sentiment changes, oscillating between gloom and excited expectation. Both, clearly, have been misplaced each time – so far.

 

The month ahead

Looking at some of the external factors in play, another decision by the SEC on the VanEck-SolidX bitcoin ETF is due on 30 September. At this point, most traders have probably priced in another delay. The final decision may well be postponed until the spring, though there are no guarantees. That will, as we and many others have commented before, fundamentally change the game in terms of investor confidence and inflow of money.

 

Before that, we have the expiration of CBOE futures tomorrow – something analysts have previously noted as a catalyst for significant downward price movements. Then there is the meeting of MtGox creditors on 26 September with the exchange’s trustee, at which he will update them on the assets held. Creditors will have another month to register their claims. This could potentially see BTC sold by creditors receiving funds back; however, it does mean the full 160,000 BTC held by the trustee won’t be dumped at market price.

 

Thus there are numerous factors that hint at considerable volatility over the coming weeks, likely compounded by the lower than usual trading volumes.

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EdenChain: blockchain protocol focused on practical enterprise use and security

Token: EDN
Price: 1 EDN = 0.06 USD
Bounty: Available
Platform: Ethereum
Accepting: ETH
Minimum investment: 100,000 USD

About

EdenChain is a Korean project that is aiming to build a platform for the enterprises of tomorrow. The ICO hard cap is USD $24 million. Through hardware integration, EdenChain targets a balancing act between leveraging the strengths of public blockchains and a high level of scalability, and meeting the security demands of enterprise companies.

The EdenChain platform allows any user to create a marketplace, attach their assets and trade them using cryptocurrency, all without the need for a third party. They have already introduced their first platform, HelloEden, which includes dedicated support in terms of technology development, as well as in business areas such as legal and marketing/PR.

Protocol – Hyperledger Sawtooth

Hyperledger Sawtooth is considered one of the most promising code bases. Among early companies already using Hyperledger Sawtooth are telecommunications giants Huawei, which is building a decompiler for the software, as well as T-Mobile and Amazon.

Sawtooth includes an advanced parallel scheduler that splits transactions into parallel flows. Based on the locations in state which are accessed by a transaction, Sawtooth isolates the execution of transactions from one another while maintaining contextual changes. This means that when possible, transactions are executed in parallel, while preventing double-spending even with multiple modifications to the same state – providing a substantial potential increase in performance over serial execution.

Main features of EdenChain

  • Parallel transactions via namespace technology allow transactions per second to grow in a linear manner.
  • Secured on-chain and off-chain interoperability enables smart contracts to interact securely with external data sources and modules.
  • EdenChain also aims to provide a comprehensive blockchain and token platform for applications across the board, including IoT, Energy, AdTech, P2P finance, Healthcare and many other sectors.
  • Supports Solidity, currently the most popular smart contract language.
  • Easy integration into existing business via RESTful API.
  • EdenChain has signed a strategic partnership with Tomochain that will allow them to deepen their footprints in Southeast Asia and Vietnam.

Tokens

An exchange listing date for EDN tokens is expected in Q3 2018. The total supply is 1 billion EDN (no more tokens will ever be created) while circulating supply is 400 million EDN.
EdenChain offers a bounty/income – node participants are compensated through rewards for staking their token or running their Eden nodes. Enterprise users can secure their own nodes or use the rewards to offset part of their running costs. The team will also be giving 400 EDN each to the top 5 posts that have been upvoted and shared through social media.

Roadmap

Q4 2018
EdenChain ICO; 3rd Developers meet-up; CleanDeal Service Launch; EdenChain Real Service PoC; Partnership with major blockchain network; Testnet for OpenEdenChain Platform; Custom Coin Issuance Service; EdenChain API Service; Mobile Wallet.

2019 Q1
ICO continues; Blockchain Conference; 4th Developers meet-up; Partnership with major blockchain network; Platform migration to Cloud; E-Oracle Network Launch; EdenChain Optimization; Mainnet Launch.

Conclusion

EdenChain aims to create the best possible solution for solving global and technical business issues – starting with performance and security. Their approach to solving efficiency issues without sacrificing user security could turn their platform into one of the most appealing up-and-coming projects out there. But at the same time, it is extremely ambitious and their attempt to tackle multiple issues and markets all at once could end up being overwhelming.

Resource links

Website
Twitter 
Facebook
Telegram
Reddit

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Get your hot Goxcoins now!

Back in 2014 the last bear market was kicked off in style by the collapse of MtGox, the largest bitcoin exchange around at the time. Having topped out in a classic bubble at the end of 2013, the market was just looking for a reason to confirm its hunch that BTC was still badly overvalued. Gox closing its doors and taking 850,000 BTC with it did the job.

 

Since then Gox has continued to cast a long shadow. The recovery of 200,000 ‘mislaid’ coins held out some hope that users would one day get some money back, and indeed that has now – apparently against all odds – come to pass. (Under Japanese law typically everything would be sold to repay creditors rather than assets being distributed directly, but a special ruling has been made in this case after the crypto world reacted with dismay after the trustee cashed out a tranche and ostensibly crashed the market. Gox will now be dealt with as a civil rehabilitation case rather than a bankruptcy.)

 

Around $1 billion of funds are at stake – the balance of the 200k BTC left. These will now be distributed pro-rata to Gox holders who sign up with the online claim filing system that has been set up (see https://claims.mtgox.com/assets/index.html). The deadline for submissions is 22 October.

 

160k BTC incoming

The reason this is now featuring again in the crypto news is because, after the price drop that took place a couple of weeks, the crypto world is hyper-attuned to the impact of whales cashing out.

 

What will be the impact of 160,000 BTC being distributed to old holders? In BTC terms, they will receive just a sixth of what they lost, but the massive bull market of 2017 means they will probably break even in fiat terms.

 

Dire warnings have been given that these coins will flood and crash the market, and that is certainly possible. Many people may just want to pull out their capital and walk away. Others, naturally, with continue to hold. At this point in the market cycle, bitcoin is a gift – whatever the short-term fluctuations, the medium term looks good as BTC builds a solid base around $6k.

 

As ever, the most likely scenario lies between the extremes. There may be some impact on the market of sellers who just want their cash. But you also have to factor in a large number of bitcoiners who have stuck around since 2014, albeit with burned fingers, and are pleased to get this windfall. True believers will put it in cold storage and carry on hodling.

 

Inferno’s opinion: this event will be priced in long before the distribution takes place. With everything going on in the crypto world right now, old Goxers selling coins here and there will just be background noise against the broader signal.

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Ten Ways to be an Emotional, Unsuccessful Crypto Trader

Want to lose your money, pride, reputation, friends, family and home? Just follow these simple rules.

 

In a Bull Market, everyone’s happy. There was a time last year when no one who had bought and held bitcoin had lost money. When the price makes ATHs on a weekly basis, it’s all good.

 

Then came the Bear. Nine months into the crypto winter, holders and traders are feeling the pinch. Many have bailed already, nursing burned fingers and wounded pride. Others are wary of further falls, terrified the market might plummet and wipe them out.

 

These are the times that test a person. Fortunes and futures are forged in a bear market like this one. But it’s almost impossible to hold your nerve and make good decisions. The markets are driven by emotion, and it’s human nature to get caught up in that. Staying objective can feel almost impossible.

 

What not to do

Rather than give you advice about how to act under this pressure, we thought it would be easier to describe the behaviours that will lead to loss of funds, pride, reputation, and possibly – if you really take them to heart – your friends, family and home.

 

So if you really want to look back in five years and know that things could have been very, very different, follow these ten easy rules:

 

  1. Trust your instincts. Your feelings never lie, right? That creaking noise downstairs really was an axe murderer; that brief eye contact with the girl at the coffee shop definitely means she loves you; and if it just kind of feels like time to sell, it is.
  2. Follow the herd. There’s safety in numbers. If you’re uncertain which way the market’s going, just do what everyone else is doing.
  3. Listen to the experts – people like Warren Buffett, Jamie Dimon and Agustin Carstens. These guys have extensive experience in investment and banking in the conventional financial sector, so they are ideally placed to comment on completely new technological and economic paradigms that lie far outside of their comfort zones and threaten their vested interests.
  4. Learn to read charts properly. If it’s going up, that logically means it’s going to continue going up. If it’s going down, it’s going to keep going down. Just like when you look out of the window and it’s raining, it means it’s going to keep raining for ever.
  5. CNBC is a better source of informed opinion about the crypto markets than anyone else. They’ve been doing this for literally months.
  6. Some guy you’ve never met on Twitter has your best interests at heart. If he tells you now is the time to buy a coin, it’s because he wants you to be rich. If he speaks with authority, it’s because he’s getting his information from reliable crypto insiders.
  7. Margin trading is an excellent way for newcomers to make enormous gains. Leveraging your position also amplifies your emotional attunement to the crypto markets, making them easier to read – kind of like tightrope walking without a safety net heightens your sense of balance.
  8. Forget HODLing. Those who can, trade. Look at it this way: if you have 10 BTC and you HODL, in ten years you’ll have 10 BTC. But if you trade, it could be 1,000 BTC. Only fools HODL.
  9. Bear markets are NOT an opportunity. No one ever succeeded by buying low, selling high.
  10. You don’t have time for due diligence, and it will be fine anyway. ICO issuers are by nature competent, honest and hardworking people who have a robust and unique business plan to disrupt billion-dollar markets. Invest or miss out.

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Friday Inferno market report

Just as two weeks ago the market’s confidence turned to dismay, this week its pessimism was steamrollered with a $400 leap in price. What can we expect from the week ahead?

The main purpose of the market, said American investor Bernard Baruch, is to make fools of as many people as possible. That happened last week with traders’ near-universal confidence that the rally to $7,400 would continue, and it apparently happened again as sentiment turned bearish across the board with the drop to $6,100.

It’s a tough time to be a bitcoiner, especially a new one, given the mixture of hope, dashed expectation and market manipulation we’ve seen in the last couple of weeks. Whether you were long or short, there were surprises, and there can’t be many traders who called both the top and the bottom profitably.

At this point, we’ll zoom out to the daily, where the larger pattern becomes clear.

Since mid-January, when a large proportion of the froth had come off the bitcoin market, BTC has been trading in a tightening wedge. The bottom of that wedge has been the $6,000 zone and just below. Bitcoin has descended to and come off that area no fewer than five times now.

The upper bound of the wedge has fallen from $12,000 down to around $7,000. Bitcoin has risen to this level and then fallen four times.

 

Tightening range

With each oscillation, the swings in price get smaller. If the pattern continues, it will run out of time in the last week of October, when the top and bottom lines cross at around the $6,500 mark. At that point, the price has to cross one or other line. Thus we have just five weeks before this stage in the market cycle finally resolves, one way or the other.

 

 

But of course, it won’t take five weeks. These things rarely go all the way to the end. Traders see the writing on the wall and collectively make a decision before that. What we’re looking for is a convincing movement above or below the bounds of that triangle (currently $7,300 and $6,300, respectively), with volume. Price may rise or dip outside of it briefly — if so, be cautious, because that doesn’t mean it won’t reverse and end up going the other direction. These ‘fake-outs’ are common. We’ll only know for sure with hindsight, but look for the volume as well as the magnitude of the movement: together they indicate how committed traders are to the move.

At the time of writing, RSI on the 4h reads almost 70, heading into overbought territory, but appears to be taking a pause and is possibly levelling off. On the daily, momentum is gaining upward pace but is not yet over the 50 mark, so there’s plenty of room to go.

 

ETH capitulation by ICOs?

The same returning optimism is not true of ETH, which has seen very heavy selling in recent days. Almost 300,000 ETH has been sold in the last month by ICOs dumping their holdings. Trustnodes reports that 160,000 ETH were sold in just 10 days. This has always been a risk for the Ethereum ecosystem, as critics have warned: it’s one thing to collect tens of millions of dollars worth of ETH in your ICO, but at some point, you’re going to have to cash out to pay bills. And if the market is crashing, you need to sell fast to make sure you have enough fiat to continue work. Then it just becomes a huge competition between ICOs to see who can cash out fastest and get the least-worst prices for their ETH. Right now it looks pretty bleak for ETH, though it saw a strong bounce from its recent low just yesterday.

So the picture — at least for bitcoin — is looking up. Mike Novogratz, CEO of Galaxy Digital, just tweeted his opinion that the bottom is in. The next decision by the SEC on the SolidX-VanEck ETF is due at the end of September, which will prove significant one way or the other.

But one last warning. That big Silk Road wallet that just sent a big chunk of coins to Bitfinex and likely sparked the last crash? There’s plenty more where that came from.

Breathe.

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Inferno Poll: what will BTC price be at the end of the year?

Back at the end of 2017, the predictions were outlandish. $50,000, $100,000, $1 million BTC by the end of 2018.

 

Even when the bear market was well under way, we still saw plenty of predictions for an ATH (all-time high) for bitcoin before the year was out, if not higher – though the six-figure forecasts started to disappear.

 

At the end of June, BitMEX CEO Arthur Hayes was still publicly standing by his $50,000 prediction for the end of the year. Around the same time Tom Lee, co-founder and head of research at Fundstrat Global Advisors – someone with some track record of success in these matters – reiterated his earlier claim that bitcoin would end the year at $25,000. And in June Tim Draper, who famously purchased a large tranche of bitcoins from the FBI’s raid on the Silk Road during the last bear market in 2014, said he too expected $25,000 by the end of the year – and $250,000 by 2022.

 

If there’s one thing we’ve learned about crypto, it’s that the picture can change in an instant. As the year wears on, however, those predictions of $25,000 are looking less and less likely. (Admittedly, some were predicated on the SEC approving one or more bitcoin ETFs in the near future, and America’s regulators haven’t exactly been racing to make that happen.) But the question remains: What will one bitcoin be worth when midnight on 31 December 2018 rolls around?

 

With a little over a hundred days to go, we thought we’d hold a poll of our own.

 

How much do you think BTC will be worth at the end of the year?

  • <$3,000
  • $3,000–$5,000
  • $5,000–$6,000
  • $6,000–$7,000
  • $7,000–$8,000
  • $8,000–$10,000
  • $10,000–$12,000
  • $12,000–$15,000
  • $15,000–$20,000
  • Above the ATH

To cast your vote, please use this Google Form. We’ll keep the poll open for a week, after which we will publish the results and the insights we gain from it. Thank you for your participation!

 

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Every airdrop at your fingertips

Airdrops can be a lucrative way to build your crypto portfolio or gain additional income, thanks to the fact that they have become so popular among crypto projects and the community. The problem is, there are now so many that it’s easy to miss even the big ones. Given that some can be worth tens or hundreds of dollars, it’s worth knowing when they’re happening. A new website, TopAirDrops, makes sure you don’t miss anything.

 

Crypto marketing takes many forms, from quality explainer videos to scammy Twitter posts. Some is effective, some annoying. The one kind that everyone loves, however, is airdrops.

 

Airdrops became popular over the course of the last year as ICOs sought to attract attention in what had become a very crowded market. In short, an airdrop is a free distribution of tokens to members of a new or established crypto community. The criteria for getting tokens might be signing up on Telegram or reposting a tweet, or it might be nothing at all — the tokens are just sent to addresses on the blockchain that meet the right conditions.

 

The advantage of this for ICO projects is that they gain lots of free exposure — hundreds or thousands of potential investors receive the token and have the opportunity to find out more about the crowdsale. The more investors, the more money they attract for marketing and development. And, as importantly, the better token distribution they will have. For the recipient, the benefits should be obvious: free digital cash, in return for little or no work at all.

 

Never miss another airdrop

 

In 2016 and early 2017 it was relatively easy to keep up with the different airdrops going on. There weren’t many. With the explosion of ICOs last year and the growing popularity of airdrops, it became almost impossible to participate in every single one. Airdrops now happen on a daily basis, across many different blockchains (Ethereum, Ethereum Classic, Neo, Waves, EOS…). It’s too much work to keep up with them all.

 

The good news is that you don’t have to, because TopAirDrops does it for you. The site gives you details of current and incoming airdrops, information about the platform used and conditions for claiming them, even approximate USD value and a rating for the project.

 

ICO issuers can register their airdrops on the site, immediately informing a large community and gaining awareness and potential investment.

 

Simply head over to https://topairdrops.io, and take a look at what’s coming. You’ll find further information about each project, including links to the official site and white paper, as well as instructions for participating.

 

TopAirDrops has a lot of other new features on the way, as well as its own token for powering a complete ecosystem of services. So stay tuned, and enjoy the airdrops!

 

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Decentralised dollars on the blockchain

It’s finally happening: more and more companies are launching dollar-backed crypto tokens, meaning the Age of Tether might finally be coming to an end.

 

Let’s face it: fiat isn’t going out of fashion. The Bitcoin Faithful might rail against the Almighty Dollar and its history of depreciation since America left the gold standard, but it’s still the reserve currency of the world (and, as it happens, the currency in which most holders value their BTC). Whatever the long-term fate of the dollar and its fiat cousins, it’s not going anywhere just yet.

 

But the conventional fiat world doesn’t interface smoothly with crypto, thanks to the frictions and costs of the banking system. That’s where crypto dollars come in: tokens that are backed by fiat reserves but move around the world as easily as any other crypto coin.

 

Here at Inferno, we’ve never been hesitant to show our suspicion of Tether, currently the foremost such ‘stablecoin’. Tether have never been transparent about the dollar reserves that supposedly back their USDT token, leading many critics to claim it’s not fully backed at all and that Tether have been printing money – effectively running a fractional reserve. (For our part, we believe the facts are better explained by Tether printing unbacked USDT, using them to buy BTC on Bitfinex, then selling those bitcoin on different exchanges for USD with which they retrospectively back the USDT. Very sneaky if so.)

 

And so we were very happy to learn that TrustToken were getting in on the act with their TrueUSD token. This is also a stablecoin, backed by dollars, but TrustToken don’t hold any funds themselves – unlike Tether. They use multiple third parties, who have fully audited accounts, and the system is governed by smart contract for transparency. This approach removes the centralisation and opacity of Tether’s method, and we hope they will be rewarded for doing what Tether should have been doing from the very start.

 

But that’s not all! Only yesterday the Winklevoss Twins announced that Gemini – their regulated exchange – would be launching the Gemini Dollar. Billed as the ‘world’s first regulated stablecoin’ (by the Winkies, anyway) this is an ERC20 Ethereum token, again backed by real dollars, that can be cashed out for the real thing on the Gemini exchange.

 

And there’s still more! Also yesterday, startup Paxos announced it was launching a fully-backed dollar token, regulated by the state of New York – apparently competing to beat Gemini Dollars to the punch.  

 

Well, we don’t care who was first. We’re just pleased we’re seeing more and more options for dollar-backed crypto tokens. The easier it is to send money around the world and to get into and out of crypto, the faster the crypto economy can grow. We’re expecting the fiat-backed token space to get pretty crowded in the future. And that will be great for everyone.

 

Except Tether.

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