Hackers have devised a new way to steal your cryptocurrencies. This time, they are running a massive scanning campaign to pick out Ethereum wallets and miners with a specific vulnerability.

Per reports on ZDNet, crypto hackers are targeting Etherum wallet and mining equipment going through devices with an exposed port 8545, the standard port for the JSON-RPC interface — a programmatic API that sits on the local device and can be used to query for mining-related information.

Ethereum developers had warned users about the dangers of exposing the JSON-RPC interface when using mining equipment and Ethereum software, instructing users to enable a password for the interface or activate a firewall to filter internet traffic coming to the vulnerable port.

By design, the JSON-RPC interface doesn’t come with a default password. It’s dependent on users setting one, which they rarely do. For Ethereum wallets or mining equipment whose port is left exposed on the internet, hackers can send commands to the API and remotely transfer funds out of the wallets.

The report states that mining rigs producers and Ethereum wallet developers have done their bit to limit the damage caused by this problematic interface by warning users of the need to add a password. Others have gone the extreme route of removing the interface altogether, but since this wasn’t a united effort, the problem persists.

While there had been plenty of Ethereum scanning campaigns over the last two years, this is the first time scans have been reported in a bear market. In fact, the report cites data from Tory Mursch, co-founder of Bad Packets LLC, who told the news outlet that the scan campaigns tripled in December, compared to last month, when prices were stable.

“Despite the price of cryptocurrency crashing into the gutter, free money is still free, even if it’s pennies a day.”

What makes these scans hard to believe is how easy one can procure the tools needed to exploit Ethereum clients via an exposed port 8545. According to the report over 4,700 devices, mostly made up of Geth mining rigs and Parity wallets, are the most vulnerable devices exposing their interface to intruders.

Last year, hackers stole $32 million in ether through a vulnerability in Parity’s popular multi-signature wallet, leading to the development team instructing users who were holding ETH in Parity wallet clients to move their funds to a secure address.

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Bitmain, the world’s leading ASIC manufacturer, is facing major headwinds in its attempt to launch an Initial Public Offering.

According to a report published by the South China Morning Post, the Hong Kong stock exchange regulator is fidgety about approving an IPO related to the cryptocurrency market given its tempestuous nature. The market has seen many companies close shop in recent months following an unprecedented price dip that led to many cryptocurrencies losing over 75% of their value within weeks, and crypto mining becoming largely unprofitable.

On September 26, 2018 Bitmain Technologies filed a $3 billion IPO that lapses in March 2019. According to the listing rules, rejection or approval should be made within six months after all questions regarding the proposal are answered. The application lapses if the regulators take over six months to issue a response.

So far, the Hong Kong Stock Exchange has kept mum about the IPO, and the China International Capital Corporation (CICC) which is sponsoring the venture has also kept the public in the dark. Hong Kong regulators seek to have a robust regulatory framework in place to ensure that investors and other stakeholders are protected prior to the approval of a crypto industry IPO.

Bitmain currently operates Antpool and BTC.com, two of the largest mining pools on the Bitcoin network. Together, they dominate 31% of the market. The company also dominates about 75% of the ASIC hardware market. This means that a change in the Bitcoin ecosystem significantly affects its margins.

On December 10, Bitmain laid off employees at its development center in Ra’anana, Israel. It blamed the vicissitudes of the market, which impelled the company to reconsider some of its projects. The Bitmain division is Israel was tasked with developing blockchain technology, mining pools and coming up with innovative artificial intelligence solutions.

According to BitMEX Research, Bitmain is facing major issues due to the current bearish market trend, and may be incurring significant losses brought on by declining demand for miners.

Although Bitmain reportedly earned over $1 billion in profits during the first quarter of 2018, its $328 million initiative to acquire a Bitcoin Cash stash is also deemed to have backfired, and investor capital injection is now crucial for its survival.

Many cryptocurrency mining companies are wading through choppy waters following the recent market slump. One widely reported victim is Giga Watt.

The company, which provides turnkey mining services, filed for Chapter 11 in November after it was unable to pay off debts totaling about $7 million. Its creditors included electricity provider Neppel Electric, Talos Construction, the Douglas County PUD, and Schmitt Electric.

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Ebang, a crypto mining ASIC hardware producer, has suffered “significant decreases” in revenue in the second half of 2018. This development was reported in documents submitted by the company to the Hong Kong Stock Exchange (HKEX) on Dec. 20.

HKEX only requires the financial period reported by IPO applicants not to end more than six months from the day of the listing document. Following this requirement, Ebang included its financial information until the end of June 2018 in the draft documents submitted to launch its IPO.

According to the data contained in the document, Ebang saw 2.1 billion yuan ($30 billion) in revenue for the first six months of this year. In 2017, during the same period, the company reported about eight times less income.

However, in a section of the report titled “Material adverse change,” the company states:

“We experienced significant decreases in revenue and gross profit for the three months ended September 30, 2018 compared to the preceding three months ended June 30, 2018.”

Earlier this month, Cointelegraph reported that after the crypto market crash, only two ASIC Bitcoin (BTC) mining rigs remainеd profitable for a period of time.

In the document, Ebang then notes a generally positive outlook to the future, predicting an increase in revenue at year’s end as compared to 2017:

“Nonetheless, our Directors expect that we will continue to record stronger results of operations as a whole for the full year ending December 31, 2018 compared to the year ended December 31, 2017.”

This is not the first time Ebang has tried to launch an Initial Public Offering (IPO), as the company’s first application from June has reportedly lapsed.

As well, Cointelegraph reported in December that the Hong Kong Stock Exchange is purportedly also reluctant to accept the IPO of leading mining hardware producer Bitmain. The IPO application at HKEX of yet another mining equipment producer Caanan also reportedly lapsed in November.

 

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Intel has been awarded patent #10,142,098 , which pertains to a system they’ve designed which improves the energy efficiency of Bitcoin miners.

While it takes a hardware engineer to fully understand what’s going on in their patent, relevant to the discussion is the following quote:

[…] certain portions of the input message, state data, and input values to multi-stage SHA-256 engines 110, 112, 114 may be fixed to constant data values during SHA-256 hashes or during certain rounds of computation in the SHA-256 hash. Rather than providing these constants using registers, embodiments of the present disclosure hardwire these constant data values to the circuits performing SHA-256 hash, thus reducing the energy consumption compared to providing these constants using registers that may be enabled by clock signals.

Intel researchers seem to have determined that there are no optimizations that can be made at “stage 0” of SHA-256 calculations, but that the other two stages, as they call them, have ample opportunity to be optimized.

Since stage-0 SHA-256 hash involves only part of the header information but not the nonce itself, the calculation of stage-0 SHA-256 does not present an opportunity for Bitcoin specific optimization. By comparison, both stage-1 and stage-2 SHA-256 hash calculations receive input messages relating to the nonce 212 and hence present opportunities for Bitcoin mining optimizations.

The gist of it is that certain constants in the Bitcoin mining process can be embedded into the hardware itself, so there is no software or computing necessary to get the same information repeatedly. Intel claims this will reduce the amount of electricity required to mine Bitcoin blocks.

The patented architecture design “may be implemented in many different system types” and is not specific to systems which use Intel chips. The images included with the 29-page patent filing are all diagrams. It is unclear whether Intel intends to go after companies which have similar designs in production or if they are merely looking to protect future developments of this type. They mention that the type of processor being used is irrelevant to the patent’s embodiments, and they are specifically gunning for ASIC development.

Does this raise the prospect of Intel getting into the Bitcoin mining hardware business? It’s entirely possible that the company, which has been a major player in computer processing for decades, wants a piece of the action.

If they actually develop hardware that uses less energy than hardware developed by firms like Bitmain, there seems to be a good chance they will succeed in their efforts, the cost of energy being a primary barrier to reaching return-on-investment for Bitcoin miners.

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Huaren Capital had entered the Philippines’ business territory to expand its crypto mining business. But the Chinese firm has found another purpose on the sideways.

The crypto giant plans to launch a digitized version of Philippino Peso called “Digital Peso” in the first half of 2019, reported Inquirer. The coin, whose per unit value would likely be pegged to 1 Peso, would be a base currency of a proposed two-way remittance corridor between China and the Philippines.

Jeff Wang, the president of Huren Capital, confirmed the report during a press meet held on Wednesday, stating that they were speaking with potential partner-banks as well as Philippines central bank for their project. However, he refused to reveal the names of the banks, but recognize their plan for carrying the potential of reducing international transaction fees for the world’s third top remittance receiving country.

“In China, they have electronic payments systems like Alipay and WeChat Pay, so the transfer of funds is effortless,” Wang explained through a translator. “We understand in the Philippines, many Filipino citizens don’t have a bank account, and when they transfer funds from one country to another or from one place to another, there’s always a high remittance fee incurred, so we are working towards reducing that kind of cost for the average Filipino citizen.”

The blockchain tycoon also recognized Chinese people working in the Philippines as their potential customers, stating that the opportunities would also be open for them as much as they are open for the Filipinos.

Government Support

Huaren Capital has established its headquarters in Manila, the capital of the Philippines, following a successful visit of Chinese President Xi Jin Ping to the country. Wang established that the host government was open to their blockchain initiatives in the state and decided to put their company in their special economic zone.

“The Philippines regards blockchain innovation as a national strategy, providing a large number of preferential policies and services to related companies, and solving the regulatory problems faced by the blockchain industry,” he explained.

According to Wang, they are now seeking a regulatory approval for their digital peso project from the Bangko Sentral ng Pilipinas (BSP). Also, they expect to finalize their partnerships with the local banks at the start of 2019 while aiming a full-fledged launch before June.

“We hope that this will bring the Philippines to the forefront of e-commerce around the world,” he added.

The country maintains circa $33 billion of remittance inflows every year, according to a World Bank report.

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The Norwegian government has scrapped a power subsidy currently granted to bitcoin miners.

According to a report from local news outlet Aftenposten, in its state budget, the government said that cryptocurrency miners in the country will have to pay normal electricity tax from the New Year.

At the moment, larger mining firms receive the same electricity tax discount as other power-intensive industries in the country. Those with a capacity of more than 0.5 megawatts are charged only 0.48 øre ($0.00056) per kilowatt hour instead of the standard rate of 16.58 øre ($0.019). An øre is 100th of a Norwegian krone.

That means that eligible miners have been paying just 2.8 percent of the standard rate to power their rigs.

“Norway can not continue to provide huge tax incentives for the most dirty form of cryptographic output like bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally,” Norwegian parliamentary representative Lars Haltbrekken said in the report.

Now with an end to the subsidy, bitcoin miners will have to shell out higher taxes, which is likely to reduce their net profits at a time when low crypto prices are already putting pressure on the industry.

Just this Monday, U.S.-based bitcoin mining firm Giga Watt declared bankruptcy, revealing in court documents that it still owes its biggest 20 unsecured creditors nearly $7 million. That number includes claims to hundreds of thousands of dollars by two power providers to the firm.

The suggestion to remove Norway’s subsidy was reportedly proposed by the Norwegian Tax Administration, an agency under the authority of the country’s Ministry of Finance. That proposal has now been approved in the state budget and will be effective from January 2019.

Roger Schjerva, chief economist of tech industry interest body, ICT Norway, told Aftenposten:

“This is shocking. Budgets have changed framework conditions without discussion, consultation or dialogue with the industry,”

Removing the subsidy will push crypto miners to Sweden and Denmark, he argued, adding that the country mustn’t “just say no to income and work in many municipalities in Norway.”

Editor’s note: Quotes have been informally translated from Norwegian.

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Miners have been decimated by the market downturn. In response, miners have started decommissioning hardware, mothballing rigs, and even selling hardware by the pound.

Bitcoin and cryptocurrency proof-of-work (PoW) mining is a controversial topic. Mining is a process where computers continuously solve a difficult algorithm in exchange for cryptocurrency. This exchange consumes a massive amount of electricity, but also secures and processes transactions on the Bitcoin network.

This excessive consumption of electricity is intentional. Decision-making power in Bitcoin is based on the agreement and consensus of miners. By making it very expensive to gain majority control of the Bitcoin network, the coin is able to remain more decentralized and more secure from hacking.

By the Numbers

Based on estimates from the most sophisticated Bitcoin miner, the Antminer S9i, mining a single Bitcoin takes roughly 51,000 kWh, the equivalent of one day’s electricity consumption for 1700 residential homes.

At a standard electricity rate of $0.12 per kWh, mining one Bitcoin costs $6100.

That said, the recent drop in market prices is cause for concern. Lower Bitcoin prices make it less profitable to mine. Lower profitability results in less miners and the miners that remain are typically large-scale operations that can keep costs down.

Mati Greenspan@MatiGreenspan

Bitcoin hashrate is now the lowest it’s been since August. It’s still up sharply since the start of the year but it seems clear that some miners are shutting down their rigs in face of lower BTC prices.

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This impacts Bitcoin by potentially centralizing decision-making in the power of a few mining corporations. These corporations, such as Bitmain, are primarily based in China.

Such high levels of centralization could trigger another hash war as seen in Bitcoin Cash. If two major mining companies disagree on the software-development direction of Bitcoin, it could cause a fork and shake people’s trust in the cryptocurrency.

Profitability Analysis

Given current market prices, even the most efficient Bitcoin mininghardware is unprofitable for the average person. Assuming an electricity rate of $0.12 per kWh, people who own an Antminer S9i would lose $340 per year to electricity costs.

This does not even include depreciation of the hardware itself, meaning the losses are much higher than this figure. An S9i sells for roughly $550 with a two-year useful life, a depreciation rate of $275 per year, increasing the yearly loss to $615.

Assuming $0.12 per kWh / Courtesy of ASIC Miner Value

That said, mining is not dead for the major players. There are many places in the world where businesses are able to secure electricity at a fourth-of-the-average rate. In many places in China, Eastern Washington, Canada, and Iceland, businesses can purchase electricity at $0.03 per KwH or lower.

Given these figures, one Antminer S9i earns over $680 and gross profit of $405 after depreciation (however, industrial miners are able to purchase this hardware at a deeply discounted rate). Most mining facilities have thousands of these machines, allowing each facility to earn millions of dollars per year.

$0.03 per kWh / Courtesy of ASIC Miner Value

In an interview with one Siberian-based mining operation, Cyberian Mine GmbH, Chief Marketing Officer Malcolm Cannon said that the company has had to drive down costs to remain profitable in the bear market:

“The price fall means it has not become more profitable [to mine], and our customers are now opting for the new machines [ASICs] that will arrive from Bitmain. . .”

This has meant that the company has had to purchase newer, more efficient mining machines from Bitmain. That said, the raging BCH hash wars have temporarily diverted mining power from Bitcoin to Bitcoin Cash, making Bitcoin mining easier and more profitable but still not completely compensating for the fall in Bitcoin prices.

Giga Watt Inc Bankruptcy

Some miners are already feeling the heat of the market crunch. Giga Watt, a Washington-based mining service that rents and sells mining power and equipment filed for bankruptcy on Nov. 19.

In June 2017, the company conducted an ICO and raised $20 million from its token (WTT). According to the company’s whitepaper, each token “represents the right to use the Giga Watt processing center’s capacity, rent-free for 50 years, to accommodate 1 Watt’s worth of mining power consumption.”

Explained: Bitcoin Cash Hash Wars, Where the Factions Stand on the Issues
Related: Related: Explained: Bitcoin Cash Hash Wars, Where the Factions Stand on the Issues

However, the company was unable to deliver on its promises of providing these services as the cryptocurrency market took a dive following the end of 2017. Unable to deliver on its promises, investors took to suing Giga Watt for selling unregistered securities and rescission of contract.

Although many of these mining companies are privately owned, previously semi-profitable enterprises could become the next victims of the market downturn. What this turbulence spells for the centralization and security of Bitcoin, and the crypto markets in general, is still uncertain.

Calculations:

1320 watts per Antminer S9i * (365.25 days * 24 hours per day) / 1000 watts per kWh = 11,571 kWh per Antminer per year.

One Antminer S9i mines 0.2253 BTC per year, given current market conditions, mining difficulty, and block rewards.

1 / 0.2253 BTC per Antminer per year = 4.439 Antminers to mine one Bitcoin per year.

4.439 Antminers * 11,571 kWh per year = 51,364 kWh per Bitcoin.

Average electricity consumed by a residential customer: 909 kWh per month.
909 kWh / 30 days = 30.3 kWh per day per residential customer.

51364 kWh per Bitcoin / 30.3 per residential customer = 1695 residential customers.

Cover Photo by Kev Seto on Unsplash

BitMEX’s head of research, Jonathan Bier, gave a statement to Bloomberg this week that will soon be proven true or false. In regards to how the upcoming Bitcoin Cash fork would play out, Bier said that he believes that the important divide between the economic majority and the mining majority will sort itself out in rapid fashion.

“The chain will split in two, but the economy will support ABC and reject SV (Satoshi’s Vision). SV will have a low price and miners will leave it in a few weeks. That is my prediction.”

As head of research, Bier would have played an important role in the roll-out of the new fork monitoring tool that Bitmex has sponsored.

A Theory with Legs

Bier’s prediction is based on the reality of the situation rather than personal feelings regarding the technicalities of the upcoming hard fork. It is an informed and wizened view. The economic majority in a cryptocurrency is, in real terms, as important as the mining majority. There are a lot of reasons for this, not the least of which is the cost of the hardware involved in mining cryptocurrencies.

Miners take financial risks on hardware with the reasonable expectation that they will be able to earn a return. If one or the other chain is better equipped to service that result, then that will become the preferred chain of miners, and if they are within a few dozen dollars of each other in unit price, this preference can fluctuate algorithmically in ways that can have a dramatically negative effect on everyday users as difficulties rise and fall and make block times irregular.

Demonstration of this principle is not hard to find. There are many orders of magnitude more miners, pools, mining pools, and so forth contributing to the difficulty of the Bitcoin network than Bitcoin Cash’s current network as a whole. Yet, Bitcoin Cash itself (owing in large part to its architecture being almost identical to that of Bitcoin’s, with some important differences) likely has as much of a lead on the majority of other altcoins.

Some exchanges have decided in advance that they will not list Bitcoin SV at all, but they are just a few of hundreds of places that people transact in BCH. Multiple major exchanges have already made pairs including both versions of Bitcoin Cash, enabling traders to engage in pre-fork futures trading.

Other Possibilities

bitcoin cash fork
Bitcoin SV currently has majority support from miners, but will that persist following the fork? | Source: Coin Dance

While Bier’s informed opinion on the matter represents one likely outcome – that Bitcoin SV loses both economic and mining support in that order and in a short span of time – there are others.

As noted in the Bloomberg article, Calvin Ayre and other wealthy individuals – some of whom, like Ayre, own a lot of cryptos as well as mining hardware – have skin in this game. They could conceivably, by themselves and at a loss (although not in their rational self-interest), prop the SV price up for a time.

The likelihood that Ayre’s planned appeals to Bitcoin exchanges — to only list his version of Bitcoin Cash — are successful feels, well, very small. Purely to stimulate trading of the SV coin (or any trading at all) on their exchange(s) and encourage deposits, some exchanges might well list SV exclusively. It would alienate some users, but the 80/20 rule applies: 20 percent of customers make up 80 percent of many business models. In this case, some small exchanges might want that 20 percent to become SV diehards or just people looking to dump their SV coins, or some combination of both. But anything approaching a volume or economic majority? Forget about it.

A scenario that feels likely to this reporter is that both chains live on indefinitely. Whether or not either token enjoys a bullish token price across exchanges, it’s hard to imagine Craig Wright or Calvin Ayre coming back into the fold at this point, nor Roger Ver and Jihan Wu welcoming them back if they decided to do so. CoinGeek by itself has the capability to prop up the SV blockchain, and its media efforts have the capability to continually attract new users and widen the base. (Bitcoin ABC has the same capabilities utilizing a wider array of resources – Jihan Wu, Roger Ver, the coterie of major exchanges which have come out in definitive support of ABC.)

Ayre, Wright, and their sizable number of supporters seem to share a very specific vision for cryptocurrency, and it seems that only complete capitulation of their peers would be enough for them to call it quits this far in. A whole generation of Bitcoin mining hardware is soon to be obsolete with next-generation miners coming online, and this soon-to-be-resold hardware has a convenient retirement plan: mine on one or all of the latter-day Bitcoin blockchains. Effectively, a dedication or rededication of any significant amount of hash power from unexpected sources to either chain would change outcomes significantly, and this possibility relies very much, of course, on the market performance of either.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.

This post credited to ccn Image from nChain/YouTube

 

China and the USA have been competing with each other in every field to gain global dominance. The same competition seems to have entered the cryptocurrency industry as White House, understanding China’s Bitcoin Dominance is now backing Ripple Labs.

Its BTC vs XRP as two global superpowers look at a crypto world

China is, by far, the undisputed world leader in bitcoin mining — with Chinese mining pools controlling more than 70% of the bitcoin network’s collective hash rate, the measuring unit of the processing power of the bitcoin network.

Many in the bitcoin and cryptocurrency industry have expressed concern about how much control this gives China over bitcoin, with the Beijing-based Bitmain Technologies mining more than half the world’s bitcoins creating an oligopolistic to near monopoly situation.

While China’s dominance is fairly visible, the United States doesn’t want to stay behind in this race. According to the reports coming in from the White House, it appears U.S. president Donald Trump’s White House is also worrying about China’s bitcoin dominance and Ripple Labs executive, are suggesting the U.S. administration is interested in ripple (XRP) adoption to offset China’s bitcoin strength.

Ripple Lab’s chief strategist, Cory Johnson, was quoted saying in a wide-ranging interview with crypto-focused magazine Breaker that

“The White House, in particular, seems to be thinking about what it means to have 80% of bitcoin mining taking place in China and a majority of ether mining taking place in China,”

“When you look at XRP, there is no mining, so from a foreign-control aspect or from an environmental aspect, XRP is a very different beast. And in conversations we’ve had with the administration, they seem to get that and think that might matter.”

China manufactures most of the world’s bitcoin and cryptocurrency mining equipment and its massive mining farms are supported by the country’s cheap electricity prices, giving it dominance in bitcoin while for Ripple, Ripple Labs controls 60% of the ripple supply and the XRP tokens don’t require any mining. This situation of Bitmain’s dominating control over Bitcoin’s mining and Ripple’s majority control over XRP has received a lot of criticism from the industry as these being centralized in hands of few. A lot of experts believe that this war of the US vs China may intensify the centralization issues as both global superpowers would want to control these cryptos.

This post credited to coingape  Image source: Coingape

As of Thursday, Sept. 25, the bitcoin price has climbed about 3 percent, briefly crossing the $6,700 level and extending toward $6,750 at one point in the early evening.

While this movement has made plenty of cryptocurrency  traders and investors happy in the short-term, a recent analysis of spending patterns relating to some of the earliest blocks of bitcoin has revealed that a very early miner has been taking advantage of the last several years’ long-term upward trajectory to slowly cash out tens of thousands of coins since Dec. 2016.

A recent tweet from a cryptocurrency expert, Blockchain data analyst Antoine Le Calvez, has revealed that a mysterious bitcoin miner has managed to send approximately 30,000 BTC cryptocurrency exchanges between Dec. 2016, and Jan. 2018, potentially cashing them out for a mammoth payday.

Mystery Miner Cashes In

According to Le Calvez, the mysterious bitcoin miner has been smart enough to cash in on their youngest blocks of bitcoin to not reveal the full extent of their mining period.

It would seem that, at the latest, the mining started somewhere around Dec. 2009, back when the value of BTC wasn’t much above $0, still wasn’t anywhere near reaching dollar parity, and the flagship cryptocurrency could be profitably mined with a standard-issue CPU. The first Bitcoin Pizza Day, you will remember, did not occur until 2010.

Furthermore, the researcher believes that the mystery miner had mined for at least seven months. Through this time, he managed to acquire more than 30,000 BTC since block rewards were high and miners were few.

He speculates that the miner could have even commenced mining operations earlier than Dec. 2009 since, recognizing that spending older coins is more likely to attract attention, he desires to conceal his sell-off. For some, this may raise questions, such as whether the mystery wallet owner is not Satoshi Nakamoto himself, although the researcher seems to think otherwise.

This post is credited to ccn Featured Image from Shutterstock