Říj 31

Why Did Bitmain’s Antpool ‘Stop Mining’ SegWit Blocks?

Antpool, the Bitcoin mining pool owned by hardware manufacturer Bitmain, has stopped mining Segregated Witness (‘SegWit’) blocks.


A Question Of ‘Charity’?

In a move which has sparked suspicion among cryptocurrency figures, data from the past seven days of block mining shows Bitmain mining blocks of under 1 megabyte – smaller than SegWit blocks mined by other pools.

“AntPool no longer includes SegWit txs in Bitcoin (BTC) blocks,” one Twitter account confirmed October 30.

If there are enough non-SW transactions to fill up Core’s 1MB base blocks and they pay higher fees than the SW transactions, why should (it) be charitable?

The curious statistics contrast with Bitmain’s desire to increase the Bitcoin block size limit as an alternative to the off-chain scaling options favored by SegWit proponents.

The apparent conflict was not lost on the industry, the research team of Hong Kong-based trading platform BitMEX also highlighting the sub-megabyte blocks on Twitter.

“Despite Bitmain’s strong support for larger blocks, Antpool has recently been producing smaller blocks (below 1MB), while other pools produce larger blocks,” staff commented.

Worst Of Both Worlds

Reactions to BitMEX included claims Bitmain, through excluding SegWit, could continue to use the highly-controversial Covert ASICBoost mining technique it had previously claimed was “not practical.”

Last month, the company began rolling out Overt ASICBoost for its Antminer hardware family, a move which similarly drew suspicion from commentators.

Bitmain 135 Watt Data Center

In a further nuance meanwhile, Blockstream’s Warren Togami noted that despite non-SegWit blocks ostensibly having a higher fee attached, the blocks Antpool had chosen to mine in fact contained less in fees than the SegWit blocks it was avoiding.

Bitmain continues to hold a monopoly on Bitcoin mining through control of Antpool and BTC.com, the latter regularly mining the most blocks on a given day.

The proportion of transactions using SegWit had continued to climb in recent months, reaching an all-time high of 48 percent in early October before dropping.

What do you think about Antpool’s mining behavior? Let us know in the comments below!


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Říj 30

Japan’s Financial Regulator Says Stablecoins Are Not Cryptocurrencies

The lack of uniformity in stablecoins has led Japan’s Financial Services Agency (FSA) to conclude that stablecoins are not cryptocurrency.


Not All Digital Assets Are Created Equal

Japan’s Financial Services Agency (FSA) recently announced that it does not believe stablecoins should be classified in the same category as cryptocurrencies.

According to Japan’s Payment Services Act and the Fund Settlement Law, cryptocurrencies are considered a method of payment that users do not need to pay taxes for. Meanwhile, stablecoins do not meet these criteria as the majority of the current dollar pegged digital assets have varying characteristics, and the lack of a uniform set of characteristics makes it impossible to categorize them.

FSA Japan

JVCEA Cannot Regulate Stablecoins

Under the Payment Service Act, stablecoins fail to meet the current criteria for classifying as a “virtual currency” and an FSA spokesperson said, Due to [varying] characteristics [of stablecoins], it is not necessarily appropriate to suggest what those companies need to obtain or register before issuing stablecoins.”

Interestingly, while the FSA recently ceded authority to Japan’s Virtual Currency Exchange Association (JVCEA) by granting the collective the authority to self-regulate Japan’s cryptocurrency exchanges, the JVCEA will not be able to regulate stablecoins as they have been determined to not be cryptocurrencies.

It appears that the task of regulating stablecoins to will fall to the FSA and regulators will need to analyze each stablecoin on an individual basis.

Do stablecoins function the same as non-fiat pegged digital assets? Share your thoughts in the comments below! 


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Říj 29

UK Fintech Industry Slams Govt’s ‘Blunt Instrument Approach’ To Cryptocurrency

The UK could compromise its fintech sector with “very blunt instrument” regulation currently under consideration, a new report from several industry entities warns.


‘Ashamedly Geared Around Bitcoin’

As local news outlet the Telegraph reports October 29, the report criticizes plans to award more power to regulator the Financial Conduct Authority (FCA) and says treating all cryptoassets in the same way as Bitcoin was counterproductive.

“Bad regulation is worse than no regulation at all,” the Telegraph quotes it as reading, adding that the extant proposals are “ashamedly geared around Bitcoin.”

Politicians had lobbied for wider FCA jurisdiction in September, six months after the regulator had launched a dedicated “task force” with the remit of formalizing the domestic space.

Far from increasing security and consumer protection, however, one of the report’s authors argues a laissez-faire attitude would be considerably more beneficial for a sector which is only just beginning to mature.

“It is a very blunt instrument approach and I haven’t seen this in other countries,” Patrick Curry, chief executive of the British Business Federation Authority (BBFA) commented about the plans.

The use of this technology is still a voyage of discovery and these technologies are being refined for different types of use. My concern is the law of unintended consequences.

Overreaching?

The government had pledged to make London a home for fintech in the coming years, sounding out concerns that Brexit would make the city an unattractive place for innovative newcomers.

Blockchain Expo - Crypto La La land

At the same time, the Bank of England has said it is open to the concept of a self-issued national digital currency while also claiming that cryptocurrency poses “reputational risks.”

“Crypto-assets also raise concerns related to misconduct and market integrity,” Deputy Governor Sam Woods wrote in June.

Many appear vulnerable to fraud and manipulation, as well as money-laundering and terrorist financing risks.

What do you think about the UK’s cryptocurrency regulation plans? Let us know in the comments below!


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Říj 28

Fidelity Won’t Build Its Own Exchange, Focused on Bitcoin Custody, Exec Confirms

Tom Jessop, President of Fidelity Digital Asset Services says that the asset manager will take crypto to the next level by enhancing the sector and providing a secure Bitcoin custody solution so institutional investors can get a piece of the crypto pie.


Bitcoin Custody Solution Will Remove Barrier

In the most recent episode of her Unconfirmed podcast, Laura Shin interviewed Fidelity president of Digital Asset Services Tom Jessop. The two had a cryptocurrency and blockchain focused discussion about the company’s plans to help develop the Bitcoin 00 and cryptocurrency market to a higher level of functionality and value.

When asked whether or not Fidelity would build its own cryptocurrency exchange, Jessop explained that he believed that the current exchanges do a fairly good job at this and Fidelity is more focused on providing custody services for institutions looking to become involved in cryptocurrency.  

Jessop also explained that a current barrier to cryptocurrency has been service providers that require pre-funded accounts and Fidelity intends to remedy this problem by building a more traditional investment platform, which allows users to execute trades on one or more exchanges at best price, then determine how to settle once completed.

Fidelity Foresees the Future of Crypto

Shin and Jessop them delved a bit deeper into the nuts and bolts of Fidelity custody solution and Jessop explained that at the moment there are plenty of investors with sizeable cryptocurrency positions that lack a custody solution and also find it tedious to carry out trades.

Fidelity intends to fill this niche by providing a cold storage solution and Jessop believes that the well-known fact that Fidelity manages more than $7 trillion in assets will provide the assurance of security that institutional investors require. According to Jessop, this is why Fidelity chooses to focus on custody rather than developing an exchange since “we know how to manage security at scale.”

Shin and Jessop closed the interview by forecasting future events in crypto and Jessop believe that retail and institutional interest in crypto is increasing as the market matures. He points out that hedge funds managers, family offices and emerging market analysts are all focused on creating new cryptocurrency products and instruments that will move the industry forward.

When asked what does 2019 hold, Jessop said the world can “expect more [influx] over this year and into ‘19, which will raise the bar for everyone and help accelerate growth in the market.”  

Do you think Fidelity’s Digital Assets Service will usher in the next cryptocurrency bull run? Share your thoughts in the comments below! 


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Říj 27

10 Years On: Five Things Needed for the Mass Adoption of Bitcoin

It’s been ten years since Satoshi Nakamoto published the Bitcoin White Paper and introduced cryptocurrencies to the world. His radical vision of a decentralized peer-to-peer electronic cash system was groundbreaking, as it sought to rebuild the structures that upheld our global financial institutions. A decade on, the cryptocurrencies market is now worth $209 billion globally, and there are more than a thousand separate tokens in circulation.


[Note: This is a guest op-ed article submitted by Samuel Leach, Founder of Yield Coin]

Despite this success, Nakamoto’s vision is yet to be fully realized. Although “cryptos” and associated phrases have entered the popular language, and awareness of them is at an all-time high, uptake has been restricted to a narrow subset of society.

Bloomberg estimates that around a thousand users own approximately 40 percent of all bitcoin currently in circulation and cryptos have failed to supplant fiat currency. Before we see the mass adoption of cryptocurrencies, there are a number of obstacles that first need to be overcome.

Regulation

While regulation is often treated as a pariah among many in the crypto community, if executed properly, it will bring beneficial change for all. Cryptocurrencies have only been in existence for a relatively short amount of time meaning many governments are still figuring out the best way to regulate them. The result of this has been a crypto market structured in a laissez-faire fashion. While it can be argued that this has fostered further innovation, it has undoubtedly led to several negative side effects.

At present, anyone could set-up a new cryptocurrency and raise significant capital without having to face repercussions if they fail to implement their plans. This has reduced overall confidence in the market, as it can be difficult to differentiate legitimate projects from nefarious ones. This is also preventing many institutional investors from entering the market, as the lack of regulatory guidelines will lead to compliance issues on their part.

Volatility

A daily price swing of 10-20 percent is not uncommon among most cryptos, making them exceptionally volatile in comparison to fiat currencies; in comparison, the pound lost 4 percent of its value against the dollar on the infamous Black Wednesday. Finding a way to temper this instability would go some way to certifying cryptos as legitimate currencies.

Bitcoin Price Volatility

At the moment, it would take a very brave consumer and equally brave merchant to conduct a transaction using cryptocurrencies. The inherent volatility of most cryptos means consumers run the risk of massively overpaying and similarly, the outlet risks the value of the crypto received being eroded.

Practicality, Usability & Accessibility

While cryptocurrencies have seen some mainstream usage among investors interested in day trading and investing, this uptake hasn’t been reflected by everyday consumers.  This is mostly due to crypto’s impracticality for day-to-day usage. Some of this is due to its price volatility but a more central factor is the lack of businesses who are willing to accept it as a form of payment. If individuals are unable to find a legitimate use case for their crypto, then its value as a form of electronic cash is zero. Further, the process of acquiring crypto itself is difficult, meaning uptake has been restricted to a tech-savvy subset of the overall population.

It should be noted, however, that while numerous solutions are in place allowing the spending of bitcoin via third-party services such as gift cardsBTMs, etc. — this often adds friction and introduces more middlemen into the experience.

BTCPay is a Better (and Cheaper) BitPay, Says Core Developer Nicolas Dorier cryptocurrencies

Security

In the beginning, cryptocurrency related crime was almost non-existent, but as the market has grown, it has attracted the attention of organized scammers and hackers. Earlier this year, criminals stole $530 million worth of crypto from the Coincheck exchange, and there have been many other examples of large-scale thefts.

With ‘traditional’ financial systems, when a payment is made, third parties ensure that the transaction goes through and if anything does go wrong, they are liable for recovering the funds. Similarly, if your credit or debit card information is stolen, then you aren’t responsible for any transactions made. With cryptos, however, it is the user’s responsibility to ensure that all the data associated with a transaction is correct. If a user’s private key is stolen, then crypto can be stolen with a low chance of recovery.

Understanding

Research has found that 38 percent of the British population do not ‘understand’ cryptocurrency. With the commonly held misconception that it is a tool for criminals to launder money being the most cited reason for mistrusting it. While those involved in the community understand the revolutionary possibilities of cryptos, the wider public still needs further education on the potential benefits.

For those not familiar with trading concepts, the notional value and artificial scarcity that underpins crypto may be hard to grasp.  Further, the existing way in which money has been exchanged for goods has been long established, and cryptocurrencies will require people to think about transactions in an entirely new way.

Without a doubt, the introduction of cryptos has been revolutionary. However, whether we are within the midst of a complete reconstitution of the financial system remains to be seen. If the engineers and developers involved with cryptos can find a way to deal with the intense volatility and lack of widespread understanding around cryptos, then their benefits will be able to be enjoyed by all.

Do you agree with these barriers to adoption? Are there more? Share your thoughts below!


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Říj 26

Litecoin Core 0.17 Will ‘Beat Bitcoin Cash’ On Cost And Speed

Litecoin’s (LTC) forthcoming client release will make it “faster” and “cheaper” than Bitcoin Cash (BCH), according to one analyst as developers confirm transaction fees will reduce 90 percent.


10X Fee Decrease Puts LTC In Front

Litecoin Core 0.17, which the Litecoin Foundation said was “upcoming” in a blog post on its now-suspended Medium account, will deliver a host of end-user improvements.

Specifically, while LTC 00 currently costs around $0.05 in average fees, after the update this will reduce closer to $0.005.

This, Alternative Assets performance analyst and LearnCrypto.io president Nich Hellmann notes, will end the status quo in which Litecoin is more expensive to use than Bitcoin Cash.

Despite its larger market cap, he continues, BCH 00 is slower and has a more “contentious” community.

“Currently because the blocks aren’t full there is no need to pay higher fees, which is one reason why the move is being taken,” developers wrote explaining the updates.

Togami: BCH Attack ‘Not Hypothetical’

LTC markets have so far not reacted to the update, trading behavior broadly falling in the line other major altcoin assets this week.

Cryptocurrency users suspicious of BCH’s development and marketing practices will no doubt have doubled down on their perspective after data this week showed its network is in a precarious position.

Updating his ongoing tracking of BCH, Blockstream VP solutions head Warren Togami noted the network’s 30-day average hashrate had fallen below 7 percent of Bitcoin’s.

This, he warned “matters (because) of the risk of exchange insolvency from double-spend theft.”

The hashrate proportion had dipped below 8 percent at the start of September, Bitcoinist reporting on Togami’s preexisting concerns about network security.

At the time, he compared the state of the network to an LTC hard fork from 2013, which imploded due to a 51 percent attack months afterwards.

Now, he says, the danger of BCH following suit is “not hypothetical.”

What do you think about Litecoin’s coming update? Let us know in the comments below!


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Říj 25

Australia Post Delivers ‘Buy Bitcoin’ Service to Its 11.7 Million Customers

One of Australia’s oldest institutions, Australia Post, has announced that customers will now be able to buy bitcoin on participating exchanges within minutes through its Digital iD service.


Australia Post Delivers Bitcoin

Now Australians will be able to buy bitcoin through their post office. Australia Post lets users sign up to local Bitcoin exchanges through its Digital iD service, which eliminates the need to take selfies and verify documents.

Think ‘Log in with Facebook or LinkedIn’ button, but for buying BTC 00.

Brisbane-based Bitcoin exchange, Digital Surge, for example, is among the first adopters of the Digital iD platform, local news outlet Micky reports.

Director of Digital Surge, Josh Lehman, says the new service helps speed up the registration process that could discourage many potential users.

“Digital iD allows us to verify the identity of a prospective Bitcoin buyer in minutes,
instead of the days it takes other exchanges,” Mr Lehman explained.

For the first time, an Australian can log on to a computer, punch in their driver’s licence or
passport details, and be buying Bitcoin within minutes.

Digital iD also works with Australian companies Coinjar and Coin Loft, and could boost confidence for potential investors, who were previously reluctant to submit personal data to questionable online services.

Digital Identity Service Struggles

Australia Post has struggled with its Digital iD program, however, with budget hand staff cuts amid controversy and a potential conflict of interest with another government digital ID program, according to local news portal Innovationaus. In addition, an attempt to gauge the possibility of private sector funding has also been “halted.” 

The Digital iD project was rolled out earlier this year after development began in 2016 with 13 participating organizations, a number which has now grown to over 40, including Queensland Police, CUA, and Airtasker.

The process is simple. Customers submit their national ID such as a driver license or passport once, and then only use a smartphone app and QR codes instead. But ultimately, Australia Post’s Digital iD service does store all of this personal information and (purportedly) lets users share only the bits of data that are required for verification on participating platforms. 

“Digital iD gives people more control over the personal data they share with organizations,” General Manager of Australia Post’s Digital iD, Cameron Gough, says. 

Australia Could be an ICO Hub

A Privacy for Usability Tradeoff

Using this new way to buy bitcoin in Australia may indeed become the easiest method currently available. At the same time, there is a tradeoff for people who value privacy.

In June, Bitcoinist reported that the Australia Taxation Office (ATO) announced it will collect Capital Gains Tax (CGT) on cryptocurrency gains. In other words, users should expect to pay capital gains tax since their newly-purchased bitcoin can be easily traced to their digital ID.

Nevertheless, this has not stopped Australians from buying bitcoin as the number of cryptocurrency holders has nearly tripled since the beginning of 2018. Therefore, Australia Post, which services 11.7 million addresses across the country based on the latest data, could attract some new buyers of bitcoin who prefer to trust a government corporation over some off-shore exchange.

Would you use Australia Post to buy bitcoin? Let us know below!


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Říj 24

Bitcoin Price Has Maximum $22K Potential By End Of 2018, Says Tom Lee

Bitcoin could end 2018 at $22,000, Fundstrat Global Investors analyst Tom Lee repeated in new predictions about the end of the cryptocurrency bear market October 19.


Lee: 200-day MA ‘Very Important’

Speaking during an interview with social media blog Crypto Tips, Lee, who is known for his bullish stance on Bitcoin in particular, highlighted the 200-day moving average price trend as a key factor in determining its future performance.

“When Bitcoin’s below its 200-day, it only goes up 50 percent of the time in the next sixth months, but when it’s above its 200-day, it’s up 80 percent of the time,” he said referring to analysis produced by Fundstrat last week.

“The 200-day and the trend that’s implied by that is obviously very important.

Ethereum ‘Capitulated’?

Far from a continuation of this year’s price downturn, Lee added he thinks it is “more likely” that Bitcoin 00 would put in an unexpected climb.

That hypothesis runs counter to assumptions shared by many other analysts within the cryptocurrency industry, who have endorsed an idea BTC/USD must first ‘bottom’ as low as $3000 before finally challenging its all-time highs.

For Lee, $6000 is the “floor.”

“Where can the surprise take place? I know a lot of people think Bitcoin’s price will collapse to $3000; I think what’s more probable a surprise is that we have a very explosive increase in price,” he continued.

For Ethereum (ETH) 00 meanwhile, Lee also saw support returning to markets. The largest altcoin by market cap had fallen more precipitously than Bitcoin, at one point trading as low as $170 in recent months, its worst performance since May 2017.

“…Ethereum is already trading like it’s capitulated,” he said.

In 2018, a combination of factors including the EOS ICO, ICOs in general, BitMEX’s ETH futures and media “hitjobs” had created a “negative” story around the asset.

What do you think about Tom Lee’s predictions? Let us know in the comments below!


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Říj 23

VanEck Says Bitcoin ETF Concerns ‘Resolved’ at Meeting With SEC

Entities seeking to launch a Bitcoin ETF (exchange-traded fund) met with the US Securities and Exchange Commission (SEC) October 23 as one commissioner spelled out the expectations in fresh media comments.


5 Key ‘Issues Resolved’

VanEck, which received a rejection of its ETF application in late August, met with the SEC to discuss its status, producing a supporting document outlining five reasons for approval.

“Issues identified in disapproval order have been resolved,” it states.

 There now exists a significant regulated derivatives market for bitcoin

Relevant markets – Cboe, bitcoin futures, OTC desks – are regulated

Concerns around price manipulation have been mitigated, consistent with approval of prior commodity-based ETPs

Cboe’s rules are designed to surveil for potential manipulation of Trust shares

Promotes investor protection.”

Stein Highlights Points Of Consideration

Speaking to Bloomberg TV Monday meanwhile, SEC Commissioner Kara Stein underscored the uncertainty over whether or not ETFs will soon see regulatory approval.

One the face of it, it may seem like the SEC is poking around and trying to cause issues but in reality, it might be the opposite.

Multiple applications to launch have stalled at the SEC’s door, authorities either rejecting or postponing their decision regarding whether or not investors can legally interact with them.

“They’re going to have to show how they can get accurate valuations… despite sometimes volatile price swings, how they can make sure there’s physical custody when necessary,” Stein told the network.

How they’re going to make sure there’s adequate liquidity, especially in a 40 act fund context so investors can get their money… we’ll look at all those factors and make a decision on that particular fund and how it’s actually going to be able to handle those particular requirements.

2019 Or Sooner?

After the initial round of rejections and delays, attention from cryptocurrency analysts and investors turned to other financial products aimed at institutional investors and their capital.

As Bitcoinist reported, multiple Wall Street heavyweights are planning to release cryptocurrency products in the short term, Intercontinental Exchange this week confirming it would launch its Bakkt platform December 12 – again subject to regulatory approval.

ETFs and their potential to shore up cryptocurrency markets meanwhile remain a talking point more generally, with various predictions surfacing that 2019 will be the make-or-break year for the instrument.

Andreas Antonopoulos, while remaining skeptical on the benefits of an ETF for Bitcoin’s reputation, nonetheless forecast that their market entry was a certainty.

“…There’s enormous market appetite and very little technical knowledge, so institutional investors simply can’t at the moment hold Bitcoin directly.” he said in July.

Stein declined to speculate on possible timeframes for an ETF approval to come from the SEC.

Does the VanEck/SolidX Bitcoin ETF now habe a higher chance of approval? Let us know below! 


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Říj 22

Int’l Financial Watchdog FATF to Introduce Cryptocurrency Rules in 2019

The Financial Action Task Force (FATF) – an international agency which is intended to tackle criminal activity across the globe, is set to issue the first set of rules regarding cryptocurrency regulations in 2019.


Focus on Crypto Exchanges

The FATF is based in Paris and it is currently comprised of 37 countries. Its’ president Marshall Billingslea said that the agency will issue new rules regarding cryptocurrency regulations. Purportedly, they will require each country to thoroughly license or regulate cryptocurrency exchanges as well as companies which provide encrypted wallets. He said:

As part of a staged approach, the FATF will prepare updated guidance on a risk-based approach to regulating virtual asset service providers, including their supervision and monitoring; and guidance for operational and law enforcement authorities on identifying and investigating illicit activity involving virtual assets.

Additionally, the president said that the watchdog will be conducting regular reviews to guarantee that the countries are actually implementing the new set of rules. According to him, the rapid development of the functions which digital currencies serve also requires the FATF to review activities and operations which are contained within the existing standards.

globe

Billingslea:

In light of the rapid development of the range of financial functions served by virtual assets, the FATF will also review the scope of activities and operations covered in the amended Recommendations and Glossary in the next 12 months and consider whether further updates are necessary to ensure the FATF Standards stay relevant.

Billingslea also noted that he expects the additional instructions to be issued by June:

By June, we will issue additional instructions on the standards and how we expect them to be enforced.

A Steady Course

The FATF’s most recent move follows the agency’s current policy towards shedding regulatory clarity over the field of digital currencies.

Earlier in June, Bitcoinist reported that the agency will introduce binding regulations for cryptocurrency exchanges and that Japan is particularly active in that direction. In fact, the country launched a self-regulatory body in April, called the Japanese Cryptocurrency Exchange Association.

What do you think of FATF’s recent move to issue its first rules towards cryptocurrency regulations? Don’t hesitate to let us know in the comments below!


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