On September 13 the Japanese bitcoin trading platform and payment processor, Coincheck, announced the firm had been approved to be a licensed “virtual currency exchange.” The exchange registration approval follows the provisions of Article 63-3 of the country’s fund settlement law. After bitcoin was legalized as a form of payment on April 1, 2017, all domestic exchanges in Japan must receive authorization from the treasury department and Financial Services Agency (FSA) to operate a virtual currency exchange business.
At the time Coincheck was extremely pleased to see the Japanese statutes pass and said the “newly made law and regulations on bitcoin are going be enormous.” Further, the exchange revealed at the time that all exchange providers must be approved by the FSA.
“In order to make the exchanges more secure, cryptocurrency has been handed over to the authority of the FSA,” explains the Coincheck blog this past June.
All the exchange providers and other companies that deal with virtual currency will need to be registered by the FSA before they can start operation. It will help to make cryptocurrency exchanges in Japan tighter, more secure, have scrupulous control.
Coincheck Expands as Japanese Bitcoin Enthusiasm Continues to Grow
Japan has often captured the number one spot in global bitcoin trade volume. Coincheck handles a lot of bitcoin trade volume as the trading platform swapped 97,502 BTC over the past 24-hours. Further back in May the firm announced the creation of interest-bearing bitcoin savings accounts, if the FSA would allow the concept. This past August Coincheck launched a new investment sandbox that tends to crypto-startups and organizations running initial coin offerings (ICO).
The Japanese trading platform’s new licensure approval follows the demise of the country’s infamous bitcoin exchange Mt Gox and reveals that officials are more comfortable with exchange operations. Moreover, the positive news comes at a time when Chinese bitcoin trading platforms have been forced to close most of its operations.
What do you think about Coincheck getting approved as a licensed bitcoin exchange in Japan? Let us know in the comments below.
JP Morgan executive Jamie Dimon calling bitcoin a “fraud” and claiming he would fire any employee from his firm who traded the digital currency for being “stupid.” Now it seems JP Morgan has been caught red-handed purchasing a bunch of XBT shares, otherwise known as exchange-traded-notes, that track the price of Bitcoin.
After a Few Harsh Statements from Executive Jamie Dimon, JP Morgan Ltd., and Morgan Stanley Purchase Bitcoin ETNs
According to public records of Nordnet trading logs, the two associated firms JP Morgan Securities Ltd., and Morgan Stanley bought roughly 3M euro worth of XBT note shares. Interestingly after the recent regulatory crackdown in China, and the statements from JP Morgan’s senior executive Jamie Dimon talking trash about bitcoin, his firm bought the dip on September 15. In fact, out of all the companies on the list, like Goldman Sachs and Barclays, the JP Morgan team of buyers purchased the most XBT notes.
Bitcoin exchange-traded-notes (ETNs) are a popular investment vehicle for mainstream investors and financial management firms who want exposure to bitcoin. A few institutions offer ETNs, among them Denmark-based Saxo Bank, which sells notes called the “Bitcoin Tracker.” These bitcoin-based ETNs track bitcoin price movements against the Euro and USD. Bitcoin ETNs have done extremely well over the course of 2017 following suit with bitcoin’s meteoric price spike.
JP Morgan Applies for Blockchain Patent 175 Times
JP Morgan doesn’t just purchase bitcoin notes, but is also heavily involved with the ‘blockchain fever’ that has infected banks across the world. The financial firm has applied for a “bitcoin alternative” patent with the U.S. over 175 times in 2013. The company is also working on an ethereum-based blockchain alongside, according to people familiar with the matter, working with Zcash development as well. With the ethereum project called “Quorum,” JP Morgan has its own Github repo that explains how the permissioned blockchain does not need consensus mechanisms like Proof-of-Work (POW) or Proof-of-Stake (POS).
Former JP Morgan Executives Leave the Firm for Bitcoin and Blockchain Projects
Additionally, former JP Morgan executives are all about blockchain technologies these days and even bitcoin. The veteran commodities trader, Daniel Masters, joined JP Morgan right after graduating college and in 2014 announced he was starting a bitcoin-based hedge fund. Another former JP Morgan mogul, Blythe Masters, started her own blockchain startup Hyperledger which is now run by the Linux Foundation. Masters is still heavily involved with the blockchain project and has a seat on the governance board.
Whether Jamie Dimon wants to admit it or not his firm was trading bitcoin-based notes after his statements. Further, over the past few years, JP Morgan cannot hide the fact that they are infatuated with blockchain technology, just like the hundreds of other financial institutions hoping they won’t be replaced.
What do you think about JP Morgan Securities Ltd. purchasing bitcoin-based exchange-traded-notes? Let us know in the comments below.
This week the lead developer of Bitcoin ABC, Amaury Séchet, engaged in a Reddit Ask-Me-Anything (AMA) discussion about the future of Bitcoin Cash (BCH), and the protocol’s future scaling.
An AMA With Amaury Séchet – Lead Developer of Bitcoin ABC
This summer Amaury Séchet (otherwise known as ‘deadalnix’), the lead developer of the Bitcoin ABC client, revealed the team’s intentions at The Future of Bitcoin event to hard fork the Bitcoin network on August 1. Since then Bitcoin Cash has been thriving, and Séchet recently explained his vision for the future of the BCH chain and the ABC client. Many other BCH supporters and developers were involved in the conversation with Séchet including Yours network founder Ryan X Charles, Openbazaar’s Chris Pacia, Bitcoin Classic’s lead developer Thomas Zander and others.
A Configurable Block Size and Finding the Right Fee Structure for Bitcoin Cash
Participants asked Séchet questions concerning the current roadmap for bitcoin cash; such as future block sizes, BCH and BTC compatibility, and protocols like layer two solutions. For instance, the developer of the Electron Cash wallet, Jonald Fyookball asked the ABC developer what he thinks about “algorithm-based block size” solutions. Séchet explains the BCH block size can be configurable using the protocol in the ABC client.”
“I like these proposals,” explains Séchet. “Right now the block size is configurable in ABC, but I would like to have a way to determine this configuration automatically in the future.”
Yours network developer, Ryan X Charles, asks Séchet how the protocol can avoid ‘dust limits’ and fee management. “We [Yours developers] run into dust limits quite easily,” Charles explains regarding the software’s recent implementation of bitcoin cash.
“There is work to be done on fee management,” Séchet responds. “Finding the right fee structure will take time, if one exists at all.”
The next version of ABC will reserve a percentage of the block space for low fee transactions. This will improve over time.
BCH & BTC Compatibility and Layer Two Solutions
Following this discussion, an AMA participant asked Séchet if he believes BCH and BTC can coexist in the future with different use cases or if he thinks all the hashpower will converge to one chain.
“Because of the way the difficulty adjustment works on the Bitcoin chain, it makes it very unlikely that it would survive being a minority chain,” Séchet states in response to the question. As a result, it is unlikely that this chain will survive if Bitcoin Cash gets a lot of traction. As long as Bitcoin Cash is a minority chain, both chain will continue to live.”
Séchet also gives his opinion about layer one and layer two scaling solutions. The ABC developer reveals he’s not against layer two solutions but believes pushing every issue towards a layer two solution is unrealistic.
“I have nothing against layer 2 per se, but I think some important points have been ignored,” Séchet explains. “First layer 2 can only be as reliable as layer 1.”
When blocks become congested and layer 1 becomes unreliable, layer 2 does so as well. Second, layer 2 will have different characteristics than layer 1 and thinking we’ll push everything into layer 2 is not a realistic roadmap.
Learning from Past Mistakes
Séchet explains a whole lot more about how he envisions the future of bitcoin cash and the ABC client, including BCH anonymity – where he hopes the protocol’s lower fees will allow for cheaper tumbling processes. The ABC developer also gives further opinions about programmers like Gavin Andresen and Jeff Garzik not being “protective enough” to keep the original values of the Bitcoin project in the past.
“It [Bitcoin] ended up being hijacked. We need to learn from this mistake and not reproduce it,” Séchet states.
However, there is no shortage of drama around the Bitcoin Cash code base. In a recent Github post, Gregory Maxwell claimed the Bcash developer plagiarized a piece of code. He said that Amaury Séchet (deadalnix) copied the migration to the per-txout UTXO database from the Bitcoin Core project, and did not credit the original authors with it. Instead, he used his name and copied everything verbatim down to the “grammatical oddities,” according to Greg Maxwell.
Do Séchet’s Actions Infringe on a Licensing Agreement?
Furthermore, Maxwell claims Séchet’s actions infringe on an open source licensing agreement and constitute a copyright infringement. He said, “Beyond being fraudulent and sleazy behavior, this action is a violation of the very minimal requirements of the MIT license.”
There is controversy over Maxwell’s position, though. Some commentators believe there is no infringement on the commit, because there is information on the source code within it. Séchet further said the code was “backported” and is “mentioned in the series of commits.”
Is He Fixing it Faster? Multiple Copyright Violations by Séchet
Maxwell continued his accusations, saying Séchet is also claiming he fixed the issue quicker than Blockstream. Maxwell also mentioned Séchet was been accused of copyright violations before. This is not a first offense. He said, “Amaury SECHET has a well known history of these copyright violating false attribution events. To give a few other examples. I also understand that he is advocating in your private issue tracker to remove all attribution to Bitcoin Core in the codebase from your repository.”
The community has responded to Maxwell’s accusations with dramatic flare. Some users are attacking Maxwell and Blockstream for focusing on trivial issues instead of updating Bitcoin Core. One user, sandakersmann, said, “So you guys are prioritizing this instead of releasing a new version of Bitcoin Core that is not vulnerable? Fits the pattern of backward priorities from you blockstreamers.”
Other users defend Maxwell and Core, saying people like sandakersmann were shifting the goalposts of the original post. They were trying to create a diversion from the serious issue of fraud and copyright infringement. User thijstriemstra responded to sandakersmann:
This has nothing to do with the fact you’re copy/pasting code and stripping out author. This is not done in any opensource project and you’re trying to divert attention away from it. It’s this project that creates unneccessary annoyance and extra work for the maintainers of bitcoin core.
Maxwell Asks Séchet to Discontinue Violating Copyright
Maxwell finished his blog post by asking Séchet to discontinue violating their copyright. He also wants him to correct his repository and credit the actual authors. At press time, Séchet had not responded to the request, other than to say the original code was “backported.”
The price of bitcoin dropping over 8 percent immediately after the digital currency’s all time high of $4,980. On September 4, bitcoin dropped to a low of $4,140. Speculators now believe the price drop today may be due to the recent announcement from the People’s Bank of China banning Initial Coin Offerings (ICO).
Bitcoin Markets Shave a Few Billion Again
There’s a bearish sentiment throughout bitcoin markets, just as we predicted would happen two days ago in our last price analysis. At press time, bitcoin’s price is trying to hold above the $4,150 territory as the currency’s value dropped another six legs down on Monday, September 4. Volume is still pretty decent with over $2.4B traded over the past 24-hours, but most of the action is stemming from this morning’s huge sell off. Bitcoin’s price dip caused the entire top eighteen cryptocurrency market capitalizations to drop, slashing prices from 5 to 34 percent, as most altcoins right now are in the red. This past week’s sell off has been the largest to date since mid-July, and we are seeing a similar 25-30 percent total correction during the bearish cycle.
Right now technical indicators show the Relative Strength Index (RSI) continues to head downwards, confirming that sellers right now have the upper hand. Of course, over the past three days, the two Simple Moving Averages (SMA) crossed hairs, and the long term 200 SMA is well above the short term 100 SMA. This again assures traders the storm is not yet over, and there is great resistance down the road. Looking at order books on some of the most popular exchanges, there are monstrous walls between the $4,600-5,000 positions. If support holds steady in the $4,160-4,200 area, bulls will have some work to do to eat through the next wave of resistance levels.
PBOC: ‘No ICOs For You’
Market sentiment seems to be geared towards the recent announcement from China’s central bank concerning ICOs. Cryptocurrency markets were already battling through a significant correction after bitcoin reached new price highs. So speculators think the recent banning of ICOs in China adds uncertainty to these types of markets. Otherwise, bitcoin is running its course through a typical 25-30 percent correction, after rocketing close to the $5K levels. Other spectators believe banks are spreading ‘fake news’ about bitcoin right now, because cryptocurrency popularity has risen exponentially. The UK publication the Mirrorreports that certain banks are spreading these phony news stories to “restore the status quo.”
Right now bitcoin is holding above $4,150, so it may consolidate in this territory and push higher this week with some bounce back. Most of the top ten altcoins below bitcoin’s market cap lost larger percentages than bitcoin, which is likely tethered to the ICO news. This has pushed bitcoin’s market dominance up to 48.5 percent among the hundreds of altcoin market caps in existence. After the lull, bitcoin could follow its typical trend of moving up higher than before after a deep correction. So far this has been a consistent trend this year for bitcoin’s price, but we should never place all of our bets on this trend, because it may not be the case going forward.
Bear Scenario: Bitcoin markets could drop lower if the $4,100 floor collapses, bringing the price into the $4,000-3,900 territory. Right now big players have stepped off to the sidelines to catch more satoshis from weak hands and wait to choose a better entry point. Most technical indicators like the Stochastic, RSI, SMA, and order books are showing a strong negative sentiment at press time.
Bull Scenario: Right now, we are either going to consolidate in the $4,125-4,200 range, or we are seeing a short term bull trap at the moment. Bitcoin needs to break upper-level resistance past the $4,600 territory, but right now walls are considerably high. Of course topping the $5K range again is not out of the question, but it’s going to take some significant time to get there again.
Where do you see the price of bitcoin heading from here? Let us know in the comments below.