Segwit Integration is Set to Increase with Bitfinex Next on the List

rrs67asd-e1510906117495Segwit wallet integration has been bumped to the top of Bitfinex’s to-do list, with an exchange staffer declaring that the job should be completed next week. Despite the scaling technology having been available since August, a number of exchanges have dithered. Now, there are signs that progress is being made in activating BIP141.

Also read: Cryptocurrencies See Volatile Prices After Canceled Fork

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Witness the Wallet Integration

Segregated Witness, as it’s officially known, has been available on the bitcoin network since August 24, and has been activated for certain altcoins such as litecoin and digibyte for much longer. After the backwards-compatible network upgrade locked in, Segwit transactions began to show up on the bitcoin blockchain. This number grew to 10% of all transactions within the first week of October, but has since fallen.

Segwit Integration is Set to Increase With Bitfinex Next on the List
The percentage of all bitcoin transactions that use Segwit.

The blockchain has grown increasingly congested of late, culminating in fees reaching an all-time high last week, when the mempool filled with over 130,000 unconfirmed transactions. While not everyone in the bitcoin community is enamored with Segwit, it is hard to assess the technology’s efficacy until it has been widely rolled out. Various wallet developers have been Segwit-compatible for weeks, but exchanges haven’t been so quick off the mark. Kraken and Blockchain are among the major players that are still Segwit-less.

Segwit Integration is Set to Increase With Bitfinex Next on the List

First Bitfinex, Then Deribit

Bitfinex is one of the world’s largest exchanges, with a 24-hour trading volume of 96,000 BTC. In belatedly embracing Segwit, Bitfinex’ actions may spur other exchanges into Segwit Integration is Set to Increase With Bitfinex Next on the Listfollowing suit. Shortly after a Bitfinex staffer confirmed that Segwit activation was on its way, Amsterdam’s Deribit exchange signaled that it too was working on Segwit.

Due to a transaction malleability fix that is built into Segwit, more data can be squeezed into each block – theoretically raising the size from 1MB to around 1.8MB. Despite this facility, block sizes on the bitcoin network have been averaging around 1.1MB, showing that Segwit’s full capacity has yet to be utilized. The major absentee from the Segwit activation party is of course Coinbase. Were the Californian player to commit to the scaling technology, the number of Segwit transactions would shoot up.

Do you think widespread Segwit activation will lead to lower fees and less congestion? Let us know in the comments section below.
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Cryptocurrencies See Volatile Prices After Canceled Fork

The price of bitcoin (BTC) has been on a bearish run over the past 72 hours, after reaching $7,900 the day the Segwit2x fork was ”canceled”. Since then bitcoin’s market cap has shaved off over $20B, and the price per BTC is hovering just above the $6,475 range. Moreover, while bitcoin has been dipping, at the same time bitcoin cash (BCH) has been rallying hard as the currency has reached a high of $1,300 per BCH on November 11.

 

Bitcoin Markets See Some Bearish Sentiment

Markets Update: Cryptocurrencies See Volatile Prices After Canceled Fork Market action on Saturday, November 11 is mirroring the day before, where traders saw bitcoin markets plummet over 7 percent in value to a low in the $6,400s range. When markets in Japan and South Korea opened, the price rebounded a touch coming close to capturing $7K, but traders failed to reach that point. During the earlier hours of Saturday morning, bitcoin’s price started diving again, dropping seven legs down to a low of $6,300. BTC trade volume is still holding steady and has been capturing roughly $5B or more in trades over the past 72 hours. The top five exchanges pushing significant trade volume this weekend include Bitfinex, Bithumb, Bittrex, Bitflyer, and GDAX.

BTC Technical Indicators

Bitcoin’s weekly and daily charts are not looking that great as red candles continue to dominate. The two Simple Moving Averages (SMA) crossed paths during the late evening of November 10. Now the long-term 200 SMA is well above the 100 SMA, indicating the road back to the upside is a long ways away. So far bitcoin’s price has corrected to levels bulls obtained on the first of November. Both the Relative Strength Index (RSI) and Stochastic oscillators have been heading south for hours, confirming bitcoin’s bear market might be just getting started. Order books show consolidation could happen in the $6,300-6,400 region as there is some good temporary support in that zone. After that, we could see a bounce back to $6,600-6,700 if buyers manage to take the reigns. If prices continue in bear mode, then a price below the $6K region could be on the cards. The key zone to watch is if the Displaced Moving Average (DMA) breaks $6150. If it does the downward push will likely follow suit.

Markets Update: Cryptocurrencies See Volatile Prices After Canceled Fork

Bitcoin (BTC) prices reached a low of $6,300. BTC is hovering just above the $6,475 zone.

The Top Five Cryptocurrency Markets

Digital asset markets, in general, are following bitcoin’s drop except for bitcoin cash, ethereum classic, and tether. Ethereum (ETH) markets are down 3.4 percent, currently averaging $298 per ETH. Ripple (XRP) markets are down 1.4 percent reaching a low of $0.20 per coin. Lastly, the fifth highest digital currency market cap held by litecoin (LTC) is down 3.2 percent as one LTC is $59 per token. Bitcoin dominance among the entire $197B cryptocurrency market cap is 53 percent, dropping from its previous high of 60 percent. One notable spike this weekend comes from ethereum classic markets which have seen ETC rise by 25 percent.

Bitcoin Cash Bulls Push BCH Markets Up Over 57 Percent

Bitcoin cash (BCH) markets have been on a tear all week long and even more so after the Segwit2x hard fork was canceled. BCH trade volume has surpassed BTC’s volume at $5.2B worth of BCH trades over the past 24-hours. The currency’s market cap is commanding $20B right now, and is just $8B away from knocking ethereum out of the second highest position. The top exchanges swapping bitcoin cash this weekend include Bithumb, Bitfinex, Bittrex, Coinone, and Korbit.

BCH Technical Indicators

BCH weekly and daily charts show the bullish momentum is strong but could see a slight correction in the short term. In contrast to BTC charts, the Simple Moving Averages for BCH are opposite. The 100 SMA is above the long-term 200 trendline, indicating the upside swing is not over just yet. However, RSI and Stochastic trends are showing oversold conditions as we speak and some resistance may lead to some temporary pullback. Order books show a nice floor in the $900-1,000 range if BCH markets see some sell-off. If BCH bulls manage to break resistance above the $1,200 region, then some smooth sailing to $1,350-1,450 could be on the cards.

Markets Update: Cryptocurrencies See Volatile Prices After Canceled Fork

Bitcoin cash markets reached a high of $1315 per BCH on November 11. Currently, the price is $1,310.

The Verdict

Markets Update: Cryptocurrencies See Volatile Prices After Canceled Fork

Bitcoin gold (BTG) will join the cryptocurrency landscape tomorrow.

Overall the cryptocurrency community is focused on the intense market action happening all across the boards. Since the hard fork was allegedly canceled, global cryptocurrency markets have gone haywire. Most of the digital assets besides bitcoin cash and ethereum classic are in the red seeing market losses. Over the past 72 hours, BCH markets have increased by 57 percent, showing a thrilling correlation between BTC markets. The upcoming week should be interesting to see if the Segwit2x fork still happens with a rogue group of miners, and the introduction of bitcoin gold markets into the overall cryptocurrency market cap. Bitcoin gold (BTG) futures are up 55 percent, averaging $285 per BTG this Saturday. Cryptocurrency markets going forward will likely see some more volatility over the course of the upcoming week.

Where do you see the price of bitcoin (BTC) going from here? What do you think about bitcoin cash (BCH) markets reaching $1,300 per BCH? Let us know what you think in the comments below.

 

Disclaimer: Bitcoin price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither http://blog.easypaypakistan.com  nor the aguahgfsd-1068x1068uthor is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”

 

Total Supply of Tethers Increases By 20% in One Week

The controversy surrounding the correlation between the release of new Tethers (USDT) and dramatic price spikes led by Bitfinex trading continues. 20 million new USDT were released shortly before a single market buy of approximately $13.5 million USD worth of bitcoin was executed on the 8th of November. The sudden spike in buying pressure quickly drove the price of bitcoin from $7075 to $7350 in less than 60 minutes. Since then, an additional 20 million USDT have been released into circulation on the 9th, and another 30 million USDT on the 10th of November.

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Approximately 110 Million USDT Have Been Released Since November 3rd

Many traders are noting an increasing correlation between the release of significant quantities of Tether and sudden movements in the price of bitcoin, with some expressing concerns at the speed with which a large volume of margin trades are executed following the release of new USDT.


Chart showing the release of USDT batches during the recent bitcoin bull run

Notorious Bitfinex critic Bitcrypto’ed has documented the market action that took place immediately following the release of 20 million USDT on the 8th of November. According to data shared by Bitcrypto’ed, $25 million USD worth of margin longs were executed in less than 30 minutes including a single market order estimated to be valued at $13.5 million USD. As a consequence, the price of bitcoin shot from approximately $7075 USD to roughly $7350 in less than one hour.

During 2017, the Number of Tethers in Supply Has Increased by More Than 3400%

The total supply of Tether has risen from less than 15 million in January to over 550 million as of this writing – comprising a more than 3400% increase since the start of the year. To some, this dramatic rise in the number of Tether has appeared significant as Bitfinex, a majority shareholder in Tether, appears to have failed to attain banking services since Taiwanese banks associated with Wells Fargo terminated the processing of wire transfers to the exchange, shortly after which Tether posted the following statement on their website:

“Tether is currently expecting continued delays in processing international wires to and from tether. to users… Since April 18, 2017, all incoming international wires to Tether have been blocked and refused by our Taiwanese banks. As such, we do not expect the supply of tethers to increase substantially until these constraints have been lifted.”

Although Phil Potter of Bitfinex has sought to distance the relationship between the two companies, stating that “Tether is a completely separate entity [from Bitfinex],” he has conceded that Tether “operates through the same money service money operator license that Bitfinex operates under in Hong Kong.” In response to questions regarding Tether’s banking relationships, Mr. Potter of Bitfinex has previously stated that Tether “ha[s] several banks in multiple jurisdictions, our principal banking relationships are in Taiwan.” Notably, however, he has failed to reveal what banking institutions provide services to the company since April, further arousing suspicions.

What do you make of the vast quantities of USDT that have recently been released? Share your thoughts in the comments section below!


Bitcoin Cash Markets Remain Resilient As the Network’s Upgrade Approaches

It’s been a crazy week for cryptocurrency enthusiasts as the digital asset ecosystem is still reeling over the canceled Segwit2x fork that was expected to take place on the Bitcoin network next week. Over the course of the past few weeks leading up to the planned 2MB Segwit2x hard fork, Bitcoin Cash (BCH) markets have doubled in value after hovering around $300 per BCH for weeks. Now the market has stabilized around the $625 region as the BCH network participants prepare for their own fork that’s just four days away.

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Bitcoin Cash Network and Markets Remain Vigilant After the Canceled BTC Fork Event

Bitcoin Cash Markets Remain Resilient As the Network's Upgrade ApproachesThe Bitcoin Cash network is thriving as the decentralized currency’s value has spiked quite a bit over the past few weeks. At the moment the price per BCH is hovering around $625 as markets currently command roughly $830M worth of daily trade volume. The price of BCH has allowed it to hold the third highest market capitalization at $10.4B just below the ethereum market cap. BCH markets are still seeing lots of trade volume from the South Korean won, as the currency typically captures around 49 percent or more of the daily volumes. The exchange rate stemming from BCH currently makes it the third highest digital asset trade volume within the cryptocurrency landscape. The exchanges trading the most BCH include Bithumb, Hitbtc, Bitfinex, Bittrex, and Korbit.

Bitcoin Cash Markets Remain Resilient As the Network's Upgrade Approaches
Bitcoin Cash (BCH) markets are holding above $600 per token at the time of writing.

Miners Have Started to Signal Intent to Fork the BCH Network

As the currency’s network hard fork approaches, the BCH chain is 8100 blocks ahead of the BTC chain. BCH this week is operating at 8 percent of the current BTC difficulty, and it’s 3.4 percent more profitable to mine BTC. Mining profitability and its fluctuations may change after the BCH network reconfigures the Difficulty-Adjustment-Algorithm (DAA). BCH miners are now signaling their intent to activate the fork and the change is estimated to occur around 2 pm EDT depending on hashrate speed.

Bitcoin Cash Markets Remain Resilient As the Network's Upgrade Approaches

Bitpay Prepares Users for the Bitcoin Cash Consensus Change

Because the fork is drawing closer the Atlanta-based company, Bitpay, has announced to its wallet users its plans for the BCH hard fork. The firm explains that with any blockchain protocol change it must always ensure that customer funds will be safe.

“For the November Bitcoin Cash protocol change, Bitpay and Copay wallets will follow the bitcoin cash chain with the most accumulated difficulty — With current miner signaling, this means that our wallets will be compatible with the new rules activated by the bitcoin cash mining majority,” explains Bitpay.

We don’t currently have any reason to think that this hard fork will be contentious or will result in a blockchain split for bitcoin cash. Users can continue to receive and send bitcoin cash transactions from their wallets up to, during, and after the hard fork protocol change.

Kim Dotcom Asks His Fans Which Cryptocurrency Will Dominate — BTC or BCH?

Also this week the notorious Kim Dotcom started talking about bitcoin cash with his 671,000 followers. Dotcom asks his fans, “By 2021 which of these two is going to carry the larger volume of Internet payments?” With just 11 hours left remaining for the poll bitcoin (BTC) is leading by 64 percent and bitcoin cash (BCH) has 36 percent.

Overall the BCH community seems pleased with the currency’s growing ecosystem and many supporters believe next week’s fork will be smooth. With Segwit2x gone and the rest of the cryptocurrency competition constantly nipping at BTC’s heels many spectators will be focused on bitcoin cash.

What’s your thoughts on bitcoin cash at the moment? Do you think the hard fork approaching will be smooth? Let us know what you think in the comments below.

Bitcoin Cash Surges as Businesses Abandon Legacy BTC

Bitcoin cash is enjoying a new lease of life as major figures throw their weight behind the chain. In the wake of the abortive Segwit split, neither bitcoin nor B2x has prospered, with the latter failing to materialize and the former dropping below $6,800 for the first time in 10 days. BCH, meanwhile, hit $866 earlier today.

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All Aboard The BCH Express

As the elation, anger, and acrimony over Segwit2x has started to settle, focus has returned to the seemingly intractable problems of bitcoin scaling and transaction fees. Given the difficulty of attaining consensus for developments of the bitcoin network, many have grown frustrated by the stalemate, with widespread Segwit adoption and Lightning Network implementation still months or years away.

Bitcoin Cash Surges as Businesses Abandon Legacy BTCWith bitcoin currently unsuitable for small transactions due to high fees, various businesses and public figures have expressed their preference for a cryptocurrency more suited to everyday use. For some, this has meant looking to the world of altcoins, where the likes of Litecoin and Dash beckon. For those keen to stick with the bitcoin brand, however, bitcoin cash looks increasingly attractive.

One member of the Openbazaar team tweeted:

Hearing lots of great things about @BitcoinCash $BCH today. Many developers and businesses seem better aligned with the vision now that 2x has failed.

The team running the P2P marketplace have every reason to be extolling the virtues of bitcoin cash, having announced that they’ll be accepting BCH on account of its cheaper fees along with zcash. As businesses have wrestled over what to do with a legacy bitcoin that’s becoming increasingly un-transactable, the BCH team have wasted no time in wooing defectors, stating:

BTC’s utility continues to decline. Watch as businesses adopt BCH.

One public figure who has thrown his weight behind BCH is Pirate Party founder and bitcoin maverick Rick Falkvinge, who declared: “With recent developments, I’m putting all available dev resources to retool my software for #Bitcoin Cash. I suspect I’m far from alone.” He later added: “I’m moving my development effort to Bitcoin Cash, as Bitcoin Legacy now has hit a brick wall and needs to be dropped like a bad habit. I have no real reason to move the coins.”

One Coin to Rule Them All

Bitcoin Cash Surges as Businesses Abandon Legacy BTCThe Bitcoin Cash market has surged over the last 24 hours, with volume exceeding $2.5 billion, 57% of which was trading against the Korean won. Much of the fevered interest in BCH will simply have been market sentiment, fueled by the growing consensus that the legacy bitcoin chain is ill-equipped to handle growing volume. It would be speculative at this stage to suggest that BCH is gearing up for its own version of The Flippening, when Ethereum believers thought their coin might actually overtake bitcoin to become The One True Coin.

Make no mistake though, if BCH’s most ardent supporters have their way, not only will bitcoin cash steal bitcoin’s market cap eventually but it will also steal its name. In the wake of the Segwit2x furore, there were hopes that the in-fighting which had driven a wedge into the bitcoin community would cease and work could resume on infrastructure improvements. Instead, the BTC/BCH debate has been ramped up, with supporters of both chains adamant that theirs is the best bitcoin.

Bitcoin Cash Surges as Businesses Abandon Legacy BTC
Bitcoin cash

Bitcoin legacy’s decentralized nature is both its greatest strength and its greatest weakness. The BCH team is wasting no time in rolling out network upgrades and implementing a clear roadmap. More than 1,500 businesses are already accepting bitcoin cash, a modest figure but one that is rising steadily.

Do you think bitcoin cash will eventually overtake the legacy chain? Let us know in the comments section below.

Breaking News: Segwit2x Fork Cancelled

Mike Belshe has published a blog post indicating that the planned Segwit2x hard fork will not be taking place. The markets have responded dramatically, with the price quickly setting a new all-time high of approximately $7900 USD.

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It Has Been Revealed That the Segwit2x Fork Will Not Take Place

Breaking News: Segwit2x Fork CancelledBitgo CEO, Mike Belshe has published a post indicating that the contentious Segwit2x hard fork scheduled for this month will not occur due to a lack of community support.

The post states that “the Segwit2x effort began in May with a simple purpose: to increase the blocksize and improve Bitcoin scalability. At the time, the Bitcoin community was in crisis after nearly 3 years of heavy debate, and consensus for Segwit seemed like a distant mirage with only 30% support among miners.” Belshe adds that “Segwit2x found its first success in August, as it broke the deadlock and quickly led to Segwit’s successful activation.”

Belshe states “our goal has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together.” Belshe concedes “it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.”

The Markets Have Responded With a Dramatic Surge Into New All-Time Highs

Breaking News: Segwit2x Fork CancelledBelshe predicts that “as fees rise on the blockchain, we believe it will eventually become obvious that on-chain capacity increases are necessary. When that happens, we hope the community will come together and find a solution, possibly with a blocksize increase. Until then, we are suspending our plans for the upcoming 2MB upgrade.”

The markets have responded with a dramatic surge into new all-time highs. Following the announcement, bitcoin saw a spike of approximately $500 USD in less than one hour -signifying a highly bullish reaction to the news. As of this writing, the price of bitcoin is consolidating above the preceding all-time high at approximately $7700 USD, after having established a new all-time high of $7900 USD.

What are your thoughts on the news that the Segwit2x fork will not happen? Share your opinion in the comments section below!


Images courtesy of Shutterstock

This Developer is Bringing Atomic Swaps to the Bitcoin Cash Network

Atomic swaps between blockchains have become a hot topic that has sparked a lot of interest due to the decentralized nature of the exchange process. This week a developer that goes by the name of “Deswurstes” or “MCCCS” has accomplished a successful bitcoin cash atomic swap test.

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Introducing Bitcoin Cash to the Atomic Swap Protocol

This Developer is Bringing Atomic Swaps to the Bitcoin Cash NetworkOn November 4, bitcoin cash (BCC) was tested using the Decred/atomic swap protocol by a developer named Deswurstes. The atomic swap Github pull request #37 states, “the first Bitcoin Cash atomic swap has been made! — Proof at the end of this pull request.” Deswurstes says he’s been interested in the scaling debate since mid-2016 and has been a bitcoin fanatic (as a small scale miner/holder, not a developer) since then. The test is one of the developer’s first contributions using the bitcoin cash code, and he plans to design friendlier-looking software to allow users to use it more efficiently.

“Atomic swaps are interesting topics, and there are many alt-to-alt exchanges, but none of them are safe; there’s nothing that prevents the exchange from stealing your money,” Deswurstes explains to news.Bitcoin.com.

When I found atomic swaps, it looked like magic to me. I thought it’d be cool if bitcoin cash had this feature. First I asked its developers if they were going to implement bitcoin cash support, but they were busy. One or two weeks later, I tried and succeeded in coding my atomic swap dream.

‘In the Future, All Altcoin-to-Altcoin Atomic Swaps Will be Instant’

The developer’s first test was a bitcoin cash-to-bitcoin cash atomic swap contract. He tested it like this because it enabled him to debug both initiate and participate commands at the same time, and each time he got closer to the working software. “Currently the software works awesome, however, it doesn’t have dynamic fee support,” Deswurstes explains to news.Bitcoin.com. “The command that makes the node software choose inputs for the transaction (fundrawtransaction) has different syntaxes in different node software.”

Deswurstes says now, people can make trustless bitcoin cash payments, but the process of compiling the software and typing commands in the command prompt is complicated for average users. “When trustless, decentralized exchanges that have order matching come with good UIs, the atomic swap will replace the current exchanges — Especially BCC-BTC will have high volume,” the programmer explains.

In the future, all alt-to-alt atomic swaps will be instant — People will be trading BTC and BCC, which’ll be the highest volume trade, in a few seconds.

This Developer Aims to Bring Atomic Swaps to the Bitcoin Cash Network

Cryptocurrency Exchanges Will Have to Utilize Atomic Swaps, or No One Will Use Them

Deswurstes believes atomic swaps just need a good user interface (UI), and after a nice looking and easy to use UI is implemented there’s nothing that can prevent everyone from using atomic swaps, the developer explains. At the moment Deswurstes notes there are two startups working on friendlier atomic swap UI’s including Barterdex, and Altcoin.io.

“One day, all of the alt-to-alt exchanges will use atomic swaps, because of its safeness and it will be as convenient as the old style trades. There’s no reason for them not to use atomic swaps If they won’t, their users will no longer use them,” Deswurstes concludes.

What do you think about implementing atomic swap processes with bitcoin cash? Let us know what you think in the comments below.


A Step-by-Step Walkthrough:Preparing for the Bitcoin Hard Forks:

At the moment there are two forks planned for the Bitcoin network, and cryptocurrency proponents are curious about taking the best preparations. One fork is called Bitcoin Gold which is scheduled for October 25, while the other hard fork Segwit2x (BTC1) will take place roughly around mid-November or block height 494784.

 

The Tale of Two More Forks

This past summer news.Bitcoin.com wrote a lot about preparing for a fork when the entire Bitcoin network and its participants experienced the August 1 blockchain split. Currently, there are two bitcoin forks scheduled to happen over the next few weeks. This means if splits happen to occur between all of them, there could be a total of four blockchains that share the same transaction history of the original Bitcoin blockchain created by Satoshi Nakamoto.

Preparing for the Bitcoin Hard Forks: A Step-by-Step Walkthrough
The Bitcoin Gold project is expected to fork the bitcoin network on October 25. However, the network will not go live until November 1.

The Bitcoin Gold (BTG) project aims to fork the network so they can create an Application Specific Integrated Circuit (ASIC) ‘resistant’ version of bitcoin. The reason they are forking the network is because the team thinks ASIC mining is too centralized. So BTG developers plan to make bitcoin mineable using Graphic Processing Units (GPU), by changing the original protocol’s consensus to an algorithm called Equihash. This hard fork is planned for October 25 the developers have stated, but the network itself won’t be live until November 1.

Preparing for the Bitcoin Hard Forks: A Step-by-Step Walkthrough
The Segwit2x project is expected to fork the bitcoin network at block height 494784

The Segwit2x hard fork is a technical compromise stemming from the New York Agreement (NYA) this past spring, between a vast majority of bitcoin miners and businesses. Some people believe the NYA compromise helped push miners to use their hashrate voting power to ultimately implement the Segregated Witness (Segwit) protocol. But the activation of Segwit came with the agreement that three months later a 2MB block size hard fork would take place. This hard fork will take place at approximately block height 494784 or roughly around November 18 depending on hashrate.

At the present time, both of these forks may or may not take place on the expected dates.

Before During and After the Forks

Preparing for the Bitcoin Hard Forks: A Step-by-Step WalkthroughThere are a few things bitcoin holders should know before, during and after the fork. Before the fork, users should make sure their funds are in the right place, at the right time. This means choosing to leave money on an exchange, which some folks like traders do, or hold the funds in a non-custodial wallet. Most people agree the best practice, to remain in full control of any amount of bitcoin holdings, is to maintain your own funds by possessing your own private keys. So before the fork, if users keep their BTC stash in a non-custodial wallet they should make sure they have their seed phrases or private keys available. If an individual possesses their private keys, they are in full control of their funds before and after the fork.

If a user chooses to keep funds on a custodial wallet or a centralized exchange then they should be fully aware the provider is in control. Trading platforms will cease deposits and withdrawals during a fork and may even stop trades temporarily. Users keeping money on an exchange must always know they will be ultimately subject to that business’s discretion.

During the fork, most people would also agree that sending bitcoin transactions while the consensus change is taking place is not the best idea. People should remain patient until 100 percent of the dust has settled before they transact with the bitcoin network. There could be confusion with the fork like blockchain re-organizations, replay attacks, and prolonged confirmation times.

After the fork, it is still a good idea to remain patient, and you can start investigating reliable infrastructure for both forks before using the split networks. From here you can research how to import your private keys so you can claim split tokens, as well as wait for splitting tools from wallet and exchange providers. For instance, many bitcoin wallet users had to wait for the app maintainers to create a tool or fully support the new network that was born this summer. Some people may have to wait a few days or even weeks before wallet providers and exchanges follow through with support and special chain-splitting tools.

Replay Protection and Attacks

Preparing for the Bitcoin Hard Forks: A Step-by-Step WalkthroughAt the moment both of the planned forks, Bitcoin Gold and Segwit2x, do not have replay protection added to the specific project’s code. Segwit2x initially had an opt-in type of replay protection, but developers have since removed the protocol. Bitcoin Gold promises replay protection, but the code also has not been added to the Github repository. Both forks could add an opt-in version or a stronger means of replay protection before the forks happen. During a replay attack, it’s possible Unspent Transaction Outputs (UTXO) can be verified by miners on both chains making it easy for an attacker to manipulate or unknowing investors could make mistakes. Some individuals believe replay protection is necessary, while there’s also an argument against the implementation as well.

Additionally, light clients, otherwise known as Simplified Payment Verification (SPV) wallets, follow the chain with the most cumulative proof of work. SPV wallets don’t check the rules and ultimately sync transactions with the longest chain headers. Those using SPV wallets will want to make sure they are on the preferred chain. While some wallet providers let users decide on which node they should tether to, other light clients will choose for you. If you don’t like the wallet startup choosing for you, then it is probably best to move your bitcoin to a client that allows choice or is tied to the chain you prefer. You can also choose to use other wallet options like paper, hardware, and full node clients.

Hardware Wallets, Exchanges, and Full Nodes

Some people believe that hardware wallets and paper wallets are better places to keep funds during a hard fork. With paper wallets, an individual can obtain or spend their funds whenever they want after the fork on both chains. With a hardware wallet, you may have to wait for a tool to be released as hardware companies like Ledger, and Trezor had to launch firmware updates for their users regarding bitcoin cash.

Preparing for the Bitcoin Hard Forks: A Step-by-Step Walkthrough

Users can also choose to side with a chain of their choice by downloading a full node client. Full nodes will enforce the rules on the specific chain they are tethered to, and these types of wallets have keys that can also be imported to retrieve split tokens at a later date.

As explained above, leaving funds with an exchange during and after a fork exposes users to the will of a company’s decisions. The business may not let you deposit or withdraw between a specified period. So if you need access to funds that are on an exchange, you may not get them right away. Additionally, some exchanges may not release support for split tokens right away, and again you will have to wait. For instance, the exchange Coinbase has not yet released bitcoin cash (BCH) holdings to their customers who kept funds on the trading platform prior to August 1 and the firm aims to release the BCH in January 2018.

Keep Calm and Bitcoin On

Over the past few weeks, wallet providers and exchanges have been releasing their contingency plans, and more will likely follow shortly. News.Bitcoin.com has been covering nearly every popular bitcoin service’s contingency plan, and we will continue keeping our readers informed every step of the way. Further, our team will provide information regarding these forks before, during and after each event so users can be sure they know what’s happening throughout each period.

Lastly, we need to reiterate further that keeping private keys yourself is truly the best way to proceed during a fork, and also being patient during a blockchain split event by not sending or receiving transactions will ensure losses won’t happen.

How are you preparing for the upcoming hard forks scheduled to take place on the Bitcoin network? Let us know your game plan and thoughts in the comments below.hjgyttrreeww-1068x1068

Putin Confirms Russia Will Regulate Cryptocurrencies

Following the meeting with Vladimir Putin, Russian regulators announced that cryptocurrencies will officially be regulated in Russia. The central bank and the finance ministry will now work together to come up with one draft law to provide a basic regulatory framework for cryptocurrencies including bitcoin, which is expected by the year’s end.

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Putin Has Spoken

At the meeting on cryptocurrencies between Putin and top Russian regulators on Tuesday, the decision to regulate cryptocurrencies in Russia was reached. “The Russian government has decided to officially regulate the mining and circulation of cryptocurrencies,” RT described and quoted Finance Minister Anton Siluanov announcing on Wednesday that:

We have agreed on the following: the state should regulate the process of issuing cryptocurrencies, the process of mining, the process of circulation…The state should head this situation and regulate it legally.

Putin Confirms Russia Will Regulate Cryptocurrencies
Putin’s meeting on cryptocurrencies.

The meeting was attended by Siluanov, Central Bank Governor Elvira Nabiullina, Central Bank Deputy Governor Olga Skorobogatova, Presidential Aide Andrei Belousov, and Qiwi CEO Sergei Solonin.

In the meeting, Putin acknowledged the risks associated with cryptocurrencies. However, he also stressed that “it is important not to create unnecessary barriers, of course, but rather to provide essential conditions for advancing and upgrading the national financial system.”

Finance Ministry to Work With Central Bank

Currently, cryptocurrencies including bitcoin are not regulated in Russia despite many attempts by various government departments to put forward proposals to regulate them. Both the central bank and the finance ministry have been working separately on a draft law to regulate cryptocurrencies. A draft bill was supposed to be introduced in October but was postponed due to a lack of consensus among the regulators.

Putin Confirms Russia Will Regulate Cryptocurrencies
Finance Minister Anton Siluanov.

The finance ministry proposed to legalize cryptocurrencies but was opposed by the central bank due to “a loss of control over the money flows from abroad.” This week, the ministry proposed to register cryptocurrency miners and to license crypto exchanges.

After the meeting with Putin, however, Siluanov told journalists that the finance ministry and the central bank will now work together to prepare one basic draft law to regulate cryptocurrencies, Tass reported on Wednesday and quoted him saying:

We will prepare the draft law together with the Central Bank…I think we will be able to determine the basic regulatory positions before the end of the year.

“According to him, with regard to regulation, the functions of the Ministry of Finance, the Central Bank and Rosfinmonitoring will be delineated,” the publication elaborated.

Possible Restrictions

In addition, Deputy Finance Minister Alexei Moiseev indicated on Wednesday that there may be some restrictions. “Russia’s Finance Ministry supports the idea to limit the amount cryptocurrency that can be purchased by individuals,” Tass detailed and quoted him saying:

We said that restrictions are needed on purchases and sales, accounts, miners’ taxation and so on…Yes, there is such an idea, we support it. We should discuss the amounts. We should look at international practice.

This is not the first time Moiseev talked about restricting the purchase and sale of cryptocurrencies in Russia. In August, he proposed listing them on regulated exchanges but banning non-qualified investors from buying and selling them. However, his proposal did not receive a lot of support from other regulators. First Deputy Prime Minister Igor Shuvalov promptly commented on Moiseev’s suggestion, stating that no legislation had been decided. The finance minister followed up with a suggestion that cryptocurrencies could be made available to anyone in the same way federal loan bonds (OFZ) are.

How do you think Russia will regulate cryptocurrencies? Let us know in the comments section below.

The Satoshi Revolution: A Revolution of Rising Expectations

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The Satoshi Revolution: A Revolution of Rising Expectations.
Chapter 1: A Revolution of Rising Expectations (part 3).
by Wendy McElroy

A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.
Satoshi Nakamoto

Bitcoin Avoids the Lethal Problems of Earlier Private Currencies

(Caveat: I do not mean to credit Satoshi Nakamoto for all good things within cryptocurrency, as I may seem to be doing. Visionaries came before him and forged new paths. For example, Timothy C. May’s“Crypto Anarchist Manifesto” was published in 1988 and opened with the remarkable sentence, “A specter is haunting the modern world, the specter of crypto anarchy.” The genius of Nakamoto was twofold. He produced an elegant, original technology that rivals the Gutenburg printing press and allows the implementation of economic crypto anarchy; and he saw clearly its broad political, revolutionary significance. As much as anything, Nakamoto is a symbol and an aegis for others who have done or are doing fine work.)

Part of the Satoshi Revolution’s brilliance lies in the fact that it is profoundly political without being ideological. Most people see little difference between the political and the ideological or, if they do make a distinction, they believe ideology is the set of beliefs that determine the specific political positions a person takes. In many cases, they are correct. But not in all cases. Sometimes politics and ideology are distinct.

Bitcoin is political in the same sense as the Gutenberg printing press (1448).
Although his press was not the first one, Johannes Gutenberg (c.1400-1468) pioneered innovations that were almost as creative as those of Nakamoto. For example, he used a durable oil-based ink rather than water-based ones that did not last well. He used a strong alloy to create close to 300 separate type bits that could be quickly assembled into uniform templates; prior printers used fragile wooden bits or carved the letters of each page into a wooden block to be inked. Then Gutenberg. He opened a world of information and ideas to the average person who no longer needed to rely on authorities for ‘truth’. The printing press decentralized knowledge from the hands of authorities to those of the common man, and knowledge is power. This made it not only a technical marvel, but also an agent of social change and revolution.

Those who ruled would have prevented the shift in power by plugging the flood of opinions and ideas, if they could have, because an illiterate, uninformed public is easier to control. A literate, informed public served the goals of populists and reformers who threaten the status quo which is the main reason state censorship existed then and now. Unfortunately for the ruling class, literacy increased and more people judged for themselves which religious and political beliefs resonated inside of them as real.

One example of social upheaval: without Gutenberg’s printing press, the Protestant Reformation is difficult to imagine. When Martin Luther launched the Reformation in 1517 by nailing his Ninety-Five Theses to the door of a German church, the document was rapidly translated from Latin into German, copied and reprinted. Luther, the man, could reach only those within the range of his voice. Luther, the mass-produced author, spread ideas across Europe in months. Within three years, hundreds of thousands of copies of his Theses had been cranked off hundreds of printing presses. The Catholic Church responded by excommunicating Luther and prompting him to flee into hiding. But ideas do not respond to hellfire, nor do they flee.

The Gutenberg printing press was a powerful, political tool which sparked movements and revolutions. But the printing press itself was not ideological because any idea could be assembled in templates and printed en masse for people to read: Catholicism or Protestantism, individualism or socialism, Karl Marx or Ayn Rand. The machine itself was neutral. The printing press had strong ideological implications, it could be argued, because it did empower the individual and the masses. In other words, it was a populist force. But authorities also used the new technology to their own statist advantage. As magnificent as the printing press was, it was a tool to produce good or ill, depending on purpose of the user.

Bitcoin is similar. It empowers the individual which is a profoundly political act. But that empowerment makes everyone freer to choose whatever ideology they wish. Bitcoin itself has no settled ideological slant. That’s why individualist, anarchists and socialists alike can use it as a way to pursue their own goals, whatever those goals may be. Amir Taaki, a developer of the DarkMarket/OpenBazaar and Dark Wallet, is an aggressive left-anarchist. He spent time in Rojava [Syrian Kurdistan] helping to found a People’s Republic through the introduction of Bitcoin. Rojava was “under embargo, so there’s no way to move money in or out,” he explained. “So we have to actually create our own Bitcoin economies. Now we have a technological tool for people to freely organise outside [the] state system. Because it is a currency not controlled by central banks.”

Bitcoin is a mechanism that can achieve a galloping diversity of goals. This is a great strength.

Why?

The answer lies in history and requires a bit of background.

A key difference between the radical, individualist movements of the 19th and 20th centuries is that the earlier one focused intensely on the importance of private money and private banking to achieve personal freedom. The radicals placed a primal emphasis on the right of every individual to create their own currency and to function as their own bank. It was a natural right every bit as important as freedom of speech or freedom of religion.

Some 20th century advocates of private money, such as Rothbard or Hayek, take a similar approach. Rothbard wrote, “Let us first ask ourselves the question: Can money be organized under the freedom principle? Can we have a free market in money as well as in other goods and services? What would be the shape of such a market? And what are the effects of various governmental controls? If we favor the free market in other directions, if we wish to eliminate government invasion of person and property, we have no more important task than to explore the ways and means of a free market in money.” Most modern advocates, however, argue in utilitarian or public policy terms instead of civil liberties.

Their 19th century counterparts were more consistently accurate in placing monetary theory at the core of all freedoms. The pivotal individualist-anarchist Benjamin Tucker believed the right to issue private currency was so important that it could destroy the State all by itself. The money monopoly was the means by which the State sustained itself and robbed the average person not merely of money but also of economic opportunity by controlling credit. Nothing was more important than to destroy the money monopoly.

Two specific events sculpted the approach of individualist anarchists to the banking monopoly and private currency. James J. Martin commented on one of them:

Few instances in American history have created as much curiosity concerning economic and financial matters among amateurs and members of the general citizenry as the panic of 1837.… Banking abuses came under concentrated scrutiny and gave rise to many proposed radical remedies.
The other event was the Civil War in which the North used the Legal Tender Acts and the National Banking Act of 1863 to finance its side of the conflict. Through these measures, Congress guaranteed the notes of authorized bankers and legally protected them from liability for debt. The act also established a national tax of 10 percent for all money not authorized by Congress.

Fresh with a knowledge that private currency not only could work but had been working well for well over a century, the 19th-century radicals responded. They did not merely theorize; they vigorously issued private currency and experimented with new economic models. Their efforts are fascinating to review but they are also cautionary tales as to some pitfalls that private money should avoid.

A major problem for 19th century individualist anarchism in America was the movement’s determination to link private money to the labor theory of value. The theory states that the economic value of a good or service is based upon the amount of labor required to produce it rather than upon what a capitalist wants to charge or what a purchaser is willing to pay. Radical individualists back then generally rejected profit from capital because it constituted value in excess of the labor invested in a good or service. They rejected excess profit in three forms: interest on money, rent, and profit in exchange, all of which were called “usury.” If the main political goal of 19th century radical individuals was the abolition of the State, then their main economic goal was the abolition of the “money monopoly.” By the term “money monopoly,” they referred to three different but interacting forms of monopoly: banking, the charging of interest, and the privileged issuance of currency. In short, unlike Gutenberg’s printing press and Bitcoin, their private monies were grounded in ideology and a badly flawed ideology, to boot. This greatly reduced the social value of their currencies as a tool. For one thing, when the labor theory of value became less popular, the currencies seemed to be discredited.

Josiah Warren provides a real world example of the problem of attaching ideology to money. Warren, who is credited with being the first American anarchist, based his political thought on two concepts, both which were common within the 19th century radical individualist movement. The first was “Sovereignty of the Individual,” which meant every human being was a self-owner with jurisdiction over his or her peaceful actions. The second was “Cost is the Limit of Price” or the labor theory of value.

Warren tested his specific solution to the money monopoly and to the ‘inequity’ of interest through a Time Store from which he issued Labor Notes. In 1827, the business opened with $300 worth of groceries and dry goods that were offered at a 7% mark-up from Warren’s own cost in order to cover expenses such as overhead. This was before groceries were pre-packaged, pre-weighed and it was common for buyers to bargain with the shopkeeper rather than pay a posted price. One of Warren’s innovations was to post prices for goods which drove prices even lower because transactions consumed less of his time. The customer paid in traditional money for the good and, then, compensated Warren for his time through a Labor Note which obliged the customer to provide Warren with an equivalent amount of the buyer’s time. If the buyer were a plumber, for example, the Labor Note committed him to render his services to Warren for “X” units of time in plumbing work. The Labor Notes were circulated and traded. Warren’s goal was to establish an economy in which profit was based solely on the exchange of time and labor.

To some degree, he succeeded. People travelled from a hundred miles away to avail themselves of Warren’s low prices. After a few years, Warren declared the experiment to be a success and closed the store’s doors. Whether the store was a success is questionable, however. And, if it was a success, it was probably due to low prices than to the Notes that came close to being a barter system. Whichever is true, it is difficult to see how this novel currency could have functioned in dense populations where people were not acquainted with each other, or for commerce on a grander scale. And exchangers still had to trust other people.

Some might state the lesson of attaching an ideology to an instrument for political liberation as “get the damned ideology correct this time.” I believe this is the wrong lesson. The point of empowering people is to give them the tools to decide on ideas and life for themselves, not to deliver a predigested message. That’s the lesson of Gutenburg and Bitcoin.

It also a reason to stand hard behind the original vision of Bitcoin, because the power Nakamoto produced can be used well or badly depending on the intentions of the user.

And, now, Satoshi?

To paraphrase George Bernard Shaw, I hear the future knocking on my door. And as I throw it open, I see Satoshi Nakamoto standing at my threshold with a grin on his face, asking to come in. Just as I begin to wave him through, however, Murray Rothbard appears and shoves him aside with the words “Not so fast there, Saschik, I have something to say to her first!” And, if for nothing more than the fact that he infused the modern freedom movement with Austrian economics, my old friend and mentor deserves to take the next step.

[To be continued next week.]