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.]

Zenapay Latest PoS Bitcoin Solution to Enter Projected $50 Billion Cannabis Market

US cash-intensive cannabis businesses (420s) are looking for ways to meet customer demand while struggling under federal prohibition. Cryptocurrencies are increasing in popularity with 420s, and now Zenapay is entering the market with its own bitcoin solution.

 

Cannabis Cash

The US states comprising its contiguous west, if outliers include Alaska and Nevada, is home to fifty-two million people. That is an enormous market. They also happen to be the bulk of states that have legalized cannabis for personal use, medicinal use, and sale.

Tension arises between all such states and the federal government because the federal government does not agree with voters’ will.

Zenapay Latest POS Bitcoin Solution to Enter Projected $50 Billion Cannabis Market

Beyond criminality, issues of banking and finance come into play. The federal government is given wide jurisdiction over banking and money, and financial institutions are wary of  running afoul of federal laws.

In practical terms this means bank accounts, access to lines of credit, and myriads of financial products are in practice forbidden to 420 companies.

Much as it was on the black market, 420s are reliant almost exclusively upon cash.

Mounds of cash on hand is not only a logistical nightmare in a modern economy, it’s also a real security issue. And with twenty more states coming online, passing slimmed-down versions of legalization/decriminalization, the cannabis market is looking for relief.

Bitcoin Solution

“Statistics from financial services firm Cowen & Co showed legal cannabis was a $6 billion industry last year, and is expected to grow to $50 billion by 2026,” RT online reports.

Population numbers and these projections are enticing payment service providers into the cannabis market.

The latest such example is a company out of Chicago, Epazz. It’s an over-the-counter publicly traded business software concern, betting rollouts early winter of this year in Apple’s App Store, and later for Android, will go a long way in making 420s more efficient and safer.

Zenapay Latest POS Bitcoin Solution to Enter Projected $50 Billion Cannabis Market

Zenapay is a one percent transaction fee, point-of-service (POS) solution. It boasts online and in-store bitcoin purchases capability using proprietary software, allowing for customer anonymity and for 420s to lessen cash burdens.

“We are filling a large need in the cannabis community,” the company’s press release quoted its CEO Shaun Passley. Merchants, he said, “due to the stringent limitations by the standard banking systems” simply cannot be banked.

A PoS with bitcoin functionality eliminates these issues.

Entrepreneurial bitcoiners, regardless of niche, are constantly looking for POS services to keep accounting straight as they look to drop cash dependency for bitcoin.

If it proves successful, Zenapay says it will offer payroll services, e-commerce stores, inventory tracking, and compliance features going forward.

What do you think? Are 420s a welcome addition to the bitcoin ecosystem? Are solutions preserving anonymity finally ‘getting it?’ Tell us in the comments below! critical-fast-bud-auto-cannabis-seeds-by-oss-bank-1068x1068


Coinbase Reveals its 2x Fork Plans

Another large bitcoin exchange in the industry, Coinbase, has announced an update concerning the upcoming Segwit2x hard fork. The San Francisco-based trading platform and wallet provider follows the recent Bitfinex announcement detailing plans for a possible bitcoin splitCBAAs-1068x1068

 

Coinbase Reveals Customers Will Have Access to Bitcoin on Both Blockchains

Coinbase Reveals 2x Fork PlansThis week the exchange Coinbase which provides over 36M wallets to bitcoin users revealed some parts of its plan for the upcoming Segwit2x fork. Coinbase states that they want to let customers know the company’s business mission is to ensure trust and safety within the cryptocurrency environment. Further, Coinbase emphasizes that there is no action required from users and “bitcoin can be securely stored on Coinbase before, during, and after the fork.”

“Customers with bitcoin balances stored on Coinbase at the time of the fork will have access to bitcoin on both blockchains,” explains the exchange.

After the fork, we will enable access when we have determined each blockchain is secure and stable. We expect this to happen within a few days after the fork, but it may take longer if additional risks emerge.

The San Francisco Exchange Will Reveal Distinct Names of the Two Bitcoin Blockchains Soon

The company executive, Dan Romero, explains they are still in the process of working on bitcoin cash withdrawals. The firm is also presently researching “engineering and security requirements for each bitcoin blockchain.”

Of course, the announcement did not give away what everyone wanted to hear — Which is an answer to the question on how Coinbase will name each fork (due to the online debates around which fork has “the right to be called Bitcoin”). The announcement is also different than when the exchange revealed its initial plans to not support the previous hard fork, bitcoin cash. This time around, the company is saying they will allow access to the new chain, and customers do not have to withdraw their coins by a certain date.

Community members are curious about the decisions made by companies like Coinbase and Blockchain.info as these firms have a lot of users within the bitcoin ecosystem. Coinbase does intend to tell the public how it will deal with the naming the two forks, as the company reveals it will be releasing this information in the near future.

In the coming weeks — nearer to the date of the fork — we will provide a more detailed plan for how Coinbase will approach naming the two Bitcoin blockchains.

What do you think about the announcement from Coinbase concerning the Segwit2x fork? Which protocol do you think they will call ‘Bitcoin?’ Let us know what you think in the comments below.

After the Boss Calls Bitcoin a ‘Fraud’ — JP Morgan Buys the Dip

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.

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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.

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip

Image via @IamNomad on Twitter.

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).

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip

The financial publication Zerohedge reports that JP Morgan applied for a “Bitcoin Alternative” patent in 2013 and was rejected 175 times.

Former JP Morgan Executives Leave the Firm for Bitcoin and Blockchain Projects

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip

Former JP Morgan derivatives executive, Blythe Masters, is all about the Blockchain hype.

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. 

Lead Developer Amaury Séchet Discusses the Future of Bitcoin Cash

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.

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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.

Developer Amaury Séchet Discusses the Future of Bitcoin Cash

A Configurable Block Size and Finding the Right Fee Structure for Bitcoin Cash

Developer Amaury Séchet Discusses the Future of Bitcoin Cash
Amaury Séchet, lead developer of the Bitcoin ABC client.

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

Developer Amaury Séchet Discusses the Future of Bitcoin CashFollowing 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.

Maxwell Claims Bitcoin ABC Developer Séchet Plagiarized Bitcoin Core Code

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 Maxwell Claims Bcash Developer Séchet Plagiarized Bitcoin Core Codeagreement 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.”

The schnorr code is backported from https://github.com/deadalnix/schnorr/blob/master/schnorr.d
The per txout db is backported from core and it 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.”

Community Response

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.”

 

U.S. Pressures BTC-e Exchange as They Plan to Distribute Funds Next Month

Last week the Russian bitcoin exchange, BTC-e, told the public about the trading platform’s plan to repay customers. Now the exchange is back and says there will be a full update come August 30 and the organization will follow with daily announcements. Further, BTC-e answered multiple questions from customers who want access to their funds.

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Releasing 55% of Funds & Pressure from the U.S.

U.S. Pressures BTC-e Exchange as They Plan to Distribute Funds Next MonthEarlier this summer news.Easypaypakistan reported on the cryptocurrency exchange BTC-e being taken down by U.S. law enforcement for connections to bitcoin laundering and illegal money transmissions. Following the FBI arresting alleged employees and seizing funds, the exchange announced on August 3 it had control over its servers and “some of its bitcoin purses.” The trading platform has released a few messages through Twitter and the forum Bitcointalk.org over the course of the past two weeks.

In those messages the exchange spoke of rebranding, working with other partners, and utilizing a unique in-house token to pay customers back similarly to how Bitfinex handled their hack. Now the exchange says come August 30th the organization will update customers every day.

“To date, there is a process of transferring digital resources to an investment company,” explains BTC-e’s latest announcement. “The company is preparing the resource for our launch. As it was announced earlier, at startup users will be able to withdraw 55% of the funds.”

We want to notify all users that there is a political background in closing our service and pressure from the U.S.

BTC-e Claims Fully Functional Exchange is Coming and Bitcoin Cash Refunds

The exchange also fielded questions from forum visitors who said they lost a lot of money due to the trading platform “going under.” Many of the traders were not happy with waiting and called BTC-e’s situation a “circus.” “There was a problem, and we will try to solve it in the shortest possible time,” the exchange says to upset clients. Another person stated that he needed his money now and called the exchange “evil.” BTC-e responds by saying that if it were possible funds would have been given out earlier and the real ‘evil’ resided with a “flag with a bunch of stars.”

The organization says they are hoping to open this September and will publish a “FAQ” in the near future. The FAQ was delayed due to an agreement with lawyers, BTC-e explains, and they can’t release it until the investigation completes. The exchange also answers a trader who asks if the exchange will have only “minimal functionality” and the company seems to think trading will be fully operational. Moreover, the exchange also detailed when they disperse customer holdings next month, Bitcoin Cash (BCH) will also be given to customers at a 1:1 rate.

What do you think about BTC-e’s recent announcement? Let us know in the comments below.

Bitcoin Cash Mining Difficulty Drops Significantly – Speeding Up The Chain

On Sunday, August 20, the Bitcoin Cash (BCH) network dropped its mining difficulty another notch down to 7 percent of BTC’s difficulty, on block 479808. Since then another mining pool has joined in on processing blocks on the BCH chain as the mining pool BTC.com has found its first block on the network.

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Bitcoin Cash Difficulty Drops to Seven Percent of BTC’s Mining Difficulty

Bitcoin Cash Mining Difficulty Drops Significantly – Speeding Up The ChainThe game theory for miners begins to get more interesting as the BCH network has become 115 percent more profitable to mine than the Bitcoin blockchain. This is due to the digital currency’s price which is hovering between the $760-790 range and because of the difficulty drop down to 7 percent of the Bitcoin network’s difficulty. Blocks are being processed rapidly now on the BCH chain as each block is being found every 3-7 minutes. BCH average hashrate per day has spiked significantly over the past four days to roughly 10 percent of the Bitcoin network’s seven exahash.

The mystery miner is now capturing fewer blocks over the past few days as other mining pools have picked up the pace. Mining pools like pool.Bitcoin.com, Bitclub, and Viabtc especially have been processing a lot more blocks recently, spreading out hashrate distribution. Viabtc has mined over 27 percent of the last 144 BCH blocks found, and the mystery miner now has only 68 percent. So far since the fork 1507 blocks have been mined and the fork is currently 1349 blocks behind the BTC chain. However, at the current speed of processing blocks and with the BCH network difficulty so low the chain should start to catch up.

BTC.com Mining Pool Joins In on BCH Mining, Other Pools to Follow This Week

In addition to the network difficulty changes, another mining pool has joined in on processing BCH blocks. The mining pool BTC.com mined its first block, 480002, on August 20, being the first pool to join since Bitclub last week. Additionally, according to Trustnodes the large mining pool BTC.top will begin mining BCH on Monday, August 21. Jiang Zhuo’er, BTC.TOP’s founder told the publication that there would be an option for miners to choose between BTC or BCH from the pool’s settings.

Bitcoin Cash Mining Difficulty Drops Significantly Drawing in More Miners
BTC.com joins in on mining BCH capturing 1.39 percent of the network.

Bitmain’s Jihan Wu Speaks on Bitcoin Cash

Bitcoin Cash Mining Difficulty Drops Significantly Drawing in More Miners
Jihan Wu founder of Bitmain, and operator of the mining pool Antpool.

The new pool follows statements made on August 17 by Bitmain founder and Antpool operator, Jihan Wu, saying “Antpool will start to provide bitcoin cash mining option after at least one of Segwit supporter/fan pools start to mining bitcoin cash.”  This means as more mining pools jump in on processing BCH blocks Jihan Wu’s Antpool may join in on mining the digital currency in the near future. A couple of days later Jihan Wu made some more interesting statements about BCH and BTC as well.

“If you want to kill bitcoin cash, please pitch Brian Armstrong to list bitcoin cash. Because lots of investors at Coinbase want to sell their bitcoin cash,” Jihan Wu states on Twitter. In another statement, Jihan Wu gives his Twitter followers a thought-provoking analogy.

America is not England. America is America. Bitcoin Cash is not Bitcoin. Bitcoin Cash is Bitcoin Cash.

BCH supporters are looking forward to this week as they believe there will be some more action with the digital currency’s hashrate and the token’s market price. At press time the BCH price has dipped well below this past Friday’s $960 highs and is currently hovering in the $760 price territory.

What do you think about the changes taking place within the Bitcoin Cash network? Let us know your thoughts in the comments below. 


 

Segwit2x and Bitcoin Core Drama Flares Up ‘Community’ Tension

On August 17 the bitcoin payment processing company Bitpay published a blog post about Segwit2x that stirred quite a bit of controversy with the bitcoin ‘community.’

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Bitpay Sparks Controversy for Promoting the BTC1 Codebase as a Reference Client to Bitcore Nodes

The post called “What Bitcore Users Need to Know To Be Ready for Segwit Activation” gives a detailed explanation to its Bitcore user base about the upcoming consensus process with Segwit2x. However, the post also leaves btc1 software (Segwit2x) as a form of upgrade for Bitcore full nodes.

Immediately a few bitcoin proponents and developers such as Peter Todd, Tuur Demeester, Francis Pouliot‏, John Carvalho‏, Rodolfo Novak‏ and others got angry with Bitpay for recommending an alternative to the Core reference code. Developer Peter Todd called Bitpay’s statement “fraudulent” and talked of litigation. Programmer Eric Lombrozo has asked his Twitter followers to openly ban any company that supports Segwit2x. Across forums and social media, the blog post caused relentless debate throughout the entire day of August 17.

Segwit2x and Bitcoin Core Drama Flares Up 'Community' Tension
Drama on the Twitter feeds.

Bitcoin.org Operator Theymos Seeks to Remove Copay Wallet and All Bitpay Services from the Website

Then later on into the day the owners of Bitcoin.org decided to create a pull request to remove Bitpay’s services and the Copay wallet from the site’s recommended wallet section. One of the operators of Bitcoin.org and the lead administrator of r/bitcoin, Theymos, explains that Bitpay is pushing “fraudulent” software.

“Bitpay is fraudulently passing off btc1 as Bitcoin software to which people are required to upgrade,” explains Theymos. “This is highly unethical and a violation of the bitcoin.org hard fork policy.”

Therefore, this pull request removes from bitcoin.org any references to Bitpay and their software/services Copay and Bitcore.

Segwit2x and Bitcoin Core Drama Flares Up 'Community' Tension

Bitcoin developers like David Harding detailed that Bitcoin.org should “proceed slowly and try to get Bitpay to clarify their position before we delist them.” Other developers agreed with Harding’s opinion, but others agreed with the proposal set forth by Theymos. Then btc1 developer Jeff Garzik explains his view stating, “NAK. It is reasonable and practical to follow the blockchain with the most hashpower (thus most secure).” Bitcoin.org operator Theymos didn’t like this statement and replied back to Garzik by saying, “Bitcoin is not and must not be ruled by miners,” and leaves a link to a Bitcoin Wiki site he controls.

Segwit2x Developer Jeff Garzik Removed From Github Repo

Just when you thought the drama would end, it didn’t, as later on that day Jeff Garzik was removed from the Core bitcoin repository as a contributor. This also created quite a stir on Twitter as people who are angry about Segwit2x stated things like, “you brought it upon yourself Jeff, enjoy working on btc1 alone.” While others defended Garzik and called the action “ludicrous.”

According to bitcoin Core contributor, Matt Corrallo, Garzik’s statements in the past would agree with the decision. “As Jeff himself advocated for several times, this is just the removal of people who haven’t been active in the project for years. No need to read too much into such things.” Software developers Peter Todd and Greg Maxwell also confirm the reason why Garzik was removed was due to inactivity. However, there are some speculators who believe the move was far more political, and coincidently done before the second half of the compromise.

Segwit2x and Bitcoin Core Drama Flares Up 'Community' Tension

It doesn’t seem like Segwit2x is off to a good start for the second half of the New York Agreement. Already bitcoiners are talking about the birth of a third bitcoin called “B2X.” Meanwhile, bitcoin cash supporters are telling Segwit2x proponents to join them, as most believe the compromise is a failed attempt. It’s safe to say the quarreling will be very intense over the next couple months in bitcoin-land, and another blockchain split is looking more probable as the days continue.

The Segwit2x Working group (btc1) plans to hard fork the network to increase the block size to 2MB on block 494,784 on the Bitcoin blockchain.

What do you think about the drama surrounding the Segwit2x code and Bitcoin Core reference client? Let us know what you think in the comments below.

Bitcoin Flies Past New All-Time High of $4K Across Global Exchanges

The price of bitcoin has climbed to another all time high of $4,000 per BTC across global exchanges on August 12 at approximately 9:40 pm EDT. It was just seven days ago when bitcoin’s price surpassed the $3,000 zone gaining $1,000 in value in just one week.

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Bitcoin Gains $1000 in Value Over the Course of One Week

Last week news.Bitcoin.com reported on how bitcoin crossed the $3K price range just five days after the network split. Now a week later the decentralized currency has continued to rise relentlessly and now commands a weighted average of $4140 per BTC at the time of writing. Most of the current demand for bitcoin is stemming from the U.S., Japan, China, South Korea and India, but the cryptocurrency is growing more popular in nearly every country worldwide according to Google Trends. Local Bitcoins volumes are also soaring in every nation state recorded by Coin Dance data.

Bitcoin Sets Another All-Time High of $4K Across Global Exchanges
Bitcoin crosses $4K on August 12, 2017, 9:40 pm EDT.

At this price, bitcoin’s entire market capitalization is roughly $66B and dominates 47 percent of the entire $134B cryptocurrency market cap. Further, since our last price analysis, BTC trade volume has increased from $1.7B to $2.3B over the past 24-hours. The $4K bitcoin price also follows in line with Goldman Sachs recent BTC prediction two months ago. Goldman Sachs chief technician, Sheba Jafari said at the time;

[Bitcoin] has a minimum target that goes out to 3,212. There’s potential to extend as far as 3,915. It just might take time to get there.

Bitcoin Sets Another All-Time High of $4K Across Global Exchanges

Brace Yourselves, Pictures of Bitcoin Price Tickers and the ‘Roller Coaster Guy’ Are Coming

Bitcoin’s value has gained $1000 per BTC over the course of the last week, and it wasn’t so long ago when the price surpassed $2K back in May. At the time bitcoin’s average 24-hour trade volume was roughly $1B, and since then volumes have doubled worldwide. Moreover, when bitcoin’s price reached the $2K milestone the network hashrate was 4.2 exahash per second, and now miners are processing at 6.1 exahash per second. Mining revenue is also doing quite well reaching its highest point in history, making mining a very profitable business in 2017.

Bitcoin Sets Another All-Time High of $4K Across Global Exchanges
In parallel with the price, Bitcoin interest is at an all time high.

Of course, cryptocurrency enthusiasts are very pleased with bitcoin’s price performance. Social media and forums are littered with pictures of people’s price tickers at $4K with plenty of funny ‘roller coaster guy’ memes as well. There have been some individuals who feel like these rises are no big deal anymore and new all time highs are just like any other day in bitcoin-land. One forum post nonchalantly says, “Meh — Getting boring, wake me up when we’re at $10k please.”

Where do you see the price going from here? Let us know in the comments below. 

Fork Wars: Segwit Lock-In and Communication Breakdown

Segregated Witness has officially locked-in and bitcoin’s price is currently coasting along at $3430. Even though Bitcoin market prices have rallied to new all time highs after the August 1 hard fork, both Bitcoin and the newly formed network, Bitcoin Cash still have some uncertain futures ahead.

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Bitcoin Cash Pushes Forward as Network Strengthens

Fork Wars: Segwit Lock-In and Communication BreakdownThe hard fork happened, and the Bitcoin network split into two different blockchains that share a previous history. The Bitcoin Cash (BCH) network has survived an entire week, with five mining pools dedicating hashpower towards this alternative chain. Currently, the Bitcoin blockchain is still 899 blocks ahead of the new BCH chain, and it’s also 54 percent more profitable to mine BTC than BCH. However, this will change on August 8 as Bitcoin’s difficulty is going to increase approx. 7 percent while the BCH chain has been lowered to 17 percent of BTC’s current difficulty.

At the moment there have been 240 BCH blocks mined since the blockchain split and an ‘unknown miner’ has processed more than 83 percent of all the blocks in existence. So far there have been a total of 16 ‘big blocks’ (over 1MB) found on the BCH network with a few large ones being over 4MB. The other mining pools which are dedicating hashpower to the BCH chain include Suprnova, pool.Bitcoin.com, Viabtc, and the Bitclub. These four pools have only found 16 percent of the 240 BCH blocks mined. At press time the BCH chain is processing blocks consistently at a rate of 30-60 minutes per block with some longer intervals here and there.

Bitcoin Cash Markets

The price of Bitcoin Cash has helped mining profitability quite a bit as the price per BCH is roughly $380 at the time of writing. BCH markets dropped to an all-time low of just under $200 per BCH, but on August 6 the price rebounded during the day. Currently, BCH markets are up over 40 percent in the last 24-hours with a market capitalization of over $6.2B. Bitcoin Cash also has the third highest trading volume processing $394M over the past 24-hours. Both BTC and BCH prices started ascending on August 7 and Bitcoin hit an all time high of $3490 during the overnight.

Fork Wars: Segwit Lock-In and Communication Breakdown
Bitcoin Cash (BCH) prices have rebounded touching $380 on August 8, 2017.

Segwit Lock-in On August 8 Block 479707

Earlier this week news.Bitcoin.com reported on the Segwit2x roadmap and the possibility of Bitcoin turning into three separate networks. Segregated Witness (Segwit) has officially locked-in at block 479707, and a ~3 month hard fork timeline will now begin. Segwit activation will go live on the Bitcoin network on August 9. A vast majority of miners and businesses have supported the compromise to implement Segwit first and then follow with a 2MB hard fork this November. So far the plan has been successful, but many Core developers vehemently disagree with the second half of the plan. Every single Core developer has stated that they will not support a hard fork in November, which means Core software will not be aligned with the Segwit2x plan.

Fork Wars: Segwit Lock-In and Communication Breakdown
Segregated Witness (Segwit) has officially locked-in at block 479707.

The Civil War and the Rest of the Segwit2x Plan

Fork Wars: Segwit Lock-In and Communication Breakdown
Bitcoin Core contributor Matt Corallo (TheBlueMatt).

Now, software developer Matt Corallo (TheBlueMatt) and other Core developers have introduced a concept for the Core reference code. It seems the new idea will have Bitcoin Core 0.15.0 automatically disconnect nodes running Bitcoin-ABC and the Segwit2x fork.

“Immediately disconnect peers that use service bits 6 and 8 until August 1st, 2018,” explains Corallo’s proposal. “These bits have been used as a flag to indicate that a node is running incompatible consensus rules instead of changing the network magic, so we’re stuck disconnecting based on the service bits, at least for a while. Staying connected to nodes on other networks only prevents both sides from reaching consensus quickly, wastes network resources on both sides.”

‘A Very Hostile and Unsafe Change Prior to Segwit2x Fork Deployment’

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Segwit2x lead maintainer Jeff Garzik.

After further feedback, Corallo explains that they updated to only disconnect bit 8 (Bitcoin-ABC), and the concept may be reviewed for other nodes in the near future. Segwit2x’s lead maintainer Jeff Garzik doesn’t like the idea and thinks it will create a “premature network split.”

“Deploying this change for NODE_SEGWIT2X – bit 7 – creates chain splits in the wild on an inconsistent basis” explains Garzik. “This creates chain splits even though Bitcoin Core and Segwit2x nodes are validating 100% the same rules today; it creates chain splits because of a presumed future rule deviation. The outcome is a bunch of non-deterministic islands.

This is a very hostile and unsafe change prior to Segwit2x fork deployment. It is safe and a convenient optimization for this codebase to make this change after a chain split, but not before.

Fear, Uncertainty and Doubt

‘Core’ developer Matt Corallo tells others that Garzik is just creating “FUD” and people should “ignore” his comments. “This obviously doesn’t create a split until their incompatible rules kick in, it will only make upgraded nodes more cleanly separated, it’s not like the network won’t still be well-connected,” explains Corallo.

It doesn’t look like the Segwit2x roadmap will be smooth sailing as Core developers want nothing to do with the second half of the compromise. Many speculators wonder why Corallo and other Core developers didn’t mention this concept earlier, as Segwit implementation was just about to lock-in. The argument on Github has continued for quite some time, and many ‘Core’ developers agree (Ack) with the idea of blocking Segwit2x and Bitcoin-ABC (Bitcoin Cash) nodes.

“@TheBlueMatt, Please reconsider that every disagreement of opinion is not “fudding”, and we can have an honest debate,” adds Garzik.

What do you think about Bitcoin Cash and Segwit2x? Let us know what you think in the comments below.