How Exchanges Plan To Deal With a Possible August 1 Fork

Over the past week, many bitcoin exchanges have revealed plans for the possibility of a network fork on August 1, 2017.

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In about a week there still may be a possibility of a network fork come August 1, even though Segwit2x is showing strong consensus. If miners fail to continue joining forces to enact BIP91 and Segregated Witness, then the UASF and UAHF plans could still happen, in fact, the UAHF may happen regardless. Below is a compiled list of exchanges that have detailed their contingency plans for an upcoming fork, as some of them will be halting deposits and withdrawals and taking the necessary steps to secure their trading platforms and customer assets.

A List of Current Exchanges That Have Issued Statements Concerning a Possible August 1 Fork

Xapo

The bitcoin company Xapo has issued a statement about August 1 telling customers that bitcoin transactions during a fork will be suspended. Xapo says if users need to do transactions during a fork, customers should get their bitcoins off Xapo before August 1. Coins held on the exchange will be available after the network change and “Xapo will keep your bitcoins safe,” explains the firm.

GDAX/ Coinbase

Coinbase and GDAX have made similar statements because they are the same company. The San Fransico-based firm has detailed that it will suspend deposits and withdrawals during an August 1 fork scenario and may halt trading. As far as the user-activated hard fork is concerned GDAX and Coinbase have also announced they will not support that chain and its associated token. Coinbase recommends that those interested in acquiring UAHF tokens should remove their bitcoins from their exchanges.

Huobi

The Chinese exchange Huobi has issued a report on its plans to suspend bitcoin deposits and withdrawals on August 1 due to “potential technical risks.” The exchange details, “if there is no fork, and the network is stable, we will resume deposits and withdrawals from Bitcoin.” Further, the company says that if customers are not comfortable with their wallet or feel they are not protected with anti-replay attack software, then they should deposit funds on Huobi before August 1.

BTCC

BTCC has also announced its contingency plan stating that the exchange will honor both a minority and majority chain. However, the trading platform has not detailed if it will suspend deposits and withdrawals at this time. “In the case of a hard fork, BTCC will give existing customers tokens on the minority chains based on how many tokens they have on the majority chain at the time of the hard fork. We will update users as the situation progresses,” explains the Chinese exchange BTCC.

Okcoin

Another Chinese exchange, Okcoin has announced that it will suspend deposits and withdrawals. The company’s statements are nearly identical to Huobi’s contingency plan. The company does say that if Bitcoin splits into several blockchains, the exchange will honor “every blockchain and give users their rightful ownership of their Bitcoin.” Further Okcoin says that if anything “unexpected” happens the trading platform will suspend bitcoin trades as well.

Gemini

The Gemini exchange issued its statement concerning August 1 saying the company will do their “best to support chain withdrawals.” However, the exchange details that unlike the Ethereum / Ethereum Classic bifurcation last year they cannot “guarantee” they will be successful as there is a lack of “bidirectional repetition protection in the different bifurcations of Bitcoin Core (including Segwit2x, UASF, BitcoinABC, and Bitcoin Unlimited).”

Bity

The Switzerland based cryptocurrency exchange Bity has detailed it will be suspending deposits, withdrawals, and trading as soon as the 29th of July approaches. The company says it is preparing replay-protection and will “start bitcoin trading as soon as the dust settles and we know which chain(s) is(are) surviving.”

Kraken

The exchange Kraken has not officially given any statements about the fork. However, during a recent podcast, Krakens CEO Jesse Powell details that the trading platform will have to freeze deposit and withdrawal funding. “Everybody with a balance on Kraken would have two coins” in the event of a fork says, Powell. Depending on the risks of replay attacks customers should receive both tokens.

Thirteen Japanese Exchanges

According to Japan’s Cryptocurrency Business Association (JCBA), thirteen exchanges have announced suspending bitcoin services on August 1. This means participating exchanges will suspend deposits, withdrawals, and possibly trading. The exchanges suspending services include Bitbank, Bitpoint, Quoine, Fisco, Coincheck, Btc Box, Tech Bureau (Zaif Exchange), GMO-Z.com, Campfire Corporation, Bit Trade, Bitcrements, Tokyo Bitcoin, and Minnano Bitcoin.

Bitflyer

Japan’s largest exchange that wasn’t included in the JCBA list, Bitflyer published its plan on July 21. Bitflyer says that customer assets will be protected and a “coin made by each of the two (or more) chains after branching will be given to customers.” Additionally, Bitflyer is taking countermeasures for replay attacks that may occur during blockchain branching. Alongside this, the Japanese exchange will also temporarily stop deposits and withdrawals until the protocol changes are complete.

Many More Exchanges Still Haven’t Told Customers Their Contingency Plans, But Have Issued Statements in the Past

That sums up the list of exchanges that have issued statements concerning a potential split and suspension of services. There still are many exchanges that have not revealed their plans such as Poloniex, Bitfinex, Bitstamp, Bithumb, Korbit, and a host of other trading platforms. At the moment people speculate that certain exchanges may be relying on the issued statements many trading platforms made last March or during the Ethereum split.

Are there any exchanges that you’ve heard from that’s not on this list? Let us know about it in the comments below.

Ethereum’s Parity Client Users Lose Millions in a Multi-Sig Hack

On July 19 the ethereum community was warned that the Parity client version 1.5 and above contained a critical vulnerability in the multi-signature wallet feature. Further, a group of multi-signature “black hat exploiters” has managed to drain 150,000 ether from multi-sig wallets and ICO projects.

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A Vulnerability Found in the Multi-Signature Contract “Wallet.sol” Used in Parity Clients

Ethereum's Parity Client Users Lose Millions in a Multi-Sig HackAccording to the company Parity and the firm’s founder Gavin Wood, the startup’s product the Parity wallet version 1.5 and above contained a bug that enabled the theft of $30 million worth of ETH. The vulnerability discovered in these specific Parity wallets used a multi-signature contract called “wallet.sol” and the contract was utilized by a few initial coin offerings (ICO) as well. Circulating reports believe that three particular ICO projects were compromised including Swarm City, æternity, and Edgeless Casino.

The Parity startup had issued a security warning on its website on July 19 detailing the extent of the issue stating;

A vulnerability in Parity Wallet’s variant of the standard multi-sig contract has been found — Immediately move assets contained in the multi-sig wallet to a secure address.

The Mysterious ‘White Hat Group’ Returns to Rescue Funds

Ethereum's Parity Client Users Lose Millions in a Multi-Sig HackFollowing this incident, a group of unknown “white hat group” hackers took it upon themselves to drain the rest of the vulnerable multi-sig wallets by sweeping the network. According to the group, they recovered 377,105 ether worth about $85M at the time of writing. The group says they will be returning the funds to accounts that have been drained and are using the DAO rescue donations for the gas to send the ether forward.

“The White Hat Group were made aware of a vulnerability in a specific version of a commonly used multisig contract,” explains the hacker’s announcement. “This vulnerability was trivial to execute, so they took the necessary action to drain every vulnerable multisig they could find as quickly as possible. Thank you to the greater Ethereum Community that helped finding these vulnerable contracts.”

If you hold a multisig contract that was drained, please be patient. We will be creating another multisig for you that has the same settings as your old multisig but with the vulnerability removed and we will return your funds to you there. We will be using the donations sent to us from The DAO Rescue to pay for gas.

How Many More Faulty Contracts Will Be Found in the Future?

The news of the vulnerability comes just after the Coindash ICO hack last week which saw the loss of $10M worth of ether. The malicious hacks from that event last week and yesterday’s multi-signature wallet drain has had little effect on the price of ethereum. However, the cryptocurrency community is once again discussing the issue of faulty contracts held within the Ethereum network that currently hold millions of dollars in funds. Close to a quarter of a billion dollars in ether has been drained by either the “black hat exploiters” or the “white hat group” since the notorious DAO debacle last year.

What do you think about the latest multi-signature wallet ethereum hacks? Let us know in the comments below.

August 1 Will Be the Potential Disruption of the Bitcoin Network

If you’ve been listening to the bitcoin ‘community,’ you’d know in about two weeks the bitcoin network may face some protocol changes. Due to the possible user-activated soft fork (UASF) planned and the chance some groups may counter this plan, this has created thousands of discussions concerning August 1. Now the bitcoin-focused web portal Bitcoin.org has issued a warning on the site that informs users of a “potential network disruption.”

 

August 1st and the Potential Network Disruption

Bitcoin users everywhere are getting prepared and heavily discussing the possibility of a blockchain split. The subject was discussed a lot this past March when bitcoin proponents and cryptocurrency businesses feared a potential split when the Bitcoin Unlimited implementation was seeing strong support. Now the conversation has resurfaced, but the topic of UASF or BIP148 is an entirely different scenario.

August 1 and The Potential Disruption of the Bitcoin Network

UASF (BIP148) is a mechanism designed to start on August 1st, at 00:00 UTC that activates a soft fork enforced by full nodes. After this point, full nodes participating in this plan will reject blocks that have not upgraded to BIP141 otherwise known as Segregated Witness (Segwit). At press time there are 1095 total UASF nodes out of 7896 reachable bitcoin nodes globally according to Bitnodes. UASF requires a lot of industry support and miners to activate Segwit, by this point if they do not support the activation the chain could diverge into two.

August 1 and The Potential Disruption of the Bitcoin Network

Currently, there are businesses that have announced initial support for BIP148 such as Abra, Trezor, Samourai Wallet, Electrum, Coinomi, Mycelium and roughly 37 other organizations. However, there are many wallets and a vast majority of exchanges that have not announced any support or issued warnings about the upcoming August 1st Segwit enforcement. This includes a significant amount of wallet providers and exchanges including Bitstamp, Kraken, Bitfinex, Gemini, BTCC, Poloniex, and many more. One relatively small exchange in Switzerland called Bity has warned its customers the platform will be halting trading on August 1st.

Bitcoin.org’s Warning

On Wednesday, July 12, 2017, 08:00:00 GMT Bitcoin.org issued a warning in regards to the potential network disruption that may take place on July 31, 20:00:00 GMT/August 1st, 00:00 UTC.

“Bitcoin confirmation scores may become unreliable for an unknown length of time,” explains the network disruption warning. “This means that any bitcoins you receive after that time may later disappear from your wallet or be a type of bitcoin that other people will not accept as payment.”

Once the situation is resolved, confirmation scores will either automatically return to their normal reliability, or there will be two (or more) competing versions of Bitcoin. In the former case, you may return to using Bitcoin normally; in the later case, you will need to take extra steps in order to begin safely receiving bitcoins again.

August 1 and The Potential Disruption of the Bitcoin Network

The warning gives users some preparation guidelines and possible outcomes for during and after the UASF event. This includes not trusting payments during this time, and not sending payments until after the dust has settled. Even the maintainer of the website Bitcoinuptime.com says that there may be “potential bitcoin downtime from the upcoming BIP148 fork” and the network’s 99.991523267% uptime will have to be updated. Further, there was an issue concerning the Bitcoin.org alert over the wording “Bitcoin may be unsafe to use starting July 31st” in contrast to saying “potential network disruption.” The developer who made the change writes;

Note: I object to this change, which I think makes the alert less clear, less forceful, and degrades alert usability.  I make this change only because the Bitcoin.org site maintainer insists upon it.

GDAX Issues a Statement Concerning UASF

Following Bitcoin.org’s disruption alert one large bitcoin exchange has come forward issuing a warning and how the company will handle the August 1 situation. The cryptocurrency trading platform GDAX, a subset of Coinbase announced there will be a temporary suspension of deposits, withdrawals, and possibly trading on August 1. GDAX executive Adam White says, “the activation of UASF may create two blockchains,” and outlines how the company plans on handling the possible fork. If August 1 results in two chains, GDAX states;

  1. One blockchain becomes dominant, resulting in the other blockchain having low community adoption and value.
  2. Both blockchains are adopted, co-existing and operating independently of one another with roughly equal community adoption and value.

In either scenario, we will implement safeguards to ensure the safety of our customers’ funds. For example, we will temporarily suspend the deposit and withdrawal of bitcoin on GDAX and may pause the trading of bitcoin as well. This decision will be based on our assessment of the technical risks posed by the fork, such as replay attacks and other factors that could create network instability.

Bitcoin ABC

Another possible scenario to think about is the “Bitcoin ABC” (Adjustable Blocksize Cap) implementation that was revealed by the software engineer, Amaury Séchet at The Future of Bitcoin event in Arnhem. The project has released its latest client Bitcoin ABC 0.14.2 and says it’s a full node implementation of Bitcoin that removes Segwit code and replaces it with an adjustable block size cap. During the initial announcement, Séchet detailed that Bitcoin ABC is part of the user-activated hard fork contingency plan against BIP148.

August 1 and The Potential Disruption of the Bitcoin Network

In essence, the ABC protocol prepares for any disruptive risks associated with UASF activation and could also activate during the August 1st “Flag Day” as well. Besides being a contingency plan, the UAHF protocol will move the block size cap towards the activation of emergent consensus where users can decide block size themselves. Bitcoin ABC could counter the BIP148 soft fork which could cause network disruption, and a possible blockchain split as well.

Meanwhile, the Segwit2x Plan Moves Forward In the Midst of Egos and Constant Bickering

Alongside these two alternative plans, the Segwit2x working group has also been steadily preparing the compromise idea announced called the “New York Agreement.” The group released beta code and have been experimenting with the Segwit protocol and a 2MB hard fork on a Bitcoin testnet. So far there has been a lot of bickering about Segwit2x between the project’s lead developer Jeff Garzik, Bitcoin core developers, and the Blockstream CEO Adam Back. Many core supporters refuse to compromise on Segwit2x calling it “Franken-segwit” and a great majority of core developers have rejected supporting the idea. However, some core maintainers have been making comments on Segwit2x’s Github and the working group’s Slack channel. There is still uncertainty concerning the New York Agreement plan, but the working group is still moving along as August 1st gets closer.

As far as August 1st is concerned users should make sure they hold their private keys. There is a possibility of network disruption and Bitcoin.com will inform our readers of everything people need to know, including exchange updates, trading, withdrawal and deposit suspensions, and any other important information that arises in regards to this specific date.

What do you think about August 1st? Do you think there will be any potential network disruption or do you think nothing will happen at all? Let us know what you think in the comments below

Contraction of Total Cryptocurrency Market Cap May Be Inevitable

The total market capitalization of all cryptocurrency markets has exceeded $100 billion USD following bitcoin’s recent establishment of new all-time price highs, in tandem with dramatic value increases in most altcoins.

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The Total Cryptocurrency Market Capitalization Has Now Surpassed Major Companies Such As Ford And Delta Airlines.

The milestone of the cryptocurrency markets attaining $100 billion status has been largely attributed to bitcoin’s impressive growth in Asia during recent months, with bitcoin’s market cap representing approximately 45% of the total cryptocurrency markets. Since the beginning of 2017 the price of a single bitcoin has tripled, creating an all-time high of over $2900USD on Bitstamp.

Over the last 7 years Bitcoin’s price has grown by an average of 0.3% daily, culminating in Bitcoin’s current market cap of over $45bnUSD, renders the digital currency of comparable size to Tesla – who currently boast a $50bnUSD market cap. With Bitcoin steadily continuing to absorb capital from new markets, this trend may continue to hold up over the longer term. New investors should exercise caution in interpreting these facts as evidence of Bitcoin’s inevitable unending price ascension, as the price of a single bitcoin has gone up over 1000% since 2015.

Contraction of Total Cryptocurrency Market Cap May Be Inevitable Towards End of 2017

Entering the 12-digit club ranks the cryptocurrency ecosystem alongside major banks such as Commonwealth Bank of Australia ($105bnUSD market cap), Royal Bank of Canada ($100bnUSD market cap), and puts the cryptocurrency ecosystem of comparable size to McDonalds US – who currently have a total market cap of approximately $125bnUSD. The total cryptocurrency market capitalization has now surpassed major companies such as Ford and Delta Airlines.

A Contraction In The Share Of The Total Market Cap Represented By Altcoins May Be Inevitable

Although market sentiment across the altcoin markets currently comprises euphoric bullishness, many speculators are preparing for the party to soon come to an end. The extreme percentage gains seen by many altcoins are very likely to be unsustainable long-term, suggesting that a contraction in the share of the total cryptocurrency market cap represented by altcoins may be inevitable. If so, the only question is: when?

Contraction of Total Cryptocurrency Market Cap May Be Inevitable Towards End of 2017Despite the intensity of the current cryptocurrency bubble, a recent resurgence in Chinese trading volume following a return to normal operations regarding fiat deposits and withdrawals may drive further growth in the total market capitalization of cryptocurrencies in the immediate future.

Will altcoins be able to retain over a 50% share in total cryptocurrency market capitalization? Or will Bitcoin again comprise over half of the total cryptocurrency ecosystem? Share your thoughts below!

European Commission Launches Digital Currency and Dark Web Consortium

A recent announcement from the European Commission details the formation of a new consortium dedicated to preventing illegal activities tied to virtual currencies and the dark web. The group consists of fifteen members from seven European countries that will develop technical solutions for investigating and mitigating this types of illicit activities.

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Virtual Currencies and Darknet Markets Evolve Quickly Says Project Coordinator

European Commission Launches Digital Currency and Dark Web ConsortiumThe European Commission’s Community Research and Development Information Service (CORDIS) has created a consortium and project called ‘Titanium’ (Tools for the Investigation of Transactions in Underground Markets). According to the announcement, the Titanium Project researchers will begin undertaking a three-year, €5 million project, that aims to curb this criminal activity and will be subsidized by the European Union.

“Criminal and terrorist activities related to virtual currencies and darknet markets evolve quickly and vary in technical sophistication, resilience and intended targets,” details the Titanium Project coordinator Ross King, a senior scientist at the AIT Austrian Institute of Technology.

Titanium Is Backed by European Law Enforcement and Interpol

The announcement says that blockchain technology used in virtual currencies like bitcoin can allow organizations and individuals to “evade traditional investigative measures.” King believes it is “necessary” to develop forensic tools and have the ability to acquire data from “virtual currency ledgers, online forums, peer-to-peer networks of underground markets, and seized devices.”

The group explains the consortium is backed by European law enforcement agencies and Interpol. Other members of the Titanium Project organization include Bundeskriminalamt (Germany), Coblue Cybersecurity (Netherlands), Universität Innsbruck (Austria) Interpol (International Criminal Police Organization), Ministry of the Interior (Austria), Ministry of the Interior (Spain) and the National Bureau of Investigation (Finland).

Organizers Say Titanium Tools Won’t Compromise Individual Privacy and Fundamental Rights

Titanium Project organizers say that Bitcoin does have many legitimate use cases. However, the consortium explains that is still used by criminals and is very popular on the dark web. Furthermore, the consortium notes the latest ransomware attack on May 12 where the attackers froze computers throughout 150 countries and demanded bitcoin payments.

King also details the consortium wants the public to know that Titanium Project tools will also respect people’s privacy and other sovereign rights.

“The consortium will analyse legal and ethical requirements and define guidelines for storing and processing data, information, and knowledge involved in criminal investigations without compromising citizen privacy,” King concludes in the European Commission announcement.

What do you think about the European Commission’s Titanium Project? Let us know in the comments below.

Japanese Companies Embracing Bitcoin See Stocks Soar with Rising Bitcoin Price

Japanese companies continue to benefit from embracing Bitcoin, following its approval by the government as a form of payment. Small businesses listed on stock exchanges that offer bitcoin-related services are seeing their share prices rise as the price of bitcoin spikes.

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Bitcoin’s Gains Spilling into Traditional Stock Markets

Japanese Companies Embracing Bitcoin See Stocks Soar with Rising Bitcoin Price
Prime Minister Shinzo Abe

On April 1, Prime Minister Shinzo Abe’s government legalized bitcoin as a form of payment. The law, which enforces strict rules on bitcoin exchanges, gives the digital currency more credibility. Many companies subsequently began integrating bitcoin into their business models, with some forming partnerships with small bitcoin startups.

As bitcoin becomes more widely accepted in Japan, its price rises sharply. The cryptocurrency has risen approximately 180 percent at press time since the beginning of the year, according to data from Japan’s largest bitcoin exchange by volume, Bitflyer.

Meanwhile, small exchange-listed companies that have started incorporating bitcoin into their businesses are seeing a similar pattern in their share prices. A well-known Japanese day trader, Naoki Murakami, said that “All of these gains coincide with bitcoin’s rally,” Bloomberg reported on Monday. He explained:

That has made the stocks of these small-cap companies an attractive way for speculators to invest in cryptocurrency markets without buying them directly. […] Not everyone is sure they can trust bitcoin exchanges. And some don’t have accounts there. That’s why they’re using the stock market to speculate.

“From about a month ago when all these virtual currencies started spiking like crazy, we began seeing the so-called ‘stocks of the virtual currency bubble,”’ he noted.

In addition, he explained that Japanese stock markets have relatively loose listing requirements, therefore many small companies are able to go public with “no income and a market value of as little as $10 million.” That is why the Tokyo Stock Exchange is home to hundreds of small companies, he explained, adding that:

It’s probably not a coincidence that Japan’s stock market is being seen as a proxy for bitcoin investments.

Here are Some Winners

Among companies that are seeing their stocks rally after they announced businesses relating to digital currencies are Remixpoint Inc, Infoteria Corporation, and Fisco Ltd, according to Bloomberg.

Japanese Companies Embracing Bitcoin See Stocks Soar with Rising Bitcoin PriceRemixpoint Inc. is the largest of the three companies, having a market value of about 31.3 billion yen ($283 million). The company opened a bitcoin exchange, Bitpoint, at the end of May before announcing its plans to install over 100,000 ATMs nationwide. Its stock has more than doubled in value since the partnership with Peach Aviation to bring bitcoin payments to the airline, Bloomberg noted. “Remixpoint is trading at 514 times earnings, the highest among all Japanese technology companies worth more than 30 billion yen.”

Japanese Companies Embracing Bitcoin See Stocks Soar with Rising Bitcoin PriceInfoteria Corporation partnered with bitcoin exchange platform developer Tech Bureau and is testing ways to use blockchain technology for proxy voting. The company saw its shares up more than 50 percent in the past month. Similarly, financial information services provider Fisco Ltd. began operating a bitcoin exchange last year and is up about 25 percent since early May, the news outlet detailed.

When the price of bitcoin fell, these companies’ share prices also experienced a similar downturn. However, overall, their gains have significantly outweighed their losses.

Do you think these companies will continue to benefit from bitcoin’s price rise? Let us know in the comments section below.

Nevada Senate Bill 398 Becomes Law, Prohibiting Tax on Blockchain Technology

Judging by recent legislation, which is mostly hostile towards blockchain technology, Senate Bill 398 in Nevada seems like an unprecedented step in a positive direction. SB398 prohibits taxation and regulations regarding the use and implementation of blockchain technology, and it was approved by Nevada governor Brian Sandoval. 

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The bill is meant to create an environment that is hospitable Nevada Senate Bill 398 Becomes Law, Prohibiting Tax on Blockchain Technologyrather than hostile to new technology startups, and it is the first one to recognize smart contracts as legitimate and binding.

The bill was filed by Ben Kieckhefer on March 20. It appears he did not want the State to follow in the footsteps of places like New York who have generated regulations that harm bitcoin and other blockchain-based companies. The politicians in Nevada overall want the blockchain and technology industry to grow and benefit their State.

A Minutes of the Senate Committee On Judiciary record document read, “The bill will help ensure the State keeps pace with technological advancements and provide a legal framework for people using a blockchain to not do so in a legal gray area.”

The bill includes the following legal requirements for county commissioners to follow:

A board of county commissioners shall not: 13 (a) Impose any tax or fee on the use of a blockchain by any 14 person or entity; 15 (b) Require any person or entity to obtain from the board of 16 county commissioners any certificate, license or permit to use a 17 blockchain; or 18 (c) Impose any other requirement relating to the use of a 19 blockchain by any person or entity.

Towards Blockchain Recognition and Acceptance…or not?

These type of bills that seem to be pro-blockchain may be a meaningful positive step toward creating more acceptance for cryptocurrencies. Seeing these kinds of bills are a nice change in tempo, because other bills have demonized crypto for contributing to money laundering schemes and other forms of crime.

For instance, in Florida, an appropriations committee recently Nevada Senate Bill 398 Becomes Law, Prohibiting Tax on Blockchain Technologypassed an anti-money laundering bill to target people who leverage bitcoin to hide finances. Also, Federal senate bill 1241 defines digital currencies as “monetary instruments,” and its intent is to target bitcoin exchanges to intercept criminal activity and undermine cryptocurrency freedom and neutrality.

Nonetheless, pieces of legislation that are bad and good for blockchain technology will continue to crop up in lockstep as politicians decide what is best for their constituency. In the end, crypto-enthusiasts can only hope for the disruptive technology to be shown in a positive light rather than be paraded alongside images of a dark criminal underworld, rife with its hackers and fraudsters and shysters and monsters.

Do you expect to see more anti-blockchain or more positive blockchain legislation in the future? Let us know in the comments below. 


Japan’s Near-Zero Savings Rates and Pension Problems Drive Retail Investors to Bitcoin

The Japanese have long put up with near-zero interest rates on their personal savings accounts. At the same time, they are worried about a serious shortfall in the national pension program. These problems have pushed retail investors to consider investing in bitcoin.

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Low Savings Rates Pushing “Mrs Watanabe” to Bitcoin

Japan’s Near-Zero Savings Rates and Pension Problems Drive Retail Investors to BitcoinBitcoin is attracting “Mrs Watanabe“, or retail investors who were originally Japanese housewives. Retail interest has jumped, bitcoin exchanges told Reuters on Friday. Investors are “trying to escape rock-bottom savings rates by investing in the cryptocurrency,” the publication wrote.

The world’s third-largest economy has been “under a mounting debt burden that successive governments have failed to address,” the BBC described in May. Japan’s government debts have almost quintupled from 50% of the country’s GDP in 1980 to 239% of GDP today.

Accompanying rising government debts is the falling of the Japanese household savings rate. From its peak of more than 23 percent, it turned negative in 2013.

Japan’s Near-Zero Savings Rates and Pension Problems Drive Retail Investors to BitcoinToday, savings rates at Japanese banks are near zero. One of Japan’s largest banks, Mizuho Bank, offers a 0.001% interest rate on savings accounts. Competing bank MUFG offers the same 0.001% rate whereas Nomura offers 0.02%.

Mutsuko Higo, a 55-year-old social insurance and labor consultant, is among the Japanese retail investors drawn to bitcoin. She bought $1,800 worth of the digital currency to increase her retirement savings in March. “After I first heard about the bitcoin scheme, I was so excited I couldn’t sleep. It’s like buying a dream,” she told Reuters.

Japan’s Pension Problems

Japan’s Near-Zero Savings Rates and Pension Problems Drive Retail Investors to BitcoinAbout 26 percent of the population is over sixty-five years old in Japan, which is the age they can start receiving pensions. Last month, the World Health Organization (WHO) showed that country’s life expectancy at birth is 83.7 years of age. For more than 20 years, Japan has been ranked number one in this metric.

Meanwhile, the Government Pension Investment Fund (GPIF), which is the world’s largest public pension fund, has been paying out to this growing retiree pool more than it takes in. The fund has also been suffering from poor performance. In 2015, its investment return was -3.81 percent, and in the first quarter of 2016, it suffered a loss of $51.8 billion.

Higo’s personal response to the situation:

Everyone says we can’t rely on Japanese pensions anymore…This worries me, so I started [investing in] bitcoins.

According to Reuters, Japan’s moms and pops are drawn to bitcoin’s gains, now that the digital currency is regulated and readily available to the public. They have been investing in stocks and futures but the broader Asian stock market benchmark has only gained 17 percent year-to-date. Bitcoin, on the other hand, has seen a rise of almost 140 percent against the yen at press time, even with the recent correction. At its peak price, bitcoin gained over 180 percent, according to the country’s largest bitcoin exchange by volume, Bitflyer.

Japan’s Near-Zero Savings Rates and Pension Problems Drive Retail Investors to Bitcoin

Do you think more Japanese retail investors will turn to bitcoin because of low-interest rates and pension problems? Let us know in the comments section below.

Markets Update: Cryptocurrency Prices Rebound After Last Week’s Dip

The price of bitcoin seems to have found some stability over the past 24 hours, after last week’s sharp upward climb in value followed by a 30 percent dip the next day. Since the drop, the price has bounced back and is hovering around US$2250-2300 per BTC at the time of writing.

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Bullish Pressure Returns to Bitcoin Markets After a 30 Percent Dip

Last week was an exciting time for cryptocurrency traders as quite a few digital assets hit all-time price highs on May 24. Bitcoin’s value reached a high of $2760 across global exchanges which was followed by a short-term downtrend to the sub-$2000 mark. Quite a few traders had assumed a significant dip to the $1800-1600 range would take place, but so far these predictions never materialized. Since bitcoin ricocheted from its low, it has since consolidated between $2200-2300 over the past three days. For now, there is a touch of bullish pressure keeping the price going, but it’s significantly weaker than last week.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip

Technical Indicators

Technical indicators still suggest a bear market could continue and what we see now may be an extended ‘dead cat bounce.’ Over the past couple months, we’ve reported that the 100 Simple Moving Average (SMA) was above the longer term 200 SMA in nearly every price analysis. However, things have changed as the 100 SMA is now below the 200 SMA indicating the downtrend may not be over.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip
Bitstamp market depth 5-30-17, 10:30 am EST.

Moreover, the Relative Strength Index (RSI) and Stochastic oscillators still show the price is overbought and bears may take the upper hand in the near future. Bitcoin’s price rebound was unexpected and has shifted traders predictions slightly, but a good majority are still assuming the uptick is merely a bull trap. If an upside breakout breaks the $2400 range, there’s a good chance we could skip the downturn and head towards all-time highs once again.

A Glimpse at Altcoin Markets

Alternative cryptocurrency markets have all seemingly followed bitcoins ups and downs over the past week. One notable altcoin that has been performing quite well is Ethereum (ETH), which is $205 per ETH at press time. On May 30th Ethereum trade volume surpassed BTC markets for the first time in history and currently commands a $19 billion market cap. The third highest market cap held by Ripple (XRP) has taken a significant dive and hasn’t really recovered much as the price hovers around $0.23 cents per XRP.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip
Ethereum trade volume surpassed BTC volume for the first time in history.

The fourth highest valued alternative cryptocurrency market NEM retraced a touch and is resting at $0.21 cents per token. Other altcoins have also rebounded since the dip including Ethereum Classic (ETC $17), Litecoin (LTC $25), Dash ($119), Monero (XMR $43), Bytecoin (BCN $0.002) and Stratis (STRAT $4.50). Another coin that has received a bunch of volume is Tether, which currently holds the fifth highest volume as some traders seem to have used the token as a safe haven from the dips.

The Verdict

For now, Bitcoin’s price has appeared to have found a temporary floor and remains relatively stable with a few light swings here and there. Some traders seem pretty confident that a horrible bear market has been avoided, but most traders are still doubtful the downtrend is over. Good news from Russia has seemingly helped push the value of bitcoin upwards. Meanwhile, talks of a scaling compromise has replaced some of the vitriolic energy that has given the bitcoin ‘community’ a bitter taste.

Bear Scenario: It’s possible a second leg downwards could happen in the near future continuing to push the price to lower levels. Bitcoin’s fiat value could dip down to the $1800-1600 range if bulls step away from exhaustion. At the moment looking at order books from popular exchanges shows a strong floor at the $2000 mark for the time being.

Bull Scenario: Bitcoin’s price has jumped back and has shown resilience after last week’s losses. In order to bring the upswing velocity further, it would help if the cryptocurrency crossed over the $2400 range. Breaking this resistance point could bring the digital asset to higher levels and possibly get closer to last week’s top or create a new all-time high.

What do you think about the price of bitcoin retracing to $2250-2300? Do you think bitcoin will continue to rise to higher levels? Or do you expect bears to lower the price further shortly? Let us know 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 Bitcoin.com nor the author 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.”

A New Bitcoin Improvement Proposal Aims to Compromise

As the price of bitcoin settles down many bitcoiners are now concentrating on the scaling compromise proposed at the Consensus event held last week. Now a few bitcoin developers have decided to work on Segwit-2MB proposals that try to adhere to each side of the debate.

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The Compatibility-Oriented Omnibus Proposal

A New Bitcoin Improvement Proposal Aims to Compromise It is still hard to envision that everyone in the bitcoin community will be pleased with a compromise. There are still some bitcoin proponents who vehemently oppose Segwit, and then there are those who fully disagree with a 2MB hardfork. On May 29 a developer named Calvin Rechner submitted a new bitcoin improvement proposal (BIP) that aims to cohere to the recent Barry Silbert scaling concept.

“This proposal is written under the assumption that the signatories to the Consensus 2017 Scaling Agreement are genuinely committed to the terms of the agreement, and intend to enact the updates described therein,” Rechner’s BIP details.

This document describes a virtuous combination of James Hilliard’s ‘Reduced signalling threshold activation of existing segwit deployment’, Shaolin Fry’s ‘Mandatory activation of segwit deployment’, Sergio Demian Lerner’s ‘Segwit2Mb’ proposal, Luke Jr’s ‘Post-segwit 2 MB block size hardfork’, and hard fork safety mechanisms from Johnson Lau’s ‘Spoonnet’ into a single omnibus proposal and patchset.

UASF and a 2MB Hard Fork Deployment in Six Months

Rechner explains that Shaolin Fry’s UASF is included so the existing Segwit deployment can be activated without creating a new release. Following the UASF implementation, the BIP explains that a 2MB hard fork deployment will occur six months after Segwit activation.

“The intent of this proposal is to maintain full legacy consensus compatibility for users up until the hard fork block height, after which backwards compatibility is waived as enforcement of the hard fork consensus ruleset begins,” details Rechner.

‘A Possible Win if the Community Will Accept It’

Following Rechner’s BIP submission, bitcoiners on social media and forums discussed the recent proposal. Throughout the conversations concerning the new BIP, a good portion of people seemed to like the idea. Some explained the reason they supported this proposal is because it includes UASF and the block size increase has safety nets in place to avoid divergent consensus.

“The Spoonnet-based improvements need clarification IMO, but otherwise it looks like a possible win if the community will accept it,” explains bitcoin developer Luke Jr. “Provided there is reasonable consensus from the community, a soft-hardfork (aka MMHF aka Spoonnet) can be theoretically made pretty safe. But I’m not sure it can really be ready within six months.”

Even though there still seems to be a lot of people hell bent towards not compromising at all, there are definitely signs of people looking to find the right compromise. It’s not certain this new BIP will be taken further, but it shows the growing trend to find consensus is important to most people from both sides of the debate.

What do you think about Calvin Rechner’s new proposal? Do you think the bitcoin community can find a compromise? Let us know what you think in the comments below.