Putin Confirms Russia Will Regulate Cryptocurrencies

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

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Putin Has Spoken

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

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

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

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

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

Finance Ministry to Work With Central Bank

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

Putin Confirms Russia Will Regulate Cryptocurrencies
Finance Minister Anton Siluanov.

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

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

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

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

Possible Restrictions

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

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

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

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

Japan’s FSA Approves Coincheck’s Bitcoin Exchange License

Just recently the Japanese exchange Coincheck announced they have become a fully licensed exchange in Japan after being approved by the country’s Finance Bureau Director.

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Japan’s Financial Services Agency Approves Coincheck’s  Cryptocurrency Trading Platform Registration

Japan's FSA Approves Coincheck's Bitcoin Exchange LicenseOn September 13 the Japanese bitcoin trading platform and payment processor, Coincheck, announced the firm had been approved to be a licensed “virtual currency exchange.” The exchange registration approval follows the provisions of Article 63-3 of the country’s fund settlement law. After bitcoin was legalized as a form of payment on April 1, 2017, all domestic exchanges in Japan must receive authorization from the treasury department and Financial Services Agency (FSA) to operate a virtual currency exchange business.

At the time Coincheck was extremely pleased to see the Japanese statutes pass and said the “newly made law and regulations on bitcoin are going be enormous.” Further, the exchange revealed at the time that all exchange providers must be approved by the FSA.

“In order to make the exchanges more secure, cryptocurrency has been handed over to the authority of the FSA,” explains the Coincheck blog this past June.

All the exchange providers and other companies that deal with virtual currency will need to be registered by the FSA before they can start operation. It will help to make cryptocurrency exchanges in Japan tighter, more secure, have scrupulous control.

Coincheck Expands as Japanese Bitcoin Enthusiasm Continues to Grow

Japan's FSA Approves Coincheck's Bitcoin Exchange LicenseJapan has often captured the number one spot in global bitcoin trade volume. Coincheck handles a lot of bitcoin trade volume as the trading platform swapped 97,502 BTC over the past 24-hours. Further back in May the firm announced the creation of interest-bearing bitcoin savings accounts, if the FSA would allow the concept. This past August Coincheck launched a new investment sandbox that tends to crypto-startups and organizations running initial coin offerings (ICO).

The Japanese trading platform’s new licensure approval follows the demise of the country’s infamous bitcoin exchange Mt Gox and reveals that officials are more comfortable with exchange operations. Moreover, the positive news comes at a time when Chinese bitcoin trading platforms have been forced to close most of its operations.

What do you think about Coincheck getting approved as a licensed bitcoin exchange in Japan? Let us know in the comments below.

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.”

 

Bitcoin’s Relationship With the ‘Mark of the Beast’ Theories

Over the past eight years bitcoin has been involved in a few conspiracy theories, and even though they are highly improbable, they are pretty humorous, to say the least.

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The New World Order and Bitcoin

Bitcoin's Relationship With the 'Mark of the Beast' Theories
Lots of people thought this man’s company purchased Bitcoin the other day. Baron Jacob Rothschild, of the Rothschild Family Baronetcy, allegedly the richest family on earth for three centuries.

Just recently we reported on the Rothschild Investment Corporation purchasing bitcoin shares and how some people thought it was Lord Rothschild, the alleged owner of the world’s largest fortune for three centuries.

Since the end of time, humans have always liked to tell ‘tall tales.’ Bitcoin itself is often considered a weird subject because an anonymous developer made the software and this has led to many conspiracy-like discussions involving the digital currency. Some have said the protocol was created by the CIA or some underground government agency plotting to rule the world. Today we will discuss two tales that have often been tethered to bitcoin by those who wear tin foil hats. After reading this, you may find yourself in a Faraday cage with your ‘bug-out bag’ waiting for the next EMP, so please proceed with caution.

The Mark of the Beast

Bitcoin's Relationship With the 'Mark of the Beast' TheoriesThis particular tale is tied to a religious belief based on the Christian’s book of Revelations where bitcoin could be considered the “Mark of the Beast.” Yes, there are a couple of random people on this earth who believe that the digital protocol may be the tool of the Antichrist that allows you to purchase food and survive under the Devil’s rule. The Illuminati has many tricks up their sleeve, and this one is fantastically clever.

The Mark of the Beast comes from a story in the Bible’s New Testament, in the book of Revelations chapter 13. In that section, particularly 13:17, it says that people on earth will have to get a mark on their bodies in order to purchase living necessities. The mark is forced upon everyone from “the great, the small, the poor and the rich.” Now because society is gravitating toward a cashless society some curious characters believe bitcoin will be the notorious mark.

“And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name,” explains Revelations 13:17

Bitcoin's Relationship With the 'Mark of the Beast' Theories
Microchip implants with bitcoin wallets have helped fuel the ‘Mark of the Beast’ and Bitcoin theory.

So you might be still asking yourself — How the hell is bitcoin associated with this mark? Well, more recently the subject of “biohacking” and microchip implants have become a popular trend. Some people in this movement have installed chips into their hands with a bitcoin wallet inside. Because Revelations states people will “receive a mark in their right hand, or in their foreheads,” some consider this the missing link to bitcoin and the mark.

However, there are those in religious circles that think this theory of bitcoin being the mark might be the opposite of what’s really happening. The publication Christian Money says bitcoin might be a way people can fight the beast.

“One of the key elements of the Mark of the Beast is to be able to prevent those that refuse to take the Mark from buying and selling. Bitcoins are decentralized and prevent any such control,” explains Christian Money.

The One World Currency

Bitcoin's Relationship With the 'Mark of the Beast' TheoriesAnother story conspiracy theorists have up their sleeves is the “One World Currency” scheme. Another speculative theory thinks that the whole globe will share one single currency, likely owned by the Rothschilds and the Bilderberg group. Now, this conjecture is again tied to the ‘cashless society’ progression, and if you want to be even more clever, this theory can be related to the Mark of the Beast. The one world currency will be trackable, and everyone on the globe will likely be forced to use these funds. That’s where bitcoin comes in, and some speculators believe that because the blockchain is traceable and the technology is part of the ‘cashless society’ paradigm shift — Bitcoin will be the one world currency. For instance, the website Occupy Corporatism believes this may be the case.

“The technocratic push toward cyber-currency or e-money, is a march toward complete control over global currencies with the development of supporting technologies and the distribution of such that facilitate an online representation of money that can be used for exchange with another fiat system,” explains Susanne Posel, of Occupy Corporatism.

The reason why conspiracy theorists believe a global currency is on its way is because many Keynesian economists have bolstered this idea over the years. Even John Maynard Keynes himself has been cited as a single world currency advocate. This school of economic thinking believes it would help the global economy and improve international trade. The introduction of the Euro, a currency that covers many countries was considered the beginning of this effort. However, in recent times certain countries like Britain, for example, have distanced itself from the Euro during the Brexit vote. As far as bitcoin is concerned becoming the world’s reserve currency, some forecast it to be the sixth largest reserve currency by 2030.

So to some of these theorists, bitcoin is just another catalyst towards the cashless one world currency secretly crafted by the elite. In essence, any electronic currency is suspect for being part of the ‘1 percent’s’ plan to enslave the ordinary plebs of society. Even the other day on July 25, 2017, the publication Beforeitsnews published a report called “The globalist one world currency will be very similar to bitcoin,” so these theories still run rampant.

It’s Highly Improbable Bitcoin Will be a One World Currency or the Mark of the Beast

Bitcoin is indeed a strange phenomenon filled with curious characters like Satoshi Nakamoto. However it doesn’t mean bitcoin was created by the CIA, will be used for a one world currency or even the mark of the beast.

What do you think about conspiracy theories tied to bitcoin? Let us know in the comments below.

How Time-locked Bitcoins Could Incentivize Smooth Hard Forks

There’s been a lot going on as far as development goes with the latest alternative clients and the Segwit2x plan also known as BTC1 on Github. One particular subject that came up on the BTC1 repository was the idea to incentivize the development community with time-locked bitcoins to smoothly activate a hard fork.

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Time-locked Incentive for a Bitcoin Hard Fork

Could Time-locked Bitcoins Incentivize Hard Forks?
Chain engineer Oleg Andreev.

The hard fork has gotten a bad name over time mostly because of the contentious fork that took place with the Ethereum network. Hard forks aren’t forward-compatible, which means that the entire ecosystem of miners, wallet providers, exchanges, and merchants need to upgrade to the new code. The Segwit2x plan aims to activate Segregated Witness (Segwit) and follow up with a hard fork a few months down the line.

This week Oleg Andreev, product architect of the blockchain network company Chain introduced Issue #72 to the Github repo called “Time-locked incentive for Bitcoin hard fork.” The scheme Andreev says is to incentivize the community with coins that cannot be spent for a period of time until after the completion of a successful hardfork. The idea comes at a time when Segwit2x offers a compromise of both Segwit and a 2MB hard fork, but the problem is some people think the second part of the agreement won’t be fulfilled.

“It is well-known that cryptocurrency development can be incentivized by long-term time-locked coins,” explains Andreev. “Meaning, that the coins cannot be spent in the peak of a bubble, or right before a disaster that was not prevented or worked around. For instance, Greg Maxwell claims that Blockstream uses such scheme.”

What Are Time-locked Bitcoins?

Time-locked bitcoins cannot be spent until a specified time or block height by using a distributed contract recorded on the blockchain. Over the years there have been added improvements to this type of time-locking infrastructure with code development like Check-Lock-Time-Verify, Relative locktime, and Check-Sequence-Verify. Bitcoin luminary and author Andreas Antonopoulos discusses the subject of time-locked bitcoins in his book “Mastering Bitcoin: Programming the Open Blockchain.” Moreover, in 2016 Thomas McCabe gave instructions on how he successfully spent a time-locked bitcoin transaction.

“Bitcoin’s scripting language is very powerful, but access to resources with regards to learning how to build a script is scarce,” details McCabe.

Could Time-locked Bitcoins Incentivize Hard Forks?

‘Measuring the Amount of “Skin in the Game” to Gauge Responsibility’

Chain engineer Andreev believes this technology could smooth the process of completing a successful hard fork.

“Considering that any hard fork by definition carries an increased systemic risk: from producing chain splits inadvertently (due to overlooked software incompatibility), to splitting the market and shattering the faith in the technology and perspectives of our social experiment.”

It makes sense to introduce a special kind of time-locked incentives that get unlocked only on a hard-forked chain. Such incentives allow community to measure the amount of “skin in the game” to gauge the responsibility of the people behind a hard fork proposal.

Forward Compatibility

Andreev gives specifications to his idea, and a few other developers including Jeff Garzik thought the concept was interesting. Additionally, Andreev’s proposal offers forward compatibility and “the code is expected to be modified to preserve the spirit of the proposal for the future hard forks,” explains the developer. Adding an incentive to smoothly activate a fork or fund bitcoin development, in general, is a unique concept but it’s likely this plan won’t be included in the Segwit2x working group’s current roadmap. There are multiple comments and suggestions made by developers that won’t make the final cut including funny ones like finding the Mt Gox missing bitcoins.

What do you think about incentivizing hard forks with time locked bitcoins? Let us know in the comments below.

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.

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

GDAX Exchange Sees Colossal ETH Flash Crash, Angered Traders Mount Lawsuit

Details have surfaced of a violent flash crash on Global Digital Asset Exchange’s (GDAX) ETH markets today, with Ethereum tokens being sold for prices as low as $0.10. Amidst a dramatic uproar from angered traders, some are attempting to mount a class action lawsuit against the company.

 

Reports Surfaced of Traders Losing Extreme Amounts Money During Violent Slippage on GDAX’s ETH-USD Market

Global Digital Asset Exchange (formerly Coinbase Wallets) provides Coinbase wallet owners with an exchange interface for bitcoin and cryptocurrency trading. GDAX offers fiat to cryptocurrency pairings to traders in 32 different countries, with Coinbase offering simple bitcoin transactions and storage services to 190 nations.

GDAX Exchange Sees Colossal ETH Flash Crash, Angered Traders Mount Lawsuit

On Wednesday reports surfaced of traders losing extreme amounts money during violent slippage on GDAX’s ETH-USD market.

Vice president of GDAX, Adam White, has blamed the crash on a multimillion dollar sell order that apparently drove prices from $317.81 to $244.48, resulting in an instantaneous $29.4% loss of value. The order then triggered approximately 800 stop losses, seeing widespread liquidations among traders in leveraged positions.

The crash saw ETH tokens being sold for as little as $0.10 USD. Many fortunes shattered as the price plummetted before many fortunes were made by those who were able to purchase drastically undervalued ETH tokens.

An official post has been published on GDAX’s blog, stating “our initial investigations show no indication of wrongdoing or account takeovers. We understand this event can be frustrating for our customers. Our matching engine operated as intended throughout this event and trading with advanced features like margin always carries inherent risk. We are continuing to conduct a thorough investigation and will keep customers updated with any resulting actions. With that in mind, it is important to note that these trades are final in accordance with our GDAX Trading Rules (Section 3.1). Honoring properly executed orders is critical to maintaining the integrity of an exchange.”

Coinbase Have Been Overcome by Technical Difficulties Lately

Coinbase Have Been Overcome by Technical Difficulties Lately

With GDAX’s terms of service stating that all trades are final, some unhappy investors are attempting to mount a class-action lawsuit against the company. A Google document file is currently being circulated, with any investors who lost capital due to the crash being encouraged to join. Despite their best efforts, many within the cryptocurrency community are highly skeptical as to the likelihood that sullied investors will be able to retrieve their losses – citing the failed attempted lawsuit against cryptocurrency exchange Poloniex after losses were sustained by investors due to technical errors besieging the exchange.

Coinbase have been overcome by technical difficulties lately, with the crash coming approximately one week after Coinbase and DGAX both experienced problems during peak-volume trading periods. The problems resulting in complaints from users who found themselves locked out of their accounts and unable to manage trades. A similar incident of extreme slippage occurred in April, with GDAX an extreme drop in price to a low of $0.06 during scheduled website maintenance.

GDAX’s slippage has been one of the numerous issues that have plagued the ethereum markets over the course of the past week. A glut of over-hyped ICOs have recently entered the markets, resulting in popular wallet service Myetherwallet to receive thousands of complaints after experiencing technical difficulties, in addition to the Ethereum network experiencing severe congestion. Many are interpreting the problems as a likely catalyst that the much anticipated ‘flippening’ (ethereum coming to overtake bitcoin as the cryptocurrency that boasts the largest total market capitalization) not to take place soon, or ever, as the recent dramas may inspire ethereum investors to realize profits and reduce risk exposure.

What would you do if you had lost money during GDAX’s flashcrash? Share your thoughts below!

AMD and NVIDIA Dive Into the Graphics Card Mining Business

Graphics card manufacturers NVIDIA and AMD are preparing to release models of their cards for cryptocurrency mining. They have began to eye the digital coin market, because customers have been buying up cards to the point of depleting their supply. 

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According to a Videcardz press article, both companies plan on releasing a version of theirAMD and NVIDIA Dive Into the Graphic Card Mining Business cards in order to satisfy people’s hunger for mining cryptocurrencies. The site said, “NVIDIA is said to launch GeForce GTX 1060 with GP106-100 GPU, a custom edition for mining. This card would lack display connectors and most likely it would not support any gaming at all. According to our sources, these cards, unlike normal editions, would only have 90 days warranty.”

According to these circulating rumors; AMD is also planning to produce a Polaris model for mining, but there are currently no more details on the nature of this miner. Some good news is that the NVIDIA graphic card miners will be cheaper than their gaming counterparts.

AMD Stock Price Climbs

As a result of all the people desiring these cards for use in mining, the stock price of AMD has climbed 7% on Tuesday. According to various news sources, this increase stock price occurred as the demand for their product has skyrocketed. The demand comes, of course, as a result of people buying cards for the purposes of mining.

An AMD spokesperson provided CNBC with a comment,

“The gaming market remains our priority. We are seeing solid demand for our Polaris-based offerings in the gaming and newly resurgent cryptocurrency mining markets based on the strong performance we are delivering

GPU’s not Suitable for Bitcoin Mining; That’s “Fake Fews”

It is good to remember, however, that these GPU miners are not being used to mine bitcoin, but rather to mine ethereum and other altcoins. During the early days of bitcoin mining these GPU’s were hot products and almost always sold out.AMD and NVIDIA Dive Into the Graphic Card Mining Business

According to Jamie Redman,  “Back in the early days throughout 2010 through 2013 graphics cards were a hot item when it came to bitcoin mining accessories. During that time many manufacturers and suppliers constantly ran out of stock for AMD series graphics cards, Nvidia, and other types of GPUs. Since then within the current bitcoin mining environment, most miners have pivoted to using application-specific integrated circuits (ASICs)”

Also, a recent article came out from barrons.com suggesting that news sites have been releasing “fake news.” Allegedly, these sites are saying that the graphics cards have been being used to mine bitcoin. The article read, “Steves writes it’s ‘fake news’ that either Nvidia’s or cards from AMD are being used to mine Bitcoin.” The site continued, “Alluding to ‘reports’ to that effect, Steves writes today that ‘this is not the case as Bitcoins are mined using ASICs and without becoming too technical about the terms, mining Ethereum is ‘ASIC resistant’ making it unprofitable.’”. Even so, there have been some instances of ASICs or sorts directed toward Ethereum’s algorithm.

Regardless of the fake news, it is interesting to see these manufacturers starting to produce cards specifically for the purpose of mining altcoins. No telling where the future will go in terms of GPU mining setups.

What do you think of this graphic card use craze? Let us know in the comments section 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!