Tag Archives: Cryptocurrency

First Look: Bitcoin Scaling Proposal Segwit2x Gets Alpha Release

    

The working group behind the Segwit2x bitcoin scaling proposal

has announced that the first version of its code is now ready for review and testing. As such, the release provides the market with a first look at the technology underlying one of the most broadly supported bids to enhance the network. Announced in May as an "agreement" that united miners and startups, Segwit2x is an alternative technology roadmap to one proposed by Bitcoin Core, the network's open-source developer group.

It has since emerged as a frequent subject of praise, criticism and discussion. However, in what could be a promising sign, Segwit2x could become a moderate option that helps to avoid a contentious network split, and it looks like it could end up being somewhat compatible with an alternative proposal, the user-activated soft fork (UASF) BIP 148, which, as coded, will activate on 1st August.

The news is notable because earlier this week any compatibility between the two proposals seemed less likely – a discordance that raised fears of a split of the blockchain into two competing assets. The development became apparent on Wednesday, when bitcoin developer James Hilliard submitted a change request, along with a code change that would reduce the time it takes for mining pools to lock in the update.

On GitHub, Hilliard said:

"This should reduce the chance of a conflict with BIP 148."

By reducing that time, mining pools will have one (or maybe two) three-day periods in which they can lock-in a controversial code change called Segregated Witness (SegWit) by signaling support using the SegWit2x software before the UASF occurs on August 1st. Though, it's unclear if mining pools will decide to do so. The request was well-received, being met with several 'ACKs' – developer shorthand for 'agreed', and a sign of approval.

Firmer timelines

The alpha release of SegWit2x includes a working version of the software, which combines two changes, the scaling optimization SegWit and an increased 2MB block-size parameter. The increase to 2MB is now scheduled for three months after SegWit activates, according to an email from BitGo CEO Mike Belshe. Prior to this, it's been less clear (even to some SegWit2x participants) when the 2MB hard fork would take place. "Segwit2x development has been moving quickly according to plan, and the project is in good shape," Belshe said, in the message to the working group.

The 2MB block size has long been a point of contention, partially because it could lead to a blockchain split if not everyone agrees to upgrade to the new blockchain code. Further, some in the industry have already suggested they don't plan to. However, SegWit2x has won the support of most major bitcoin companies and mining firms, in total representing over 80% of bitcoin's hash rate. (Though it remains unclear how reliable this support will be owing partly to fatigue around the issue). With the alpha version out, the wider community now gets to review and test the software. The release also includes a new bitcoin testnet that developers can use to put the software through its paces and identify any bugs.

Testing phase

Developers can trial the software using the new test network, called testnet5, for the next two weeks. "We are planning to conduct rounds of testing against the new testnet5 including everyone from the working group who would like to participate," BitPay senior developer Justin Langston said in another email to the working group. The plan for these rounds is to simulate the code's deployment lifecycle, from signaling support for SegWit to activating the 2MB block-size parameter. These rounds of testing and review are aimed to help avoid any future network problems, such as, in a worst-case scenario, the loss of users' bitcoin.

In the email, Langston wrote:

"My perspective is limited. We need your feedback on what tests would be essential for your company to adequately assess applicable risks and be prepared to deploy on livenet, signaling accordingly, when the time comes."

Security loose ends?

Feedback on SegWit2x's  plan has already been rolling in. One working group participant argued there is potential for 'replay attacks' in the event of a hard fork. Replay attacks, in the event of a split leaving the community with two bitcoin tokens, could allow users to accidentally spend their bitcoin on both networks. This confusion happened last summer when ethereum split into two coins, leading some companies to lose money. The participant argued that protection from this confusing and potentially dangerous issue is needed within Segwit2x's code.

Some Bitcoin Core developers have also criticized Segwit2x's development timeline as being too short, because it often takes a significant amount of time to catch all errors associated with bitcoin code changes. SegWit itself was tested for over a year before it was launched. So far, though, SegWit2x developers haven't skipped a beat, saying the project will continue to move forward along the original timeline, with the beta release scheduled for 30th June. On 21st July, users will be able to run and signal the fully vetted software, according to the group.

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Bitcoin and Ethereum Just Crashed, Taking Coinbase Down With Them

Bitcoin and Ethereum Just Crashed, Taking Coinbase Down With Them

 

    

After both hit all-time highs earlier this week, Bitcoin and Ethereum prices

plummeted as much as 25% Thursday — but many investors were unable to trade for much of the selloff. Coinbase, a leading cryptocurrency exchange, confirmed that it was completely offline by 9:35 a.m., though the outage appears to have begun several hours earlier, with investors reporting problems on Twitter throughout the night. The company blamed "sustained heavy traffic," likely caused by intense Bitcoin and Ethereum trading, for crashing the Coinbase website and mobile app, which remained completely down for at least four hours.

As has become a familiar frustration to blockchain enthusiasts in recent days, Coinbase went offline at the worst possible time, just as extreme price swings in the cryptocurrencies made investors desperate to buy or sell. Around 10 a.m. Thursday, the Bitcoin price fell as low as $2079, a more than 30% drop since breaking the $3,000 milestone last weekend (and a 19% decline in the previous 24 hours alone). At the same time, Ethereum, a rival cryptocurrency whose eye-popping 40-fold gain this year has far outpaced Bitcoin's returns, was down as much as 25% from its price a day earlier. The Ethereum price dipped below $274, just three days after it traded above $400 for the first time.

Coinbase had a similar outage in late May while Bitcoin was trading at record highs, illustrating that new systems for trading blockchain currencies are not yet as reliable as traditional stock market exchanges — a lesson a number of investors were learning the hard way, based on their tweets. (While Coinbase initially said it had restored full access to the exchange by mid-afternoon Thursday, it was still trying to repair service for at least some users after 5 p.m., according to a status report on its website.)

Bearish comments by influential investors have triggered several recent selloffs in Bitcoin and Ethereum, such as when Mark Cuban said he thought they were "in a bubble" last week. Morgan Stanley likely contributed to this week's declines by publishing a couple of research notes casting doubt on whether the surge in cryptocurrency prices is justified. "Market likely getting ahead of itself as we have not seen exponential rise in use case yet, but value is rising exponentially," Morgan Stanley analysts wrote in a note Wednesday.

That followed an even more skeptical research report the bank released a day earlier titled "Blockchain: Unchained?" "The rapid appreciation of Bitcoin and others is somewhat surprising in light of some developments that seemingly would have put downward pressure on the currency," another group of Morgan Stanley analysts wrote, citing the SEC's rejection of a Bitcoin ETF, among other factors. "Their values are too volatile and too hard to actually use for payment for most to consider them currencies," they added. The cryptocurrencies’ prices bounced back later in the day. As of 6 p.m. Thursday, Bitcoin was down less than 3% and Ethereum was down just under 8% over a 24-hour period.

Chuck Reynolds


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World’s First Blockchain Insurance Marketplace To Launch Ambitious ICO

World’s First Blockchain Insurance Marketplace To Launch Ambitious ICO

  

The world’s first Blockchain-based insurance marketplace,

InsureX, is set to launch an ICO in July 2017 in a bid to raise at least 2200 ETH. The first in a large number of token sales set to launch in the next few weeks, London-headquartered InsureX intends to use the funds to create a trading platform specifically for insurance products.

“Blockchain technology presents an exciting opportunity to disrupt the insurance industry,” CEO Ingemar Svensson said in a press release Thursday. Citing Allianz insurance data, he continued: “Preliminary estimates are that gross written premiums generated by insurers contribute 3.5 trillion or 5.7 percent of the global GDP – that is a massive opportunity.”

In addition to finding products themselves, InsureX will offer a secure exchange of confidential documents and other data on the platform, which operates in the Software-as-a-Service (SaaS) format. The insurance industry is already slated for change, thanks to Blockchain solutions with products such as IBM Blockchain built on a hyperledger seeking to streamline common processes.

“Currently, insurance is traded and processed in traditional ways, often manually and with layers of intermediaries,” Svensson continues. “As part of the typical insurance deal, a large amount of documents and data have to be exchanged, which in a manual system introduces cost, delays and errors to the process.” The ICO will go live on July 11, with IXT tokens initially sold at an ambitious rate of 1.125 IXT per ETH, increasing to 1.757 per ETH as the sale continues through until July 31.

Chuck Reynolds


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U.S Judge Upholds Vote To Confiscate Family’s $80mln Gold Coins

U.S Judge Upholds Vote To Confiscate Family’s $80mln Gold Coins

 

The family who found ten gold coins allegedly worth $80 mln

has again lost the battle to stop the US government confiscating them. Acc Mag reported on Wednesday June 14 that Judge Legrome Davis of the Eastern District Court of Pennsylvania upheld the position of the state: the coins originally belonged to the state, therefore the discoverers would not be offered compensation.

The story is a timely reminder about the lack of control over state-issued means of exchange in an age where decentralized assets are flourishing. Ten 1933 Saint-Gaudens double eagle coins were found by the Langbord family, descendants of a U.S cashier, locked in a safety deposit box. Originally coined by the Philadelphia Mint, most were destroyed when the US abandoned the gold standard. However, the few that have slipped through the net have fetched huge sums; in 2002 an identical coin went for $7.5 million at auction.

Nevertheless, when the cache was handed over to the Mint for verification, lawmakers said that they were originally illegally removed from circulation and therefore still belonged to the state. The Langbords have appealed the original decision from 2011 several times without success, yet will continue to challenge the ruling after their latest setback. Cryptocurrency’s rise has seen attempts to increase state control of its value in recent months. The European Union, for example, is attempting to pass legislation obliging wallet holders of Bitcoin and other assets to link these to their real identity.

Chuck Reynolds


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Bitsquare: Our Support For UASF Requires Trading Halt

Bitsquare:
Our Support For UASF
Requires Trading Halt

    

P2P marketplace Bitsquare has confirmed support

of a user-activated soft fork (UASF) and signalled its opposition to Bitmain. In a blog post on Wednesday, Bitsquare reiterated its desire for SegWit activation while condemning Bitmain’s user-activated hard fork (UAHF) proposal. “This announcement of Bitmain is great news for Bitcoin, as it removes a lot of uncertainty and gives a lot of support for the UASF side,” founder Manfred Karrer said.

Karrer announced that as part of the process of supporting UASF, Bitsquare would “halt trading” until the issue of a hard fork was resolved. “We can expect that Bitmain will use its hash power to attack the UASF chain if they feel the need for that. This might lead to all kind of unpleasant situations like long confirmation times, an unclear amount of confirmations to be considered safe, very volatile tx fees and more,” stated Karrer. He continued, “For an exchange that means undefined and uncontrollable risks … there would likely be a huge effort for support and arbitration which would kick us back with our road map. For all those reasons, we need to halt trading on Bitsquare.”

In what he labelled as an ‘exit strategy’ for users, Karrer added that support for alternative base currencies for Bitsquare – Dogecoin and Litecoin, perhaps with Dash and others to follow – would appear ‘with the next release’ of the project. Despite the problems facing the community due to the escalating debate, Bitsquare nonetheless saw new weekly trading highs in several markets, according to data from Coin Dance.

Chuck Reynolds


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Litecoin’s Charlie Lee Quits Coinbase, Receives $12,000 Donation

Litecoin’s Charlie Lee Quits Coinbase, Receives $12,000 Donation

    

A $12,000 donation has accompanied Litecoin creator Charlie Lee leaving Coinbase

to work on his creation full-time. After Lee announced he was stepping down from Coinbase duties to dedicate himself to Litecoin development, his Litecoin Foundation received a donation of 438 LTC – around $12,000 at Tuesday’s rates. The donor, known by his handle JoeyBTC, made himself known following a Twitter request. Litecoin proceeded to come down from circling $35 per coin as Bitcoin itself slumped, with Lee’s optimistic announcement having little effect on investor opinion.

The move is the first major event for the Litecoin community since SegWit activation caused a giant price rise in May. While a long time ago in terms of 2017’s cryptocurrency price action, Litecoin just six weeks ago was the star of altcoin markets, regularly outperforming other top 10 assets and bucking downward trends. Responses to Lee on Twitter were therefore keen to forecast a new surge upwards in a market currently dominated by Ethereum (ETH). Last week, Trezor became the first Litecoin hardware wallet to support SegWit.

Chuck Reynolds


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Network Costs Bite As LocalBitcoins Introduces Deposit Fees

Network Costs Bite As LocalBitcoins Introduces Deposit Fees

    

LocalBitcoins has announced it is introducing Bitcoin deposit fees

from June 21 due to rising Bitcoin network fees. In an email to users on Tuesday, the P2P marketplace explained that the Blockchain space required to manage deposits outweighed withdrawals and that fees, therefore, needed to be levied on the process. “In the Bitcoin network managing deposits uses up a lot of blockchain space while handling a withdrawal uses up much less space.

This means that a large part of the old Bitcoin transaction fee was for covering costs related to deposits,” the email reads. “By introducing deposit fees customers who make many small deposits will pay a larger share of the overall transaction costs and customers who send out transactions will enjoy lower fees.” LocalBitcoins is only the latest Bitcoin business to introduce increased rates as a result of network usage costs.

While withdrawal fees are decreasing, a similar move this week from exchange Kraken came as a result of user backlash over its previously proposed fixed-rate Bitcoin withdrawal fee of 0.025 BTC ($6.20). LocalBitcoins’ new fee schedule will be dynamic, equal to “about 3x the amount of sending fees” – the reduced withdrawal fees. “LocalBitcoins is committed to improving the situation,” the platform continued on the topic of future developments. “We'll invest resources towards developing various offchain technologies, transaction batching and other tools to make using Bitcoin cheaper for our customers.”

Chuck Reynolds


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Bitcoin Volatility Reaches Fee Estimates As Prices Stay High

Bitcoin Volatility Reaches Fee Estimates As Prices Stay High

    

Volatility is not just affecting Bitcoin’s price itself;

it is also hitting Bitcoin fee estimates as transactions continue to be slow and expensive. Data added to Twitter by BitGo engineer Jameson Lopp shows a giant increase in spreads of BitGo’s estimated most appropriate fee level for a Bitcoin transaction since the end of May. The action contrasts markedly with previous data, which on a graph produces almost entirely flat lines.

Volatility appears to have increased in step with transaction fees themselves. According to 21.co’s fees calculator, the “fastest and cheapest” option on Tuesday is 390 satoshis per byte, down from the previous levels of 450, which also coincides with slightly reduced estimation volatility.

Not all were convinced of the interest of the data, however, one respondent to Lopp describing the findings as “rather boring” when the number of stuck transactions is taken into account. On that topic, the size of the Bitcoin mempool has, in fact, decreased in recent weeks, coming down from all-time highs seen mid-May. Reductions accelerated in line with a drop in prices on Monday but have since reversed as a correction hit.

Chuck Reynolds


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Repeating Bitcoin Price Fall With Ethereum Gain Will Cause Flippening: Bruce Fenton

Repeating Bitcoin Price Fall With Ethereum Gain Will Cause Flippening: Bruce Fenton

    

Ethereum will become the biggest coin if the past 24 hours’ performance repeats

Former Bitcoin Foundation Executive Director Bruce Fenton has said Ethereum will become the biggest coin if the past 24 hours’ performance repeats. In a tweet on Monday, Fenton said a reoccurrence of Bitcoin’s nine percent fall coupled with Ethereum’s 15 percent gains would result in the latter becoming the world’s largest cryptocurrency. Fenton added that those investors who pulled out following yesterday’s drop in price had likely performed a “bad trade” as a correction gets underway. Ethereum’s mammoth leaps have caused it to become the new focus of community attention, as various sides argue over its true value.

Flippening

On Sunday, Twitter commentator WhalePanda released an extensive post on ETH, arguing why it was inferior to Bitcoin on a technical level. Unlimited supply, ICO hype and other factors contributed to the view that the asset was more likely part of a significant bubble than Bitcoin. Nonetheless, Bitcoin’s dominance is slipping fast, by market cap now controlling only 40.5 percent of the total. With further robust trading, very little stands between here and what is known in the crypto community as the ‘Flippening’ – where ETH’s market cap usurps that of BTC.

Chuck Reynolds


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Blockchain Startup Stratumn Closes European Record $7.8 Mln Series A Round

Blockchain Startup Stratumn Closes European Record $7.8 Mln
Series A Round

    

Business-to-stakeholder Blockchain startup Stratumn

has raised €7 mln ($7.82 mln) in a joint venture with names including Nasdaq and Digital Currency Group (DCG). Stratumn, which launched in 2015, says the Series A round represents the “largest” such investment closure in the European Blockchain space.

“Our new investors will enable Stratumn to continue and accelerate its development and more effectively address growing needs in our markets,” CEO and Co-Founder Richard Caetano said in a press release this week. “We are especially happy with the continued and increased support from Otium Venture, who have accompanied us for a year, and excited to welcome CNP Assurances, Nasdaq and Digital Currency Group, who will help us reinforce Stratumn’s presence in the insurance and capital markets sectors.” DCG head Barry Silbert gave special welcome to the startup, which he described as having joined the investor’s “family” of projects.

Silbert added:

“Stratumn’s Proof of Process Technology solves critical challenges around verifying and auditing the integrity of data used to make critical business decisions, and we look forward to helping the team build partnerships across our network of blockchain service providers and enterprises.”

DCG-owned Grayscale Investments’ Bitcoin exchange-traded GBTC, meanwhile, is now trading as if the price per coin were around $5,220. As commentator Tuur Demeester noted on Friday, this represents an 85 percent premium over net asset value.

Chuck Reynolds


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