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Sunday, 9 October 2016

Ethereum Fiasco Justifies Principled Decisions of Bitcoin Developers

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Ethereum Fiasco Justifies Principled Decisions of Bitcoin Developers
Ethereum, a network still in its infancy which was introduced on July 30, 2015, is already dealing with a major conflict amongst its community  as a result of a hard fork which was implemented without the full consensus of the community.
Even worse, the hard fork was executed to benefit a certain party of the Ethereum community, not the network as a whole.

Bitcoin and scaling dilemma

Bitcoin Core developers and the Blockstream team have constantly received heavy criticism over the past few years from the Bitcoin community for their inability to reach consensus on the everlasting blocksize debate.
Eventually, as the Bitcoin network and its underlying technologies matured, a number of sophisticated proposals emerged, such as Segregated Witness and the Lightning network, to scale the network in a more cautious manner.
In contempt of the Bitcoin core developer team’s practical approaches of dealing with the expanding blocksize, many members of the community, including startups and entrepreneurs, have called for an execution of hard fork to instantaneously enlarge the Bitcoin block size.
Yet, the Bitcoin Core developers remained devoted in the development of various scaling technologies and proposals to optimize the Bitcoin network with minimum effect to the protocol and users.
As Edan Yago, CEO of Epiphyte Corporation, notes the developers’ innovative approaches in dealing with the network’s scaling dilemma allowed Bitcoin to survive for over 7 years, without any significant fork or chain split.

Ethereum hard fork and and its impact on Bitcoin network

Granted, the proposals and suggestions to launch a hard fork on the Bitcoin network could be justified, since they may serve the network an appropriate purpose. The issue with a hard fork is, the unforecasted and unpredictable result it will bring to the network.
The Bitcoin Core developers, who have proven to be skeptical, philosophical, and confident with their technical knowledge of the network, are aware of both the negative impact a small block size could bring to the Bitcoin industry and the unpredictable nature of a hard fork.
If executed poorly, a hard fork could possibly put pressure on the Bitcoin network itself, which could potentially lead to its demise. This very reason is the motivation of Bitcoin Core developers of building various scaling technologies which could optimize the network without imposing any negative impact to it.
Bitcoin enthusiasts and entrepreneurs, including Stephen Pair, BitPay co-founder and CEO, and security engineer Stephen Cole told the community that the Bitcoin Core developers deserve credit for their approach to the blocksize debate, and their daring mentality.

New Geth Fails to Prevent Ethereum Blockchain Attacks, Erik Voorhees Says Network Only Gets Stronger

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New Geth Fails to Prevent Ethereum Blockchain Attacks, Erik Voorhees Says Network Only Gets Stronger
As Ethereum continues to suffer from spam attacks upon the execution of its new Geth release “Come at me Bro,” ShapeShift CEO Erik Voorhees reassures users that it only makes the network stronger.
Amid the transaction spam attack earlier last week, exchanges and wallet platforms experienced various delays in processing ETH deposits and withdrawals.
While users and traders are experiencing delays, Erik Voorhees says that in dealing with spam, the Ethereum development team is building more robust and innovative security measures.
Voorhees says:
“Every time someone attacks a Blockchain platform and fails to kill it, the platform gets stronger, and more worthy of building upon.”
The Ethereum development team as well as its co-founder Vitalik Buterin released a series of statements unravelling short, mid, and long-term fixes to prevent serious spam attacks affecting the network.
On October 3, the Ethereum development team introduced Geth release 1.4.15 called “Come at me Bro” as a solution to recent DoS and transaction spam attacks.

New Geth Release Fails to Prevent Spam Attacks

Despite the efforts of the developers, the new release had a minimal impact on the network, failing to prevent more DoS attacks which began to stall ETH deposits and withdrawals in exchanges including Kraken, Bitfinex, and Shapeshift.
Recent series of transaction spam attacks initiated by an anonymous attacker, are creating over 1000 new smart contracts at a rate of 30 / minute, which exceeds the capacity of the Ethereum network.
Exchanges released statements to their users, warning them of potential delays in trading and settlement of orders.

Unlike Bitcoin, The Bank Of Japan Changes Goalposts Again

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Unlike Bitcoin, The Bank Of Japan Changes Goalposts Again
The Bank of Japan announced earlier this week that it would abandon its target for expanding the money supply (set at 80 trillion yen annually) and focus on targeting a zero percent yield on the 10-year government bond.
The move comes after years of targeted quantitative easing failed to have an impact on inflation and boost the economy. The Yen has appreciated since the announcement, indicating doubts about whether the Central Bank has enough tools in its arsenal to maintain near zero long-term interest rates.
The change of the central bank’s goals can catch market participants on the wrong foot, causing huge trading losses. The advantage of Bitcoin is that the rate of increase in money supply is hard-coded and known to everybody.
Central banks usually have stated goals - to control inflation, to maintain a stable exchange rate, to support growth, etc. Central banks use the monetary policies available to them to try and meet these goals. Let’s look at examples of how in the past central banks have shifted the goalposts resulting in market turmoil.

Swiss Franc’s sudden surge

Countries with a pegged exchange rate usually run into trouble when their foreign currency reserves are low. Speculators can then short the currency, making the central bank run out of foreign currency. Switzerland, which had pegged its currency against the Euro, faced a different problem in 2015. The proposed quantitative easing of the European Central Bank generated fears that the Swiss Central Bank would be forced to print more Swiss Francs to maintain the floor. This prompted the Swiss Central Bank to abandon the floor in 2015, leading to chaotic markets where the Franc appreciated by 30% in the minutes following the decision.

Nixon Shock

During the period after World War II, the world operated on a fixed currency exchange rate, with various currencies being exchangeable for a fixed amount of gold. The system, called the Bretton Woods system, used the dollar for international settlement, because the dollar was redeemable for a fixed quantity of gold by the US government. In 1971, President Nixon of the United States unilaterally suspended the convertibility of the dollar into gold. The 'Nixon Shock' caused instability in the currency markets leading to floating exchange rates and is also suspected to have triggered stagflation in the United States.
 

London-Based Bitcoin Company Plans to Open Bitcoin Exchange in Jamaica

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London-Based Bitcoin Company Plans to Open Bitcoin Exchange in Jamaica
London-based Bitcoin wallet company, Caricoin is trying to start up a Bitcoin exchange in Jamaica. Caricoin is pitching to the Bank of Jamaica for support in creating their Caribbean exchange which aims to merge Bitcoin with the Caribbean banking system.

The BoJ proposal

Till date, Caricoin does not have an official proposal and is currently working on putting it together. They hope that the BoJ will embrace Bitcoin as other banks have with its technology which could put the Bank of Jamaica in a good position to develop Blockchain-based Fintech solutions with a Caricoin-BoJ partnership.
Karsten Becker, Regulatory Advisor spoke to Cointelegraph on Caricoin’s plans:
“Getting the approvals to run an exchange will enable us to cross this bridge by permitting our users to link their bank accounts or debit cards directly to their Bitcoin wallets, and to use this new functionality to easily buy and sell Bitcoin.”
Caricoin is also targeting local merchants as well to sell goods online for Bitcoin. With the current Caribbean e-commerce requirements, this gives merchants the ability to cash their Bitcoin for fiat currency as they push to online stores and grow their customer bases. Since Bitcoin is almost accepted world-wide, Jamaican e-commerce limits can now be shattered with Bitcoin.

Caricoin’s current position

The company itself is regulated in the UK and is preparing documents to present to the Bank. Since Jamaica has an Electronic Transactions Act, Caricoin can speed up transactions using cryptocurrency rather than the traditional banking system.
“Caricoin was created by a group of Jamaicans living abroad and we thought at home was the best place to kick things off for the region,” adds Becker.
Becker says that Caricoin is focusing on Bitcoin and is the only digital currency in the Caribbean that is getting attraction, however they plan to experiment with Ethereum’s Blockchain for Fintech advancements.
“Due to the massive benefits to be gained by using Bitcoin in our developing region, we envision a new era where Bitcoin will truly complement traditional currencies and allow people from the Caribbean to be a larger part of the global financial community - we call this ‘financial inclusion’.”

The road ahead

It has been 3 months since they released in the Caribbean and since Bitcoin is not regulated, it does not break any Caribbean financial rules, unless integrated with local banking. During the Caricoin system pilot, Becker said they injected $55,000 worth of Bitcoin into the app and was a huge success. From Turks & Caicos to Barbados people used it for mobile top-ups and online shopping.
“We have spoken with a few fiat exchanges that are interested in opening up their platforms so their users can trade in the digital markets” said Becker.
Caricoin establishing itself in Jamaica will make it the first Bitcoin exchange in the country. With its 3 month old user base, it could be a positive milestone for Bitcoin in the Caribbean as more people will explore its financial benefits. The approval of the Bank of Jamaica will be one more step to integrate Bitcoin into the Caribbean economy.

Why Bitcoin Will Beat Mobile Payment To Its Game In Africa

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Why Bitcoin Will Beat Mobile Payment To Its Game In Africa
Indications are rife that Bitcoin use will grow in parts of Africa in the coming years in the mobile payment market which Statistics says is expected to grow to 101.34 million users in 2016.
EY's attractiveness survey Africa 2015 says capital investment into Africa between 2013 and 2014 surged to $128 billion, up 136% and foreign direct investment FDI created 188,400 new African jobs at a 68% increase.
Co-founder of Chankura in South Africa, Thabang Mashiloane, says they have discovered that ±13% of the $128 billion has been flowing within Africa in remittances and the large number of the unbanked Africans living outside their home countries would likely be served better in coming years when the limitation created by the lack of infrastructure for Blockchain/Bitcoin use cases by most African countries is addressed. This, he said, would be at the expense of mobile payment
Mashiloane told Cointelegraph:
“I believe the African continent will be one of the top adopters of Bitcoin.”
He added:
“Mobile money which is the thriving banking sector in Africa has one of the most important element missing in its merits and that is access to global finance. Bitcoin will empower anyone in Africa regardless of their financial status or educational background to participate in the global financial markets. It could be by a way of buying stocks in Wall Street. An African farmer can be able to trade freely without any hustle with anyone in world using Bitcoin and smart contracts for escrow services. This has never been done before with mobile money or traditional banking system.”
Blockchain expert in Morocco, Bellaj Badr, said Bitcoin use will grow rapidly in South Africa and Sub- Saharan African countries whose communities have been accelerating the adoption of the digital currency and many promising local Bitcoin-based enterprises that have been launched such as ICE3X and BitX in South Africa and BitPesa in several countries in east and west Africa.
“I am 100% certain that the Bitcoin revolution in Africa is starting there and it will meet a great success similar to the success of the mobile payment where Africa has become a reference in this field,” he said.
Mashiloane believes that Bitcoin is already disrupting mobile money in Africa and will be the backbone of the financial infrastructure in Africa for the next financial businesses.
Citing Kenya as an example, he stated that the reason why traditional banks cannot compete in such countries is because their systems are far much more expensive to implement. He stated:
“Mobile money system have been estimated to be 70% less to implement as compared to starting a bank. I believe Bitcoin is doing the same thing to mobile money: it is far much cheaper to become a Bitcoin-backed financial business as compared to a mobile money business. As I mentioned earlier this will need such Bitcoin backed financial businesses to partner with existing Blockchain infrastructure companies to facilitate payments, remittances, lending, insurance and other possible Blockchain use cases that are changing the financial landscape.”

US National Debt Now Worth Bitcoin Thousands Of Times Over

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US National Debt Now Worth Bitcoin Thousands Of Times Over
The US national debt is several times greater than the value of all physical cash, and thousands of times the value of Bitcoin.
Standing at around $19.5 trillion, the debt accrued by the US federal government amounts to significantly more than the combined value of all the world’s physical cash, gold, silver, and cryptocurrency. Those four combined barely cover two-thirds of the US national debt, leaving the daunting task of debt reduction.

Bitcoin is still a small player in the global financial world

Besides the staggering level of US debt, what this fact reveals is how new and minor a player Bitcoin still is in the global economy. The leading cryptocurrency is worth a fraction of a percent of all physical cash in existence, and at present has a 24-hour transaction volume of about $50 million. By comparison, in 2010, Visa processed daily transactions worth over 100 times that.
If Bitcoin’s current role in the global economy is small, that of other cryptocurrencies is even more miniscule. While on a general upward trend, alternative cryptocurrencies combined make up barely 20% of the category’s market capitalization. Ethereum, the number two cryptocurrency, only ranks at around 11% of Bitcoin’s combined value and less than half its volume, while the next top 13 cryptocurrencies combined barely equal Ethereum.

The US may be due for another recession soon

To make matters worse, in addition to the ever-increasing national debt, Americans may soon have to worry about getting through a recession as well. Several key indicators, including stalled sales in farm machinery and transportation, show that a recession may be right around the corner.
Globally, the central banks of some of the world’s key economic players have called on thegovernment for help in saving their respective economies. The EU in particular may be heading for a breakup, according to the Vice-Chancellor of Germany, as a result of the UK’s exit from the Union.

MapOfCoins Unleashes Technologies Library for 800+ Cryptocurrencies to ‘Facilitate Digital Learning’

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MapOfCoins Unleashes Technologies Library for 800+ Cryptocurrencies to ‘Facilitate Digital Learning’
Cryptocurrency reference service MapOfCoins announced February 20 the launch of its Technologies tool aiming to give insight into the inner workings of the most popular currencies in the cryptospace.
The new resource, which MapOfCoins describes as “a large strategic shift in its development,” is being released in tandem with a contribution portal intended to make it easier for users to suggest improvements and updates. A major website redesign, the first since its original launch in February 2014, has also been completed.
In a press release issued last Friday, the service explained the changes were intended to allow users primarily to keep track of the accelerating industry:
“Currently, more than 800 cryptocurrencies are presented on the website. From the beginning the project’s core idea was to draw attention of people engaged in the cryptocurrency world and to facilitate digital learning.”
MapOfCoins has come to be recognized in the community in its year-long existence primarily through its unique Node Link Tree, used to present the relationships between various currencies and the original from which they were forked. Bitcoin, Bytecoin, NXT, and Ripple are all covered. Over time, further information for specific currencies has been added, with the goal of creating an exhaustive “library” of information for consultation.
MapofCoins
“The main thing that we are continuously going to provide is the thorough analysis of cryptocurrency development,” MapOfCoins’ creator Ada Vainikainen told CoinTelegraph. “The website has turned from an interactive coins map into a digital library that covers not only each particular coin, but also the technologies they are based on. The mission of the project is to be transparent and trustful as well as dynamic.”
The new Technologies section meanwhile currently includes Bitcoin, Ripple, CryptoNote, NXT, Ethereum, XCurrency, Stellar, and Zerocash. Details of each protocol, from basic facts surrounding creation to specific attributes, are currently being uploaded and expanded.
Long term, Vainikainen intends to reposition MapOfCoins to increasingly take its cue from user feedback, helping with updates to reflect the latest market changes. “We have a number of usability features being developed at the moment. Since the Bitcoin tree has become too large, we’re experimenting with the new visualization styles. Our goal is to make the information easily accessible with such features as filters and advanced coins statistics,” she said.
With any research-based resource in cryptocurrency, developers are faced with the problematic nature of an industry changing its identity rapidly over the shortest periods. MapOfCoins specifically is tasked with reflecting the current state of the altcoin market, updating coins which have become defunct while being able to detect those which are inauthentic. Vainikainen remains optimistic in this area.
“It is hard to predict how the cryptocurrency world will evolve,” she explained. “The fact is that mapofcoins.com is made as a repository for both active and defunct coins. Even if the number of active cryptocurrencies is going to decline, it is a tribute of history, so the information should be preserved for the next generations.”
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