Weekly News (Ethereum new high, Bitcoin falls, Blockchain etc.)
It was a rough and rowdy week for Bitcoin, as prices fell to points that haven’t been seen in just over a month or so. There were Hard Fork talks, the ever present scaling problems that just never seem to go away and the news of Ether’s rise to fame and rapid gain in value. For some, it meant the loss of a lot of money when prices fell and for
Ether Hits A New All-Time High Value
The Ethereum network got another big boost this past week as Ether, the smart contract-based blockchain’s token hit an all new record high. Ether peaked at $43.11 USD this past week. The latest rally is believed to be attributed to the ongoing problems that Bitcoin is having in the scaling department. It is speculated that the dilemma Bitcoin is facing is causing some to cash out their Bitcoin in exchange for Ether.
This should come as no surprise, as multiple national governments, as well as State government bodies and even private corporations are all exploring smart contracts and how they can be applied to better serve the needs of the interested parties.
Whatever the reason, Ether has seen a value increase of slightly over 100% since March 10th. The rallies are simply fueling even more people to get their hands on the token while it’s still at a manageable price point.
As Ether Goes Up, Bitcoin Comes Way Down
For the same reasons it is believed that Ether has had a strong rally period within the last week, it is believed that is also why Bitcoin prices fell to their lowest since the beginning of February. Bitcoin started the week at $1232 and had its lowest point of $946 earlier today before rebounding up to $1045.
This comes just after a report earlier in the week celebrated the first 30 days straight of $1000+ value for the cryptocurrency.
Speculation runs wide as to the reasons why the price has suffered and while there may be many different ideas as to the causes, one that runs true among all serious speculators is the Bitcoin Scaling problems and the SEC rejection of the Winklevoss Trust. The rebound is expected to hold true through the next few days, with many speculators stating that the worst is now over for the short term.
Within the last 48 hours, the major Bitcoin exchanges around the globe unanimously decided that they would not allow Bitcoin Unlimited to trade until it had security measures in place to prevent spending the new coin on both blockchains (called Replay Attack). This squashed earlier fears that Bitcoin Unlimited would end up with more hashing power, therefore replacing Bitcoin. At this point, those rumors are not believed to be viable and as a result, Bitcoin has seen a sharp increase to its present value of $1043.
Chinese Regulators Discuss Draft Rules with Exchange Owners
The news out of China is that there is no real news out of China. The fiasco that began as a hand slap for Chinese operated Bitcoin exchanges has now had the exchanges basically at a standstill for the past month and a half and the end is still not insight. Originally, it was believed that the exchanges would be down for a mere couple of days and then that turned into a month and as we approach month 2, one has to wonder, just how efficient China really is.
They have just released the documents that outline the proposed requirements. They are seeking comments from the exchanges on these new regulations. The new regulations are aimed at preventing fraud and money laundering activities. If these regulations are approved, all users will be required to obtain certifications and verify their identities in order to deposit funds onto the exchanges.
Bitcoin Exchanges Plan Wants to Avoid Another Ethereum Situation
20 of the largest Bitcoin exchanges met this past week to draft the final implementation of a contingency plan in the event that the Bitcoin Core network takes a hard fork to make way for bitcoin unlimited to become its own currency. The consortium cited the Ethereum split last year and fears that “Replay Action” could seriously hinder the blockchain, Bitcoin integrity and other obvious issues that would be faced.
Replay Action is when the same transaction is recorded on both blockchains, causing all kinds of chaos. Bitcoin Unlimited will be required to implement this Relay protection to the satisfaction of the exchange owners or they simply will not be listed.
The other fear is that Bitcoin Unlimited will have enough of the hashing power that they needn’t worry about the dual blockchain set-up in the first place: they could simply replace Bitcoin as the only currency on the core network. Most pundits agree that this is not a possibility now that the exchange consortium has released its contingency strategy.
The document released by the exchange group assured everyone that their main goals is to stay running throughout this entire process with ‘zero’ down-time. Part of the document reads,
“As exchanges, we have a responsibility to maintain orderly markets that trade continuously 24/7/365. It is incumbent upon us to support a coherent, orderly and industry-wide approach to preparing for and responding to a contentious hard fork. In the case of a bitcoin hard fork, we cannot suspend operations and wait for a winner to emerge.”
As more news unfolds, the price of Bitcoin could be affected drastically.
Trump Administration To Adopt Block Chain Tech
This past week, in Washington D.C., High level officials spoke in favor of the President’s administration adopting blockchain technology to see how it can be applied to government and to further the development at the tech’s intersection with public policy.
At an unplanned presentation, Mark Calabria, chief economist for the Vice president stated,
“We are approaching this with an open mind. We recognize that we’re not necessarily the innovators, but what we can do is get out of the way and figure out where the government stops you from being innovative.”
Supporters of block chain tech have felt that adoption of the tech by the government would help to normalize and usher it into private sectors and this is what is being seen today, so acceptance further up the chain of command is welcomed.
Blockchain Tech Could Create Faster, More Convenient and Cheaper Financial Markets
Jens Weidmann, president of Bundesbank made a speaking appearance at a G20 summit in Berlin this week. Bundesbank, Germany’s Central Bank, is a strong blockchain advocate and in his brief speech, Weidmann had this to say,
“The question of whether digitalization will lead to a revolution in financial services and infrastructure, as some commentators argue, remains unanswered for the time being, in my view. However, one certainly can’t deny that new technologies like blockchain, robo-advisors or crowd funding could have the potential to make financial markets and services faster, more efficient, more convenient, and more inexpensive for everyone.”
He also stated that he believes there is a need for Fintech regulations to a “certain extent”. He cites the fact that most corporations using financial innovations that are technology-enabled work on global scale, or at least carry out a number of cross border transactions and that for this reason, there needs to be accountability and a global set of rules for the Fintech’s to follow.
Alaska House Vote on Bitcoin Business Licensing Requirements
Alaskan officials are set to vote on a bill within the state’s House of Representatives. If passed, the bill would require certain digital currency companies to license themselves as a money transmission service and make them obligated to follow the state’s financial regulation laws.
In the United States, it has been a split decision, so far. Some of the states have worked legislature into effect that corresponds with Alaska’s current attempt. States like New York also sought to have these businesses licensed and under the state’s financial regulatory eyes. On the other side of the equation, you have states like New Hampshire, who just recently passed into law, a bill that explicitly excludes digital currency companies from the financial regulatory laws.
In Alaska, House Bill 180, the proposed law would require any business that exchanges, stores or transmits digital currency on behalf of the customer would be required to be licensed under the state’s money transmission laws, which requires approval from the state’s Banking and Securities Committee.
This is the second attempt of lawmakers in Alaska to get a bill passed that would require digital currency companies to obtain licensure. The first attempt failed to gain enough support after months on the House floor.
EU Parliament to Monitor and Regulate Bitcoin Users
Earlier this week, the EU parliament have released a newly published draft legislation that lays out their plans to regulate digital currencies.
The draft lays out ways for Parliament to properly give additional power to financial watchdogs within the EU so that they may collect more data on users of digital currency, including language that paves the way for databases to be created for the sole purpose of linking wallet addresses to particular people.
In addition, if approved, the new legislation would require that national level intelligence agencies must share the collected information on digital currency users with other member nations. The document states, verbatim, ” … virtual currencies should not be anonymous.”
The bill, which was drafted and prepared by the EU Committee on Economic and Monetary Affairs, as well as the Committee on Civil Liberties, Justice and home Affairs goes on to say,
“To combat the risks related to the anonymity, national Financial Intelligence Units (FIUs) should be able to associate virtual currency addresses to the identity of the owner of virtual currencies. In addition, the possibility to allow users to self-declare to designated authorities on a voluntary basis should be further assessed.”
The draft bill, which was put to vote this week Passed 88-1 with 4 abstentions.
Polish Police Investigating the MIA Bitcurex Bitcoin Exchange
Polish law enforcement announced this week that it intends to pursue an investigation in regards to Bitcurex Bitcoin Exchange. The Polish based exchange went offline earlier this year, citing that the IT System was damaged by an external interference. The exchange owner stated that he had already spoken to authorities to report the incident. As of march 19, 2017, there is still no content at the website’s domain.
Police in Łódź released a statement saying that they were investigating the almost 5 due to suspicion of crimes against the property of third persons. Those interested in filing a formal complaint can do so by written notice, and include any supporting documentation that proves the amount you are claiming as a loss. File all complaints directly with the Łódź Police Department.
Ponzi Scheme: Gemcoin Slapped with $74 Million Judgement
Almost 18 months after the SEC raided the offices of US Fine Investment Arts Inc (USFIA), an entity associated directly with Gemcoin, the judge in the case handed down a staggering seventy-four million dollar judgment, ordering that amount to be paid as fines to the various in the case.
Gemcoin was supposed to be tied to amber mine holdings as a value add to precious stones the customers were told they would receive. The SEC successfully proved, in court, that CEO Steven Chen committed fraud and that most of the money from investors ended up getting doled out to shell companies tied to Gemcoin. All of those shell companies are listed as defendants in the case, along with Chen.
The court’s final judgment ordered several of the business entities to pay a total of $51.9M in disgorged profits, while Chen was ordered to pay $3.8M in prejudgment interest and a civil penalty worth $16.7M.
The FBI, who has also indicated an investigation into Gemcoin has made no formal charge filings and it appears that Gemcoin and the saga is over for good.
Another week has come and another week has gone. There was a lot of chaotic type activity in the Bitcoinverse (as I like to call it), this past week. Bitcoin Unlimited Nodes went down due to some weird code bug, The Exchange consortium pretty much killed all hopes that Bitcoin Unlimited had of taking over as the new Bitcoin, Ether shot way, way up and Bitcoin fell way, way down and a bunch of lawmakers have votes pending regarding blockchain tech. The good news is that this week is over. While there is no bad news guaranteed, the “hold your hats!” news that you can expect to see in the very near future involves another Bitcoin ETF for the SEC to decide on, the introduction of Bitcoin Unlimited and whether or not, for sure this time, there will be a hard fork or not and the whole merge of the entire process onto the exchanges. So, exciting it will definitely be.
Gene is an avid Bitcoin enthusiast and computer programmer who is currently studying to be a software engineer. He is 40 years old and lives in Daytona Beach, Florida with his girlfriend and their son.