Bitcoin markets rose above $5,000 for the first time after a week of rising prices.
Archives for September 1, 2017
After a years-long development process and even more debate and political struggle, Segregated Witness finally activated on the Bitcoin network last week. The protocol upgrade introduced a number of benefits which can enable more advanced second-layer protocols. It also offers a block size limit increase for wallets that utilize the new feature, meaning users can enjoy lower fees and faster confirmation times.
One week in, Segregated Witness has been implemented in several wallets, though overall adoption is off to a bit of a slow start. While many wallets and services indicated prior to the activation that they would be ready for the upgrade, many are taking a bit of a conservative approach when it comes to main-net release, while others have since faced unrelated difficulties that demanded their attention.
So far, hardware wallets are among the first to have jumped on the new opportunity. Both Trezor and Ledger have fully implemented and enabled Segregated Witness. This is not very surprising: Hardware wallets stand to benefit from SegWit more than most wallets, as it helps to significantly speedup the signing process.
“But we mostly implemented Segregated Witness to help the network first,” Ledger CTO Nicolas Bacca told Bitcoin Magazine. “The more Segregated Witness transactions are used, the more space there is for everybody. In a way we’re also doing our part to disarm the 2x part of the SegWit2x hard fork.”
Another hardware wallet provider, Digital Bitbox, also implemented Segregated Witness in its firmware, cofounder and Bitcoin Core contributor Jonas Schnelli told Bitcoin Magazine, but it still requires a compatible desktop app to utilize the feature. This is a work in progress.
Full node wallets like Bitcoin Core are also in the process of implementing Segregated Witness. But Bitcoin Core developers decided to not include the feature straight away in order to avoid edge-case attacks that become harder to execute as time passes. Bitcoin Core will instead release a new version of the software, 0.15.1; this could take another month or two before it’s available.
“It’s days away,” GreenAddress developer Lawrence Nahum told Bitcoin Magazine. “We were ready a while back; however, during testing we found that fees were a bit higher in one of our wallets. That’s because some software libraries available now weren’t available when we implemented SegWit. At this point it’s mostly a matter of more testing.”
Most other wallets are also in various stages of implementing the feature, but for various reasons haven’t gotten to the point of release quite yet. In some cases, like BitGo and BTC.com, this had to do with the prioritization of integrating Bitcoin Cash into their service; the new cryptocurrency launched unexpectedly only a couple of weeks ago. Similarly, Mycelium told Bitcoin Magazine it has been implementing new features which diverted some time and attention away from SegWit.
Other popular wallets, including Bitcoin Wallet (also known as Schildbach’s Bitcoin Wallet), Breadwallet, Electrum, mSIGNA, as well as webwallet Xapo confirmed that they are implementing SegWit, and all told Bitcoin Magazine that they expect this should be available soon — though none gave a specific timeframe for it.
The post One Week Into SegWit, Hardware Wallets Lead the Pack in Slow-But-Sure Roll Out appeared first on Bitcoin Magazine.
BTC-e has posted a new update claiming that funds withdrawals will be activated starting tomorrow.
Russia may have a finalized cryptocurrency trading bill by the end of the summer, according to a senior lawmaker.
Another day, another all-time high for the BTC-USD markets. Bitcoin has been on a strong bull run since its bottom in the $1800s and, despite many technical indicators, has pushed to new highs, week after week. With the international uncertainty surrounding the North Korean conflict and the recent news of Dalia Blass’s recent hire at the SEC, there is plenty of bullish news to fuel the push. However, the current BTC-USD all-time high resides in the lower $4800s, which many market analysts say is the local top of this run.
Figure 1: BTC-USD, 6-Hour Candles, Bitfinex, Recent Bull Fibonacci Extension
Typical Fibonacci Extensions are 127% and 160% of the total length of the bull run. $2600 (0% retracement value shown above) marks the breakout point of the current bull market BTC-USD is experiencing. There have been 4 attempts made to break the $4480 values (100% retracement value shown above). Due to the prolonged effort to break these values, we can make the argument that $4480s are the local top values; any values that breach beyond the $4480s are extensions of the bull run.
A week ago, BTC-USD made a test of the lower $3600s in a move that would ultimately bounce and push us to our current all time high. However, the move from the local bottom to the $4800s is currently forming a reversal pattern called a “Rising Wedge.” Although a Rising Wedge has a relatively high rate of failure, it is still something BTC-USD traders should keep an eye on:
Figure 2: BTC-USD, 2-Hour Candles, Bitfinex, Rising Wedge
The Rising Wedge is characterized by higher highs and higher lows that converge about an ascending value. For anyone trading reversal patterns, it is paramount to confirm the breakout before entering a position. In low confidence patterns like Rising Wedges, we must wait for a breakout below the wedge and for strong trading volumes to increase the likelihood of success. Some evidence that points toward a possible reversal is the RSI and MACD divergence.
Divergence is essentially an indication that there is potential bullish momentum loss in the market. It’s important to note that bearish divergence does not guarantee a market reversal and it does not mean the market will pullback. The only thing we are permitted to take away from bearish divergence is the argument that the market has an increased probability of either consolidation or a market pullback. In strong bull markets, bearish divergence can be seen for hours, days and even weeks.
Should the Rising Wedge break to the bottom, we can calculate the expected price move as follows:
Figure 3: BTC-USD, 2-Hour Candles, Bitfinex, Rising Wedge Price Target
In our case, should the Rising Wedge break to the bottom, we can expect an approximate $500 move downward. However, should the pattern fail to break to the bottom, we can expect a price upward to test the 127% Fibonacci Extension values around $5000 before encountering any significant resistance.
Global uncertainty surrounding North Korea’s aggression plus ETF optimism give further evidence to support a continued bullish market.
A potential Rising Wedge could potentially cause a $500 BTC-USD market retracement. The pattern has yet to be confirmed.
Should the Rising Wedge fail to break to the bottom, we can expect a further push toward the 127% Fibonacci Extension values of $5000.
Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
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The Bitcoin Cash (Bcash or BCH) mining saga continues.
Last week, Bitcoin Magazine reported how — assuming all miners would act in their short-term self-interest — Bcash could potentially have its blockchain freeze in its tracks. Then, last weekend, the Bcash mining saga further developed, as some miners periodically triggered an emergency difficulty adjustment, leading to extreme swings in hash power, unreliable block times and increased inflation.
Now, the situation has taken yet another turn.
Bitcoin Cash is currently less profitable to mine than Bitcoin (BTC). And according (translation) to at least one mining pool operator, BTC.TOP’s Jiang Zhuo’er, this is intentional. Some miners, including Zhou’er, seem to be coordinating to keep the Bitcoin Cash difficulty where it is now, relative to Bitcoin and relative to the price of the two coins. In other words, Bcash miners are keeping Bcash a little less profitable to mine than Bitcoin, on purpose.
As we explained in our first article on this topic, miners that are driven by short-term financial incentives should all switch to the chain that is most profitable to mine (regardless of what other miners do). Yet, Bcash is still being mined despite being less profitable — and at a relatively regular pace. Blocks aren’t found too fast or too slow, inflation is not out of bounds, and the situation seems relatively stable.
In short, miners are collectively leaving money on the table to ensure that Bcash is usable.
The big question, therefore, is why.
The simple explanation would be that the Bcash miners expect the BCH exchange rate to increase significantly in the future and are therefore willing to “take one for the team” right now. (Keep in mind that even if miners believe in Bcash’s long-term potential, they would individually still be better off mining BTC and selling their proceeds for BCH — but someone needs to be mining Bcash for that to even be possible.)
Alternatively, miners could be invested in Bcash enough to want to keep it — and thus their investment — alive. Or maybe someone else is similarly invested is subsidizing the miners.
It could also be a matter of honor or pride.
Or perhaps there is a bigger picture.
The Bitmain Factor
Two of the biggest Bcash miners are ViaBTC and, indeed, BTC.TOP. But the vast majority of Bcash hash power is mining anonymously to two BCH addresses. This hash power must therefore belong to one or two mystery miners, or maybe one or two mystery pools.
Meanwhile, there is quite a bit of circumstantial evidence to suggest that Bitmain is involved with Bcash to some degree.
First and foremost, Bitcoin Cash was the realization of the “UAHF,” a plan first proposed by Bitmain. And while the mining hardware manufacturer has publicly distanced itself from the project to some extent since, it did not rule out the possibility of supporting Bcash later on. Indeed, two of Bitmain’s pools, Antpool and BTC.com, have mined BCH since.
Meanwhile, Amaury Séchet, lead developer of Bitcoin ABC (the first software implementation that implemented this UAHF) received funding from the Bitmain-sponsored Bitcoin Development Grant. Similarly, Juan Garavaglia, CEO of early Bitcoin Cash infrastructure development company Bitprim, is or was the authorized Bitmain distributor for the U.S. and Canada. And while any connection between BTC.TOP and Bitmain has so far been denied, ViaBTC did at least receive investment from the mining giant. And of course, Bitmain co-CEO Jihan Wu established himself as a big proponent of Bcash, both online and offline.
Furthermore, Bitmain might be one of the parties that could benefit the most from Bitcoin Cash, if the coin proves successful in the longer term. As opposed to Bitcoin, Bcash is still fully compatible with covert use of the patented AsicBoost technology that Bitmain admitted to having implemented in its chips, while Bitcoin ABC has no plans to counter this. And as Blockstream CSO Samson Mow argued, by producing their own coin, Bitmain can perhaps to some extent guarantee future hardware sales, even if Bitcoin were to ever, for example, adopt a proof-of-work algorithm change.
All this, and of course the fact that Bitmain is a world-leading producer of hash power, suggests that the company is in a good position be responsible for one or both mystery miners. Or that someone associated with the company is.
While this theory is speculative and parts of it are officially denied, it would mean that Bitmain — or someone associated with Bitmain — is almost single handedly propping up Bcash. As a result, the coin is currently relatively functional. But barring more durable solutions, Bcash’s future might just depend on Bitmain’s willingness and ability to keep it that way.
Thanks to Johnathan Corgan for his feedback.
The post Miners Are Leaving Money on the Table to Mine Bitcoin Cash: This Could Explain Why appeared first on Bitcoin Magazine.
A new paper suggests bitcoin mining may naturally resist centralization – a finding with potential implications for the long simmering scaling debate.
French hypergrowth startup DomRaider aspires to develop an open-source solution dedicated to real-time management of auctions based on blockchain technology. Tristan Colombet, DomRaider CEO, explains the operation in the video Over the last four years, DomRaider has become the European market leader for the auctioning of expired domain names. Today, its Founder, Tristan Colombet, … Continue reading European Leader in Domain Name Drop Catching announces ICO to Build Blockchain-Powered Auction Platform
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The independent film Banking on Bitcoin, covering Bitcoin’s roots, its possible futures and its underlying technology, is now on Netflix. “Bitcoin is the most disruptive invention since the internet, and now an ideological battle is underway between fringe utopists and mainstream capitalism,” reads the Netflix news release. “The film shows the players who are defining how this technology will shape our lives.”
Banking on Bitcoin is a good film, professionally produced. On the hugely popular Netflix platform, the film will give many newcomers an understandable first introduction.
The overall impression is that this a good historic and ideological overview of Bitcoin’s first development phase but it’s in need of a sequel. From its cypherpunk roots and days of early adoption, the film focuses on the digital currency’s rocky relationship with the banks and regulatory bodies, setbacks like the fall of MtGox and the Silk Road, as well as some figures who were “first through the door,” like Charlie Shrem, Erik Voorhees and Gavin Andresen.
At the same time, Bitcoin and crypto enthusiasts are likely to find two shortcomings: First, the film dedicates too much time to stale old news like Silk Road and BitLicense, and not enough to new developments. Second, because it was first begun in late 2013 and wrapped up in the fall of 2016, the coverage of recent developments is very limited: The film essentially stops at the end of 2015.
Bitcoin Magazine reached out to the film’s director/writer/producer Christopher Cannucciari and associate producer Phillip Galinsky to find out more about the film’s background and their future plans.
What is your background, and what has been your role in the film?
Christopher Cannucciari: I had become interested in digital currency while I was producing a 2009 documentary in Kenya and some locals had introduced me to what would become mpesa. Kenya had just had a major crisis due to post-election violence of 2008. The banks had shut down and Kenyans came up with the novel idea of texting phone credits which could be used as money to pay for goods and services. Upon my return the thought of new ways to used technology as money stuck with me. Fast forward to 2013 and my interest in Bitcoin became so strong that I decided to bring my abilities as a filmmaker to it.
Phillip Galinsky: I’ve been involved in the film since the beginning when it was just Chris working in the role of Director and myself working in the role of Producer. Chris and I were working together on an unrelated project over a three-day shoot and I kept noticing (and occasionally mentioning to other members of the production team) that the price of bitcoin was skyrocketing.
Others working on the project seemed skeptical at first, but as the weekend drew on and the price nearly doubled, people became more interested. Chris and a number of other team members asked me to explain what bitcoin was and how it worked.
I was (and am) primarily interested in Bitcoin from a technological and moral consequentialist perspective, so I walked through the basic functions of blockchain technology, and attempted to explain how the capacity of blockchain technology to enable distributed, decentralized, censorship-resistant databases is a crucial enabling factor for development and implementation of the next generation of free and open global societies. My technical and somewhat arcane explanation turned out not to be the most effective way introduce the technology to the crew, and a number of people expressed interest in a gentler and easier to digest source of information about Bitcoin.
Chris in particular wanted to know more about Bitcoin due to previous experiences that showed him the power of technology as currency, and took note of the fact that, although Bitcoin had been around for about half a decade by then, most people still hadn’t heard of it and there were few high quality resources to be found that were targeted toward informing a general audience about the technology.
I introduced Chris to the NYC bitcoin community and we worked together on the many components of documentary film production.
What is the main message that viewers should take away?
Christopher Cannucciari: Before the public passes judgement on Bitcoin, they deserve to know where it came from, how it works and how it fits into society.
Bitcoin didn’t come from nothing, it came [off] the shoulders of the Cypherpunks. Bitcoin is a technology, and technologies are neither good nor evil, but rather [they’re] accelerants. Society can use it as a tool however they see fit, and our hope is that those who wish to learn about Bitcoin will understand that it is there for them to participate as much as anyone.
The film doesn’t cover developments after the end of 2015 (price increases in 2017, investments, DAOs, spectacular ICOs, sidechains, Lightning Networks…). I guess you had to take a long time for post processing and marketing (probably for lack of funds) between the end of shooting and the first release?
The story of Bitcoin is just too big to fit in a single film. Banking on Bitcoin is a primer for what Bitcoin is, where it came from and how it survived its initial challenges. As a primer, the audience can then dig in deeper and discover the many more complex stories.
We certainly could have tried to fit in many more stories, subjects and details, but the film would have lost its focus rather quickly. It was essential for us to honor the initiated while holding the attention of those who wanted an entry point to this amazing subject.
Vitalik Buterin appears in a couple of scenes but is never mentioned, and Ethereum is never mentioned. Why?
Christopher Cannucciari: I held interviews with Vitalik in Toronto, Wences Casares in Silicon Valley and even traveled to the Bitcoin Bowl in Florida. As much as I wish I could have kept these stories in the film, we had to keep focus on what was unfolding before us in New York.
Ethereum deserves its own story and perhaps we can find a way to tell that story in the future.
You often mention the tension between the original libertarian, crypto-anarchist spirit of Bitcoin and its new “sanitized” mainstream aspects, Ben Lawsky’s regulations and Blythe Masters’ Wall Street blockchains. What’s your own take?
Christopher Cannucciari: The Crypto scene in New York was amazingly vibrant and the state had a golden opportunity to foster it and give New York the same innovative energy Silicon Valley had in the 1980s. What happened instead is Bitcoin was eyed with suspicion and the regulations around it made it difficult for “garage” entrepreneurs to participate. It is now left to those who can afford to work with the regulators.
Phillip Galinsky: There are both positive and negative consequences of the adoption of blockchain technology by “Wall Street.” All blockchain development, both open and closed source, has the positive consequence of informing developers about the limitations and capacities of the technology. Open source endeavors produce the most accessible and immediately useful technologies to facilitate further blockchain invention and innovation. However, even closed-source development produces valuable knowledge about the possible uses of blockchain technology; for example, this white paper released by Blythe Masters’ firm Digital Asset Holdings which goes into great depth about one of the many possible uses of blockchain technology.
This is not to say that all blockchain based systems will be positive or bear normative value from a moral consequentialist perspective. Blockchain technology is incredibly powerful and will shape the future of human interaction and societal system architectures, for better or worse, and it is largely on the shoulder of developers to ensure that the blockchain is used to increase well-being in the world.
Is the end meant to suggest that Craig Wright is Satoshi? What is your own bet? Who is Satoshi?
Christopher Cannucciari: It’s very interesting how this is a sensitive issue. Craig Wright was presented in the same way as Dorian [Nakamoto] was. The carousel of Satoshi’s identity will continue; Wright will not be the last to come forward.
While Wright is most certainly not Satoshi, some have suggested that he was a drop for the real Satoshi. The timing was interesting, Wright was in need of capital to settle some big debts and all of a sudden he was in possession of some valuable, early Satoshi-era Bitcoins. For those who want to play the Satoshi game, I added this breadcrumb to keep the search on.
The Bitcoin/blockchain story is far from over. Are you working on a sequel to the film, and what role does blockchain technology play in your future work?
Phillip Galinsky: There will certainly be an ever-increasing wealth of material for filmmakers to cover in the blockchain space in coming years, as many of the most exciting developments in blockchain technology — self-executing contracts, oracles, distributed autonomous organizations, and most fascinating to me, blockchain-based societal control systems — are still in the nascent stages of development and implementation. Chris and I have discussed the possibility of making a sequel; however, we haven’t made any specific plans to do so at this point in time.
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In July, the U.S. Securities and Exchange Commission (SEC) moved in on the “Wild West” world of ICOs, which has sent the blockchain world reeling. Now, the Israel Securities Authority (ISA) has announced its own plans to form a panel to regulate Initial Coin Offerings (ICOs).
This week, the ISA announced that its chairman, Prof. Shmuel Hauser, has put together a committee to examine the regulation of ICOs. The committee will investigate the applicability of securities regulations on ICOs based on shared ledgers that are being offered to the Israeli public.
On July 31, the Israeli Bitcoin Association (IBA) made its own official public statement on the topic of ICOs. The IBA cautioned potential ICO participants that it’s important to understand the huge risks that exist in investing in ICOs.
This new world tends to captivate innocents tempted by the hope of getting rich quick. We implore the public considering investment in ICOs to treat the matter with serious consideration, out of a recognition that investors might lose all their money.
Regarding regulation, the Association cautioned that “the regulatory attitude towards this area is yet to be clarified. On one hand, this means investors will find it difficult to demand their rights, due to a lack of an appropriate infrastructure. On the other hand, it is possible that in the future there will be a regulatory intervention in a specific project or in the whole domain, which may hurt its continued operation.”
It seems that that time “in the future” for defined regulation is now in the works.
Udi Wertheimer, an Israeli blockchain researcher, read this latest announcement from the ISA in its original Hebrew and provided Bitcoin Magazine with his translation of the document.
“The announcement itself is neutral in tone,” Wertheimer told Bitcoin Magazine, “pointing out that the ISA is interested in encouraging new investment and funding options, and does not wish to stifle new innovations, but at the same time acknowledging that some ICOs turned out to be scams and others involved market manipulation, while yet others ended up being hacked in various ways, all leading to investor funds being lost.”
The document lays out its rationale as follows:
While considering the ISA’s policy in the last year on developing innovative funding models in parallel with keeping the interests of investors and warning from unregulated investments, it seems there’s a growing need of regulation in the field of ICOs. The committee’s job will include investigating this activity and the applicability of Israeli law as it exists today and as it may have to be adjusted, while reviewing their legal status in other countries.
“This is the first time I know of that Israeli authorities referred to ICOs directly. Israel is home to many ICOs, like Bancor, Kik’s Kin, Stox, CoinDash and others,” said Wertheimer.
He noted that the ISA recently cracked down on “binary options” companies, which tried to subvert security laws but were eventually identified as illegal. Even though these companies were registered elsewhere, the ISA forced them to shut down operations both in Israel and abroad.
Wertheimer also summarized the committee’s responsibilities as described in the document:
Here’s my rough translation of the “next steps” at the bottom of the announcement pic.twitter.com/KSizLaYSD0
— Udi Wertheimer (@udiWertheimer) August 30, 2017
Wertheimer told Bitcoin Magazine: “Personally, I hope that regulators keep a hands-off approach in the near future, as I’m still hoping this field can still find a way to self-regulate. However, given the massive PR push by these ICOs both in Israel and internationally, I’m not surprised the ISA decided to take a close look.”
Meni Rosenfeld of the Israeli Bitcoin Association told Bitcoin Magazine that the Association has not yet formulated a stance on the ISA’s investigation.
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