While bitcoin has managed to stabilize above the $4,000 mark, it’s new post-fork counterpart bitcoin cash witnessed a tremendous rally beginning August 17. Bitcoin cash (BCH) rallied from around $300 to almost hit $1,000 on August 19 before corrected back to the $600-700 range on August 20 afternoon.
The surge in the price of bitcoin cash was driven by its mining profitability surpassing that of bitcoin combined with record high trading volumes in South Korea. The increase in bitcoin cash’s mining profitability has led investors to see more potential in bitcoin cash’s future value as more miners may switch to BCH should its mining rewards continue to be higher than its predecessor’s. But another thing miners will consider is the long-term store of value bitcoin provides, suggesting we might not witness a major shift.
Another important driving factor for the price of bitcoin has been its addressing its scalability. Now that the SegWit protocol upgrade has been locked-in, bitcoin’s price received a substantial boost. However, there is a second part to the so-called “New York Agreement,” which has led to the implementation of SegWit and that is the SegWit2x hard fork.
The SegWit2x hard fork is a fork to the Bitcoin blockchain that aims to increase the block size from 1MB to 2MB. The timing of the hard fork has now been declared and will take place on block 494,784 in late November. Another hard fork in the Bitcoin network will likely cause volatility for the price of bitcoin leading up to the fork, but it is not yet certain that the hard fork will take place. Despite the majority of miner’s still signaling for SegWit2x, the hard fork is not receiving much support from the Bitcoin community.
This week’s review is compiled from contributions by Jamie Holmes, Joseph Young, Michael Scott, Nigel Dollentas, and Nuno Menezes.
A backlash against BitPay for misleading users has resulted in their software being forked, meaning its code will be altered so that users have a Bitcoin Core based option for bitcore. On August 18, Bitcoin developer Nicolas Dourier begun to fork the code from BitPay’s bitcore so that merchants can get paid in bitcoin while avoiding upgrading to SegWit2x, which has weak support across the ecosystem.
BitPay, a large payment processor of bitcoin for merchants, allowing them to receive payments with zero confirmations, released an update for its customers on August 17, advertising it as an upgrade to SegWit. However, instead of getting merchants ready for the SegWit activation on August 21, they lead bitcore users to setup a btc1 node. Effectively, they are leading their users to prepare for the SegWit2x hard fork, which is unanimously rejected by the Core developers.
In a first such deal in Japan, Fisco Ltd. has issued bonds denominated in bitcoins. The financial information provider designed the ‘bitcoin bond’ so it could meet regulatory requirements and the development of a vast array of bitcoin instruments is helping to galvanize its status as an asset class in its own right.
After becoming a legally recognized payment method in Japan, Fisco anticipates that bitcoin will be recognized as a financial asset. The bond sale took place on August 10, where a unit within Fisco issued three-year debt worth 200 bitcoins to another firm within the group, to see if the instrument could be useful for fundraising. The debt pays a three percent coupon and returns 200 bitcoins to the holder on maturation.
ZeroLink, the product of the combined efforts between developers from SamouraiWallet and HiddenWallet, promises to make using Bitcoin fully anonymous, something that has never been achieved before.
Zerolink is not only an excellent anonymity technique; it’s a whole process that’s called the Wallet Privacy Framework. The Wallet Privacy Framework consists of a pre-mix and post-mix wallet, as well as a mixing technique. Three layers of anonymization are implemented to ensure that users are not deanonymized through tactics such as network analysis.
Egypt will see its first bitcoin exchange, Bitcoin Egypt, launch at the end of August. Citizens gain direct access to the cryptocurrency for the first time.
International bitcoin exchanges have refused to deal with Egyptian Pound, acting as a barrier to adoption. Acquiring bitcoin can be done via LocalBitcoins or with money exchangers who work with other payment methods. Two entrepreneurs from Alexandria, Rami Khalil and Omar Abdelrasoul, want to change this.
Since the beginning of August, NEO has demonstrated a rapid increase in value, quickly becoming the sixth largest cryptocurrency in the market, with a $2.3 billion market cap as well as entering the top five of CoinGecko’s rankings. Still, the vast majority of traders and investors within the cryptocurrency market are still unfamiliar with NEO and its history.
NEO first debuted in China as Antshares Blockchain. The Shanghai-based open-source blockchain project raised over $4.5 million in its initial coin offering (ICO) and developed the “Onchain” universal blockchain framework. In the Chinese cryptocurrency market, Antshares gained popularity amongst traders as a competitor to Ethereum.
BTC-E, the oldest bitcoin exchange in the market which was seized by the US law enforcement in July due to the involvement of Alexander Vinnik, the founder of the exchange, in some of the largest bitcoin exchange hacks including the Mt. Gox and Bitcoinica incidents, is planning to recover its services and user funds by distributing BTE tokens to users.
In 2016, when Bitfinex was hit with a $70 million security breach, the exchange’s development team designed a solution in which users were able to claim their lost funds through the Bitfinex (BFX) tokens as time passed. In essence, users were given the right to claim their balances through company profits. Eventually, Bitfinex bought back all of the BFX tokens issued after the hack, restoring the stolen funds of users.
On August 15, Blockstream, a leading provider of blockchain technologies, launched Blockstream Satellite, an innovative service that provides free access to the Bitcoin network. It will target an estimated four billion people currently not connected to the internet, due to lack of availability or affordability.
Blockstream Satellite broadcasts real-time Bitcoin blockchain data from satellites in space, delivering availability across two thirds of the Earth’s landmass, with plans for near global coverage by year end.
The market cap of crypto hit $120 billion and bitcoin already seen its price go up more than 400 percent in 2017. Institutional investors are finding it harder to turn their back on the cryptocurrency.
In finance, many of the debates revolve around digital currencies and Blockchain technology. Many investors are looking to consult with the best financial advisors. There are concerns over how fast new entrants are raising funds, with initial coin offerings and fundraising now exceeding Internet angel and seed investing.
Goldman Sachs acknowledged the growth of digital currency is something investors cannot ignore. Robert Boroujerdi and Jessica Binder Graham, two Goldman Sachs Group Inc. analysts, clarified a few points about trading cryptocurrencies, ICO’s and how to define cryptocurrencies. They argue between the Currency and Commodity definition. Even so, Goldman strategists haven’t specified whether investors should buy digital currency.