Bitcoin Corrects While Bitcoin Cash Surges to All-Time High As SegWit2X Cancelled: Week in Review Nov 13
The price of bitcoin rallied to a new all-time high of over $7,750 on Wednesday when the proposed SegWit2X upgrade to the Bitcoin network was called off. However, the rally was short-lived.
After reaching a new all-time high as fears of another split of the Bitcoin network immediately subsided, the price of bitcoin somewhat surprisingly suffered a sharp decline all the way down to the mid $5,000s before recovering above $6,000 on Sunday.
The price of bitcoin’s closest competitor, bitcoin cash (BCH), rallied from around $600 at the beginning of the week to reach a new all-time high of over $2,600; ending the week around the $1,600 mark.
Whether this inverse price movement between bitcoin (BTC) and bitcoin cash (BCH) is a sign that the community wants bitcoin to have low transaction fees and high speeds so that it can be a digital currency and not just purely digital gold or whether bitcoin cash backers are simply pushing up the price of “their” digital currency in an attempt to take over bitcoin as “the real bitcoin” – as some are suggesting – remains to be seen.
On the other hand, this drop in the price of bitcoin may just have been a natural correction after the aggressive rally bit has had in the past four weeks and India’s central bank’s statements regarding a potential future ban of bitcoin in the country did also not help the price.
Altcoins have also benefited from the correction in bitcoin’s price. Popular cryptocurrencies such as ether classic (ETC), litecoin (LTC), and monero (XMR) have surged to November highs while ether (ETH) rallied by over ten percent before ending slightly up versus the week prior.
This week’s review is compiled from contributions by Christoph Bergmann, Gil Davis, Jamie Holmes, John Becker, Rahul Nambiampurath and William Peaster.
Joseph Lubin, one of Ethereum’s co-founders, said in an interview at the Web Summit technology conference in Lisbon, “There’s certainly some irrational exuberance in the space, it’s such a profoundly powerful technology that people are excited about it and I think that that’s what’s driving this rush into the ecosystem.”
Lubin’s words seem cautiously optimistic, while Vitalik Buterin, the inventor and co-founder of Ethereum, weighed in on the matter as well.
“I’m concerned a lot of these token models aren’t going to be sustainable,” Buterin told an interviewer at Devcon3, the Ethereum Developers Conference in Cancun, Mexico. Buterin’s worries stem from the fact that the vast majority of ICOs, like traditional startups, will fail. Now Ethereum’s own token, ether is not tied directly to any of these ICOs and their projects, but the cryptocurrency is being used in their trading. The fear is that, with large influxes of ether to these ICO projects, the ones who fail could potentially dump massive amounts of ETH back into the market, causing wild price fluctuations.
Buterin believes that the value of ether can be stabilized through scarcity measures on the platform. This can be done through two methods as suggested by Buterin. The first involves using a proof-of-stake form of verifying transactions on the network as opposed to the current proof-of-work model. The second is to impose fees on applications developed on Ethereum and burning those ether tokens over time.
Ethereum’s annual developer conference, devcon three, concluded one week ago in Cancun, Mexico, with well over a thousand attendees. The four-day event included some intriguing talks such as numerous presentations highlighting the humanitarian use cases of blockchain technology, details on the scaling approaches for Ethereum and progress in the wider Ethereum ecosystem. Here we detail highlights from devcon three. While the content was interesting and engaging, the organization of the event was not up to standard, with some people missing from the ‘list.’
During an interview on November 9, 2017 with Yahoo Finance the current U.S. Treasury Secretary, Steve Mnuchin, expressed concerns over bitcoin and its potential illicit uses on the dark web.
“The first issue and the most important issue is to make sure that people can’t use bitcoin for illicit activities. So we want to make sure that you don’t have the dark web funded in bitcoins. And that’s something that is a concern of ours today.”
He further explains that their goal is for “bitcoin dealers” in the U.S. to have customer and Bank Secrecy Act requirements. Current discussions are ongoing with others internationally with the hope to stop bitcoin’s use in the exchange of illicit services. Still, the department of Treasury does not have an official stance on the cryptocurrency.
Clipboard exploits are nothing new in the hacking world, but the CryptoShuffler Trojan is the first of its kind, in that it specifically targets crypto wallet addresses. Clipboard apps store copied data so that users can paste this data thereafter. Alas, the CryptoShuffler identifies when users have copied a wallet address into their clipboard, and then swaps the address with the hacker’s own address, presuming that a crypto transaction is occurring.
For now, the malware’s creators have instructed the trojan to target Bitcoin addresses specifically, though they could presumably reconfigure the malware to attack the addresses of any cryptocurrency. At press time, the hackers have stolen over 23 bitcoins using CryptoShuffler.
Thanks to another Bug in Parity, a User Accidentally Freezes up to a Million of other People’s Ether
Parity announced on its blog that they discovered a critical bug. They found a vulnerability in the “Parity Wallet library contract of the standard multi-sig contract.” All users, which used this contract to store digital assets since July 20, are profoundly affected.
If we dig deeper into the story, it gets adventurous. There has been a library contract, which could be transformed into a standard multisig wallet and get possessed by any user. One person did this, by accident, and activated the “suicide” function of the contract. The mishap wiped out the whole code of the library, which turned every single multisig contract which used the library unusable.
In other words, every single digital asset, be it ether, be it some token, can’t be moved. How much value is affected, cannot be said for certain. A list estimates around 500,000 ether, some social media chatter mentions one million ether. According to Parity, the circulating numbers can’t be confirmed. But it’s not the worst bet to say that at least $100 million and at worst more than $300 million are destroyed. A significant part of it is the Polkadot funds, which have been collected by Parity itself.
Until today, Bitcoin and other cryptocurrencies in India have operated within a legal gray area. There has been no official stance on their usage by the government. A Director of the Reserve Bank of India (RBI) however, made a public statement on the subject in Mumbai on November 6.
The Executive Director of the RBI, Mr. Ganesh Kumar, declared that Bitcoin and other cryptocurrencies would not be legal tender. Furthermore, they will not be recognized for payments or any other monetary exchanges. He did, however, go on to say that the government remains interested in the technology powering Bitcoin. He foresees great potential for its usage in the future.