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Bitcoin Loses One-Third of its Value to Reach Twelve-Month Low: BTCManager’s Week in Review Nov 26

Reading Time: 6 minutes by on November 26, 2018 Altcoins, Bitcoin, Blockchain, Finance, News, Platform, Tech
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The price of bitcoin crashed by a staggering 33 percent in the last seven days after uncertainty sparked by the bitcoin cash “hash war” reminded markets in the prior week how volatility cryptoassets still are. Bitcoin dropped from $5,600 on Monday morning to around $3,750 by Sunday afternoon, to reach a new twelve-month low.

Bitcoin’s steep price decline was exemplified by a video that showed Chinese miners throw out mining hardware in wheelbarrows to resell them second-hand as mining bitcoin is no longer a profitable venture for them at these price levels.

The decline in bitcoin mining profitability is also one of the reasons why digital currency mining company GigaWatt was forced to file for bankruptcy.

While bitcoin holders suffered heavily in the past seven, the biggest loser out of the top coins this week was unsurprisingly bitcoin cash (BCH), which is down over 50 percent week-on-week. The hash war has left deep wounds on the face of BCH, which is now the Bitcoin ABC upgraded version of the “original bitcoin cash,” while the Bitcoin Satoshi’s Vision of bitcoin cash now trades as BSV on most exchanges.

Issues with the code of both new bitcoin cash upgrades have added more uncertainty about the future of bitcoin cash and the “we are in it for the long-term” rhetoric of the Bitcoin Satoshi’s Vision side still has some investors concerned that BSV may launch an attack on the “new” official BCH chain, which uses the Bitcoin ABC upgrade.

In light with the lack of profitability of bitcoin mining, a report was published that showed that GPU mining for ETH was no longer profitable, which also pointed to a general downturn in the cryptocurrency mining industry. With fewer miners being willing to secure networks, it should come as no surprise that network values are currently tumbling. The value of ETH, for example, dropped by almost 35 percent week-on-week.

This week’s contributions have been provided by Aisshwarya Tiwari, Nigel Dollentas, Ogwu Osaemezu Emmanuel, and Priyeshu Garg.

Bitcoin Price Crash Forces the Chinese Miners to Sell Their Equipment As Junk

It is not only the HODLers who are affected by the recent dip in the price of bitcoin, as a report by International Times, published November 23, 2018, posits that cryptocurrency miners in China are selling their expensive mining rigs at giveaway prices.

It appears that shine associated with cryptocurrency mining is steadily waning off, as a recent report states the crypto market slump has forced miners in China to sell their expensive machines in second-hand markets to realize their scrap value.

The reason for such a drastic measure is not too hard to guess, as the miners are no longer able to cover up the electricity costs incurred while running these machines.

It is worse for people who got into the mining business after bitcoin came into prominence in late 2017. Machines bought at prices close to $2900 are hard to sell for even $15 in 2018.

U.S. Bitcoin Mining Pioneer GigaWatt Files for Bankruptcy in Washington

GigaWatt, one of the earliest players in Central Washington’s bitcoin boom, has filed for bankruptcy protection, making it the latest casualty in an industry hammered by falling prices.

According to a report from the Seattle Times, employees of the East Wenatchee company, which hosts thousands of computer servers for cryptocurrency mining, learned that the company’s owners had put it in Chapter 11 on November 20, 2018. 

GigaWatt’s interim manager George Turner told the publication that the news about the owner of the company filing for bankruptcy was sprung on the employees. Turner himself reportedly heard about the bankruptcy from a business associate and was terminated on Tuesday along with all of the company’s 19 employees.

Turner said the Chapter 11 filing, in U.S. District Court in Spokane, may be connected to efforts by three of the company’s majority shareholders to sell GigaWatt.

According to Monday’s bankruptcy filing, GigaWatt has less than $50,000 in assets against nearly $7 million in creditors’ claims. Creditors range from the Douglas County Public Utility District, with a claim of $310,000, to two Singapore-based firms, Cryptonomos PTE, and GigaWatt PTE, with combined claims of $3.67 million.

Bitcoin Cash ABC’s Rolling Ten Block Checkpoints Update Could Be Catastrophic

Bitcoin Cash ABC’s new rolling ten block checkpoint system, introduced to defend against “deep” hostile reorganizations, actually increase the risk of consensus chain splits and provide new opportunities for attackers, BitMex reported on November 21, 2018.

Less than two weeks after the hash war between two forks of Bitcoin Cash began, both of the newly spawned blockchains seem to be running into potentially crippling technical difficulties.

After evaluating Bitcoin Cash ABC’s rolling ten block checkpoints update, BitMex found that the highly anticipated software update put its entire network at risk of 51-percent attacks from rogue miners. The report, published on the BitMex blog on November 21, explored some of the tradeoffs that were made in the update, and found that it was not clear whether any of the so-called “positive” updates were net benefits.

The main change Bitcoin Cash ABC developers made was introducing a special line to its code, changing how the network enforces trust in the transactions being submitted for processing. The network previously relied on a classic PoW algorithm to validate blocks on its network, but saw its latest software update introduce controversial “checkpoints.”

Checkpoints are made to protect ABC against “deep organization attacks,” which involve bad actors tricking the network into mining (fake) versions of its blockchain, The Next Web explained, which can lead to transaction reversals and other network interruptions.

With the new validation model, though, ABC uses every 10th block to measure accuracy. Therefore, if a miner sees blocks on the network that don’t match this checkpointed version of the ABC blockchain, it will automatically reject them.

However, the implications of such a change will have significant impacts on the network security. Cryptocurrency systems analyst Eric Wall told Hard Fork that if an attacker controls more than 50 percent of the overall processing power driving the ABC blockchain (hashrate), they can submit a set of ten blocks to the network simply by reorganizing nine “honest” blocks.

French Residents Will Soon Be Able to Buy Bitcoin (BTC) in Local Tobacco Shops

KeplerK, a France-based fintech firm has established a strategic partnership with tobacco shops in the region to enable them to sell bitcoin (BTC) to cryptocurrency enthusiasts in the state starting from 2019, reported Reuters on November 22, 2018.   

Per sources close to the matter, purchasing the world’s flagship cryptocurrency, bitcoin in France will soon be a smooth and seamless process, thanks to a deal between KeplerK, and thousands of French tobacco shops.

Keplerk has reportedly contracted a local cash register software firm to print bitcoin vouchers which will be sold by tobacco shop owners to their customers who will, in turn, redeem the coupons via KeplerK’s electronic cryptocurrency wallet

As stated on its website, KeplerK’s bitcoin and ether vouchers will be available in different denominations in over 10,000 point of sale outlets in France. KeplerK claims ticket holders can seamlessly validate the code on their vouchers and redeem it for bitcoin or ether on its website or mobile app within five minutes.

Binance Cryptocurrency Exchange Integrates Refinitiv’s KYC Software

Binance (BNB), the world’s number one cryptocurrency exchange by 24-hour trading volume has joined forces with Refinitiv, a U.S.-based financial technology firm, to integrate the latter’s “World-Check” know-your-customer (KYC) software into its trading platform, reported Finance Magnates on November 20, 2018.

In a bid to become more regulatory compliant and curb the activities of bad actors on its platform, Binance crypto-exchange and bitcoin trading venue is integrating Refinitiv’s “World-Check” software for its know-your-customer operations.

Per the team, World-Check uses information from authoritative sources in 200 countries to verify people’s data and has reportedly been “stress tested with over 100 regulators and financial institutions” across the globe.

Although Satoshi Nakamoto invented Bitcoin with a picture of an entirely decentralized monetary system devoid of government and regulators intervention in mind, the widespread activities of crypto-criminals has made regulation critical to the survival of the crypto-space.

With its presence steadily growing in various parts of the globe including Uganda, Malta, and others, the Changpeng Zhao-led cryptocurrency exchange has started paying more attention to regulatory compliance.

European Parliament Member Optimistic about a Blockchain-Powered Political System

Eva Kaili, the Greek member of the European Parliament, spoke optimistically about the future of cryptocurrency past standard applications and focused on the potential within politics on November 22, 2018.

The interview was conducted at Decentralized 2018, a blockchain conference held in Europe and organized by the University of Nicosia. The Chair of Science and Technology Options Assessment (STOA) spoke toEAK TV regarding benefits that supply chains were already receiving, as well as the future implications in other sectors as well.

Innovations like smart contracts made famous by Ethereum could allow for existing operations to be done more efficiently and without human intervention, reducing overhead and error.

Another potential benefit that could help the European Union is cross-border technology. Despite the 28 members being geographically close together, different borders increase inefficiencies and costs when it comes to transferring value or information from one country to another.

Kaili isn’t the only one with this idea: various blockchain solutions are popping up all over the world from a voting system in Catalonia, tokenizing real estate in New York, and blockchain islands in Malta just to name a few. Blockchain technology is so appealing due to its versatility, and potential application into so many different sectors.

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