Bitcoin’s Upside to Continue on Indian Demand and SegWit Update: BTCManager’s Week in Review Nov. 21
by Jamie Holmes
The demand for Bitcoin in India dominated the cryptocurrency media space last week, as the demonetization push has opened up arbitrage opportunities, whereby the price in Rupees significantly exceeds the US Dollar price; bitcoin is trading on LocalBitcoins in India at over 60,000 Rupees, equivalent to roughly $875 at the current USD-INR exchange rate. Also, bitcoin’s strength has been buffeted by a weakening Yuan, prompting buying interest from Chinese investors.
Central banks also stole the limelight last week, with the Riksbank stating their intention to create a digital Krona for Sweden. Moreover, the People’s Bank of China took another step closer towards the implementation of a national digital currency, whereby the scientific research arm of the central bank issued a call for developers to study cryptocurrency architecture.
Finally, the emerging divide in the Bitcoin community was exposed as the start of voting for the Segregated Witness update, Bitcoin Core’s approach to scaling, commenced on November 18. In approximately two weeks, if 95 percent of miners vote for the change, Segregated Witness will be rolled out. But not everyone in the ecosystem supports the change, as highlighted by ViaBTC’s push for an alternative implementation; Bitcoin Unlimited.
This week’s review is compiled from contributions by Alexander Lielacher, Christoph Bergmann, James Ryan Moreau, Jamie Holmes, Michael Scott, and Nigel Dollentas.
Mrs. Skingsley, deputy governor of the Swedish Riksbank, stated that the central bank is thinking about issuing a digital Krona – the “eKrona”. Since the usage of cash has dramatically dropped in the North European country, where the amount of coins and notes in circulation has reduced by 40 percent since 2009, this decision seems to be obvious. Skingsley called this decision “as revolutionary as the paper note 300 years ago.” The institution was the first central bank in the world to issue paper money back in 1660. Why should it not be the first to pioneer digital money too?
The government’s war against the informal economy is boosting Bitcoin adoption in India, while Bitcoin might help the Indian economy to better deal with the pains of getting rid of cash. The annulment of 500 and 1,000 Rupee notes has caused chaos, whereby people are looking to bitcoin to safeguard their wealth. Other countries, such as Australia, could follow suit and reinforce the rising demand for Bitcoin, whereby UBS have recommended that the A$100 and A$50 denominations should be removed from circulation to reduce crime, increase tax revenues, and boost bank deposits.
Following a summons from the Internal Revenue Service (IRS) to bitcoin exchange Coinbase to reveal customer information, the firm has enacted stiff opposition to the request. The US tax authority requested information on all of Coinbase’s customers who bought bitcoin between 2013 and 2015. Pointing to just three instances of tax evasion through the use of bitcoin, an IRS agent claims at least two of these incidents were aided and abetted by Coinbase. However, legal analyst Padovano says that questions surrounding whether or not this is a good enough reason for such an extensive request remain.
While most of the blockchain’s focus to date has centered on the financial sector, new applications targeting health data management, pharmaceutical supply chains, and disease management are being widely bantered about. While the core advantages of the blockchain have been well documented through hundreds of proof-of-concept projects, mainstream deployment is likely still far off. Nevertheless, nodes of blockchain experimentation continue to take place giving rise to new possibilities for healthcare industry innovation.
Texas-based blockchain startup Factom, a company that provides businesses and governments with blockchain solutions to manage and store their data, has announced on November 18 that it will receive funding from the Bill and Melinda Gates Foundation to help them complete work on a blockchain-based medical records initiative. With a focus on biometric verification, identity management and medical records wrapped into a mobile delivery system, Factom is looking to test the worldwide scalability of its technology in developing nations.
From reducing administrative and operational costs to processing cross-border payments and the settlement of securities, the blockchain is slowly changing how things are done in the financial industry. An area where the blockchain is extensively being trialed and implemented is on securities exchanges. One of the latest developments is the Korean Stock Exchange, which is utilizing the blockchain to launch a new secondary trading marketplace for Korean startups called Korea Startup Market (KSM). The new marketplace will allow investors to trade equity holding of startup companies in the open market.
A crowdsale which is attempting to set itself apart from the rest is the Janus token sale. With a cap of 7,000 BTC, or roughly $5 million, they are seeking to remodel the idea of what the DAO originally set out to be. Janus will use the funds raised from the token sale to build out business ventures, blockchain applications and work to sell them at profit over time sharing profits with investors and eventually making an exit and selling the business. Another unique twist is that the asset which is being issued is a token on the Nxt blockchain, not Ethereum’s.
Litecoin, known to some as the digital silver and for being the first altcoin, is different due to its ASIC-resistant algorithm, the increased money supply, and shorter block times. However, it may also be the best cryptocurrency to utilize as a storage of value. If you are looking to make a cryptocurrency portfolio, a major percentage should be allocated toward Litecoin. The relatively docile market trends compared to other cryptocurrencies will provide some stability. The high market capitalization is a promising indicator for long-term growth, and its daily trading volume will ensure investors entering or exiting Litecoin will not upset the market.