by Jamie Holmes
The largest story in the past week has been the news out of China, with exchanges retracting margin trading, significantly reducing global volumes and leading to more stability in the price of bitcoin, holding ground above $800. As shown below, volumes are down 80 percent since the PBOC news broke.
— Chris Burniske (@ARKblockchain) January 15, 2017
While Bitcoin’s market capitalization was at all-time highs not too long ago, a different indicator of the ecosystem is now approaching fresh highs. The processing power of the Bitcoin network is nearing three exahashes, demonstrating increased interest in bitcoin mining.
Bitcoin's hashrate (security) is exploding ... estimated +13.5% increase in this adjustment period (2016 blocks). Hashrate = 2.777 Exahashes pic.twitter.com/O02JMpJ8RY
— Alistair Milne (@alistairmilne) January 16, 2017
This week’s review is compiled from contributions by Christoph Bergmann, Farzana Begum, Jamie Holmes, Joseph Young, Malcolm Cannon, Michael Scott, and Nigel Dollentas.
China’s central bank cracked down on margin trading at Chinese exchanges such as BTCC, OKCoin, and Huobi who withdrew this trading feature on January 12. Whether or not this is a permanent measure remains to be seen. In the short-term, this should lead to a more stable market, and we should find out if volumes in China are as colossal as they are purported to be. These latest developments could bode well for Bitcoin, as there will be no negative press about the sky-high volatility.
The Bank of Russia, does not plan to impose a ban on Bitcoin. Olga Skorobogatova, the Deputy Governor of the Bank of Russia, announced on January 12 that the central bank nor the government would prohibit the usage of bitcoin. Skorobogatova emphasized the complexity and sophistication of bitcoin and explained that the government should not impose a ban on Bitcoin until it fully understands both technical and economic aspects of the digital currency.
WikiLeaks founder Julian Assange encounters the questions of fans and critics in an AMA (Ask Me Anything) held on January 10. To eliminate the ongoing rumors, that he is dead, missing or kidnapped, he read out the hash of the latest Bitcoin block in a video. So, Assange delivered an incredibly strong proof that he is alive now. There is no doubt left, if you understand to some degree, how Bitcoin works.
One question that often surfaces on bitcoin online forums is whether a Bitcoin wallet has to be limited to just one device, given a person’s natural desire to want to have multiple access points, much like an online bank account. To offer some perspective on this dilemma, we turned to Bitcoin product tester and UX specialist Patrick Patton to provide some thoughts on how one can access private wallets across multiple devices (PC/Mac and mobile) in an easy and efficient way.
Stylistically, Banking on Bitcoin feels a little bit like the 2015 movie about the financial crisis: The Big Short. There are neat graphics of some of the currency’s technical underpinnings. However, it does not rely on actors to tell the story of Bitcoin. The movie draws from interviews with financial columnists from the Wall Street Journal and the New York Times; early adopting bitcoin entrepreneurs like Charlie Shrem and Eric Voorhees, and establishment figures including the Winklevoss brothers and former New York Superintendent Benjamin Lawsky.
Since the birth of bitcoin, this has motivated many aspects of the blockchain on its way to reshaping society and the nation state. Bitcoin separates money and state, reducing the power of central banks. Moreover, bitcoin provides some anonymity to support a perpetual traveler lifestyle, as people begin to protest against governments by not complying with taxes and as blockchain technology develops even further, smart contracts will disintermediate many aspects of government, radically changing our concept of the nation state.
A research note from Needham & Co., who successfully predicted the rise of BTC-USD to their target of $848, dated January 10 states that if a Bitcoin ETF is approved, it could see up to $300 million in new assets in the opening week. While the approval of the ETF would precipitate a massive inflow of money into bitcoin, the research note also highlighted the concurrent shifts in regulatory concerns and perception of digital assets. While many may be unprepared for the effect of a bitcoin ETF on the price of the cryptocurrency, Needham & Co. reckon the probability of approval is very low.