Drama In Bitcoin: BTCMANAGER’s Week in Review for July 10
Bitcoin reached a new milestone this week as the 420,000th block was mined and the mining reward was halved from 25 BTC to 12.5 BTC. Other stories added their own drama this week, all of which carry consequences for the bitcoin community: HashOcean cloud mining appears to have closed down, leaving investors in the lurch; the E.U. is considering extensive regulation for money transfer businesses and prepaid cards, in the hopes of blocking funding for terrorism; and central banks around the world are wreaking all sorts of havoc on domestic fiat currencies.
Compiled from contributions by Jamie Holmes and Lori Brown
On July 9th the 420,00th block of bitcoin’s blockchain was mined, meaning the reward for mining blocks on the blockchain has been reduced for the first time since 2012. Because of the halving, prices have begun moving up for BTC in respect anticipation of the lower reward for blocks mined. There is much to be considered now in regards to where BTC’s price will go from here.
Recent news in Venezuela has contributed to a panic sell-of of BTC in that country, where it has been trading at a significant discount. Though a variety of reasons have contributed to the lower price, the longer-term view is that this is just the start of a downward trend.
Communication from the European Commission to the European Parliament and Council has made recommendations intended to help identify hidden terrorist funding through the requirements of multiple forms of personal information. The two main targets for the action are the prepaid card market and the “anonymous currency exchanges,” which both possess obstacles for the Commission.
Thanks to ‘easing’ monetary policies, there is potential to drive further divergence between bitcoin and fiat currencies, and to boost bitcoin’s value over the long-term. Bitcoin and other decentralized virtual currencies will stand to gain as the limits on the extent of the money supply prevent debasement of its value. This feature of bitcoin stands in stark contrast to the way that central banks can artificially inflate or deflate the value of fiat currencies.
Cloud-mining site Hashocean.com mysteriously vanished some time after 6:00 pm on June 25th 2016 along with their social media accounts and customer support. However the sudden disappearance of HashOcean may not have been unexpected to everybody. Now, with over 700,000 site users suffering a financial blow, multiple petitions have been organized to call on authorities to pursue the people behind HashOcean.