“WannaCry” Shines Bad Light on Bitcoin: BTCManager’s Week in Review May 15
The price of bitcoin surpassed the $1,800 mark on May 11 to reach a new all-time high. This was followed by an immediate correction down to $1,700 as traders took profits. The altcoin market experienced similar price movements with leading cryptocurrencies retracted off their highs to close the week a little under their all-time highs. The exception was Ripple (XRP), which managed to become the second largest digital asset after its price rally continued throughout the week to hit a new all-time high of $0.22 late on May 14.
The big media focus in the past seven days, however, was on the “WannaCry” ransomware attack that brought hospitals in the U.K. to a halt and affected a wide range of other companies including FedEx and the German train network Deutsche Bahn.
The “WannaCry” cyber attack was launched on May 12 and infected upwards of 200,000 computers in 99 countries. The reason why this news is relevant to the bitcoin community is because the ransom payments required for affected companies to regain access to their computers are to be made in bitcoin. In nearly 30 languages the ransomware is reportedly holding its digital victim’s operating systems hostage, with a demand of bitcoin equivalent to $300 in order to regain access and ownership of their own computers and networks. The attack has been deemed “The Worst Ever Recorded” attack and continues to lock up computers despite the reports of a digital cure to this vicious virus.
According to British Intelligence officials, the “WannaCry” cyber attack may not be over yet and more businesses could become infected with the ransomware in the coming week.
Furthermore, it has come to light that the Chinese central bank is allegedly planning to issue new regulations to govern the country’s bitcoin exchanges in June. Citing anonymous sources on the matter, Chinese media outlet Caixin reported that the People’s Bank of China (PBoC) is about to issue new regulatory guidelines for bitcoin exchanges that cover anti-money laundering requirements and as well as new management guidelines.
The Chinese financial regulator is reportedly close to completions of their on-site inspections of the three largest bitcoin exchanges OKCoin, BTCChina, and Huobi. The next step will be the issuance of a “notice of administrative punishment” to each exchange, which will result in fines for the three companies for violating prevailing rules or regulations as well as a complete full identity verification process for users to trade bitcoin and to withdraw their funds from exchanges as part of the upcoming anti-money laundering regulations.
This week’s review is compiled from contributions by Alex Lielacher, Christoph Bergmann, Evan Sixtin, Jamie Holmes, Joseph Young, Lori Brown, and Nuno Menezes.
After a month-long deliberation, the Litecoin community came to a consensus to activate Segregated Witness on Litecoin. On May 10, Litecoin creator and Coinbase Director of Engineering Charlie Lee celebrated the implementation of SegWit on his social media; litecoin will serve as an experimental testbed for bitcoin and may go some way toward a progression in the scaling debate.
Almost immediately after activation, Lee revealed the first SegWit transaction made in the Litecoin network, demonstrating a successful implementation process of the Bitcoin Core development team’s solution.
The Deutsche Bundesbank, the Central Bank of Germany, warns customers of bitcoin. The price of bitcoin might have been rising fast over the course of May 2017, but according to Bundesbank Chair Carl Ludwig, there is an imminent danger of a downward correction. Since no Central Bank backs bitcoin, it cannot be secure money. For a prohibition however he sees currently no cause.
The Australian government has released a statement called ‘Response to The Productivity Commission Inquiry into Business Set-up, Transfer, and Closure’ detailing its plans to make changes to its regulations on blockchain and cryptocurrencies as well as creating a better working environment for fintech innovation in the country. These changes are now being implemented through the 2016/2017 national budget.
Countr POS, a Dutch company based in Amsterdam providing point of sale software for more than 3,000 merchants in Europe, has announced a strategic partnership with Coinify, a blockchain payment service provider (bPSP), to allow customer payments in 14 cryptocurrencies including bitcoin, ether, litecoin, dogecoin, and others.
A forward-thinking fashion leader, Martine Jarlgaard, is using the distributed ledger so that her clothing company will be accountable for the story behind the making of its garments.
The industry of fashion, while highly competitive, has always been an enabler of bad business, even if accidentally, because consumers have not previously been able to access the creation data for their purchased clothing. With this in mind, the London Fashion Designer has taken a bold leap into the future, by launching an initiative that uses blockchain technology; this technology provides a distributed record of events.
Russia’s largest online retailer, Ulmart, revealed on May 10 it going to start accepting bitcoin. Ulmart is also Russia’s largest privately held Internet Company specializing in e-commerce, and announced the adoption of bitcoin on May 10, planning to start accepting it as a form of payment from September 1, 2017.
Even though Russia has had an unfriendly attitude toward Bitcoin in the past, the country now seems to be warming to cryptocurrency, with a report in April suggesting the legalization of this new asset class in 2018.
Advances in neuroeconomics may one day identify a bubble in real time, but for now, we have to ascertain the state of the market based on other factors. While it is most certain that bitcoin is not in a bubble, altcoins as a whole may be experiencing herding effects and distorted valuations may be contributing to a bubble forming. On the other hand, some altcoins may be undervalued and it may take a large cryptocurrency crash for the most worthy ones to shine through.
UK-based charity St Mungo’s has teamed up with social technology startup Alice in an effort to create better transparency with regard to donations made by the public by leveraging the Ethereum blockchain.
According to the Public Trust and Confidence Report released by the British government in 2016, the public’s confidence in charities is at an all time low. Alice is looking to remedy this problem by applying blockchain technology. Using Ethereum smart contracts the startup has created a hyper-transparent donation platform, which holds any donations made until the set outcome is achieved, which provides instant accountability and transparency for the donor.