digest

May 20

Cryptocurrency weekly digest (14.05 - 19.05): Bullish trends at the market, Bitcoin Gold attack, Ethereum as the new Apple

May 20

The above mentioned and other news in our leading analyst’s weekly column.

Introductory paragraph

Last week was by no means easy for the cryptocurrency market. Bitcoin that has scarcely broken the $9300 level lost all it had been gaining with so much effort. Now the currency is testing the $8200 level and most probably is aiming at $8000.

Fig. 1 Bitcoin price graph

https://lh4.googleusercontent.com/Q0fWHcqcdf6vJ6FYRgiD9YLdUhfAg1RBusOcTbQTegIo6LaaQMiWB0FfHDXCCcQHjXp-kKHbcLCRJqJrDwJdC4plVJR-iWAMqVJh5Dz2tLBq2ZqH1tPAhwyaU5rrMuSI2sWTLRqK

 

The bitcoin movements were followed by the altcoin market. Most of the altcoins were in the red last week. Unfortunately changes for the better are not seen from our perspective because, as we are continuously repeating every single digest, technological innovation and legislative implementation are not rushing to present themselves to the wide world. From time to time positive opinions about bitcoin and cryptocurrency are spoken out in the market, but the traders don't see it as a clear sign to buy like they did a year ago anymore.

Meanwhile many interesting events are happening in the market. The first ICO projects as we mentioned in our last digest are starting to bear fruit. For instance, one of the social networks has adopted the Civic identity method. Besides, more conservative enterprizes start thinking on constructing their own digital assets based on the traditional ones. For example Switzerland, Norway and China are talking about the possibility of launching digital analogues of fiat money. Introduction of such digital entities won’t make national currency more popular, but it will help solve a number of problems: money forgery, payment transparency, etc. It is possible that though the future world would not fully belong to digital money, it would allow to devise all sorts of mixed options. Another topic of last and some of the previous weeks was stable coins attached to fiat. That allows to smooth volatility that is often associated with cryptocurrencies, mitigate the conversion of cryptocurrency to fiat and back, and help to withdraw the profit faster. And there is another tendency these days – merges between large new industry players and traditional ones, such as exchanges and banks, tech companies and exchanges, tech companies and banks. It would seem that during the last few weeks the market and investment is becoming less attractive to major players who are gradually coming to recognize that new tech and concepts can be implemented in more traditional fields of economy.

But this is just a hypothesis that could be tested in the nearest future.

So, on to the news that are rather plentiful.

Bitcoin

There are still no significant news about technical implementation of the leading cryptocurrency, but there is a number of third-party studies. In particular Alex de Vries carried out a calculation to find out that bitcoin consumes 2,55 gigawatt per day that is nearly as much as Ireland does. Experts are anxious about the possible environmental consequences and low effectiveness of electrical power use because at the time being bitcoin seems to be one of the most energy-consuming payment solutions in the world.

BTCP

The recent bitcoin and ZClassic fork-merge’s team has published a roadmap at its site. According to this roadmap in the second quarter of 2018 the project planned to release beta merchant platform, launch several tor-nodes, and build a one-click BTCP-mining client. The third quarter is to see a very interesting phase – Lightning implementation. Apart from this Alexander Majarek, a well-known crypto enthusiast has confirmed successful BTCP sending and receiving via SMS. This could be a marketing gag, but the service exists for real. Nevertheless, since it was designed by a third party we would not recommend to use it until officially announced. In the future SMS cryptocurrency transfer can become a solid support for reinforcing the BTCP positions in the market because smartphones are still considered a luxury in countries with weak economies and people are mostly using the simplest cell-phones.

NEO

The NEO-based THEKEY project has announced that its Blockchain Identification Verification Technology MVP (Minimum Viable Product) had undergone development and was ready for community review. This would mean that all NEO-based products are a step-closer to being law-abiding. The latter will be possible after a reliable digital passport will be handed out to every network member.

Ripple

At the Consensus 2018 international conference Ripple announced a new initiative called XSpring that is intended to support developers working on XRP-linked projects.

IOTA

The crypto project partnered to Kontact.io, IoT (Internet of Things) location platform provider. The partnership will allow Kontact.io to implement distributed ledger technology, to facilitate device-to-device and device-to-cloud communication and make them more reliable. IOTA in its turn has got a partner who would help promote its platform.

Civic

The blockchain-startup that conducted one of the first successful ICO announced that their decentralised user identification system will be implemented in Hilo social network.

Bitcoin Gold

The bitcoin fork’s network has been attacked. Reddit users wrote about it mentioning miningpoolhub.com. Apparently it was a 51% attack in order to perform “double spend” and to steal assets from exchanges. At the Bitcoin Gold forum the information has been confirmed.

VeChain

The cryptoproject will perform a split (just like the one at stock markets): the coin quantity will increase by 100 at mainnet launch. The users owning VET will have them exchanged 1:100

Exchanges

Bitfinex exchange addressed its users requiring to fill in their tax information that could be reported to the state later. The deadline is May 24, 2018.

NASDAQ-powered DX.Exchange placed a vote among its users about what coin it should list next.

Börse Stuttgart, the second-biggest stock exchange in Germany announced plans on launching Bison cryptocurrency trading platform. The platform will allow individuals to trade XRP, ETH and LTC and will be launched this September.

The largest social trading network announced launching its own crypto exchanging platform and mobile app for it in the USA. At launch time ten coins will be available for exchange: BTC, ETH, BCH, XRP, LTC, EOS, XLM, NEO, DASH and ETC.

Binance postponed the TrueUSD token (analogue to USDT) launch till May 22 2018. The reason for delay is concern about the sufficient liquidity to meet high demand. Provision for the necessary amounts required more time.

UPBit exchange that has been accused of fraud presented audit results to prove not guilty. According to the exchange’s representatives the audit results did not show any sign of attempts to send the client’s assets to exchange workers’ personal accounts.

The Tel Aviv Stock Exchange in partnership with Accenture and The Floor are planning on developing a blockchain securities lending platform. The platform will facilitate securities lending providing access to larger volumes within shorter time-frames.

Regulation

The Chinese authorities have released their cryptocurrency rating. The first four lines were given to Ethereum, Steem, Lisk and, what was rather expected, NEO. Bitcoin was rated only 13-th. We are very pleased to say that Waves, a Russian-developed project, has been listed among the TOP-15.

The People’s Bank of China representatives voiced the opinion that the state should be the only one who is to control any currency issuance, and that is to imply that blockchain technology must stay away from finance. This statement contrasts with the prior expressed intention of the government to issue its own cryptocurrency.

Switzerland is following China and Venezuela in considering the possibilities of launching its own state-backed cryptocurrency. The government has asked lawmakers carry out a study to sum up all the points in favour and against the issuance of digital frank. The same subject is also being discussed in Norway.

Misc

Enterprise Ethereum Alliance (EEA) has announced launching an open-source cross-platform blockchain framework. The solution that was called Enterprise Ethereum Client Specification (CS) 1.0 should build trust towards smart-contracts, facilitate business operations and help construct more effective business-models.

The internet-giant Amazon stated it had partnered with Kaleido startup. Kaleido will provide AWS (Amazon Web Services) platform users the ability to build their own blockchain without the need for being cryptographic experts.

Tech companies Hewlett Packard and Nokia partnered with Streamr startup in order to build a user data marketplace. The platform will allow users to upload their data and get rewarded.

Bitmain, one of the largest bitcoin mining equipment manufacturers leads the investment round issued by Circle Internet Financial LTD that plans on launching UDSC (analogue to USDT) jointly with Goldman Sachs.

The RiskQ company working on digital security published a fragment of false MyEtherWallet site code and concluded that the hacker responsible for the attack that lead to $150 thousand loss was a Russian speaker. The conclusion was made when analysing the comments inside the code that were written in Russian.

Canaan Creative, the second largest bitcoin mining equipment manufacturer submitted an application for IPO worth $1 billion. The size and timing have not been publicly announced but the company would like to start as early as July.

Bitmain Technologies plans on entering the AI technology market, The company whose annual profit of $3 billion seeks a way to diversify business in the face of China’s government unpredictable behaviour towards cryptocurrency.

Advanced Miners startup announced development of a next generation ASIC built on 12Nm chip that generates 28GH/s. That is twice as much as Bitmain’s S9 does. The chip was created in partnership with Japanese GmO.

Santander international bank used blockchain technology for voting at the annual investors’ meeting. The voting was carried out as usual but a shadow register was created in order to ensure accuracy and transparency and also to accelerate the counting process. The technology was designed jointly with Broadridge Financial Solutions, JPMorgan and Northern Trust also took part in the experiment as custodian banks.

Nomura, a major Japanese Bank has formed partnership with a number of cryptosecurity specialists and investment managers in order to be the first to provide cryptocurrency related services in Japan. Another large Japanese bank, Mitsubishi UFJ Financial Group, plans on issuing its own cryptocurrency by 2019.

Sberbank and MTS announced making a deal were the bond offering and the sale was carried out through the National Settlement Depository blockchain. Five smart-contracts were created for the deal. Four for the offering, one for the future pay-off. The emission totaled 750 million roubles.

Market opinions

PayPal CEO John Rainey voiced an opinion that cryptocurrencies are not fit for adoption by general public. In particular he said that merchants are not ready to receive payments in digital money due to high volatility.

Juan Villaverde, Weiss Cryptocurrency Rating agency representative said that in his opinion poor economic state of Iran could push its citizens towards more active use of cryptocurrency. The price of national currency is very low, the rial is trading at $0,0000335. The country is suffering under US sanctions that hinder the dollar flow and kick-started hyperinflation processes.

Twitter Inc. CEO, Jack Dorsey said that Internet should have its native currency and that he did not know whether bitcoin would fit in.

William Mougayar, the author of «The Business Blockchain» and Ethereum Foundation advisor stated that regulators do not have the necessary comprehension of cryptocurrencies.

Apple’s co-founder Steve Wozniak compared Ethereum to Apple and said that it can gain as much power in the future. At the WeAreDevelopers conference he spoke enthusiastically about Ethereum noting in what respect it resembled to Apple and added: «Ethereum interests me because it can do things and because it’s a platform».

The week’s joke

Nothing funny enough was found among the key news, but a whole thread of old jokes about cryptocurrency has been discovered at Reddit. The most up to date one in our opinion is :

Why won’t the government embrace bitcoin?

They hate the idea of a ‘Proof Of Work’.

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