Week ending November 12th, 2017
Your weekly roundup of all things crypto brought to you by Coin Street
Neil’s Market Wrap
The crypto currency world has never been boring, far from it, however this week has been so jam packed with mind boggling events, conspiracy theories and plot twists that it seems like the whole space is being driven by a team of Hollywood script writers and producers.
First Bitcoin hit another all time high of a little over $8000, then the Segwit2x fork cancels out of nowhere, (Source) this pumps the price even higher momentarily before everyone remembers that they were only in it for the free 2x coin and Bitcoin takes a nose dive. Cue a couple of days of outrageous market movements in most of the alt coins, with many seeing 30-60% gains daily and then, just when the dust was beginning to settle the Bitcoin Cash crew led by Roger Ver the original Bitcoin Jesus pull all the stops out with their story that Bitcoin Cash is Bitcoin and somehow pull it off sending the price catapulting over 200% to as high as $2400. Confused? Me too.
It’s almost too convoluted to attempt to explain, basically there is a power struggle going on between two factions of the Bitcoin camp. If you don’t know why there are two Bitcoins, better go and get an overview of forks. Both believe they are the truest and closest version of the original founders plan and computer code. The miners, the people who use huge computers to solve the algorithm and ‘find’ Bitcoins can only mine one or the other at any one time, this means the computing power is fluctuating between the two as miners try to determine loyalty (and profitability). One consequence of this is that time it takes to confirm a Bitcoin transaction has gone up significantly, as has the cost of the transaction fee. This is a vicious circle because it then makes Bitcoin Cash appear to be more attractive as it boasts faster and cheaper transactions.
I’m not sure I even have the energy to opine on Parity Wallet having an amateur hacker ‘rattle their doors’ and end up freezing somewhere in the region of $400m Ethereum. Read about it in the roundup below and I’ll bring more on it when we find out what happens next.
No-one ever said crypto was straightforward.
This Week’s Highlights
Bitcoin Cash takes off.
Off off off, like a big crypto rocket, we don’t know what is going on exactly but lots of people made a ton of money this weekend and one or two made billions. (Source)
DEUTSCHE BANK: We may be looking at ‘the start of the end of fiat money’
Deutsche Bank isn’t known for its gold bugs, but that hasn’t stopped its strategist Jim Reid from writing a paper that discusses “the start of the end of fiat money.”
Reid’s basic contention is this: The dominance of the fiat currency system since Richard Nixon decoupled gold from the dollar in 1971 “is inherently unstable and prone to high inflation,” and an offsetting disinflationary shock that kept it afloat since 1980 is now slowly reversing.
If that’s the case, Reid says the fiat currency system — a term which describes any currency whose value is backed by the government that issued it, rather than by a commodity like gold or silver — could be “seriously tested” over the next decade. (Source)
Vaneck re-enters crypto markets with first major indices
After the Securities and Exchange Commission (SEC) refused a review of Vaneck‘s exchange-traded fund (ETF) application, the company formally withdrew and went back to reassess. They’ve emerged, joining forces with Cryptocompare to offer single indexes and baskets of indexes, indices which will be the first of their kind by a major firm to track bitcoin and other cryptocurrencies. (Source)
Parity discovers second flaw in five months
Users of the popular Parity Ethereum wallet have been left reeling after its developers revealed the discovery of a security flaw. The threat, which has been described as “critical”, renders all multi-sig contracts unusable and has locked up hundreds of millions of dollars of ether. The news couldn’t have come at a worse time for Parity, which has been battling to restore its reputation following July’s embarrassing hack which led to at least 150,000 ethers being stolen. The original theft would have been worse were it not for the actions of white hat hackers who helped to recover an additional 377,000 ethers (Source)
Tim Draper on Bitcoin: ‘In 5 years if you use fiat currency, they will laugh at you’
Electroneum go offline after DDOS
The British mobile miner startup who created a huge social media buzz for their recent ICO which raised in the region of $40,ooo came under a DDOS attack only hours after launching their mining feature. These are the guys who advertised that their platform was super secure, literally un-hackable. Fortunately they now have enough money to employ Hackerone, who definitely know what they are doing. Let’s hope it rubs off. (Source)
This is how the CME’s Bitcoin circuit breaker would work.
While the CME already uses daily vol limits on most other markets, including crude, gold and market futures, to temporarily halt trading when price swings get out of control, the CME has never before dealt with something like bitcoin, which in addition to being the world’s best performing asset classes in recent years, is also its most volatile. And, as the WSJ adds, it is also unclear how much impact CME’s limits will have on bitcoin, since its futures market has yet to emerge and most trading in the digital currency is on exchanges outside of CME’s control. (Source)
The Chair of the SEC says all ICOs will have to register as Securities.
In a recent speech to an exclusive group of attorneys in New York, Walter Joseph “Jay” Clayton III, Securities and Exchange (SEC) Chairman, in prepared remarks and brief statements, equated Initial Coin Offerings (ICOs) with securities, which will mean massive regulation of a red-hot market. This is probably bad news for investors in the short term, but ultimately offers stability and reassurance in the longer term. (Source)
That’s a Wrap
That’s all for this week. It’s a fast moving space. They say one week in crypto is a year in the real world.
Can we ask one favor please?
See you next week.