Winklevoss Bitcoin ETF denied, but is this the end? Bitcoin Unlimited suffers a DDoS attack that knocked 500 nodes offline. BitClub accused of malleability attack against Bitcoin Unlimited. Coinbase no longer covering on-chain BTC or ETH transaction fees. Hawaii decides to regulate bitcoin exchanges, causing them to leave the state. LBRY available for download and they just saved 20,000 university videos from deletion. Randy talks about his experience with hardware wallets and the latest in crypto security. Ethereum reaches a milestone with $3 Billion market cap. JJ discusses how the language used for cryptocurrency ought to be different than the language used for fiat-based investing. Ethereum Naming Service auction delayed by bugs. Bitfinex opens margin trading for Monero, DASH, and Zcash.
All this and more on the Neocash Radio podcast, episode 198 — Wednesday, March 15th, 2017!
We’ve written out short overviews of the topics discussed on today’s show below! Be sure to listen in to the whole podcast to get more information, insights, and thoughts on each of them from JJ, Darren, and Randy!
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|Traditional Financial Markets||Cryptocurrency Markets|
|Gold $1,219||Bitcoin (BTC) $1,250|
|Silver $17.32||Ethereum (ETH) $33.14|
|Oil $48.96||DASH $99.00|
|Dow Jones 20,950 points||Zcash (ZEC) $45.74|
|30Y UST Yield 3.112%||Monero (XMR) $19.39|
Last Friday, the U.S. Securities & Exchange Commission voted down a proposal from the Winklevoss twins to create a Bitcoin ETF (exchange-traded fund). Many, like the writer of this Yahoo! Finance piece were not surprised:
The entire original appeal of bitcoin, when first introduced in a 2009 white paper by someone using the pseudonym Satoshi Nakamoto, was its anti-government appeal. Bitcoin is meant to be an unregulated, decentralized, non-fiat currency. As one DC-based risk-analysis firm, Oxbow Advisory, tweeted: “Don’t ask the fiat to remove the fiat.” (The joke there: don’t expect the government to warm to a currency that undermines it.)
And while the price of Bitcoin reached record highs near $1,300 in the moments before the announcement, the price of 1 BTC dropped to below $1,100 in the wake of the SEC’s decision, though it has regained a value of $1,250 as of this podcast’s writing.
Note the change in the cryptocurrency market cap allocation and how Bitcoin’s market cap lowered compared to DASH, ETH, and other altcoins:
Not long after a bug was posted to the Bitcoin Unlimited Github account, a DDoS attack was underway exploiting that reported weakness. A patch was released half an hour later but in the meantime, the DDoS attack was successful in knocking 500 Bitcoin Unlimited nodes offline.
The discourse between Bitcoin Core/Seg-Wit supporters and Bitcoin Unlimited supporters at this point has escalated past what one would call a debate; now it more closely resembles American politics with canned rhetoric and polarized positions. BitClub has been accused of performing a malleability attack on the network in an effort to make a case for Seg-Wit. All the while, Bitcoin Unlimited is garnering more support. Miners signaling support for Bitcoin Unlimited have mined 32.5% of the last thousand blocks; miners signaling support for Seg-Wit have mined 27.4% of the last thousand blocks.
Related listening: We’ve got a special bonus interview with Bitcoin Angel Investor and Bitcoin.com CEO Roger Ver! Roger talks with us about how the current Bitcoin block size limit is throttling the Bitcoin network, why Bitcoin Core’s Seg-Wit isn’t a good solution in his mind, and how Bitcoin Unlimited could be poised to increase the block size and allow the Bitcoin network to scale.
Popular cryptocurrency wallet app Coinbase announced several updates on its blog today, but the biggest news is that Coinbase will no longer be paying on-chain Bitcoin or Ethereum transaction fees for their customers beginning March 21, 2017:
“Since our inception, we have been paying network fees on behalf of our customers to help support the growth of the bitcoin and ethereum networks. We now have over 6 million users worldwide, and this has become a significant cost. Fees will be assigned dynamically based on the current network conditions and will be paid by customers when they send an on-chain transaction. Transactions between Coinbase accounts will continue to be off-chain and free.”
There’s a discussion in the Ethereum sub-reddit with the headline “People will soon find out how expensive it is to use Bitcoin instead of ETH!”
Coinbase will also be discontinuing account access via SMS/text message on March 21, citing the rapid growth of global smartphone use since Coinbase first launched its SMS account access feature in 2013.
Hawaii’s Division of Financial Institutions is requiring that all cryptocurrency exchanges operating within Hawaii must register as money transmitters and hold redundant cash reserves for all of their customers’ digital currency holdings:
“In other words, if Coinbase holds one bitcoin for a Hawaii customer, the practical outcome of this policy will require Coinbase to also hold the equivalent cash value of that bitcoin, currently well over $1,000, as redundant collateral.
This policy is obviously untenable. No digital currency business — and frankly, no commercially viable business anywhere — has the capital to supplement every customer bitcoin with redundant dollar collateral. Even if Coinbase could manage the extraordinary capital strain and massive exchange rate exposure inherent to this policy, it would do nothing to further our customers’ paramount interest: that Coinbase absolutely secures digital currency held on their behalf and makes their funds available, in full, anytime they wish to spend or liquidate.
To repeat: [Hawaii’s] dollar-collateral policy does nothing to protect customer funds. To the contrary, compliance with this policy would siphon millions of dollars away from critical operations, recruitment and retention of expert staff, and constant reinvestment in the business necessary to guarantee the security of customer digital currency. We cannot accept this tradeoff.”
Hawaii residents have until March 29, 2017 to close their Coinbase accounts. The Hawaii State Reps. Chris Lee and Mark Nakashima recently introduced House Bill 1481, which would create a “Blockchain Technology and Digital Currency Working Group” to study possible regulation of cryptocurrency and blockchain startups. The bill passed the Hawaii State House and passed its first reading in the State Senate, which referred it to both the Ways & Means Committee and the Economic Development, Tourism, and Technology Committee. They’re actually holding a public hearing on this bill right around the time we finish recording our podcast today.
Today, the University of California at Berkeley began deleting 20,000 college lectures from its YouTube channel. The U.S. Department of “Justice” (aka “Just Us”) ruled that U.C. Berkeley was in violation of the Americans with Disabilities Act after receiving complaints from two employees of Gallaudet University who claimed the 20,000 free online educational lectures from U.C. Berkeley (a “public” university) were inaccessible to blind and deaf people because of a lack of captions, screen reader compatibility, etc.
LBRY copied all 20,000 video lectures (>4TB of data!) and they’re uploading them onto their blockchain-powered decentralized digital content sharing app, which ensures that the videos permanently available for free and censorship-resistant.
Comparing Cryptocurrency Hardware Wallets: KeepKey, Ledger Nano S, Trezor
Randy spends a few minutes explaining simply how cryptocurrency hardware wallets like KeepKey, Ledger Nano S, and Trezor work and why they’re a more secure way to store Bitcoin. One of the major benefits of hardware wallets is that even if the device is lost or damaged, all of the user’s digital currency holdings can be recovered with a seed phrase. And your cryptocurrency addresses are generated offline—similar to a paper wallet—and your hardware wallet signs any transactions on the device, never revealing or transmitting your private keys.
More functions are being added to hardware wallets, and while Randy hasn’t used a Trezor yet, the KeepKey and Ledger Nano S have some great features. Beyond just Bitcoin functionality, the KeepKey also supports creating DASH, Ethereum, Dogecoin, and Namecoin wallets. The latest Ledger Nano S hardware wallet firmware upgrade (v0.13) supports Bitcoin, Dash, Ethereum, Zcash, Dogecoin, Litecoin, Ethereum Classic, Stratis tokens, and Fido U2F authentication and also allows for multiple login identities on the hardware wallet, which is helpful for plausible deniability in the event that someone in the meatspace tried to physically force you to hand over your device and PIN/passphrase.
Ethereum Updates in brief
- Ethereum Hits $2 Billion Market Cap (A feat only Bitcoin has reached so far in the crypto-sphere.) UPDATE: In the short time between recording our podcast and publishing it, ETH actually passed the $3 Billion market cap milestone.
- An update to Ethereum’s programming language—Solidity v 0.4.10—was released
- Ethereum Name Service Launch Delayed By Bugs — An auction for .eth domain names was delayed after several bugs were discovered.
- An open-source Etherchain Light blockchain explorer was released on Github. Etherchain Light is a network-agnostic Ethereum blockchain explorer that allows developers to develop decentralized apps (Dapps) on a private testnet rather than the Ethereum mainnet or public Ethereum testnet.
Bitfinex launches margin trading for Monero (XMR/USD, XMR/BTC), DASH (DSH/USD, DSH/BTC), and Zcash (ZEC/USD, ZEC/BTC) pairs.