By Sandra Upson January 19, 2018
IN 2014, JOSEPH Poon and Thaddeus Dryja were bitcoin-obsessed engineers hanging out at pizza-fueled meetups in San Francisco. Their conversation often turned to the central problem of bitcoin: How to make it more useful? The bitcoin network’s design effectively limits it to handling three to seven transactions per second, compared with tens of thousands per second for Visa. Poon and Dryja recognized that for bitcoin to reach its full potential, it needed a major fix.
The pair had an idea, one whose elements were already in the air at the time. On the weekends they met in unofficial coworking spaces to hammer out a paper describing their vision. Six months later, they revealed their work at a San Francisco bitcoin meetup. They called it the Lightning Network, a system that can be grafted onto a cryptocurrency’s blockchain. With this extra layer of code in place, they believed, bitcoin could support far more transactions and make them almost-instant, reliable and cheap, while remaining free of banks and other institutions. In other words, it promised to fulfill the cryptocurrency dream originally set out by Satoshi Nakamoto in 2008.
As word of their paper spread, blockchain enthusiasts started hashing out its technical details in blogs and on social media. Around the world, engineers began trying to turn the ideas in Poon and Dryja’s paper into working code. “It was the second most exciting paper I had read in the blockchain era,” says Rusty Russell, a developer at Blockstream, a blockchain technology company. “The first was Satoshi’s.”
More at: The Lightning Network Could Make Bitcoin Faster—and Cheaper – Wired
By Kellie Ell January 19, 2018
- Bitcoin is “something regulators need to deal with but not ban,” says former FDIC Chair Sheila Bair.
- “We don’t ban assets,” she says.
- Bair worries some people are investing in digital currencies without understanding what they are.
Amid threats of a potential ban on cryptocurrency, former FDIC Chair Sheila Bair said digital currencies such as bitcoin should be more tightly monitored but not stopped.
“It’s something regulators need to deal with but not ban,” Bair told CNBC’s “Fast Money” on Thursday. Bair, who said she does not own any bitcoin, now serves as a board member for Paxos, a financial firm developing blockchain technology for digital currency.
“I think some additional regulation would be good, and I argue for that,” she said. “Especially on anti-money-laundering laws, where I think there are a lot of concerns over use of bitcoin or other digital currencies.”
More at: Regulate bitcoin but don’t ban, says former FDIC chair – CNBC
By Matthew Tompkins January 19, 2018
A new report that analyzes illicit transactions conducted on the blockchain has determined that less than 1% of all Bitcoin transactions are criminal in origin.
Elliptic, a UK based cybersecurity firm specialized in creating tools to identify criminality associated with blockchain related transactions, has released a report analyzing the global Bitcoin market with a focus on money laundering.
The results somewhat surprisingly find that the much-hyped criminal elements involved in Bitcoin appear disproportionately small, amounting to less than 1% of all Bitcoin transactions. Another surprising fact discovered in the report was that illicit Bitcoin transactions were again disproportionately made to European sources.
. . .
The research paper identifies the fraction of all transactions that consist of illicit payments here, emphasizing how the figure has fallen from just over 1% in 2013:
According to our study, the total percentage of identified ‘dirty bitcoins’ going into conversion services was relatively small. Only 0.61 percent of the money entering conversion services during the four years analyzed were verifiably from illicit sources, with the highest proportion (1.07 percent) seen in 2013.
More at: New Study Finds Less Than 1% of Bitcoin Transactions To Exchanges Are Illicit – Bitcoinist.com
By Mike Orcutt January 18, 2018
Close examination reveals how power is being consolidated across their networks.
In cryptocurrency circles, calling something “centralized” is an insult. The epithet stems from Bitcoin creator Satoshi Nakamoto’s revelation: a monetary system doesn’t need a central authority, like a government, to work. That’s such a potent idea that it’s morphed into a battle among crypto-enthusiasts between good—that is, “decentralized”— currencies and evil ones, or anything with a whiff of “centralization,” that are assumed to threaten the utopian view of cryptocurrencies as the vehicle for a new financial world order.
Do these arguments hold any water? Emin Gün Sirer, a cryptocurrency expert at Cornell University, says in many cases the jury’s still out—mainly because no one’s bothered to take a hard look at how decentralized these networks actually are.
This piece first appeared in our new twice-weekly newsletter, Chain Letter, which covers the world of blockchain and cryptocurrencies. Sign up here – it’s free!
“We don’t have any real metrics yet.” he says. His group aims to help change that with newly published results from a two-year-long study focused on Bitcoin and Ethereum, the world’s most popular cryptocurrency networks.
More at: Bitcoin and Ethereum Have a Hidden Power Structure, and It’s Just Been Revealed – MIT Technology Review
By Clare Dickinson January 18, 2018
Intercontinental Exchange has launched a data feed for bitcoin and other virtual currencies, as the world biggest financial institutions start to build a professional framework for trading the volatile assets.
ICE Data Services has teamed up with Blockstream — which provides blockchain technology, a type of distributed ledger that backs virtual currencies — to offer the real-time feed from 15 trading venues.
It will include leading cryptocurrencies measured against the US dollar and other major currencies, according to a statement from ICE, the owner of the New York Stock Exchange.
Lynn Martin, the president and chief operating officer of ICE Data Services, said: “With the broad array of cryptocurrencies and exchanges, and given the price variances between exchanges, it’s critical that investors have a comprehensive source of pricing information.”
The move by ICE comes shortly after two of its rivals, CME Group and Cboe Global Markets, launched trading in futures contracts. And this week Goldman Sachs’s chief financial officer R. Martin Chavez said on the bank’s earnings call that it is aiming to offer clearing in the contracts after receiving requests from clients.
More at: US exchange giant launches cryptocurrency data feed – Financial News
By Arnab Shome January 17, 2018
The Polish government hopes this will revolutionize payments and the banking systems.
When it comes to the blockchain technology development in Europe, Poland is very progressive. The Polish Blockchain Technology Accelerator (PATB), which operates under the patronage of the Ministry of Digitalization, has revealed that one of its team is working on the development of a digitized national cryptocurrency, called Digital PLN (dPLN), as reported by the Polish daily Puls Biznesu.
Prof. Krzysztof Piech is the initiator of the dPLN project and is leading a team at the Lazarski University in Warsaw, which is working on this. The team had already developed a working basic version of dPLN, and is currently working on the advanced version of the code. The team is also planning to begin the software testing phase in about two weeks.
More at: Poland is Developing National Cryptocurrency – Finance Magnates
By John Kennedy January 17, 2018
Spooked investors are selling their cryptocurrency as value tumbles.
Has bitcoin’s bubble burst?
At the time of writing (17 January), bitcoin’s value had plunged to $10,811, a drop of around 46pc (compared to a high of $19,500 in December).
Fears of a regulatory crackdown have sent cryptocurrencies tumbling as investors rush to sell their coin.
According to CoinMarketCap, cryptocurrency trading has seen bitcoin fall 10.45pc overnight, Ethereum fall 11.6pc, Ripple fall 16.8pc, bitcoin cash fall 10.5pc and Cardano fall 13.6pc.
Out of the myriad of cryptocurrencies out there, some of the biggest falls include NEO by 20pc, and Qtum by 19pc.
More at: Have regulatory fears finally burst the bitcoin bubble? – siliconrepublic