51.1%: Bitcoin Dominates Cryptocurrency Market For First Time Since May

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October 9, 2017

For the first time since May, the Bitcoin Dominance Index surpassed 51.1 percent, solidifying its position as the cryptocurrency market’s most valuable, secure, and widely utilized blockchain network.

Why Bitcoin’s Dominance Index Fell Below 40 Percent and Possible Reason For Recovery

In May, the transaction fees of Bitcoin payments increased drastically, up to $4 on average per transaction, due to the abrupt increase in the size of the Bitcoin mempool–the holding area for unconfirmed transactions–and the average Bitcoin block size.

Several analysts and developers attributed to the sudden surge in the number of transactions and the size of the Bitcoin mempool to potential spam attacks that were deliberately launched with the intent of clogging the Bitcoin network with transactions with substantially low transaction fees.

In an interview with BraveNewCoin, Laurent, the French developer behind Bitcoin analytics platform OXT, stated:

“Considering that the published elements are the result of an exploratory analysis, I would say that I’m 95% confident [that spam attacks occurred]. 100% confidence will require an in-depth analysis which is currently outside what my financial resources allow me to do. We’ll need an in-depth analysis to estimate the cost of this attack but it’s likely that it wasn’t so expensive (all things being relative).”

Whether spam attacks led to the congestion of the Bitcoin blockchain network is of less importance, as some analysts argue that spam transactions with small fees should be considered as Bitcoin transactions and verified by the miners. But, it is crucial to acknowledge that the integration of Segregated Witness (SegWit), a scaling and transaction malleability solution developed by the Bitcoin Core development team, relieved the Bitcoin blockchain network of congestion by decreasing the size of individual transactions.

More importantly, the adoption rate of SegWit is growing at rapid pace. According to prominent Bitcoin investor and Atlanta Digital Currency Fund partner Alistair Milne, 10 percent of transactions in the Bitcoin network are already SegWit-enabled and more or less one tenth of the users in Bitcoins which amount of millions of users, have started to experience significant decrease in fees despite the lack of SegWit implementation by popular Bitcoin wallets such as Blockchain and Coinbase.

Because receivers can start dealing with SegWit-enabled transactions and large platforms like ShapeShift, which account for three percent of all global Bitcoin transactions, the rate of SegWit adoption will continue to rise at an exponential rate.

Why is Scalability a Factor to Bitcoin’s Dominance Index Recovery?

Through the emergence of Ethereum, the ICO market, and other unique cryptocurrencies such as Zcash and Ethereum Classic, Bitcoin has evolved into a robust store of value and a reserve currency-like safe haven asset in the cryptocurrency space. Because Bitcoin transactions were expensive and difficult to deal with pre-SegWit, many users have moved on from Bitcoin to other cryptocurrencies like Litecoin that are yet to struggle with scalability issues.

However, the integration of SegWit and the rapid adoption of the software have allowed Bitcoin to become an efficient digital currency once again, with transaction fees averaging below $0.2 for regular transactions. As the development team behind Ledger explained, SegWit wallet users and transaction receives can experience up to 35 percent in transaction fee reduction, and that rate could increase in the future depending on the adoption rate of SegWit.

“Segwit introduces the concept of block weight which changes the way the transaction size is computed by splitting the signatures in a different area — you can typically save 35% of the fee paid when sending a transaction immediately,” explained the Ledger team.

As Bitcoin continues to evolve into a more usable and efficient digital currency, its dominance over the cryptocurrency market will only increase

$4,875: Bitcoin Price Surges toward All-Time High as Altcoins Plummet

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October 9, 2017

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The bitcoin price surged past $4,875 on Monday as traders began to flee from the altcoin markets and pour their wealth back into bitcoin ahead of the SegWit2x hard fork that is scheduled for November.

Bitcoin Price Surges Past $4,875

Bitcoin’s dominant hold on the cryptocurrency economy had tapered throughout 2017, with bitcoin’s share of the total market cap falling as low as 34% after entering the year at 88%. The year’s bull market led to a dramatic expansion of the altcoin markets, and the initial coin offering boom reduced bitcoin’s market cap share further still.

Today, however, bitcoin dominance soared to nearly 54%, its highest mark since May, as traders began to liquidate their altcoin holdings and concentrate their wealth in bitcoin. At present, the bitcoin price is trading at a global average of $4,877, which represents a 24-hour gain of 7% and brings bitcoin within $123 of the $5,000 threshold. Altcoin prices, meanwhile, are bleeding. Aside from bitcoin, no top 10 cryptocurrency has experienced a 24-hour price increase, and five of them have posted double-digit declines.

Bitcoin Price Chart from Bitfinex

The bitcoin price is faring well on every major exchange, but Korean traders appear determined to pull it past $5,000 to a new all-time high. At present, Bithumb’s BTC/KRW is trading at $4,999. This is more than $120 above the global average and more than $250 above BTC/JPY on bitFlyer.

BTC Trading Volume Chart from CoinMarketCap

The Role of SegWit2x

One theory for today’s bitcoin price climb is that traders are positioning themselves to profit from upcoming airdrops. There are two bitcoin hard forks on the horizon that give bitcoin holders the opportunity to claim airdropped coins at the moment of the blockchain split, similarly to the Bitcoin Cash hard fork that took place on August 1. The first, Bitcoin Gold, is scheduled for October 25, and the second, SegWit2x, is slated to take place in November. It is unlikely that Bitcoin Gold is having a significant effect on the bitcoin price, although traders will definitely seek to extract any profit that they can from the airdrop. Although SegWit2x — if executed — will produce coins that are most likely more valuable than those minted by Bitcoin Gold, it also seems a bit unlikely that traders are already making such a large push to accumulate bitcoins ahead of an event with a November target date.

The more likely scenario is that traders are responding positively to signs that bitcoin exchanges and mining pools — even those that purportedly support the SegWit2x hard fork — have begun to announce that they will support both bitcoin blockchains following the chain split. Both Coinbase and Bitfinex have explicitly stated that they will support both the incumbent and the new blockchain, and Bitfinex has further stated that they will list the SegWit2x coins as B2X — not Bitcoin or BTC. Even mining pool ViaBTC — a proponent of both SegWit2x and Bitcoin Cash — has indicated it will allow its users to mine either blockchain. Rightly or wrongly, some traders view these developments as an indication that the SegWit2x fork will not happen or, if it does, the new blockchain will be treated as an altcoin.

Recent Ethereum Upgrade May Make Wall Street Fall in Love With Blockchain

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October 9, 2017

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Wall Street continues to have a tenuous relationship with Blockchain technology. Large banks have recently made statements both for and against the new technology, with some companies like Bank of America already pursuing patents.

Problem with privacy

Part of the struggle these financial platforms are having with Blockchain technology is the issue of privacy. The key issue for traders is to keep their positions a secret in order to keep other traders and competitors out of the loop. While Blockchain technology provides immutability, it does not provide complete security or anonymity – keys for enterprise level financial adoption.

However, the ZK-Snark, or Zero Knowledge proofs recently being enabled on the Ethereum blockchain following the network’s Byzantium upgrade, represent a new way to have both anonymity and immutability on a single chain. According to Bloomberg:

“Its ability to reshape vital financial market functions like clearing and settlement has always hinged on whether banks can keep customer and proprietary data secret. Zero-knowledge proofs, a theoretical possibility for decades, are now a reality, letting transactions be verified without the need to share any of the underlying data.”

Bitcoin Believer Tommy Lee Creates Five Crypto Indexes to Help Institutional Investors

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October 9, 2017

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Tommy Lee, of Fundstrat, is well regarded on Wall Street for his bearish predictions, but he has been a believer in Bitcoin for some time.

The strategist has now created five different indexes to help traditional Wall Street investors understand the evolution and behavior of cryptocurrencies.

Big caller

Lee has been at the bottom of many predictions, renowned to be mainly bearish on investments. However, he recently predicted that Bitcoin would reach $6,000 by the end of the year, and a high of $25,000 by 2022.

Despite big drops and major hurdles, such as China’s ban, and his former company’s CEO calling Bitcoin a ‘fraud’, the strategist has remained bullish on Bitcoin.

Crypto trackers

Lee’s company, Fundstrat, is currently track a total of 630 digital currencies which they divide into market capitalization and trading volume. These are the five indexes he has formed.

Investors can then analyze the relative performance of different digital currencies within the indexes, similar to how the advance-decline line of the number of S&P 500 stocks rising versus falling on a given day can indicate the health of the market.

Fundstrat technical strategist Robert Sluymer, said:

“It gives us a sense that something’s happening in the cryptocurrency move, that you don’t have the same speculative move as you had in the first quarter, second quarter.”

Fundstrat went on to explain that they use a proprietary algorithm to determine how the coins should be weighted in an index. These are reconstituted every quarter. Fundstrat also makes it clear that these indexes are purely for research as it stands, and not for supporting any investment products.

Turning the tide

There has been a real divide in Wall Street between traditional investors and the major financial players there. Some, like Jamie Dimon at JPMorgan are totally against it, while others say they are staying away as they do not understand it.

Lee’s indexes should help these types of confused, or undecided, investors realize the potential of this unprecedented asset.

The development of digital currency indexes also reflects the growth of the market to a size that may be increasingly attractive to institutional investors, Lee said in the report. He pointed out daily trading volume in the 10 largest digital currencies is a “surprisingly high” $3.5 bln.

Mastercard CEO Attacks Bitcoin, Finds Solace in Government-Backed Cryptos

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October 9, 2017

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Ajay Banga, CEO of Mastercard, has leveled a scathing attack on any and all cryptocurrencies that are not government mandated, calling them “junk”.

Digital currencies are almost direct competition for a company like Mastercard, and when asked his opinion on the futuristic technology, Banga was not complimentary of how things stand at the moment.

Big disruptor

Knowing that digital currencies are big disrupters in the traditional money market, traditional investors, and now even established money movers, have been scathing.

Banga was not totally against the idea of Blockchain-based money and tokenization, however, his big caveat was that it needs to be government backed.

“If the government creates digital currency, we will find a way to be in the game. We will provide rails for moving currency from customer to merchant. The government mandated digital currencies are interesting. Non-government mandated currency is junk,” he said.

Normal rhetoric

Banga’s attack on Bitcoin brought up nothing new or visionary, spurting the usual concerns without much backing or research. He criticised Bitcoin for its volatility, and use-cases for illegal activities, such as ransomware attacks:

“If I pay for a bottle of water in Bitcoin, one day it is two bottles for a Bitcoin the other day it is 9,000 bottles. This does not work. Any currency needs stability and transparency, otherwise you will get all the illegal activities in the world. Why was the ransom for the virus (wannacry ransomware) collected in Bitcoin? Why has China cracked down on Bitcoin?”

Banga seems to be another bigwig who has a stake in the game, and thus is not happy to give up that piece of pie. He, along with traditional bankers and investors, are fearful of Bitcoin as it continues to break new ground and blow precedents out of the water.

The Wall Street divide

The divide of big names on Wall Street seems to grow daily as those in the camp of Jamie Dimon, who called Bitcoin a ‘fraud’ continue to recruit those who seem to be more fearful than certain.

Meanwhile, there are those who are looking to profit, and those who are major backers, despite coming from traditional and closed-off investment channels.

Axel Weber, the former President of Bundesbank and Chairman UBS, said:

“I get often asked why I‘m so skeptical about Bitcoin, it probably comes from my background as a central banker.”

Meanwhile, Brock Pierce, Chairman of the Bitcoin Foundation, is taking these knee-jerk reactions as good things.

“When the incumbent industry is making statements like this and acknowledging you…it’s a sign that what we’re doing is working…it’s a huge validation,” said Pierce.

Jeff Garzik SegWit2x Bitcoin ‘Upgrade’ Comments Spark Trolling Campaign

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October 9, 2017

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Bloq founder and former Bitcoin Core contributor Jeff Garzik is facing new criticism over his SegWit2x advocacy.

Comments by Garzik on Twitter Sunday caused well-known cryptocurrency community figures to come out in disagreement, many having already taken a public stance against the Bitcoin hard fork.

Garzik’s description of SegWit2x as an “upgrade” to Bitcoin turned out to be particularly contentious.

“Segwit is an upgrade,” commentator Vortex responded. “Segwit2x is an alt coin created by a single dev who thinks he knows more than Core.”

Circumstances have become increasingly difficult for Garzik since his rejection from the Bitcoin Core Github repository in August.

SegWit2x has since hardened its position with his involvement, with the cryptocurrency industry and businesses expecting the repercussions of its genesis in November to be more wide-reaching than that of the Bitcoin Cash fork in July.

Bitcoin has shaken off initial concern about the impact of the coming hard forks to its network, with prices staying above $4500 once again over the weekend and even achieving $4623, representing a one-month high.

Wall Street Great Bitcoin Divide

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October 4, 2017

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Where Wall Street was once a united front in running the financials of America, and to an extent, the rest of the world, it is suffering a polarization as Bitcoin disrupts opinions.

As the digital currency keeps booming, investors, financial managers and major banking CEOs are finding themselves in different camps for different reasons.

Those for it

The most recent championing move for Bitcoin has come from Goldman Sachs, a company that has slowly come around to the digital currency, as they are exploring a new trading platform that would be centered on trading Bitcoin and Ethereum.

This platform, which will be run by Chief Executive Lloyd Blankfein, comes just weeks after JP Morgan Chase CEO Jamie Dimon spewed vitriol about Bitcoin.

However, JP Morgan is seemingly a little bi-polar for as their CEO threatens his employees if they are caught involved in Bitcoin, the same company had also been experimenting with the some of the infrastructure that underpins digital currencies – Blockchains.

Fidelity Investments have also taken a bold step for Wall Street as CEO Abigail Johnson, made cryptocurrency balances visible on the investment manager’s website for customers that hold an account with Coinbase.

Morgan Stanley seems to be on the side of Bitcoin as CEO James Gorman, said he saw Bitcoin as “certainly something more than just a fad.”

Those against it

Jamie Dimon declared Bitcoin “a fraud” that would “eventually blow up.” the JP Morgan CEO and his thoughts on Bitcoin coincided with a ban of ICO’s in China and is said to be one of the catalyzing factors in the recent drop in price.

“It’s worse than tulip bulbs and won’t end well,” Dimon said, referring to the classic, 17th-century asset bubble.

Recently immortalized in the movie, the Wolf of Wall Street, Jordan Belfort, has come out against the new-age currency. He agrees with Dimon’s assessment adding that his concerns also go into the security surrounding an online currency.

Malta Pilots Blockchain-Based Academic Certificate Recording System

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October 4, 2017

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The government of Malta is advancing a project to test the feasibility of using Blockchain technology for the recording of academic certificates. The government has partnered with Learning Machine Technologies to advance the project.

Under the agreement, learners and workers in Malta can safely store their educational records and other credentials in one place, prove ownership of the records and credentials, and share them with anyone around the world for free.

According to Minister for Education and Employment, Evarist Bartolo, the project is a win/win strategy for the government.

“For the first time, Maltese learners have a way to keep track of their lifelong achievements in one place, with the flexibility to share them with whomever they choose at no cost. Maltese businesses will find that hiring workers with the right qualifications has gotten much easier. This is a win/win for Malta, whose skilled workforce is among the primary drivers of its economic success.”

Benefits of recording data in Blockchain

Because of its distributed nature and tamper-proof features, the use of Blockchain or distributed ledger technology (DLT) for the purpose of recording data and sensitive information is very feasible. When it comes to academic records and credentials, the technology will be very useful, as it can provide a digital version of a paper document that cannot be tampered with. Moreover, the technology can also facilitate the exchange of information among parties.

Under the Maltese government the first digital academic certificates will be issued in late 2017. Three Maltese institutions have already given their support for the issuance of the certificates.

Malta is one of the Blockchain-friendly countries in Europe, as it aims to become an ideal grooming place for the technology in the region by legalizing cryptocurrencies in casinos – an industry that has been concentrated in the country.

Other Blockchain-based academic projects

Meanwhile, the Kenyan government has partnered with technology firm IBM to advance a similar digital academic certificate project. It is, however, interesting to see if these projects will be successful, and if there will be more governments advancing similar initiatives in the near term.

New Transparent Blockchain-Based Cloud Platform by Oracle and Its Leading Competitors

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October 4, 2017

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Technology firm Oracle has announced the scheduled launch of its Blockchain technology-based Oracle Cloud Platform in 2018. The platform is aimed at helping businesses employ the technology for supply chain management and smart contracts.

According to Oracle Cloud Platform senior vice president Amit Zavery, the technology has the capability to transform how business transactions are done, to make them more transparent, secure, and efficient.

“Blockchain holds the promise to fundamentally transform how business is done, making business-to-business interactions more secure, transparent, and efficient.”

The Oracle Cloud Platform is designed to offer “pre-assembled” tools for business enterprises to use for operations that require contracts, transactions, and tracking.

The platform is developed on top of the open-source Blockchain called Hyperledger Fabric by Linux Foundation. The Hyperledger Fabric is a private digital ledger that is designed to be very difficult to tamper with.

It is endorsed by some Oracle competitors including SAP, Intel, Cisco, and IBM. The Oracle Cloud platform is currently in beta testing mode.

Blockchain projects applications

Various companies beyond the finance sector are increasingly utilizing Blockchain technology to replace the traditional authentication practices in law, shipping, and real estate.

Among the companies there is IBM, which is collaborating with distributors such as Nestle and Walmart to integrate the technology into their supply chain procedures, with an aim to help lessen the spread of foodborne diseases.

According to the Hyperledger Project executive director, Brian Behlendorf, there’s a lot of business opportunities involving the assistance of other companies, in their bid to integrate Blockchain into their operations.

“Oracle’s support for Hyperledger Fabric is great to see. It’s one more validation of the market acceptance of what we believe can become – a standard platform for enterprise distributed ledger applications.”

Helping Blockсhain adoption

Oracle has been a member of the Hyperledger Project since early September 2017. By democratizing the integration smart ledger to their processes, such moves from tech giants may just be the very push that Blockchain needs to sustain its growth within the commercial space.

From Messengers to Food Reviews, Companies Incorporate Blockchain into Apps

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October 4, 2017

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In 2017, ICOs have collectively raised over $2.3 bln. Many of these startups received millions in contributions without even a working prototype of their product. In the eyes of some investors, this has lead to speculations that the ICO market has already entered bubble territory. It is yet to see how many teams will actually be in a position to keep the promises made to investors and to deliver their product.

Recent announcements by large corporations like JP Morgan and Microsoft are suggesting that the enterprise is also starting to experiment with Blockchain technology. This emerges a whole new ocean of challenges associated to scalability, but also opportunities for Blockchain mass adoption.

Main challenges

Users of mainstream apps are usually more concerned about the front-end rather than the technology that makes it work. It’s very likely that the average individual will never know more about Blockchain than Internet users today know about the Hypertext Transfer Protocol (HTTP). This raises many challenges in the integration of Blockchain into mainstream apps since in many cases, it can’t be used as a feature to justify slow loading times or gas fees.

Despite this limitation, some mainstream applications are still incorporating Blockchain into their software. Next, we will analyze three examples and the reasons why they chose to do so.

Kik – messenger

Kik Interactive, the creator of popular chat platform Kik, recently ended the crowdsale for its native token after raising over 165,000 Ether. Kik is creating Kin as an ERC20 token that will be integrated into the Kik messenger. Its main use is to serve as a currency for in-app transactions and a reward system. With over 15 mln monthly active users, Kik is by far the most popular app so far to integrate Blockchain.

It is important to note that social media king Facebook also once tried implementing a virtual currency into their social network.

Its main use was enabling users to make in-app purchases on the Facebook platform. This endeavor famously failed and was closed back in 2013. The program received a lot of criticism because the company was taking a 30 percent cut on all the revenue from the coins.

Joey Krug, the co-Chief Investment Officer of Pantera Capital, stated that the Kin token is valuable because it will not act as a middleman that collects fees. Blockchain enables to build a completely new incentive model where the focus is exclusively on the community.

Munchee – food reviews

Munchee, a popular food review mobile app, has announced that the firm will be incorporating Blockchain into their platform. Centralized websites like Yelp, are vulnerable to review-score manipulation by the firm in order to increase profits. Some small business owners have even claimed that Yelp is actually already doing this in order to maximize gains from ads. This claim has been brought to court.

In order to solve this problem, Munchee is building an immutable Blockchain ledger for food reviews. This technical deployment will be composed of two smart contracts, the first is to maintain an audit trail of submissions and reviews, and the second is to keep the MUN token record. The MUN token is a method of exchange inside of the Munchee ecosystem, built to facilitate relevant advertising and promotion for restaurant owners while building a quality content base by rewarding creators for their activity.

Codemojo – rewards platform

Codemojo is a global rewards network that helps the enterprise to manage loyalty programs and to set up reward structures. The firm states that every year rewards points from brands that are worth close to $360 bln go unredeemed. The main reason for this is that consumers often have several restrictions like for example a limited catalog of products or a limited avenue. Additionally, most of these points amount to nothing for users as they are thinly distributed across a large array of outlets.

In order to solve this problem, Codemojo announced the launch of a Blockchain based rewards network and the Alloy token. This will enable partnering brands to set an exchange value for their reward points in ALLOY and for consumers to recollect points from promotions all around the globe and to store them all in a single wallet.

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Bitcoin Price Surges Past $4,875

The Role of SegWit2x

Problem with privacy

Big caller

Crypto trackers

Turning the tide

Big disruptor

Normal rhetoric

The Wall Street divide

Those for it

Those against it

Benefits of recording data in Blockchain

Other Blockchain-based academic projects

Blockchain projects applications

Helping Blockсhain adoption

Main challenges

Kik – messenger

Munchee – food reviews

Codemojo – rewards platform

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