The Bitcoin “halvening” happened last week—an event within the Bitcoin protocol where a new Bitcoin mining era started with the mining reward dropping to 12.5 BTC from 25 BTC. Speculation before the event held that something might happen to the market, economy or community; but so far, very little has changed in reaction.
After the Ethereum DAO (Distributed Autonomous Organization) attack with millions of dollars’ worth of ETH stolen, the Ethereum community has successfully executed a hardfork to secure the stolen funds. Keep reading for resources and details about that hardfork and the events leading up to it.
Ever wondered if you can live on only bitcoins? Bitcoin programmer Felix Weis answered that question in part by roaming the world for 18 months using only bitcoins to pay his way. Netki CEO spoke up at a conference suggesting that pokémon could be added to the blockchain (not a new suggestion, but still worth mulling over). Bitcoin mining equipment maker Bitmain acquires blockchain data analysis company Blocktrail.
Finally, Charlie Shrem, CEO of now-defunct Bitcoin exchange BitInstant has been released from a two-year jail sentence he received after being charged with money laundering.
As for the market, Bitcoin value is currently at $667.59 (BitcoinAverage.com) after showing a two percent dip from $677 over the last four hours. As for a weekly review of the price, the current market value is very close to what it was seven days ago. The market rose up above $685 during July 17; but fell once again back down to its more familiar price.
Bitcoin’s second “Halvening” came and went and not much happened
Last week saw something that seemed like it would be a momentous event for the Bitcoin market: the block discovery reward was halved, reducing to 12.5 BTC from 25 BTC. This is a planned event that is effected by the very code that runs the Bitcoin protocol, as more Bitcoins are mined (by way of miners securing blocks onto the Bitcoin blockchain) every so many the number rewarded will halve until eventually blocks will no longer produce rewards. This is because the pool of total bitcoins has a set limit at 21 million that will never be changed.
The halving event came and went on July 9, 2016. Not much happened to the market, the hashrate of miners working to add blocks to the blockchain or the economy and community in general.
According to Bitcoin Magazine examining the lack of reaction, the market exchange rate did not change as a result of the halving event—but the market value did increase before the halving in anticipation of the event. The current market value has been hovering around $673 (up only a little from $650 right before the event). However, on the run up to July, the Bitcoin market value rose approximately 50 percent from $450 in the three months before the event.
Hash rate, a metric that can help designate the health of the blockchain by measuring how much computational power miners are aiming at discovering blocks (and thus earning bitcoins as reward), did not change very much either. According to Bitcoin Magazine, the hash rate did not change much at all—dipping as little as one percent or less. It was predicted that some miners might drop out, or increase their power to make up for the half-reward, but the birds-eye view of the hash rate shares has not changed very much.
Finally, coupled with fears that miners might drop out with the reduction of potential profits from mining, are predictions about the stability of the network. So far, this has not happened, as Bitcoin market volatility still remains fairly smoothed out, hash rate has not changed and the number of miners has not changed that much.
It could be too early to tell if there will be an impact, only a week and a half in. Miners would have already bought their mining equipment, the reward-halving event has been known for years (and its date of effect easily predicted) and miners would already have their equipment bought and paid for, rent paid, and electricity predicted for the month. It will likely take a few months for the running costs to catch up with sunk costs such as mining equipment.
Ethereum hardfork successfully occurs
Yesterday, the Ethereum blockchain executed a hard fork, a modification to the codebase that changed how blocks are processed in such a way that blocks on the previous codebase cannot be processed, at block number 1920000. This hardfork was supported by 87 percent of ETH holders with 80 percent of the miners voting in favor. The intent of the fork, which began as controversial, was intended to resolve a problem that arose in the Ethereum DAO (Distributed Autonomous Organization), where a thief used an exploit in the code of the DAO to begin stealing millions of dollars worth of ETH.
According to Crypto Coins News, the Ethereum market price jumped yesterday when it became clear that the hardfork was about certain; then once the hardfork was completed, the price made a significant leap.
This decision is interesting for the cryptocurrency and blockchain-based technology development community as it shows that through majority consensus the rules upon which a blockchain runs can be changed. It’s important to note that this fork did not modify the past transactions on the blockchain (they remain secure and unchanged); instead the fork addresses the problem that allowed the theft of ETH from the DAO and transferred the stolen ETH tokens from the bad DAO to a newly formed “whitehat DAO.”
The details of the hardfork are available on Ethereum’s blog where Vitalik Buterin, founder of Ethereum, explains how it worked and why it was necessary.
“The recovery contract is already returning DAO token holders’ ether,” said Buterin about the hardfork’s protocol and execution; “about 4.5 million ETH has been sent to DAO token holders, and about 463000 ETH is in the control of the curator; a contract to facilitate extrabalance payments is currently undergoing security review.”
“Although some do question the analogy ‘code is law’. I do not,” said Christoph Jentzsch, Slock.it UG (operator of the Ethereum DAO) Founder and CEO on Reddit about the fork. “We just found out that we have a supreme court, the community!”
Bitcoin programmer Felix Weis spent 18 months going around the world using only Bitcoin
On January 12, 2015 Felix Weis, Bitcoin programmer and evangelist, decided to attempt to go around the world using only bitcoins to pay his way. His trip ended 18 months later in July 2016 after visiting 27 countries and 50 cities; his story is told by Forbes reporter Laura Shin.
Weis acted with only three rules for his trip:
- No banks. And that meant no Western Union, no money exchanges, no converting USD to euros, no euros to yen.
- Bitcoin first. He had to use Bitcoin whenever possible.
- Cash only for bitcoin. Recognizing that there would be times when he would need local currency, he allowed himself to do peer-to-peer exchanges of bitcoin for cash. And that led to some fun adventures.
According to Weis, in order to make ends meet in each city he visited he used Coinmap, an ever-growing map of businesses accepting bitcoins to find places to stay and places to eat.
“In terms of lodging, I did everything from couch surfing to five star hotels. I paid for all the flights and hotels with Bitcoin,” Weis said. “If the hotel didn’t accept Bitcoin directly, I used Expedia, and for the flights, I used CheapAir. I would like to thank these two companies because they helped me a lot.”
Weis said he also leaned heavily on members of the Bitcoin community in the various different countries he visited. Eighty percent of the people he traded with were already into Bitcoin, he explained, and he found them using LocalBitcoins, a website dedicated to helping people exchange bitcoins locally. He even traded bitcoins with some people for cash (some who had been as-yet unaware of Bitcoin).
On the start of his trip, Weis began in Prague, where SatoshiLabs SA is headquartered—SatoshiLabs is the producer of the TREZOR Bitcoin hardware wallet. Weis says that he wanted to purchase a hardware wallet to keep his bitcoins safe during his trip. Weis explained he kept the bulk of his bitcoin savings in the wallet; but he kept a spending stipend on a mobile wallet (on his smartphone); for this purpose he used a variety of wallets such as Android Bitcoin Wallet, Mycelium and Copay.
On his trip, Weis interviewed numerous Bitcoin startups around the world and asked them where they expected to be with cryptocurrency in 10 years. While he intended to keep a record of these interviews, he has not published anything. “I’m a programmer, not a blogger,” he said. “People kept telling me, You have to write a blog, but my blog died after one month. It was so much work.”
More details of Weis’s cryptocurrency-fuel globetrotting adventure are posted in the Forbes article about his trip, including how he chose where to go, what he did when he got there and more of what he learned. The entire article is worth the time to read it.
Pokémon strikes again: Justin Newton, CEO of Netki, proposed putting pokémon on the blockchain
Fortune magazine reporter Robert Hackett wrote up some of the broad strokes that came out of the Fortune Brainstorm Tech conference this week. During the proceedings Justin Newton, CEO of Netki Inc., proposed putting Nintendo Co. Ltd.’s famous Pokémon video game IP on the Bitcoin blockchain. Netki recently raised $3.5 million USD in a seed round to provide human-readable wallet addresses for Bitcoin and other cryptocurrencies.
Newton is not making a totally unprecedented suggestion; blockchain-technology is an excellent mechanism for providing secure provenance for virtual property. In Nintendo’s Pokémon games, the eponymous digital animals “pokémon” act as a sort of virtual property that the games urge players to collect and upgrade (or in Pokémon parlance “evolve”).
As an intellectual property Pokémon has built up a virtual empire for Nintendo of TV shows, movies and video games. And now, with the recent advent of the augmented reality mobile video game Pokémon GO, developed by Niantic Labs, it has given the property a giant explosion in popularity. According to figures taken from the Google Play store installs of the game have reached almost 50 million users since the game’s launch on July 6 (the game also has an iOS version).
The best example of a video game that uses a blockchain to store cryptographic proof of ownership is Spells of Genesis (SoG) developed and published by EverdreamSoft SA. SoG is a collectable trading card game (TCG) that uses a minor arcade element to allow people to play using the cards they collect. The cards themselves are virtual property assets secured on a blockchain and can be traded between users or transformed into other cards or other cryptocurrency tokens.
Virtual property collection games are a perfect use for the cryptographic security of proof-of-ownership that blockchain-based technology can provide. A well-secured blockchain, such as the Bitcoin blockchain, can also provide a level of tamper-proofing by making sure that assets could not be easily counterfeited or duplicated (this is a problem common to virtual world economies such as seen in games such as Diablo 2).
Bitmain acquires blockchain data analysis and wallet API company Blocktrail
Yesterday, Bitcoin mining outfit Bitmain Technologies Ltd. announced the acquisition of blockchain data analysis and wallet API company Blocktrail B.V. This acquisition adds Blocktrail’s full featured multi-signature wallet API and blockchain explorer to Bitmain’s already extensive stable of Bitcoin services that include a Bitcoin mining equipment manufacture, a blockchain explorer, a cloud-mining outfit and the second-largest Bitcoin mining pool.
Jihan Wu, cofounder of Bitmain said, “Blocktrail’s products, services and team are highly valuable to us. We hope to utilize this acquisition to continue to offer better services and products to BTC.com’s customers worldwide.”
According to a press release about the acquisition, Bitmain will be hiring on Blocktrail’s three current employees. The service will also continue Blocktrail’s current API and services as-is without any changes for current customers.
For more information, see Blocktrail’s blog for the announcement.
Jailed CEO of Bitcoin exchange BitInstant, Charlie Shrem released from prison
Charlie Shrem, the CEO of now-defunct Bitcoin exchange BitInstant has been released from prison after serving most of a two-year jail sentence for money laundering and his involvement in the Silk Road black market.
“Currently I’m home in southern Pennsylvania where Courtney and I have relocated temporarily,” Shrem wrote on his eponymous website about his freedom. “We will spend the summer months enjoying the outdoors, good food, family, friends and the small things that I missed while I was away, and at the same time transition back into normal life. I’m grateful for the opportunity to be back home.”
Shrem is not currently able to commit to media interviews at this time as he says he is under the same communication requirements he had when he was sentenced. Shrem’s Reddit account is /u/Bitcoin_Charlie and, at time of writing, he has posted twice there since his release.
Featured image credit: Bitcoin Logo, https://www.flickr.com/photos/thelastminute/12350379324.
- Latest Posts
SIGN UP FOR THE SiliconANGLE NEWSLETTER!
Join our mailing list to receive the latest news and updates from our team.
SIGN UP FOR THE SiliconANGLE NEWSLETTER!
Join our mailing list to receive the latest news and updates from our team.