This week’s summary of various cryptocurrency news and developments:
The SEC has rejected the Winklevoss Bitcoin ETF
The Winklevoss’ quest to launch a bitcoin exchange-traded fund (ETF) has been rejected by the US Securities and Exchange Commission (SEC). In its statement, the agency cited a lack of regulation among bitcoin’s biggest markets, and the risk of fraud. The Winklevoss twins, Tyler and Cameron, have been waiting for the SEC’s approval for roughly 3 years, as it has been delayed multiple times. In the SEC’s statement, the following can be read:
“Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. Therefore, as the Exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs — agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market — the Commission does not find the proposed rule change to be consistent with the Exchange Act”7
The SEC did, however, leave the door open for future products tied to bitcoin: “The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop,” the document reads. “Should such markets develop, the Commission could consider whether a bitcoin ETP would, based on the facts and circumstances then presented, be consistent with the requirements of the Exchange Act.”
The average bitcoin transaction fee is now abbove $1
According to Bitcoin.com, bitcoin transaction fees have increased by more than 1200% over the last two years. Recently, a tweet by Nikita Zhavoronkov, a lead developer at blockchair, showed the world the average bitcoin transaction has passed the $1 mark. Although some believe the fees aren’t a problem for the cryptocurrency, others believe these do harm those who have but a few satoshis in their wallets. As a Redditor suggests, the fees are now bigger than the amount of bitcoin 55.2% of addresses have, which could mean there are millions in unspendable bitcoin. This heated the bitcoin scaling debate, and even though there are many polarized opinions out there, most are unhappy with the current fees and slow confirmation times, so the problem should soon be addressed.
— Nikita Zhavoronkov (@nikzh) March 5, 2017
BitClub performed a malleability attack on the bitcoin network
According to Bither, a bitcoin wallet, a bitcoin mining pool with roughly 4% of the network’s hardware named BitClub, has recently hit the bitcoin network with a malleability attack. The incident reportedly caused confusion, and nearly brought Blockchain.info down. It essentially consisted of altering the txid in blocks mined by the pool, technically a double spend. Most believe the attack was political, as BitClub’s operator is for SegWit, which aims to address transaction malleability. According to what Amaury Secheet, a software engineer at Facebook and Bitcoin Unlimited developer told CryptoCoinsNews, there was no theft involved, but there could have been. The attacked has sparked a lot of controversy, as bitcoin miners are usually the ones protecting the network, not attacking it.
There are now over 10,000 bitcoin-related projects on Github
A search for “bitcoin” on Github currently shows 10,090 results. The number is rather high: Wi-Fi, for example, currently yields 7,441 results. Most projects on Github are open-source, which means anyone can create new versions of these projects and change them however they want to. These are called “forks” and bitcoin has over 7,000 of them, most being related to altcoins.
Major Chinese exchanges have postponed the return of bitcoin withdrawals
All three major Chinese exchanges – OKCoin, Huobi, and BTCC – have postponed the return of bitcoin withdrawals, after being inspected by the People’s Bank of China (PBOC). The three exchanges published similar announcements, stating that bitcoin withdrawals will remain closed, until they’re approved by regulators. Huobi’s statement, roughly translated, reads: “Once the regulatory authorities approve, you can resume withdrawals. [However, for] the specified time, please pay attention to the official announcement [on Huobi]”.
Russian PM ordered a study on blockchain technology for the public sector
Russian Prime Minister Dmitry Medvedev has ordered two government ministries to research blockchain technology applications for Public Administration, as part of the country’s “digital economy” program. On a transcript published on the official Russian government’s website, the country’s Prime Minister stated that “one of the breakthrough technologies is blockchain”, a type of technology that is already being used by prominent corporations, banks, and some countries. The two ministries need to look into how blockchain technology could be leveraged “in the system of public administration and the economy of the Russian Federation”, and have until May 11 to deliver a response. Medvedev has, in the past, been quoted as saying that blockchain “may decisively change our lives”.
Bitcoin’s price crashed after SEC’s ETF rejection, but has been recovering
The SEC’s ETF refusal caused bitcoin’s value to fall to nearly $1,000, a plunge as, on Bitstamp, one bitcoin was worth close to $1,288 before SEC’s decision was known. At the time of press, one bitcoin is currently worth $1,186, according to Bitstamp. The cryptocurrency has been on a wild roller-coaster ride recently, as prices have been going up and down, in part due to speculation.
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