Cryptocurrency Highlights Of The Week

Segregated Witness is progressing towards release, and a The DAO rescue attempt has failed. Here are the cryptocurrency highlights of week 25:

  • It has been announced that the Segregated Witness soft fork pull request has been merged into Bitcoin Core. Segregated Witness is a fix for transaction malleability, that has a side-effect of reducing the required block space used per transaction by removing signatures from a transaction and moving them into a separate data structure. It is estimated the latter can reduce transaction size by 60%. Bitcoin Core developers may now approve the request so that it can merged into the Bitcoin Core master Git repository branch. It is expected that the code will be released with Bitcoin version 0.12.2, after which it will ultimately activate once Bitcoin miners will signal support over 95% of blocks in a 2,016-block long retarget period.

  • It was also announced that the CheckSequenceVerify (CSV) soft fork had reached its activation threshold and will subsequently activate on block 419,328, a few days before the block reward on block 420,000 (expected to be mined at July 10, 2016). CSV will allow users to lock coins for a pre-defined number of blocks after a CSV transaction. It mainly adds flexibility as an alternative to CheckLockTimeVerify (CLTV), which was already merged into Bitcoin Core previously and allows users to make coins unspendable until a pre-defined block height. The CSV functionality will be used on the Lightning Network in order to open payment channels, as the latter will require the users to lock in a certain amount of Bitcoin.

  • Members of The DAO curator team and Ethereum foundation have “attacked” The DAO in what became known as the “White Hat Attack”, in attempt to secure the remaining funds after last week’s attack by a malicious (still unknown) person or group. The attack managed to drain 7 million ether from The DAO, but unfortunately alerted the DAO attacker who subsequently joined the new split. As a result, the DAO attacker could steal from the newly created child DAO in the same way as was done with the main contract as the child inherits the same buggy code. As this means funds are thus still not secured, the only option remaining to retrieve these funds is now via a hard fork.

  • The motive for Craig Steven Wright to pretend being Satoshi Nakamoto may finally have been revealed. It appears Wright had a huge financial incentive, after striking a deal with a Canadian peer-to-peer payment company called nTrust. nTrust CEO Robert MacGregor was convinced Wright was Satoshi, and “acquired Wright’s various debt-laden computer companies and IP rights for $15 million and placed them in a new company called nCrypt. MacGregor’s plan was to sell the dozens of bitcoin technology-related patents Wright claimed to be working on.” Craig Wright is currently still attempting to build a large patent portfolio around the digital currency and technology underpinning it, filing more than 50 patent applications since January this year. The easiest way to be granted these patents would obviously be convincing the world that he is Satoshi Nakamoto.

  • The Bitcoin rally came to an end this week after The DAO hack and proposed hard fork seemed to initiate a correction across cryptocurrencies. The value of the most popular digital currency fell by more than 15 percent, taking the exchange rate down to about $655 per BTC. Ethereum on the other hand started to recover from the initial panic after The DAO attack, with its value increasing by more than 20 percent, giving ether an exchange rate of $14.16 per ETH.