Cryptocurrency Highlights Of The Week

Bitcoin’s block reward has been halved, and Ethereum is moving towards a hard-fork to dismantle The DAO. Here are the cryptocurrency highlights of week 27:

  • The reward Bitcoin miners receive for mining a block has been halved from 25 coins per block to 12.5 coins per block, in-line with Bitcoin’s pre-defined mining schedule that dictates mining rewards drop by half every 210,000 blocks (which take roughly 4 years to mine). As block 420,000 was mined 15.75 million Bitcoins have now been mined in total since Bitcoin’s inception. This equals 75% of Bitcoin’s built-in limit of 21 million coins. The network difficulty at the moment of the halving was at an all-time high of 213,398,925,331, with a total network hashrate that exceeded 1.5 exahashes per second. It is expected that a reduction of miners’ income will now cause the latter to drop, although this effect is also expected to be largely mitigated by Bitcoin’s price increasing by around 60% percent over the last three months. In any case Bitcoin’s inflation rate will drop from 8.3% per annum before the reward halving to just 4.2% per annum as of today.

  • Ethereum developers have released the first specifications of a possible Ethereum network hard-fork that would dismantle The DAO and turn it into a refund contract. The details of the hard-fork can be found here. It must be noted that it still requires testing and a community review. In the meanwhile, Ethereum developers are emphasizing that they are merely providing a service with providing the Ethereum community with an option to hard-fork the network, and that they are not committed to a specific stance on the issue. Ethereum’s founder Vitalik Buterin even took aim at Bitcoin, arguing that hard-forks are democratic therefore the best way to resolve an issue. Bitcoin itself is using a soft-fork to roll out a major change like Segregated Witness, which requires only a few (miner) participants to agree in order to actually make the change to the protocol. As such, Bitcoin is said to governed by a small mining oligopoly and thus not censorship resistant.

  • Russia will be getting its own R3CEV as QIWI Group, Accenture, BINBANK, MDM Bank, Bank Otkritie, and Tinkoff Bank have expressed their intention to get together in the Consortium For Blockchain Exploration announced on the sidelines of the XXV International Financial Congress. As the name implies, the Consortium will explore the implementation of blockchain technology for financial services. At about the same time a similar announcement was made in The Netherlands involving the opening of a “Blockchain Campus” on behalf of the Dutch Ministry of Finance. This “Blockchain Campus” is intended to offer a platform for banks and financial services to explore blockchain technology together.

  • The European Commission (EU) has adopted a proposal that would bring virtual currency wallets and exchanges under the supervision of the EU’s Anti-Money Laundering Directive. This would resulting in “ending the anonymity associated with such exchanges”, as they would be required to apply proper due-diligence controls. First Vice-President Frans Timmermans commented that “Today’s proposals will help national authorities to track down people who hide their finances in order to commit crimes such as terrorism.” EU’s Commissioner for Justice, Věra Jourová, added: “Today, we are putting forward stricter transparency rules to cut terrorist financing and step up our fight against money laundering and tax avoidance.”