The Bitcoin block size debate has been driving the news after the release of Bitcoin XT and the Ashley Madison hackers are now demanding Bitcoin ransoms. Here are the cryptocurrency highlights of week 34:
- The week started with a bang with the release of Bitcoin XT 0.11A. Bitcoin XT is a fork of Bitcoin’s software created by Gavin Andresen and Mike Hearn in attempt to end to the ongoing block size debate. The block size that is limited to 1MB in Bitcoin Core is raised to 8MB in Bitcoin XT, allowing Bitcoin’s network to process more transactions per block. The underlying blockchain will not fork until a block larger than 1MB is mined on Bitcoin XT. The latter currently has support of almost 14 percent of Bitcoin’s network, which is insufficient to successfully commit a “coup” as some call it.
- The release of Bitcoin XT also prompted the return of Bitcoin’s founder Satoshi Nakamoto after an absence of four years. Satoshi stated he was appalled by Bitcoin XT violating the “original vision” of Bitcoin, and warned that Bitcoin would be a “failed project” should two developers “succeed in redefining what Bitcoin is” arguing that Bitcoin “was designed to be protected from the influence of charismatic leaders, even if their name is Gavin Andresen, Barack Obama, or Satoshi Nakamoto.” Satoshi added that “we should take more time to come up with a robust solution” to make Bitcoin “a competitive monetary system while also preserving its security properties”.
- “Digital currencies are ‘harder money’ than a gold standard” according to a presentation given by Andy Haldane, Chief Economist and the Executive Director of Monetary Analysis and Statistics of the Bank of England. The reasons for this are that “gold’s exchange rate could be decided by a few people” and “sustained adoption would see ongoing deflation”. The question on how “central banks should respond to the financial system being reshaped by technology” is left open.
- Will blackmail drive Bitcoin mass adoption now that the hackers behind the Ashley Madison data leak have started to demand Bitcoin from users in order to prevent their exposure? This question could be asked after at least one user included the data received an email this week with the demand for 2 BTC to paid, in order to prevent sharing of his information with his significant other. With 37 million hacked accounts in total, a whole lot more people could be facing a forced introduction to Bitcoin.
- The unfolding drama surrounding the block size debate had a major impact on Bitcoin’s price, crashing its value by more than 14 percent or $38 per coin. A “flash crash” on Bitcoin exchange Bitfinex catalyzed the drop, as a big order briefly pushed the price below $180. The current exchange rate has partially recovered from this level and is now at $228 per coin.
