Overstock is intending to transform Wall Street, and a new altcoin addresses Bitcoin’s governance issues. Here are the cryptocurrency highlights of week 51:
- Last week it was reported that online retailer Overstock.com had been granted permission by the Securities and Exchange Commission (SEC) to “issue open securities by means of a Blockchain-based innovation”. The news was confirmed this week, although the details appear to be a bit different that initially reported. In fact, CEO Patrick Byrne stated that the company has not even decided which blockchain it will be using. The used blockchain would have to be able to handle large numbers of transactions, and the Bitcoin network is currently facing a scalability problem that makes it too limited to function properly. Regardless of the chosen blockchain, the new approach would mark a revolution on Wall Street. Settlements would be instant, also eliminating “friction costs” along the way, while also removing the possibility of a practice called “naked short selling”.
- Bitcoin’s current governance structure, which has so-far prevented a fix to Bitcoin’s limited block size, has also pressed a group of Bitcoin developers to start working on a new alternative currency called Decred. The group is concerned by the “deepening centralization of power in the governance of the project and the interests of those who fund it”. The comments seemed to be aimed at the small number of Bitcoin Core developers and their affiliations to startup Blockstream, as the group mentions that “Bitcoin development is funded by external entities” due to a lack of community funding. It is also stated that this creates a “conflicts of interest” for the developers. For this reason, Decred will get a “system of decentralized community-based governance”.
- Almost two years after the Japan-based Bitcoin exchange Mt.Gox collapsed the country will likely get its own regulation similar to the BitLicense. Sources close to a draft proposal have revealed that virtual currency exchanges will be required to register with the government. They will also have to implement know your customer (KYC) and anti-money laundering (AML) policies, and undergo regular external checks from certified public accountants or auditing firms. The biggest burden from this regulation will probably be that exchanges will also be required to maintain a minimum capital requirement.
- In the meanwhile SBI Sumishin Net Bank, Japan’s largest trust bank, has announced that is intending to explore blockchain use cases with the Nomura Research Institute (NRI). Although any details are not provided, it sounds similar to how other banks are working with startup R3CEV to explore blockchain use cases. The latter group now consists of 42 banks after twelve additional banks joined its ranks. Banco Santander, Danske Bank, Intesa Sanpaolo, Natixis, Nomura, Northern Trust, OP Financial Group, Scotiabank, Sumitomo Mitsui Banking Corporation, US Bancorp, Westpac Banking Corporation and BMO Financial Group make up the latest additions.
- The end of Bitcoin’s price rally is still nowhere in sight as the value of the digital currency continued to increase this week. Compared to the previous week, the value of Bitcoin increased by more than eight percent or roughly $36 per coin. One Bitcoin can now be traded at an exchange rate of about $461 per coin.