Coinbase CEO Brian Armstrong lashes out against Bitcoin Core developers, and R3 CEV completes another blockchain test. Here are the cryptocurrency highlights of week 9:
- Last weekend a small group of about 70 Blockchain technology industry leaders gathered in North America to attend the “Satoshi Roundtable”, in an attempt to get closer to an agreement on the way Bitcoin should be scaled. Coinbase CEO Brian Armstrong, a leading supporter of the Bitcoin Classic fork, was present at the event. Just before this weekend, Armstrong posted a blog in which he shares the way he experienced the event. In his blog, he concludes that it is not scaling that is the biggest risk to Bitcoin, but that the bigger problem is “the systemic risk to Bitcoin if Bitcoin Core is the only team working on Bitcoin”. Armstrong writes that Core developers are very intelligent, but lacking communication skills, immature, somewhat narcissistic, and stuck in both groupthink and a perfect solution fallacy. He continues by arguing that Bitcoin Classic presents the best way forward, and urges this happens quickly as the upcoming halving presents a big risk if Bitcoin ventures forth on its current trajectory.
- On Monday, a spam attack on the Bitcoin network put further strain on Bitcoin’s limited processing capabilities. Users reported that transactions were taking hours to be processed, as a result of a rogue wallet flooding the network with loop transactions. Ironically, Bitcoin’s 1MB limit was once implemented as an anti-spam measure, but is now making it possible to hinder the system with relatively few transactions. With no plans to raise the block size, the delays that occurred on Monday could easily become a new normal.
- R3 CEV and the banking consortium of 42 of the world’s leading financial institutions have tested the blockchain for the use of trading fixed income securities. For this test, the consortium used “smart contracts” to quickly settle trades. Apart from the banks, the test was performed with the help of Ethereum, Eris Industries, Chain, IBM and Intel. R3 CEO David Rutter stated that “this development further supports R3’s belief that close collaboration among global financial institutions and technology providers will create significant momentum behind the adoption of distributed ledger solutions across the industry.”
- There were already unconfirmed reports about Bitcoin being about to become “real money” in Japan, and Japan’s Cabinet has now officially proposed changes that would label Bitcoins as “asset-like values which can be used in making payments and digital transfers”. It is still quite a distance from being an official currency, but it certainly marks a big step. Under the proposed changes, Bitcoin exchanges would become regulated by the Financial Services Agency. This means they would have to comply with KYC and AML procedures, and undergo regular financial audits.
- Ethereum continues to profit from Bitcoin’s increasingly painful scaling situation. The popular altcoin nearly doubled in value again this week, as the price rallied to roughly $12.30 per ETH. As a result of the rally, Ethereum could soon reach a total market capitalization of $1 billion. In the meanwhile, Bitcoin lost about seven percent of its value, and is currently trading at $400 per BTC.
