BTC.com Mines First Ever Block With Software Not Based on Satoshi’s Original Code

On March 13 the Bitcoin network experienced a historic event. During the early morning hours, the first block from an alternative client, not written in Satoshi’s original C++ code, was mined on the mainnet.

Also Read: Speculation Decreases Bitcoin’s Dominance in Cryptocurrency Markets

Block 457010: The First Block Ever Mined By Client Not Written In Satoshi’s C++ Framework

Just recently the mining pool BTC.com mined the first block ever written in an entirely different codebase. The alternative implementation of the bitcoin protocol named ‘Bcoin’ is written in node.js. Bcoin was built by developer Christopher Jeffrey, the Chief Technical Officer at Purse and former employee for Bitpay.

Bcoin’s codebase is written in javascript (node.js.) and claims to be an advanced fullnode implementation. The protocol was developed by Purse CTO Christopher Jeffrey two years ago.

Jeffrey is a long-time developer of open source code and has contributed to many different projects. Bcoin has been in development for almost two years, and the 1.0.0 beta version was released this past February. The alternative Bcoin implementation has been tested on the Bitcoin testnet and is currently used in production within the backend and wallet system at purse.io. However, this is the first time a mined Bcoin block was battle-tested on Bitcoin’s mainnet as stated by the miners on Github:    

We just made the first Bcoin block: 457010

Bcoin Gets Some ‘Battle Testing’ On Mainnet

Bcoin’s node.js. protocol offers full blockchain validation, runs natively in browsers and apps, includes SPV mode, wallet infrastructure, mempool/miner configuration, and is Bitcoind compatible among other features. Furthermore, the alternative client provides support for many BIP proposals such as BIP70, BIP150, BIP151, and BIP152. The alternative client allows developers to test and experiment with a multitude of applications and scaling methods. Many open source programmers believe various implementations can help decentralization and can also uncover errors within the dominant client.    

“Multiple implementations are also good for standardization; in a monoculture, the dominant software becomes the standard, giving the developers of the dominant software a higher degree of control over the future development of the protocol than was originally intended,” explained Ethereum developer Vitalik Buterin back in 2013. “If there is only one implementation, errors get uncovered later rather than sooner, and the result is a sort of Talebian ‘stability breeding its own instability.’”

A tantalizing tweet from the Twitter account @bcoinio.

Moreover, Bcoin also supports other integrations such as MAST, the Lightning Network, Segregated Witness and more. Purse and Bcoin creator Christopher Jeffrey say they open sourced the protocol “to accelerate the next generation of killer apps.” Following the first block mined not written in C++, Bcoin developer Christopher Jeffrey stated:

Up until now, bcoin in production usually just meant the chain, mempool, and wallet code. Excited to see that the mining code is finally getting some battle testing.

Bitcoin.com spoke with Purse founder Andrew Lee about the recently mined Bcoin block and he said he’s very pleased with Christopher Jeffrey’s accomplishment.

“It’s a pretty significant milestone in the path towards decentralized protocol development,” Lee told Bitcoin.com. “I’m very proud of Christopher and what we’ve built at Purse/Bcoin. With hostility and fatigue at an all time high, the event gives me hope that we can come to a resolution that doesn’t involve a chain split.”

Additionally, on the weekend of March 24, a Bcoin Hackathon will be taking place in San Francisco at the Hackreactor HQ. Attendees will hear from Bcoin developer Christopher Jeffrey, as well as build cryptocurrency applications with the chance to win three prizes – including a 1BTC award and a signed copy of “The Internet of Money” written by Andreas Antonopoulos.

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Bitcoin ETFs Unlikely For The Foreseeable Future

Rejections Likely for Upcoming Bitcoin ETFs

The SEC’s decision to disapprove the proposed rule change for Coin ETF last Friday was primarily based on the nature of the bitcoin markets. The Commission claimed that Bats BZX Exchange must “have surveillance-sharing agreements with significant markets for trading” bitcoin or its derivatives and that those markets must be regulated for the rule change to be consistent with the Exchange Act. However, since “the Commission believes that the significant markets for bitcoin are unregulated”, the two criteria are not met.

The chance that significant markets for bitcoin will be regulated in the near future, if at all, is slim. The wider Bitcoin community has already come to understand this, and expects the Commission to reject the proposed rule change for Solidx Bitcoin Trust, as evident in chat rooms and forums online.

Confirming the community’s expectation is former Needham analyst, who is now Head of Research at Blockchain Capital LLC, Spencer Bogart. Citing how the grounds for disapproval of Coin ETF “were related to the dynamics of the underlying bitcoin markets” as opposed to something specific in the ETF filing, he told Bitcoin.com that:

The odds of approval are very low for both of the other two Bitcoin ETFs.

Bogart, who is famous for estimating a sub-25 percent chance of Coin ETF being approved by the SEC, now says that the chance for Solidx Bitcoin Trust is “extremely low”, noting that it is “likely to be rejected on the same grounds”.

Very Little Anyone Can Do

Furthermore, Bogart believes that both NYSE Arca and Solidx Management LLC, which is the sponsor of Solidx Bitcoin Trust, can do “very little” to better the chance of Solidx Bitcoin Trust being approved. Bogart said that he did not think NYSE Arca has a better chance of getting its rule change approved than Bats BZX Exchange, adding that:

NYSE would need to enter into “surveillance-sharing” agreements with all the major bitcoin exchanges around the world and they would need to have a reasonable chance of regulatory action against any manipulative trading activity that is detected. Both are unlikely.

Future Prospect of SEC’s Approval

The SEC noted on Friday that, in the future, “regulated bitcoin-related markets of significant size may develop” enough for a Bitcoin ETF to be approved. However, Bogart believes differently, stating that:

I don’t see the SEC approving a Bitcoin ETF for the foreseeable future. I think any major bitcoin investment products will need to be launched in other jurisdictions.

On February 24, NYSE Arca filed the first amendment to its proposed rule change relating to the listing and trading of shares of Solidx Bitcoin Trust under NYSE Arca Equities Rules 8.201. The comments are due on March 16. When the chance of approval is very low, exchanges sometimes withdraw their proposed rule changes. At press time, NYSE Arca has not done so and the Solidx team did not immediately respond to Bitcoin.com’s request for comment.

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Bitcoin Block Size Growth Plan ‘BIP100’ Gets Update

Bitcoin developers Tom Harding, Dagur Valberg Johannsson and Jeff Garzik have updated the code to BIP100, a “dynamic maximum block size by miner vote” code proposal which has been in the works for nearly two years. The BIP (short for ‘Bitcoin Improvement Proposal’) could serve as a solution to the ongoing debate over Bitcoin’s block size.

Also Read: New Bitcoin Caching Features Could Improve Block Verification

A BIP represents a design document meant to introduce new features and information to the Bitcoin community. BIPs represent a central avenue for communicating ideas to the distributed Bitcoin community.

BIP100 Puts Miners First

Jeff Garzik

The BIP would theoretically allow miners to vote on what the block size limit should be. Mr. Harding believes that miners are actually more invested in Bitcoin than other participants in the peer-to-peer network, and thus better equipped to make decisions.

“They invest in hardware that cannot be used for anything else, and they are the one group that will always, every day, be paid in bitcoin and no other currency”, the Bitcoin developer says. “In the aggregate, miners’ stewardship of the protocol secures Bitcoin. This was Satoshi’s design and it has proven correct beyond all expectations”.

When he first read BIP100, Mr. Harding did not like it. “I believed in June 2015 that miners might manipulate the block size in ways that were not in the best interest of all users”, he tells Bitcoin.com. “But over the next two years, it was we developers who showed ourselves unable to manage the maximum block size reasonably”.

The text for BIP100 puts vivid emphasis on the miners. “Miners directly feel the effects, both positive and negative, of any maximum block size change imposed by their peers”, reads the proposal on Github. “Larger blocks allow more growth in the on-chain ecosystem, while smaller blocks reduce resource requirements network-wide”.

According to the Github proposal, miners act as an “efficient proxy” for the Bitcoin system since they earn bitcoins when they create blocks.

In order to be deployed, BIP100 needs to garner a considerable amount of support from miners. “A simple deterministic system is specified, whereby a 75% mining supermajority may activate a change to the maximum block size each 2016 blocks”, reads the proposal. “Each change is limited to a 5% increase from the previous block size hard limit, or a decrease of similar magnitude”.

Tom Harding

Among adopting nodes, there will be no disagreement on the evolution of the maximum block size, according to BIP100. “The system is compatible with emergent consensus, but whereas under that system a miner may choose to accept any size block, a miner following BIP100 observes the 75% supermajority rule, and the 5% change limit rule”, the proposal reads.

“Excessive-block values signaled by emergent consensus blocks are considered in the calculation of the BIP100 block size hard limit, and the BIP100 calculated maximum block size is signaled as an excessive-block value for the benefit of all observers”.

Carrots, Sticks and Speed Limits

BIP100 has been in the making for nearly two years. The proposal was published first by Mr. Garzik, who runs the enterprise blockchain firm Bloq, and who enjoys waxing about the intersection of artificial intelligence and Bitcoin.

“Economic actors that wish to see the speed limit [block-size limit] at X or Y – thus dictating the free market – will lobby the Chief Scientist and other ‘core’ developers, individually, in private, in public, with carrots, and with sticks”, writes Mr. Garzik in the draft for BIP 100. “When [the] Bitcoin market cap [grows 10 times] or more, the lobbying [will be] even more intense. Yet there is no single human or commitment on the planet capable of picking a good speed limit”.

Does BIP100 offer a tenable solution to Bitcoin’s growth issues? Let us know in the comments below.

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New Academic Paper Suggests Bitcoin is Resistant to State Control

A new academic paper, entitled “Bitcoin: Order without Law in the Digital Age”, explores the “fundamental structure” of Bitcoin. The paper seeks to show “how its decentralized order contrasts with currency regimes”. Highlighting how technology has changed our lives, the paper notes how – with the advent of Bitcoin – even modern currency is not exempt from the steady march of technological progress.

Also Read: Could Bitcoin Affect Emerging Market Monetary Policy? 

The paper highlights how bitcoin can “perform the functions of currencies without the traditional law of currency”. The paper also adds that Bitcoin’s global and distributed approach to order without law, as opposed to more spatially-close communities, is novel. “Order without some forms of law is nothing new”, the paper reads. “But previously most forms of order without law depended on relatively close-knit communities”. 

Technology Changes Central Bank Money

“Software is eating away even a function as basic as currency”, concludes the paper. “The digital revolution is evolving from a phenomenon that changed the way we communicate, to an era that is producing innovations that disrupt many of our preconceived notions of law and governance”.

The paper, penned by John O. McGinnis and Kyle Roche, does not suggest that bitcoin will replace the US dollar, but that the digital currency could change people’s ways of life.

“Bitcoin’s sustained success and growth is proof that it is changing the way individuals and societies exchange value”, the paper argues. Bitcoin is significant for both its own order without currency law and for establishing a platform to help sustain other forms of non-legal order, according to the paper.

More Resistant to State Control

Venezuela has slowly transformed into a poster child for oppression against Bitcoiners.

“Bitcoin represents a potential third currency regime far more resistant to state control, because it is minted in no physical place, operates under encryption, and places a numerical ceiling on the number that can be created”, according to the paper’s abstract. “The trust required is not in any government but in the decentralized order of those who verify Bitcoin transactions”. Bitcoin has advantages over other currencies.

“As the Bitcoin ecosystem continues to grow, its non-legal order can help it climb the rungs of stability created by distrust in government”, state the authors. “Bitcoin’s order without currency law will facilitate other forms of order with less law”.

The Internet could provide an example of how technology disrupts longstanding institutions.

“Like the Internet, Bitcoin is multijurisdictional, and thus one sovereign cannot shut it down”, notes the paper. “Miners can move elsewhere and people can use it elsewhere. Additionally, if Bitcoin proves to be popular and widely used, its advocates will make it difficult for governments to shut down even within personal jurisdictions”.

Competition to State Issued Currencies

The paper surmises that, in certain nations, bitcoin could function as competition to fiat currencies.

“Central banks have often proven incapable of binding themselves to their redemption promises”, the authors suggest. “Their public law monopoly status gives them immunity from the legal and marketplace sanctions that ordinarily prevent commercial banks from reneging on their commitments”.

Additionally, central banks do not need to fear losing customers. Central banks can thus pursue policies that are not in the best interest of the public. Thanks to Bitcoin, citizens who have little trust in their nation’s currency regime are free to consider bitcoin. However, as reported first by Bitcoin.com, hyper-inflationary Venezuela has seen instances of government crackdown on Bitcoin users, lending credence to the claims made in the academic paper.

“Bitcoin’s greatest advantage over such state-issued currencies is that it has no political master to serve”, the paper reads. “Bitcoin grants an option to citizens of monetarily oppressive regimes to transact in something other than their state-issued currencies. In fact, we are already seeing Bitcoin gaining market share in transactions in nations such as Cyprus, Argentina, and China, where citizens have reason to doubt the value of the national currency”.

Bitcoin, the cyberpunk underground and not the product of legal institutions, is historically unique in this respect.

“Until recently, there has been no widespread currency that has been the creation of something other than legal regimes”, according to the authors.

Do you use Bitcoin for political or central bank motivated reasons? Let us know in the comments below.

Images courtesy of Shutterstock

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Antpool Points 75% Hashpower at BU, While Exchanges Confirm Listing a Split

According to reports, the large mining pool Antpool which commands 16.6 percent of the global hashrate is currently switching its mining configurations to support Bitcoin Unlimited. Meanwhile, popular bitcoin exchanges discuss listing another token in the event of a chain split. 

Also Read: Could Bitcoin Affect Emerging Market Monetary Policy? 

Antpool Dedicates 75% Hashrate Towards Bitcoin Unlimited

Over the past couple of months, the Bitcoin network scaling debate has intensified. Moreover, rather than just discussions taking place, many Bitcoin proponents are taking action with various ideas that theoretically could scale the decentralized currency.

For instance, people have proposed a user-activated soft fork (UASF) because Segregated Witness (Segwit) support has stalled. The idea has become popular amongst Segwit supporters and seems to be gaining traction with the proposal being pushed to Github. On the other hand, there are those who support Bitcoin Unlimited (BU) which will essentially increase the block size. Just recently Bitmain Tech founder Jihan Wu told the publication Bloomberg, “We will switch our entire pool to Bitcoin Unlimited.”    

On March 7 Antpool began signaling for BU, initiating a small percentage of its hashpower to support the alternative client. Ten days later, on March 17, the Chinese mining pool kicked it up a notch as reports reveal nearly 75 percent of Antpool’s hashrate is dedicated to BU. The author of the report explains the switch using a table from blocks 450000 to 457678. Reddit user “arnoudk” states:  

Antpool has just switched its usa3 nodes. Yesterday, it switched its usa1 nodes. Last week, it switched all of its Beijing nodes. In total, approx 75 percent of Antpool’s hashrate is now counting towards BU, and the remainder is voting neutral (No BU, no Segwit).

The Coinbase and Bitcoin Unlimited Meeting

Another interesting event this week was a meeting between Bitcoin Unlimited developer Peter Rizun and Coinbase staff. Rizun explains that exchanges and wallet companies like Coinbase support bigger blocks because “they have a fiduciary duty to preserve the assets of their customers.” Additionally, if a minority chain token arises Coinbase will support the chain, and allow the market to choose naturally. However, the exchange would prefer that the minority chain dies quickly in order to avoid market complexity.

Rizun also details the San Francisco-based company’s biggest concern is a replay attack, an issue Coinbase dealt with during the Ethereum hard fork. A replay attack is when a valid transmission is manipulated, fraudulently repeated or delayed resulting in exchange losses. Coinbase representatives also established that they would like to see more quality analysis from BU’s production releases.

“Two ideas mentioned were: (a) an audit of the BU code by an expert third-party,” explains BU developer Peter Rizun. “And (b) the use of “fuzzing tests” to subject our code to a wide range of random inputs to look for problems.”

Overall, things seem to be moving forward for BU after last week’s debacle with core developers. BU nodes have recovered, and mining support for the proposal is currently at 32.5 percent at the time of writing. Additionally, it’s been reported that 18 other popular cryptocurrency exchanges will list Bitcoin Unlimited in the event of a chain split. The replay attack is also mentioned in the participating exchanges’ statement as a primary concern.

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Bitcoin’s Other Scaling Problem

Although many Bitcoiners subscribe to laissez-faire political and economic beliefs of the libertarian variety, some “invisible politics” has reared its ugly head in the ‘Bitcoin Community’ thanks to the digital currency’s scaling issues. The growth of Bitcoin has created a variety of social governance problems that have left many in the ‘Community’ confused.

Also Read: Bitcoin Block Size Growth Plan ‘BIP100’ Gets Update

Bitcoin Governance

While focus has been largely on scaling Bitcoin at the technical level to make room for increasing transaction demands, the distributed governance of Bitcoin itself has proven difficult.

“There are two types of governance. Governance of a specific software project and governance over consensus rules,” submits Eric Lombrozo, Bitcoin developer and CEO of Ciphrex. “For historical reasons, the two have been conflated in the minds of many people.”

Mr. Lombrozo suggests problems could manifest in several ways.  “Governance over a particular software codebase doesn’t require universal agreement over all changes as long as it remains compatible with the existing network,” he says. “It’s only when compatibility is broken that it creates issues that affect everyone in the community.”

Further adding questions to Bitcoin’s social issues, when former Bitcoin developer Mike Hearn left Bitcoin for R3CEV, he lamented how Bitcoin had become “completely controlled by just a handful of people.”

Benevolent Dictator?

Critics have claimed Bitcoin needs a “benevolent dictator” to expand and onboard an increasing number of transactions. “Someone, or some group, must decide how to meet users’ requirements,” Reuters reported on the opinions of some in the Bitcoin space.

Cornell Computer Science professor, Dr. Emin Gun Sirer, cites Ethereum, a blockchain smart contract model, and its “benevolent dictator model” as a working example of distributed governance.

Vitalik Buterin, Ethereum founder and main programmer, in effect holds controlling decision-making power over that open-source creation community, some say (even though those who disagreee can fork the network).

Mr. Buterin has defended this model. “Over the last couple of years it’s become apparent that having a static protocol is just not a viable approach,” Buterin said at a blockchain conference. “Software has to evolve … and there has to be some mechanism for agreeing on how software is going to upgrade.”

Mr. Lombrozo points out, however, that Ethereum’s ‘benevolent dictator’ could not stop a split in the Ethereum blockchain, resulting in an duplicate version dubbed ‘Ethereum Classic.’

Gavin Andresen, Bitcoin’s former Chief Scientist, has discussed in YouTube videos how Bitcoin has evolved from a similar model after pseudonymous founder Satoshi Nakamoto’s departure.

“If you go back in history, it was really simple. It was whatever Satoshi decided at the beginning. That’s really where we started. We had one source code. We had one [pseudonymous] person who made all the decisions about what should Bitcoin be, how should it evolve, and what should it do,” he said.

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Bitcoin Could Face Ethereum-Style Split

Loss of public trust and utility, branding issues, a market capitalization crash, and a collapse of trust in the entire crypto-currency space. A contentious Bitcoin hard fork, which represents a change to the Bitcoin protocol requiring all nodes to update, could indeed result in two Bitcoins. Exactly this – a split network – happened in the wake of Ethereum’s choice to hard fork after the $56 million hack of the DAO, a decentralized investor-directed venture capital fund on Ethereum.

Also Read: Charlie Lee: “People Don’t Understand Segwit”

Hard Fork Could Lead to Duplicate Bitcoin Network

Not only might perceptions of Bitcoin suffer in the case of a Bitcoin fork, but so too could Bitcoin’s use-case as electronic cash. The issue of scaling Bitcoin has certainly been contentious, and if a fork is initiated with considerable opposition, there could be proponents claiming both versions of Bitcoin are the real one.

In a recent Medium post entitled A Fork in the Road, Bitcoin entrepreneur CEO Vinny Lingham highlights how, at least in the short-to-medium term, a network split would impact Bitcoin negatively.

“If a split is portrayed badly in the media and creates confusion, we will possibly go into another 2 years of sideways and down,” wrote Mr. Lingham on March 15. “Do we have that much time again with other competitors on the heels? And let’s be frank, a Hard Fork is not Bitcoin dying. It’s Bitcoin duplicating. Now we have two Bitcoins, both won’t die, maybe one will. Which one is the real Bitcoin? Do not underestimate how many enemies Bitcoin has — a fork will just give them all the ammunition they need to confuse the market”.

Bitcoin exchanges have recently unveiled their contingency plans if Bitcoin splits in the wake of a hard fork, which involves them listing the duplicate Bitcoin on their exchanges as an alternative crypto-currency.

Before the Ethereum DAO hard fork, many believed that a minority chain in the case of a split would cease to persist. When the hard fork took place, an alternative blockchain to the original Ethereum deployment persisted (by some miners’ choice to stay with that chain), which itself claimed to be the original Ethereum. It called itself “Ethereum Classic” (ETC). Trading of ETC rivaled that of Ethereum (ETH) immediately after the split.

“There are some people who dismiss this problem in the Bitcoin community,” acknowledges the Ethereum Classic project coordinator who only goes by Arvicco. “But they are wrong to do so.”

An important aspect for any digital currency is its scarcity, which acts as an economic incentive for people to use a certain blockchain. If digital currencies risk splits, then their value is undermined. “Creating two networks destroys network effect,” Mr. Lingham suggests.

A Future with Many Bitcoins?

To the surprise of many, the Ethereum network split into two after a hard fork.

Wonders Arvicco: “If there is one Bitcoin with a 21 million coins limit today, and two Bitcoins with 42 million coins tomorrow, what prevent us from having 64 Bitcoins with 1.2 billion coins a few years from now?”

In another technical twist, if there were such a split as happened in the case of ETH and ETC, all bitcoin holders would have an equal amount of BTC and (theoretical) BUTC post-split. After the Ethereum split, cross-fork trading spiked between it and ETC, leading some to believe the same would happen in the case of a Bitcoin split.

As happened on Ethereum and Classic, this could result in cross-chain transaction replay. Transaction replay happens when transactions on one chain are replayed on the other chain, moving both types of coins.

“Imagine that as a result of fork, you got both Bitcoin (Core bitcoins) and BUTC (Bitcoin Unlimited bitcoins) on the same addresses,” explains Arvicco. “Now, you want to pay for something with BTC, but to your surprise the same amount of BUTC is also moving to the seller’s address, even though they were not supposed to.”

Another example would be if one wanted to get rid of their BUTC via an over the counter transaction. You get the payment and transfer your BUTC to the buyer. But, the ‘core’ bitcoins from the same address are also sent. This could damage user confidence and diminish the use-case for on-chain transactions.

Whereas Ethereum’s replay problem was mostly dealt with via ‘splitter’ contracts designed to separate ETH from ETC, Bitcoin does not have the scripting capabilities to deploy such contracts.

“The only practical way to mitigate the issue would be mixing the legacy coins with post-fork mined coins of different flavors, either BTC or BUTC,” he says. 

Developers could introduce incompatible transaction formats, which could preclude a second hard fork – this was the solution used on the ETH/ETC networks. Replay protection could also be introduced simultaneously with the first fork, but this option is not being publicly discussed by developers.

“In practical terms, both networks would be hardly usable for some time after a fork due to replay attacks,” believes Arvicco. “For normal users, it will be problematic to gain the knowledge how to protect themselves from it, so they’ll probably stop using the network altogether.”

Splitting Coins is Not Hard, for Some

Bitcoin Unlimited could trade under its own ticker post-split.

Many people are not worried about a split, including Bitcoin developer Peter Todd. “It’s easy to split Bitcoins via nLockTime, as the exact height of the different chains will definitely be different,” says Mr. Todd on Reddit. “I’ve been asked by two or three exchanges to evaluate their plans to do exactly that. IIRC one had invented the technique themselves, and one or two others I suggested it to them.”

But, while splitting his BTC from his BUTC via nLockTime might be easy for longtime Bitcoin developer Peter Todd, this might not be so for the common bitcoin user.

What are your thoughts about a potential Bitcoin split? Let us know in the comments.

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Alaska Introduces A Bill to Regulate and License Bitcoin Businesses

The State of Alaska has introduced a bill this week defining digital currency, as well as broadening its definition of money transmission to include it. A wide array of business functions would require money transmission licenses, including buying and selling through a third party, transmitting, controlling, and issuing digital currencies.

Also read: Bitfinex Will Not Obtain License to Do Business in Washington State

Introduced by representatives Zach Fansler and Sam Kito III, Alaska State House Bill No. 180 outlines a large number of amendments to the state’s existing money transmission laws which were enforced on July 1, 2008.

Currently, the Alaskan statutes declare that a person wanting to engage in the business of money transmission in any way, including advertising and soliciting for this service, must hold a money transmission license or become an authorized delegate of a person who holds a money transmission license.

Defining ‘Virtual Currency’

Digital currency is not currently defined or included in the state’s existing money transmission statutes. This new bill adds a definition for digital currency including bitcoin but refers to them as ‘virtual currency’. According to the bill, virtual currency “shall be broadly construed to cover digital units of exchange” that:

1. Have a centralized repository, which it defines as “a single third-party administrating authority that controls the system, issues the currency, establishes the rules for the currency’s use, maintains a central payment ledger, and has authority to redeem the currency or withdraw the currency from circulation”;

2. Are decentralized, distributive, open-source, math-based, peer-to-peer virtual currency with no central administrating authority and no central monitoring or oversight. The term distributive is further defined to mean validated through distribution among a network of participants who run an algorithm to validate the transaction;

3. May be created or obtained by a ”computing or manufacturing effort”.

‘Money Transmission’ Using Virtual Currencies

The bill also updates the existing definition of money transmission with a section pertaining to digital currencies. The term “money transmission” now includes conducting the following types of activity in the state, or involving a resident of the state:

Receiving virtual currency for transmission,

Transmitting virtual currency,

Securing, storing, holding, or maintaining custody or control of virtual currency on behalf of others,

Buying and selling virtual currency as or through a third party,

Performing retail conversion services, including the conversion or exchange of fiat currency or other value into virtual currency,

Controlling, administering, or issuing virtual currency.

Previous Attempts

Alaska has tried to include ‘virtual currency’ in the definition of ‘money transmission’ before. In House Bill No. 271, introduced last year, the definition of virtual currencies was proposed. However, this bill died in committee. Another bill from Alaskan lawmakers seeking to include virtual currencies was Senate Bill No. 152, introduced last year by the Senate Rules Committee by Request of the Governor. However, this bill did not even get as far as House Bill No. 271 and suffered the same fate in committee.

Alaska’s Interim Solution

Instead of getting a full money transmission license, Alaska currently offers ‘Limited License Agreement Orders‘ for digital currency businesses.

This limited license agreement is for those requesting “approval of a license to provide transmission of virtual currency or does business that incorporates virtual currency in addition to the “traditional” money transmission of fiat currency”, the state’s website explains. Currently, only Coinbase and Circle Internet Financial have this limited license agreement orders and both are listed as having ‘active’ status.

If this latest bill is approved, many digital currency businesses will have to obtain an annual money transmission license from Alaska’s Division of Banking and Securities. Recently, Coinbase pulled out of Hawaii because of the state’s strict money transmission license requirements. A couple of days later, Bitfinex pulled out of Washington State because the state requires the company to have a money transmission license as well.

What do you think of Alaska’s move to license Bitcoin businesses? Let us know in the comments section below.

Images courtesy of Shutterstock, the State of Alaska, and Coinbase

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Major DDoS Attacks Hit Bitcoin.com

Truth Under Attack

When Bitcoin.com re-launched the updated site in 2015, it was smack in the middle of the Bitcoin block size debate, which has also been called by many the Bitcoin “civil war”. It’s no secret that during this time, Bitcoin.com has positioned itself as a proponent for on-chain scaling solutions, as envisioned by Bitcoin creator Satoshi Nakamoto.

Since then, Bitcoin.com has worked with industry experts and leaders in the space to deliver news, uncensored information, and tools to the Bitcoin community. Most recently, Bitcoin.com has opened the Bitcoin.com Mining Pool, which mines using the Bitcoin client Bitcoin Unlimited (BU) and pays 110% block reward and has zero fees.

Due to this, Bitcoin.com has been the target of individuals and groups that don’t share the same vision. And this week, the site along with the new mining pool and uncensored forum have all been targeted by attackers in attempts to bring down the site and stop the flow of uncensored information.

Censorship in and of itself has been a huge point of contention within the Bitcoin community, which has had a real and lasting impact to the block size debate in many ways.

Due to the heavy DDoS on Bitcoin.com domain and subdomains, the forum and mining pool all have had intermittent up-time. Bitcoin.com has also been working with Cloudflare to help mitigate the issues but some users may still be experiencing problems.

Suspicious Timing

It’s also worth noting that the attacks have come at the same time as when the news was released that some Bitcoin exchanges unveiled a hard fork contingency plan. The signed statement has come under a lot of scrutiny because at least two of the exchange signers, Kraken and Shapeshift, said the document they signed was not the same as what they were originally shown. Also missing from the signed statement are several of the biggest exchanges on the market, Coinbase, Gemini, Localbitcoins, among several others.

The significance of the timing of these two events can’t be overlooked, as the signed statement clearly has been lauded by the same groups who don’t hold the same values and vision as on-chain scaling proponents in attempt to further smear on-chain scaling. In addition, there have been other subversive attempts at attacking the Bitcoin network in recent times, which has left many scratching their heads just who is behind these sorts of attacks.

We’ve also learned that many BU nodes have had to resort to identifying their nodes as Core because they are being DDoS’d also, as described by Roger Ver in a tweet sent today.

What are your thoughts on the recent attacks on the Bitcoin network and on-chain scaling proponents? Let us know in the comments below!

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Digital Asset Trading is Going Viral, And You Don’t Even Need to Log In

Exponential Growth

“To date, our best month ever was $20 million, which was this past January and that was up about 30% from December 2016”, Mr. Voorhees tells Bitcoin.com in an emailed statement. “In March thus far, we’ve processed over $30m, so we [are on target to] more than double our highest month ever”.

Shapeshift regularly adds new altcoins and requires neither emails nor passwords, and thus no signups and accounts. All of this might have contributed to its recent success. 

In the 24 hours between March 13 and 14, Shapeshift processed over 4,300 customer orders totaling about $3 million, according to the CEO, who also once ran popular Bitcoin gaming site Satoshidice. The volume is coming primarily from trades between bitcoin, dash, ether, and monero.

“Augur and Zcash are also under heavy load”, he adds.

BTC Payments ‘Increasingly Unreliable’

Erik Voorhees, Shapeshift CEO

Shapeshift customer support staff has been working “nearly non-stop to process orders and refunds” as needed, according to Mr. Voorhees. “Unfortunately, some of why Shapeshift is not running perfectly smooth has to do with much-publicized Bitcoin scaling problems”.

Bitcoin’s recent scaling issues, which have seen transaction volume bump up against its 1 MB data limit, have created a transaction confirmation backlog.

“The Bitcoin transaction delays have been really frustrating for us and our customers”, according to Mr. Voorhees, who wrote one of the first long-form pieces on the digital currency, Bitcoin: A Libertarian Introduction. “Even when we send transactions with high fees, which keep getting higher, our customer may not receive bitcoin for an hour or sometimes a day and it’s impossible to predict ahead of time”.

Bitcoin payments have become increasingly unreliable and expensive for Shapeshift. “Those in the Bitcoin community who are not dealing with thousands of customer orders per day probably don’t appreciate the serious degradation in Bitcoin utility that has been occurring for over a year, and very intensely for the past few months”.

He adds: “Regardless, the digital asset industry is just on fire right now, in a good way, and it’s impossible not to be thrilled with the growth across multiple assets”.

What do you think about Shapeshift as a digital asset application? Let us know in the comments below.

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Bitpay Adds Miner Fees To Invoices

New Fees on Bitpay Invoices

Starting on March 23, a new fee will be added to each Bitpay invoice to cover the rising transaction costs of the Bitcoin network. Many businesses currently use Bitpay’s invoice service, which is a customizable API-based system capable of creating and sending multiple invoices to customers. It is still free for payees to receive money using the invoice service. However, payers will see the miner fees added to the total amount to be paid.

“Until now Bitpay has covered the network costs for combining and sweeping UTXOs [Unspent Transaction Output Set] from Bitpay invoice payments”, the company revealed.

Recently, Bitpay CEO Stephen Pair spoke about the Bitcoin network’s mining fees rising “exponentially”. He said that the fees that Bitpay covered for customers in February crossed the $50,000 mark, prompting the company to raise the minimum invoice amount from $0.04 to $1. With this latest announcement, Bitpay stated that:

In order for us to continue processing secure, on-chain bitcoin payments without incurring losses as UTXO consolidation costs increase, as of March 23rd we will now be automatically adding this network cost to the total cost of paying a Bitpay invoice.

UTXO-Based Network Miner Fees

“The miner fees paid to combine and sweep UTXO’s from Bitpay’s receiving addresses are a major part of Bitpay’s increased network costs”, the company described. Instead of simply passing along the payments’ network miner fee, Bitpay has decided to charge fees based on the number of UTXOs which a payment is sent from.

Each UTXO points to a single Bitcoin address that a wallet could choose to send bitcoins from. It is also the part of a Bitcoin transaction that tells the network how much unspent money is at each sending address.

Wallets commonly have dozens of addresses that make up part of each payment sent. A typical spend from most wallets can stack many addresses together to total up the amount being sent. A payment might only have one UTXO or it could have hundreds of these addresses. Bitpay’s invoices will be charging for each one individually. These fees are added to the invoice on top of the payer’s own miner fee which originates in the payer’s wallet, giving Bitpay no control over them. The company admitted:

We realize that for many users, this network cost may make smaller payments uneconomical.

How to Minimize Fees

For users who are concerned about additional network costs on their Bitpay payments, the company said that they “strongly recommend making Bitcoin purchases in larger increments to offset the cost across a larger payment value”. In addition, Bitpay also suggested that, to avoid double-paying the network fees, “be sure to pay the exact BTC amount requested on the Bitpay invoice”. In addition, the company noted that: “A good way to ensure that you do not overpay or underpay a Bitpay invoice is to scan the QR code or pay with a payment-protocol compatible wallet like the Bitpay wallet app”.

Bitpay concluded that “This network cost will not have a significant effect on the majority of payments made through Bitpay”. While purchasers will see the added fee, “our merchants’ fees and pricing will not be affected by this change”, the company reiterated.

What do you think of Bitpay’s move to add miner fees to their invoices? Let us know in the comments section below.

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Popular Bitcoin Exchanges Reveal Controversial Hard Fork Contingency Plan

A Large Group of Bitcoin Exchanges Reveal Hard Fork Contingency Framework

On March 17 roughly twenty well-known exchanges released a statement concerning the possibility of a hard fork and a network split. The statement noted that the exchanges believe a hard fork is imminent and how their business plan looks in that situation. The exchanges that signed the letter of intent statement detailed their plans of listing both token assets if a blockchain split takes place. This would include asset listings for Bitcoin Core and Bitcoin Unlimited (BU) protocols. Exchanges who signed the letter include Bitstamp, BTCC, Bitsquare, Shapeshift, Kraken, and more.  

“We have decided to designate the Bitcoin Unlimited fork as BTU (or XBU),” explains the participating exchanges. “The Bitcoin Core implementation will continue to trade as BTC (or XBT), and all exchanges will process deposits and withdrawals in BTC even if the BTU chain has more hashing power.”

However, the statement of how exchanges would designate the names of the tokens listed has become a contentious issue for those supporting BU. Furthermore, the community and two signatory exchanges had noticed that the letter of intent was altered after it was published. Both Shapeshift and Kraken who signed the letter stated there were changes made to the original document they had signed. The issue at hand was calling the Core protocol BTC, even if that client was not the longest chain with the most proof-of-work running. Kraken explained they did not want to be in a position to decide which chain gets to keep the BTC moniker. Shapeshift founder Erik Voorhees explained his opinion of the name issue on Twitter stating:  

“For the record, myself (personally) and Shapeshift would use the BTC/Bitcoin name for whichever chain unambiguously “won,” over time,” Voorhees detailed.

Coinbase Releases a Statement

Coinbase founder Brian Armstrong.

On March 18 Coinbase founder Brian Armstrong revealed his opinion of the recent contingency plan letter and explained why his company did not participate.

“Coinbase didn’t sign this letter because I think the intention behind it is wrong,” Armstrong states. “On the surface, it is a communication about how exchanges would handle the hard fork, and a request to BU for replay attack protection. But my concern was that it was actually a thinly veiled attempt to keep the BTC moniker pegged to Core software. I think a number of people who put their name on it didn’t realize this.”

Armstrong agrees that listing forked assets makes sense, but he doesn’t believe the BTC name should automatically go to one development team. “If there is overwhelming support from miners and users around any new version of the software (regardless of who wrote it), then I think that will be called Bitcoin (or BTC),” says Armstrong. The Coinbase founder says the company wishes to remain neutral in the debate.

Bitfinex Introduces Listing Pairs

Additionally, one of the exchanges who participated in the letter, Bitfinex released its own listing plan called Chain Split Tokens (CST). Bitfinex customers will be allowed to speculate on the future events of a fork using the CST tokens which include BCC (Bitcoin Core) and BCU (Bitcoin Unlimited).

“Users will be able to create CSTs by “splitting” a bitcoin through the Token Manager (located in the order type drop-down menu of the sidebar order ticket),” Bitfinex explains on their website. “Once split, the BTC will be removed from your account for each BCC, and BCU added. Through the same Token Manager, you will be able to reverse this process at any time, trading in equal numbers of BCC and BCU to extract BTC.”

The discussion doesn’t seem to be over as far as the bitcoin name and branding is concerned. After the contingency letter, bitcoin proponent Olivier Janssens started a petition to get exchanges to remain neutral and not choose sides. “Designating Bitcoin Core as the default Bitcoin BTC/XBT is premature at best and at this point a highly political decision,” Janssens petition explains. There are quite a few bitcoin supporters who agree with Voorhees, Janssens, and Armstrong’s opinions concerning the longest chain getting the right to the BTC name, as many of them have referred to this quote offered by Satoshi in the bitcoin white paper;  

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Mining Pool Bitclub Network Mines Its First Bitcoin Unlimited Block

Over the course of the past few weeks, there has been an increase in support towards the BU client from miners. On March 17 the mining pool Antpool had pointed 75 percent of its hashrate towards BU and by the end of the evening close to 90 percent was signaling BU support. Now the mining pool Bitclub is changing the game by mining a BU block when the organization previously mined using the Core client.

The Bitclub Network’s pool currently holds 2.9 percent of the Bitcoin network’s global hashrate. This hashrate plus the added signal from Antpool will likely push the total BU support upwards. Currently, explicit mining pool support by proposal according to Coin Dance data shows BU is currently at 37 percent.

The Reason Behind the Switch

Our sources have been in contact with the Bitclub Network operators, and they informed us of why they decided to switch proposal support. Bitclub says they have had significant issues with unconfirmed transactions. The Bitclub network has a lot of transactions going to and from its membership base, and new members began to have problems getting transactions confirmed.

Two leading members of Bitclub spoke with our sources and explained their frustrations with the current network congestion. The slow network has been a significant inconvenience for Bitclub, and they told to our sources they are making the switch from Core to BU to help with the goal of upgrading the Bitcoin protocol to facilitate more transactions. Moreover, the leaders explained how they have been watching Ethereum trade volumes rising, and they are very concerned about bitcoin going down because of the state of the network.

When It Comes to Scaling Wheels Are in Motion

There seems to be a lot of bitcoin proponents concerned with the current state of protocol development with its rising fees and congestion issues taking place more frequently. Bitcoin businesses like Bitpay and Coinbase are changing their business models because network fees are too high for the companies to cover. Since the issues have become topics bitcoiners can’t avoid any more, node operators, and miners are taking action.

Bitclub and Antpool’s latest support show these two pools have moved past conversations and have decided to use their hashrate as a voice of reason.

What do you think about Bitclub mining their first Bitcoin Unlimited block? Let us know in the comments below.

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Libertarian City Liberstad in Norway is Moving Forward Using Bitcoin as Primary Currency

Holmesland and his team started looking at properties for Liberstad in August 2015 and found Tjelland Farm with the appropriate “size, location, internet and electrical connection, water supply, good construction ground, and no permanent residents on the surrounding properties”, he told Bitcoin.com. An agreement was made to rent this property until May 19 to give them time to sell at least 15 hectares of plots, then buy the property for 5 million Norwegian kroner. For the presale, which started on August 15 last year, Holmesland said:

We only accept Norwegian kroner (NOK) and bitcoin (BTC) for land sold through the presale.

Each plot of 1000m2 costs 35,000 NOK (about 4,000 USD), and the reserve price is 7,000 NOK (approx. 800 USD). If the land sale target is reached, development will start on June 1. After rezoning and waiting for the government to approve the development plan, Holmesland estimates that full development could begin within 24 to 36 months. During that time, the team plans to build roads, campsites and concert areas for landowners to use free of charge.

Creating a Private City

Initially, the team aims to “create a completely private city where all land is privately owned, and all the public services are provided by private actors through voluntary means”, Holmesland shared, adding that:

Our long-term and overall goal is to one day make Liberstad an autonomous city-state with its own economy much like Hong Kong, Singapore or even Monaco, but without politics, taxes and politicians.

In Liberstad, basic city services such as kindergartens, schools, hospitals, retirement homes, private security service, garbage collection, arbitrary courts, and insurance companies will be provided “on the internal market or through voluntary organisations free from any tax, force or coercion”, he described.

There have been over 500 inquiries and at least 120 people have placed an order, Holmesland revealed. From this group, 63 people have paid the deposit so far. He further detailed:

There are now 63 people who have reserved a total of 10,5 hectares of land in Liberstad. These are people who have paid the security deposit and signed the purchasing agreement. This leaves 4,5 hectares left that we need to sell before we can proceed with the purchase of the main property.

Starting a Business in Liberstad

Liberstad residents can become members of the Liberstad ‘internal-market’ business registry (LIMBR) which is “a closed market exclusive for the residents”, Holmesland described. Residents can use “whatever medium of exchange they want, except for national currencies”, he elaborated, noting that:

Liberstads business registry is free to join for the residents, but one of the requirement is that they can not accept national-currencies. If you want to accept Norwegian kroner you will have to register a second business with the Norwegian government.

Businesses wanting to accept Norwegian kroner have to “follow the Norwegian law and regulations and pay tax and VAT”, Holmesland conveyed, adding that they may also have to register with the Norwegian business registry. One business can have two registrations; one with the Norwegian government to accept Norwegian kroner and the other with LIMBR to accept anything else.

The Liberstad team has established a Norwegian-registered nonprofit corporation called Liberstad Drift AS which is Liberstad’s operator, to provide and facilitate the city’s public services. Liberstad Drift AS can accept both NOK and bitcoin. VAT and other taxes that the state requires will be added for all kroner transactions.

Promoting Bitcoin

“We use Bitpay for all our Bitcoin transactions. We will also advise all other businesses in Liberstad to do the same”, Holmesland said. In addition, Liberstad Drift AS plans to give discounts to customers paying with bitcoin for all of its services once Liberstad is up and running. This is to encourage people to start using bitcoin, he explained, adding that:

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Bitcoin Developers Propose Changing Proof-of-Work Algorithm

Bitcoin Community Members and Developers Propose Changing Bitcoin’s Proof-of-Work

The past week in bitcoin-land it’s been quite a ride, to say the least. Scaling topics have now eclipsed all discussions concerning the March 10 ETF decision. Most of the “community” is now focused on the block size debate and the possibility of a hard fork in the near future. There are those who vehemently oppose a hard fork and have decided to come up with solutions to avoid the situation by proposing some ideas that are very controversial. This week community members and Bitcoin Core developers such as Luke-jr have been discussing trying to change Bitcoin’s Proof-of-Work (PoW) algorithm.

Of course, the discussion of changing PoW has stirred contentious arguments once again. Many people within the community believe the PoW consensus mechanism is one foundation within Bitcoin’s code that should never change. However, the group discussing the algorithm change are afraid of “de facto control” by a great majority of the network hashrate. The group has pushed the conversation further by creating a website, and a Twitter handle to promote the idea.

“A call for research, testing, and finally implementation of a decentralization-friendly algorithm for Bitcoin’s proof-of-work,” explains the BTC PoW Initiative website. “Bitcoin has been unable to implement a scaling solution due to greedy miners who want to keep fees high and who even mine empty blocks, not caring that it increases network congestion. — Changing the proof-of-work will fire the current crop of miners and open the door for quickly and easily scaling the network.”

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The EU is Now Targeting “Unpermissioned” Blockchains

The EU has recently been very active in attempting to regulate digital currencies, including bitcoin. Last week, Bitcoin.com reported on the European Parliament’s proposal to amend the EU’s fourth Anti-Money Laundering Directive (AMLD), tackling digital currency anonymity. Now, a different proposal submitted by Parliament members is targeting specific areas of digital currency applicable to the EU fintech framework, including “unpermissioned” blockchains.

Also read: Digital Currency Regulation Heats Up In The EU As Parliament Proposes Additional Rules 

Many of the EU’s efforts to regulate digital currencies have been through amending the AMLD. Still in its early stage of the EU legislative process, this new proposal seeks to amend an existing EU fintech proposal called ‘Fintech: the influence of technology on the future of the financial sector (2016/2243(INI))’. In a recent draft report, members of the European Parliament urge the European Commission to consider several amendments directly concerning bitcoin and other digital currencies.

Investigating the Role of Bitcoin Mixers

In one amendment, Parliament members call on the European Commission to investigate the role of bitcoin mixers. Amendment 257, paragraph 16, reads:

[The Parliament] Is concerned by the increased use of unpermissioned blockchain applications, in particular Bitcoin, for criminal activities, tax evasion, tax avoidance and money laundering; calls on the Commission to investigate the role of bitcoin mixers in this process.

This proposed amendment follows a global conference on countering money laundering and digital currencies in January which more than 400 financial investigators attending, including the FATF, Interpol, Europol, CEPOL and the Basel Institute on Governance. During the event, participants were told that: “All countries are advised to take action against Digital Currencies Mixers/Tumblers”.

Energy Usage and VAT

Some amendments in the proposal revolve around Bitcoin mining’s “high energy” usage such as Amendments 159 and 252. One amendment reads:

[Parliament] Notes that some implementations of DLT technology such as the Bitcoin blockchain have extremely energy intensive computational requirements and that, therefore, research should be encouraged to find ways of mining and verification that are energy efficient, especially for large scale uses.

Some benefits of digital currencies and blockchains were also added to Amendments 160 through 162, including competition of currencies and using an altcoin for solar energy credits. The Parliament “stresses that the current emergence of currency competition between national currencies and private virtual currencies could benefit innovation and price stability”, one proposal reads.

Fintech and blockchain initiatives such as a solar coin as well as research to achieve “environmentally responsible energy use and behaviour” are also welcomed, according to Amendment 162, in order to “reduce the environmental cost of Bitcoin-mining and related activities”.

Another amendment concerning bitcoin is one where taxation of payments made with digital currencies was suggested. In October 2015, the EU Court of Justice ruled that bitcoin transactions are exempt from Value-Added Tax (VAT) “under the provision concerning transactions relating to ‘currency, bank notes and coins used as legal tender’”. A Parliament member added Amendment 160 which reads:

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This Happens to Your Coins During a Bitcoin Hard Fork and Possible Blockchain Split

Bitcoins You Possess Will Be Safe

The first and foremost piece of information all bitcoin holders should know is that in the event of a hard fork that splits the blockchain, bitcoins you possess will be perfectly safe.

Over the past year or so hard forks have gotten a bad reputation for political reasons, but in actuality, most types of forks are merely protocol upgrades. A blockchain split occurs during a hard fork which in turn branches the chain into two parts. If this happens, there is nothing a bitcoin holder has to do but wait and watch the fork unfold.

The folks at the subreddit r/btc have compiled a very well written frequently asked questions post concerning protocol upgrades and how users are affected. The thread gives details about the hard fork process and what to expect.

When the blockchain branches into two there will be two digital assets immediately after the hard fork. Bitcoin holders who possess their private keys will have access to assets on both chains after the split event occurs. So, if you “keep your money” in a local wallet on your computer or on your phone you can just stay put and watch the fork happen.

If you hold money on a bitcoin exchange, then it will be up to the exchange’s discretion on how they choose to disperse both token assets to customers. Most of the well-known industry exchanges have already pledged to support both assets if a blockchain split event takes place.

Storing Bitcoin On Exchanges  

Users should remember that holding cryptocurrency on an exchange is not recommended even during non-eventful times. As explained above, after a blockchain split customers storing bitcoin on an exchange will have to succumb to the rules of that specific trading platform. For instance, it’s highly possible that exchanges will pause withdrawals for 24-48 hours during and after the fork. Most reputable exchanges should and will likely disperse both assets to their customers sometime after the event, but users should expect a waiting period while the businesses assesses the situation.

The bitcoin exchange Coinbase explains the company’s current contingency plan to its customers concerning a hard fork and possible blockchain split which includes pausing deposits and withdrawals;

“Ensuring the safety of customer funds is our top priority,” explains the San Francisco-based exchange. “In the event of a hard fork of the Bitcoin protocol, it is likely that Coinbase will temporarily suspend the deposit and withdrawal of bitcoin from the platform pending our assessment of the technical risks posed by any fork, such as the possibility of replay attacks, network instability, or other factors. Customers should take note that they will not be able to withdraw bitcoin from or deposit bitcoin to Coinbase for a period of up to 24 hours or more following the fork. In the event of a hard fork of the Bitcoin protocol, Coinbase may suspend the ability to buy or sell on our platform during this time.”

The other twenty or so well-known bitcoin exchanges that revealed their hard fork contingency plans last week will also list both digital assets (creating another account for their customers, for the “new” forked coin). Yet it is safe to assume these exchanges will also pause deposits and withdrawals during a split event. Customers will have to follow the rules of the exchange they store their funds with, and each business will have different guidelines.

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Chandler Guo’s Mining Pool Makes the Jump to Bitcoin Unlimited

Chandler Guo Supports Bitcoin Unlimited

Chandler Guo shows his support towards Bitcoin Unlimited on March 21.

Over the past two months, there has been a lot of support directed at the BU protocol as many miners have begun to vote for the bitcoin client. Last week the large mining pool Antpool pointed a majority of its hashpower towards BU. Antpool currently runs 19 percent of the global hashrate.

Following Antpool’s decision to support BU, another mining operation called the Bitclub Network mined its first BU block on March 20. Bitclub Network’s pool commands 3.7 percent of the global hashrate and pool owners detailed they were frustrated with network congestion

Last month Chandler Guo said he was creating a new mining operation called X pool and stated, “The pool will signal Bitcoin Unlimited.” Guo has always had strong opinions and is vocal within the cryptocurrency industry as he is well known for his stance during the Ethereum fork. On March 21 Guo revealed to his Twitter followers, he will now be directing his support towards the BU protocol.

I’ve made the jump to Bitcoin Unlimited today. Come join us, come to Bitcoin Unlimited.

Guo’s X Pool Joins the Fleet of Global Miners Supporting the BU Protocol

At press time 40.3 percent of blocks mined on March 21 supported BU. Pools signaling BU support include Viabtc, Antpool, Bitclub Network, Bitcoin.com, BTCtop, Canoe, GBminers, and Slush.

40.3 % of blocks mined on March 21 show Bitcoin Unlimited (BU) support.

With the additional push from Chandler Guo’s mining pool, roughly another one percent of the network hashrate will be added to BU support. If Guo follows through with his original plan and adds another 100PH to the X pool, the operation hopes it can accumulate 3.3 percent of the global hashrate in the near future.

Bitcoin Unlimited support at the time of writing has signals stemming from nine mining pools. xbtc.exx.com&bw.com represents Chandler’s Guo’s X pool.

The Chinese investor is a big believer in the cryptocurrency revolution stating last year he believes the global GDP will be based on bitcoin. Guo also has a vested interest in Ethereum Classic (ETC) and has offered capital to ETC startups working with the protocol. With X pool pointing its hashrate at BU, it shows Guo is once again stating his opinion publicly but also backing up his words with hash power.

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Coinbase Launches Margin Trading on GDAX for Institutional Traders

Interest from Institutional Investors

“Over the last few years, we have seen growing interest from institutions that desire advanced trading features”, said Adam White, head of GDAX, in the announcement on Monday. He also added that:

We believe this feature [margin trading] will attract a new wave of institutional clients, ultimately reducing volatility and supporting growth of the digital asset industry.

White believes that there is a pent-up demand for digital currency trading from institutional traders since they have been sitting on the sideline while waiting for the U.S. Securities and Exchange Commission (SEC) to make its decision on a Bitcoin ETF. When it became clear to them that there would not be a Bitcoin ETF, White said that these professional investors would turn directly to bitcoin spot exchanges.

He then described how “the only exchanges these institutional traders are going to go to are the ones like GDAX that are based in the U.S., with an impeccable record, the trusted and secure exchanges that meet these regulatory requirements”, Forbes reported. White also noted that:

We’re the first and only exchange to offer a product that meets the requirements of these professional and institutional traders having accounted for state and federal regulatory requirements.

Margin Trading on GDAX

In addition to operating in Europe, the UK, Canada, Australia and Singapore, GDAX is available in U.S. states “where Coinbase is either licensed to engage in money transmission, where it has determined that no such license is currently required, or where licenses are not yet being issued with respect to Coinbase’s business”, according to the company’s website. Currently, Coinbase is licensed to engage in money transmission in 38 U.S. states and territories. Its website states that the “US states not yet supported by GDAX include: Wyoming, Hawaii, and Minnesota”.

To access margin trading on GDAX, a customer has to be an Eligible Contract Participant (ECP), “as defined in Section 1a(18) of the Commodity Exchange Act and applicable regulations thereunder”, Coinbase explains. There are many ways to qualify as an ECP. For example, a financial institution as defined in Section 1a(21) of the Commodity Exchange Act, an entity with total assets exceeding $10,000,000 or an individual with “amounts invested on a discretionary basis, the aggregate of which is in excess of $10,000,000” all qualify.

While GDAX is tailored to institutional investors, it is not the only bitcoin exchange offering margin trading, however. Some exchanges that offer margin trading to U.S. customers include Kraken, the crypto-traders’ favorite Whaleclub, cloud mining exchange Cex.io, Evolve Markets, 1broker, etoro, Avatrade, Japan’s Coincheck and the Forex platform Simplefx. Bitfinex also offers margin trading but not to U.S. customers.

For margin trading on GDAX, White said in the announcement that:

Eligible customers can trade up to 3x leveraged orders on BTC, ETH, and LTC order books.

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