Last Week In Crypto - For the Week Ending 20th May, 2017
“There just aren't anywhere near enough coins to go around, and pre-existing holders will grasp ever more tightly into this surging market, as perennially dictated by human nature.”
- Sean Walsh, Founder of Redwood City Ventures (blockchain and fintech investments firm)
Headline News
Bitcoin Dominance Index dips below 50%
The Bitcoin Dominance Index has dipped below 50% for the first time in the history of the cryptocurrency. The index is a loose measure of how much bitcoin contributes to the total cryptocurrency market’s value. Possible reasons for the decline include the stability of bitcoin. As the currency becomes less volatile and more stable, speculators may have moved on to other altcoins. This can be seen through the recent explosion in the prices of altcoins, up to such a level that it has even sparked talk of an altcoin bubble.
Ripple Locks Up $14 billion in Smart Contracts
Fintech firm Ripple, which owns a large amount of the XRP cryptocurrency (about $16 billion in total) has pledged to lock up 88% of those funds in escrow accounts. The firm will use a series of smart contracts to accomplish this move. This move is aimed at addressing concerns of investors who worry that the firm may decide to flood the open market with its holdings and depress the price of XRP. The worry has only compounded in recent months as the price of XRP spiked from under 5 cents to around 25 cents. In order to finance its operations, the firm will ensure that the smart contracts are structured in such a way that they briefly make 1 billion XRP available each month for about 5 years which may be used to pay the firm’s bills.
Ransomware Attacks Cast Bitcoin In Bad Light
A global cyber security threat that attacked computer systems and servers in over 99 countries has cast bitcoin in a bad light and has brought a lot of negative media attention. A ransomware attack dubbed WannaCry, which was the result of a leaked NSA tool, targeted a wide range of industries ranging from UK’s National Health Service to FedEx Corporation by locking up data. To get back control of the data, the ransomware demanded a ransom denominated in bitcoin. This resulted in a lot of people blaming bitcoin for the problem. Security expert Andreas Antonopoulos described the reaction as “blaming the duffel bag full of cash for a kidnapping”.
Latin American Stock Exchange Embraces Blockchain
Latin America's third-largest and Chile's largest stock exchange, the Santiago Stock Exchange has made public a project to incorporate blockchain technology to support lending solutions. The project is being operated with a partnership with IBM. Typically, after contracts are signed the exchange spends two to three days in supporting office processes that largely involve the exchange of information. After the implementation of this project, the exchange projects a 40% reduction in time taken to exchange this information. The project involves running a private blockchain network where participating banks and regulators will operate individual nodes.
Sidebar News
- Initial Coin Offerings (ICOs) have recently emerged as a new way of funding startups, although the tread has come fraught with controversy. Boost VC, a traditional venture capital firm, has announced that it will embrace that trend by investing between $25,000 to $100,000 in selected companies to help them conduct a successful ICO.
- US-based Coinbase has reached a total of 7 million users with approximately 100,000 users signing up every week. Meanwhile, Indian bitcoin exchange Zebpay crossed 500,000 downloads on android, which are more downloads than all of South Korean exchanges’ apps combined. A huge surge in users is not always the best thing - exchanges, Bitstamp and Poloniex, have warned of an “overload” on resources due to a spike of new users.
Markets
Bitcoin - ↑ 16%
- Week Start: $1,772
- Week End: $2,052
Ethereum - ↑ 46%
- Week Start: $90
- Week End: $131
Footnote News
Starting this week, bitcoin wallet provider Xapo has decided to pass on bitcoin network transaction fees to users. It will now give users an option to either pay a standard fee of 0.00067902 BTC or a higher priority fee of 0.00108716 BTC when sending transactions from a Xapo wallet.
Norway’s largest internet-only bank, Skandiabanken will now let users integrate their bank accounts with their Coinbase accounts. While users may not yet buy cryptocurrency through the integration, they can view their balances using the new feature. This move mimics a similar integration done by US financial services firm, USAA in 2015.
Worth Reading - CoinDesk’s feature story about Gavin Andresen, the man that became the most public face of bitcoin during the 2013 price rally.