Cryptospace News Digest, June 12 – 19
The DAO drama, panic at exchanges, bitcoin’s future and a bit of blockchain for the future â€” all the week’s events in ForkLog’s traditional overview.
This week, the world’s first cryptocurrency has surpassed yet another important level having soared above $750 for a while. Last Saturday night, bitcoin has leaped over $730, and remained in those realms ever since. However, the cryptocurrency’s volatility is too high to make any long-term predictions.
Part from good old pressure from Chinese investors and forthcoming reward halving, this time analysts link bitcoin’s skyrocketing to US Dollar’s cheapening agaist yuan and yen.
Bitcoin is traded around $760 at the time of writing with market cap at around $12 billion.
The reasons for bitcoin price upsurging and possible strategies for trading are highlighted in our interview with professional cryptocurrency trader Kir Kelevra.
Overall steady trading process of main cryptocurrencies was erupted by the news of the DAO theft. As a result, ETH and DAO tokens crashed down, along with Lisk tokens, possibly due to panic selling.
Thus, on Saturday ETH was as low as at 0.0135 BTC having lost nearly a half of its earlier price. Lisk slided down below 0.0005 BTC, while DAO tokens were as cheap as 0.0001 BTC. On Sunday, ETH is traded around 0.016 BTC ($12.40).
It all was caused by the attack on The DAO, the world’s first decentralized venture fund, which kicked off Friday morning. Ethereum tokens started leaving the foundation, and the overall amount of the loss stands at upwards of $65 million. ForkLog provided all details of the crisis leading toÂ Ethereum’s hardfork proposalÂ and The DAO possible dissolution. Finally, the statement from the attacker has been released. The latter has confirmed that he or she took several millions of ETH tokens using a bug the DAO’s source code. However, he or she claims that the coins have been taken completely legally. The Attacker noted that he or she will seek legal advice to protect the newly acquired property.
Whatever future holds for the tokens, some events will surely happen in no time. There’s no doubt the cryptoworld won’t remain the same now. There are many questions about the very DAO model.
Samson Mow, COO of BTC, believes that bitcoin has a room for further growth. Apart from reward halving, which, as he expects, will heat up the demand for BTC, the future holds more important events for the cryptocurrency, which, according to Mow, will positively influence the entire ecosystem.
Popularization also gains steam, as evidenced by the news from the Caribbean, where the first bitcoin payments network has been launched. The idea was implemented by Caricoin Ltd. in association with BitGo and Bitrefill.
Meanwhile, AICPAÂ (TheÂ American Institute of Certified Public Accountants) has urged the IRS to provide further clarifications as to how bitcoin and other cryptocurrencies are to be considered in the context of tax accountancy. According to the request dated June 10, the ambiguity in virtual currency taxation causes the experts to worry.
Cryptocurrencies at Corporate Service
Japan’s biggest bank Bank of Tokyo-Mitsubishi UFJ (MUFG), having initially casted away earlier media reports, has eventually confirmed it is developing its own cryptocurrency dubbed MUFG Coin. The details are scarce, however, it is believed that initially it will be used for internal settlements, and later the bank will add exchange options for yen.
The Bank of Canada is also developing its own blockchain-based digial currency. The CADcoin hit the news after a closed event in Calgary where Kyle Camper, executive director of Bitcoin Alliance of Canada, was present. It was him who posted the keynote from the conference. The system will see the bank converting user assets into CADcoins. Verified parties will process the transactions, while the central bank destroys the coins as soon as it’s over.
Russian payments processor Qiwi failed to reach consensus with the country’s central bank as to its bitruble project. The company was initially confident that there will be no problems with the regulator. Apparently, something went wrong.
However, even though the government’s motives are quite clear, Dmitri Rudenko, the director for Russia’s Post Bank, told at SPIEF that Russia could have benefited from developing cryptocurrencies and blockchain technologies due to the country’s natural and infrastructure-related features. He also warned that the government would inevitably lose control over money transactions.
Blockchain and Fintech
Speaking at a private fintech summit in Washington D.C., Adrienne A. Harris, Special Assistant to the US President for Economic Policy, stated that new technologies were the drivers of change for both consumers and companies, as they change their interaction with the world of finance.
Ann Cairns, MasterCard president for international markets, also said blockchain has a great potential. According to her, the payments system concedes using bitcoin’s underlying technology in its basic systems.
PricewaterhouseCoopers (PwC) has announced a project to research the possible use of blockchain technology in insurance. The initiative incorporates a research and creation of a possible solution.
Meanwhile, Russia’s Fund for Development of Internet Initiatives partnered with Russia-based Skolkovo foundation to create an accelerator for startups engaged in fintech industry. The program will kick off September 2016.
Europe’s biggest insurer Allianz has announced it successfully tested smart contracts for bonds related to disaster risks. To run the test, Allianz partnered with Nephila Capital, a Bermuda-based company. Their joint efforts are aimed at cutting expenses for bond redemption in the wake of unforeseen disasters. Smart contracts will enable fast p2p transactions between insurers and investors.
A project resembling the one earlier launched by BitFury in Georgia kicked off in Sweden. The Cadaster service of the kingdom has launched testing of a blockchain-based system for land title right registration.
Smart contracts’ potential is truly enormous. New forms of economic organizations, like decentralized autonomous economies built on smart contracts around markets including both individuals and organizations in the form of DAO or DAC, will be controlled by artificial intelligence. That’s what Maxim Orlovski, Ph.D., an expert in compex systems, told ForkLog in an interview.
This week, New York’s Department of Financial Services has issued the second BitLicense. The famous certificate’s second licensee is Ripple Labs, who is now entitled to run operations using its native token XRP.
The new week will bring more interesting news. Stay tuned.
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