- Ethereum co-founder Vitalik Buterin warned that his blockchain is “almost full,” and that it lacks the ability to scale due to a bottleneck.
- Prominent analyst Willy Woo predicts that the carnage in the altcoin markets may soon be at an end.
- In Palestine, Hamas uses Bitcoin for cross-border funding, but civilian usage outstrips even the largest estimates of terror financing.
- India’s Supreme Court criticized the actions of the central bank and gave it two weeks to justify its crypto ban.
The Next Web
This week, Ethereum (ETH) co-founder Vitalik Buterin warned that his blockchain is “almost full,” and that it lacks the ability to scale. He claims that a bottleneck keeps organizations from joining the network. In his interview with The Star, Buterin also remarked that Ethereum is already expensive.
Vitalik explains that the main problem is that every computer must verify every transaction. Currently, Ethereum is run by a consensus method that uses a proof-of-work system, similar to Bitcoin. However, in light of these challenges, Ethereum developers have decided to transition to a proof-of-stake system — a plan which has received considerable criticism.
Vitalik also notes that corporations are still warming to public blockchains — most prefer the half-decentralized private alternatives. One reason bigger organizations may shy away from networks like Ethereum is that joining would make the blockchain more full, driving competition and costs up.
“Scalability is a big bottleneck because the Ethereum blockchain is almost full. If you’re a bigger organization, the calculus is that if we join, it will not only be more full but we will be competing with everyone [else] for transaction space,” Buterin told The Star.
“The problem with the current blockchain is this idea that every computer has to verify every transaction,” said Buterin. “If we can move to networks where every computer on average verifies only a small portion of transactions then it can be done better.”
Although Bitcoin still sits 50% lower than its all-time high of $20,000, its dominance over altcoins remains immutable: The rate now nears 70%.Whenever Bitcoin sees a loss, altcoins experience devastating losses. However, noted analyst Willy Woo predicts that the carnage in the altcoin markets may soon be at an end.
Woo believes that altcoins may soon be headed into a “region of support” based on two key indicators. The altcoin capitalization-to-Bitcoin capitalization ratio and the altcoin market volume-to-Bitcoin ratios show a steady upward trend, as illustrated by this image which Woo posted on Twitter.
However, not everyone is as convinced as Woo. 70% of respondents to a Twitter poll believe that the altcoin carnage is not complete, while the other 30% think that the altcoin market has bottomed. Many believe Bitcoin will continue to outshine altcoins, especially given that institutions and governments focus on it exclusively.
[Woo] believes that altcoins may soon finally find some support against Bitcoin. He posted [an] image on Twitter, which shows that the altcoin capitalization-to-Bitcoin capitalization ratio and the altcoin market volume-to-Bitcoin market volume indicators are currently “heading into a region of support.”
The two aforementioned indicators are currently poised to encounter two key lines of historical support. Should history repeat itself, altcoins should bounce in the coming months, potentially to kick off what crypto traders call an “altseason”.
Experts say that the Palestinian Sunni-Islamist fundamentalist group, Hamas is now using bitcoin for cross-border funding at an unprecedented rate. However, civilian bitcoin usage outstrips even the largest estimates of terror financing in the Palestinian region. Civilians commonly use bitcoin to make international transfers and execute freelance payments and bypass Israeli control.
A Gaza-based developer named Al-Safadi notes that the region “works like a black market,” when it comes to crypto. This has enabled Hamas’s Qassam Brigades to massively increase their bitcoin fundraising. An anonymous source says that donations have exceeded $12,000 this year, with an additional $195,000 coming from the group’s bitcoin mining operations.
This distressing activity has caused bitcoin-related activities to be deemed non-compliant by local banks. Still, civilian crypto transactions far outweigh those linked to terrorist activity. Many hope that the official banks will recognize this and support the growth of this burgeoning market.
“People there [in Palestine] are starting to learn and ask about it. … Palestinians are more using bitcoin [than ether] … to make international transfers and to bypass Israeli control.” — Anonymous source, Palestinian based in UAE
Al-Safadi, the Gaza-based developer, told CoinDesk that Qassam Brigades operations are “secret” and not publicly related to the civilian bitcoin ecosystem. However, bitcoin dealers are now required to record the wallet address, amount and full name and ID number of every client for each liquidation for police records. “Gaza works like a black market,” he said, adding he doesn’t know what the police do with this “surveillance” information.
“The crypto market is promising in Palestine and has a good opportunity to grow there,” the UAE-based source added… Both Al-Safadi and the local seminar teacher said they hope global exchanges and official banks will eventually allow Palestinians to transact with bitcoin through compliant digital platforms.
This week, India’s Supreme Court heard testimony regarding the recent anti-crypto actions of the Reserve Bank of India (RBI). As of July 2018, the RBI forbade banks from servicing cryptocurrency operators and exchanges. These actions put a halt to crypto activities in the region, as platforms were effectively prevented from operating there.
On Wednesday, Indian Supreme Court Justice Rohinton Fali Nariman criticized the RBI’s crypto ban harshly. He gave the bank just two weeks to justify its actions. The RBI agreed to the two-week deadline. Meanwhile, the Indian government is still actively considering making cryptocurrency illegal across the country. In July, a government committee recommended a total ban on all tokens excluding an official digital rupee. Experts predictthat the country would lose around $13 billion if the proposed ban became law.
As summarized by advisory resource Crypto Kanoon, which was present at the hearing, Nariman gave the RBI just two weeks to justify its actions… “Now justice Nariman questions RBI why you have not properly responded to the representation. You just said that we are forwarding to Govt. Angrily says this is not an answer,” one update on Twitter read.
Crypto Kanoon summarized [the hearing]: “Case takes the most unpredictable turn. Justice Nariman directs that RBI must respond to the representation in the manner appropriate. Offers to defer the case for 2 weeks as part-heard, let the answer come on reconsideration of banking ban by RBI. RBI has agreed.”
That’s the roundup for August 25th. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!
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