- While Bitcoin is still by far more valuable, Ethereum overtook the crypto juggernaut in one key metric: daily USD transaction fees.
- A young Stanford engineer is challenging longtime Congresswoman Nancy Pelosi and using crypto donations to fund her campaign.
- Backlash from regulatory bodies has early financial backers of Facebook’s Libra token reconsidering their investment.
- Google claims to have made a quantum computer, which could have serious repercussions for the crypto industry.
It’s no secret that Bitcoin is the dominating token in the cryptocurrency field. It’s the most valuable and the most well-known, to the point where all non-BTC coins are referred to as “altcoins.” However, one such altcoin just surpassed the Bitcoin behemoth in one key metric: total daily USD-denominated transaction fees.
The altcoin to accomplish this feat is Ethereum, a blockchain-based Bitcoin competitor first introduced in 2014. Rising to the top of the pack when it comes to transaction fees is significant because it signifies an extraordinary amount of activity. As Forbes put it, “In cryptocurrency networks, transaction throughput is limited in order to preserve decentralization. If the network is processing too many transactions per second, the users’ ability to run their own full nodes and check that no one is cheating will be harmed. Since the whole point of using a public blockchain is to gain properties like censorship resistance and trust minimization, avoiding centralization is key.”
The uptick in Ether activity appears to be a result of the popularity of a “Ponzi scheme-esque” game called FairWin. One analysis suggests that up to half of the gas used in recent transactions on the Ethereum network comes from FairWin, and the game’s rise correlates with the uptake in Ether activity.
The total value of all the transaction fees paid on a cryptocurrency network every day is a key metric to watch because it illustrates the level of demand for that particular blockchain. If people are willing to pay relatively high fees to use a particular blockchain, they must be getting some sort of utility out of it.
Additionally, fees are intended to eventually replace the creation of new Bitcoin as the incentive for miners to secure the network. Things will likely work differently for Ethereum, as the Ether token is expected to be issued on a perpetual basis, which means a never-ending block subsidy. This is effectively a trade-off of dilution of the current Ether supply in exchange for a higher level of network security.
In terms of their possible effect on the Ether price, it’s unclear if fees are an important metric to watch. While total fees can be a useful indicator of the amount of real activity on a cryptocurrency network and provide a greater incentive for miners or stakers to secure the network, this data point doesn’t necessarily have much to do with the native token of the network.
This point is especially true when it comes to Ethereum, as that blockchain is often used to issue and transfer non-native tokens.
A 27-year-old Stanford engineer is hoping to oust Congresswoman and current Speaker of the House in the March 2020 Congressional primary, and she’s raising capital for her campaign in a modern way: by accepting cryptocurrency. As of this writing, Agatha Bacelar’s Congressional campaign is currently taking donations in five different tokens: Bitcoin, Bitcoin Cash, Ether, Litecoin, and USD Coin.
Bacelar has been critical of the level of technology awareness and proficiency in the House of Representatives; she previously claimed that only 3% of reps have backgrounds in science, engineering, and other tech-heavy fields. She’ll have an uphill battle against Pelosi, who has represented San Francisco in Congress for 31 years. Bacelar has currently raised $5,000 towards her million-dollar goal.
Cryptocurrencies have increasingly made their way into various aspects of the political process in the United States. Candidates for various levels of political office in the country have accepted digital assets to fund their campaigns.
The crypto industry has also formed mechanisms for representation in Washington D.C. In late August, BitPAC, the first-ever Bitcoin-based political action committee announced that it will expand its candidate supporting program with a utility token dubbed Politicoin.
Since its announcement in May 2019, the Facebook-backed Libra cryptocurrency has attracted major buzz, as well as financial support from institutions like Mastercard, Visa, and others. Libra’s run-up to its planned 2020 release hit a snag this week, with criticism and legislative issues giving the token’s financial backers cause for concern.
Libra has faced pushback from regulators in the United States and Europe, with the US Federal Reserve branding the Facebook token a “serious concern.” The Federal Reserve has stated that Libra can’t move forward in the US unless Facebook submits its plans for a full review. This kind of reaction from regulators and legislators is causing some early backers to rethink their investments.
The Libra Association is expected to provide additional details about its plan for the cryptocurrency at a meeting in Washington, DC this week.
It is unsurprising that some financial institutions would consider Facebook’s reach — including over 2.4 billion platform users — combined with a payment infrastructure as a prospect for profit and future revenue.
However, unless the social network is able to quell the concerns of regulators, there may be the risk that major financial players will withdraw their support, which has only reached a non-binding letter of intent stage.
Without the backing of these companies, Libra could finish before it has begun, or at least, its potential as a payment method will become very limited.
As one of the biggest tech behemoths on the planet, it’s no surprise that Google constantly at work finding new ways to improve technology. According to a new report, Google claims to have reached “quantum supremacy”: its engineers have built a quantum computer able to solve formerly impossible mathematical equations. If true, this is a huge leap forward for existing technology, but it could also have sweeping repercussions for the crypto industry.
It’s worth noting that quantum computers are still largely theoretical, so the effects of Google’s claim have yet to be seen. However, experts are concerned that the rise of quantum computing capabilities could undermine some of crypto’s core values; these powerful machines could affect how sensitive data, such as private crypto keys, pass through the internet.
Precisely because the full capabilities of quantum computers are not yet known, combatting their impact to existing blockchain platforms may sound like a doltish task.
As frequently explained by prominent bitcoin evangelist and author Andreas M. Antonopoulos, the threat of quantum computing in his mind is often overplayed.
“We can migrate quite easily to another algorithm,” he said last year during one of his monthly Q&As. “It’s not really as big a threat as people think it is.”
What’s more, while the capabilities of quantum computers might be vastly more extensive than currently imagined, they may also be vastly overstated.
“Google’s quantum breakthrough is for a primitive type of quantum computing that is nowhere near breaking cryptography,” said bitcoin core developer Peter Todd. “We still don’t even know if it’s possible to scale quantum computers.”
That’s the roundup for October 5th, 2019. Check i next week for the latest news of cryptocurrency innovation and regulation around the world!
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