Bitcoin This week: CFTC Subpoenas Major Crypto Exchanges, Bitcoin Prices And More
Bitcoin Developers Propose New Protocol For Mining
Matt Corallo, one of the developers of Bitcoin Core, has published an early proposal to improve the Bitcoin network (BIP), by decentralizing Bitcoin mining through the adoption of a new protocol. The BetterHash Mining Protocol(s) was published on Github, addressing a lot of current concerns affecting the Bitcoin Network with regards to becoming more centralized for mining.
At the moment the most used protocol is Stratum, but the design lacks major components such as those related to mining pools, which limit the diversity of blocks. According to Corallo, this allows mining pools and their operators to have a wrongful influence in the Network’s updates and affect the resistance to censorship of Bitcoin. For this reason the developer wants to replace Stratum with a new protocol that divides the construction of blocks and the execution of payments into two protocols known as Work and Pool.
Steve Wozniak Claims Bitcoin Should Be The Currency Of The Internet
Steve Wozniak, co-founder of Apple, has commented on his hopes that Bitcoin will become the native currency of the Internet. His comments followed those of Jack Dorsey, CEO of Twitter and Square, on the future of Bitcoin. Although Wozniak was not sure that this would ever become a reality, he seemed truly hopeful during the Money 20/20 Conference in Amsterdam.
Wozniak, who has previously shown his support for cryptocurrencies in general, and Ethereum in particular; supports the technological development of the entire market, despite not being an investor himself. Furthermore, Wozniak claimed that only Bitcoin (BTC) represented true digital gold and was decentralized.
CFTC Subpoena Bitstamp, Coinbase, Itbit And Kraken
The United States Commodity Futures Trading Commission (CFTC) has subpoenaed major crypto exchanges Bitstamp, Coinbase, Itbit and Kraken, as part of the existing investigation into the price manipulation of Bitcoin (BTC). According to reports, the CFTC’s investigation was motivated by the lack of response to a request sent by the Chicago Mercantile Exchange (CME) to the crypto exchanges, requesting information regarding specific times of trading activity, with which the exchanges declined to comply, only submitting a few hours worth of data.
The CME began selling Bitcoin futures in December 2018 and made the requests for data in January of this year after the first futures contracts settled. The CFTC has jurisdiction over the matter, given that Bitcoin (BTC) has been designated as a commodity. According to Jesse Powell, CEO of Kraken, the subpoena represents a “newly declared oversight” of how BTC prices form futures prices and has “the spot exchanges questioning the value and cost of their index participation.”
Coinrail Suffers A $40 Million Hack
Coinrail, a South Korean crypto exchange, has informed its users that it has suffered a hack to the value of approximately $40 million. The exchange suspended its services as soon as the hack was noticed by the team, who have conducted a system maintenance. The “cyber intrusion” resulted in ERC-20 based token being stolen from the platform, these included the NPXS token from the Pundi X project, ATC from Aston and NPER project's token.
Following the hack, Coinrail alerted users to the address associated with the hacking episode, Fake_Phishing1432, which has apparently tried to sell over 26 million of NPXS tokens on IDEX. According to Coinrail and Pundi X, IDEX has frozen the assets sent from the address, and the NPXS tokens are not liquidated. As for the other stolen tokens, it appears that they have been sent for trading to EtherDelta, another decentralized cryptocurrency exchange. The hacking episode seems to have compromised over 30% of Coinrail’s reserves, although they claim that most of the tokens are currently frozen. As for the remaining 70%, Coinrail assures its users that the reserves are safe and that they have been moved to a cold wallet which is not accessible through the internet.
Bitcoin Prices Crumble
Although Bitcoin (BTC) had a somewhat stable week, it closed down about $1,000 from its previous value. It started the week at $7,600 only to drop slightly on Tuesday, where it held until Thursday, when prices went back up to the $7,700 mark. By Friday, Bitcoin was at the $7,600 mark, but experienced a massive loss on Sunday, reaching its lowest point of $6,800. Prices were most likely affected by the ongoing investigation by the Commodity Futures Trading Commission into price manipulation in the Bitcoin market. Comments made by Jay Clayton, the Chairman of the Securities and Exchange Commission, with regards to the classification of almost all ICO’s as securities, may have also played a part in the sudden drop in prices. Although the major detonator is without doubt Coinrail's hacking episode.