CryptoCurrencies

Crypto market pulls out of its nosedive. Wall Street’s current generation of greedy, heartless misers found themselves haunted by a spirit from the past on New Year’s Eve – and it turned out to be the ghost of Herbert Hoover, the last American president to see such end-of-year carnage on the exchange floor. But even as the stock market moved into bear territory, digital coins began to attract investors once again. Over the course of four days, bitcoin cash went from $82 to $229 at peak, before settling back down to around $180. That 120% improvement over the course of Wall Street’s week long retreat is unique in terms of results, but not direction. Ether, Tron, Cardano, and others saw double-digit growth. Meanwhile bitcoin core and ripple, which top the market cap leaderboard, both had positive weeks. Funny how the politicisation of the U.S. Federal Reserve has the opposite effect on firms that depend on faith in central banks and those that are predicated on their irrelevance.

Is blockchain useless? While enthusiasts celebrate crypto for its own sake, corporate leaders have been trying to stay ahead of the technology by building distributed ledger technology into their IT architecture. Even if bitcoin turns out to be a sham, they reckon, at least the underlying database structure can smooth out some internal processes. According to a new study cited in Bitcoin.com, though, it might be the speculators rather than the captains of industry who have the right of it. Aside from the mule work of verification and auditing, the Moscow School of Management Skolkovo team found, businesses haven’t found any way to actually use such private blockchains platforms as Corda or Hyperledger. The report indicates that, at least over the course of 2018, private blockchains have been a “niche,” and the real advancement has been in “public, uncontrolled, universal and disruptive.”

China: EOS continues to reign, BTC disappoints. Beijing’s view of cryptocurrency and blockchain technology is far more nuanced – if that’s the word, otherwise “hypocritical” – than is widely understood. The same regime which forbids crypto trading actually has a monthly beauty contest for digital coins called the Global Public Blockchain Technology Assessment Index. In a December 20 report, the Ministry of Industry and Information Technology updated the index which continues to rank EOS and Ethereum as the top two public blockchains. China’s own GXChain supplanted BitShare for the third slot and Bitcoin dropped to a less-than-stellar 18^th. Literally, less than Stellar, which now occupies the 13^th spot Bitcoin held last month. In December, the index began coverage of Ontology, which debuted in a 4^th-place tie with Komodo. The ministry’s Center for Information and Industry Development scores projects on the bases of technology, application, and innovation.

Lightning Network

Lightning finding its grease. Lightning Network, launched in April to enhance payment scalability, passed a couple Big, Round Numbers this past week. It recently exceeded the BTC 500 barrier shortly after passing $2 million. As it increases nodes and channels on a daily basis, LN offers an ever faster and more secure process for performing transactions. Scalability has always been an issue for cryptocurrencies, particularly bitcoin which regularly sees its payment processing capacity compared unfavorably with Visa’s. Multiple media reports suggest that, as this work gets done during a comparatively dim time for crypto trading, it could have a dramatic impact on the next bull market.

Bitmain lays off half its workforce. Chinese crypto firm Bitmain finally pulled the trigger on some long-expected furloughs, according to several media reports. CoinDesk cites sources inside the company as saying that the firm will return to its knitting and focus on mining while letting go staff in its blockchain development and artificial intelligence labs. Some of these people might barely have had time to unpack their coffee mugs, as around 1,500 to 1,600 layoffs are expected at Bitmain, which started 2018 with a workforce of roughly 1,000.

LOOKING FORWARD: Crypto-focused journalist Kai Sedgwick offered his forecast for the coming year via Bitcoin.com but, as he puts it, “2018 didn’t play out the way it was promised,” so take all this with a mine of salt. Still, Sedgwick sees the resurgence of privacy, ICO-esque raises in the form of security token offerings and the expansion of decentralized credit networks as 2019’s major themes. He also sees potential trends stemming from the emergence of a killer dApp, growing acceptance of peer-to-peer cash, greater functionality on the Lightning Network, improvements in custodial services for institutional investors and a deepening futures market as possible fuel for growth in the crypto space. … A bipartisan bill has been proposed in Washington that would exclude cryptocurrencies from regulation as securities. The Token Taxonomy Act would define digital tokens in a way distinct from stocks and bonds, and thus not in the purview of the Securities and Exchange Commission. The SEC currently uses the so-called “Howey test,” based on a 1946 Supreme Court ruling, to determine if a transaction constitutes a securities sale. CNBC, in reporting this development, acknowledged that the bill is “largely symbolic,” coming at the end of a legislative session that a) is about to pass the gavel from one party to the new majority party, and b) still can’t find a way to fund 20% of government operations and so has more pressing matters to attend to.

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