The growth of Ethereum has been experiencing a slow down compared to its journey in the first half of the year. As the crypto market deals with a much volatile period right now, ETH’s value has trended lower since the end of October and was currently at $382.10.
However, the Ethereum community was met with a good surprise on Tuesday as they had hoped to catch the first glimpse of Ethereum 2.0 becoming a reality. The community came across a Github repository about the deposit contract. The deposit contract is a one-way Ethereum smart contract that holds staked ETH crucial for securing the new Proof-of-stake [PoS] network.
This Github repository was shared across the crypto Twitter. David Hoffman shared this news, noting:
“Releasing the deposit contract on election night is Peak Ethereum”
Despite the release of the repository the developers have not yet officially announced the release. Interestingly, the developers had also warned about fake deposit contracts appearing and asked the community to not take any steps before the official confirmation.
The core developers have been working relentlessly to roll out ETH 2.0 without much hassle and at a point where it is working smoothly. On the lines of perfecting these inner workings, Ethereum foundation’s researched Danny Ryan had stated that the library was critical to creating keys, signing messages, and thus, had to be secure. He added:
“Critical, in early phases, [means] that if you use this library, they need to be secure; if you use it to generate your wallets, it needs to have good randomness; and if you are signing your deposits which have a signature associated, it needs to be correct.”
However, with no official confirmation from the core developers, users have been warned by the influencers in the space and many have tried to add more information regarding what is contained in this repository. @Oisinkyne shared his two cents on Anthony Sassano’s post about this and noted that it was just code for wallet generation and mnemonic import code.
With a lack of confirmation from the developers’ end, the community is still awaiting a specific date for the launch Deposit contract. There has been a last-minute delay and the launch was pushed by two weeks. This meant that we could see an official update from the developers regarding this anytime now.
Canadian VR Company Sells $4.2M of Bitcoin Following the Double-Spending FUD
NexTech AR Solutions, a Vancouver, Canada-headquartered developer of VR and AR solutions, has booked a $200,000 profit after selling over 130 bitcoins. The firm justified its decision with the double-spending that allegedly occurred on the BTC network yesterday.
- According to a press release published by the company, NexTech has sold all of its BTC holdings, amounting to 130.187 bitcoins. With today’s prices, this amount is worth north of $4,2 million.
- The sale has come less than a month after the initial purchase – revealed on December 29th, 2020. Despite the relatively short period, though, BTC’s price has expanded, and the firm managed to realize a profit of $200,000 after the sale. This means a 5% ROI in just a little over three weeks.
- However, what’s more interesting is the company’s reasoning for the sale. NexTech CEO Evan Cappelberg said that the decision came after reports of a “critical flaw called a ‘double spend’ may have occurred, which, if true, allows someone to spend the same Bitcoin twice.”
- The executive argued that such a development would undermine the faith in the BTC network. “If the system is built on scarcity and faith in the system, then a ‘double spend’ would eliminate both – essentially destroying the store of value it was meant to be.”
- This alleged double-spending accident raised numerous concerns inside and outside of the community. Nevertheless, Andreas Antonopoulos, among the most popular BTC proponents, debunked the rumor with comprehensive tweets and explanations.
- He called the rumor an “irresponsible publication” and said that the situation was nothing more than two blocks getting mined almost simultaneously.
- Antonopoulos further explained that this was a regular block reorganization instead of a double spend and concluded that “nothing weird or outside the consensus algorithm happened. Bitcoin continues to work exactly as it should.”
- Similarly, Blockstream CEO Adam Back shared Antonopoulos’s conclusion, saying that “there was no Bitcoin double spend. Stop misreporting stuff, seriously.”
Bitcoin Correction Intact While Altcoins Skyrocket: The Crypto Weekly Recap
Bitcoin failed to recover in the past seven days and it marked a further decline of about 8%. This has its current price hovering around $32,000 and its dominance has declined to 64.1%. But before we take a look at what this means for the altcoin market, let’s see what happened with BTC.
The cryptocurrency started off trading above $35K and even took a shot at $38K on Saturday. The bears had a mind of their own, however, and prevented this from happening, sending the market in a sideways trajectory for the next few days.
Yesterday, though, things took a turn for the worst as the market tanked and lost about $5K in just a few hours. This continued in today’s trading session as the price hit a low of around $28,800. The bulls regrouped and prevented a 4-hour candle close below $30K and managed to recover to where we currently stand at around $32,000.
In between all this, however, a lot of things happened in the altcoin market. Ethereum breached its former all-time high above $1430, major large-cap coins such as LINK and Polkadot also saw serious increases. Cumulatively, this reduced Bitcoin’s dominance to about 64% and it’s interesting to see how things will develop from here.
What may have triggered the sell-off during the past few days was news that a double-spent had happened on Bitcoin’s network – something which, if true, could undermine the entire credibility of its blockchain. Well-known proponent and industry expert Andreas Antonopoulos took it to Twitter to explain in great detail why this wasn’t the case. He made it clear that nothing that happened was out of the ordinary and that Bitcoin’s network is and has been operating exactly as intended.
Elsewhere, the US Treasury Secretary nominee, Janet Yellen, reiterated that cryptocurrencies have been used for illicit activities but also said that they can improve the current financial system.
“Long Bitcoin” has also become the most crowded trade according to a survey by the Bank of America, which goes on to show that the interest in the cryptocurrency continues to increase.
In any case, it’s interesting to see how the next week will go and if the coveted $30K mark for Bitcoin will hold up.
Market Cap: $937B | 24H Vol: 166B | BTC Dominance: 64.1%
BTC: $32,460 (-8.89%) | ETH: $1,237 (+7.53%) | XRP: $0.273 (-1.41%)
Andreas Antonopoulos Fights FUD With Facts: Bitcoin Is Safe And Worked As Expected. Long-term Bitcoin proponent and industry expert Andreas Antonopolous took it to Twitter to bust the recent FUD that a double-spent had taken place on Bitcoin’s network. He reiterated that the protocol is working fine and as intended.
US Treasury Secretary Nominee Yellen: Crypto Can Improve The Financial System. The nominee of President Joe Biden for the US Treasury Secretary, Janet Yellen, has said that the technology behind cryptocurrencies has the potential to improve the efficiency of the financial system.
Largest Asset Manager BlackRock May Start Trading Bitcoin Futures. The world’s largest asset manager, BlackRock, has filed two documents with the SEC, letting the watchdog know that some of its funds may start trading cash-settled Bitcoin futures contracts in a huge move for the entire cryptocurrency industry.
Ethereum 2.0 on Track as Staked ETH Tops $3.6 Billion. According to the latest update from developers who are working on Ethereum 2.0, everything is on track and the network is also growing in terms of the amount staked and its security. This comes as ETH hit a new all-time high this week.
Bitcoin And Tesla Stock The Biggest Market Bubbles According to a Deutsche Bank Survey. According to a survey conducted by the large multinational Deutsche Bank, Bitcoin and Tesla stocks are the biggest market bubbles in the recent month. It indicated that more than half of the investors believe in this narrative.
Long Bitcoin Unseats Tech Stocks as the Most Crowded Trade in January, BofA Reports. Long Bitcoin has become the most popular trade recently, unseating stocks of technology companies. This became clear in a study conducted by the Bank of America. Bitcoin continues to gain interest.
This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Polkadot, and Chainlink – click here for the full price analysis.
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO35 code to get 35% free bonus on any deposit up to 1 BTC.
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
Bitcoin as a last resort? Murmurs of crypto as reserve currency abound
Reserve currency is money held by central banks or treasuries usually for international transactions. Argentina is not going to be able to purchase a Boeing 737 MAX passenger jet, for example, with its highly inflationary peso; it will have to pay with U.S. dollars, which is why Argentina keeps dollars on hand — i.e., in “reserve.”
A second basic function is to support the value of a national currency. If the Brazilian real, for instance, plummets during an economic contraction, Brazil’s central bank could bid it up again by purchasing reals with dollars that it holds in reserve.
Could Bitcoin (BTC) fulfill these key functions of a reserve currency? “I certainly think so, in the future at least,” Franklin Noll, a monetary historian and the president of Noll Historical Consulting, told Cointelegraph. Bitcoin’s electronic nature makes it well suited for settling payments. “If gold was used in the past to do so, this digital gold should do the job as well, if not better.”
Meanwhile, these are unusual times. When markets crashed amid the COVID-19 crisis in March, Bitcoin followed suit. “BTC did not perform well,” Sinjin David Jung, managing director at International Blockchain Monetary Reserve, told Cointelegraph. But in early 2021, the world is facing a different circumstance, one marked by extensive stimulus spending — especially in the United States — and if the dollar falters, according to Jung:
“BTC’s position is almost like the ‘last resort reserve currency’ in holding value if the increase of the U.S. dollar supply becomes the only tool for avoiding financial depression while paradoxically resulting in supercharging the market.”
“The U.S. dollar is still king”
But challenges remain, and Bitcoin probably won’t supplant USD anytime soon. Said Noll: “The current problem with Bitcoin — as with gold — is that few, if any, goods or debts are denominated in Bitcoin.” Furthermore, according to him: “It’s hard to see a future where a significant amount of the world’s trade is denominated in Bitcoin. The U.S. dollar is still king.”
Jonas Gross, project manager at the Frankfurt School Blockchain Center — a think tank associated with the Frankfurt School of Finance & Management — sees little chance that BTC will be used as a reserve currency by any industrialized country in the near future. “Skepticism remains very high,” he told Cointelegraph, referring to a recent statement made by European Central Bank president Christine Lagarde that called for global regulation of BTC because of money laundering concerns, among others.
That said, “the U.S. dollar’s dominance as the world’s reserve currency could indeed be threatened,” continued Gross. China is in advanced testing of its central bank digital currency — i.e., its digital currency/electronic payment project — which could be launched as early as 2022, and foreigners might be allowed to access and use it for transactions. In that event, Gross added:
“It would be possible to use a digital version of the yuan for global payments easily and conveniently — transaction costs could be reduced, and the digital yuan would ‘flow across borders’ quite easily.”
China’s yuan will have to go some distance to catch the dollar, however. USD accounted for 60.46% of the world’s allocated foreign exchange reserves as of Q3 2020, followed by the euro (20.53%), Japanese yen (5.92%) and U.K. pound sterling (4.50%), according to the International Monetary Fund. The yuan was only fifth (2.13%).
Just six dominant reserve currencies since 1450
Campbell Harvey, professor of international business at Duke University, told Cointelegraph that as the rates of borrowing in the United States rise, “the riskier it [USD] becomes as a reserve currency. At some point, it is too risky, and alternatives are sought.” Indeed, economic history teaches that global reserve currencies do not last forever.
In August, business intelligence firm MicroStrategy announced that it had adopted Bitcoin as its primary treasury reserve asset. At the start of 2021, former Canadian prime minister Stephen Harper raised the ante, suggesting that not only companies but governments might use crypto as a reserve, albeit as part of a “basket of things” that also included gold and fiat.
There have been six major world reserve periods since 1450, with an average span of about 94 years. The U.S. dollar has already been the world’s reserve for 100 years, surpassing the average, and is nearly equal to its predecessor, the British pound, which dominated for roughly 105 years.
BTC by itself is unlikely to become a reserve currency because of its extreme volatility, though, Harvey said. “Currently, the USD volatility versus 10 leading currencies is about 3%–4% per year. BTC is in the range of 80%–90%.” Gold, he added, has an annual volatility of about 15%.
Part of a basket?
On the other hand, cryptocurrencies could be used as part of a basket in the future, added Harvey. “It would unlikely be a single cryptocurrency in the basket. By the time this happens, all major central banks will have their version of a cryptocurrency.”
The idea of a diversified basket is not new, continued Harvey, referencing F. A. Hayek’s 1943 Economic Journal paper titled “A Commodity Reserve Currency.” Still, “there are plenty of issues: What assets do you use and what are the weights?” Also, who actually determines the weightings and if and when an asset is to be added or dropped?
“Bitcoin could indeed be used as part of a ‘basket of things’ as a hedge against inflation and political turmoil,” Gross said. One already sees BTC being used as a corporate treasury reserve, he added, mentioning MicroStrategy. Noll, too, viewed some corporations’ recent embrace of Bitcoin as a treasury reserve as a significant development:
“It is a short step from widespread private reserve currency/asset to public reserve currency/asset. If Bitcoin is good enough for banks, insurance companies and cities, it certainly is good enough for a small nation looking to bolster its own reserves.”
José Parra-Moyano, assistant professor at Copenhagen Business School, told Cointelegraph: “It could be that if Bitcoin or other cryptocurrencies establish and continue showing technical security, central banks will incorporate them to their reserves.” But maintaining technical security over time won’t be easy, he suggested.
Is the infrastructure sufficient?
Is BTC’s infrastructure anywhere close to ready? Jung told Cointelegraph: “At this point, only BTC [among cryptos] could be considered a contender for the last resort reserve currency”; its transparency, simplicity and track record “clearly show it to be engineered for this function.”
“There are indeed some hurdles to overcome,” according to Gross. “Lower volatility and higher speed — e.g., implemented through the Lightning Network — would increase BTC’s attractiveness.” Furthermore, he outlined that efforts to educate regulators about cryptocurrencies should be improved so that they understand the potential of the technology “from a portfolio diversification perspective.”
Other potential obstacles are Bitcoin’s “newness” — it has only existed for 12 years — noted Harvey, as well as its still-limited adoption, vulnerability to manipulation — “see the academic evidence on USDT and BTC” — and also vulnerability to algorithmic attacks, “a 51% attack is costly but feasible.” Harvey added:
“Central banks don’t like it because it’s deflationary, and the algorithmic nature of the money creation usurps their economic influence — of course, this last point is also a selling point.”
Jung believes that the often-cited volatility flaw is exaggerated. BTC can’t help but be volatile in the process of its positioning as the last resort reserve currency. It will “continue to be volatile until the conditions are met when the U.S. dollar value starts to consistently drop even as the excess U.S. dollars are fueling greater market gains.”
Finally, in asking about BTC’s potential as a reserve currency, it is assumed that there will always be the need for such a reserve. Harvey, for one, isn’t so sure. “Why do we even need a ‘reserve’ currency?” he asked. “In the future, everything will be tokenized. To pay for something, you will have your choice what to pay in — e.g., BTC, gold, IBM stock, etc. Users will have easy access to millions of cross rates and will be instantly able to ‘pay with whatever asset you choose.’”
“Inherently when you speak about a reserve currency, it is all about long-term stability and competitiveness,” said Jung. “As such, the U.S. dollar will always act as the world’s primary reserve in times of geopolitical uncertainty. But what happens when the world and the U.S. dollar is in a continual state of quantitative easing?”
In that event, all bets are off, and national governments, beginning with smaller countries, might indeed gravitate to a basket of hard and digital assets as their reserve currency of “last resort.” Crypto and blockchain proponents will just have to continue spreading the word and hope that BTC or any other cryptocurrency will eventually become mature and worthy to take up the mantle of a commonly accepted reserve.
Ethereum Price Can Skyrocket to $10,500 According to Fundstrat
Charted: Chainlink (LINK) Remains In Strong Uptrend, Why It Could Test $25
TradingView Launches ‘Bitcoin Timeline’ to Show BTC Price Changes With Events
Analyst: Hodlers will be this year’s biggest Bitcoin gainers
Over 31% of People in Latin America Want to Invest in Bitcoin
Biden Appointed SEC Chair Gary Gensler is not Going to Save Ripple’s XRP Token
Tether’s General Counsel: iFinex v. NYAG Case Continues with a Court Meeting in 30 Days
After alleged hack, Russian crypto exchange Livecoin shuts down
2020 Crypto-In-Review: The Year of The ₿ull
Crypto exchange Bitpanda opens pre-orders for Visa debit card
Litecoin, Dash, FTX Token Price Analysis: 21 January
Bitcoin And Tesla Stock The Biggest Market Bubbles According to a Deutsche Bank Survey
Former Ripple CTO may have lost much more than $220M in Bitcoin
The Brilliant Minds Behind the BTC Ultimatum Project, and Their New CEO, Eric Ma
Monero Price Analysis: 17 January
Rick and Morty crypto art sells for $150,000 on Gemini-owned platform
Treasury Secretary nominee Janet Yellen warns of crypto crime
Bitcoin Price Analysis: 20 January
Palit GeForce RTX 3070 GameRock Ethereum Mining Rig
Digital euro to face review by 2 institutions, before possible launch in mid-2021
Blockchain6 days ago
Will exchanges run out of Ethereum?
Blockchain1 week ago
‘Crypto is exactly like dot com bubble; Bitcoin, Ethereum can survive it’
Blockchain1 week ago
Brian Brooks, Crypto-Friendly OCC Leader, Steps Down
Blockchain5 days ago
Bitcoin Cash, Zcash, Decred Price Analysis: 17 January
Blockchain1 week ago
Consob Blocks 6 New Illegal FX Websites
Blockchain5 days ago
Ethereum, Monero, Algorand Price Analysis: 17 January
Blockchain5 days ago
Decred co-founder explains the possible effects of a CBDC takeover
Blockchain5 days ago
Cardano “Working On Something” That Could Solve Twitter’s Decentralization Dilemma