Bitcoin & Altcoin Analysis 16-01-2018

  • Bitcoin Price Fundamental Analysis

Bitcoin, the most dominantly traded digital currency, resumed its recent selling spiral and lost almost 18% on the day to a hit a four-week low at 10,892, before recovering some ground to now trade around 11,590 levels. The sell-off puts Bitcoin almost 40% down from its Dec peaks near the $ 18k mark.

The spot tracked the broad-based sell-off across the cryptocurrencies’ space as the regulatory crackdown in South Korea and China is seen gathering steam, with the South’s Finance Minister saying that banning trading in cryptocurrencies was still an option. Additionally, the Chinese efforts to outline a centralized trading of virtual currencies also underscores the crackdown fears. 

  • Ethereum Ripple and Bitcoin cash Down

All the top cryptocurrencies by market capitalization are in a sea of red today, with Ethereum down 21%, Ripple down 26.50% and Bitcoin cash losing 21% so far this Tuesday, according to CoinMarketCap data.

Meanwhile, the cryptocurrency market cap fell dramatically by 20% to $561.92 billion, with Bitcoin’s share increased slightly to 35% of global cryptocurrency trading.

  • Bitcoin Cash now has its own Native Bitcoin Development Branch

For those unaware of what Bitcoinj does, allow us to explain. It is a project best known for being a cornerstone of the Bitcoin ecosystem. In its original state, it was the second Bitcoin implementation and the first to target SPV light wallet functionality. Not everyone wants to run a desktop client or full node on their machine at all times. Moreover, SPV functionality is very important when it comes to mobile cryptocurrency wallets.Most Android wallets make use of Bitcoinj as we speak.

With Bitcoinj Cash, the goal is to unify all forks for BCH. More specifically, a lot of forked versions of this SPV implementation exist. Unifying them all under one banner will make it easier for everyone involved. Moreover, the team hopes to engage more community members to contribute to this particular branch of development. No one can deny Bitcoin Cash has a strong and vibrant community right now. Solutions like these will only improve the overall ecosystem.

As a result of this new branch, we will see more mobile wallets support Bitcoinj Cash. Some might even switch over from BTC to BCH full-time. HashEngineering’s Android wallet is switching over to Bitcoinj Cash in the near future. Moreover, the Lighthouse project – which has all but been forgotten – may be revived thanks to this new implementation. Crowdfunding through Bitcoin has always been a great concept. Unfortunately, it also became impossible due to mounting fees and slow transactions. With BCH, this option becomes viable again.

It is also important to note this new development branch will not just focus on SPV wallets. Instead, the team wants to expand upon its functionality, although no further details were provided at this point. It all depends on how the community and interested developers respond to this new development. With enough support, Bitcoin Cash may look very different from today. That would be a good sign, mind you, as more functionality can only be considered to be a good thing. Especially when it comes to business-friendly services, there’s always room for future improvements.

  • Vitalik Buterin Leaves China to Focus on Ethereum Development

Buterin announced that he has stepped down from his role as a general partner of Fenbushi Capital, which has been one of the most active investors in the blockchain and cryptocurrency sector. He noted that he will no longer serve as a full-time partner of the firm, but will remain as an advisor.

During an interview with TechCrunch, Buterin emphasized that although the cryptocurrency market has demonstrated an exponential increase in users and valuation, the practical usability of blockchains have regressed to the rising transaction fees and scalability issues.

To address the growing demand for Ethereum and the high expectations from the global Ethereum community, Buterin explained that he will solely focus on the development of the Ethereum blockchain network and solving scalability issues to provide a better ecosystem for decentralized applications. He stated:

“I expect 2018, at least within the Ethereum space that I’m best able to speak about, will be the year of action. It will be the year where all of the ideas around scalability, Plasma, proof-of-stake, and privacy that we have painstakingly worked on and refined over the last four years are finally going to turn into real, live working code that you can play around in a highly mature form in some cases on testnets, and in some key cases even on the public mainnet.”

The statement of Buterin came after several experts in the cryptocurrency sector including Augur co-founder Joey Krug said that there is a clear lack of developers working on scaling solutions for the Ethereum network. The rise in the popularity of successful decentralized applications such as CryptoKitties, EtherDelta, and 0x have congested the Ethereum network, which is already processing more transactions than all of the blockchains in the global market combined.

According to Etherscan, the Ethereum network is processing around 1.2 million transactions on a daily basis, which is more than 4 times larger than the daily transaction volume of bitcoin.


But, as the developers of Bankex explained, who recently introduced a practical implementation of Vitalik Buterin and Joseph Poon’s Plasma, a scaling solution that uses interconnected blockchains to reduce the congestion of the main Ethereum blockchain network, apps like CryptoKitties are executing hundreds of thousands of transations on regular basis, filling the Ethereum network with large-size transactions.

Some decentralized applications like 0x have off-chain solutions to execute orders or transactions off-chain and broadcast them to the main Ethereum network after batching many transactions into one single transaction. Still, the vast majority of applications still do not have innovative solutions to reduce the congestion of the Ethereum network.

As such, Krug emphasized that developers working on Ethereum scaling solutions are crucial for the ecosystem, and there must be more developers contributing to the open-source codebase of Ethereum scaling solutions.

“Ethereum really needs more developers on problems like sharding, proof of stake, and plasma, right now there simply aren’t enough. It should also hire some more operations people to help orchestrate it all, for instance, Solidity is just now being formally audited. Ethereum would be 100x more kickass with these things [and around] 10 developers each working on all three of those hard problems above.”


  • Bitcoin to Head France’s Cryptocurrency Regulation Task Force

France’s economy minister has established a task force to examine the risks that bitcoin and other cryptocurrencies present to the economy and propose regulatory guidelines that will mitigate these threats.

On Monday, economy minister Bruno Le Maire announced that his department had created a cryptocurrency task force that will be chaired by a former central banker.

“We want a stable economy: we reject the risks of speculation and the possible financial diversions linked to bitcoin,” Le Maire said, according to a rough translation. “I have just entrusted Jean-Pierre Landau, former deputy governor of the Banque de France, with a mission on cryptocurrencies.”

Laundau, dubbed “Monsieur Bitcoin” by French media outlet Les Echos, served as second deputy governor of the Banque de France from 2006 to 2011.

Despite this nickname, Laundau has been a fierce critic of cryptocurrency. In 2014, he penned a Financial Times op-ed in which he called bitcoin the “tulip of the 21st century” and said that no currency could succeed without active management from a central bank.

Accusing bitcoin creator Satoshi Nakamoto of making a “fatal mistake” in restricting the currency’s supply, Landau said that bitcoin’s value was derived exclusively from its criminal use cases and investor speculation:

“The currency is at present attractive for two reasons. One is anonymity, which makes it suitable for tax evasion and money laundering. This will not last; authorities are already wising up. The other is pure speculation. Bitcoins are the tulips of modern times. The mania is not yet over. But the longer it lasts, the more investors are likely to be burnt,” he wrote.

According to Le Maire, Laundau’s task force will be responsible for “proposing guidelines on the evolution of regulations” with a specific focus on controlling the development of these nascent technologies and preventing “their use for purposes of tax evasion, money laundering, [and] financing criminal activities or terrorism.”

In addition to establishing a cryptocurrency task force, Le Maire has called for this year’s G20 summit to debate the creation of an international framework for cryptocurrency regulations, a proposal that has been met with approval by both Germany and Italy.


Bitcoin drops as China renews crackdown on cryptocurrency

BITCOIN is leading the decline of the digital currency as Chinese warnings of the risks of trading and South Korea’s announcement of a ban