Saturday, 19 August 2017

The blue chip brokerage house Fidelity has allowed its customers to create their own Bitcoin accounts, further accelerating Bitcoin’s bull run. The price of the digital currency hit the $4000-mark this week following the anointment by the mainstream media of the currency as a new asset class.

Other Bitcoin projections

Other industry players and experts are predicting a brighter future for Bitcoin. According to an analyst from Standpoint Research, the price of the virtual currency can reach the $5,000-mark by 2018.

These rosy predictions about Bitcoin create the question on whether ordinary investors should invest part of their savings, or even their retirement accounts, into the cryptocurrency.

Why invest or not to invest in Bitcoin

To help the ordinary investors in deciding whether they will invest their hard-earned money into the digital currency, here are three reasons to invest or not to invest in the cryptocurrency.

Three reasons to invest in Bitcoin

  • It’s gaining mainstream credibility as industry players consider it as the new gold – Bitcoin has many of the same qualities of gold, whose value is not controlled by governments.

  • Many investors and finance industry experts are serious about the promise of Bitcoin – A large number of mainstream investors and entrepreneurs already consider Bitcoin and other cryptocurrencies as a legitimate asset class.

  • There is only a limited amount of Bitcoin – There are only 21 million Bitcoin tokens to be mined and no new tokens will appear until after 2140. This makes Bitcoin a deflationary currency whose value increases naturally with time.

Three reasons not to invest in Bitcoin

  • Bitcoin only exists on computers – Cryptocurrencies like Bitcoin are just a piece of code on the Internet and they are thus intangible. Then again, the money in your bank account also only exists as number on a computer.

  • Bitcoin is very volatile – In the ten years it has existed, Bitcoin has been prone to major bubbles and painful crashes.

  • Many Bitcoin users are shadowy figures – Despite the belief by many that Bitcoin could replace cash in the future, the digital currency is also known for purchasing drugs and paying extortion fees on the Internet.

Exercise caution

Those who are looking to hop on should remember to invest for the long term, and never to invest more than they can afford to lose. Right now, cryptocurrency continues to climb and it looks like there is no way to lose. That sort of thinking is extremely dangerous and prospective investors should exercise caution, whatever they chose.

source: https://cointelegraph.com/news/is-bitcoin-on-its-way-to-5000-and-should-you-invest-or-stay-away-from-bitcoin

The developers behind Segwit2x, a controversial plan to increase the transaction capacity of the bitcoin blockchain, plan to announce a firm date for a hard fork today.

A copy of a forthcoming blog post obtained by CoinDesk indicates that the Segwit2x team plans to enable bitcoin's miners to elect to run new software at block 494,784 on the blockchain, a block they expect will occur sometime in November of this year.

The announcement, while not yet public, is expected to be released formally later today. Entitled, "Bitcoin Upgrade at Block 494,784," the draft post is currently live on a website related to the project.

The post reads:

"During the month of November 2017, approximately 90 days after the activation of Segregated Witnesses in the Bitcoin blockchain, a block between 1MB and 2MB in size will be generated by bitcoin miners in a move to increase network capacity. At this point it is expected that more than 90% of the computational capacity that secures the bitcoin network will carry on mining on top of this large block."

If enacted, Segwit2x could enable a second hard fork of the bitcoin network in 2017, one that could also result in the creation of yet another version of the bitcoin blockchain with its own unique cryptocurrency.

Bitcoin Cash, created through a hard fork on August 1, is currently trading at just over $300.

Announced in May, Segwit2x is an agreement supported by more than 50 industry startups, miners and technologists and organized by industry investor Digital Currency Group. To date, its developer team has drawn support mainly from industry startups.

Still with a portion of bitcoin's mining network backing the new bitcoin cash blockchain, it remains to be seen just how many miners on either chain would dedicate computing power to yet another blockchain.

For one, there is already a live version of the blockchain that supports larger blocks. Secondly, with the adoption of SegWit on the bitcoin blockchain, its proponents argue block size is no longer an effective metric for capacity.

source: https://www.coindesk.com/block-494784-segwit2x-developers-set-date-bitcoin-hard-fork/

Understanding Segregated Witness

Segregated Witness (SegWit, for short) is scheduled to “lock in” within 24 hours and activate in about two weeks. Not everyone understands what this Bitcoin protocol upgrade actually does, so in this article, I seek to explain to a general audience what Segwit is.

 

But first, let’s take a look at bitcoin.

Bitcoin As A Global Ledger

To understand Segwit, we first have to understand a little bit about Bitcoin.

If you think of Bitcoin as a single global ledger, a Bitcoin transaction is a lot like a bank check. As the owner of some amount of money, you can sign over some of your money to someone else.

And, much like a check, a Bitcoin transaction has a signature. Instead of a physical signature, you create a digital signature using your private key.

Interestingly, while a signature on a physical check takes up maybe 10% of the check, a digital signature in bitcoin takes up more like 50% of the digital check.

To continue the analogy, a Bitcoin block is like a box of signed checks or transactions. Much like physical boxes in the real world, Bitcoin blocks have a limit on how many transactions they can contain.

Right now, those boxes come in a standard 1MB size — and they are full. You can put just a few checks into the box so that it’s almost empty, but you can never put more checks into the box than the box can hold.

To keep the global ledger consistent and cheat-proof, everyone that wants to can audit the ledger by auditing these blocks (boxes of checks). A copy of the box of checks is sent to anyone that wants to audit the ledger.

If, in an audit of these boxes of checks, someone found that one of the checks overspent (that is, the person writing the check does not have enough money in their account to cover the transaction), they would reject the entire box.

This is important since, otherwise, people would start writing bad checks. We also need to do this fairly often so people can actually have a good idea of how much money they have, so we send the boxes of checks to everybody (meaning every node on the system) to audit pretty frequently — every 10 minutes on average.

Contextualizing the Scaling Debate

Because there’s a limit to the block (box) size, there is a limit to how many checks that can clear on the network in a timely manner. That is, the throughput of Bitcoin transactions is limited. The scaling debate that’s been going on for the past few years in Bitcoin is really about how to get more transactions through the system.

The two solutions that groups came up with can be thought of in two ways. The first would be to make the box sizes bigger. The second would be to create a new type of check and only give bigger boxes to those who request them.

Making the Box Bigger

One group wanted to do away with the current boxes and make the boxes larger. This is great if everybody is forced to use a bigger box, but there are some problems with this idea.

If some people kept using the smaller box, this would cause discrepancies in the ledger and create two different ledgers. Additionally, even if everyone used the bigger box, a lot of people checking the ledger would not receive the bigger boxes in time to examine that all the checks were valid. 10 minutes is too little time to receive and audit the box for some people.

The main advantage of making the box bigger is that it’s a relatively simple change. There aren’t new style checks to worry about and everything can operate as before.

Bitcoin Cash is essentially using this solution by lifting the 1MB block size limit and implementing an 8MB block size instead.

Changing the Checks

The other solution is to introduce new style of check. We could still make larger boxes available, but only to those that want them. This “change the check” solution essentially cuts away the signature part of the check for everyone that isn’t accepting the bigger boxes.

Remember how the signature is about 50% of the transaction? SegWit cuts the checks in half and sends everything but the signature to everyone that’s accepting the old, smaller box. We send the larger boxes to everyone that’s accepting the new, larger box.

Given that the checks are half the size for the smaller boxes, we can fit about double the number of checks in the smaller boxes, increasing throughput. Anyone that’s receiving the larger box could audit everything in the box as normal and anyone receiving the smaller box could still audit without worrying about getting the signatures in time.

Because we’re accommodating the people that aren’t using the newer, bigger box, SegWit is backwards compatible. That means everyone will have the same copy of the ledger no matter what size box they’re using.

The main drawback to SegWit is that everyone will have to get used to the new style of checks before we see some gains in throughput. It’s also a bit more complicated than just making everyone use a larger box. Additionally, everyone receiving the new style checks but using a smaller box won’t get to audit the signatures since they won’t receive them.

Bitcoin is using the “new check” solution starting in a couple of weeks.

In Summary

Bitcoin is a distributed ledger, and it helps to think of transactions and blocks as checks and boxes. Bitcoin Cash is standardizing on a bigger box for everyone while SegWit is using larger boxes for some while accommodating those that don’t want to use larger boxes with new types of checks.

Does this help you understand SegWit better? Answer in the comments below.

source: https://medium.com/@jimmysong/understanding-segwit-block-size-fd901b87c9d4

 

Kuna Cryptocurrency Exchange and Kuna Bitcoin Agency founder Michael Chobanian has announced that there are 150 Bitcoin automated teller machines (BTM) which are scheduled to be installed in Ukraine in 2017.

Of the total, 20-30 ATMs will be installed in the country’s capital of Kiev by the end of the summer.

According to Chobanian, their decision to install the BTMs was due to a request of a customer, as well as the constant demand from Ukrainian entrepreneurs.

He says:

“By the end of the year, around 150 Bitcoin ATMs will be installed throughout Ukraine. This is at the request of one customer who contacted us. Plus, there is a constant demand from entrepreneurs across Ukraine who want to engage in this business, that is, buy terminals and sell cryptocurrencies.”

The plan

According to Chobanian, the planned 150 Cryptomat BTMs will be able to support the sale of such cryptocurrencies as Ether, Waves, Golos and Bitcoin. Customers in the country will be able to buy the digital currencies using the country’s official currency hryvnia.

Chobanian also claimed that the BTMs do not need user identification and can be used by all types of customers. Anyone who wants to do business in BTMs can also do so without securing any license.

Current state of Bitcoin ATM use in Ukraine

Based on data from the BTM tracker website CoinATMRadar, there is only one BTM operating in the country so far a two-way machine that was installed in the port city of Odessa in southern Ukraine in late April.

There are, however, around 4,000 street terminals that are reportedly selling the digital currency Bitcoin. These terminals are not BTMs, but they sell vouchers that can be used by customers to redeem for Bitcoin on the website of Bitcoin service provider BTCU.

source: https://cointelegraph.com/news/ukraine-scheduled-to-install-150-bitcoin-atms-in-2017

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