Tag: BTC

Understanding forks and Bitcoin variants, BFSI News, ET BFSI

Personal Finance

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NEW DELHI: Bitcoin enjoys incomparable popularity, with a market capital of $1.24 trillion on October 21 after the all-time high value of $66,000, according to CoinMarketCap.

But there are also cryptocurrencies such as Bitcoin Cash and Bitcoin SV, which belong to the same Bitcoin family, with some fundamental similarities and differences.

What led to the emergence of these newer versions? How are they different from each other? We start by first trying to understand Bitcoin forks that are responsible for the creation of Bitcoin variants.

Forks and their types:

A blockchain fork is simply an upgrade in the network initiated either by developers or the crypto community.

* A soft fork has a minor upgrade and needs only a majority of nodes to upgrade to the latest version.

– It is ‘backwards-compatible’, which means that the upgraded chain can successfully share and use data from earlier versions of the network.

– Soft forks bring small changes and do not separate from their parent chain.

* Hard forks bring major changes and require all the nodes to upgrade to the new rules.

* Mostly they lead to permanent separation from the old chain, making newer versions incompatible to the older version like in Bitcoin Cash.

A Bitcoin fork was created through a hard fork, as a result of disagreement within the Bitcoin community over speed, transaction fees and block size or to add more features to the existing Bitcoin. So far, there have been 100 BTC forks, out of which 74 versions have survived and are still functional.

Bitcoin variants: Bitcoin Cash and Bitcoin SV:

Bitcoin Cash (BCH)

Origin:

* It emerged as a result of a hard fork in August 2017.

* The upgrade Segwit2x was proposed by a fraction of the Bitcoin community to scale up the blockchain by increasing the block size and lowering transaction fees.

* However, Segwit2x would also burden the miners and full-node operators to store excessive data.

* The proposal led to the creation of a hard fork, Bitcoin Cash (BCH).

* BCH is the second largest fork of the network and considered electronic cash.

* Its block size is 32 MB while BTC has a block size of just 1 MB.

* The transaction cost is substantially lower and a faster transaction rate of 200 TPS than 5-7 TPS of BTC.

* Bitcoin Cash further forked and bifurcated into Bitcoin Cash ABC and Bitcoin Cash Node (BCN).

Bitcoin Satoshi Vision (BSV)

Origin:

* In November 2018, BSV was created by the efforts of the Australian Computer scientist Craig Wright who persuaded the community to increase the block size of BCH to 128 MB.

* Bitcoin SV expanded its block size to 1 TB, obviously much larger than Bitcoin.

* BSV’s transaction cost is the lowest among the three variants of Bitcoin, and is at a high transaction speed of 9000 TPS due to its large block size.

* BSV uses the scaling platform Bitcoin Scaling Test Network (STN) to achieve the desired scalability.

* Educational platforms such as Bitcoin SV Academy and banking application Gravity give the biggest use cases for the adoption of BSV.

* BSV’s supporters hail it as the genuine peer-to-peer financial infrastructure, true to the vision of Satoshi Nakamoto (the famed pseudonymous person who created Bitcoin).

* It is priced at $170.80 on October 27, according to CoinmarketCap.

Other leading Bitcoin hard forks include Bitcoin Gold, Bitcoin Cloud, Bitcoin Classic and Bitcoin Private.

Key similarities in BTC, BCH and BSV

* All three Bitcoin variants have the same stock supply of 21 million coins, and the total supply of the three coins is expected to be exhausted by 2140.

* Both BCH and BTC work on the PoW (Proof-of-Work) model.

* Just like Bitcoin, the BCH blockchain ensures transparency, is publicly accessible and cannot be modified by a single entity.

(For the latest crypto news and investment tips, follow our Cryptocurrency page and for live cryptocurrency price updates, click here.)



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President, BFSI News, ET BFSI

Personal Finance

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SAN SALVADOR: Facing resistance from the World Bank, IMF and opposition parties to his move to make bitcoin legal tender in El Salvador, President Nayib Bukele has promised $30 for each citizen who adopts the cryptocurrency.

Initiated by Bukele, El Salvador’s parliament approved a law this month to allow the crypto money to be accepted as tender for all goods and services in the small Central American nation, along with the US dollar, its national currency.

The crypto money will become legal tender in September.

Bukele said that in a bid to boost its wide adoption, each citizen who opens an electronic bitcoin “wallet” named Chivo will have the equivalent of $30 uploaded to their account.

“It will be a gift,” Bukele told national television late Thursday. “Just download and register and you will receive the bitcoin equivalent of $30 to use.”

Bukele did not specify where the money would come from.

He said more than 50,000 people in the country of 6.5 million were already using bitcoin.

On Twitter, the president also accused the opposition of trying to “sow fear” among Salvadorans about the bitcoin law.

He gave an assurance that use of the cryptocurrency will be optional, and wages and pensions in the country will continue to be paid in US dollars.

Bukele has touted the move as a way to make it cheaper and easier for Salvadorans abroad — some 1.5 million, mainly in the United States — to send money back home in the form of remittances, which represent almost a quarter of the country’s GDP.

According to World Bank data, El Salvador received more than $5.9 billion in 2020 from nationals living abroad.

But opposition parties have said the plan is “unworkable” and experts and regulators have highlighted concerns about the currency’s notorious volatility and the lack of protections for its users.

On Tuesday, the cryptocurrency fell beneath $30,000 for the first time in five months. At its highest, bitcoin was worth more than $63,000 in April.

Last week, the World Bank rejected a request from El Salvador for assistance in its bid to adopt bitcoin as a currency, citing “environmental and transparency shortcomings”.

The IMF has also flagged concerns, with spokesman Gerry Rice telling reporters El Salvador’s move “raises a number of macroeconomic, financial and legal issues that require careful analysis.”

The Central American Bank for Economic Integration (CABEI) has said it will provide technical assistance for El Salvador to regulate the use of bitcoin.

On Thursday, the first bitcoin teller machine was opened in the capital San Salvador, where people can deposit dollars in cash into their bitcoin wallet.

The country’s only other bitcoin machine is in the coastal town of El Zonte, where hundreds of businesses and individuals use the cryptocurrency for everything from paying utilities bills to haircuts or buying a can of soda.



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Australians can now receive wages in Bitcoins as crypto acceptance grows, BFSI News, ET BFSI

Personal Finance

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Bitcoin‘s dramatic surge from $22,000 in December 2020 to about $60,000 now is prompting many employed by cryptocurrency firms to take part or entire salaries in bitcoins.

After Miami City Council pledged to pay part of wages in Bitcoins, Australians can now receive a portion of their employment wages in Bitcoin using a new service from Living Room of Satoshi, a leading Australian Bitcoin payments company.

The “Wages” service allows a user to nominate a percentage of their regular pay to be converted to Bitcoin and instantly sent to their Wallet of Satoshi Bitcoin Lightning wallet. Wallet of Satoshi is a free application for iOS and Android, also created by the founders of Living Room of Satoshi, that boasts tens of thousands of active users worldwide.

Living Room of Satoshi

Living Room of Satoshi is an Australian company that enables payment of any bill, or transfers to any bank account, using Bitcoin and other crypto-currencies. Established in 2014, Living Room of Satoshi have facilitated hundreds of millions of dollars in payments and are fully regulated, operating under their own Australian Financial Services Licence.

The company is named in honour of Satoshi Nakamoto, the pseudonymous and mysterious creator of the original Bitcoin software.

Its CEO said with the astronomical rise in prices in the last six months, to provide an option for regular folks in Australia to also join this burgeoning ecosystem. The simplest and most pain-free way is to have a small percentage of your wage converted and sent to you when you get paid, he said.

In India

While there is no major trend of payment in Bitcoins in India, engineers and developers at crypto firms in India are being paid in kind.

Many young engineers and freelancers are accepting payments in cryptocurrency due to the ease of transferring it across borders, lower transaction costs.

With the dramatic surge of bitcoin value, those who accept the pay in such unit have reaped a huge windfall.

The risks

There have been times when thousands of dollars in value have been wiped overnight, and there is no guarantee the price will not continue to fluctuate in the future.

After a huge surge post Coin Base listing, bitcoin is down over 14% from record highs.

Still, there are signs that cryptocurrency has arrived on Main Street.

Growing popularity

Recently Mastercard said it expected to directly support some forms of cryptocurrency on its network in 2021, with one executive claiming that “digital assets are becoming a more important part of the payments world”.

Earlier this year, the City Commission of Miami has pledged its support to a proposal that would allow workers in the city to accept cryptocurrency as part of their salaries in the future.

the city’s mayor, Francis Suarez, said on Twitter that after his resolution was supported by local officials, a suitable vendor will be “procured” to “be able to offer our employees to get a percentage of their salary in Bitcoin (BTC).”

“This allows our residents to pay for fees in Bitcoin, and would also allow the city manager to cooperate with Miami county for taxes to be paid in Bitcoin,” Suarez announced. “This allows our residents to pay for fees in Bitcoin, and would also allow the city manager to cooperate with Miami county for taxes to be paid in Bitcoin,” the city’s mayor, Francis Suarez, the city’s mayor was quoted as saying.

The proposal has also been put forward to the state legislature for allowing BTC to be considered “an acceptable currency for us to potentially invest in, in the future.”



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Bitcoin falls after a spectacular rally; what led to this?, BFSI News, ET BFSI

Banking & Finance

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Bitcoin took a downfall around 17% after a long rally which began in March 2020 with touching new highs around $34,800 a whopping 800% increase.

However, the world’s most popular cryptocurrency sank 17% wiping out the gains which were made over the start of 2021.

Sumit Gupta, Co-Founder & CEO at CoinDCX, India’s largest crypto-exchange said, “Bitcoin’s growth is largely attributed to how it is designed and in May 2020, we witnessed third halving , a supply shock event, where the number of daily mined Bitcoin gets cut in half. In the previous 2 halvings, Bitcoin and overall crypto market cap has risen exponentially, and a similar trend is expected this time around.”

The adoption came largely from institutional investors and institutions across the globe.

Sumit explained how Microstrategy included Bitcoin in their company’s treasuries and payment rails like PayPal, Square are integrating cryptocurrencies due to rising demand from retail investors. He added, “In 2021, if the increase in Bitcoin’s demand continues we can expect even greater demand from institutional investors, hedge funds, family offices, and from retail investors as well.”

Arjun Vijay, Co-Founder & COO at Giottus Cryptocurrency Exchange has noticed more and more BTC leaving exchanges across the world, 19% more transfer than the 2017 price increase, which is a signal that investors are holding BTC as long-term investments. UK-based Ruffer investment, a recent example of investors looking to hedge their investment, had invested 2.7% of its AUM in Bitcoin in November 2020. Even Insurance companies like MassMutual, the Massachusetts insurance firm with $235 Billion in AUM, dipped its toes into Bitcoin with a $100 million purchase.

Vijay believes that with more players joining the bandwagon we will be noticing more price increases in the days to come. Also, a lot of new investors are waiting for a correction to enter this rally but Bitcoin price growth has been relentless all this while.

On the crash of 2018, Sumit noted, “This is the first time we are witnessing such a huge demand from such large players at such a scale. This is significantly different from 2017, where the huge demand was primarily from retail investors, followed by a crash in 2018.”

If the global demand from institutions and investors continues, we might see higher price action in coming months and years.



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