BitPR Weekly Crypto Highlights: Ethereum Hard Fork

Week 2 Jan 2019
11 Jan 2019

Ethereum is preparing for its upcoming Constantinople hard fork that will lay the groundwork for its eventual transition to Proof-of-Stake (read on below).

We’ve covered the ongoing development activity related to Ethereum in the past. This continuous development is good for the community and Ethereum is looking to keep this momentum going in 2019. However, it remains to be seen how effective these activities are – the project has promised much in the past but is still beset by scalability issues and questions about what it will do in a post-ICO world.

The new year has also seen the same ol’ issues. For instance, people are still trying to decipher the SEC’s and other regulators’ stance on cryptocurrencies. There are still questions about valid use cases and widespread adoption of crypto. At least, the crypto-friendly American retailer, did its part by announcing that it would become the first major U.S. company to pay some of its Ohio state business tax using cryptocurrencies. Overstock is also behind tZero, the SEC-regulated alternative trading system (ATS) for security tokens.

For what it’s worth, here is how crypto markets performed over the last seven days (WARNING: it is ugly).

7-day crypto market state. Source: Coin360

Huobi and OKEx Will Support Upcoming Ethereum Constantinople Hard Fork

OKEx and Huobi Global have joined Binance in announcing their support for the Ethereum Constantinople hard fork scheduled for 16 January 2019. Constantinople offers an upgrade to the existing Ethereum blockchain, enabling the eventual transition from Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus algorithm.

The upgrade will prevent backwards compatibility. OKEx and Huobi advised their clients to transfer their ETH to their respective exchanges in preparation for technical issues that might result from the hard fork.

To ease the transition to PoS, Ethereum’s development community has reached a preliminary agreement to block ASIC mining equipment from mining Ethereum. This should take effect in the next 2-4 months and may lead to greater decentralization by taking big mining pools out of the game. At the same time, it will increase the efficiency of traditional hardware and GPU mining.

Upcoming Token Exchange to Trade Nasdaq-Listed Companies

DX.Exchange announced the launch of its trading platform for Nasdaq-listed companies on the 7th of January. Traders can use either crypto or fiat currencies to purchase tokens. The tokens are backed 1:1 by real-world stocks.

DX.Exchange has partnered with MPS Marketplace Securities to purchase traditional assets and to generate ERC-20 tokens. At launch, MPS is planning to purchase shares in AlphaBet, Apple, Amazon, Facebook, Microsoft, Tesla, Netflix, Baidu, Intel, and Nvidia.

DX.Exchange is also partnering with Bloomberg to power Bloomberg’s crypto center.


The Race for Dapp Adoption

The ultimate success of blockchain platforms will likely be determined by the number and usage of decentralized applications (dapps). As an analogy, iOS and Android owe much of their success to the number of apps in their App Store and Play Store, respectively.

The leading dapp platforms, based on the number of dapps, include Ethereum, EOS, AION, NEO, TRON, ICON, Wanchain, Lisk, Tezos, and Cardano.

Adoption and usage will determine success or failure for many of these platforms. Ethereum aims to solve its scalability issues. EOS is focused on creating a vibrant ecosystem to compete with Ethereum. TRON wants to improve the reach of the TRX cryptocurrency and attract developers from other platforms.

Where they are now:

  • Ethereum – is the leading platform with 2,200 dapps, 12,000 daily active users, and 5,300 smart contracts;
  • EOS – has been gaining momentum with 115 dapps and 14,000 daily active users;
  • AION –has developed several partnerships and is known for its interoperability features, supporting Mavennet, Velocia, VeriTransfer, and ClanPlay;
  • NEO – supports 76 dapps and has 40 active tokens on the platform. Its strongest case for adoption is its highest recorded transaction speed of up to 2,433tps. However, concerns include reports of several downtimes;
  • TRON – supports 49 dapps. The top 3 dapps enjoy an average 285,000 transactions daily, out-performing top 3 dapps on Ethereum that only average about 2,800 transactions;
  • ICON – Most of the projects on the ICON platform are results of partnerships;
  • Wanchain – known for supporting interoperability;
  • Lisk – allows JavaScript developing for dapps, and JavaScript developers are plentiful;
  • Cardano – apart from supporting dapps, Cardano has recently released new smart contract development tools.
  • Tezos – a relative newcomer that launched in September 2018;


Ethereum Studio ConsenSys and AMD to Develop Cloud Computing Infrastructure

ConsenSys announced their partnership with AMD and Halo Holdings, an Abu Dhabi-based investment firm, to develop a cloud-computing infrastructure on the blockchain platform. ConsenSys will be banking on its expertise with the blockchain, and AMD’s hardware experience, to build a computing hardware designed specifically for selected dapps. Consensys Founder Joe Lubin expects that this will help address the platform’s scalability and adoption issues.


BitTorrent is launching its own cryptocurrency on the TRON network

The BitTorrent Foundation is now issuing a new cryptocurrency named the BitTorrent Token (BTT) on the Tron network. The BTT token is TRC-10 compatible and can be used through the µTorrent client. The new cryptocurrency enables users to spend and earn crypto while sharing files, thereby incentivizing users to share (‘seed’) files using BitTorrent.


Understanding the SEC’s Stance on Crypto

There are many regulators with oversight on cryptocurrencies in the U.S, such as the Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading Commission (CFTF), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Internal Revenue Service (IRS). However, these agencies have varying views on how cryptocurrencies should be regulated.

Since last year, the SEC has emphasized their need to regulate Bitcoin Exchange Traded Funds (ETFs). The agency has also penalized several ICOs and hundreds of startups for securities violations. Regulators are trying to answer the question of how to protect consumer interests while enabling technological innovation. However, most SEC Commissioners seem to focus on the risks that crypto assets pose to the financial system than the potential for innovation.


Japan Denies Considering Bitcoin ETF

Multiple sources including Bloomberg reported last week that Japan is considering approving Bitcoin ETFs as an alternative to Bitcoin futures contracts. However, the Japanese Financial Services Authority (FSA) has since denied such reports, claiming that it does not see the necessity for any crypto-related derivatives as of now. Of course, that is not the same as saying ‘never’, but we shall see. The focus now shifts to the US SEC’s decision on Van Eck’s Bitcoin ETF by the end of February (assuming it does not get delayed).

With each rejection, the SEC may continue to identify what is missing in the filings. This could increase the probability of an eventual approval. Again, we shall see.


Check back next week for more bite-sized crypto highlights!

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