Week 10 - 2020 News Recap
Cryptocurrency No Longer Banned in India
Back in 2018, the Reserve Bank of India has imposed a ban on cryptocurrencies and cryptocurrency trading, however, this ban was officially overturned in March 2020 by the decision brought by India’s Supreme Court. The Reserve Bank claimed at the time that the state needs to perform ring-fencing to protect the financial security of India’s native currency, adding that Bitcoin and other crypto-assets cannot be treated as currencies given their non-tangible nature. RBI’s decision greatly affected banks and startups that offered cryptocurrency-backed services and trading with cryptocurrencies, while all of them closed due to the ban on crypto trading.
A petition that included the Internet and Mobile Association of India argued that India should follow the example of other countries and their views on cryptocurrencies. The petitioners claimed that India should allow cryptocurrency trading, challenging the Reserve Bank of India, emphasizing that some of the governments in the world are also looking into launching their own digital currencies. A tech investor, Nitin Sharma, stated regarding the ruling of the court that the day when the RBI’s ban was overturned makes up for a historic day for India. The founder and CEO of WazirX, a Bitcoin exchange platform stated that as of the day of the ruling, India can now join the global innovation led by cryptocurrencies and join the blockchain revolution.
How Far Has Justin Sun and Steemit Takeover Drama Gone?
Justin Sun, the founder and CEO of TRON Foundation and TRX, as well as the CEO of BitTorrent, announced on February 14th, that he will be taking over the Steemit platform. The community wasn’t thrilled about the decision as Sun might have expected, criticizing the move made by Sun. Since the legal entity holds a large quantity of STEEMIT cryptocurrency, the community deemed the move as the opposite of the platform’s policy, as well as describing the takeover as “malicious”. Despite the negative comments, Justin Sun moved on with the takeover, which is how the entire Steemit drama commenced.
With the takeover of the Steemit platform, there was a major shift of power on the network as noted by the community although the entire process was conducted in accordance with STEEMIT rules. Other major players such as Huobi, Poloniex, and Binance are also in the game. In the spirit of decentralization and in compliance with STEEMIT rules, validators performed a soft fork on Steemit staked funds, as there were promises from Steemit Inc. that these funds won’t be used for voting. Moreover, there was a promise that the staked funds would be used for the general growth of the Steemit ecosystem, while the fork is irreversible. However, Justin Sun made a comeback thanks to the voting power of Poloniex, Binance, and Huobi, that managed to bail him out while holding a voting monopoly on the network. Based on this comeback, the community considers Steemit to be centralized as of the recent events.
IOTA One Week Ahead of the Official Network Launch
IOTA (MIOTA), a unique decentralized ecosystem known by distributed ledger “Tangle”, Directed Acyclic Graph, IoT-driven projects and partnerships with big names from the automotive industry, announced reopening the network at the beginning of March. After commencing its seed migration on the last day of February in 2020, IOTA announced reopening the network on March 10th. IOTA uses a centralized transaction verifier for enabling the network’s operations. The verifier is known as Coordinator. What is presumed to be the consequence of the presence of Coordinator on the network, multiple cases of drained user wallets emerged.
On February 12th, the network closed due to having more than several reports on the problem with drained user wallets, planning to reopen in the second week of March. The team decided to shut down the Coordinator, which gave them time to investigate. The team determined that the likely culprit that caused the vulnerability for this malicious attack where users’ private seeds were compromised, was a third-party integration with Moonpay gateway service. As the team has found the faulty and has identified how the attack was authorized and facilitated, the network will soon open and restart its usual operations.
$50,000-Worth Bitcoin is Mined Daily at a New York Power Plant
A power plant based in the upstate New York has been using some of its electricity to mine Bitcoin, facilitating industrial-scale mining. Greenidge Generations is a natural gas power plant in the area of Finger Lakes region, with the latest venture commenced in the sector of mining cryptocurrency, specifically Bitcoin. The power plant announced installing a mining farm for cryptocurrency, with nearly 7,000 mining rigs powered by the electricity generated on-site. According to CoinDesk, with the described capacity of power and mining equipment, the New York-based power plant can mine around 5.5 BTC every day, turning around 50,000 US dollars worth of Bitcoin.
The plant itself had a major renovation in 2017, worth 65 million dollars where the plant lived through a transformation from using coal to natural gas, in addition starting a mining farm. The CEO of Greenidge Generations, Dale Irwin, stated that adding the mining farm operations would complete the unique purpose of the power plant to contribute to the “environmental stewardship”. Given the fact that the costs of these operations are steady and predictable, the power plant is said to be in a favorable financial position. The executives of the plant stated that they believe that the mining operations conducted on-site should remain profitable even after the process of halving expected in May 2020, when the mining reward for Bitcoin miners should reduce from 12.5 BTC to 6.25 BTC.
Coinbase CEO Confident That the Number of Crypto Users Will Increase from 50 Million to 5 Billion
Comparing the development and mainstream adoption of the internet to the development and rise of cryptocurrencies to the mainstream use, Brian Armstrong, the CEO of one of the biggest exchanges in the market of crypto assets, shared his opinion on the bright future of cryptocurrencies in terms of the growing user base. Coinbase CEO shared in a series of tweets published on March 4th, that he isn’t certain whether blockchain will help the mainstream adoption of cryptos, but predicted that a major leg up should belong to the chain that manages to facilitate scalability, privacy, tool solutions for developers and decentralized identity. The co-founder of A16z, Ben Horowitz and Brian Armstrong had a conversation on the parallels between cryptocurrency development and the internet, which was the case that inspired the series of positive predictions Armstrong shared in his tweets.
Armstrong noted that the challenge of scalability that crypto encountered in the early days can be compared with the slow speed of the dial-up connection that posed as a major challenge for the internet. At the same time, issues with privacy in crypto assets can be compared with internet traffic encryption standards and the challenges it brought to the mass adoption of the internet as we know today. Based on these parallels, Armstrong claims that the market of cryptocurrencies should soon increase its user base from 50 million to 5 billion users.