Top Crypto News – 03/01/2018

Bitcoin rises after report says early Facebook investor Peter Thiel is buying massive amounts

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Founders Fund, run by Peter Thiel, a PayPal co-founder and early Facebook investor, has bought millions of dollars in bitcoin, The Wall Street Journal reported Tuesday, citing sources familiar with the situation.

Bitcoin rose more than 13.5 percent to near $15,017, according to Coinbase, amid the report. As bitcoin’s price climbed, trading in the Cboe bitcoin futures was also briefly halted in accordance with pre-set rules.

The venture capital firm bought about $15 million to $20 million of bitcoin, and told investors that after bitcoin’s surge in the last year, those holdings are worth hundreds of millions of dollars, the newspaper said. It wasn’t clear whether Founders had sold any of its holdings, the report said.

Bitcoin’s performance in the hour around the report

Source: Coinbase

At a conference in late October, Thiel said people are “underestimating” bitcoin and compared the digital currency to gold. “If bitcoin ends up being the cyber-equivalent of gold it has a great potential left,” he said.

Venture capitalist Tim Draper bought nearly 30,000 bitcoins in a 2014 U.S. Marshals Service auction. Draper confirmed to CNBC in early December that he is still holding all those coins.

Written by CNBC

 

Ethereum Foundation Announces Millions in Grants for Scaling Research

 

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The non-profit that oversees development of ethereum has officially unveiled two subsidy programs that will support research on how to grow the number of transactions its blockchain can process.

In a blog post published Tuesday, ethereum creator Vitalik Buterin described how the network is beginning to reach 1 million transactions per day. In his view, scaling the network is “the single most important key technical challenge” that developers need to work on before blockchain applications can be widely used.

As such, the subsidy programs are being launched to incentivize developers to implement two proposed solutions for scaling: sharding and layer-two protocols that would be built on top of the blockchain today.

Sharding is a process that requires only a few nodes on the blockchain to verify a transaction, instead of having every node do so. Currently, ether’s developers are finishing the specifications for their sharding protocol, and are looking for teams to build implementations and launch them on ethereum’s testnet.

Layer-two protocols, on the other hand, take a different approach by taking transactions off the main ethereum blockchain. The network would allow transactions to move on and off the blockchain in order to be processed, but would not be used to actually process the transactions.

According to the blog post, the subsidies for each program will range from $50,000 to $1 million and are intended to cover development costs. For both solutions, successful teams will also have a hand in implementing the protocols on ethereum’s mainnet as a next phase.

In addition to the research ethereum’s developers are performing, the foundation is looking for third parties to look into the scaling issues.

In his post, Buterin wrote:

“Independent teams of developers, companies and university and academic groups are all welcome to apply; we recognize that different types of applicants may require different formats and processes and we are willing to be flexible to accommodate individual teams’ needs.”

Vitalik image via Shutterstock
Written by Coinbase

 

Koreans Deposited 64 Times More Fiat Into Crypto Exchanges in 2017

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Koreans Deposited Over 2 Trillion Won

On January 1 the Korean Financial Supervisory Service (FSS) obtained data on deposits made at cryptocurrency exchanges for the year 2017. Sedaily reported:

The balance of deposits as of December 12 last year amounted to 2.067 trillion won [~USD$1.95 billion]. This is a 64-fold surge from 32.2 billion won [~$30.3 million] at the end of 2016. This is the first time that the total amount of deposits in the virtual money market has been confirmed.

The publication revealed that the total amount of deposits in 2014 was 2.5 billion won (~$2.35 million) and it was 9 billion won (~$8.46 million) in 2015.

State-Owned vs Commercial Banks

According to the news outlet, approximately 1.4 trillion won of the deposits went through state-owned banks, such as the Industrial Bank of Korea (IBK), while deposits totaling 743 billion won went through commercial banks last year.

Koreans Deposited 64 Times More Fiat Into Crypto Exchanges in 2017Most major Korean cryptocurrency exchanges use commercial banks and not state-owned banks. Bithumb uses Nonghyup Bank and Shinhan Bank, Coinone uses Nonghyup Bank, and Kobit uses Shinhan Bank.

However, newcomer Upbit uses IBK. This exchange is backed by Kakao Corporation, which owns the country’s most popular chat app, Kakao Talk. The publication detailed, “The reason why the deposits through national banks are larger than commercial banks is that the virtual accounts that were mainly used in the Upbit business, [which] started from August last year, passed through IBK.” Upbit is now reporting the largest 24-hour trading volume of all South Korean crypto exchanges.

Lawmakers Look to Act Fast

Koreans Deposited 64 Times More Fiat Into Crypto Exchanges in 2017Democratic Party lawmaker and a member of the House of Representatives of the National Assembly, Park Yong-jin, obtained the data above. He was quoted commenting, “the risk of losing assets will increase if there is a problem with the exchange due to excessive funding due to the overheating of virtual currency speculation,” adding that:

The National Assembly and the financial authorities are trying to strengthen the management and supervision of exchanges. We have to hurry.

In August, Park submitted a proposal to revise the Korean Electronic Financial Transaction Act to provide a regulatory framework for bitcoin, as news.Bitcoin.com previously reported. However, this bill has not been adopted.

What do you think of Koreans depositing over 2 trillion won into cryptocurrency exchanges last year? How much do you think they’ll deposit in 2018? Let us know in the comments section below.

Written by Bitcoin.com

 

Blockchain Wars: IOTA’s Tangle Takes on Ethereum

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The blockchain craze continues unabated as more companies create new applications faster than ever. The architecture made popular by bitcoin and its contemporaries has proven to be a useful tool that offers better security and transparency, leading to its growing adoption in several industries thanks to its effective communications and public ledger.

Even so, blockchain’s meteoric rise has not been without speed bumps, and there have been instances where it has shown weaknesses that could prove to be major challenges down the road.

In an industry such as the Internet of Things (IoT), blockchain’s capabilities have proven to be a particularly strong fit. Interconnected devices require rapid and transparent verification of data, something blockchain’s ledger can handle exceptionally well. However, some have complained that blockchain’s somewhat rigid architecture makes it well-suited for robustly storing small amounts of data. This means it’s not truly scalable for things such as big data storage that has come to be synonymous with IoT.

This and other concerns led a team of developers to launch IOTA, a cryptocurrency platform designed for the demanding IoT ecosystem. With a twist on the traditional blockchain the company calls Tangle, IOTA claims to provide zero-fee transactions, as well as a unique verification process that resolves many of the scalability problems associated with bitcoin.

Tangle is attempting to position itself as a viable alternative to the Ethereum blockchain, which is still the gold standard for most applications built on the architecture. Regardless, new Ethereum-based solutions for IoT could render the discussion moot, offering a better way for IoT to function.

Storage Versus Streaming

One of the biggest points of contention between supporters of blockchain and Tangle is the former’s capacity for data storage. IoT systems create massive amounts of data to parse and store, and most existing blockchains simply cannot handle the load. Indeed, the technology is meant to offer strong, secure storage for limited amounts of data.

 

Detractors argue that this philosophy is incompatible with IoT design, and proffer that Tangle delivers a better solution thanks to its take on mining. With IOTA, every transaction requires the user to verify two other, random transactions, creating a tangled ledger that reduces the need for mining and theoretically removes any fees. This makes it a useful infrastructure for IoT devices that require micro and nano-transactions to process data being communicated, without raising overheads.

In this sense, Tangle architecture does exhibit notable advantages over blockchain. Transaction processing in blockchain means that much larger block sizes and volumes will take significantly longer to process as they must be completely verified to be appended to the chain.

For an IoT platform, this could represent prohibitive costs, and a lack of functionality due to longer processing times. However, some blockchain-based applications could present a third option using Ethereum’s blockchain, helping to resolve many of the system’s issues with data storage.

The blockchain craze continues unabated as more companies create new applications faster than ever. The architecture made popular by bitcoin and its contemporaries has proven to be a useful tool that offers better security and transparency, leading to its growing adoption in several industries thanks to its effective communications and public ledger.

Even so, blockchain’s meteoric rise has not been without speed bumps, and there have been instances where it has shown weaknesses that could prove to be major challenges down the road.

In an industry such as the Internet of Things (IoT), blockchain’s capabilities have proven to be a particularly strong fit. Interconnected devices require rapid and transparent verification of data, something blockchain’s ledger can handle exceptionally well. However, some have complained that blockchain’s somewhat rigid architecture makes it well-suited for robustly storing small amounts of data. This means it’s not truly scalable for things such as big data storage that has come to be synonymous with IoT.

This and other concerns led a team of developers to launch IOTA, a cryptocurrency platform designed for the demanding IoT ecosystem. With a twist on the traditional blockchain the company calls Tangle, IOTA claims to provide zero-fee transactions, as well as a unique verification process that resolves many of the scalability problems associated with bitcoin.

Tangle is attempting to position itself as a viable alternative to the Ethereum blockchain, which is still the gold standard for most applications built on the architecture. Regardless, new Ethereum-based solutions for IoT could render the discussion moot, offering a better way for IoT to function.

Storage Versus Streaming

One of the biggest points of contention between supporters of blockchain and Tangle is the former’s capacity for data storage. IoT systems create massive amounts of data to parse and store, and most existing blockchains simply cannot handle the load. Indeed, the technology is meant to offer strong, secure storage for limited amounts of data.

Detractors argue that this philosophy is incompatible with IoT design, and proffer that Tangle delivers a better solution thanks to its take on mining. With IOTA, every transaction requires the user to verify two other, random transactions, creating a tangled ledger that reduces the need for mining and theoretically removes any fees. This makes it a useful infrastructure for IoT devices that require micro and nano-transactions to process data being communicated, without raising overheads.

In this sense, Tangle architecture does exhibit notable advantages over blockchain. Transaction processing in blockchain means that much larger block sizes and volumes will take significantly longer to process as they must be completely verified to be appended to the chain.

For an IoT platform, this could represent prohibitive costs, and a lack of functionality due to longer processing times. However, some blockchain-based applications could present a third option using Ethereum’s blockchain, helping to resolve many of the system’s issues with data storage.

Streamr, an application based on Ethereum, has designed a platform for IoT systems that uses live data streaming instead of storage. In the development team’s mind, storage in such technology is superfluous on an atomic level, as most devices require live data to make the best possible decisions, as opposed to outdated information.

Moreover, Streamr proposes to create a marketplace that allows IoT providers to monetize their live data and create a greater incentive for interconnectedness and participation. The system even hosts a development environment designed to facilitate easy creation of IoT applications.

 

Ethereum and Tangle: Which Reigns Supreme?

On a deeper level, this IoT battle between Streamr and IOTA represents a broader clash of philosophies. On one hand, blockchain has proven to be a game-changing technology. Ethereum’s smart contracts and architecture have lead to a boom in the sector, and the democratization of information.

On the other hand, Tangle offers to virtually remove the cost of transacting and solve the mining issue thanks to its verification methodology. IOTA also claims that its verification method removes many of the centralization problems traditional mining creates. Because there is no need for miners to process blocks of transactions, there is no motivation to centralize the verification process.

However, Ethereum backers have countered that even with Tangle’s supposedly superior design, they must still run on hardware that is not optimized for that type of process. Instead, verification could become bogged down due to existing technology’s binary nature, and lead to longer processing times down the line.

Moreover, solutions like Streamr render the data conversation moot, as they remove the burden of data storage from the blockchain. Instead of handling massive amounts of data that can crash the network, live streamed data offers an immediate solution for IoT, and reduces the overall chain’s operational load. Most importantly, however, is that the existing ecosystem is already geared toward existing platforms such as Ethereum’s ERC-20. By creating applications that fit in to the wider environment, developers can reduce the development costs and compatibility issues.

An Escalating Race

Despite blockchain’s popularity, new solutions are constantly emerging that could threaten its recent darling status in the technology world. While Ethereum has in many ways solidified its staying power and remains the most popular development environment for blockchain-based applications, Tangle is an intriguing competitor.

IOTA’s architecture is still young, and while it has made promising steps towards broader adoption, the newer upstart must still contend with Ethereum’s existing infrastructure and first-mover advantage. Additionally, companies that build on Ethereum remain ahead, as they are already compatible with the prevailing systems. With the introduction of live-data streaming capabilities from companies like Streamr, Tangle may face an uphill battle dethroning Ethereum in the IoT sphere, even when considering its custom-built design.

Written  by Investopedia

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