Bitcoin block size: UASF updates its proposal
A controversial Bitcoin block size proposal has been upgraded.
UASF, in fact, is a new idea proposed by a pseudonymous contributor called Shaolingfry.
She/he wants to solve the bitcoin block size debate with a user activated soft fork (UASF), a possible method arount the actual deadlock over the Segregated Witness (Segwit) solution.
Right now, the need for a majority consensus in order to make a decision means that any mining pool with enough hashing power has the veto power over any proposal; this might be the reason why SegWit is tardy to arrive.
Conversely, UASF wants to bypass the veto power and put the decision only into the hands of bitcoin’s users.
After a first general UASF proposal, Shaolinfry suggested a change – BIP148 – in order to moving the power out of the miners’ decision and give it to the “economic majority”.
Gregory Maxwell and other bitcoin developers refused this proposal because it could undermine the bitcoin blockchain stability.
“We should use the least disruptive mechanisms available and the BIP148 proposal does not meet that test,” he wrote
For this reason, Shaolinfry announced he/she is working on a redraft of the proposal to address some of the concerns suggested by Maxwell and other developers.
Shaolinfry published an announcement post saying that the reason for this changes is related to technical criticisms of how UASF would upgrade the network.
“BIP 148 is certainly not what a normal UASF would or should look like. While support for BIP 148 is surprisingly high, there are definitely important players who support UASF in general but do not like BIP148 approach.”
This revised proposal suggests the use of BIP8, but this concerns how soft forks are implemented.
Segwit and BIP8
Right now, if the 95% hashrate support for the Segregated Witness option is not reached by November 15th, the proposal will be discarded by default.
Anyway, the technical changes made in a proposal (BIP8) would be automatically locked in at the end of the time period, even if they could be adopted sooner.
Shaolinfry’s idea is that after the November 15th, a UASF SegWit proposal will be edited according to the BIP8 changes.
This means that the bitcoin community would have 1 year to prepare the upgrading of a UASF, removing the possible destabilizing effect of a short-term.
“I believe this approach would satisfy the more measured approach expected for bitcoin and does not have the issues Maxwell brought up about BIP148.”
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Bitcoin users growth: read the University of Cambridge’s research about cryptocurrencies
According to a recent research conducted by the University of Cambridge, bitcoin users number has increased by four times in five years.
The research explains that bitcoin active wallets surged from 8.2 mln in 2013 to nearly 35 mln in 2016, suggesting that the number of active wallets ranges from 7.5% to 30.9% of the total number.
The Global Cryptocurrency Benchmarking Study by the Cambridge Centre for Alternative Finance at the University of Cambridge suggested an estimated number of unique active bitcoin users wallets to be grown from between 0.6 mln and 2.6 mln in 2013 to currently between 5.8 mln and 11.5 mln in 2017.
This study – led by Dr. Garrick Hileman & Michel Rauchs – is the first of its kind to examine the growing global cryptocurrency industry and its exchanges, wallets, payments and mining platforms.
The research, in fact, is not only focused on bitcoin users, but also on cryptocurrencies in general.
“81% of wallet providers are based in North America and Europe, but only 61% of wallet users are based in these two regions,” the study which collected non-public data from nearly 150 companies and individuals states. “Almost half of all wallet providers are located in the United States and the United Kingdom. If we break down origin by world region, Europe is leading with 42% of wallet providers, followed by North America with 39% and Asia Pacific with 19%.”
North American wallet providers think that the current regulation is good and 57% of European and 2% of Asian-Pacific wallet services seem to be satisfied with the existent regulation.
Exchanges have to gain more popularity yet as only two of the 51 exchanges included in the research can provide a decentralized platform: 40% of North American wallet platforms said that the existing regulation is excessive and too strict – a point of view shared by 14% of European companies.
Another focus of this study is the innovative and rapidly changing of the cryptocurrency economy that is becoming more fluid in a few countries.
It says the line between exchanges and wallets is more and more “blurred” and several other digital currencies after Bitcoin are now supported by a growing environment as they are able to be used in a wide range of use cases.
Also, it argues that security-related problems and the lack of clarity about digital currencies regulation will continue to be prevalent in the next future.
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Intesa Sanpaolo Blockchain: a new trial for recordkeeping
The newest Italian Banca Intesa Sanpaolo blockchain – related project has been tested with the main goal of validating trading data.
Thanks also to a partnership with Deloitte and the Italian startup Eternity Wall, Intesa San Paolo started to test a new proof-of-concept at the end of 2016.
Heart of the project is the open-source OpenTimestamps protocol, developed by Peter Todd, a Bitcoin Core contributor, that Eternity Wall moved to implement.
The Intesa Sanpaolo blockchain project uses the bitcoin distributed ledger to notarize transactions and create a publicly available database trail for future referral.
Information security officer for the bank, Carlo Brezigia explained:
“Relevant data has been hashed to produce a short unique identifier – a digest – equivalent to its digital fingerprint. This fingerprint has been associated to a blockchain transaction and hence registered on the blockchain: the blockchain immutability provides robust non-refutable timestamping that will always prove without any doubt the existence of that data in that specific status at that precise moment in time.”
According to a Deloitte statement, Intesa Sanpaolo tested this tool between October and February with tht idea of including support for other blockchains, potentially including also private ledgers.
This Italian blockchain trial shows the will of regulated financial institutions to test public blockchains.
In an official announcement, the bank’s retail innovation accelerator officer, Gianni Cavallina, explained the interest in experimenting these protocols beyond the main use case of digital currenciese:
“In particular, considering public blockchains, we are exploring the applicability of different use cases, abstracting from the value of its native digital currency. Notarization is one of the most interesting applications.”
Intesa Sanpaolo Blockchain projects– also member of the R3 distributed ledger consortium – also include tests on several blockchain use cases made during the previous years, including trade finance and digital identity.
Read more about previous Italian projects related to the Blockchain here.
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Bitcoin in Russia: transactions will be monitored
Bitcoin in Russia will be officially “recognized” by 2018, but each transaction will be subjected to monitoring.
In a recent statement by the Russian central bank, Deputy Finance Minister Alexey Moiseev explains – in an interview quoted by Bloomberg – that a legal position about Bitcoin in Russia will be taken in the next future.
Recently, bitcoin and altcoins had been put aside regarding regulation, with users and companies operating in Russia threatened with takedowns and jail.
In October, Russian communications watchdog Roskomnadzor blocked access to a peer-to-peer marketplace called LocalBitcoins, but developers responded by setting up a new mirror site, LocalBitcoins.net.
“The state needs to know who at every moment of time stands on both sides of the financial chain. If there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations,” said Moiseev about the Russian government position.
While digital currencies are still yet to receive an official status, Bloomberg reports that they will be treated as assets, cash or security by mid-2017.
Back in January, Deputy Olga Skorobogatova (Bank of Russia) commented that authorities “would not like to concretely block anything” instead of “understanding how to approach cryptocurrency and from this generating a basis for regulation.”
Read more about Bitcoin in Russia by clicking on the blog post titles below.
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Bitcoin Sweden regulation: the blockchain to record property deals
A new project for Bitcoin Sweden regulation has moved to its second phase. In fact, the Sweden’s land registry authority, the so- called Lantmäteriet, wants to use the distributed ledger tech with the main goal of recording property deals.
This project was conducted by the blockchain startup called ChromaWay and the consultancy group Kairos Future, that are also working in partnership with two banks: SBAB and Landshypotek.
Talking about the project’s potential, ChromaWay CEO Henrik Hjelte commented:
“It could be a great benefit for economic growth”.
Also, he said that Sweden is the ideal country to test a distributed ledger system for land titles, because trust in public authorities is higher than elsewhere and it could influence other countries to do the same in the next future.
Thanks to this system, a buyer and seller would open a contract where banks and the land registry can view the workflow of the deal, such as due dates for payments.
“In the blockchain confirmation of each step in the workflow is made with a hash, like the blockchain normally. Everyone has the same information and you can check it yourself,” said Magnus Kempe of Kairos Future.
Another use case for this project is the potential verification of an IOU issued by the bank to its property buyer.
“That part is going to be hidden for the others in the contract. You will only have the hash confirming from the bank that the IOU has been signed,” commented Kempe.
That said, SBAB Bank explaind it has no imminent plans to implement the blockchain:
“Our reason to participate in the project has not been to actually implement the solution in our current processes. But rather an opportunity for us to get a better understanding of the blockchain technology and how it might possibly fit in our future products/offerings.”
Bitcoin Sweden regulation: what is the EU doing?
Recently, the EU passed a directive that puts more weight behind digital signatures; a similar bill has been proposed in Arizona too.
Click here to read more about EU regulation related to bitcoin and blockchain.
A the moment, this land registry project is looking at new ways for working at this issue.
“Actually, the land registry today, they don’t receive much physical paper, they get PDFs of the contracts which are signed electronically so they don’t store the physical contracts. What we are thinking of is, you can actually sign the contract digitally in the blockchain to the land registry, they can award the land titles and then you can throw away the paper so you’re not dependent on the physical archive.”
According to ChromaWay’s Henrik Hjelte, the use of blockchain could be disruprive in order to manage ownership of property and improving transparency in real estate sales.
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Blockchain regulation: Arizona recognizes it under state law
Another move has been made in Arizona in order to make Blockchain regulation more effective.
In fact, a legislature has creared a bill that would recognize the distributed ledger signature and smart contracts under state law.
At the moment the bill has been sent to the governor’s desk for a final approval.
As previously reported, this bill would make data tied to a blockchain “considered to be in an electronic format and to be an electronic record” in the US State of Arizona.
Also, the bill quotes specifically the Ethereum smart contracts, so there is a specific effort with the main goal of capturing new kinds of delivering information – the distributed ledger– under existing laws.
The bill explains:
“‘Smart contract’ means an event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on that ledger.”
This bill was sent to sent to Governator Doug Ducey’s office on March 27th, after clearing the Senate by a 28-1 vote on the 23rd.
Even if it’s not so clear if or when the governor will sign the bill, its support suggests that this measure will see the light soon.
A few members of the legislature’s lower chamber, in fact, approved this bill unanimously previously this year.
This Arizona bill is similar to a legislation passed and signed in Vermont last year. There, lawmakers proposed to allow data embedded on a blockchain to be used in a court of law.
Click here to read more about Blockchain regulation worldwide.
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Bitcoin fork: why developers keep calm
Right now the debate about a possible Bitcoin fork is very noisy and maybe it is the main factor that is driving the cryptocurrency price at the moment.
At press time, bitcoin value is less than $1000 with some traders that are liquidating their positions.
Amidst one of the more volatile period of bitcoin, developers seem not to be scared or worried about this two-year scaling debate.
Several miners are running the so-called solution “Bitcoin Unlimited“, a popular alternative bitcoin software that opened a discussion of a possible fork of the network which could generate two different digital currencies, a result similar to what happened with the recent Ethereum hard fork that lead to the creation of Ethereum Classic.
Bitcoin Core contributor Eric Lombrozo has taken a skeptical point of view, explaining that the bitcoin community is not new to this issues.
Bitcoin XT and Bitcoin Classic, or other software alternatives that aims at changing the bitcoin blockchain- related rules, have emerged, but also declined, over the last few days.
While users who support the Bitcoin Unlimited think that is the real future for bitcoin, arguing that a bitcoin fork will bring it as the winning software, critics view it as broken.
Lombozo explained:
“The idea you can change bitcoin by lobbying one group of stakeholders against another is fundamentally flawed, as is the idea you can force controversial consensus rule changes. Bitcoin requires more tactful politics.”
On the other hand, Bitcoin Unlimited supporter Peter Rizun believes that bitcoin will see a block size increase, making bitcoin competitive with the other alternative cryptocurrencies.
“In my opinion, there’s a 75% chance we get an upgrade to larger blocks in 2017,” he commented.
So, while some people substain that only one software will be able to survive after this possible bitcoin fork, other experts suggested that most people won’t move to a new blockchain, so Bitcoin Unlimited will lead to another digital currency.
But, of course, the greatest part of the community want only one bitcoin.
Bitcoin Core contributor Luke Dashjr said to Coindesk:
“A hard fork is by definition an altcoin that the entire community decides to adopt as a replacement. Since most of the community rejects Bitcoin Unlimited, it is impossible for it to become a hard fork. Anyone can fork at any time. That people don’t speaks to the strong incentives not to.”
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Nevada stops blockchain transactions taxes
A new bill has been proposed to the Nevada Senate and, if it pass, will stop local taxes and fees on the use of a blockchain ledger, both for payments and contracts.
Nevada Senate Bill 398 was filed yesterday and presented by Senator Ben Kieckhefer, who wants to create a legal level for the use of blockchain-based networks.
Notably, this bill will also stop local governments asking for taxes on the use of the distributed ledger or to require a special licensure in order to use it.
This new proposed bill explains:
“A local governmental entity shall not: Impose any tax or fee on the use of a blockchain or smart contract by any person or entity; Require any person or entity to obtain from the local governmental entity any certificate, license or permit to use a blockchain or smart contract; or Impose any other requirement relating to the use of a blockchain or smart contract by any person or entity.”
If this bill pass, its benefits won’t be applied only to these potential economic expenses.
Kieckhefer’s suggestion, in fact, will allow blockchain records to be used in proceedings, noting that “if a law requires a record to be in writing, submission of a blockchain which electronically contains the record satisfies the law”.
“A smart contract, record or signature may not be denied legal effect or enforceability solely because a blockchain was used to create, store or verify the smart contract, record or signature. In a proceeding, evidence of a smart contract, record or signature must not be excluded solely because a blockchain was used to create, store or verify the smart contract, record or signature,”the proposed bill states.
Last month a similar proposal was made in Arizona, or a further move to legitimize the use of blockchain distributed ledger; a previous effort was also proposed in Vermont back in 2016.
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Bitcoin exchange regulation in China
Soon a new bitcoin exchange regulation in China may be required to ensure know-your-customers (KYC) verifications.
According to an article published by Caixin, the People’s Bank of China issued a new paper for the Chinese exchanges on which it is looking for comments for the proposed regulation.
This move is part of a effort by the Chinese central bank in order to have a bitcoin exchange regulation and avoid money laundering and other financial crimes.
According to the official press release, this paper explains both a regulation related to the anti-money laundering (AML) issues and the creation of a customer identification system.
Bitcoin users will have to own an on-site certification if they want to deposit funds. To do se, they will have to present identification at the time of registration. Also, for clients who hold more than ¥50,000 (over $7,200) in volume, a remote video certification will be required to authenticate their own identity.
The document also contemplates that there must be a senior management team who controls AML procedures and reports dubious transactions.
This news come after the PBoC’s decision made back in January that indicates to intervene in the Chinese bitcoin market during this period of heavy bitcoin price volatility.
Since then, bitcoin exchanges started to implement several new policies, ending margin trading and freezing withdrawals for a few cryptocurrencies.
At the moment, while I’m writing this article, bitcoin Chinese exchange withdrawals are still frozen.
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Trump Bitcoin – related new project: how will he use the Blockchain?
The newest Donald Trump Bitcoin – related project was announced this week during the DC Blockchain Summit held in Washington.
US regulators and officials explained their goal of increasing the adoption of blockchain technology within the government and the American private sector.
Also, a few representatives of President Trump, talked about the potential use cases of the distributed ledger, commenting that they are developing a new Trump Bitcoin project related to the public policy.
In fact, they underlined the ledger potential to streamline bureaucracy, empower consumers and drive economic growth.
Chief economist for Vice President Mike Pence, Mark Calabria, gave a speech in which he explained how the Donald Trump administration wants to exploit the blockchain technology and what possible applications can have the tech in government and finance, as Treasury Department is conducting a review of the whole American financial system.
“We are approaching this with an open mind. We recognize that we’re not necessarily the innovators, but what we can do is get out of the way and figure out where the government stops you from being innovative.”
Trump Bitcoin project benefits
The co-chairs of the Congressional Blockchain Caucus asserted that they are looking for understaning how the tech could be developed to be used within the public sector.
“We’re very interested in helping to facilitate the deployment of blockchain technology in federal agencies and across the government. Our role is to prod government agencies to look at more efficient ways of doing things,” said Jared Polis.
Republican co-chair from Arizona, David Schweikert, argued that one of the main goals is to keep policymakers updated about the technology’s potential .
“How do those of us who do policy not leap ahead and screw up what we don’t know is coming tomorrow? Sometimes those of us who get elected are arrogant sometimes in what we think we know. How do we help our brothers and sisters in congress understand this isn’t just about cryptocurrency? There’s an incredible world out there that’s so much bigger.”
Public and private
That said, private sector has a major role to play in the government’s blockchain adoption.
Managing director of financial services at Accenture, David Treat, explained that the public sector is not just a political advertisement.
“It was a completely different dynamic of not being reactive and not being, ‘Tell me what you did, and let’s opine on whether that was good or OK.’ It was actually, ‘We see this thing on the horizon, we know it has relevance – can you teach us?'”
Also, blockchain experts and analysts argued that its adoption by the government might help to normalize it for use in other sectors.
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