Time to sum up the goings on in the world of Bitcoin once again. Let’s see what’s been going on last week. What significant developments have there been and what has the price been up to last week.
Coinbase published quite an insightful article on July the 6th on a possible threat to the survival of Bitcoin. It reads:
Perhaps the most infamous potential attack, known as a ‘51% attack‘, would find a single entity introducing a version of the blockchain that it controls and is accepted as valid. While academics have argued attacks can be carried out with a smaller percentage of the network, at 51% of the hashrate, such an attack would be almost guaranteed to work.
The article highlights the concerns that if in case after the halving of the reward estimated to happen at the end of this month the price doesn’t rise significantly, smaller miners will be faced with going out of business. This then gives even more power to the bigger players in the mining game. Although the general opinion seems to be that the 51% attack is unlikely as it would essentially be shooting themselves in the foot by the big mining companies, it is still possible and should be something to be kept in mind.
As of today, transaction verification on the bitcoin blockchain can already be seen as being controlled by a small number of influential participants. As of early June, 70% of all hashrate came from just four Chinese mining pools: F2Pool, Bitmain’s AntPool, BTCC Pool and BW.com, a percentage that, combined, represents a majority control of the bitcoin market.
It is still seen as an unlikely occurrence as sabotaging the currency would directly impact the miners and every businesses first goal is to make a profit. There are other issues that Bitcoin could face like hacks at exchanges and compromised details. But that goes with anything. Criminals have always been and will always seeks new ways of gaining through illegal activities.
The EU 4th Anti-Money Laundering Directive
The Commission has today adopted a proposal to further reinforce EU rules on anti-money laundering to counter terrorist financing and increase transparency about who really owns companies and trusts.
The EU Commission has made one of its priorities the fight against money laundering, terrorism financing and tax avoidance and hence are having a deeper look into cryptocurrencies. The new changes proposed on the 5th of July will try and tackle the new means of these issues.
“Tackling terrorist financing risks linked to virtual currencies: to prevent misuse of virtual currencies for money laundering and terrorist financing purposes, the Commission proposes to bring virtual currency exchange platforms and custodian wallet providers under the scope of the Anti-Money Laundering Directive. These entities will have to apply customer due diligence controls when exchanging virtual for real currencies, ending the anonymity associated with such exchanges”
Whenever the markets are in turmoil Bitcoin thrives. We saw that in effect back in 2013 when Cyprus’ economy collapsed and Bitcoin plummeted into greatness. There was also a jump of over a $100 per BTC after the Brexit referendum results were announced. If Donald Trump were to actually become the next president of the United States we would see an uncertainty that is seen as one of the top 10 global risks. Up to this point I didn’t truly believe that Trump winning was an actual possibility, but hey I didn’t think that Brexit would actually happen either.
So there’s lots of uncertainty in the world today and with the upcoming halving of the mining reward we could potentially see Bitcoin reach new highs. Some say sky is the limit. Another possibility is that nothing groundbreaking happens. Economics is a tricky business. I for one am increasing my stash of Bitcoins before the halving for sure.