Bitcoin’s price has once again retreated to lower levels and the recent bull run seems to at least temporarily be running out of steam. This generally reflects the prevailing uncertainty of the wider markets. However, those who have been following cryptocurrencies for a while know there is no reason to panic. After all, such swings are quite normal in the wondrous world of crypto.
This week we will talk about blockchain as a technology. The government of Australia believes blockchains will in the very near future become the ground for all financial technology. Saudi Arabia in turn has presented a blockchain-based system to improve international trade during these COVID-ridden times.
In other news we will check out Russia’s new crypto-hostile legislation and a certain rogue rascal waging war against blockchain by trying to censor information on Wikipedia.
Last week’s news can be read here.
ETH transaction fees have grown hundreds of percent
Transaction fees in the Ethereum network have rapidly risen over 600% in the last month. The median price in turn has spiked nearly 900% during the same period. At worst transaction fees have reached nearly $9 dollars per transaction.
The development is largely a result of other applications built on top of Ethereum. So called decentralized finance applications have gained increasing popularity and many of them are built on Ethereum’s blockchain. The more these applications are used, the more expensive all transfers in the blockchain consequently become.
The explosive rise in transaction fees has alerted Ethereum developers to shift their focus from the upcoming Ethereum 2.0 to the current situation at hand. Developers are trying to solve the transaction fee problem in order to keep Ethereum usable.
One proposed solution to the problem is to make using certain heavier smart contracts notably more expensive. However, this option also runs the risk of making some smart contracts useless. As another setback it may take weeks or even months to find solutions to fix the issue.
Australian government: All fintech firms will use blockchain within 10 years
A committee of the Australian government has published a report predicting all companies in the sectors of financial and regulatory technology will use blockchain within the next ten years. The report asserts that fintech and blockchain will be crucial for Australia’s future.
“Most fintech and regtech projects will either be built predominantly on distributed ledger technology or blockchain or heavily using that within the next 10 years,” the report forecasts.
According to the report, the financial potential of blockchain will grow to $175 billion dollars during a five-year period. In the next ten years it is estimated to grow up to $3 trillion dollars.
Aside traditional fintech, the report also predicts that other financial sectors will increasingly turn toward using blockchain. As an example the report names the Australian agricultural sector, which is believed to grow to $100 billion dollars by the year 2030.
Stablecoin markets grow $100M every day
The combined market value of so called stablecoins is growing by $100 million dollars every day, reports crypto analysis firm Coinmetrics. According to Coinmetrics the growth is driven particularly by decentralized finance systems, of which many use stablecoins.
Stablecoins refer to cryptocurrencies based on blockchain or something else with their value pegged to national fiat currencies, gold or other stores of value.
“A global stablecoin is a cross-border phenomenon. It can be operated in one jurisdiction, denominated in another’s currency, and used by consumers in a third. The regulatory response must match this,” states Andrew Bailey from Bank of England.
According to CoinMarketCap, the most significant stablecoin by far is Tether. Tether currently dominates the market capitalization of all stablecoins with a share of roughly 80%.
Crypto-hater combats blockchain on Wikipedia
Wikipedia is currently being used as an arena for guerrilla warfare against cryptocurrencies. The center of this is anti-crypto activist and author David Gerard, who is also a senior Wikipedia editor.
Gerard’s latest success is removing an article about the Australian crypto company Power Ledger, of which he proudly brags in his blog. Gerard alleges that news articles about Power Ledger are nothing but forwarded press releases.
“The only genuine press coverage was about how Power Ledger was a scam,” Gerard claims.
Gerard also asserts that related articles by The Economic Times and Tech Crunch about the subject were just press releases by Power Ledger. Tech Crunch has over 16 million readers and Wikipedia itself states that The Economic Times is the world’s second most significant English business media.
Gerard has also often publicly exerted his hate for all things related to cryptocurrencies. According to him blockchains are scams and he despises all crypto-related news sites. Gerard has also written a book about the subject titled The Attack of the 50-Feet Blockchain.
Russia’s new law would prohibit crypto mining
The Russian Ministry of Finance has introduced a new draft concerning cryptocurrencies. If passed, the law would in essence prohibit all forms of cryptocurrency mining in the country.
While the draft does not nominally outlaw crypto mining, it would still practically prevent it another way. The law states that while using mining programs and equipment is not illegal, gaining cryptocurrencies as a reward for it is.
“Miners receive crypto as a reward for recording transactions on the blockchain, and this becomes illegal,” commented Igor Runets from BitRiver, one of Russia’s largest crypto mining companies.
Russia already has regional restrictions regarding cryptocurrency use. However, since the new law would be implemented on a federal level it would overrule them and apply everywhere in Russia.
According to the draft, any violation of the law could be penalized with a fine of a million rubles or up to 7 years in prison.
Saudi Arabia wants blockchain business passports
Saudi Arabia is planning a blockchain-based business passport for companies. The passport could supposedly be used internationally with the intent of easing the bureaucracy involved in different licensing procedures.
The Saudis believe such a digital passport could for instance allay problems caused by the COVID-19 pandemic in trade. Companies would be able to acquire the passport from their respective countries, after which it would be blockchain-verified automatically. This is believed to provide solutions for functioning with COVID-related restrictions.
Saudi Arabia presented its passport for a group of company leaders from G20 countries. However, implementing the passport would still require international support for the project.