Even countries can create cryptocurrencies – Weekly news 37/2019

Welcome back to our weekly news, dear readers. Bitcoin’s price has been floating around $10 000 dollars for the past weeks, and despite minor fluctuations no radical movements have been seen. This has already incited the humorous question if bitcoin can now be considered a so called “stablecoin”.

Bitcoin’s stormy and stable success has also alerted the world to the potential of blockchains – and countries are not an exception. The Marshall Islands now intend to create their own cryptocurrency, which will be sold in advance to all willing parties. France in turn has plans to prevent the possible arrival of Libra in Europe, citing Facebook’s crypto as a threat to nations and their citizens.

In other news we have the exponentially growing computing capacity behind Bitcoin’s blockchain, millennial interest in crypto and Lightning Network development and dangers. Despite some growing pains, the young granddaddy of crypto seems to be loading rocket fuel to reach new heights.

Last week’s news can be found here.

The ten-year-old granddaddy of crypto is again above ten grand and rising.

Prasos Ltd competes for title of best fintech firm

Prasos Ltd, the company behind Coinmotion and Denarium, has entered the finals of a competition seeking “the most revolutionary fintech company of the year”. The finalists were chosen in a prevote, and in addition to Prasos there are five Finnish fintech companies competing for the title. The other companies are Bankify, cloudasset, Invesdor, Mash and Tomorrow Tech.

A jury consisting of fintech investors and experts will choose the winner in the finals held at Future Digital Finance Forum in Helsinki Finland. According to the judges the choice will be made based on the company’s vision, innovation, entrepreneurship and scalability.

The event itself will gather a group of fintech, cryptocurrency and blockchain hobbyists and specialists from different countries to speak and partake. The theme of the event is the future and evolution of financial technology on the Nordic markets.

“This is of course awesome for us. It’s great that our work is noticed and appreciated,” comments Heidi Hurskainen, CEO of Prasos.

Heidi Hurskainen believes Prasos will in the future become an even more significant blockchain company.

Millennials favor cryptocurrencies in case of recession

Investing platform eToro has published a recent survey in which they studied the investment preferences of different age groups. According to the survey 40% of so called millennials would most preferably invest in cryptocurrencies in case of an economic recession.

Older age groups, the so called generations X and Z, were not as interested in cryptocurrencies and preferred other investments as safe havens. Representants of generation Z would invest 50% in real estate, while generation X believed that commodities were the best hedge against a recession.

“We believe that if a recession were to occur, we’d see shrinking stock portfolios and growth in other asset classes like crypto, as well as new fractional ownership models. Historically, these investment opportunities have been limited to high net worth and institutional investors, but innovation is unlocking these opportunities for everyday investors and clearly, these results indicate that the demand is there.” comments eToro’s managing director Guy Hirsch.

Another investigation confirms that bitcoin and crypto is mostly understood by young people, which bodes well for the future.

France wants to keep Libra away from Europe

French finance minister Bruno Le Maire has stated that France aims to prevent the development of Facebook’s upbcoming Libra cryptocurrency. According to Le Maire Libra causes risks for both European monetary sovereignty and private citizens, and should therefore not be launched.

”So I want to say this with a lot of clarity: In these conditions, we cannot authorize the development of libra on European soil,” Le Maire said in a conference for OECD countries.

Libra has also met earlier political resistance due to its nature, which critics fear may give Facebook a power position comparable to central banks. Facebook’s earlier recklessness regarding user privacy has also not helped inspire trust in their project, which in theory could allow the company access to the transactions of billions of people.

It remains to be seen if Libra will ever see the light of day. So far the project has faced heavy headwind from both authorities and cryptocurrency users.

According to Bruno Le Maire Libra is a threat both to the state and citizen privacy. (PICTURE: SmartGov)

Marshall Islands want their own crypto

The Marshall Islands intend to publish their own national cryptocurrency dubbed “Marshallese sovereign”, or Sov. The new currency will be issued by the state and launched aside the country’s earlier official currency, the U.S. dollar.

The Marshall Islands intend to spread their cryptocurrency with a mechanism heavily reminding of ICOs, or Initial Coin Offering projects. The idea behind ICOs is that investors can buy tokens in a presale before the project’s release, and if the project is successful early investors are rewarded.

The island nation’s own way of distribution is called Timed Release Monetary Issuance, or TRMI. Consumers can buy TRMI tokens before the official release of the currency, and later exchange the tokens to Sov-coins. According to the Marshallese government the intention is to have use and liquidity for the currency already at the moment when it is published.

“TRMI is really another way of doing an ICO but in a more responsible and methodical manner. When you do TRMI, you’re looking at the appetite for the product and how it’s going to behave in the markets.” comments minister David Paul.

David Paul believes the Marshall Islands could become one of the world’s crypto centers.

Dangerous Lightning Network bug discovered

Developers of Bitcoin’s Lightning Network have warned that several currently used Lightning programs have a bug, which can cause loss of funds. The bug applies to versions LND 0.7, C-Lightning 0.7 and éclair 0.3 as well as all their earlier versions. Users of these versions are recommended to update their programs immediately.

It is unclear if the vulnerability has yet been abused or if users have lost bitcoins. According to Lightning Labs’ technical chief Olaoluwa Osuntokun the company has verified that the vulnerability has been used, but so far no details have been revealed.

The Lightning Network is a second-degree solution built on Bitcoin, which can in theory increase Bitcoin’s transaction speed thousandfold with minimal fees. The Lightning Network is a potential solution for Bitcoin’s scalability problems, but so far it is still under development and not ready for widespread use.

The Lightning Network has massive potential, but its development is still in progress.

Bitcoin’s mining capacity grows almost exponentially

Bitmain, one of the world’s biggest mining pools and producers, has recently published two new devices: Antminer S17 and Antminer T17, which produce more computing capacity in relation to energy use than any earlier miners of the company. These new devices quickly found more demand than supply, since Bitmain reports both were sold out in just a few minutes.

The computing capacity of the Bitcoin network has seen almost exponential growth and repeatedly broken records. At the time of writing the network’s capacity is over 8 exahash, which is as big a number as it sounds. The computing capacity has grown 10% in a week, 31% in a month, 100% since May and 200% since last December.

The introduction of new mining devices on the markets is likely to further increase the Bitcoin network’s computing capacity. A rising computing capacity has historically been a good indicator for bitcoin’s upcoming price rise. Miners tend to increase their computing capacity when they expect long-term growth, and so far their optimistic patience has always been rewarded.

Bitmain’s new Antminers are likely to further increase mining capacity.

Writer Robin Nyberg