Taproot further improves Bitcoin – Weekly news 41/2020

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Hello there, and welcome back to another week of crypto news. This time we will take look at Bitcoin’s long-awaited Taproot update, which is now ready. If the update functions as expected, it will lift Bitcoin’s safety and privacy to a whole new level. Additionally Taproot will enable Bitcoin smart contracts to be implemented in Bitcoin, rivaling Ethereum’s promises.

Additionally we will check out the possibilities of cryptocurrencies and blockchain. Nigeria has now turned to Bitcoin as a measure against police violence in the corruption-ridden country. Blockchain in turn has been utilized to digitalize and gamify collectible sports cards.  

In other news we have hodling by both users and exchanges, as well as Europol’s massive operation and its impact on work against cybercriminality.

The previous weekly news can be found here.

Earth Lightning
Combined with the Lightning Network, Taproot can truly make Bitcoin money of the future.

The Taproot update is ready

Bitcoin’s long anticipated Taproot update is now ready. However, the update will not yet be implemented as developers want to ensure it functions as expected.

Taproot and the associated Schnorr signatures are regarded as one the most important upgrade for Bitcoin in the past years. Taproot will improve the privacy of Bitcoin use and enable different smart contacts and similar functions in the system.  

As an example Taproot can facilitate time locks and transactions requiring multisig confirmations from several users. With Taproot these different conditions can also be hidden so that they cannot be detected in the blockchain.

Testing taproot and gaining a wide consensus to implement it may still take years. However, the upgrade will likely be introduced sooner, since it has not met similar resistance as Bitcoin’s previous significant update SegWit.

Taproot notable improves Bitcoin’s security and its development prospects.

Five largest exchanges control 10% of all BTC

While Bitcoin as a system is extremely decentralized, a certain amount of its infrastructure remains highly centralized. According to blockchain data platform Chain.info, over 10% of all bitcoins are in the hands of five large crypto exchanges.

More than 1.96 million BTC is currently held by the five largest crypto exchanges. Most bitcoins are held by Coinbase with an estimated 944 904 BTC distributed across 4.39 million different wallets.  

Other large exchanges follow far behind Coinbase. Huobi has an estimated 323 665 BTC, Binance 289 961 BTC, OKEx 276 184 BTC and Kraken 126 510 BTC.

In total the bitcoin balance of these five exchanges amounts to roughly 10.6% of all circulating bitcoins. The real number, however, might be even greater. Blockchain analysis firm Chainalyais has earlier estimated that approximately 3.7 million bitcoins are permanently lost. If this holds true, then nearly 15% of all circulating bitcoins would be held by these five biggest exchanges.

Binance overwhelmingly has the biggest amount of bitcoins in their control. (PICTURE: Marco Verch, CC BY 2.0)

Europol arrests 20 cybercriminals in international operation

Europol has arrested a total of 20 people suspected of connections to the QQAAZZ criminal network.  The operation was conducted in collaboration with authorities from 16 different countries.

QQAAZZ is accused of laundering tens of millions of euros for different cybercriminals. The group is believed to have used cryptocurrencies and mixer services for this endeavor.

During the operation roughly 40 houses were searched in the United Kingdom, Spain, Italy, Latvia and Bulgaria. In Bulgaria authorities also confiscated Bitcoin mining equipment, which the criminals allegedly used as part of their scheme.

Authorities having partaken in the operation regard the collaboration as a significant case, which will also affect future efforts against cybercrime.

”This was an extensive investigation that had implications around the world,”  stated FBI Special Agent in Charge Michael Christman.

The international operation is seen as a new preceent in the battle against cybercrime.. (PICTURE: OSeno, CC BY-SA 3.0)

More than half of ethers are hodled

More than half of all the ether tokens in the Etherem blockchain have remained unmoved for the past year. In the past 12 months only 39.6% of ethers have moved. Approximately 20% of ethers have stayed still already since October 2017.

This hodling trend is believed to be connected to the upcoming Ethereum 2.0 update. One of the most significant changes in the update is moving the Ethereum blockchain’s confirmation mechanism from traditional Proof-of-Work mining to Proof-of-Stake mining.

In Proof-of-Stake mining the validation of blocks and transfers is based on how much cryptocurrency the user holds.

Ethereum hodling has probably grown as users prepare for changes in the mining system.

Bitcoin is used in Nigeria against police violence

Nigerian feminist group The Feminist Coalition has lost their banking services after partaking in protests against local police violence. As a response to the bank blockade, the group has now started accepting bitcoin donations to fund the continuance of their activity.  

Police violence and corruption are serious problems in Nigeria. At the center is a police group called SARS, short for Special Anti-Robbery Squad. SARS has on multiple occasions used violence and threats against Nigerian citizens, but authorities have turned a blind eye to these violations.

As a result of the violence, Nigerians have started the EndSARS protests demanding the abolishing of the infamous group. Authorities and old institutions, however, have sided with SARS against citizens, whereby the EndSARS movement has faced different setbacks.

The decision by The Feminist Coalition to start using bitcoins is a prime example of how the technology allows bypassing political censorship. Bitcoin cannot be restricted like traditional money transfers, whereby it works as an excellent protection for citizens in corrupt states.

The situation in Nigeria is so dire that many citizens believe the police is against them.  (PICTURE: TobiJamesCandis)

Russian soccer master launches blockchain cards

Russian soccer team and Premier league champion Zenit St. Petersburg is introducing new blockchain-based collectible cards of their players. The cards are similar to traditional collectible items, but work in a completely digital environment.

Zenit also intends to publish a game related to the collectible cards, in which users can trade, collect, buy and sell cards. The value of the cards in the game is fixed based on how well the depicted player fares in the soccer league.

Blockchain enables many new game mechanics, which have earlier not been possible. Earlier digital collectibe items have not been unique, as nothing limits their production. Through blockchain every card can be made truly unique in the same way as traditional collectible cards.

Zenit St. Petersburg sees great potential in blockchain. (PICTURE: РПЛ)

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