Tuesday, November 13, 2018

Hash War on the Horizon ⚔️

November 13, 2018

A Bitcoin Cash Hash War is Coming, What it Means

Less than two days away, the Bitcoin Cash (BCH) community is preparing for its scheduled upgrade that could split the blockchain into two different cryptocurrencies if the community can't agree.

The fight lies between two different proposals, Bitcoin ABC and Bitcoin SV. In short, Bitcoin ABC wants to lay the technical groundwork on the BCH network to set it up for future development.

In contrast, Bitcoin SV (Satoshi's Vision) believes that increasing the block size from 32MB to 128MB will help increase the network's ability to transact since each block could fit more transactions.

So who supports what? Here is the breakdown:

Bitcoin ABC Supporters:

Bitmain
Coinbase
Binance

Bitcoin SV Supporters:

CoinGeek
Bitcoin.org
Craig Wright

Hash war on the horizon

While "pre-fork" trading on Poloniex last week showed overwhelming support for Bitcoin ABC as Bitcoin SV plummeted to below $100 within the first few days, a look at the hash power may tell a different story.

⛏ What is hash power? Hash power (also known as hash rate) refers to the speed at which miners can perform. The higher the hash power, the more blocks the miner solves. With this the miner gets rewarded more often and has more control of the network.

According to Coin Dance, a popular cryptocurrency statistics platform, 72% of the Bitcoin Cash's total hash power is now being controlled by miners that support Bitcoin SV.

However, this could change as Bitmain has allegedly called for 90,000 Antminer S9 miners to join the war in favor of Bitcoin ABC - effectively lowering Bitcoin SV's influence on the network.

As the event nears, the hash war will only heat up with both sides attempting to get as much miner support as they can.

How should hodlers prepare?

During this event on November 15th, we recommend users don't send BCH as a precaution to avoid replay attacks.

Though users can prepare for the blockchain split themselves, it is easier for users to send BCH to a credible exchange that has announced support for the fork. The exchange wallet will then manage the split, and then automatically credit accounts with new coins.

CRIME

Crypto Trader Fined More than $1 Million by CFTC for Fraud

Crypto fraudster

The U.S. Commodity Futures Trading Commission (CFTC) has fined a cryptocurrency trader $1.1 million for fraud. The person fined, Joseph Kim, operated a fraudulent trading scheme involving Bitcoin and Litecoin.

Kim defrauded investors by misappropriating more than $600,000 of the investors' assets. During September and November 2017 Kim transferred this amount of Bitcoin and Litecoin from his investment firm's account to his personal account. Kim attempted to make the excuse that he transferred the coins due to security concerns about the firm's wallet.

To make things even worse, Kim continued to collect investor funds in hopes to make trading profits to repay the amounts he took from his employer. Between December 2017 and March 2018, Kim obtained roughly $545,000 from at least five customers.

When his employer became aware of Kim's actions, they immediately fired him.

Didn't stop there

After being fired, Kim started his own crypto investing firm. He told his investors that he left his previous firm voluntarily. He promised his investors that he would use a low-risk trading strategy. This was a lie. Kim ended up trading away all of these customers' funds.

After the CFTC caught wind of all of Kim's actions, they fined him $1.1 million. In addition, Kim will never be able to trade securities again, including cryptocurrencies and will also spend 15 months in jail.

Regulators protecting the people

Investors often complain about regulators, but from an objective view, US regulators have done a superb job protecting investors. The CFTC and SEC have cracked down on fraudulent actors in the market, making it more trustworthy for investors.

James McDonald, director of enforcement at the CFTC, explained:

"Today's Order stands as yet another in the string of cases showing the CFTC's commitment to actively police the virtual currency markets and protect the public interest."

EXCHANGE

Bitfinex's New Fee Structure Ruffles Feathers

3% on $1 million

Released Sunday, Bitfinex's new fee structure is ruffling some feathers in the community despite affecting less than 1% of its customers.

According to the announcement, Bitfinex will now tack on a 3% fee if...

a customer makes more than two fiat withdrawals within 30 days
a customer withdrawals more than $1 million within 30 days

A gateway nonetheless

While some users are displeased by the announcement, Bitfinex will likely remain a dominant player as a gateway that connects fiat to crypto. Allegedly, in October, the exchange processed over 700 withdrawals that represented "more than $1B."

In closing, Bitfinex stated it will continue to fight against "powerful forces attempting to harm global cryptocurrency markets."

BITS

But wait, there's more...

Bitmain's co-founder Jihan Wu has lost influence over company decision-making as he moves from director to supervisor.
Japanese bank holding and financial services company Mitsubishi UFJ Financial Group, Inc. (MUFG) said it will use Ripple (XRP) to create a new cross-border payments service to Brazil.
Shell and BP are among a group of firms planning to launch a blockchain-based platform to help automate the energy industry by the end of the year.

MEME