Bitcoin news roundup: February 26 2017

Thanks for joining us for this round of headlines in the world of bitcoin and fintech. In this edition we celebrate bitcoin’s new all-time high, share some insights on scaling, and show how banks and governments are reacting to it all. Dive right in for these headlines and more!

A new all-time high
Image courtesy of TechCrunch

2017 started off strong for the price when it surged past the $1000 USD mark on the first day of the year. Aside from a drop to $785 on January 10th, growth has been quite steady overall. This week we saw rally #2 of the year, with the price rising to a new ATH average of $1220. As of February 24, it was averaging around $1151 on major exchanges. 

As for possible factors driving the price, a TechCrunch article speculates it could be a sign of its growing popularity as a more mainstream asset. “Both the NASDAQ, Dow, Russell and S&P 500 have all set all-time highs just in the last week.” This is in contrast to bitcoin’s popular choice as an alternative asset when traditional markets are doing poorly. Also mentioned in the same article is the ruling on the Winklevoss ETF, which has generated plenty of opinions on where the price may land post-verdict. If approved, it would make bitcoin more visible and accessible to average investors. 

Mempool backlog and scaling solutions

It’s been a whirlwind of excitement and anticipation between the all time highs and the pending ETF ruling. On a more unfortunate note, another record was set recently when the mempool congestion grew to a backlog of over 100k transactions. Many users were stuck playing the waiting game until their transactions eventually confirmed. Until consensus on a scaling solution is reached and implemented, it’s likely we’ll see similar patterns of congestion continue.

The front runner solutions for scaling are split between Bitcoin Unlimited(BU), which seeks to scale by increasing the block size as necessary, and Lightning Network(LN), which proposes the use of off-chain payment channels to allow for a micropayment-friendly network and instant transactions. Along with BU and LN, another newly proposed idea for scaling has surfaced called Sprites, which claims to be even faster than lightning

An article from Brave New Coin states that there are at least five teams working on LN projects. One such project includes our proposed solution, Thunder. Our engineer and Thunder project lead, Mats Jerratsch, says it’s still too early to know how much of an impact LN could have on block space. If you’re curious about LN and Thunder, our project’s source code can be viewed here

Love it or leave it: banks react to bitcoin
Image via RT.com and © David Gray / Reuters

In addition to mainstream investors growing more receptive to bitcoin, recent headlines show that a number of banks have also shown interest. Three of Japan’s largest financial services companies including Sumitomo Mitsui Banking Corporation Group and Mizuho Financial Group have invested in Tokyo-based bitcoin exchange bitFlyer, which is Japan’s largest exchange by volume. This $1.75 million funding round comes months before new legislation takes effect that will enable existing firms in Japan to offer bitcoin and other cryptocurrency-related services.

And exciting news out of Vienna announced that the Austrian capital is now home to the world’s first dedicated bitcoin bank, according to RT. Situated in a vibrant shopping area in downtown Vienna, the bank is run by Bit Trust Services, who intend for it to be a safe and easier way for customers to learn about bitcoin and buy it in person. Austria’s first bitcoin ATM was set up in July 2014, with additional ATMs following. Since then it has become a small but welcoming hub for bitcoin users, with more than 20 vendors accepting it.

In contrast to the positive news out of Japan and Austria, the Central Bank of India has declared bitcoin is not legal tender and will not be recognized as a valid digital payment. Despite the government’s push to encourage digital payments instead of cash, India’s Central Bank issued statements cautioning users against using bitcoin earlier this month. In response, local startups including Zebpay and Unocoin have formed the Blockchain and Virtual Currency Association of India as a way to lobby the government and legitimize bitcoin in the country.

Embracing block chain technology
Image via CoinDesk

According to an article published earlier this year by Deloitte LLP principal, Eric Piscini, 2017 could be the year we see a new important phase of development for block chain technology. Previous years have been spent focusing on proofs-of-concept, but in 2017 an industry-wide effort is needed to shift these ideas into robust working solutions.

Chicago-based administrator of funds, Northern Trust, has done just that with their newly-deployed block chain-based solution. The Northern Trust block chain, “hosted by IBM and running on the open-source Hyperledger framework,” is small with only 4 nodes, but it’s the immutability of the network that sets it aside from other possible solutions. The private block chain is “designed to deliver a significantly enhanced and efficient approach to private equity administration.”

Hitachi is another company migrating away from concepts to solutions. Their project began testing on February 9th, and uses a block chain platform to handle their rewards points program. Hitachi is also involved in a block chain e-check trial with Bank of Tokyo-Mitsubishi UFJ that began last year. While their final versions have yet to be deployed, it’s promising to see testing in progress. We hope 2017 brings innovative solutions on all fronts for block chain technology and digital assets.

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