Cryptocurrency market and news roundup 27 September 2018
Market and news update
Markets turn bullish again
The markets have turned bullish again following yesterday's breaking news that Google is easing its cryptocurrency advertising ban, Coinbase is introducing a new listing policy, and up to 50 or so cryptocurrency organisations and companies had been invited to DC for a roundtable discussion with the US government.
Markets are up by around $12 billion USD. XRP and BCH are leading the charge, each with a 20% upswing overnight -- Ripple even briefly overtook Ethereum again to second ranking by market cap.
Despite strong gains in the altcoin market, BTC dominance is at 52%, refusing to dip below the 50% mark since early August.
Bitcoin is moving up from that critical $6,400 mark, up to around $6,500 today.
Bitcoin price volatility has reached the lowest point in 21 months according to an analysis that looks at Bollinger Band data.
We've got a chart here that shows both volatility and price. Unfortunately price is shown logarithmically which makes about zero sense for this chart, but you can still see the historical volatility quite easily.
Bitcoin Cash (BCH)
Bitcoin Cash has rallied -- up over 20% -- after news that Bitmain has finally filed its application for an Initial Public Offering (IPO). It's reported that mining giant Bitmain holds close to 30 percent of its assets in cryptocurrency, with Bitcoin Cash featuring prominently in that; Bitmain has been a public supporter of the fork.
Red Belly Blockchain hits 30,000 txp/s via AWS
So this next story has some pretty insane numbers attached to it.
The University of Sydney and CSIRO's Red Belly Blockchain has recently completed a trial running of the blockchain in the cloud via Amazon Web Services and has managed to somehow crack 30,000 transactions per second.
For comparison, bitcoin currently maxes out at 7 transactions per second, Zilliqa, which uses sharding, has reported up to 2,400 transactions per second, and VeChain Thor has posed a theoretical 10,000 per second limit for its blockchain.
Visa claims the ability to reach up to 24,000 transactions per second, although some crypto publications like bitcoin.com argue that the average is closer to 1,700.
Either way – clocking in at 30,000 is big stuff.
The CSIRO – which is Australia's pre-eminent science and research organisation, and also the organisation that invented WiFi – distributed the blockchain across 1,000 virtual machines over 14 different regions, including the Americas, the Asia Pacific and Europe and managed to achieve an average confirmation time of only 3 seconds.
The Red Belly Blockchain is being developed as a solution to issues that dog current-generation blockchains such as scalability, double-spending, forks and energy consumption. They achieved this by introducing a unique consensus model called deterministic byzantine consensus.
This consensus model allows for confirmation when a threshold amount of messages have been received, allowing for slow nodes to be excluded from consensus. These slow nodes are called “weak coordinators” and are vital to the function of the new algorithm.
Previous tests of the Red Belly Blockchain, which involved 300 machines localised in a single data centre, reached speeds of 660,000 transactions per second.
The blockchain is intended to function somewhere between a public and private blockchain, with its intended use-case being aimed at the financial sector, as well as exploring its use in industries such as agriculture and education.
You can read more about this unique blockchain via the CSRIO's website or the research paper, which will be included in the description of today's video.
VC firm Andreseen Horrowitz buys 15% of the MakerDAO
Venture capital firm Andreessen Horowitz has purchased a 6% stake in the MakerDAO project for $15 million.
The MakerDAO issues the DAI, which is a unique type of stablecoin. The DAI is intended to equal 1 US dollar. The DAI balances its price through the use of smart contracts to buy and sell Ether when needed.
Instead of being backed by US dollars, the DAI is collateralised through another asset issued by the MakerDAO platform, the Maker coin.
If this confuses you, don't worry. What you really need to know is that the DAI is a stablecoin backed by cryptocurrency reserves rather than fiat reserves. And the DAI is part of the MakerDAO project, which also includes the Maker coin.
Blocktivity tracks blockchain usage
And one more for those who want a new way to judge a coin's value. Blocktivity.info is a new project that looks at the blockchain activity of coins and ranks them accordingly.
Here's what they have to say about the project and its goals:
"One way to consider a blockchain project is through its market cap. Another way, closer to the real value, is observing the activity on the blockchain. Lots of FUD and HYPE are responsible for "misplaced" capital in the cryptocurrency space. Here, we are observing which project is actually being used by people, which is, in our opinion, the best predictive indicator of value you can have."
One-third of ICOs not listed on exchanges
A new report from research firm Diar has revealed some concerning statistics about ICOs.
Since 2017, an entire one-third of tokens that were issued after the completion of a successful ICO, have not yet been listed on an exchange. That's $2.3 billion worth of tokens that are stuck in wallets, unable to be traded or add liquidity to the market. Half of these projects completed their funding in 2017, meaning investors have been unable to capitalise on their investments for a long time.
Of the tokens that are on exchanges, Diar reports that 44 – which have raised a collective $1 billion – sit at the bottom of the exchange tables because they have practically zero liquidity.
Even Bankera, which is one of the biggest ICOs from this year and raised $150 million in February, shows less than $100,000 of liquidity in the past 24 hours, which is well above average for the month, according to CMC data. Bankera sits at #1703 by market cap.
We've got a few more pieces of data from that report to have a look at.
This is the top 10 losers, which shows the amount raised and how much the project's value has declined since then.
But it's not all doom and gloom. They also revealed some of the most successful ICOs to date and they emphasise those were projects which went on to create their own independent blockchains. They call these foundation tokens.
And lastly, we get an insight into the amount of capital raised through private token sales.
All the data that Diar used for analysis was from a snapshot of CoinMarketCap and tokendata.io from the 20th September 2018.
Tether does not affect BTC price
A new study has come out claiming that the controversial Tether USDT stablecoin, which currently has a supply of over $2.8 billion, has no meaningful impact on the price of bitcoin. To understand why this study is important, let's dial things back a bit.
Tether is controversial because there is a lot of doubt over whether or not each USDT is actually backed by a US dollar.
This doubt became especially problematic late last year when bitcoin's price went to the moon and reached the all-time high of $20,000 USD.
The problem was that a lot of capital flowing into the market to purchase bitcoin was believed to be coming in via USDT.
So if USDT wasn't really backed by US dollars, then it would have meant that bitcoin's price had been artificially inflated. Kind of like pushing up the market price of gold by purchasing it with counterfeit money.
This caused a lot of traders to worry about what the true price of bitcoin was.
Joey Krug, the co-chief investment officer at investment firm Pantera Capital, said in a New York Times article back in January this year that if USDT was manipulating the price of bitcoin...
“It could mean that a lot of the rally over December and January might not have been real.”
This obviously has massive implications for the market, and this sentiment may have contributed to bitcoin's catastrophic decline in January, which saw nearly half of the coin’s value wiped out in a single month.
So back to the study and its findings. This study by the University of Queensland contradicts the belief that USDT pumped up the price of bitcoin, and instead claims that USDT has "no meaningful impact" on bitcoin price.
In fact, the lead author Dr Wang Chun Wei goes onto say that "claims saying that it is Tether that props up bitcoin are definitely not true", despite there being more than $2 billion worth of Tether on the market.
This is important news for cryptocurrency users everywhere, as it points to the legitimacy of bitcoin's value now, as well as its all-time high value of $20,000.
Interestingly though, the paper did have this to say about whether or not the pattern of new Tether entering the market was suspicious or not:
"Our findings show that tether grants were potentially timed to follow bitcoin downturns, and subsequent bitcoin/Tether trading volumes increased."
So it appears that the paper claims that USDT may have been released to coincide with dips in bitcoin’s price, but regardless of whether or not pumping up the price was the intention, it had no effect.