Terence Zimwara


JP Morgan says bitcoin’s 2020 surge is set to continue as the digital cryptocurrency competes better against gold as an alternative currency. In a note, the financial institution says that with millennials set to become a more important market participant in the coming years, their preference for bitcoin to gold sets up the crypto for future success.

The financial institution’s assessment comes as the digital currency continues to see increasing adoption by institutional investors and an embrace by corporations like payments giant Paypal.

According to a report, JP Morgan estimates the “physical gold market is worth $2.6 trillion, which includes assets held within gold ETFs.” The financial giant deduces that for bitcoin to catch up with gold market value, “the cryptocurrency would have to surge 10x from current levels.”

At the time of writing, the bitcoin market capitalization was at $242.2 billion while the value of one BTC was just above $13,000.

Meanwhile, JP Morgan, whose CEO Jamie Dimon once labeled bitcoin a fraud, acknowledges in the note that “cryptocurrencies derive value not only because they serve as stores of wealth but also due to their utility as means of payment.”

The financial giant adds that as “more economic agents accept cryptocurrencies as a means of payment in the future, the higher their utility and value.”

Although JP Morgan believes that new millennials will be key to bitcoin’s future success, the increasing adoption of bitcoin by large corporations suggests the cryptocurrency might close the gap with gold much faster. Bitcoin has surged by almost 15% from the time Square announced its bitcoin purchase on Oct. 8. Immediately after Paypal’s cryptocurrency announcement, the digital currency breached the $13,000 mark.

However, with more corporations expected to follow in the footsteps of Square and Paypal by acquiring and holding large quantities of bitcoin, the resulting shrinking supply will continue to push the price upwards.

Author: Terence Zimwara

Source: News. Bitcoin: JP Morgan Sees Millennials’ Bitcoin Preference Over Gold as Foundation for Its Long Term Success

The rapid growth of decentralized finance (defi) protocols is contributing to the increasing proportion of ETH supply that is now locked in smart contracts. More than 15% of the total ETH supply is now locked, compared to 11.5% from a year ago. This growth led to the inevitable decline of BTC dominance.

According to a report, over 5% of ETH is locked up in the WETH (wrapped ether) smart contracts, enabling it to interact with other tokens more easily. Most of this WETH has then been locked up in defi contracts, including Maker, Uniswap, and Balancer.

The report also notes that aside from “defi use cases via WETH, the largest ETH balances in smart contracts are for exchange multisigs.”

Data from Dune Analytics showing the current WETH supply on September 16, 2020.

While exchange multisigs simply “represent custodial passive holding, the other contracts (WETH, Compound, etc.) are all examples of how ETH is moving beyond the simple ‘store of value’ use case.”

Meanwhile, despite seeing its dominance diminish, BTC still showed “bullish fundamentals, both in terms of on-chain activity and price trends.”

Also, taking note of the interesting similarities between what happened during the 2017 ICO boom and the current defi craze, the report states:

A similar trend played out in the bull run of early 2017, when money flowed into high-yield ICOs at a much faster rate than BTC. However, later in 2017, BTC started to regain dominance as ICO investors took profits and de-risked into a more reputable asset.

While it might seem logical to conclude that investors will move profits from high-yield defi tokens into BTC, the report presents a different possibility:

“Many investors now talk of ‘stacking wei’ as opposed to ‘stacking sats,’ signifying a potential shift in BTC’s status as the default store of value within crypto markets.”

This suggests that BTC’s waning market dominance might be permanent this time around, as far as retail crypto investors are concerned. However, given the growing interest in BTC by institutional investors, the digital currency stands a “better chance of attracting investment from traditional hedge funds than the defi community.”

Author: Terence Zimwara

Source: News. Bitcoin: Over 15% of ETH Supply Locked in Smart Contracts, BTC Dominance Declining

The Ethereum Classic (ETC) blockchain network lost $5.6 million to one miner following a 51% attack initially thought to be a chain split.

During the attack, the offending miner managed to double-spend 807,260 ETC ($5.6 million) after spending 17.5 BTC or $200,000 (at time of writing) to acquire the hash power for the attack.

The ETC team initially issued a statement advising its clients to halt interactions with the network while corrective steps were taken.

At the time, one of the developers at ETC, James Wo insisted the event “was not a 51% attack” while stressing that the “offending miner went offline and was using old client software.”

The investigation by Bitquery now debunks ETC team’s initial theory.

According to Bitquery, the attacker “mined 4280 blocks for four days.” It adds that “he did only a little mining before and stopped mining after the attack.”

In result, the miner “sent all the mining reward money (13K ETC ) to address 0x401810b54720faad2394fbe817dcdeae014066a1, where it resides at the time of writing.”

Bitquery’s report provides a timeline of how the sophisticated attack unfolded as well as the identity of the crypto exchange used by the miner to facilitate the attack.

Meanwhile, the ETC team now acknowledges the event is in fact an attack. In a statement issued late on 5 August the team said:

Today another large 51% attack occurred on ETC which caused a reorganization of over 4000 blocks. Until further notice ETC pool payouts are disabled and we encourage all our miners to switch to our ETH pool in the meantime.

Members of the ETC team also said, “in light of recent network attacks, it is recommended that all exchanges, mining pools, and other ETC service providers significantly raise confirmation times on all deposits and incoming transactions.”

Meanwhile, ETC Cooperatives says its director of developer relations, Yaz Khoury will be working Bitquery to learn out “more about the recent attack, including the attacker’s addresses, origin of hashpower, the flow of funds, and more important details.”

In 2019, ETC suffered a similar attack prompting some exchanges like Coinbase to immediately cease interactions with the blockchain.

Author: Terence Zimwara

Source: News. Bitcoin: $5.6 Million Double Spent: ETC Team Finally Acknowledges the 51% Attack on Network

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