Bitcoin Magazine’s Top 6 News Stories of 2016
Bitcoin, digital currency and blockchain technology experienced another explosive year in 2016. While bitcoin breached the all-time high in USD market cap, several new digital currencies claimed a place in the spotlights as well, while the blockchain buzz arguably peaked it all.
Of course, Bitcoin Magazine kept up with all of it. Looking back on 2016, we compiled three top 6 lists, with our best-read topics in technology, business and news.
These were 2016’s six top news stories, by popularity.
6. IRS Orders Coinbase to Hand Over Customer Data
The Internal Revenue Service (IRS) took the Bitcoin community by surprise late November.
The US tax agency ordered major exchange and defacto wallet service Coinbase to hand over customer data for all users that bought bitcoin between 2013 and 2015. An extraordinary request, as the targets of the investigation are not specified, but instead referred to as a group of “John Does”. The request may also be a sign that the IRS is taking a more pro-active stance toward digital currency users and businesses in the U.S.
Shortly after the request was issued, Coinbase denounced the IRS' move, announcing it plans to challenge the order in court. About two weeks ago, a Los Angeles attorney also asked a federal judge to halt the IRS probe. And only yesterday, the IRS asked the court to dismiss the motions.
Indeed, the story is still developing; but it already secured a #6 spot in our top news stories for 2016.
5: The Rise and Fall of The DAO
The DAO made headlines in 2016. As a DAO (Decentralized Autonomous Organization), The DAO was a code-based investment company built on top of Ethereum, in which shareholders were the decision makers of the project. By May of this year, The DAO had collected more than $150 million worth of ether, shattering previous crowdfunding records.
And then it got gutted.
Due to a bug in the code (or as the perpetrator may argue: a feature), someone was able to withdraw millions of dollars worth of ether from The DAO in June. Even before the “company” had made any investment, the project was drained for about a third of all its funds.
What followed was a cat-and-mouse game between the developers behind The DAO and Ethereum, and the hacker; an engaging saga for Bitcoin Magazine readers, securing a fifth spot in our top 6 news stories for 2016.
4: Bitcoin Cloud Services Uncovered as Cloud Mining Ponzi Scheme
With an exclusive story published in June, Bitcoin Magazine uncovered the supposed cloud mining service “Bitcoin Cloud Services” (BCS) as what appeared to be a blunt Ponzi scheme.
Pictures as well as videos of the hardware facility turned out to be photoshopped, fooling and defrauding an estimated 4,300 customers. Rather than paying out profits from mining, the company most likely paid old users in money invested by newer users, while keeping some of it. Indeed, a straightforward scam.
Unsurprisingly, BCS is no longer active; it seems its operators ran off with an estimated loot of up to 2,500 bitcoins, worth well over $500,000 at the time.
3: Craig Wright’s “Satoshi Nakamoto” Saga
Another year, another Satoshi Nakamoto.
In May, Australian computer scientist and businessman Craig Wright “revealed himself” to be the man behind the moniker of Satoshi Nakamoto, inventor of Bitcoin. Major media outlets including the BBC and the Economist reported on the news, while the claim was also backed by several prominent figures in the Bitcoin community. Most notably former Bitcoin Core lead developer Gavin Andresen — but also New Liberty Dollar issuer Joseph VaughnPerling and others.
When it came to providing cryptographic proof of his claimed second identity, however, Wright failed. While Wright did publish a signature made with a private key only Satoshi Nakamoto should control, it turned out to be a publicly available signature, found in Bitcoin’s blockchain.
Wright followed up with an odd apology, claiming he could not prove he was who he said he was. And while some still hold on to their belief that Wright really is the inventor of the pioneering digital currency, most have dismissed the possibility by now.
2: The Halvening
When Bitcoin first launched, miners earned 50 bitcoins for each block they mined. But this number is halved every four years, or more specifically: every 210,000 blocks. This ensures that Bitcoin’s block reward eventually decreases to zero, limiting the total amount of bitcoins that will ever be in circulation to 21 million.
2016 marked the year of the second block reward halving. Dubbed “the halvening,” July 9 was the day that Bitcoin’s block reward decreased from 25 new bitcoins to 12.5 — not counting fees. It represented a key moment in Bitcoin’s history, reflected in the popularity of the topic on Bitcoin Magazine, and secured a second-place spot in our top 6 news stories for 2016.
1: “The” Ethereum Hard Fork and the Birth of Ethereum Classic
The rise and fall of The DAO was one of the biggest news stories of 2016. But its aftermath was even more significant.
To reimburse investors of The DAO, the Ethereum Foundation eventually opted to hard fork the Ethereum blockchain. It was a controversial decision, as it questioned both the “code is law” mantra and claims of “amorality” long perpetuated by creators of The DAO as well as developers behind the Ethereum project itself. Furthermore, not all users agreed with the hard fork. While polls and other data suggested that a majority within the Ethereum community supported the radical solution, a sizable minority did not.
Some of these users objected to the Ethereum Foundation’s decision so strongly, that they refused to make the switch to the new version of Ethereum when the hard fork happened in July, and continued to use the “original” Ethereum blockchain. As a consequence, the Ethereum’s network and currency split in two. Rather than one Ethereum, there were multiple: “Ethereum” and “Ethereum Classic.”
Both Ethereum and Ethereum Classic continue to chug along to this day. And while the combined market cap of the two has fallen sharply since Ethereum’s heights, both digital currencies claim a top-ten spot by market cap.
And, a number-one spot in our top 6 news stories for 2016.