Bitcoin Magazine’s Week in Review: Looking Back to See the Way Ahead
It’s been a turbulent time for the cryptocurrency markets, so now is a good time to reflect on how and why we got here in the first place. First, an op ed makes the ideological case for Bitcoin. Then, we continue to review the history of Bitcoin from its Cypherpunk days, with the latest installment of The Genesis Files, this time paying tribute to Wei Dai and his “b-money” protocol.
South Korea has seen one of their cryptocurrency exchanges hacked this week, with Coinrail reporting a major theft. Meanwhile, Coinbase has added more tokens and a crypto index fund to its exchange offerings.
Misconceptions about Tether and what is going on with this U.S.-dollar-backed token are explored and explained.
Featured stories by Robert-Jan den Haan, Andrew Kiguel, Randolph Malone, Nick Marinoff and Aaron van Wirdum.
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Andrew Kiguel, founder of Hut 8 Mining, reflects on what Bitcoin means, beyond the hype of its bumpy price charts. He argues that Bitcoin represents freedom to store wealth in an asset that is out of government’s reach; freedom to conduct transactions — peer to peer — without relying on centralized financial institutions that have eroded our trust.
He acknowledges that Bitcoin is not perfect. It will evolve. Scammers will remain, as they do everywhere in the financial community. Regulation will come. Gains will be rightfully taxed. Detractors will continue to hate. Volatility will remain. However, because of the freedom it puts in the hands of individuals, Bitcoin will not disappear or pop like a bubble. Ever.
Wei Dai is best known for an idea he casually announced in November 1998, just after graduating from university. His idea, b-money, was eventually included as the first reference in the Bitcoin white paper.
“Efficient cooperation requires a medium of exchange (money) and a way to enforce contracts,” Dai explained in his initial proposal. “The protocol proposed in this article allows untraceable pseudonymous entities to cooperate with each other more efficiently, by providing them with a medium of exchange and a method of enforcing contracts. [...] I hope this is a step toward making crypto-anarchy a practical as well as theoretical possibility.”
There is substantial controversy surrounding Tether, a cryptocurrency that claims to be pegged to the U.S. dollar. According to Tether, each token is backed by one U.S. dollar, held in the full reserve of Tether. But the existence of the U.S. dollars pegging Tether has been called into question. Worries also exist that Bitfinex has been using Tether to prop up the price of bitcoin.
Research shows that misconceptions exist regarding how Tether functions, which in turn may be contributing in part to the existing controversies. By better understanding how Tether functions, it may be possible to provide some clarity.
Executives at South Korean cryptocurrency exchange Coinrail reported a hack on June 10, 2018, when thieves allegedly made off with 30 percent of the tokens on the exchange, worth over $40 million and made up of altcoins and assorted tokens. An investigation is under way, and law enforcement officials are working to figure out who was behind the attack. This is the fifth major hack of 2018.
Among all the other big announcements that have been coming from Coinbase recently, the company announced on Monday, June 11, via blog and Twitter, that during the coming months it intends to add support for Ethereum Classic (ETC) to its exchange platform. The currency will join bitcoin (BTC), ether (ETH), litecoin (LTE) and bitcoin cash (BCH) as the fifth digital currency supported by the largest U.S.-based crypto exchange.