Category Archives: Bitcoin

Solana saw an influx of new users as high transaction fees onEthereum [ETH] and Bitcoin[BTC] drove new demand to the Layer 1 (L1) network, data from The Block showed.

ReadSolanas [SOL] Price Prediction2023-24

On the Ethereum network, the meme coin craze led by the unprecedented rally in the price, trading volume, and market capitalization of frog-themed Pepe (PEPE) situated a spike in transaction fees on the chain.

According to data from Messari, average transaction fees rallied to a high of $27.61 on 9 May, its highest level since May 2022.

As for the Bitcoin network, the introduction of Ordinals and BRC-20 tokens led to a significant increase in network activity and fees on the chain.

Data from Messari further showed that the average transaction fees on the chain went as high as $30 on 8 May, its highest since April 2021.

Intending to find blockchain networks that offer lower transaction fees, users have been moving away from Ethereum and Bitcoin.

Solana emerged as a top contender in this quest, garnering increased attention and leading to a rise in the number of active addresses on its network. Data from The Block revealed a 113% increment in the count of daily active addresses on the chain.

Assessed on a month-over-month (MoM) basis, Solana recorded a total of 7.72 million active addresses in April. Interestingly, with about two weeks left to go in May, the chain has already seen 7 million active addresses.

Additionally, data from The Block showed that new address count on the chain has grown significantly since the end of April.

In May, Solana witnessed the creation of 4.19 million new addresses, surpassing the count of 3.76 million new addresses that joined the network in April.

This surge in new address creation on the L1 network highlights the growing adoption of the platform amid high transaction fees on the Ethereum and Bitcoin networks.

However, while Solanas network activity has experienced growth since the end of April, data from Artemis revealed a decline in other ecosystem metrics.

For example, according to the on-chain data, the networks total value locked (TVL) was on a downtrend since 19 April. At $269.78 million at press time, it has since fallen by 8%.

Realistic or not, heresSOLs market cap in BTCterms

Likewise, the decentralized exchanges (DEXes) housed within the L1 network suffered a drop in transaction volume since the month started. Per data from Artemis, DEX volume on Solana has plummeted by 66% since the beginning of May.

Regarding the chains native coin SOL, trading at $20.73 at press time, its value declined by double digits (17%) in the last month.

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Ethereum, Bitcoin users rush to Solana [SOL] as they seek - AMBCrypto News

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Binances share of Bitcoin spot market falls more than half since February peak of 85% - CryptoSlate

05/14 update below. This post was originally published on May 12

BitcoinBTC, ethereum and other major cryptocurrencies have been grappling this year with a U.S. crypto crackdown that some think could "destroy all value of bitcoin."

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The bitcoin price has climbed over the first few months of 2023 but remains far from its late 2021 all-time highs, with traders hailing a "new market regime." The fate of ethereum and other cryptocurrencies are meanwhile hanging in the balance as U.S regulatory agencies battle for control of the market.

Now, a leaked memo circulated to Democratic House financial services committee members has revealed the "key messages" lawmakers were told to stick to that could see almost all cryptocurrencies categorized as securities.

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The document, passed to committee members by the Democratic party ahead of Wednesdays joint House hearing on crypto policy, was leaked by Fox Business reporter Eleanor Terrett on Twitter. "The problem isnt ambiguityits mass non-compliance with existing laws," the memo reads. "We can't invent new accommodating regulatory structures simply because crypto companies refuse to follow clear rules of the road."

The memo calls on Democratic lawmakers to push back on Republican claims "they are working to provide clarity to the markets by carving out space for the Commodity Futures Trading Commission (CFTC) in crypto" ... "Republicans are proving that they really aren't serious about protecting investors and consumers."

Bitcoin, ethereum and cryptocurrencies have become a partisan issue over the last year, with high-profile Republicans such as Ted Cruz giving their backing to crypto while influential former Democrat presidential hopeful Elizabeth Warren embracing the idea she's "building an anti-crypto army."

05/14 update: This week, a bipartisan bill from 2022 was reintroduced to Congress by lawmakers that would require U.S. federal agencies to report on El Salvador's cybersecurity and financial stability capabilities as part of efforts to fight using cryptocurrency as legal tender, claiming bitcoin could "weaken economic and financial stability and empower malign actors."

El Salvador became the world's first country to make bitcoin legal tender in 2021, with the country's president Nayib Bukele buying almost 2,400 bitcoins as part of a plan to make bitcoin a core part of the country's economy.

"Given U.S. interest on prosperity and transparency in Central America, we must seek greater clarity on how the adoption of bitcoin as legal tender may impact El Salvadors financial and economic stability, as well as El Salvadors capacity to effectively combat money laundering and illicit finances," Jim Risch, a Republican from Idaho who announced the legislation, told the Washington Examiner.

"Never in my wildest dreams would I have thought that the U.S. government would be afraid of what we are doing here," Bukele posted to Twitter last year when the bill was first introduced.

U.S. president Joe Biden issued an executive order last year directing federal agencies to investigate how to respond to the bitcoin, ethereum and crypto boom.

Under chair Gary Gensler, the U.S. Securities and Exchange Commission (SEC) has claimed authority over the crypto market and suggested it views all cryptocurrencies other than bitcoin as unregistered securities.

"Both the SEC and CFTC are aligned on the fact that the SEC is the regulator to determine if crypto assets are securities, and the SEC has made clear that nearly all crypto assets are securities," the memo read, adding: "End of story."

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Gensler, who has attracted criticism from the crypto community for his "regulation by enforcement" approach, has repeatedly asked Congress for more resources to better police the crypto market.

"Republicans want to reverse course and tie the hands of the SEC," according to the memo. "The SEC must continue to lead the regulation of the U.S. crypto market, and Congress must do its part to provide them with the resources they need."

The bitcoin, ethereum and crypto industry has broadly criticized the memo.

"Bizarre that they put something so blatantly illegal in writing," Ari Paul, the chief investment officer of BlockTower Capital, posted to Twitter. "The SEC has no authority to determine what is and isn't a security under law. For them to do so would be a violation of the laws governing their operation."

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com.Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.

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Leak Reveals Secret Democratic Plan For A Game-Changing U.S. Crypto Crackdown That Could Hit The Price Of Bitcoin And Ethereum - Forbes

The launch of BRC-20 tokens and Ordinals NFTs on Bitcoin has transformed the No. 1 blockchain overnight into a clunkier version of Ethereum.

The core developers and miners who signed off on the networks Taproot upgrade in November 2021 never envisaged this would be the result. Bitcoin now suffers from many of the same problems that have bedeviled Ethereum for years, including scammy memecoins and shitcoins, NFTs of monkey pictures hogging block space and skyrocketing transaction fees.

The network is even having to deal with incidences of miner extractable value (MEV), whereby miners profit by reordering pending transactions.

Im kind of upset at myself for not realizing, says Quantum Economics founder Mati Greenspan, a Bitcoiner since 2013.

It took these guys starting to hype up JPEGs on Bitcoin until I was like: Oh shit, what did we just do? He laughs ruefully.

Some Bitcoiners on Bitcointalk and Twitter refer to the impact of Ordinal NFTs and BRC-20 tokens as an attack on Bitcoin, an exploit of Taproot, or simply as spam clogging up the network.

Its sparked a fierce debate over whether unexpected outcomes are precisely the sort of outcomes you should expect from a permissionless protocol, or whether something needs to be done to get rid of them.

BRC-20 tokens were only launched by anonymous developer Domo back on March 8. They use Ordinal inscriptions of JavaScript Object Notation (JSON) data to deploy token contracts, mint tokens and transfer tokens. Some argue this is horribly inefficient and costs four times as much in transaction fees as if they just used binary.

Alongside the inefficiencies, theres also a gold rush for minting memecoins. Someone will deploy a contract with a ticker for a new token and a max supply, and then traders rush in to mint as many as possible in the series, on a first come, first served basis, at whatever fee rate gets them priority. These tokens have already surpassed $1 billion in market cap even though Domo argues they will be worthless.

But they are here to stay at least in the short term with major wallets already adding support for BRC-20 tokens. And newer developments, such as the launch of a Uniswap fork that amassed $500,000 in trading of smart BRC-20 tokens (SBRC-20) in just a few days, suggest that the building of a permissionless new ecosystem on Bitcoin is set to continue.

Greenspan points out that while the flurry of interest has seen Bitcoin transactions hit an all-time high, the number of unique addresses plummeted, meaning fewer people are accessing the network. And while transaction fee revenue has overtaken the block reward seen by many as the only way to ensure Bitcoins security after another couple of halvings it comes with a lot of issues.

I spoke to one miner yesterday who said his revenue has doubled, which is nice, especially ahead of the halving, so its good for miners, but its terrible for the countries of Nigeria and El Salvador, for example, where, suddenly, the average cost to send a transaction is $30, he says. The dream of financial inclusion on Bitcoin has been temporarily postponed.

Read also: What its actually like to use Bitcoin in El Salvador

Interestingly, this isnt the first time someone has put a token or NFTs onto Bitcoin. Counterparty led the way with NFTs on Bitcoin, with Spells of Genesis and Rare Pepes in 2015 and 2016. And stablecoin Tether also launched a token on Bitcoin back in 2014 via the Mastercoin protocol (which later became Omni).

On Bitcointalk, there is much discussion of fighting off the attack on Bitcoin, with some claiming its the work of malicious Bitcoin SV devs. Users are talking about a soft fork to enforce strict Taproot validation script size, ways the protocol can filter out what they see as spam or even a hard fork to reverse Taproot.

Bitcoin developer Luke Dashjr stated that action should have been taken months ago. Spam filtration has been a standard part of Bitcoin Core since Day 1. Its a mistake that the existing filters werent extended to Taproot transactions [] since this is a bugfix, it doesnt really even need to wait for a major release.

Glassnodes lead on-chain analyst, Checkmate, tells Magazine that he believes this sort of censorship is against the entire ethos of Bitcoin and notes there are already optional mempool rules enabling node operators to filter ordinals if they choose.

From my view, any attempt to ban or censor these transactions is far more of an attack on Bitcoin than leaving them be. They are within consensus rules, and when a loud minority of individuals want to change the rules to stop something they dont like, that is the real attack.

But podcaster Chris Blec made the case on Twitter that limiting transaction types to ensure the health of the network wasnt censorship.

If it doesnt depend on the content of the message or the sender of the message, then its not censorship, he said.

Hass McCook, a former member of the Bitcoin Mining Council and a Bitcoin true believer, is no fan of Ordinals but thinks trying to get rid of them is a step too far, saying:

The only thing more important than Bitcoin is freedom. My general take is I personally dont like it and dont see value in it. But I dont want to censor it. I think that could go down a very dark path.

If the protocol allows for something and somebody is happy to pay to do that thing, then it is what it is.

Andrew Poelstra, director of research for Blockstream, is one of the inventors of Taproot. He doesnt like the upgrades toxic offspring either but doesnt see any practical way to stop them.

As near as I can tell, there is no sensible way to prevent people from storing arbitrary data in witnesses without incentivizing even worse behavior and/or breaking legitimate use cases, he wrote.

Read also: Is Bitcoin a religion? If not, it soon could be

Its not going to be possible just to ban useless data, he said, noting that people could just hide useless data like NFTs inside of useful data like dummy signatures or public keys.

Doing so would incur a 2x cost to them, but if 2x is enough to incentivize storage, then theres no need to have this discussion because they will be forced to stop due to fee market competition anyway.

The best-case scenario and the most likely, according to interviewees for this piece is that interest in the tokens and NFTs will die down as the memecoin fad plays out.

Network congestion on Bitcoin is not a new thing, right? says Greenspan. It usually comes with hype. But also it leaves when the hype is over.

Whats most likely to happen is people are gonna run out of money.

But if Ordinals continue to have an outsized impact on the network, theres always the nuclear option of forking Bitcoin to modify or remove Taproot. Blec and many others have raised the possibility, though it seems mostly hypothetical at this stage.

Greenspan says, while its always possible to implement a hard fork, itll split the network. And nobody wants that.

McCook says the market chose Bitcoin, rather than Bitcoin Cash or Bitcoin SV during the scaling wars in 2017, and he predicts the current version would win over a fork with Taproot.

Id take the Ordinals one. So, even though I dont find any value in Ordinals, maybe I need to inscribe something in the future that I need to have absolute censorship resistance, he says.

This could potentially have pretty powerful implications. Lets say Julian Assange decided to do his WikiLeaks info dump as an inscription, this is a very useful thing.

Greenspan also believes the benefits of using Bitcoin to store data have only just begun to be explored.

People are now aware that Bitcoin has the ability to store files. And Im excited to see what, you know, forward-thinking developers will do with this new tool. More than just creating memes.

When he released BRC-20, Domo added, I believe there are almost certainly better design choices and optimization improvements to be made.

Plenty of people agree. One of the easiest improvements would be to use binary rather than the JSON format, which developer John W. Ratcliff argues is one of the most inefficient data formats anyone could use. He believes this would reduce BRC-20 tokens from 89 bytes to 19.

This means that they are paying over four times as much in fees to commit these BRC-20 tokens than necessary, he said.

Hashrate Index researcher Colin Harper says that using binary code could reduce bandwidth by as much as 80%. However, this wouldnt entirely solve the problem, as Bitcoin influencer Udi Wertheimer points out, given the spike in fees is due to token minting degens bidding up fees to get their transaction prioritized into order to mint or snatch up low serial number tokens before the supply runs out.

Theres also another way to issue assets on Bitcoin called Taro, which Domo says is a better solution. Taproot Asset Representation Overlay is a proposed protocol that will allow people to issue digital assets on Bitcoin that can be transferred to Lightning for fast and cheap transactions.

Read also: Attack of the zkEVMs! Cryptos 10x moment

A much more radical and experimental approach is being taken by Trustless Computer, which is behind a Uniswap v2 fork called Trustless Market that enabled $500,000 worth of swaps in its first three days.

The projects documentation states its working toward a Turing-complete virtual machine called BVM built on top of Bitcoin to enable a DeFi ecosystem.

Core team member @punk3700 tells Magazine it is not a layer 2, its a protocol within layer 1 that works like Ordinals but uses SBRC-20s.

Instead of writing text files to Bitcoin, Trustless Computer writes smart contract transactions to Bitcoin. Raw files vs. programs/logic/apps. He claims this cuts down the bandwidth required for the tokens by 80%90%.

I think the BRC-20 in their current form (using text files) are a flash in the pan, he says. You cant use paper and pen to build an alternative scalable financial instrument.

Our SBRC-20 implementation is different. We use smart contracts, the same ERC-20 smart contract on Ethereum. It works exactly as programmed.

Ordinals is v0.1 of what is possible on Bitcoin. Trustless Computer shows that you can build a full DApp ecosystem on Bitcoin.

He expects that well see MakerDAO, Aave, Compound and other smart contracts deployed soon, which, if it works as he claims it will, would be a huge change for Bitcoin.

While the project has recieved coverage in other major crypto news outlets, Magazine hasnt verified their tech works as promised, and the extent to which you can integrate smart contracts with Bitcoin is debatable, so tread carefully.

The influx of NFTs and token minting on Bitcoin has shown the blockchain remains unable to scale to deal with increased demand, meaning the more popular it gets, the worse it works.

The Lightning Network is usually touted as the solution, but Nostr creator Fiatjaf noted it has been unable to cope with the recent fee spike. Channels are too fragile, it costs a lot to open a channel under a high fee environment, to run a routing node and so on, he wrote, stating that users instead had to rely on the centralized Lightning providers.

Greenspan believes that gradual progress toward scaling is the only safe solution to ensure Bitcoin remains bulletproof.

Weve seen Segway; weve seen Taproot. I mean, these are, these are good progressions and steady scaling. Which is whats best usually for a decentralized network of this size. You dont want to rush things because you might break them. As weve seen.

Read Also: Reformed altcoin slayer Eric Wall on shitposting and scaling Ethereum

Various parties, including StarkWare and blockchain researcher Eric Wall, have been investigating scaling Bitcoin using zero-knowledge (ZK) rollups, which is Ethereums plan to solve its very similar challenges.

But ironically, while the surge in demand caused by Ordinals has shown that further scaling is required, its also made it much less likely the community would agree to a new hard fork to enable ZK-rollups. After all, they voted for Taproot and look what happened?

I doubt that will ever happen, says Checkmate.

I am also skeptical of even a soft fork since the unintended consequences of the witness discount have woken everyone up to the risks of change.

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Based in Melbourne, Andrew Fenton is a journalist and editor covering cryptocurrency and blockchain. He has worked as a national entertainment writer for News Corp Australia, on SA Weekend as a film journalist, and at The Melbourne Weekly.

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Ordinals turned Bitcoin into a worse version of Ethereum: Can we fix ... - Cointelegraph

Bitcoin (BTC) users have been given a possibly more efficient way to mint new assets on the blockchain after an updated edition of the recently-rebranded Taproot Assets Protocol was released by Lightning Labs.

In a May 16 blog post, Lightning Network infrastructure firm Lighting Labs criticized the current methods by which assets are inscribed on the Bitcoin blockchain, calling them particularly inefficient and pointed to cumbersome protocols that write asset metadata directly into block space.

The Taproot Assets Protocol is designed to operate maximally off-chain in order to avoid the network congestion that has become an unfortunate characteristic of the Bitcoin network since the inception of the BRC-20 token standard by anonymous developer Domo on March 8.

Lightning Labs said Protocol users could soon integrate BRC-20 assets into the Lightning Network, with wallets, exchanges and merchants ported, over instead of needing to bootstrap a new ecosystem from scratch.

Domo has previously said the Taproot Assets Protocol is a far better solution for minting new assets on Bitcoin when compared to the pre-existing methods like JavaScript Object Notation (JSON), as it allows for users to easily transfer to the Lightning network for fast and cheap transactions.

The overwhelming majority of BRC-20 tokens created thus far utilize Ordinal inscriptions of JSON data to deploy token contracts, mint tokens and transfer them.

This method has drawn widespread criticism from developers, who claim the process costs four times as much in transaction fees compared to just using binary.

The Taproot Assets Protocol is the rebranded version of the original Taro protocol. Lightning Labs was forced to change the name of the software following what it called a frivolous trademark infringement suit filed against them by blockchain development firm Tari Labs on Dec. 8 last year.

Related: Ordinals and BRC-20 will disappear in a matter of months, says JAN3 CEO

The total value of BRC-20 tokens briefly surpassed the $1 billion mark on May 9 but has since shrunk back down to $500 million, a drop of nearly 50%.

Magazine: $3.4B of Bitcoin in a popcorn tin The Silk Road hackers story

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Lightning Labs launches updated protocol to help solve Bitcoins BRC-20 issues - Cointelegraph

Tokenized versions of real world assets, like commodities and real estate, have outperformed Bitcoin and Ethereum so far in 2023, according to a new report from blockchain analytics firm Nansen.

The report delves into the terrain of real world assets, or RWAs, and how they are being onboarded onto blockchains through various instruments. It also marks the debut of Nansens Real World Asset Index, which tracks 22 different governance tokens created on Ethereum.

Nansen used the price of BTC and ETH as benchmarks for the indexs performance. The RWA index, which had a total market cap of $335 million as of May 8, has outperformed the top two cryptocurrencies, with notable peaks in January and April.

Tokenization of commodities, real estate, art, and bonds has become a disruptive and trendy new way to manage these assets.

According to Nansen, theres been a significant uptick in interest in tokenized RWAs in 2023. The company noted that several important institutionsGoldman Sachs, Bradesco and Siemenshave been getting involved.

Although Nansen Researchs price index includes 22 specific protocols, it also offers tracks 40 different RWA protocolsa non-exhaustive list, the company said in its reportgrouping them in seven different categories: money markets, real estate, luxury goods, debt markets, infrastructure, carbon markets and commodity markets.

An important distinction this year, according to the report, is that real-estate and RWA securitization infrastructure do not dominate the marketas was the case pre-2021. Instead, debt market protocols have been especially popular.

Steady rise in activity over the past year shows an interest in debt market projects such as Maple Finance and Centrifuge, with five protocols in this category reaching the top 10.

Due perhaps to double digit yield opportunities offered by some of these protocols, and despite the ongoing bear market, interest by investors in real world asset markets is trending positive.

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DeFi Debt Tokens? They're Outperforming Bitcoin and Ethereum in 2023 - Decrypt

Nearly 50,000 Bitcoin held by long-term wallet addresses have entered the market again. While BTC sale by long-term holders is typically considered bearish, past experience shows that revived supply entering the market has led to a recovery for BTC in the long-term.

Also read: Lido Finance faces $782M Ethereum withdrawals from bankrupt Celsius, ETH holders brace for selling pressure

Bitcoin wallet addresses holding the asset for more than a year shed their BTC holdings earlier this week. While a decline in BTC supply held by long-term holders is typically considered bearish for an asset, in the case of Bitcoin, revived supply usually precedes a price recovery.

When Bitcoin held by long-term holders (users that held BTC for greater than a year) enters the market, it is defined as revived supply. On May 15, nearly $1.3 billion worth of Bitcoin reentered the market, and similar levels of revived supply were seen twice over 2022.

In June and November 2022, 100,000 BTC and 205,000 BTC entered the market, representing more than $1.3 billion in dollar value at the time. These spikes in revived supply were followed by a recovery in the assets price.

Bitcoin revived supply in June and November 2022

While the volume of BTC revived in May is relatively lower compared to previous spikes, the dollar value is comparable. The chart above shows the steady recovery in Bitcoin price, in the two to three months after the revived supply entered the market.

If history repeats, Bitcoin price could recover from its decline below the April peak of $30,899.

The supply on exchanges, a key metric showing the volume of Bitcoin that hits exchange wallets, reflects the recent increase in revived supply.

Bitcoin supply on exchanges

Bitcoin supply on exchanges was 1.13 million as of May 15, when long-term holders sold BTC, according to data from Santiment. Since then, it has fallen to 1.11 million as demand on exchanges absorbed the sale of BTC by long-term holders. In this context, the assets price could recover from its recent pullback.

Bitcoin price is in an upward trend that started at the beginning of 2023. The asset hit an April 2023 peak of $31,028 (on Bitstamp) and witnessed a correction thereafter. In its path to recovery, BTC price faces resistance at $28,459 and $29,480, levels that acted as resistance between March and mid-May.

BTC, which trades around $26,800 at the time of writing, is below its 10-day and 50-day Exponential Moving Averages (EMAs) at $27,278 and $27,677, respectively. These price levels could act as immediate resistance to Bitcoin price.

BTC/USD one-day price chart

If Bitcoin price plummets to the 200-day EMA at $24,837, it is likely to invalidate the bullish recovery thesis for the asset. The downside target is $24,342, a level that acted as support throughout March and April.

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Bitcoin price recovery likely undeterred by $1.3 billion BTC sale of long-term holders - FXStreet

BitcoinYuichiro Chino/Getty Images

Top economist Steve Hanke reiterated that the world's most popular cryptocurrency is essentially worthless.

He was reacting to bitcoin falling to a two-month low last week after starting 2023 on a tear.

"Bitcoin is a bubble. It has no inherent value and is terribly overpriced," he tweeted.

Bitcoin, the most popular cryptocurrency, is way too expensive and essentially worthless, according to Steve Hanke.

The professor of applied economics at Johns Hopkins University, was reacting to news of the original virtual currency falling to a two-month low last week after starting 2023 on a tear. Bitcoin has retreated almost 12% from a 10-month high reached last month.

"Bitcoin is a bubble. It has no inherent value and is terribly overpriced," Hanke, a former economic adviser to President Ronald Reagan, said in a tweet on Sunday. It's not the first time the economist has slammed the cryptocurrency - in March, he said it is a highly speculative asset, adding that "buying bitcoin is a fool's game."

A bubble exists when investors perceive the current price of an asset to be much more than what it should be, based on its long-term, underlying qualities. It's typically marked by a rapid escalation of an asset's price to such highs that it becomes unsustainable, causing it to collapse in value.

Bitcoin has slumped to around $27,380 from a peak of more than $31,000 reached in mid-April. It rallied 88% through the first 3 1/2 months of the year amid optimism that an end was in sight to the Federal Reserve's interest-rate increases.

The token's weak performance in recent weeks came as senior cryptocurrency execs warned about regulatory stasis in the US. The Securities and Exchange Commission and other watchdogs have cracked down on major crypto exchanges including Binance and Kraken.

The collapse of crypto-friendly lenders Signature and Silvergate Capital amid the still-unresolved banking turmoil has also undermined investor sentiment in the digital-asset sector.

Read the original article on Business Insider

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Bitcoin is a bubble with 'no inherent value and is terribly overpriced,' top economist Steve Hanke says - Yahoo Finance

Dogecoin's DOGE/USDnetwork activity hit an all-time high earlier this week, with a tenfold surge in daily transactions.

The cryptocurrency, considered the first "meme coin," briefly surpassed both Bitcoin BTC/USD and Litecoin LTC/USD.

On Sunday, over 645,000 transactions were registered on the network a significant increase from Dogecoin's usual average of about 20,000 daily transactions.

See Also:Crypto Holders Show Resilience As Wallets With At Least One Bitcoin Surpasses 1M

Supporters say this bolsters Dogecoin utilization and opens the door to potential decentralized finance (DeFi) services that could be built using blockchain technology.

Critics argue that the introduction of DRC-20 could lead to network congestion, diverging from Dogecoin's original goal of becoming an everyday currency. High fees and network congestion are significant issues for any blockchain, they say.

These factors could potentially make the network more expensive and slower for regular users, thus potentially hindering cryptocurrency adoption.

Next:SEC To Target Coinbase In Regulatory Action

Read more:
Dogecoin Mania Fuels Surge In Transactions, Outpacing Bitcoin ... - Benzinga

Crypto unintelligentsia discourse has been set aflame by this weeks Big Crisis in Bitcoin.

Until recently you could have sent a bitcoin transaction rather cheaply, probably at a fee rate of 1 satoshi per vByte (equivalent to a fraction of a cent). Now, with the rise of the use of non-fungible token-like inscriptions and the BRC-20 token standard on Bitcoin, normal fee rates are comparatively absurd. At time of writing, getting a bitcoin transaction sent in a reasonable time period would cost something like 100 satoshis per vByte.

All things considered, its actually still pretty cheap but its way more expensive than bitcoiners are used to. And so, people are upset. The thing is, they are upset not because fee rates are high, but because of why fee rates are high.

See, the Bitcoin blockchain has always had scarce blockspace. When billions and billions of people want to use bitcoin will it become too expensive to use? has always been an open question about Bitcoin. It was even a central point of contention during the Blocksize Wars in 2015 to 2017 which led to the introduction of Segregated Witness (SegWit) to Bitcoin and the Bitcoin Cash hard fork.

(Of note: SegWit solved for transaction malleability and opened the door to our most recent reason for fees going up; funny how that works).

This time around, bitcoin fees have skyrocketed because a lot more people want to use bitcoin. And not to send permissionless, sound money to others or because they want to store wealth, but instead to put monkey pictures on the Bitcoin blockchain and speculate on tokens.

Blasphemous. Bitcoin should be used for financial transactions, hence the hullabaloo.

Putting aside the moralistic argument of what Bitcoin should be used for, bitcoiners have never really had a good response to how the network should handle periods of time when transaction fees spike. Canned answers that people will just pay for the blockspace or the free market will figure it out are setting up a world where the only people who are able to afford to transact on the network are the Bitcoin Rich.

Yuck. So much for unseating the rent-seekers.

Of course, high bitcoin fees have some potential solutions. The most commonly cited solution is Bitcoins Lightning Network, which has been pinpointed as a serviceable means to send bitcoin quickly and cheaply. When youre already on-boarded and using the Lightning Network (and you know what youre doing), its absolutely great. Transactions feel magic. Theyre fast and cheap (when they dont fail).

But the problem is you cant get to layer 2 without sending initial transactions on layer 1, in this case the currently comparatively expensive Bitcoin blockchain. Its just like you cant get to the second story of most buildings without first stepping into the first story. In both cases, you can just wait until fees go down or until the elevator banks free up (or take the stairs, I guess?). But what if fees dont go down? What if people keep piling into the building youre in?

One way to solve this could be through third-party custody. Thats like your friend setting up a zipline from another building to the second floor through a window they opened for you so that you can get to the second floor without ever touching the first floor.

Doesn't it feel dirty though?

Unfortunately, the current design of Bitcoin probably doesn't allow for the entirety of the world to efficiently onboard through layer 1. Maybe the big philosophical discussion around being financially self-sovereign ends for most because it really is difficult to be fully self-sovereign, even with bitcoin.

Our future conversations around bitcoin should then probably focus on one thing: trade-offs.

Maybe it's fine that I use my bitcoin in a custodial way because it's easier for me, and you use it non-custodially. Fine. Maybe Im wrong and youre right. Maybe it's none of your business how I use my own (or, rather, my custodians) money.

The point is: we should be more open to discussing custodial solutions to our problems no matter how dirty it might make us feel. And to that end, applying some custodial products in your financial or bitcoin life need not bar you from using non-custodial products.

You can use both. We just deserve more clarity and options when it comes to these particular trade-offs.

See the original post:
As Bitcoin Scales, We Need Better Custodial Solutions - CoinDesk