What has been happening around Blockchain Technology and Cryptocurrencies this week? The most relevant local and international developments as well as appealing background reports in a pointed and compact way in retrospect in our weekly review.
The story of the German programmer Stefan Thomas, who lost access to his Bitcoins worth over 250 million Swiss francs, has made headlines this week. In order to understand such incidents in some depth, a trip into Bitcoin's price history and unique characteristics is worthwhile. The first trade of Bitcoins for dollars is said to have taken place in July 2010. Sources refer to trading ranges between USD 0.0008 - 0.08. This was shortly followed by the first documented Bitcoin transaction for a tangible asset in the form of two pizzas. 10,000 Bitcoins were paid for the baked goods. The equivalent of $41 at the time would have a value of around CHF340 millions today. Bitcoin's price history illustrates that in its early years, a few hundred or even a few thousand Bitcoins did not represent a substantial value and therefore the owners were accordingly negligent with regard to its safekeeping. Stefan Thomas is not the only one facing this issue. The number of "lost" Bitcoins is estimated to be around 4 million, a good 20% of the overall supply.
Speaking of bitcoin supply: Why did Bitcoin founder Satoshi Nakamoto choose 21 million as the upper limit? Many people are aware of the number and understand the disinflationary nature of Bitcoin. But wouldn't 20 million have been enough? The answer to this is rather simple. While the choice was arbitrary to a certain extent, 21 million does include some beneficial features. Friends of mathematics will respond to the article with "makes sense".
A considerable degree of progress has been made in the area of crypto regulation in the USA over the past year. This seems about to continue in 2021. In the past, the United States lagged somewhat behind, but it has since created striking progress in the legal recognition of digital assets. Last week, the OCC granted U.S. banks permission to use private stablecoins and public blockchains for their payments. Also the regulatory agency SEC stated that it would pay more attention to the cryptocurrency market. This week, the announcement was made that Gary Gensler would serve as chairman of the Securities and Exchange Commission (SEC) under the Biden administration. Gensler was previously chairman of the Commodities Futures Trading Commission (CFTC) and taught several courses on blockchain and cryptocurrencies at MIT. He is already familiar with the ecosystem, referring to Bitcoin as a "modern form of gold." As for his stance on Bitcoin and the cryptocurrency market, Gensler has made statements that indicate support for cryptocurrencies.
One aspect that makes mass adoption of blockchain networks difficult involves its current silos. A multitude of different blockchains are responsible for different things, but they cannot communicate with each other. This is exactly where interoperability comes into play. In order to break down silos, communication between blockchains must be ensured. Yves Longchamp explains in a detailed report how much potential this technology actually has. He describes the new worlds that interoperability opens up and showcases Polkadot, currently the largest project in this area.
Ein wichtiger Aspekt, der die Massenadoption von Blockchain-Netzwerken erschwert, sind die aktuellen Silos. Eine Bielzahl von verschiedenen Blockchains ist für unterschiedliche Dinge zuständig, miteinander kommunizieren können sie jedoch nicht. Genau das ermöglicht die Interoperabilität. Um Silos aufbrechen zu können, die Kommunikation zwischen Blockchains gewährleistet sein. Worum es sich dabei handelt und wie gross das tatsächliche Potenzial dieser Technologie ist, erklärt Yves Longchamp in einem Ausführlichen Bericht zu Blockchain-Interoperabilität. Er zeigt die neuen Welten, die Interoperabilität öffnet und stellt das aktuell grösste Projekt in diesem Bereich vor: Polkadot.
In addition: Intellectual property and trademark protection are tricky topics, especially for open source proponents in the blockchain industry. In this very world, there should be room for a philosophical discussion on the topic. Pascal Hügli takes us through a philosophical and political discussion and sheds light on transformations that digitalization brings along. With Bitcoin, there has emerged not only a "decentralized world currency", but also a new meta-idea. Based on principles of the free market economy, it contradicts an extended trademark protection.
Selected articles in the weekly review:
For a better understanding of incidents of lost Bitcoins amounting to millions of dollars, it is worth taking a trip into its price history and its unique features.
https://cryptovalleyjournal.com/focus/background/how-can-bitcoins-worth-250-million-be-lost/
One of the most important features of Bitcoin is its digital scarcity. The total supply is limited to 21 million. But what is the number 21 all about?
Why did Satoshi Nakamoto choose 21 million as Bitcoin’s maximum supply?
MIT Blockchain Professor Gary Gensler will be appointed as the new SEC Chairman under the Biden administration. In the past, he has repeatedly made positive statements about cryptocurrencies and Bitcoin.
MIT Blockchain Professor Gary Gensler appointed as SEC Chairman
Interoperability, according to the Oxford Dictionary, is "the ability of computer systems or programs to exchange information." In the current environment, blockchains mostly operate in a silo, which limits the range of capabilities they offer, how they can be used, and ultimately their adoption.
Intellectual property and trademark protection are tricky topics, especially for open source advocates in the blockchain industry. Particularly in this world, there should be room for philosophical debate on the topic.
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