This week on Planet Bitcoin - 5 February 2016

Friday 05 February 2016

TL;DR: Bitcoin and Blockstream get a nice boost.

It’s been another relatively quiet week on the bitcoin markets. Towards the end of last week we saw some heavy falls, from the high $390s down to the $360s. That turned out to be a bottom, and although the $360 levels were plumbed a couple more times over the next few days, that was as low as it got. Instead, the picture was one of a slow slide downwards, punctuated by those increasingly half-hearted drops.

Chart

That picture ended with a sharp spike back upwards on Thursday: a $10 leap back up into the $380s. It should go without saying by now that such developments should be accepted with a sprinkling of salt, since in terms of ‘natural’ market movements they are unconvincing - rather too prone to reversing without notice, or intended to suck in traders who fear missing the next rally. Such is still the state of bitcoin in 2016, and although market manipulation is nothing like as rife as it once was, it may be a while longer before we see the back of it (given that plenty of it happens in the traditional markets, it might be a lot longer).

Stepping back a bit, as it’s useful to do from time to time, the overall picture of the last six months has been a gentle upward slope despite the ups and downs - though the next few weeks will show whether that’s about to change or not.

Around the bitworld

There has been the usual round of news that company X or government Y has decided to plough Z amount of money and time into blockchain research - the most recent being the Bank of Korea, South Korea’s central bank (North Korea’s central bank being located under Kim Jong Un’s bed and holding reserves comprised chiefly of his favourite Swiss cheese). It’s important to note that these are permissioned ledgers that are similar to unpermissioned blockchains like bitcoin’s, but have critical differences. 

There’s been a $55 million piece of good news for Blockstream, which announced the Series A funding into sidechain technology, http://bitscan.com/articles/spotlight-on-sidechains global expansion and industry collaboration. Blockstream funds several of bitcoin’s core developers, and is therefore unavoidably entangled in the block size debate. Put simply, Blockstream is de facto aligned with Bitcoin Core, whose devs advocate for segregated witness rather than an outright increase in block size such as is offered by Classic. So their new $55 million will presumably give segwit more clout, and prove a step back for Classic supporters. Will it bring consensus - whatever form that might take - closer, or further out of reach? We can’t yet tell.

Sigh.


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