Today’s News is Brought to You By
To receive daily news, research, analysis, education, and more directly to your inbox everyday for FREE, subscribe here.
Fighting Centralization with Forks
Sia forks from ASICs
This week, Sia formally announced the code that will activate a hard fork, or rather, upgrade the blockchain to avoid ASIC miners from taking over the network.
The move doesn’t come as a surprise for the $264 million decentralized cloud storage protocol. Actually, it’s a path that multiple other coins in the industry have chosen to make sure that the mining process stays decentralized among participants.
⛏ What is ASIC mining? In short, ASIC mining hardware is made to specifically mine one type of cryptocurrency using one algorithm. This means ASIC miners can be more efficient than GPU and CPU miners. However, since ASIC mining hardware is expensive, it has led many to believe that the advantage ASIC miners have over GPU and CPU miners could lead to centralization among the wealthy.
Since ASIC miners are able to mine cryptocurrencies at a much higher efficiency than GPU and CPU miners, they inevitably take over networks.
For Bitcoin, the ASIC advantage has entirely shifted the power in mining from anybody with a normal computer to high-powered mining farms owned by giants like Bitmain.
According to Blockchain.info, just 5 identified mining pools control more than 63.6% of Bitcoin’s hashrate:
Since a majority of Bitcoin’s network is maintained by a small amount of mining pools, some developers argue that ASICs wield too much power and have created measures to block them.
One method coins have taken to ensure ASIC resistance is to require a significant amount of memory which makes the size and cost of creating ASIC miners much more expensive. In addition, since ASICs are created to only mine one algorithm efficiently, a handful of coins are now mined with multiple algorithms to fend off ASICs.
Still, though the coins are “ASIC resistant” for the time being, mining hardware manufacturers like Bitmain will continue to attempt to overcome these hurdles with new ASIC models.
For Sia, its community will win the battle against ASICs on October 31st when the hard fork is activated, but the war against ASICs is far from over.
Crypto Bull Mike Novogratz Tames Down Optimism
Novogratz is an esteemed crypto investor
Mike Novogratz is a former hedge fund manager at Fortress Investment Group and entered into the crypto industry by earlier this year raising $250 million to develop a “cryptocurrency merchant bank” in Canada.
In May, Novogratz launched a cryptocurrency index with Bloomberg, called the Bloomberg Galaxy Crypto Index.
Novogratz is known for his bold predictions about the crypto market. In the past, he has set lofty price targets for Bitcoin and continuously called the bottom on the crypto bear trend.
Now he has a different tone
Despite making bold predictions in the past, Novogratz has recently tamed his optimism for crypto. He has realized that everything will not immediately fall in place and that the technology needs wide-scale adoption before it can reach an appropriate valuation.
Specifically, Novogratz calls for the need of institutional money to revive the market. Novogratz’s fund recently became the first client of Fidelity’s new crypto service. He recognizes this is a significant step for crypto, but more institutions need to become involved for the price to return to where it was at the beginning of this year.
Novogratz thinks this institutional wave will come at some point in the first half of next year. He also noted that Bitcoin may need to show the ability to break $10,000 for some institutions to become interested.
World Money Laundering Regulators to Establish Crypto Regulations in June
Cracking down on money laundering
The Financial Action Task Force has plans to establish regulations for cryptocurrencies by June of next year. The regulatory body will create guidelines, as well as enforcement expectations.
In a statement, the Financial Action task force detailed its plans for regulations:
“As part of a staged approach, the FATF will prepare updated guidance on a risk-based approach to regulating virtual asset service providers, including their supervision and monitoring; and guidance for operational and law enforcement authorities on identifying and investigating illicit activity involving virtual assets.”
What is the FATF?
The Financial Action Task Force is an intergovernmental agency based in Paris, France. The organization was founded in 1989 with the initiative to stop international money laundering.
The agency has jurisdiction in 37 countries, including the United States. The FATF publishes a “blacklist” containing countries that do not cooperate with its policies. As of 2016, this list consisted of two countries, Iran and North Korea.