Cryptocurrency in 2017 – the 12 biggest happenings
In the world of cryptocurrency, 2017 felt like a decade. Every day seemed like a never-ending tirade of cryptocurrency news and happenings. We have compiled the 12 biggest events in crypto this past year and its implications for the cryptocurrency world. As the saying goes, those who don’t learn from history are bound to repeat it –
JPMorgan CEO Jamie Dimon stated that Bitcoin is a “fraud”. After some well-known figures in wall-street started investing in cryptocurrencies, he criticised that Bitcoin does not have legal support and it will “blow up”. His criticism caused Bitcoin to fall to this session’s lowest at $4,106.23. However, he also stated later that he is open-minded about the uses of cryptocurrencies, if they are regulated and controlled.
In April, Japan passed a law recognizing Bitcoin as a legal tender. This has brought Bitcoin exchanges under anti-money laundering and categorised it as a prepaid payment instrument. The law stands in complete contrast to China, where Bitcoin has been banned. This is one of the reasons why Japan has become the world’s largest cryptocurrency market today.
September witnessed mainland China suddenly banning cryptocurrencies. It banned residents from trading in digital currencies on exchanges and made it illegal for Chinese start-ups to raise funds by Initial Coin Offerings (ICOs). The value of Bitcoin and Ether fell soon. China believes it protected itself from ‘scary crypto bubble’. But because of Bitcoin’s decentralised and autonomous nature, start-ups moved out of the country and the prices soared up again.
Bitcoin witnessed its first two hard forks this year, dividing the currency into – Bitcoin (BTC), Bitcoin Cash (BCC) and Bitcoin Gold (BCG). While the third planned fork – Segit2X got cancelled. These forks were the result of high demand from community members, who believed that Bitcoin was centralised, monopolised by a few and had scalability issues.
BCG has introduced the biggest revolution on Bitcoin – adoption of PoW algorithm and Equihash, on which ASIC cannot be used. ASICs are used on BTC and BCC, and are specifically made for Bitcoin mining. These chips are expensive and controlled by a few big companies. This monopolises power on the blockchain. But BCG will use GPUs for mining to give a fair opportunity to ordinary miners.
The highly anticipated Segwit2X hard fork, which was schedule for last November got cancelled because of lack of community support. The fork aimed to increase the blocksize of Bitcoin. But with only 30% community support, the upgrade got cancelled. Though as fees on Bitcoin rises because of low on-chain capacity, developers believe that a consensus will come soon.
- NiceHash Hack
The NiceHash Hack is supposed to be the fourth largest hack in crypto history. On Dec 6th, 2017, the Slovenian-based mining company reported a hack of 4700 BTC (around $80 million). This “highly sophisticated hack” used an employee’s credentials to get access to the company’s system. However, since Bitcoin’s thefts are unique, this stolen money cannot be used as the news spreads around.
- US ICO Regulations
The US SEC (Securities and Exchange Control) has issued warnings about risks involved in ICOs (Initial Coin Offerings). Start-ups have raised around $2billion worth of capital this year through ICOs. Due to their significance as start-up funds, the US SEC has mandated ICOs to comply with existing SEC securities regulations.
- Bithumb hack
South Korea’s largest Bitcoin and Ether exchange, Bithumb got hacked in July 2017. It resulted into loss of millions or billions of won from customer accounts. around 31,800 Bithumb website users suffered from this hack. The hackers hacked an employee PC and used “voice phishing” for scamming.
- Parity Ethereum Hack
Due to a mistake by a novice hacker, around 587 wallet-holders on Parity were unable to access their digital wallets in November 2017. Though no money could be hacked, but around $162 million have been frozen on Parity as a result of the deleted code. The company considered using a technique to unwind the Ethereum blockchain to unfreeze the wallet.
- Youbit Exchange Hack
The South Korean Bitcoin exchange, Youbit was hacked in December 2017. The hackers hacked around a fifth of the clients’ holdings. Though the company has gone out of business, the users would get back around three-quarters of the digital currencies they had in the account. Cryptocurrency hackings increased this year as price of Bitcoin rose 15 times high.
Futures are standardised contracts in which a particular asset is bought/sold at set price and particular time in future. First Bitcoin Futures trading has been started in the US by the CFE group this December. It is supposed to bring more “transparency, greater liquidity and efficient price-discovery to the ecosystem”.