Bitcoin Tumbles Below Gold As China Tightens Regulations
Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations. A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016 . As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates they aim to bring practices in line with how bitcoin is traded in other markets. The draft states that Chinese bitcoin exchanges would be subject to current banking and anti-money-laundering laws and be required to collect information to identify customers, according to people familiar with the matter. They say the draft, if implemented, would require exchanges to install systems for collecting and reporting suspicious trading activity to authorities; China’s central bank would be in charge of handling violations by the exchanges. The people said officials could still revise the guidelines, which were passed to exchanges in recent days. Chinese investors have fled the market since authorities started scrutinizing bitcoin trading in the country, prompting exchanges to install trading fees and, in some cases, to suspend withdrawal of bitcoin from their platforms. The central bank opened up investigations in January at the country’s three largest bitcoin exchanges, Huobi, OkCoin and BTCC, and delivered a terse warning last month that bitcoin platforms risk being shut down if they skirt rules on money laundering and foreign exchange. In the past 30 days, yuan-denominated bitcoin trades accounted for 17% of global volumes, down from 97% in the past six months , according to data tracker Bitcoinity. However, as Bitcoin has dropped, Ethereum has exploded in popularity since the JPMorgan-linked blockchain alliance news hit ... The 'other' virtual currency has seen its price explode to almost $50... Massively outperforming Bitcoin * * * For those who are new to Ethereum and are curious about the distinctions between that technology and bitcoin, below is a quick primer courtesy of CryptoCompare: 1. In Ethereum the block time is set to 14 to 15 seconds compared to Bitcoins 10 minutes. This allows for faster transaction times. Ethereum does this by using the Ghost protocol. 2. Ethereum has a slightly different economic model than Bitcoin – Bitcoin block rewards halve every 4 years whilst Ethereum releases the same amount of Ether each year ad infinitum. 3. Ethereum has a different method for costing transactions depending on their computational complexity, bandwidth use and storage needs. Bitcoin transactions compete equally with each other. This is called Gas in Ethereum and is limited per block whilst in Bitcoin, it is limited by the block size. 4. Ethereum has its own Turing complete internal code... a Turing-complete code means that given enough computing power and enough time... anything can be calculated. With Bitcoin, there is not this form of flexibility. 5. Ethereum was crowd funded whilst Bitcoin was released and early miners own most of the coins that will ever be mined. With Ethereum 50% of the coins will be owned by miners in year five. 6. Ethereum discourages centralised pool mining through its Ghost protocol rewarding stale blocks. There is no advantage to being in a pool in terms of block propagation. 7. Ethereum uses a memory hard hashing algorithm called Ethash that mitigates against the use of ASICS and encourages decentralised mining by individuals using their GPU’s.
March 17, 2017 at 02:22PM
via Digg http://ift.tt/2mDKpGl