FUD. Fear, Uncertainty, Doubt. The Bitcoin network has had quite a bit to worry about over this past year. 2018 brought unprecedented change to the Bitcoin community.
Some changes were good for the platform, others were not so helpful. While 2018 was definitely the toughest year yet for Bitcoin, it was also a time of tremendous growth.
In spite of the inundation of negative news, the month of December closed out the year with a flurry of positive activity for Bitcoin. Bitcoin and blockchain educator Sam Wouters announced the release of his monthly Bitcoin recap highlighting key happenings within the Bitcoin universe.
Wouters tracks Bitcoin news across a variety of categories each month. He looks at Bitcoin adoption progress, technological development, network security, Bitcoin mining advances and changes, business news, education, regulations and politics, archeology, price, and trading. Let’s look at some of the top news stories Wouters featured for December 2018.
One of the top areas of growth and adoption for Bitcoin was within its Lightning Network (LN). The LN was created to solve the scalability issues that have plagued Bitcoin since its inception. Bitcoin in its pre-Lightning state was extremely limited in the number of transactions it was capable of processing at a time. Therefore, the number of people able to conduct transactions on the Bitcoin network was also limited.
LN sought to change that reality by creating a second layer to Bitcoin. That endeavor has largely been successful. Wouters points to an article announcing that the LN hit a 500 BTC network capacity in December. This shows enormous growth in liquidity and payment routing.
Quite a lot has been happening in terms of technological development on the blockchain. Particular areas of growth are again related to the LN as well as Segregated Witness (SegWit). However, one of the more compelling links Wouters identifies is to a presentation by Bitcoin research and development trailblazer Luke Dash Jr. The presentation highlighted possible upcoming advancements across Bitcoin.
Dash presents a plan to streamline SegWit v1 through simplifying signatures, script language, and sign-time script. He also plans to implement instant peer-to-peer transactions on the LN, reducing on-chain space use. He proposes plans to implement signature aggregation, decentralized side-chains, and confidential transactions in a nod to original concepts like immutability and anonymity. Finally he postulates a reduction in block weight and size limits to ensure sustainability.
Security continues to be a hot issue, with both advancements in security features and hacks/potential hacks to existing crypto and blockchain platforms. Currently, one of the more interesting, yet controversial topics surrounding security is not a new safety feature — nor is it a hack, for a change.
Two days from now, on January 3, 2019, a small, yet fervent group of Bitcoin security enthusiasts is spreading the word across the entire Bitcoin universe to withdraw all tokens from public exchange platforms and into private keys. The purpose of this exercise is not to break the exchange system, but rather to educate Bitcoin users about the value of off-chain, private key security storage.
While some argue that the inevitable and permanent loss of potentially countless private keys ought to be a huge deterrent against this practice, the core proponents of this idea maintain avid support, strictly from a security perspective.
Bitcoin mining difficulty has seen quite a bit of volatility over the the past year, and December was no different from the rest of the year. Difficulty adjustments take place most often to solve issues of inflation and to encourage price corrections.
According to a link provided by Wouters, mining difficulty is down 32 percent from all time highs while hash rates continue to move slowly upward.
Much of the business news Wouters linked to in December was related to mining giant Bitmain, and for good reason. Bitmain reported $740 million losses in Q3 of 2018. These losses were related to inventory, investments in Bitcoin Cash (BCH), and the severe financial consequences of ongoing hash wars across the Bitcoin network.
In another blow, Bitmain announced plans to lay off approximately 50 percent of its employees, including members of key innovation and development teams. This announcement could not come at a more terrible time for most of its workforce, as they were apparently unemployed by Christmas — or at the latest by the year’s end.
Finally, Bitmain’s difficulties have continued, as rumors of Jihan Wu and Micree Zhan stepping down have flooded social media. Whether these rumors end up being true or not, the negative news is painful for the company, and the network as a whole.
Education is advancing at a rapid rate thanks to a renewed focus on development of user friendly platforms within Bitcoin. Educational news and opportunities include a quick tutorial on how to accept Bitcoin payments whilst building an online store.
Also new to education are videos about Bitcoin price manipulation, routing and hashed time contracts on the Lightning network, and an explanation of how Lightning payment channels work.
Regulation and Politics
The biggest regulatory news in December 2018 for cryptocurrency was not a new law or safeguard, but simply the attention of U.S. lawmakers. A few bipartisan congressmen introduced a bill seeking to challenge the Securities And Exchange Commission’s (SEC’s) definition of securities. The SEC has been operating under the exact same laws for the past 72 years. This is huge news — as it has been a long time coming for a change-up.
Because the bill was introduced so late in the year, it really means absolutely nothing at this point. It will need to be reintroduced in 2019 in order to go through the legislative process. However, the fact that it happened at all means that Congress is finally addressing the crypto elephant in the room.
Price and Trading
After such a terrible year for Bitcoin prices, it is hard to believe there is anything good to report at all. However, even with the price of Bitcoin plummeting from over $19k to under $4k this year alone, overall transaction numbers are actually up. This means that more people are actually conducting transactions on the Bitcoin network despite its abysmal showing over the last half of 2018.
Additionally, he notes the fact that the Japanese Yen overtook the U.S. Dollar as the most traded fiat pair. Bitcoin has always had a strong following in Asia, and this news solidifies the reality that Asia is one of its fastest growing markets.
While pundits may pump negative news, December’s statistics represent positive changes for Bitcoin. With this amount of rapid change and the variety of changes taking place across the Bitcoin community, the first month of 2019 is bound to bring more exciting news to Bitcoin enthusiasts globally.
Do you think these statistics signal an excellent 2019 for Bitcoin? Is more negative news on the horizon? Let us know your thoughts in the comments below!