NIST Mistakenly Says That Bitcoin Was a Fork of Bitcoin Cash

In a baffling research paper, the National Institute of Standards and Technology (NIST) claims that Bitcoin is a fork of the original network, with Bitcoin Cash actually being that original network and coin.

The findings were shared through NIST’s resource sharing hub called Computer Security Resource Center (CSRC).

According to the research paper, BCH’s origin comes from the implementation of Segregated Witness (SegWit), which was supported by around 90 percent users of the Bitcoin network.  

While the paper gets that background right, it differs largely in reporting a few findings as compared to what is the consensus among the cryptocurrency industry.

For starters, the paper refers to Bitcoin Cash as “BCC,” while the accepted ticker for the cryptocurrency is “BCH.” It also states that the implementation of SegWit caused the original Bitcoin blockchain to be named as Bitcoin Cash.

An excerpt from the report reads:

“When SegWit was activated it caused a hard fork, and all the mining nodes and users who did not want to change started calling the original Bitcoin blockchain Bitcoin Cash (BCC) [sic]. Technically, Bitcoin is a fork and Bitcoin Cash is the original blockchain. When the hard fork occurred, people had access to the same amount of coins on Bitcoin and Bitcoin Cash.”

Bitcoin cash has lately been attracting controversies

This is not the first time that Bitcoin Cash is making rounds of news with something controversial.

It was recently reported that Bitcoin Cash had allegedly been involved in insider trading at Coinbase.

While this report caused anger and frustration throughout the community, one of Bitcoin Cash’s strongest propagators, Roger Ver, immediately dismissed the negativity associated with the news, stating that “insider trading is a non-crime.”

Roger Ver is the CEO of information resource Bitcoin.com, which itself has become a firm supporter of Bitcoin Cash. The company’s home itself describes that “the Bitcoin Core (BTC) network is in trouble due to high fees and slow transaction times. Bitcoin Cash (BCH) is the upgrade that solves these problems.”

Unlike Litecoin and Dash – which are also Bitcoin forks – Bitcoin Cash gets to be perceived with a particular dislike within the Bitcoin Core community and vice versa. Both sides are not hesitant to let the other know how they feel whenever any of them gets the chance to do so.

This hatred has been in play for the last few months, ever since Bitcoin Cash came into inception.

One of the primary reasons behind this is cited as the bitter note on which Bitcoin Cash parted itself from Bitcoin.

Does this research paper have any significant effects?

It remains a research paper on the cryptocurrencies and would not have any significant effects on their market value, but it could certainly fuel some debates from supporters of Bitcoin and Bitcoin Cash, who pass no opportunity to debate the utility and effectiveness of the “other coin.”

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The World Gold Council Says Bitcoin Is Not Parallel to Gold

“Cryptocurrencies are no substitute for gold.”

This is the title of a research paper issued by the World Gold Council (WGC), the market development organization for gold.

Over time, and especially since last year, numerous comparisons have been made between gold and cryptocurrencies, particularly Bitcoin.

With the sky-high price of the cryptocurrency along with its investors’ penchant for “saving” it, experts and general audience alike took seemingly no time in calling it “digital gold,” a term that has now gained traction to the point where the WGC has to address it.

Bitcoin is not comparable to gold

The WGC paper is quick to address the differences between gold and what is considered the premier cryptocurrency of the world. It explains that while Bitcoin’s unprecedented rise last year was phenomenal, it does not mean that it was bound to replace gold in any capacity as had been suggested by some experts.

The paper further points out a few critical differences between Bitcoin and gold.

It explains how gold is more stable in value and less prone to fluctuations, how it is a commodity that trades in a regulatory framework yet maintains a tremendous level of liquidity, and how it has a very established role when it comes to investments. But of course, gold has been around for centuries; Bitcoin has been around for almost a decade.

The paper further mentions that unlike Bitcoin, gold has a demand that is considered universal when it comes to trading it. No matter where you are or which region you have traveled to, you will always be able to trade in your gold for the local currency. Whereas, the same cannot be said about Bitcoin or any other cryptocurrencies for that matter as they are limited in demand and can only be understood by a select few who are familiar with the mechanisms of the technology.

The paper further mentions that despite reports of gold’s value fluctuating or getting negatively affected due to Bitcoin and cryptocurrencies, no evidence backs such claims. The paper explains that the pace at which gold’s value improved last year is in line with previous few years as well.

In the report, the WGC joins other revered supporters of blockchain technology by commenting that the technology has potential to be beneficial and effective and could be utilized in various avenues by the gold industry in addition to the other market segments that are currently researching the technology.

It further elaborates that at the moment, several entities from the gold market itself are assessing the usage of blockchain to effectively turn gold into a “digital asset” by introducing functions on its supply chain and post-trade processes – functionalities that can be made available through private blockchains rather than public ones.

Moving towards its conclusion, the report explains that while cryptocurrencies have shown “remarkable” increase in the last year, they remain untested in several markets especially when it comes to having them as part of an investment portfolio.

It describes that until cryptocurrencies have a less-volatile value and more options for liquidity, it would not make much sense to compare it to gold, which does not only have these characteristics but also some other key aspects that are viable for an investment asset.

The WGC ends the paper by stating that “these characteristics underpin gold’s role as a mainstream financial asset that will likely continue to resonate in today’s digital world.”

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Samsung Partners with a Cryptocurrency Mining Hardware Manufacturer to Make Its Own ASIC Chips

It is not just blockchain technology that is being adopted by corporations all over the world, but the crypto fever is also getting to them by the looks of it.

As per local news sources, South Korean tech giant Samsung will be manufacturing ASIC (application specific integrated circuit) chips that are used for mining cryptocurrencies.

This move came not long after Samsung surpassed Intel to claim the spot as the world’s largest seller of chipsets.

Details on the development

It is important that Samsung has partnered with a cryptocurrency mining hardware manufacturer in China to start making its own ASIC chips.

While more details were not provided by the company on the development, a source from Samsung confirmed to local news platforms that the company’s foundry was indeed carrying out manufacturing processes for cryptocurrency mining chips.

However, the official stated that they would not be able to disclose further details regarding the operations, at least for now.

Samsung already manufactures GPU chips that are an integral part of gaming computers, which are also used by miners for small cryptocurrency operations.

Effects this might have on the current mining operations

Samsung currently has one of the largest and advanced semiconductor manufacturing plants in the world, which has not only helped its own products, such as its line of cellphones – but has the company supply manufacturing elements to its counterparts and competitors.

Samsung is currently the sole supplier for Apple’s iPhone X OLED screens, mostly because it is the only company that can meet such a high demand while also maintaining the quality desired from these high-end cellphones.

It is likely that Samsung will leverage from these operations to establish itself as the primary provider for ASIC chips as well.

This would also bring Samsung in direct competition to TSMC, a Taiwan based semiconductor manufacturer which works in collaboration with Bitmain, a Chinese company that runs one of the most significant cryptocurrency mining operations in the world.

However, Samsung is not the only big corporation to have expanded into ASIC mining chip manufacturing to increase the competition for the aforementioned companies.  

In December 2017, Japanese conglomerate GMO Internet had announced that it would be launching its own ASIC chip manufacturing and cryptocurrency mining operations. The company has already secured a location in Europe and plans to have its full-fledged operations start very soon.

With corporations such as Samsung joining in the cryptocurrency industry – even indirectly – this could lead to initiate a whole new industry segment in its own right.

At the moment, individual miners have to spend a large amount of money without any earnings to ensure that they can run a mining computer on their own, as most of the time, these miners only get paid for the work that they perform and not for the equipment that they need to execute these operations.

While ASIC chips or the related equipment would still not come cheap, with bigger corporations churning them out on a commercial or retail level, there could be a significant difference in their price which would make owning a mining machine somewhat affordable for individual miners.

Whereas, for mining corporations, it would make a massive difference in equipment costs as compared to generated revenue.

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Facebook Shuns Cryptocurrency Advertisements

In an update to its ad policy, Facebook Product Management Director, Rob Leathern, issued the company’s approach towards advertisements related to ICOs and cryptocurrencies.

In his statement, Leathern explained that Facebook will never allow “misleading or deceptive ads” on its platform and has thus made amendments to its ad policy.

The policy text is provided below:

“Ads must not promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings, or cryptocurrency.”

Due to its wording, the policy can be applied to various scenarios, and Leathern states that it was the very intention behind the policy’s implementation while the company works on developing further solutions.

Leathern wrote:

“This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across our platforms including Facebook, Audience Network and Instagram. We will revisit this policy and how we enforce it as our signals improve.” 

However, he was quick to mention that due to the extensive nature of the ad program, the company might not be able to catch every ad that violates this policy. He advised the users to report such content if they stumble upon it so that it can be dealt with efficiently.

He concluded by stating that the policy intends “to make it harder for scammers to profit from a presence on Facebook.”

Reasons behind this decision

It would not be incorrect to state that 2017 could easily be called the year of initial coin offerings (ICOs).

During this single year alone, 891 ICOs were held, which collectively raised more than $6.6 billion. This essentially termed ICOs as the most popular crowdfunding trend of recent years, leaving the other modes far behind.

One of the reasons behind the success of ICOs is how they allow startups to gather funds quickly by offering investors stakes in the company through tokens, which can then either be monetized by those investors or used within the company for governance and other purposes.

This method of raising funds is not just quick but requires minimum capital by these startups, which can then go on and utilize the raised funds for the operations that they described at the time of the offering.

However, this very function of ICOs has also enabled malicious parties to use them as a digital alternative for traditional scam programs. Users who invest their funds in such ICOs are at risk of losing them, which had been the case in a few ICOs in 2017.

Due to these reasons, regulatory authorities such as the U.S. Securities and Exchange Commission have been issuing repeated warnings to investors, who seem susceptible to fall for promises of unprecedented gains by seeing lucrative online advertisements, most notably from social media.

Considering these facts and developments, it was not shocking to see Facebook declaring its stance on the issue. However, what seemed surprising was the social media giant’s decision to ban ICO and cryptocurrency related advertisements altogether instead of having them regulated.

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The South Korean Government Steps up Efforts to Ensure Cybersecurity

Now that the South Korean government has decided not to ban cryptocurrencies, it seems like it is stopping at nothing to ensure that it is covering all its bases and ensuring that the industry complies with all requirements proposed by the jurisdiction.

In its latest move in this regard, the government fined eight cryptocurrency exchanges on account of not maintaining proper security requirements, even after considering the large number of funds that they handle each day for their clients in the form of cryptocurrency.

This move came in the wake of a major hack endured by Japanese exchange Coincheck, which had been robbed for more than $500 million in NEM (XEM) as a result of the hacking incident.

Some of the major exchanges that received these fines by the South Korean Communications Standards Commission (KCSC) include Upbit, Korbit, Yapian, Coinone, and Coinpia.

Not maintaining up to date security despite imminent risks

As reported earlier, during the phase of determining the effects of cryptocurrencies and deciding how to handle this new financial market, the government of South Korea had been going through investigative measures for various cryptocurrency exchanges in the last quarter of 2017.

During the investigation, the government officials closely went through various aspects of these exchanges including but not limited to the regulatory and security risks that they posed to affiliated parties, this was when these lapses in security measures came to light.

Out of the ten cryptocurrency exchanges being investigated, eight were found in violation of necessary security measures.

Said violations ranged from not having up to date security systems to negligence in protecting customer passwords and other pertinent information.

Coinone and Yapian, for instance, were hit with penalties totaling more than $50,000 for not meeting the requirements to store private data effectively (including account passwords). It was also mentioned that these exchanges had not identified or sorted those accounts differently that had been inactive for more than a year.

Korbit and Upbit – two of the most popular exchanges in South Korea – received penalties for $20,000 each, the former for not having sufficient systems in place to even detect a security breach, while the latter because it violated the Privacy Act followed in the country.

Bithumb, one of the exchanges that had been investigated, remained unharmed by any penalties and stood as one of two exchanges that held this distinction among these reports.

Reports also suggested that, to some South Korean officials, the fine amount is not sufficient enough. These officials allegedly think that because these exchanges make way more in profits, they should be held accountable with stricter fines for being negligent.

It could reinforce security measures

While the news would have been difficult for these exchanges, it seems that the authorities needed to take such measures to remind the exchanges of the threats that lurk around for them and their customers.

With the growing cyber attacks on cryptocurrency exchanges – especially those from South Korea – it is essential that any entities which work on that front leave no stone unturned to keep themselves and their stakeholders protected from unforeseen events.

Such measures by the government, while sounding harsh, could actually go a long way in ensuring that security details are always taken care of and not neglected in any manner.

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