Blockchain Bites: Clearing the Record on Yellen’s Crypto Concerns and the Bitcoin Double-Spend Fracas

After falling 13% yesterday, Bitcoin is rising again. Meanwhile, Janet Yellen has offered a more nuanced look at crypto, and small Ethereum mining pools are organizing a campaign against a possible network upgrade.

Top shelf

Miners Revolt!
Eight Ethereum mining pools, which account for around 30% of the network’s hash power, have formed a quasi-cartel to crack down on a proposed blockchain update that would lower mining fees. The proposal to improve Ethereum (EIP) 1559 published by Vitalik Buterin would burn mining fees to reduce the volatility of transaction costs. While larger mining pools such as BitFly, F2Pool and Sparkpool are ambivalent about the upgrade, according to CoinDesk tech reporter Will Foxley, smaller miners are not calling for EIP 1559.

Trust progress?
Grayscale Investments lays the foundation for five new cryptocurrency trusts for Chainlink, Basic Attention Token, Decentralized, Livepeer and Tezos. Preliminary filings have been filed by the company’s “legal trustee”, although it does not guarantee that any of these investable products will see the light of day, according to reports from CoinDesk’s Dan Palmer. (The Digital Currency Group owns both CoinDesk and Grayscale.)

Bank deposits
Signature Bank announced deposits of $ 10 billion from customers of its cryptocurrency company in a call for earnings on Thursday. With a share of 16% of the total deposits of the New York company, this sum is twice as high as that of Silvergate Bank, which, according to Nathan DiCamillo of CoinDesk, is generally considered the first crypto-forward bank. Without revealing his name, the CEO of Signature said he now has the “Top 5 Crypto Exchange”.

Crypto sweep
The U.S. government’s top investment watchdog advised a number of unregistered cryptocurrency companies that they allegedly defrauded mostly international investors with false company information. Of the 28 suspicious investment firms that the US Securities and Exchange Commission (SEC) called on Thursday, CoinDesk reporter Danny Nelson found eight that appear to be targeting potential cryptocurrency investors.

Big in Japan
After the US Securities Exchange Commission (SEC) lawsuit against Ripple, Japanese XRP stans are wondering. The cryptocurrency has gained in importance in the country as a remittance instrument, is supported by one of the largest Japanese financial companies, SBI, and is viewed by Japan’s economic regulator as a “cryptocurrency” – arguably not a security. “I think the crypto community sees this as a huge blow to them and as a kind of forerunner of what could happen in the future that other companies are also vulnerable,” Mike Kayamori, CEO of Liquid Global, told Sandali Handagama of CoinDesk.

Fast bites

BITCOIN ETF: Five reasons why it should be approved. (Bloomberg opinion)

HUMAN TRADERS: A quant fund (not crypto-specific) gives people a chance. (Bloomberg)

FOR THE FAITHFUL: Joe Weisenthal thinks Bitcoin is a religion. Who is the Pope? (Bloomberg)

BLUE SKY? Jack Dorsey’s open source social media platform published a 60-page overview of the decentralized ecosystem. (Blog)

CUT TO THE CORE: One notable Bitcoin Core developer reflects on his time structure and argues that Bitcoin needs to be decentralized. (Blog)

Market information

Efficient Markets?
Two events that aimed to explain Bitcoin’s 13% drop in price on Thursday are a little more complicated than they appear on the surface. Yesterday, Bitcoin saw its largest intraday decline since March 12, 2020, when Bitcoin fell 39%.

In search of a reason, some suggested that the markets caused a tantrum in response to rumors that double-spending was being made on the bitcoin blockchain in the wild. This story has been picked up by the mainstream press. Others, the traders, were startled by comments made by Treasury Secretary Janet Yellen, who raised concerns about the use of crypto among the criminal underground. This story was also picked up by the mainstream press.

CoinDesk tech reporter Colin Harper set the record straight: the transaction that looked like a double expense – the very phenomenon Bitcoin was designed for – was a normal occurrence. The problem arose after BitMEX researchers found an orphan block that contained a 0.00062063 BTC transaction that was also contained in a valid block that was incorporated into the blockchain.

But it really wasn’t a big deal. With a so-called block reorganization, Bitcoin dealt with the problem under program control. While bitcoin was technically “double-issued,” notes Harper, “no new coins were added to bitcoin.”

After a US Senate hearing where Yellen briefly spoke on Wednesday about money laundering and terrorist financing issues plaguing Bitcoin, the former Fed chairman issued a differentiated opinion on crypto in a letter to the Senate Finance Committee a day later.

That is, “I think we need to study carefully how we can encourage their use for legitimate activities while restricting their use for malicious and illegal activities,” she wrote. “If this is confirmed, I intend to work closely with the Federal Reserve Board and other federal banking and securities regulators to implement an effective legal framework for this and other fintech innovations.”

It is likely to be confirmed today, CoinDesk regulation reporter Nikhilesh De said.

While neither the rumored double issues nor Yellen’s concerns are not events, both were based on limited or inaccurate information that was picked up (including yesterday’s blockchain bites).

However, news should not be held responsible for the market spit, nor should the new information in the public register be viewed as the cause of today’s price hike. As Nic Carter wrote, the efficient market hypothesis, which states that asset prices reflect all the information available, is complicated.

Right now, like during the March panic, the best thing to remember is that “the time in the market beats the timing of the market”.

On the game

Bitcoin support
Yesterday was a sign of solidarity in the Bitcoin community after nChain’s chief scientist Craig Wright pushed for cultural touchstones, and to remove the first cryptocurrency whitepaper from their websites.

Wright, who has long claimed to be the pseudo-anonymous creator of Bitcoin, Satoshi Nakamoto, has filed patents on Bitcoin’s earliest records and intellectual property. The particularly wild developer, law student and academic is also the creator of Bitcoin SV (for Satoshi’s vision), a fork made from Bitcoin Cash and a competing coin. dismissed Wright’s legal challenge and upheld the document even though – the main repository for the Bitcoin codebase – shut it down.

Regardless of how CoinDesk editor-in-chief Zack Seward reported, some of crypto’s best-known voices have decided to host a mirror copy. These include Square, Coin Center, Facebook subsidiary Novi, and CoinDesk, as well as dozens of other companies, nonprofits, and individuals. It has also been uploaded to the “uncensible” Arweave platform as well as the Internet alternative InterPlanetary File System (IFPS), Seward said.

According to, Nakamoto’s Bitcoin whitepaper was published under an open MIT license, making it a public domain document. “There is no doubt,” people have the legal right to host the white paper, the nonprofit said.

Wright has long been a thorn in the side of the Bitcoin community and has launched several lawsuits against celebrities who challenged his claims of being the authentic Nakamoto. Hodlnaut, the pseudonymous account of the lightning torch experiment charged with defamation, was spotlighted in 2019 with a wave of Bitcoin enthusiasts adopting his cartoon cat avatar for their Twitter profile photos.

While the event shows that Bitcoin is still able to partner up, the real problem is much bigger than Wright’s copyright claims. Dozens of companies have patent key technologies that support or support this open source system. In a sense, some would argue, copyright law is simply an abomination to Bitcoin’s core ideal of legality.

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