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Libra developers have proceeded from project to development. Ethereum hard fork will postpone the launch of the difficulty bomb for 611 days. SEC adjourned decision on Wilshire Phoenix application.
According to the statement of Libra team, they finally finished the design of the main network and determined the full list of necessary functions. Now, developers have started working directly on writing program code. There are already 8 nodes confirming transactions. In total, by the beginning of a full-fledged launch of the project, the number of nodes will be increased to 100.
After White Paper publication, the Libra project faced a barrage of criticism from official authorities. Regulators in the United States, France, Germany, India, South Korea and many other countries have expressed strong dissatisfaction with the potential risks. The authorities of Switzerland and the UK showed caution in their statements, but also did not dare to outspoken support of the initiative to launch a new cryptocurrency.
Despite the emerging challenges, the launch of the Libra project is planned for 2020. According to the information available, its team does not experience technical difficulties with the plan implementation. Most of the troubles were caused by the political factors. For instance, under pressure from government criticism, five important participants emerged from the project. Among others, Visa and MasterCard left the Association. This has led to a number of significant changes in the company's plans. For example, the paragraph on dividend payments for the association members has been excluded from the technical documentation. According to Chris Brummer, a professor of law at Georgetown, in such a way Facebook is trying to dismiss some of the charges and avoid equating tokens with securities.
At this point in time, such fears seem groundless, since the new cryptocurrency has a fixed rate. However, the rejection of dividends will remove the attacks on the Libra project regarding conflicts of interest. An asset portfolio will be formed to maintain exchange rate stability. Now, its managers are not tempted to invest in high-risk financial instruments.
According to the plans of developers, on January 2, Muir Glacier hard fork will be held on Ethereum network. Its task is to transfer the launch of the difficulty bomb to 4 million blocks. As stated by Hudson Jameson, miners and node operators must update the software by December 30. Ordinary users do not need to take any action. If necessary, the team will publish detailed instructions.
Ethereum’s difficulty bomb is an artificial complication of calculations during cryptocurrency mining. It was launched with the aim of rapid end users’ switching from Proof of Work protocol to Proof of Stake one. It was expected that in this way Ethereum team will motivate users to more actively use the new version of blockchain. However, the delay in update development forces to reschedule this process launching.
According to Hudson Jameson, this Ethereum hard fork will delay the launch for approximately 600 days. He is confident that such a procedure will not be needed in future, since Ethereum 2.0 protocol will be already launched by that time. However, this is the second hard fork that postpones the launch of difficulty bomb. The previous one was held in March 2019 and did not cause any technical difficulties. Despite the team was considering the option of completely deleting this mechanism from blockchain, it was decided to use the already proven technology. It is stated that users should not worry about blockchain stability. In fact, the team will launch the proven mechanism this time.
Concurrently, active work on Ethereum 2.0 is being carried out. Danny Ryan announced the security system audit planned for February, which will test its resistance to DoS attacks and unwanted chains emergence.
The US Securities and Exchange Commission (SEC) decided to reschedule the final decision on a statement from Wilshire Phoenix to February. The company plans to launch bitcoin ETF exchange-traded fund. According to the regulator, he does not yet fully understand the mechanisms for protecting investors from increased risk in cryptocurrency trading. Although the company has developed methods to stabilize the rate of its financial instrument, SEC wishes to study this issue deeper.
Over the past two years, the US regulator refused to coordinate the work of bitcoin ETF funds more than ten times. In almost all cases, the applicants have heard the same answer that cryptocurrencies are too volatile and their rate may be subject to manipulative influence. Therefore, trading this asset carries excessive risk for investors.
When developing their product, Wilshire Phoenix tried to avoid such accusations. In the event of instability on cryptocurrency platforms, the trust should change the ratio of assets by reducing the number of bitcoins in the portfolio due to an increase in securities with increased risk tolerance. In particular, in this situation, the company plans to increase purchases of Treasury bonds. However, currently the regulator considers such hedging of bitcoin ETF fund risks to be insufficient.
Now, three applications for bitcoin ETF approval are waiting a decision by SEC. In addition to Wilshire Phoenix, a proposal submitted by Kryptoin Investment Advisors in October should be considered. More interesting are the events involving Bitwise and NYSE Arca. The Commission initially rejected this application. However, in November, it returned to its consideration, as the previous decision was made with certain violations.