This week in blockchain and crypto had interesting developments as crypto continued its expansion into mainstream markets with a few notable mentions on the growing interest in stablecoins.
This week saw bitcoin saw a bitcoin cash hard fork take place with an on-chain battle starting due to the emergence of yet another rogue chain developing during the planned hard fork. Two additional blocks broke into two different chains. As a result, the old chain considers the new chain invalid while the new chain considers the old chain invalid. However, going by the consensus mechanism, the chain with the longest history was considered the trusted ledger. The fork however came at a cost. Bitcoin Cash miners appear to have wasted money mining 14 blocks on the wrong chain after the altcoin underwent a hard fork.
This week also saw the U.S. Federal Reserve Board publish its semi-annual “Financial Stability Report‘ central bank prognosis which warned of a stablecoin crisis on the global economy if not protected. The report points to a stablecoin worst case scenario where a run on the issuers would result in coin holders panic enmasse and demand the return of the fiat staked. The report raises concern where a stablecoin operation fails – operations, liquidity, credit – leading to a loss of confidence and market panic. The report consolidates and formalizes regulators’ concerns and notes the steps required to prevent a stablecoin catastrophe.
BitGo, a digital asset trust company, revealed this week that it is now processing more than 20 percent of all bitcoin transaction. This means that a sizable share of on-chain transactions pass through its services, a sign of consolidation, and power, in the crypto space. This revelation however raised concerns about market collapse if BitGo were to go down. However, BitGo was quick to point out that its multi-sig security guarantees there is no single point of failure and clients hold their keys in case of a security breach.
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