Coinbank, ahem, I mean Coinbase made waves in the media again this week with yet another round of troubling news. Putting aside where you stand on the drug war and legalities regarding drug use, most of us in the cryptosphere enjoy the fact that cryptocurrencies give us an alternative to the censorship we see in the fiat monetary system. This was brought to light this week when Coinbase temporarily froze the BTC wallet of the legal defense team representing Ross Ulbrict’s appeal fund. For those who don’t know, Ross Ulbrict was found guilty of charges stemming from his involvement with the late Silk Road dark web marketplace. Then, shortly afterward Coinbase decided to unfreeze the same account or wallet, which was confirmed by the #Free_Ross Twitter account associated with that Coinbase account. Furthermore, #Free_Ross went on to say that Coinbase informed them that the freeze was because of an auto algorithm that associated their account with one that had been compromised and apologized for the incident. To be fair, it could possibly be that Coinbase was simply trying to protect the #Free_Ross account from theft when they decided to freeze their wallet. Or maybe not, like with this white hat hacker, who’s entire family has been blocked from using Coinbase because of his profession. Coinbase has to comply with KYC (know your customer) and AML (anti money laundering) best practices with the industry they are in but, it’s becoming very clear that the bigger you get in this space the more you become just like the banks we are trying to bypass. Cryptocurrencies will have these issues with the “on ramps” and “off ramps” ie going into and out of government issued currencies until we can use cryptocurrencies altogether without ever exchanging back. We must keep the fight moving in that direction.
If you haven’t read my previous post on the scaling debate, start there to get the background on the scaling debate. This week we started to see more support coming out in favor of the different proposals. Starting off, we have Bitmain who supports the proposal SegWit2x, announcing their contingency plan should the UASF (BIP148) slated for activation on Aug 1st occur. Next up, we have Bitsquare, a decentralized, Tor based, exchange application that has announced their support for UASF (BIP148). They announced they will be halting trading due to their worry of Bitmain’s contingency plan that I just mentioned. They go on to further state that they are uncertain of what Bitmain might do and go as far to say they believe that Bitmain might attack the UASF (BIP148) chain if it activates. Two more bitcoin mining pools have also announced their support for SegWit2x. F2Pool and Bixin Pool have both made it clear who they support. They both stated in separate announcements that they believe that SeqWit is a technologically sound and mature technology. This reasoning is most likely from the fact that Litecoin has now been running SegWit active nodes for around a month with no issues.
Seems like things are coalescing into a majority here as we head down the stretch towards this Aug 1st deadline. I’m not saying I know what will happen, but as of now, I believe SegWit2x will activate before UASF (BIP148). For better of for worse, wherever you stand on this debate, the people that have the most money and can afford to run the most nodes will most likely win this debate. Regardless of how this plays out, make sure you are taking the precautionary steps to safeguard yourself no matter what happens. A great tutorial was released this week as of how to do that called 1August.org. I will say that I am personally keeping my cryptofolio the same percentage wise. What I mean by that is I will not be selling any of my BTC in anticipation of this potential chain split. I do and always have however, hold the majority of my BTC private keys in offline cold storage. If you hold your keys, YOU will be able to decide which chain you will follow after this all shakes out. Make sure to get your private keys into cold storage before August 1.
This Week in Regulation
Here are some developments this week which will impact bitcoin on a regulatory front. Nevada aims to become the “blockchain state” in the US with their recent legislation headed by Senator Ben Kieckhefer. The bill prohibits taxation of blockchain technology in the state of Nevada. Another state to recently pass favorable cryptocurrency regulation is New Hampshire. Being what some label as the freest state in the nation, New Hampshire continued to live up to that reputation with the recent passage of a bill that exempts digital currency traders from the state’s money transmission regulations. Lastly, I will leave you with an an article that gives a decent outline of a naughty vs nice list for bitcoin friendly states. Sort of funny how the usual suspects are working hard to make people less free, and the converse are getting things done to give people more freedom. I think this lines up well with the walking to liberty project. These are also things people should consider when deciding to move to a state that will give them more freedom. Seems like the Free-er states are getting more free, and places like CA, NY , FL and others are going in the opposite direction. These states that go against the free nature of cryptocurrencies will do so at their own expense and detriment. You can’t stop this, but you can lose out.