Today, Bitcoin price appears to continue in its period of relatively low volatility, with the days of tight margins comparing similarly to the price range of the past 24 hours: a high of USD 10,062 and a low of USD 9,864 (CoinDesk).
— BitcoinValueBot (@bitcoinvaluebot) September 23, 2019
It can be unusual for a digital asset to see such fine percentage ranges of 2%, although upon closer inspection, there have been the tell-tale signs of spiking and dipping demand and price action more akin to Bitcoin markets.
Nevertheless, everything seems to be in parity and neither bulls nor bears are certain of victories so far on a Monday trading session that is only just reaching noon for Europe.
First of all, we should start with Bakkt, whose launch so far is rather much of a whimper than a shout, with underwhelming responses to the first regulated Bitcoin futures also settled with actual bitcoin.
Having gone live at midnight (UTC), the Intercontinental Exchange (ICE) Bakkt platform which hosts the futures only saw 18 Bitcoin worth of futures traded. While USD 180,000 is not by any means a meager amount, it does seem to be far cry from the hyped up expectations that Bakkt had been building up since over a year ago.
Many believed then, that the moment of a financial tool like Bakkt would go online, huge amounts of institutional money would feel safe to enter the market, since Bakkt was regulated and, to a certain extent, even protected from losses and fraud via insurance.
As it turned out, however, and as we rather much predicted in our past analyses, this should have been expected, given the lukewarm responses to past similar financial products.
CME bitcoin futures traded $460 million on its first week. Current volume is around $700 million. The Van Eck fake ETF traded $0 on its first week.
How much volume will Bakkt attract is a key variable for the week ahead. Would you expect Bakkt to flop or to launch successfully?
— Alex Krüger (@krugermacro) September 22, 2019
Ari Paul was less harsh, and provided a rather logical explanation for why adoption would be much slower at Bakkt, since it needed physical settling of actual Bitcoin. He believed it would be a more gradual sort of uptake with Bakkt, unlike others before it, like the cash-settled futures at Chicago Mercantile Exchange (CME):
“With CME futures, anyone with the right FCM [Futures Commission Merchant] could immediately trade on launch […] I’d think the incremental demand (beyond CME) would come from people who want to buy or sell physical for delivery, at least at first. Receiving could be instant (use FCM to convert), but I’m kind of thinking depositing physical will be gradual.”
Bitcoiners should not need worry on the limp response to Bakkt, however. Bitcoin foundational metrics continue to grow stronger day by day and its scaling solutions continue to mature and develop with every week seeming to bring with it new important developments. The latest news in this regard comes with a latest study by two researchers who claim they have successfully verified Bitcoin’s second-layer Lightning Network.
So far, Lightning Network detractors have been criticizing the solution for being riddled with bugs that could lead to loss of funds. But this latest paper, by researchers Aggelos Kiayias and Orfeas Litos from The University of Edinburgh, is determined to show that even for such an immature technology which is a long time from being ready for consumer use, the underlying security is already quite firm.
‘A Composable Security Treatment of the Lightning Network’ details how “treatment delineates exactly how the security guarantees of the protocol depend on the properties of the underlying ledger”.
Using “formal verification”, Litos believes that the system’s security-critical parts are “rock-solid” and that they actually expected this outcome. By inspecting the Lightning Network specifications, they determined that the rules every lightning software implementation needs to be able to send payments to the rest of the network was “as secure as Bitcoin“.
They added that money would only be lost on the network by honest participants if Bitcoin’s signature or hash functions had failed. By using a realistic underlying ledger, the team could identify exact bounds of security for the network’s operational paramaters:
“Specifically, we provide a concrete answer to the question ‘how often a lightning network user has to check the blockchain, especially when a multi-hop payment is under way?'”
And if fundamental strength of the Bitcoin network isn’t enough to get your Monday juices flowing, then this bullish news about chipmaker MicroBT expecting a USD 400 million revenue in this quarter should. The China-based Bitcoin mining gear manufacturer has said that it expects a very profitable 3rd quarter even with delays on their much-anticipated chip. CEO and CTO Dr Yang ZuoXing confirmed this during a keynote speech at the New Era Mining Industry Summit in China over the weekend.
— WhatsMiner (@Whatsminer_MBT) September 22, 2019
The WhatsMiner M20 series are priced at between USD 1,500 to USD 2,000, with pre-orders for new mining equipment expected only to arrive in January 2020.
Who said Bitcoin mining was no longer profitable or no longer in demand?
Image Courtesy: Pixabay