Bitcoin's first Sidechain launched today, after three years in the making. It goes by the name of "Liquid" and is developed by Blockstream. The Liquid Network is designed to provide fast, secure, and confidential transactions to address the needs of exchanges, brokers, market makers, and financial institutions around the world. According to Blockstream, the Sidechain offers the following features:
- Liquid’s native Liquid Bitcoin (L-BTC) asset is backed by a two-way peg to Bitcoin (BTC) and can be redeemed at any time, providing institutions and end users with a secure and rapid way to transfer bitcoin between members with full settlement in two minutes.
- Liquid’s Issued Assets brings bitcoin-like features to traditional assets, such as tokenized fiat, digital reward points, and attested assets (e.g. gold coins), removing the need for dedicated blockchains or wallet software.
- Blockstream’s Confidential Transaction technology ensures that the amount and asset type transferred are known only to the transacting parties, enhancing the privacy of both L-BTC and Issued Asset transactions.
Today, the network was opened for all of Blockstream's partners (including Bitfinex and BitMEX) to use for real transactions. Hardware wallet providers Ledger and Trezor have stated plans to adopt the technology soon.
This development marks a turning point in the history of tokenization and token-issuance and things like this will cement Bitcoin's status as the King and will make Ethereum obsolete.
Horizen Proposes Solution to Prevent 51%-Attacks
The team behind cryptocurrency project Horizen, formerly known as "zencash", saw more than $500,000 hacked from an exchange in a 51 percent attack earlier this year. Now, their team came up with a solution to prevent this attacks in the future. A 51 percent attack can occur when a single entity controls the majority of hashpower of a specific digital currency, hence it requires a miner to produce blocks in secret before posting them to the blockchain. The solution is updating their proof-of-work consensus algorithm with a so-called "delay function" that penalizes miners that could be preparing for such an attack.
The Bitfinex Situation
Bitfinex has troubles with fiat-deposits and -withdrawals. There are ongoing rumors about Bitfinex being insolvent, I personally don't believe this, I think they have problems with banking, they lost banking partnerships several times in the past. The real problem could be Tether, the well-known stablecoin is issued by the people behind Bitfinex. They tried to hide it from the public, but the Panama Papers revealed that connection. Additionally, there are dubious surroundings about Brock Pierce, the creator of Tether, AND the owner of Noble Bank, which is the bank where the USD-reserves that back USDT are stored.
Today, the discrepancy between BTC/USD and BTC/USDT trading-pairs exceeded 200$, which is a sign of very high volatility.
If Tether goes down, we all are in big trouble. I personally advise to avoid USDT for now and move to alternative stablecoins like TrueUSD or USDC (This is a personal opinion of Mr.Y and does not represent BCW as a whole!).