The Wildest Week in Crypto History
Over the past few days, there have been two huge headlines that have grabbed the attention of the crypto-community. Roughly 300 Millions dollars were lost thanks to a bug in a widely used digital wallet service, and the much anticipated Segwit2x hard fork was called off earlier today. Here’s what you need to know about both:
Parity Wallets
Parity is a popular digital wallet used to store cryptocurrencies. In an attempt to fix a vulnerability within the wallet’s code, a developer accidentally changed ownership of hundreds of millions of dollars worth of Ethereum. After realizing his mistake, the developer deleted his code in an effort to return the mishandled funds. Unfortunately for the developer as well as the wallet owners, the funds were locked within the wallets, inaccessible to anyone.
This is bad news for not only anyone holding Ethereum in a Parity wallet but also for Parity Technologies, the provider of the digital wallet service. This is the second strike against the company in the past few months and they’ve lost credibility and trust with the majority of their users not to mention the negative headlines they’ve generated towards the security of crypto in general.
Segwit2x Hard Fork Suspension
Regarding the blockchain, a hard fork is a substantial change to the current protocol that results in an updated blockchain. There have been multiple hard forks (Bitcoin Cash, Bitcoin Gold and Ethereum Classic were all born from hard forks) in the past, but none have gained as much exposure and publicity as the Segwit2x fork, scheduled for November 16th. The fork would have made an additional 2MB of blocksize and created a totally separate blockchain that would compete with Bitcoin.
Bitcoin’s price has doubled over the past few months, and many people speculate that the spike is at least partially thanks to new buyers entering the space after learning about the Segwit2x fork. The incentive behind any fork is that anyone holding the original currency (in this case, Bitcoin) at the time of the fork will also hold the equivalent amount of the new token. So if you own 5 Bitcoin at the time of the hard fork, you’ll also own 5 of the new Bitcoin2x currency.
While the fork may have brought a lot of publicity to Bitcoin over the past weeks and months, news broke today that the Segwit2x fork has been officially suspended. In a letter signed by members of the Segwit2x fork coalition, including the CEO’s of Bitgo, Bloq, Blockchain and Shapeshift, the details leading up to the suspension were given. Here’s what they had to say:
“Our goal has always been a smooth upgrade for Bitcoin. Although we
strongly believe in the need for a larger blocksize, there is something we
believe is even more important: keeping the community together.
Unfortunately, it is clear that we have not built sufficient consensus for
a clean blocksize upgrade at this time. Continuing on the current path
could divide the community and be a setback to Bitcoin’s growth. This was
never the goal of Segwit2x.”
Moving Forward
Although further consequences from this week’s events remain to be seen, the crypto community has turned it’s attention to the immediate affects it would have on the market. Bitcoin vaulted to a near all time high minutes after the hard fork suspension was announced but has since cooled off. Alt coins like Neo, OmiseGo,Ripio, and others have jumped up since then as well. Even after all that’s happened, crypto junkies remain positive and the ups and downs of this roller-coaster-of-a-week keep us coming back for more.
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