- Bitcoin and crypto markets faced a volatile week but Bitcoin manages to stay above USD 13,000
- Iran and Cambodia make the news as more governments adopt crypto and blockchain
What a week it has been for Bitcoin! After surfing to new highs in price for 2020, Bitcoin almost broke the USD 14,000 resistance but faced at least two sell-off dips that took it temporarily below USD 13,000, before recovering by the weekend’s close to stay alive above USD 13,000.
The rest of crypto has not fared as well, with Ethereum failing to hold levels above USD 400 and continuing most of Friday struggling to stay afloat past USD 390. Nevertheless, even amid Defi slowdown and Bitcoin network reaching its highest level of congestion since 2017, the mood remains buoyant that crypto markets could hold on and prepare for a fresh rally in the closing months of the year.
On the latter fundamentals, the Bitcoin network is currently experiencing high levels of transaction congestion, with the mean fee per transaction right now reaching about USD 11 (just under 0.009 BTC) according to data analytics firm Glassnode. This is an almost five-fold increase over the past two weeks, accompanying a price jump from USD 11,100 to USD 13,900 or thereabouts.
London broker Bequant told CoinDesk:
“Bitcoin mempool is back in focus in the wake of rising transaction volumes, causing congestion in the network and consequently driving fees higher.”
Basically, this just means that because the transaction queue has become so long, people are paying more to miners so that their transactions are prioritized before others, leading to a fee war that forces people to outbid each other in an attempt to get selected to enter the next block found — which is how Bitcoin transactions are confirmed.
Bitcoiners will be quite pleased, however, as the last time this happened was in 2017 when Bitcoin hit its current all-time high close to USD 20,000 and historically, price rallies do lead to network congestion. Miners dropping out of the network are currently to blame, as hashrate has slid over the same period. Over the last week, the 7-day moving average of Bitcoin’s hashrate has lost about 20% of its hashrate or 26 exahashes per second (EH/s) to 120 EH/s.
All the same, more good news all around for crypto and blockchain as the Iranian central bank makes amendments to national law to allow for Bitcoin, as the cash-strapped Central Bank of Iran looks to alternative currencies to help imports.
The Iran Daily, citing The Islamic Republic News Agency (IRNA), reports that the national cabinet has amended recent legislation on digital assets that now makes it legal for cryptocurrency to be used as a payment for import funding. This doesn’t mean a free for all, as it only means that Bitcoin must still be legally mined and can only be exchanged to fund external imports but it has allowed for Bitcoin miners to directly supply the central bank an authorized limit of Bitcoin, based on how much subsidized electricity the miner uses alongside further guidelines supplied by the Iranian Ministry of Energy.
Bitcoin mining is legal as of 2019 but it is heavily regulated in Iran due to the cheap cost of subsidized energy but the same report suggests that Bitcoin could help Iran circumvent sanctions that restrict the country’s access to the US dollar.
In Southeast Asia, Cambodia has also announced the Bakong, which will be its national blockchain-based platform for digital money transactions. According to local media Dap-News, it is “a payment and money transfer service through banks or microfinance institutions” that an initiative of the National Bank of Cambodia has established under a collaboration with several other national entities.
Cambodian financier PRASAC first invested in Bakong last year in October, before the central bank set a launch as a closed circuit enterprise. The report quoted PRASAC executive vice president Sony Say:
“Bakong is a new and modern payment tool that allows customers to make interbank transactions and bill payments easily, quickly, securely and free of charge.”
Mass adoption full steam ahead, it would seem!
Image Courtesy: Pixabay