Hacks, Stablecoins, And Governments – Year In Review
At the end of the year, it is always good to look back at the passing year. How did the cryptocurrency industry go through 2019?
It’s always hard to summarize a whole year – 365 days is a long period, full of many remarkable events. But it is also a great moment to bring back some memories and rethink the current state of the industry. Let’s take a look at the most important events and trends from the last year.
Under hackers attack
The beginning of 2019 in the cryptocurrency industry was quite depressing. We entered the new year during an ongoing bear market, full of both hope and fear for the upcoming months. Unfortunately, the new year began with a rather unpleasant event. In January 2019, the New Zealand cryptocurrency exchange named Cryptopia suffered from a serious security breach, which resulted in the the theft of approximately 16 million dollars. That eventually led to the closing of the exchange.
And it wasn’t the only example of hackers attack crypto entities during the last year. Probably the most significant attack was on one of the leading exchanges, Binance, which was hacked in May. In this case, the number of stolen assets exceeded $40 million. Thanks to reserve resources, the exchange managed to survive the loss. But it wasn’t the end of its trouble.
In August, Binance suffered from another security breach. This time, the assets at risk weren’t funds, but user data. A mysterious hacker named “Bantov Platon” began to disclose traders’ ID on the Internet. However, the exchange CEO Changpeng Zhao stated that stolen data is fake, even if the pictures of documents and users holding them looked disturbingly true.
These were only major examples of hacker attacks on crypto exchanges. Unfortunately, such situations frequently occure in the blockchain industry. It’s hard to avoid them, but every attack is also a valuable lesson for developers.
But the struggle of hackers to steal our bitcoins aren’t the only recurring “trend” in 2019. What year would it be if no one claimed to be Satoshi Nakamoto? This time, the leading character in the race for the title “Faketoshi of the year” was still Craig Wright. Australian crypto entrepreneur is trying to prove to be the Bitcoin creator for quite some time, and this year is no different. In 2019, however, Wright’s attempts ended in a lost lawsuit.
Far more interesting “Faketoshi” came later this year. In August, the Internet got crowded with rumors about the upcoming revelation of Santoshu’s identity. On behalf of Ivy McLemore & Associates PR agency, a man named James Bilal Khalid Caan was trying to convince the crypto world that he is the real Bitcoin’s creator. According to his words, he quit the industry because of a hard drive failure, but now he is back with a new project. Of course, his complicated explanations failed to convince the crypto community but were quite amusing.
Libra on the horizon
Although interesting, hacker attacks and self-declaimed crypto developers weren’t the most important in the passing year. The real game-changer and the news which broke the market out of stagnation was the announcement of Facebook’s cryptocurrency in June. From what we know now, Libra is going to be a stablecoin backed by fiat currencies (mostly US dollars), created to provide a worldwide, digitised payment system.
The release date for Libra is still unknown, but the announcement itself caused an ongoing trend in the cryptocurrency industry. Stablecoins have become the main focus of interest for crypto entities over the past year. The answer for Facebook’s cryptocurrency was, among the others, Binance Venus, which shares a similar goal: providing “digital assets pegged to fiat currencies across the globe.”
Authorities are not asleep
The emergence of Libra also increased governments’ interest in the issue of cryptocurrencies and began an ongoing discussion on that subject. Facebook itself got under fire of the American authorities, and both social media founder Mark Zuckerberg and head of a stablecoin project, David Marcus, testified about their work. Due to a regulatory backlash, Libra’s partners, such as PayPal or Visa, eventually withdrew from the project.
Never before was the legal status of cryptocurrencies discussed as often as in the second half of 2019. What concerns the authorities the most is stablecoins, which are believed to be a threat to global economic stability. The disapproval against cryptocurrencies pegged to fiat was expressed, for example, by G7 (a group of the seven most advanced economies in the world).
Stablecoins and blockchain technology are not only a concern (worry) for governments – they are also desired by them. Many countries expressed more or less interest in developing their own digital asset backed by the national currency. Such an idea was recently endorsed by France.
Enter the dragon
One country stood out from other countries in the matter of blockchain innovations in the passing year. The Chinese government decided to show its plans of implementing blockchain technology into the country’s economic structures.
China struck down the crypto world, announcing its support for blockchain in the incoming years. According to Chinese President Xi Jinping’s, this technology will be a new focus for the country’s economy. China is also working on its own stablecoin pegged to its national currency, yuan, which is going to be the main competitor for Facebook’s Libra.
However, the new direction doesn’t come along with lifting the existing ban on other cryptocurrencies. On the contrary, Chinese law enforcers are now even more strict toward Bitcoin – especially since it is used by protestors in Hong Kong. Nevertheless, China was the leading player in the cryptocurrency industry at the end of 2019.
Bitcoin’s price in restless times
How was the market price reacting to all those events? The cryptocurrency industry entered into 2019 with both hope and legitimate concerns. The year 2018 ended with an ongoing crisis and Bitcoin’s price oscillating around $3,000. The bear market was in its finest form and people were wondering how the situation would develop. Some believed in upcoming comeback of Bitcoin while others were worried about even further downfall. Events like Cryptopia attack wasn’t helping the situation.
Nevertheless, Bitcoin was slowly recovering after losses and began to come back to the $10,000. The real breakthrough was the announcement of Libra. Facebook’s entrance into the crypto industry triggered an explosion of enthusiasm among investors. However, the situation didn’t stand long. Inaccuracies related to the character of stablecoin and the growing discussion about cryptocurrency regulations caused some significant price fluctuations.
Eventually, the leading cryptocurrency began to fall once more, interrupted only by China’s shift toward the blockchain technology. The enthusiasm on this decision faded away quickly and the Bitcoin finished 2019 with the price near $7,000. On the one hand, it might be disappointing if we look at the current state of the market from the perspective of a quite productive summer. But on the other, the situation at the end of 2018 was far more depressive. And yet, the market managed to recover. So let’s hope that 2020 will be a successful year for crypto.
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