The Russian Ministry of Finance does not desire to eliminate bitcoin but regulates it. Vladimir Putin clarified that Russia counts on a surplus of electricity.

Within the Russian government, there is a debate going on about the controversial suggestion of the Central Bank of Russia to prohibit the trade, use, and mining of Bitcoin in that nation.

Russian President Vladimir Putin highlighted this problem at a ministerial meeting that took place recently. Although the leader did not want to take sides on the financial regulator’s proposal, he expressed that his nation counts on many competitive advantages, especially when it comes to mining activities in its territory.

The Russian leader clarified that this nation has a surplus of electricity and counts on well-trained personnel to improve the development of the Bitcoin mining industry.

Putin said the Central Bank would not represent an obstacle for the nation to achieve technical progress and also pointed out that he is making the necessary efforts to implement the latest technologies in this area.

Putin defended the stance of the financial entity on the point of bitcoin volatility because it carries too many risks, first of all to citizens. The Russian president asked his ministers to continue the debate n on the subject and reach a unanimous decision among all the parties involved in such a discussion.

Officials and Other Representatives of Russia Openly Showed Disagreement with the Ban on Bitcoin

The proposal to prohibit bitcoin in Russia was not well received by the Ministry of Finance of that nation. Ivan Chebeskov, director of the financial policy department of that ministry, expressed that the minister of that portfolio currently shows a supportive stance on regulation but does not have a supportive stance on the ban on cryptocurrencies.

Chebeskov thinks that prohibiting cryptocurrencies in Russia could slow them and leave the nation behind in the high-tech industry relative to other countries. One of these nations is the United States of America, with whom relations approached a heated-up scenario. The United States of America currently has 42% of the world’s Bitcoin hash rate, while Russia holds only 13%.

On the other hand, the founder of Telegram, Pavel Durov,  expressed himself regarding the situation. Durov highlighted that banning the cryptocurrency industry will inevitably crush and reduce to dust many high-tech sectors of the economy.

Durov also manifested that the measures against the cryptocurrency industry would encourage an exodus of technology and information experts to more friendly regions.

The news regarding bitcoin in Russia appeared on January 20, when the Central Bank of Russia pointed out that bitcoin and cryptocurrencies represent a threat to the well-being of Russian citizens and the financial system’s balance.

The financial entity suggested banning bitcoin and other relevant cryptocurrencies as a method of payment through a series of laws and bills.

By: Jenson Nuñez

The new proposal brings a solution postulated in 2019. This new solution could get applied to DLC contracts in Bitcoin.

Bitcoin keeps going through more upgrades, and this time a proposal aims at improving the way of spending bitcoins (BTC) deposited in a contract.

Smart contracts have been lurking around Bitcoin for years. They do not count on the complexity of the contracts that operate on the Ethereum network, but they give some payment conditions that show how the BTC will get spent.

Among these cases, users can see the pay-to-contract (P2C) or payment to the contract. With P2C, a contract sets up its procedures between the payer and the receiver under a public signature. According to the policies of this contract, both parties can corroborate that the payment happened successfully just by presenting their public key.

However, to meet a completion for this payment, the receiver, who owns the payment’s UTXO, needs the hash of such transaction and his private key to spend the BTC. In a new proposal brought by Maxim Orlovsky, the hash adheres to a partially signed transaction (PSBT) that will permit the process of creating the transaction inside the P2C contract and its signature to get along in separate ways.

The proposal gets rooted in a postulate made by the programmer Andrew Poelstra aiming at the P2C optimization for payments in 2019.

The most prominent benefit of this improvement resides in security and privacy. With payment through a P2C contract and allowing PSBT signatures. Users can also spend the BTC acquired, and sign with hardware wallets without the need to put the private key in danger.

This improvement is, at the time, only a proposal under debate. This proposal does not appear on the list of Bitcoin Improvement Proposals or BIPs yet.

In the BIP procedures, right after the starting point of the discussion, a draft gets considered and adhered to the list of proposals. This proposal subsequently receives approval or it simply gets rejected and forgotten by the community. If it gets approved, a soft fork would appear and set up its procedures to achieve its final implementation in Bitcoin.

Smart Contracts in Bitcoin are Becoming More Complex Now

P2Cs are not the first smart contracts that work on Bitcoin. Last year, news came to light about how, through discreet logging contracts, oracles gained the ability to operate within the network. These oracles could range from sports betting systems to trading BTC futures contracts.

It is worth considering that smart contracts are the foundation stone for the operation of decentralized finance. Unlike Bitcoin, Ethereum brings the creation of complex contracts due to its language. However, with Taproot, the Sapio programming language also came to light, which could bring up chances of seeing more complex DeFi platforms in Bitcoin.

Leading programmer in the Bitcoin ecosystem, Jimmy Song, has spoken about how Taproot could activate improvements by conditioning how BTC got spent.

By: Jenson Nuñez

CBDCs and improvements in payment systems are still interesting areas for The International Bank for Settlements. The BIS would desire to set up new public goods linked to technology for central banks.

The International Bank for Settlements intends to encourage the projects of regulatory technology and supervision of the transactions that get executed with digital assets, such as bitcoin (BTC) and other relevant cryptocurrencies this year.

The financial entity with roots in Switzerland highlighted the information during a press release. The entity said the Innovation Group would release new central bank digital currency (CBDC) projects this year. According to the institution, the entity plans to bring new technological public goods for central banks while targeting green finance and cyber security-oriented projects.

According to Agustín Carstens, along with the expanded network of centers and the plans to be released this year, the entity would bring a solid stance to set more innovations solidly and sustainably.

The entity intends to work while taking advantage of the benefits of digital technology, serving the interested public, and working in parallel with the central bank, the community, academia, and even the private sector.

The Bank for International Settlements also plans to apply several initiatives to improve global cross-border payments evaluating the practical and technological complexities that the implementation of payment agreements represents.

These Projects Are about to Start Soon

The BIS revealed the projects that will soon start to get implemented. One of them is Rio, which will focus on how central banks can use streaming data to police electronic markets. The first phase creates a prototype that gathers and processes large amounts of currency data in real-time. In the next one, the team would create a production-ready user dashboard.

Another project joined efforts with the Central Bank, and now together, they gather all the data from two CBDCs, Helvetia II and Jura.  They will then look at CBDC-related projects that could apply Arena, a private blockchain that serves as a testing ground for central banks in the nation.

The Ellipse project creates a platform that will help financial regulators extract, query, and study data from different sources, using artificial intelligence and machine learning as tools.

In Hong Kong, a project related to DeFi will intend to learn if they can improve financing for small and medium-sized businesses, which is a historically underserved market segment, according to the Bank for International Settlements.

In London, they will evaluate how people and companies can take more advantage of CBDCs. This evaluation would take effect through a project that will allow the development of updated payment solutions.

And a second project will create a platform that supports applications that people and companies can use to save, transfer and pay with CBDC to retailers.

Lastly, at the Nordic Center, there will be projects that intend to demonstrate how a holistic view of payment data serves as a tool to monitor illegal activities such as money laundering, and terrorist financing, it also includes tax evasion.

By: Jenson Nuñez

Companies in the Bitcoin industry have been demanding more clarity in regulations. Regulations will also pass into a future United States CBDC.

Bitcoin and cryptocurrency-oriented companies have been recently requesting more clarification of the regulatory framework for their environment. February would now become the month in which this will get decided since the White House is arranging a proper regulation plan to set up strong regulations in the country.

In mid-January, according to various reports, companies in the crypto environment might be getting ready for a possible set of regulations that would take effect this year.

The most recent news reported by Bloomberg indicates, according to its sources, is that the White House would need federal agencies to lead a series of investigations into the risks that could crypto-assets imply for economic activities in the nation.

The White House itself, in parallel with President Joe Biden, would be at the frontline of these new cryptocurrency regulations. According to reports in various media outlets, the United States of America will not prohibit bitcoin, according to Gary Gensler, current US Securities and Exchange Commission director.

According to Bloomberg, the agencies leading these investigations would be creating a series of strategies to study the impacts on financial dynamics. These agencies also lead investigations to study the national security challenges in the field of cryptocurrencies.

On the other hand, the SEC showed a calmed attitude towards bitcoin and cryptocurrencies, maintaining its investor protection stance.

A New Road for a CBDC in a Country Like the United States of America

Countries like China and Russia have already given new steps toward their central bank digital currencies or CBDCs, being the digital yuan the CBDC having the longest run until now.

Therefore, the regulations might get revealed in February; although these regulations do not define a prohibition path, they may represent the beginning for the launch of the CBDC in the United States.

However, it seems that these reports will not represent a strong stance concerning the advance of CBDCs in a country like the United States of America, mainly because the Federal Reserve has not launched its approval.

Companies and their Needs to Deal with Clearer Regulations

The regulatory framework in the United States of America is still dealing with various uncertainties. The struggle is more than just a fear of restrictions; it is also about the lack of regulations. This situation has led companies to look for more solutions to push the government to find a way to solve the problem.

Last December, at least six directors of Bitcoin companies stood before the US Congress, requesting better sets of regulations. A report came to the public eye highlighting how US-based bitcoin companies had reached an increase in their spending on lobbying to push legal authorities to set up these regulations.

Companies and users still have to wait for the White House to allow defining the upcoming steps to be taken, by cryptocurrency companies, on the regulatory framework within the United States of America.

By: Jenson Nuñez

The main challenge of the proposal is to avoid bifurcations. Irreversible confirmations on Ethereum 1.0 cannot take more than two hours.

Ethereum 2.0 (or ETH 2.0) has not arrived yet, and the team is already thinking about new upgrades. Vitalik Buterin, co-creator of Ethereum, joined efforts with a group of developers and highlighted a new proposal to set up irreversible transactions in ETH 2.0 in 12 seconds.

The proposal came to light on January 24. Buterin, in a blog post on Ethereum.org, highlighted the details of this new implementation. The notion of a block known within Bitcoin or the current version of Ethereum changes the scenario for Ethereum 2.0, this situation is possible because of new concepts called slots.

A block gathers the information of many transactions within the Bitcoin blockchain. When the block meets its confirmation, it gets instantly embodied in the blockchain. For Ethereum 2.0, slots implemented periods of twelve seconds in which a block can or cannot meet its confirmation.

Another type of block gets completed between 64 and 94 slots. This situation happens because, during the next cycle of slots, the block header executes the hash of the last slot of the previous block. This process takes effect in networks like Bitcoin, where each block aims at the block that comes before and generates the so-called blockchain.

Due to these complex confirmations procedures, the times when a transaction can become irreversible within the Ethereum 2.0 blockchain, take around fifteen minutes. This completion time is the average time to guide all 64 slots to their completion. Vitalik Buterin currently desires to lower this confirmation to just one slot with at least twelve seconds.

Improving User Experience in Ethereum 2.0

According to Vitalik Buterin, reducing completion times to twelve seconds will create a better user experience, strengthen network security and bring minimal errors within the protocol.

Regarding the improved user experience, those users who apply Ethereum 2.0 will acquire payments with waiting times of at least twelve seconds so that the transaction turns into an irreversible operation.

The HowManyConf portal is in charge of measuring the number of confirmations of a transaction on a given blockchain and it requires to be as secure as six confirmations in Bitcoin. For Ethereum, setting a confirmation of a transaction actually takes at least two hours and a half and under the proof-of-work (PoW) consensus protocol in version 1.0 of this network.

How to Set a Reduction on Confirmation Times and other Challenges

According to Vitalik Buterin, the current solution is to generate super committees. These super committees would be a subgroup of validators inside the Ethereum 2.0 network, capable of validating transactions way faster than previous validators; each group validates the blocks inside a slot.

According to Buterin, to achieve this goal, multiple challenges must get faced. In the first place, there is the change of protocol in Casper, whose algorithm carries out the completions when the minimum 64 slots period gets fulfilled.

Another challenge is finding ways to discourage 51% of attacks on the network. The number of validators chosen within a “super committee” would come into consideration too.

According to the document itself, currently, only one proposal is under discussion, considering that Ethereum 2.0 is not yet fully operational, and it could get delayed one more year.

By: Jenson Nuñez