A possible mitosis of Bitcoin and the incorporation of SegWit, among others, the problems of the Ethereum network, while Japan and Russia do not finish adopting it and the deactivation of the Zcash masks, cause the sale of large packages of cryptocurrencies.

We are facing a moment of renewal within the cryptocurrency market. We have detected that large packages of cryptocurrencies are being sold, due to investors, both large and medium-sized who have had assets for months and are getting rid of them and by new miners, who inject capital indiscriminately, knocking down the value of cryptocurrencies. The situation seems to have bottomed out, in this case and should remain stable, until Ethereum, Bitcoin, Zcash and Litecoin, as the most representative values ​​of the market, rise again, during the second half of the month.

ETHEREUM, ZCASH, BITCOIN AND THE REST OF CRYPTOCURRENCIES, IT SEEMS THAT THEY ARE RECOVERING, SLOWLY

The situation, already complex with the problems of Ethereum and Zcash, can be aggravated with changes in Bitcoin. The most important cryptocurrency in the market is not in a good moment, not at the valuation level, but internally, since there are internal disputes between the developers of this cryptocurrency, in addition, the lack of maintenance is a drag and the lack of a correction in the difficulty, since in a few years all the Bitcoin could be mined if the situation is not corrected. So much so that Bitcoin faces on August 1 the inclusion of SegWit and a possible Hard Fork that breaks the currency.

SEGWIT

For those who do not know what this Segregated Witness or SegWit is, it is an update within the Bitcoin software, which aims to solve some serious problems of this cryptocurrency. SegWit is an update to the Bitcoin Core, long developed by the Bitcoin team. The original idea was to make a correction in the malleability of transactions, the biggest weak point of the Bitcoin software. It is not a harmful problem for users, but it has been exploited several times for attacks and requires a patch.

SegWit offers us other advantages and the focus right now is on developing a solution that allows fixing the malleability in transactions in order to solve the scaling problem of Bitcoin. This coin has serious scaling problems at present, which are not being solved and that time only makes it worse.

Thanks to SegWit, the size limit of each Bitcoin block is increased, allowing the implementation of a second layer that improves the system. The problem, therefore, is the size of the Bitcoin blocks, insufficient to support the volume of transactions that are implemented under the Bitcoin blockchain. The blockchain is the ledger of transactions that have occurred on the network so far, a vital element of cryptocurrencies. The limit of 1Mb per block is no longer enough to account for the hundreds of user transactions, which occur every minute.

This causes users to have to wait for the transaction to execute, which, due to saturation, can take hours or days. If the network grows, the number of transactions increases, while the block size is not changed, which only makes the situation worse. SegWit wants to solve the problem in two ways: the first, increasing the size of each block to 4Mb, which is supposedly the absolute limit. In the first instance, it should grow to 2-2.1Mb immediately after activating SegWit and then it will scale. The second part is the malleability of the transactions, a minor problem within Bitcoin that will be solved with SegWit. This should increase the capacity of the network.

MITOSIS

Bitcoin faces another problem and it is an internal mitosis or what is the same, Bitcoin could be divided into two independent cryptocurrencies, the first would remain Bitcoin and the second has no name. This is a rumor that is gaining momentum with the inclusion of SegWit and the Hard Fork that is envisioned for the Bitcoin network. This will make Bitcoin no longer the preferred cryptocurrency on the market, losing at least 50% in value or even more, something that the market would absorb, triggering the value of all cryptocurrencies.

The possibility of this split due to internal problems between the developers who work and maintain Bitcoin, seems to join the problems of users who mine ETH and ZEC and only have capital, they throw it directly into the market, this being an added problem. This makes large and medium investors sell assets due to uncertainty.

RUSSIA AND JAPAN

Russia and Japan have the keys to why it is a bad time to sell and you have to wait. Both countries are expected to start regulating cryptocurrency operations such as Bitcoin and Ethereum in September, although we would not rule out others. Russia works on its own cryptocurrency, due to the depreciation of the Russian ruble and China is in the same, also the depreciation of the Renminbi and the Yuan, betting on a cryptocurrency based on the Ethereum blockchain that may be in current use.

EUROPEAN UNION

Jordi Ayet Uigarnau, the Vice-President of the European Commission, in a report has suppressed or minimized the false belief that cryptocurrencies are an instrument used by criminals, terrorists and people who only want to launder money. The document makes it clear that money laundering and the financing of terrorism with cryptocurrencies are less related to criminal activities than what has been said so far, which is an important step.

Electronic money is defined in the Second Directive on electronic money (EMD2, 009/110 / EC) as a monetary value stored electronically, magnetically, represented by a claim on the issuer that is issued when receiving funds in order to make transactions of payment and that is accepted by a natural or legal person other than the issuer of electronic money. A key feature of electronic currency is its pre-paid nature (…) virtual currencies like Bitcoin are not considered electronic money as they do not represent monetary value.

We are talking about a devastating report, which establishes that cash is a more attractive instrument for criminals than electronic financial instruments, especially in low-tech areas or in states of turmoil due to armed conflicts. This report also concludes that cash "constitutes a more competitive and attractive tool because it is easier to access than electronic money."

USA

Most of the investors worldwide are in the United States, with significant capital invested in digital securities. We have been without news for a long time, but we have data on the interest on the part of the SEC, a regulatory body that watches over money laundering and fraud, has shown interest, above all, in Ethereum and is working on a rigorous study to admit Ethereum and Bitcoin on the New York Stock Exchange, which would be a very important boost to the cryptocurrency market.

CONCLUSION

The second half of the year, which we have already entered, will be moved and there will be many changes, very profound. Goldman Sachs and JP Morgan speak of a significant rise in Altcoin, which is how all the cryptocurrencies that came after Bitcoin are called. The summer will be a bit tortuous and on August 1 we will see if there is mitosis in Bitcoin or if it continues as a single currency, but with an increase in block size and therefore, in difficulty. Ethereum and Litecoin are two values ​​that can skyrocket dramatically and Zcash may deliver surprises in the coming months. It is expected that by the end of the year the value of the cryptocurrency market will be double or more than at the peak of Bitcoin, therefore, we must be very attentive to what happens.