One ambitious bitcoin company is seeking to make mining a hobbyist activity again.

China-based Bitmain let slip today it will soon release its latest bitcoin mining rig, the R4, which it believes will be powerful enough to "bring mining back home".

Representatives for Bitmain said in an email to CoinDesk that the R4 is "the second most powerful bitcoin miner in the world", and that it will seek to reach enthusiasts with its production.

By building the miner with 16nm chips, Bitmain said it is able to reduce the cost of electricity for the miner, a leading factor for profitability. According to the spec sheet, users can expect a hashrate of 8.6 TH/s with a power consumption and efficiency of 845W and nearly 0.1 J/GH, respectively.

Ambitious aims

For the average bitcoin enthusiast, mining is a thing of the past.

Ever since the first ASIC chips were introduced in early 2013, bitcoin mining difficulty has skyrocketed, making it more difficult for the average person to eke out any sort of profit with their own hardware. But Bitmain is providing details on why it believes the activity may once again be viable for the general market.

To ensure the miner can achieve the proposed power rates, the company is advising that customers also buy its newly launched APW5 power supply unit. Bitmain explained that the APW5 "will be our most advanced power supply".

The Antminer S9 achieved similar power rates and is now the "go-to" home mining hardware, but problems emerged. For example, when a miner is going at full power, the fans can be absolutely deafening. (As heard in this video of a miner with a small farm in his garage).

To get around that, Bitmain has designed a new fan, which it says was "inspired by the fan of a silent split air conditioner" to reduce noise issues.

According to the company's spec sheet, it should only achieve a noise level of 52 decibels, about as loud as a conversation at home.

While Bitmain removed all mention of pricing from its website except to say that the sale would start on Monday, screenshots of the product page show it could sell for $1,000. Along with it, the APW5 PSU may cost prospective miners an additional $300.

Questions ahead

But while the miner may succeed in being quieter and more efficient, there's still the question of profitability.

Assuming the current bitcoin price, electricity costs of $0.12 per kilowatt hour and an upfront $1,300 hardware cost, breakeven with this hardware is 391 days, not factoring in any mining pool fees.

What hasn't yet been solved is the fact that, in many of the most popular locations, electricity costs are still extremely high. That's why mining operations congregated in the Pacific Northwest, western China and very cold parts of the world such as Iceland.

Naturally, if the price of electricity goes up or the price of bitcoin goes down, the time to breakeven could be even longer.

Whether Bitmain can actually bring the bitcoin miner back home remains to be seen. Yet solving for noise, one of the main complaints of mining, could be a big first step.

Bitcoin miner image via CoinDesk

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Could a development on the ethereum blockchain help resolve one of bitcoin's longest-running debates?

It may not seem like an obvious question given the differences between the two blockchain networks. After all, bitcoin aims to provide an uncensorable digital currency, while ethereum seeks to serve as a platform for decentralized applications.

However, given that a decision made last month has effectively split ethereum into two competing blockchains, some academics and analysts are wondering just that.

More than a month after the collapse of The DAO, two ethereum blockchains operate, a development that has resulted in a chaotic transaction environment and criticisms that linger to this day as to whether the move that led to this result was the "right choice" in response to the challenges faced.

It's in this context of decentralized governance that the ethereum hard fork is now helping to inform the block size debate in the bitcoin community. That debate, which began in 2015, has divided bitcoin users on how best to scale the network to accommodate more users for months.

To some, the Bitcoin Core development team was seen as too conservative, too worried about the technical failures of a hard fork to take actions that could improve the ability of the network to grow. But since ethereum's public struggles changing its consensus rules with this technical fix, sentiment has shifted.

Joe Colangelo, executive director of Consumers' Research, for example, said that he believes the result "completely vindicates" the path taken by Bitcoin Core, the network's largely volunteer development team.

Colangelo reasons that the conservative nature of the development team, while perhaps frustrating to some in context of a capacity change, has given himself and others confidence in other rules that make bitcoin valuable.

He told CoinDesk:

"The intransigence of the bitcoin development community is a feature, not a bug. If it's this hard to raise the block size, that 21m limit for bitcoin looks rock solid."

Conservatism rewarded

To recap, it helps to understand the context of why both blockchain networks needed to consider forking their code, or making a change that would require participants to accept new rules for the blockchain, and how they differ.

Late last month, the development community behind ethereum forged ahead with a decision to push a change to its blockchain that effectively recouped investor losses in The DAO, a smart contract-based funding vehicle that collected millions in ether this summer.

To do this, all participants in ethereum needed to adopt a new version of the blockchain's history, one where the stolen funds were moved to a new wallet for investors.

This was an emergency measure, spurred by the perceived need to stop illicit actors from absconding with the funds.

In some ways, issues on bitcoin started similarly, first with the network hitting its capacity for transactions, and then with others calling for action in response.

But Bitcoin Core, the volunteer development community that works on the code, resisted calls for a hard fork that would boost the block size. Rather, its members have prioritized more incremental solutions like Segregated Witness as mechanisms for scaling the network.

Some argue that the stance of bitcoin's developers, while controversial, has been validated by ethereum. Others argue that the implications go beyond that, and could have lasting repercussions for the industry.

Industry observer Chris DeRose told CoinDesk that bitcoin's success to date is the result of a development team that is "decoupled from short-term speculative incentives".

"The bitcoin leadership model seems much better geared towards more prudent management of actual users' macroeconomic issues – despite the, often times horrendously loud, interests of short-term speculators," he said.

'Too early' to say

As to what lessons were learned – and whether the hard fork conservatism is justified – other aren't so sure.

Some observers told CoinDesk that time will decide whichever viewpoint emerges as the one that informs the larger industry, or if any conclusion can be reached

Gil Luria, head of technology research for Wedbush Securities, said he believes it’s "too early to say" to draw conclusions from the ethereum fork.

One potential reason is that it's not clear whether ethereum classic, the old version of the blockchain that is now maintained by a new development team, will be able to sustain its early growth and momentum. Traders, those who provide market liquidity for both blockchains, are now debating this question.

"Ethereum has gone into uncharted territory and that community is learning something new every day," he told CoinDesk, adding:

"These last few weeks are not unlike the early days and months of bitcoin, which survived many challenges and came out stronger."

Jim Harper, a senior fellow at the Cato Institute, agreed.

"I think the [ethereum hard fork] will produce valuable lessons for bitcoin and cryptocurrency generally. I just don’t think we can know what they are yet," he said.

Right move to make

Others, on the other hand, viewed the ethereum hard fork as a positive development for blockchains broadly, one that might make even conservative elements of its communities open to change.

Investor Roger Ver, a bitcoin investor who has pushed strongly for an increase in the block size, argued that the ethereum hard fork wasn't the disaster that many observers believe.

By providing investors with value on both blockchains, he argues, more value was created in the development of two networks, and that ethereum's reputation remains largely unchanged.

"The combined market cap of [ethereum's two blockchains] is actually greater after the fork than before, so this means that the market valued ETH and ETC more than ethereum alone," he told CoinDesk.

In his view, even though the network was split, no parties came to any harm as a result.

“This means that no one lost any money, no one was hurt, and the ecosystem now has an additional cryptocurrency to choose from," he said.

Ver went on to say that such a move is "perhaps it is the best option for bitcoin going forward", adding that multiple versions of bitcoin would provide more choices to potential users.

The disagreements show that the event is likely to be scrutinized for some time, and that it will, at the very least, continue to inform debate on how blockchain communities can – and should – achieve change.

Decision image via Shutterstock

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The Hyperledger project, the blockchain initiative led by the Linux Foundation, has elected a new technical steering committee (TSC).

Launched late last year, the Hyperledger Project to date counts more than 40 established companies and startups among its membership. Voting for the body concluded earlier this week following a previously announced election period.

Among those who retained positions are R3CEV CTO Richard Gendal Brown; Digital Asset Holdings chief ledger architect Tamas Blummer; Fujitsu researcher Hart Montgomery; Intel engineer Mic Bowman; and IBM Open Technology CTO Christopher Ferris, who served as the committee's first chairman.

New members include Arnaud Le Hors, senior technical lead for IBM; IBM blockchain fabric chief architect Binh Nguyen; Intel venture technical lead Dan Middleton; London Stock Exchange principal architect Greg Haskins; DTCC senior enterprise architect Murali Krishna Katipalli; and Salesforce software engineer Sheehan Anderson.

With the election concluded, work now turns to electing a new TSC chairman. The nomination process, which began yesterday, runs through 31st August.

Voting begins on 1st September, with the results expected to be announced one week later on 8th September. Like with the previous vote, the TSC chair election will utilize Condorcet-IRV, a voting platform created at Cornell.

Polling booth image via Shutterstock

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The price of classic ether (ETC) has plunged over the past week, as the original excitement surrounding the newly created digital currency appears to have worn off with investors.

The adjustment would appear to have taken some of the momentum out of the nascent ethereum classic blockchain, which has enjoyed notable price gains and trading volume despite the fact many analysts expected it to die off shortly after its unlikely creation.

But those gains came to a halt this week, as ETC plunged 23.47% against ether (ETH) during the seven-day period, and it experienced a 23.16% loss against the US dollar in that time, Poloniex data reveal.

At press time, the price was up slightly at 1.5% over the last 24 hours.

For those who are less familiar, the digital currency came into existence in late July when idealists who opposed ethereum's (ETH) hard fork began supporting a market for its old blockchain, one that was free from a contentious technical change.

Digital currency exchange Poloniex helped provide classic ether with some validation by listing the ETC/BTC and ETC/ETH currency pairs on 24th July. After, ETC quickly rose in value against ETH, surging more than 2,000% in early August.

This week's price movements took place amid a backdrop of weak trading volume.

Market participants traded $38.1m worth of ETC during the period, with daily transaction activity ranging from as little as $1.87m to as high as $9.5m, according to CoinMarketCap figures.

In comparison, ETC's trading volume surged in late July and early August, reaching $103.1m on 26th July and $147.86m on 2nd August.

After ETC enjoyed this strong start, some have expressed concern the digital currency is suffering excitement fatigue.

This a widespread problem for altcoins, many of which suffer declining interest because they don’t have much to offer beyond their speculative value, Petar Zivkovski, director of operations for bitcoin trading service Whaleclub, told CoinDesk.

He said:

"When volumes die off as they did this summer month of August, there is no more speculative demand to sustain prices, so they decline, in some cases quite sharply."

But Zivkovski emphasized his view that ETC has more promise than many other altcoins, and stated that this digital currency might go through cycles like this periodically. He said this differs from other altcoins that only go through one or two such cycles before their volume dries up.

Some of ETC's supporters are very passionate, noted Jacob Eliosoff, a cryptocurrency investment fund manager. As a result, they probably won't "call it quits" so soon, he asserted.

However, he emphasized that not all of ETC's backers share this level of excitement, and that some of these supporters may be lukewarm about the currency.

"There may be a quieter majority who were less committed and are moving on," he stated.

Trading chart display via Shutterstock

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Customs agents in Finland revealed today that they seized bitcoin and other items worth about €1m earlier this year in connection with the operation of an online dark market.

In addition to the bitcoin and other "movable property", the Finnish customs agency said it stopped about 15 kilos of drugs totaling 10 million doses and valued on the street at about € 1.1m, according to a statement.

Three Finnish individuals are suspected of trying to bring into the country more than 40 pounds of powdered drugs, more than 40,000 ecstasy tablets, 30,000 tabs of LSD, a variety of "designer" drugs and pure methamphetamine.

All three individuals have been in prison since April, when the drugs were seized.

According to a translation of the statement:

"The suspects are about 30 years old and a native of southwest Finland and the Helsinki metropolitan area. Customs has made the investigation of the case [in] co-operation with the Netherlands, the US Germany, Latvian authorities and Europol."

A representative of Finland's customs office told CoinDesk the online drug site was named Valhalla. According to DeepDotWeb.com, the site has been in operation since October 2013. Valhalla is still operational.

Referred to as the "Online Drug Shop" in the translation of the statement, the shop appears to have risen to prominence in  2014, when its proprietors began marketing themselves by sending out free LSD to potential buyers.

An earlier version of the site was named Silkketie, which translates as Silkroad, according to the representative. Due to the ongoing nature of the investigation the agency was not able to provide additional details.

The site was run via the Tor browser and appears to have accepted bitcoin for payment.

According to the statement, the Southwest Finland District Court has until September of this year to consider the full extent of the charges.

Update: This article was updated with information provided by a representative of the Finnish customs office.

Drugs and euros image via Shutterstock

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There was an outlier among a group of financial institutions that this week announced they are in the process of building a new blockchain and digital currency settlement network.

Called the 'Utility Settlement Coin', the project was created by startup Clearmatics and tested by four global banks: UBS, BNY Mellon, Deutsche Bank, and Santander. But a fifth member of the consortium, ICAP, stands apart for two reasons.

First, its team of participants span multiple companies within the market infrastructure provider. Second, as a market infrastructure provider, a digital currency that runs on a distributed ledger could be disruptive to its offerings.

But, it's this unique positioning that ICAP hopes to leverage, not to guard against being made obsolete, but to help inform how a proprietary distributed network might be efficiently adopted.

Michael McFadgen, the managing director of ICAP's FinTech investment arm Euclid Opportunities, elaborated on the principals he expects the firm will follow as a more certain timeline for the effort is laid out.

McFadgen told CoinDesk:

"A long-term vision for market infrastructure based on distributed ledgers is that it has some common layers that the market uses widely. One of those layers is hopefully the Utility Settlement Coin. We will likely be building on top of that."

The Utility Settlement Coin (USC) runs on a blockchain platform the group calls the Decentralized Clearing Network designed to let central banks open up their real-time gross settlement service and provide more access to central bank-issued cash.

Though details of how market infrastructure providers like ICAP might adopt the technology have yet to be clearly defined, McFadgen said he believes four principles will likely guide the process.

Critical mass

The first principle, the necessity of widespread adoption, is reflective of the difficulty of changing the very foundational infrastructure of state financial institutions and convincing other market participants to embrace the idea.

"Something like a USC doesn't work if you have 10 different coin designs," said McFadgen. "We plan to be very careful to make sure all the stakeholders are involved and there is broad industry acceptance."

Even if broad adoption is achieved, though, there remains the additional question of how each of these possible central bank-backed digital currencies might interoperate.

At this early stage, McFadgen said the consortium has "not yet thought about how we would interoperate with something like Ripple", a distributed ledger network that has also seen strong interest from major banks.

He added:

"There are lots of people looking to implement this type of structure. We are going to need to have an operation with people like that to make sure all our asset are coordinated."

The second principle, is the principle of engagement.

Yesterday, Clearmatics CEO, Robert Sams told CoinDesk that numerous central banks and regulators from OECD economies have been engaged in the process from the early stages of development.

But, McFadgen said that an even more diverse group of financial institutions still needs to be engaged, including, buy-side, asset managers, hedge funds and "any financial institution with a nexus with financial markets".

The infrastructure

The third principle is that of commercialization. But, this term may only loosely define the actual final business model.

As opposed to a traditional corporate endeavor, McFadgen adopted similar language as Sams in describing the project as a utility that may eventually adopt any of a number of business models.

The USC project is so early in its development that, in spite of Euclid Opportunities being an investment firm, ICAP hasn't taken a stake in the project. "There is no entity to take a stake in," McFadgen said.

This could be a sign that confidence in the project remains reserved due to the potential challenges it could face with wider adoption.

For example, if USC is ever implemented, each central bank would have to adopt its own version of the coin, backed by the nation's native currency.

ICAP and blockchain

The ICAP team currently working with the USC project includes Jenny Knott, CEO of its Post-Trade Risk and Information division; its newly hired chief innovation officer, Charles Ocheret; and multiple distributed ledger and blockchain staffers from Traiana, its financial markets automation startup.

Much of that same group has been working with blockchain at ICAP since late last year.

A large portion of ICAP's blockchain-related work has been focused on standardizing a post-trade workflow into a "Rosetta Stone" for post-trade, that could be easily integrated with distributed ledgers should that time ever come.

But earlier this year, ICAP also announced that a team of seven employees from Traiana had completed a test with startup Axoni that converted trade data from banks so it could be processed on a blockchain.

According to McFadgen, this effort isn't competitive with the Clearmatics platform. While Clearmatics is focused on the rails upon which transactions move and the cash that is transmitted, Axoni is working with ICAP to build smart contracts that determine the nature of the transaction itself.

McFadgen concluded:

"We are involved in many conversations about distributed ledgers and we are going to continue to be involved in those conversations and doing work in research labs."

ICAP logo via ICAP

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