Here are some of the major developments in the world of crypto over the past few days.
Bitcoin suddenly crashed from $58,350 to $52,500 lows within two hours on Aug 5. BTC has recovered since then and was trading at $54,384 at the time of publication. It was the first time BTC traded below $53,000 since February 26, after the period of spot Bitcoin exchange-traded funds in the US.
Ether plunged 18% from $2,695 to $2,118 before recovering to $2,358. The cryptocurrency market saw the liquidation of around $740 million in worth of leveraged positions, wiping out $644 million in leveraged longs. It hit ETH traders the most, where $256 million in ETH longs got liquidated, followed closely by $231 million in BTC longs.
The slide was concurrent with a 7.1% plunge in Japan's Nikkei 225 stock market, along with the central bank's move to raise interest rates. This was developed in less than three days as $500 billion was shaved off the total crypto capitalization, driven by U.S. jobs data, slowing growth in technology stocks, and fears over mass selling from Jump Crypto.
Galaxy Research Warns of Long-Term Unsustainability for Bitcoin Rollups
According to a recent analysis by Galaxy Research, although the Bitcoin layer-2 scaling networks, or "rollups," are designed to provide low-cost, quick, and decentralized Bitcoin payments, they may eventually become unsustainable. According to a post dated August 2, Galaxy analyst Gabe Parker made comments indicating that core challenges to the rollup case on Bitcoin are posting costs.
It batches dozens of transactions into one batch and posts a summary to the main blockchain, like Ethereum, acting like a "data availability layer." The obvious limitation here is that Bitcoin can process 4MB capacity per block while posting uses a considerable amount of data on its base layer of up to 0.4 MB per posting. If numerous rollups post data on the base layer or every six to eight blocks, it could cause base-layer fees to skyrocket, possibly pricing out smaller transactions.
Galaxy Research says that in low-fee environments, this tab usually touches $460,000, while in a high-fee climate, the costs could reach $2.3 million. In order for rollups to survive, they have to accumulate heavy fee revenues from transaction fees on their networks.
Dogecoin to Get Major Security Update with Core 1.14.8 Release
The famous memecoin, Dogecoin gets ready to release Dogecoin Core 1.14.8 with a serious security update. It will improve reproducibility in the compilation process which is vital for security and reliability. The new version passed a reproducibility test that the user "junior developer" on X reaffirmed, thus proving the idea that developers are able to run the same output from source code more than once.
The network's literal lifeline is the Dogecoin Core client. It engages with the network, authenticates transactions, and maintains user keys. Due to this, reproducibility becomes paramount to have, since unaudited code comes with huge risks of exploitation, exposure of private keys, or even vulnerabilities in the network.
Despite the update, Dogecoin's price fell 2.5 per cent to $0.1131 on August 2. On the other hand, it still holds the lion's share of 62% when it comes to its market share for memecoins. The total market value of memecoins tumbled by 21.5 per cent within the last 10 days from $54.70 billion on July 22 to $42.91 billion on August 2.