Welcome back to another Bitcoin News in Review, where we feature some of the biggest stories of the week here on CryptoCoins News. This week, there was a drop in the Bitcoin price, Dogecoin’s price continued to decline, Ecuador banned Bitcoin in favour of its own cryptocurrency, and more. Check out this week’s Bitcoin News in Review after the break.
Explaining Bitcoin’s Recent Price Drop
If you’ve been monitoring the Bitcoin price this week, you’ve probably noticed that it has dropped below $600 USD (currently at $588). While it’s rarely possible to pinpoint an exact cause for a price change, there are a few good theories for the recent drop. People may be selling BTC for travel (it’s summer vacation), big Bitcoin holders (whales) may be selling, or maybe there simply isn’t any real reason for the price to go up at this time. You can read more theories as well as an in-depth analysis here.
Dogecoin isn’t really dead, but if things don’t change soon, Dogecoin may be on its way out. This week, the Dogecoin price continued to decline. The Dogecoin community is well-known for its strong community and impressive marketing (e.g. Josh Wise’s Dogecar), but that doesn’t seem to have helped the price, which has been on a downwards trend throughout 2014. At the time of this post, one Dogecoin is worth 37 Satoshis (compare that to 111 Satoshis just four months ago).
So why does the price continue to fall despite the community’s efforts? It’s highly possible that the price drop is due to the way Dogecoin itself works. Unlike most cryptocurrencies, Dogecoin is inflationary, meaning that coins are not capped and can be produced infinitely. This drives the price down because the more coins are produced, the less valuable they seem.
Furthermore, Dogecoin is seeing competition from another altcoin – Reddcoin. Reddcoin is also inflationary, but unlike Dogecoin, Reddcoin is taking steps to ensure that inflation does not drive the price down. In an attempt to save the altcoin, Dogecoin will finally merge mine with Litecoin. But whether or not this saves Dogecoin remains to be seen.
Ecuador Bans Bitcoin
With 99 votes for and 22 against, Ecuador’s parliament has voted to ban Bitcoin. Instead of using Bitcoin, Ecuador will use its own state-run cryptocurrency backed by the Banco Central del Ecuador (Ecuador’s central bank). Although exact implementation plans have not yet been outlined, Ecuador’s Monetary and Financial Regulatory Committee will regulate the currency while the central bank will be responsible for development and implementation. The Bitcoin community in Ecuador has raised privacy concerns over the new legislation in this open letter to the government.
In related news, Russia is once again looking to ban cryptocurrencies.
Xapo Releases Bitcoin Debit Card
The first shipment of Xapo Bitcoin debit cards just went out on July 29th. The Xapo debit card is tied to one’s Xapo Bitcoin wallet. Xapo stores bitcoins in underground vaults protected by armed guards, leading many to consider Xapo to be one of the safest online wallets. Unlike most wallets, Xapo also provides insurance. CCN recently interviewed Ted Rodgers, Chief Strategy Officer at Xapo, which you can read here.