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Today in crypto, Grayscale argued that Zcash could challenge Bitcoin’s network effects as financial privacy gains importance, the UK moved to expand the Bank of England’s mandate to stablecoin and payments innovation and StarkWare demonstrated quantum-resistant Bitcoin spending on mainnet without a protocol change.
Grayscale says Zcash (ZEC) could mount a rare challenge to Bitcoin’s (BTC) powerful network effects as artificial intelligence increases the value of keeping financial transactions private.
The asset manager’s head of research, Zach Pandl, argues that Zcash benefits from being a later entrant, allowing it to combine Bitcoin-like monetary characteristics with optional transaction privacy. That distinction could become more important as AI makes large-scale analysis of financial activity increasingly sophisticated.
The call follows a sharp rise in ZEC, which has gained roughly 19-fold over the past year. Even after that rally, Zcash’s market capitalization remains below 1% of Bitcoin’s, leaving substantial room for appreciation if it succeeds in taking even a modest share of the market, according to Grayscale.
Bitcoin still has formidable advantages, including deeper liquidity and an established network that competing cryptocurrencies such as Litecoin have struggled to dislodge. Grayscale also cautioned that Zcash remains a high-risk asset and that further gains are unlikely to be smooth.
Institutional activity around Zcash is also increasing. Nasdaq-listed Cypherpunk Technologies recently acquired a $33.33 million mining fleet from Winklevoss Capital that now accounts for about 18% of the network’s hashrate.
The UK is moving to put stablecoins at the center of a new Bank of England mandate aimed at supporting innovation in digital payments.
The government plans to give the Bank of England, the UK’s central bank, a secondary objective to support innovation in payment systems and emerging forms of digital money, HM Treasury announced on Thursday.
The mandate will cover payment systems that use digital settlement assets such as stablecoins, while financial stability will remain the BoE’s primary objective.
The proposal comes as the UK steps up its work on stablecoins through regulatory changes, payment experiments and closer coordination with the US.
StarkWare researcher Avihu Levy has tested an experimental quantum-resistant transaction on the Bitcoin mainnet, in what the company described as the first transaction of its kind.
According to StarkWare, the transaction was confirmed Wednesday in Bitcoin block 964,199. Onchain data shows that it spent a 10,000-satoshi output protected by Levy’s Quantum Safe Bitcoin (QSB) scheme, with MARA Pool mining the block after receiving the transaction through its Slipstream service.
Levy’s paper and code repository said QSB combines hash-based one-time signatures with computational searches that bind an authorization to a specific transaction. The construction is intended to prevent forgery even if a quantum computer breaks the elliptic-curve cryptography Bitcoin uses.
The test moves Levy’s April proposal from theory to an onchain demonstration, showing that Bitcoin’s existing consensus rules can accommodate one form of quantum-resistant spending without a protocol change.
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