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Russia Squares Off with China in Battle for Bitcoin Mining Supremacy

· August 9, 2017 · 2:00 pm

An aide to Russian President Putin seeks to raise $100 million through an ICO of his company in a bid to help dethrone China as the country with the biggest Bitcoin mining industry. Putin has warmed up to blockchain technology, Ethereum in particular, and has extended support for its adoption through the help of local partners. Many believe that these developments indicate Russia’s predisposition to replace USD with Bitcoin as a reserve asset.


Russian Miner Coin

One of Putin’s aides on all matters pertaining to technological security co-owns a company seeking to raise $100 million worth of Bitcoin and Ethereum by holding an initial coin offering for its token, Russian Miner Coin. On its website, RMC claims that their investors will own rights to 18% of its total revenue earned using the company’s mining equipment. Russian official Dmitry Marinichev said, “Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future.”

BTFO China?

RMC has adopted a two pronged strategy to accomplishing their goal of usurping China’s dominance in the mining of digital currencies. Firstly, they plan to make full use of Russia’s lower power prices vis-a-vis China: Not only does Russia produces 20 GW (gigawatts) of surplus power capacity, but it also has very cheap consumer electricity prices at only 80 kopeks (1.3 cents) per kWh (kilowatt hour). Secondly, the company plans on using Bitfury chips in Russia for mining.

The founder of Bitfury Group is Valery Vavilov, a Latvian with ties to Russia. Bitfury also happens to be the biggest rival to Bitmain technologies, which is China’s largest producer of mining computers. Eventually, RMC will seek to produce semiconductor chips in Russia itself that it can then use to reduce the power consumption involved in crypto-mining. They aim to devote 10% of the ICO proceeds towards the creation of these processors to achieve quick results.

Russia’s Tryst with Blockchain

President Putin has been very receptive of the nascent asset class of cryptocurrencies and has been particularly charmed by its underlying blockchain technology, specially Ethereum. With Russia going through its worst recession in recent history and facing decreasing revenues from oil and gas, Putin is believed to have earmarked Ethereum as the potential tool to rejuvenate the country’s economy.

The Kremlin’s website even mentions that after meeting with Ethereum’s founder Vitalik Buterin in June, Putin extended overwhelming support to the youngster to implement blockchain technology in Russia with the help of local partners. Russia’s Central Bank has already rolled out a pilot project built on blockchain that has the capability to process online payments and verify customer data with lenders.

Reaction

The general consensus about this development is that this would not have happened without Putin’s backing and blessing. This move has coincided with Bitcoin breaking all-time high records and crossing the $3500 mark, which has raised a few eyebrows. Some have suggested that this is the most obvious indicator yet that Putin aims to use digital currencies to replace US Dollars as a reverse currency/asset.

Cynics argue that such large scale Bitcoin mining by the Russians might just be a mask for laundering money in the country notorious for corrupt oligarchs. Regardless, Russia’s embrace of the world of cryptocurrencies and blockchain technology comes as great news for the crypto-verse as it can only result in a greater adoption of the financial technology.

What do you think about Russia’s move to rival China in bitcoin mining? Do you think they are adopting the correct strategy? What do you believe are the ulterior motives behind Putin’s interest in this new fin-tech world? Let us know in the comments below.


Images courtesy of Wikimedia Commons

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Bitcoin Network Stats Show Block Time Is Back To Normal

Source: bitcoin

Bitcoin Network Stats Show Block Time Is Back To Normal

Just a few days ago, there was some concern among the Bitcoin community regarding how fast new blocks were being mined on the network. In a normal world, the time between Bitcoin blocks is roughly 10 minutes. Earlier this week, however, blocks were being found in under six minutes, thanks to a major network hashrate increase. Based on today’s Bitcoin network statistics, everything is back to normal.

Also read: John McAfee Doesn’t Think Bitcoin Is The Digital Currency Of The Future

Major Hashrate Increase Leads To Faster Blocks

The Bitcoin network heavily depends on the amount of hashpower used to generate new coins and validate transactions. Every now and then, that total hashrate will either drop or increase significantly. These types of movements will have an impact on the Bitcoin block time, which is the time required to generate a new block with confirmed transactions on the network.

A few days ago, the Bitcoin network saw a major hashrate increase, as BitFury deployed their new mining chip on the network on a large scale. Thanks to this chip’s performance and lower energy requirements, incredible computational power can be achieved. Directing such a power at the Bitcoin network caused a bit of unrest among the miners, as the block time on the network started decreasing, and came pretty close to the five-minute mark at one point.

It goes without saying that, while faster block times also means faster transaction confirmations, such a situation is a double-edged sword. Rapid validation of Bitcoin transactions can lead to security issues as these validations could come from one minor attempting a 51% attack on the network. If such an attack were to be successful, the Bitcoin blockchain would split in two, rendering a lot of transactions invalid.

However, it turned out that fear among the Bitcoin miners was a bit premature, as no miner or mining pool got anywhere near a 51% attack during this brief period of faster block generation. By the look of things, the new hashpower pointed at the Bitcoin network was spread out among mining pools in an even fashion.

One thing to keep in mind is how the Bitcoin network is affected by a difficulty coefficient, which will scale depending on the total amount of hashpower pointed at the network. If there is more hashpower, the difficulty will increase, and the block times will return to their regular 10-minute interval schedule without any issues. That difficulty adjustment has taken place, and things seem to be back to normal.

Network Statistics Confirm Block Time Is OK

Every day, a bot posts the latest Bitcoin network statistics on /r/Bitcoin, displaying the total amount of BTC in circulation, the current difficulty, and the average block time. Based on the statistics posted a few hours, the average time until a new block is found on the Bitcoin network is back to its regular interval, as it currently sits at 10 minutes and 4 seconds.

The difficulty adjustment did its work flawlessly once again, as the total amount of hashpower pointed to the network is still well above 700 petahash.  If this trend of adding more hashpower keeps up, another upward difficulty adjustment will follow in a few days. Scalability is an integral part of the Bitcoin network and goes much further than just the block size itself.

What are your thought son the current Bitcoin network statistics? Do you expect a major hashpower increase throughout 2016? Let us know in the comments below!

Source: Reddit

Images credit of BitFury, Shutterstock

The post Bitcoin Network Stats Show Block Time Is Back To Normal appeared first on Bitcoinist.net.

Bitcoin Network Stats Show Block Time Is Back To Normal

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