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Bitcoin Hashrate Hits Record 83.5 TH/s While Price Trades Sideways

Bitcoin’s blockchain produced new historic records this week as the cryptocurrency’s technical health increasingly contradicts its lower price. 


Bitcoin Hashrate Hits 83 Quintillion

As data from monitoring resource and wallet provider Blockchain.com confirms, it was Bitcoin’s 00 hashrate leading the charge, hitting 83.5 quintillion hashes per second on August 29.

That number is BTC’s best achievement in its ten-year history, and the first time hashrate has surpassed 80 quintillion hashes per second.

Hashrate refers to the amount of computing power servicing the Bitcoin network. The more hashes per second involved, the more power miners are devoting to processing and validating transactions.

A higher network hashrate also means better security and often better decentralization of mining power across more users.

The metric has hit record levels continually in recent months, and the implied benefits make it a cause for celebration among BTC proponents.

On Friday, it was RT host and serial Bitcoin ‘permabull’ Max Keiser who took heart from the statistics, even as BTC/USD dropped 8% in a sudden loss of support.

Keiser additionally noted Bitcoin’s high share of the overall cryptocurrency market cap. That number hit 70% this week, according to some measures, its highest since March 2017.

“New (all-time high) for (Bitcoin) hashrate as alts die and players position themselves strategically ahead of BTC’s move back to 85% dominance,” Keiser summarized on Twitter.

BTC Booms At Altcoins’ Expense

As Bitcoinist noted, altcoins have indeed suffered as a result of Bitcoin’s rise. For Keiser, the future is also bleak – he claimed Bitcoin Cash and Bitcoin SV are “particularly vulnerable” to further loss of value.

Ethereum, meanwhile, is set for a halving – not of the block reward, but of price.

“ETH heading back to $90,” he finished, repeated a warning from earlier in the week about the largest altcoin.

Bitcoin’s price meanwhile has failed to match the strength of its network fundamentals. While not unprecedented, the schism nonetheless gives analysts cause for concern, with several advising traders to take precautionary measures with their holdings.

“I’m long BTC,” popular day trader FilbFilb told Twitter followers as Bitcoin hit $9600. Despite being up from local lows of $9350, this was not enough to restore sentiment.

“Live by the sword, die by the sword,” he added.

Earlier, Bitcoinist noted a theory that margin trading was responsible for sudden turbulence on Bitcoin markets. BTC/USD losing $500 in minutes is just the latest example of the phenomenon, which intersperses periods of sideways price action.


What do you think about BTC’s network performance versus price? Let us know in the comments below!


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Cryptojacking Campaigns Rose 29% in Q1, McAfee Says

In the first quarter of 2019, cryptojacking campaigns aimed at victims’ PCs to mine cryptocurrencies rose 29%, according to a recent report by security software provider McAfee.


Hackers Target Windows PCs to Mine Monero

The antivirus maker founded by crypto fan John McAfee discovered that both Windows and Apple ecosystems are equally vulnerable to cryptojacking campaigns.

Most of the mining attacks on Windows computers use PowerShell for propagation and execution. The latter is a task automation engine and interactive Command-Line Interface (CLI) created by Microsoft for system administration and configuration management.

In the first quarter, one of the most significant crypto malware campaigns discovered by McAfee was PsMiner. Hackers have been using a Trojan to distribute the mining worm. The malware is designed to mine Monero by exploiting the vulnerabilities in servers running Hadoop, ElasticSearch, Weblogic, Redis, SqlServer, Spring, and ThinkPHP.

Monero (XMR) is a cryptocurrency that allows users to make peer-to-peer transactions anonymously without being traced even by their addresses. The coin is among 15 largest cryptocurrencies by market cap. As of August 30, it boasts a capitalization of $1.15 billion. Monero is attractive for miners thanks to its generous reward potential. Also, XMR miners don’t have to use expensive GPUs and ASIC systems as in the case of Bitcoin.

Back to PsMiner, it reaches the victim’s computer by a PowerShell command that downloads the WindowsUpdate.ps1 payload, the McAfee report says.

McAfee Report Says Apple Devices Are Vulnerable Too

Besides PsMiner, another malware family, called CookieMiner, has been attacking macOS devices and sharing code with a past campaign to steal digital wallets and credentials. The malware used EmPyre backdoor to automate the stealing process.

McAfee found that CookieMiner stole data from popular crypto exchanges, including Binance, Coinbase, Bitstamp, Poloniex, Bittrex, and MyEtherWallet. The malware got access to data like passwords to access the crypto exchanges’ sites. However, the main goal was to infect computers to mine Koto.

In general, ransomware attacks rose 118% over the first quarter, the report says. There are new ransomware families, while hackers use innovative techniques. Even so, hackers still need victims’ involuntary cooperation. McAfee concluded:

“Even with all the sophisticated attack techniques being developed, attackers are still highly dependent on human interaction and social engineering.”

Do you think hacking attacks represent one of the most significant problems for the crypto space? Share your thoughts below!


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QuadrigaCX Update: Accountants Petition to Move Case to Toronto

Court proceedings against defunct Canadian Bitcoin exchange QuadrigaCX will focus on people in Ontario, say liquidators.


EY: ‘Few Ties’ Keep Bitcoin Case In Nova Scotia

In a court document filed this week, Ernst & Young (EY), the accounting giant acting as the exchange’s bankruptcy trustee, petitioned for a relocation of their case.

Currently taking place in Halifax, Nova Scotia, the saga should shift to Toronto, says EY, as the subjects of interest reside specifically in Ontario. 

“As the majority of the professionals are located in Ontario, there would be significant cost savings to transferring the proceedings to Ontario,” local news outlet the Financial Post quotes the company as saying. 

“There are very few remaining ties to Nova Scotia at this time.”

As Bitcoinist reported, QuadrigaCX abruptly imploded in December 2018 following the death of its CEO, Gerald Cotten.

A scandal then erupted, with users claiming they lost funds worth in excess of $190 million in both cryptocurrency and fiat currency. 

Questions over funds management by Cotten combined with suspicions the exchange was in trouble long before his death formed the basis of the ongoing legal proceedings. 

This week marks the final deadline those affected can submit claims for compensation. 

QuadrigaCX Users Await News Of Lost Money

In June, EY alleged Cotten had misappropriated funds for his own use. At the same time, the accountant said it could not locate the full tranche of missing Bitcoin, leading to anger from consumers. 

Further controversy centers on assets which Cotten allegedly purchased with company funds. Some of these have been sold in cooperation with the CEO’s widow, Jennifer Robertson, EY says.

According to the Financial Post citing a report, “those assets include properties in Nova Scotia and British Columbia, a small aircraft, ‘luxury vehicles,’ a sailboat, investments, cash and gold and silver coins.”

The debacle is not the only one meanwhile facing the Canadian Bitcoin scene. Last month, it emerged that US regulators were investigating social messaging app Kik over its 2017 initial coin offering (ICO).

As per allegations from Securities and Exchange Commission (SEC), Kik flouted the law by selling tokens as unregistered securities.

The ensuing court proceedings have dropped multiple bombshells due to the minute details supplied by both sides. 

Separately, fellow US organization the Commodity Futures Trading Commission (CFTC) is eyeing derivatives giant BitMEX. Despite not being operation in the US, the regulator claims the company failed to uphold a ban on US residents using its services.

The results of the investigation are pending, while news of its existence in late July sparked a mass funds exodus.

What do you think about the QuadrigaCX investigation? Let us know in the comments below!


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Analyst Bullish After Looking At Bitcoin Trading Order Books

Bitcoin’s recent price performance has provided little inspiration lately. An ongoing range-bound bounce between the high $9k and mid-$10k price levels has not given any clear direction of future movements. Some analysts expect a breakdown to a new lower low while others remain bullish.


Bitcoin Order Book Looks Bullish

From its Monday high which touched $10,600, BTC has been on the back foot as the week as progressed. The slow slip down to today’s prices of around $10,150 has led many to predict a further fall back into four figures again. For the past day or so, bitcoin price has been oscillating between $10,200 and $10,000 in an ever-tightening channel according to Tradingview.com.

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BTC price 1-hour chart – Tradingview.com

A pennant appears to have formed on this hourly time frame which is likely to lead to a breakout. Crypto analyst and trader Jacob Canfield is bullish in the short term, predicting an upside breakout within the next few hours. This extrapolation has been derived from looking at the order book which he claims is stacked to the upside.

“#Bitcoin trading has been like watching paint dry.
Paint drying bitcoin price action should probably be ending in about 4 hours or so.
I expect a resolution of this to come soon.
I’m personally leaning to the bullish side with the way the order books are stacked.”

The short time-framed pennant is likely to reach its conclusion later today or early tomorrow. Over the past week, the lows have been higher which could be another sign of a bullish movement though not all are convinced.

Other traders are a little more indecisive on the next move but all are in agreement that something is about to happen soon. Price action trader ‘TheCryptoCactus’ pointed out;

“There is no reason that a move either way should surprise you and you should have had plenty of time to prepare for both scenarios. Chart looks daily bullish but I’m expecting wick down to trap shorts.”

While ‘WelsonTrader’, who has also identified the wedge formation, has gone for the bearish option predicting a slide to a new lower low back in the $8k zone before any sign of a recovery.

“When #Bitcoin inevitably breaks down from the wedge we’re in, I’m expecting $BTC to drop over 20%+ from the current price, and a total of 40%~”

Either way, a larger move is likely before the week is out but it remains to be seen whether bitcoin will stay within its trading range or drop to a new low confirming the correction is still in play.

Will BTC price drop to $8k before reclaiming $11k? Add your predictions in the comments below.


Images via Bitcoinist Image Library, BTC/USD charts by TradingView, Twitter: @JacobCanfield, @WelsonTrader

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Why Binance Crypto Lending Could Be a Bad Idea

Not a week goes by without the world’s most dominant crypto exchange launching a new service or incentive. This week has been no different with the announcement of a controversial crypto lending platform. Reaction has been mixed and not all think it is the best thing for the crypto ecosystem.


In its latest move to cement a growing monopoly in the crypto services industry, Binance announced a lending platform which will launch on August 29. The service will allow users to lend out their holdings for fixed periods of time, initially 14 days, and gain a passive income from the interest. It also added that there will be annualized interest rates for certain crypto assets – with its own native token, BNB, unsurprisingly offering the highest interest rate.

Offering Fixed Interest Rates is Unwise

danger bitcoin price

The crypto community has already reacted to the latest attempt from CZ et al to dominate the industry by hovering up as many customers as it can. Offering fixed interest rates is not so commonplace in the financial industry and could cause problems down the road, especially when one of the proposed interest payment options is in Tether (USDT).

Research director Larry Cermak tweeted exactly that, stating that offering guaranteed rates of return is never a good idea. There were further comparisons of the proposed platform to the Bitconnect lending scam which folded in January 2018. Some of the responses to the announcement were quite vociferous.

“I did not know that @cz_binance is so desperate to try to make us keep his coin … once binance is out from us #BNB will crash so hard that ppl will start starving and they will also ruin his family i think is time to create a blog about all this ponzy scams!”

While it is highly unlikely that Binance is in fact a scam, the new lending scheme does appear to be just another attempt by the company to get people to hodl Binance Coin.

Forget About Basic Crypto Security

Another aspect not overlooked by astute industry observers is the encouragement to keep funds locked up on a centralized exchange that has already suffered a hack this year. Granted, Binance has its SAFU for insurance against such things, but in reality it is just one big digital bank holding all of the keys. And as the old crypto adage goes, ‘Not your keys, not your coins’.

Binance also has ambitions to be the provider of the world’s stablecoins, all built on its own blockchain and protocol of course, to take on Facebook’s Libra. The company seems to have no inhibitions at the moment and is on track to becoming the totally dominant ‘Google of the crypto world’.

In order for cryptocurrencies to fulfill their intended destinies as decentralized money, they need to be released from controlling elements such as centralized exchanges, companies, tokens and lending schemes. Binance’s lending scheme goes completely against the basic rules of crypto security and adds another element of third-party control over user’s funds.

Is crypto lending bad for the industry? Add your thoughts below.


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BitMEX Owns 0.15% Of Bitcoin Supply As Insurance Fund hits $324M

Cryptocurrency derivatives giant BitMEX now controls 0.15% of all the bitcoins in circulation, new data from the company reveals. 


BitMEX Expands Fund By 50% Since January

Compiled by industry media outlet The Block, a chart of BitMEX’s Insurance Fund shows its stock has reached 31,300 BTC as of August 25.

That figure is the largest on record for the fund, which BitMEX uses to reimburse winning traders on behalf of those who do not have funds to cover losses.

The Fund has become well known due to its rapid increase in size since 2018 in particular. Compared to January 1 this year, its balance has increased by over 50%. 

Twelve months ago, the Fund held just 10,000 BTC, at the time valued at $77.5 million. 

As BitMEX explains in a dedicated blog post, the Fund acts as a safeguard for users who incorrectly guess the trajectory of the market and avoid accruing negative balances on their account. 

The Fund has held a positive balance since March In 2017 when a sudden market crash caused by US regulators’ rejection of the first Bitcoin exchange-traded fund (ETF) saw its entire reserves used up. 

Since then, the company has mushroomed into one of the most formidable exchange platforms in the cryptocurrency world. As Bitcoin grew in 2019, so too did BitMEX’s notoriety for liquidating huge numbers of traders in times of volatility. 

As Bitcoinist reported, its success has attracted the attention of US regulators, who in July revealed they were investigating reports of US traders circumventing security protocols to trade on the platform secretly. 

The impact became obvious for BitMEX, which registered huge capital outflows after the news broke. 

Arthur Hayes, the company’s traditionally vocal CEO, then announced he was retiring until September, allegedly choosing to live in the wilderness and shunning media appearances.

Margin Trading Implicated In Bitcoin Price Spikes

This week, meanwhile, a fresh theory emerged supporting the idea that margin trading like that offered by BitMEX directly induces volatility on Bitcoin markets.

Recent weeks have seen sudden moves of up to $1000 in each direction for Bitcoin, in between periods of almost zero price movement. 

Uploading a combined volume chart, the Twitter trader known as CryptoSqueeze directly attributed the phenomenon to actors like BitMEX.

“The effect of cascading margin calls and stop-loss triggers causing $300 slippage between XBT perpetual swaps on Bitmex vs Spot BTC,” the account noted.

“One word for overleveraged traders: Brutal.”


What do you think about BitMEX’s insurance fund and Bitcoin price impact? Let us know in the comments below!


Images via Shutterstock, Twitter: @cryptoSqueeze

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Early Bitcoin Contributor Projected $10 Million BTC Price 10 Years Ago

Just a week after the bitcoin genesis block in January 2009, computer scientist Hal Finney published a price prediction model of $10,000,000 per coin based on it becoming the world’s dominant payments system.


Ten Million Dollars Per Bitcoin

The assumption was based on the premise that bitcoin would eventually become the world’s dominant currency. He concluded that it should be equated to all of the wealth in the world if it became the top payments system. The excerpt from a paper on the release of bitcoin v0.1 a decade ago has made it onto crypto twitter.

“You think bitcoin twitter is bullish? Hal Finney, was calculating a bitcoin price of $10,000,000 per coin just ONE WEEK after the the genesis block on January 3rd, 2009. Absolute legend.”

He also noted that bitcoin’s acceptance rate would be slow at first. This is still clearly evident a decade later as very few people on the planet hold more than one of them. Finney noted:

“One immediate problem with any new currency is how to value it. Even ignoring the practical problem that virtually no one will accept it at first, there is still a difficulty in coming up with a reasonable argument in favor of a non-zero value for the coins.”

He went on to work out total worldwide household wealth at the time which was estimated to be around $100-$300 trillion. With 20 million coins only, that puts each one at around $10 million. Interestingly Finney did not use the 21 million BTC that is the actual limit, presumably accounting for Satoshi’s stash that would remain locked up forever.

It appears that their ‘little experiment’ has been a wild success. Despite just a fraction of the world’s population holding and using bitcoin, its price has skyrocketed over the past few years and it has become the disruptive force that it was intended to be. Governments and central banks are rattled which means that bitcoin has the potential to become a dominant payments system, though ten million bucks per coin is probably a little farfetched.

Finney, who said computers can be used as tools to liberate and protect people rather than to control them, was a noted cryptographic activist and cypherpunk. He created the first reusable proof of work system before bitcoin in 2004. In January 2009 he was the first recipient of a bitcoin transaction and he sadly passed away in late August 2014.

How high can Bitcoin price possibly go? Add your thoughts below.


Images via Bitcoinist Image Library, Twitter: @DrBitcoinMD

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Bitmain to Increase Hashrate By 50% With 600,000 New Mining Chips

Showing renewed optimism, Bitmain is increasing its investments in the crypto mining industry. Now, Bitmain is reportedly buying 600,000 new crypto mining chips. As a result of this new investment, the company expects to make over $1 billion in profits.


Bitmain to Increase its Capacity By 50% Hash rate

The battle to produce fast cryptocurrency mining gear is heating up. In this context, Chinese Bitcoin mining giant, Bitmain Technologies Ltd, is placing orders for new mining machines with high hash rate capacity.

In this connection, and according to a Chinese news outlet, “Recently, a supply chain person close to TSMC broke the news.” This source reported that Bitmain has recently placed new orders for 600,000 mining chips.

As Bitcoinist reported earlier, Taiwan Semiconductor Manufacturing Company (TSMC) is Bitmain’s chip supplying contractor. TSMC ranks as one of the most profitable chipmakers in the world.

Moreover, according to the same source, some of these chips include the latest 7nm model, with a single power of 50 Tera hashes per second. The recent Bitmain order also comprises 16nm model chips.

Therefore, within a few months, observers believe that Bitmain’s total network computing power could skyrocket by about 50%.

Company Hopes to Reach a Valuation of $12 Billion

Despite losses in the first quarter of 2019, which reached approximately $625 million, Bitmain remains optimistic about the strengthening of the mining industry. In effect, with this new investment, the company expects to hit a valuation of $12 billion.

Last February, Bitmain announced its next-generation 7nm ASIC chip, BM1397, which boasts improvements in performance and energy efficiency. These chips are designed to mine cryptocurrencies using the SHA256 algorithm for proof-of-work purposes, such as Bitcoin and Bitcoin Cash.

Moreover, the Antminer models come with enhanced hash rate capacity. Last April, the chipmaker announced the specifications for the latest 7nm Antminer 17 series. For example, the Antminer 17 Pro comes in two variants, a 53 TH/s and a 50 TH/s capacity models.

In addition, according to Bloomberg sources, Bitmain is working with specialists to prepare for a U.S. share sale that could occur as soon as the second half of 2019.

What do you think about Bitmain’s new investments in crypto mining? Let us know in the comments below!
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Bitcoin Panic Unwarranted But Ethereum Still ‘Ugly’ Below $200

The week has ended with reclamation of five figure prices by bitcoin. Some of the altcoins have been marginally dragged up with it, but many including Ethereum are still looking extremely weak.


Bitcoin Back Over $10k

The past five instances bitcoin has dropped into four figures have been brief encounters. There is clearly a mass of buyers waiting in the upper $9,000 price zone to keep the digital asset from falling further. Yesterday, analysts were leaning towards a bearish stance predicting further declines, even into the $8k region.

The lowest price tapped by BTC was $9,750 according to Tradingview.com. During today’s Asian trading session it returned to $10,250 and has started to consolidate around there, currently trading at 00.

bitcoin

BTC prices 1 hour chart – Tradingview.com

The market chop has continued and there is no sign of clear direction at the moment which makes the fear and panic totally superfluous. Yesterday the bitcoin fear and greed index dropped to its lowest level for over a year hitting 5, today it is back up to 33. Crypto warlord John McAfee called for a halt to this unnecessary panic:

Bitcoin jitters? Just stop it! Short term fluctuations are meaningless. Bitcoin is still up almost 300% from 6 month’s ago. Every time there’s a dip I have to calm people in replies, DMs, etc. GET A GRIP! You know in your heart Bitcoin cannot lose. Relax!

Ethereum Not Out Of The Woods

The same cannot be said for Ethereum however, and there appears to be greater reason to be concerned for anyone holding large amounts of it at the moment. ETH has made a 3.5% gain on the day to recover to $193 but it is still looking extremely weak. Some may see this as a greater risk/reward opportunity but popular crypto analyst Josh Rager remains bearish.

$ETH will surely increase in value but has been outperformed by $BTC ever since the ICO boom busted. I wouldn’t compare ’19 ETH to pre-euphoria ATH BTC. If BTC breaks down to $8ks, ETH will follow with a break under $150. ETH chart is ugly. Not the time to accumulate ETH IMO.

Ethereum market share has dropped to just below 8% which is its lowest level for over two years. All of the altcoins have been battered though so ETH is not alone in its suffering. The network is still healthy and new improvements are constantly being made. The upcoming two phase Istanbul hard fork will bring in a number enhancements on the road to ETH 2.0 so it is only a matter of time before the world’s second largest crypto asset starts to recover.

Will Ethereum make a recovery this year? Add your thoughts below.


Images via Shutterstock, Twitter @Josh_Rager, @officialmcafee, BTC/USD chart by Tradingview

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‘Foolish’: Crypto Fund CEO Warns Against Bitcoin Maximalism Narrative

Cryptocurrency politics is focusing on Bitcoin at the expense of altcoins, but a flip could occur any time, an industry investor has warned.


Simpson: Don’t Pin All Your Hopes on Bitcoin

That was the conclusion from Arianna Simpson, founder and CEO of crypto and blockchain-focused investment fund Autonomous Partners.

In a discussion on social media August 22, Simpson said sentiment favored Bitcoin over altcoins now, but that status quo has changed multiple times and could do so again.

“The general crypto narrative seems to be drifting back to bitcoin maximalism,” she summarized.

…BTC has clearly outperformed most other cryptoassets by a wide margin YTD. Expecting that this will always be the case (or that holding only BTC is the right move) strikes me as foolish.

The comments come at a timely juncture in cryptocurrency’s history. As Bitcoinist reported, Bitcoin’s returns have vastly outperformed major altcoins in 2019. Unlike the previous bull run in 2017, alts have so far failed to rally, losing more and more value in BTC terms. 

Top five tokens such as Ethereum (ETH) and Ripple (XRP) continue to trade around 80% below their all-time highs. Against BTC, both are lower than ever.

Well-known traders have thus gone on record in recent weeks to announce the death of the altcoin market, possibly for good. Among them was Peter Brandt, who likened the lifelessness of alt markets to the dot com boom of the early 2000s.

Ethereum ‘Better Performing Investment’

Simpson’s opposing argument is thus even more conspicuous.

“Those who have been in this space for many years should recall that this is by no means the first time the pendulum has swung back and forth — in 2017 bitcoin was old news and it was all the shiny new (Layer 1 technologies) that were going to take over the world,” she continued.

“In reality, ETH was a better performing investment for many (even when considering the major correction of 2018!) than BTC was. So BTC remains king, but discounting everything else is silly.”

Her remarks will be music to the ears of long-suffering investors whose portfolios have failed to react to this year’s Bitcoin bull market. 

Pressure also continues to come from Bitcoin advocates, with developer Udi Wertheimer this week publicly chastising Ethereum participants in particular for the losses following 2017’s ICO craze. 

“It’s time for the ETH gang to wake up, smell the ashes, and take some responsibility,” he tweeted. 

“Their 2017 ‘blockchain everything’ narrative failed miserably and cost retail investors BILLIONS, dumped into scams supported by ETH naiveté.”

What do you think about the Bitcoin vs. altcoins debate? Let us know in the comments below!


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