Srp 20

Bitcoin Network Grows With $2 Billion BTC Moving Daily

There are several measurements of the health of the bitcoin network. Hash rate is probably the first that comes to mind but daily volume is another indicator of how successful the system has been.


Govts and Banks Cannot Stop Bitcoin

Bitcoin was spawned by a movement dedicated to the freedom of financial oppression by central banks and governments. Personal spending power is governed by bankers and politicians, and in a world where state fear is increasing along with terrorism, capital controls will become more commonplace.

People are being restricted on how and where they can move their own money. The bad few have changed everything for the good many, and ever invasive new money laundering and monitoring regulations affect everyone.

Very few countries in the world allow their citizens to move their own money at free will and most will actively monitor bank accounts whether suspicious or not. The state controls the finances, not the individual.

This is the problem and the answer has become clear in recent years. Bitcoin provides a decentralized form of currency that can be moved peer-to-peer without government intervention. At the moment it is early days in the industry and many are still reliant on centralized crypto exchanges that can suppress that freedom if necessary.

The bitcoin network has grown to such an extent that an average $2 billion worth is being transferred every day. Industry observer ‘Rhythm Trader’ has acknowledged the true power of bitcoin.

$2,000,000,000 worth of bitcoin are moved, on average, every single day using the network. No government, bank or third party had to verify these transactions, nor could they have stopped any of them if they wanted to. The true power of bitcoin.

The power that this network is capable of is just one aspect of it. Yes, bitcoin can be truly disruptive and this is what governments fear. The escalating trade war between the US and China is a prime example as both governments want to devalue their own currencies to outdo their opponents.

Bitcoin cannot be devalued unless it is perceived to be worth less by those that trade and hold it. The opposite is likely to happen however as global economic woes deepen. Scarcity is another aspect of bitcoin which was coded into it from the genesis block. Economist Misir Mahmudov took this philosophical view:

Time = currency of life
The key property of time is scarcity
The only thing that shares this quality is Bitcoin

Food for thought.

Will bitcoin continue to grow as world economies crumble? Add your thoughts below


Images via Shutterstock, Twitter @misir_mahmudov, @Rhythmtrader

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Srp 19

P2P Bitcoin And Dash Transactions Soar In Venezuela

Venezuela’s inflation rate topped 130,000% in 2018 as peer-to-peer Bitcoin and Dash transactions reached new all-time highs month after month. 


Bitcoin Thrives in Broken Economies

For the past few years, the Venezuelan economy has been rocked by political and economic instability that has led to shortages of food and medicine, nationwide blackouts, riots and unstoppable hyperinflation that rivals that of the Zimbabwe dollar in the 1990s. 

In fact, Venezuela had the highest inflation rate of 2018 and at its peak, it was 130,060%. Surprisingly, in May 2019 Venezuela’s central bank publicly published economic data for the first time since 2015 and the data shows that Venezuela’s inflation rate in 2016 was 274%, 863% in 2017 and 130,060% in 2018. 

Hyperinflation in Venezuela is so bad that most citizens have to spend all their money immediately because if they hold off for a few days the currency will continue to lose value against the rising price of basic daily staples. 

The majority of Venezuelans do not trust the bolivar, and in the past those who were unable to spend their income on the spot sought to purchase gold or the US dollar as a hedge against inflation.

Both options come with risks as organized crime and price gouges are always prepared to take advantage of those holding physical currency. 

Crypto Finds a Real World Use Case in Latin America

Fortunately, cryptocurrencies are easier to ‘hold’ and have become a safer option embraced by a growing number of Venezuelans. Both Dash and Bitcoin have become popular mediums of exchange and store of value currencies. 

A recent study from the Ledger Journal investigated the role Bitcoin played in countries experiencing economic uncertainty and contributing analyst Jackie Johnson found that: 

In countries where residents are under pressure from economic mismanagement, Bitcoin trading becomes critical. Two factors drive Bitcoin trading: one, there is pressure to purchase Bitcoin using local currency before it loses even more value; and two, there is a need to redeem for the local currency either past purchases or purchases made outside the country by friends/family, enabling residents to cope with rising prices. This results in an increase in Bitcoin trading in the local currency.

Johnson’s findings are supported by data from LocalBitcoins which shows explosive growth in the number of peer-to-peer Bitcoin transactions and all throughout 2018 and 2019 Venezuela and Argentina have continuously notched new all-time highs for peer-to-peer Bitcoin transactions. 

Despite the growth in Bitcoin transactions Venezuelan economist Danial Arraez says that mass adoption is still a distant target. Arraez said: 

In the country there is still not enough adoption of bitcoin, because with few exceptions, cryptocurrencies, including bitcoin and altcoins, are, in most cases, a proxy currency (substitute) to facilitate fiat exchange, with the USD-VES pair being the most traded, but without being able to set aside the VES-CLP (bolivars in Chilean pesos), VES-COP (in Colombian pesos), VES-ARS (in Argentine pesos), VES-BRL (in Brazilian real) and VES-PEN (in Peruvian sol) pairs.

Interestingly, a Rhythm, a popular crypto analyst recently tweeted that if a person held $1 million worth of Venezuelan bolivars since 2013, this amount would now be worth less than $0.37. 

Bitcoin might not have reached the level of mass adoption in Latin America, but if the situation doesn’t change it appears that will only be a matter of time before it does. 

Do you think Bitcoin mass adoption will first occur in Latin America or a different region? Share your thoughts in the comments below! 


Images from Bitcoinist Image Library, Twitter: @RhythmTrader, Shutterstock

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Srp 17

3 Reasons Why Bitcoin Price Hasn’t Returned to $13,000

Despite the promises of crypto analysts and institutions like Goldman Sachs, Bitcoin price continues to hover around low 5 figures. What’s going on?


After struggling to hold above the $11,000 point earlier this week, Bitcoin price, at last, succumbed to selling pressure and dropped below $10,000 for the second time in three weeks. Prior to the drop, numerous analysts predicted that $10k would serve as a reliable bounce point as the price represents important psychological support.

Clearly, this was not the case and even after making a strong upside move from $9,500 to $10,450, Bitcoin still struggles to stay above $10,100. 

Let’s take a look at what is keeping the king of cryptocurrencies down. 

Dovey Wan says Ponzi Scheme is Crashing the Crypto Market

On July 14 Primitive Crypto founding partner Dovey Wan attributed the sharp sector-wide correction to bulk Bitcoin sells from PlusToken, a Chinese Ponzi scheme. The scheme managed to accrue 200,000 Bitcoin and more than 800,000 Ethereum from naive investors in China.

According to Wan, not every member of the PlusToken team has been arrested yet and data from cybersecurity auditing firm Peckshield shows that recently more than 1,000 Bitcoin was transferred to Huobi and Bittrex from PlusToken accounts. 

Wan is convinced that the scammers are covertly shifting their funds “into small batches into exchanges, like 50 to 100 Bitcoin per batch.”  Wan also claimed that she recently stumbled across a chat where Chinese traders were saying that someone had been dumping 100 BTC non-stop on Binance.

If true, it is entirely possible that large back to back sales of Bitcoin could affect spot rate across exchanges but this sole event is probably not fully responsible for Bitcoin’s malaise

Mind the CME Gap 

The CME Bitcoin Futures gap is another popular topic amongst Bitcoin traders and many cite the existence of the gap as a reason why Bitcoin continues to drop below $10,000. A glance at a Bitcoin daily chart shows an $870 gap between $7,177 and $8,050.

The gap is simply the outcome of Bitcoin price moving over the weekend while the CME Futures are closed and the space denotes the difference between the previous close and the new opening price once the market reopens.

The gap is a cause for concern as traders set the price as a target that must be filled at some point, typically when an asset corrects and retraces to supports in the vicinity of the gap.

Many traders believe that Bitcoin must revisit this $7,100 to $8,500 range to truly correct before resuming its strong bullish trend to a new all-time 2019 high. 

Bitcoin Accumulation Before Surge on Recession Fears 

An assortment of crypto analysts have posted charts suggesting that Bitcoin has entered a lengthy consolidation phase and will continue to be pinned between $9,000 to $14,000 until more excitement and momentum build up over the 2020 halving event. 

Earlier this week as the stock market took a horrific tumble over weakening macroeconomic fundamentals, fears of a recession sprang up as an economist focused on an inverted yield curve on treasury bonds.

This week the slope on US Treasury bonds became inverted and for economists and market analysts, this is typically an indicator that a recession could be on the way.

At the same time, Gold has continued to rise in price and many investors believe that Bitcoin is a similar store of value and hedge against volatility.

If the US and other countries truly are on the verge of a recession, one would increase inflow into Bitcoin and a significant increase in its market cap and value.

At the time of writing, Bitcoin is steadily dropping back towards $10,000 and $9,800 is the most immediate support level. 

Do you think Bitcoin price will dip below $10,000 over the weekend? Share your thoughts in the comments below! 


Images from Bitcoinist Image Library, Twitter: @DoveyWan, BTC/USD charts by TradingView

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Srp 17

Mid-Week Bitcoin Dump Not Caused By Chinese Ponzi: Researcher

Wednesday’s Bitcoin flash crash was not due to a sell-off from Chinese ponzi scam, PlusToken, a researcher has claimed. Sid Shekhar, the co-founder of London-based, TokenAnalyst, said the disputed coins were moved earlier on the blockchain.


We Can All Relax, It’s A False Alarm

As Bitcoinist reported on Thursday, cryptocurrency influencer, Dovey Wan, brought the $3 billion scam to the attention of the international crypto-community on Twitter. Analysis from Peckshield suggested that about 1000BTC from PlusToken had flowed into Huobi and Bittrex since July.

The reporting of this just after the crash which saw bitcoin price dip back into four figures led many to correlate the two.

However, the TokenAnalyst review shows that very few PlusToken-associated addresses held any significant number of bitcoin and moved them recently. According to Shekhar:

It doesn’t look like any of these addresses are exchange owned. So that was enlightening. We’ll keep an eye on this to see if they do move the 100s of millions into exchanges at some point.

But Can We Really?

The reason that very few Bitcoin addresses associated with the scam contained much in the way of coins, was because they had already moved. TokenAnalyst did find thousands of bitcoin on the ledger belonging to the PlusToken team. But much of this money filtered into Bitcoin mixing services about a month ago.

This correlates with Peckshield’s data that the coins started moving nearly-July. Its findings were only that about 1000BTC flowed into exchanges. The rest, according to the new research by TokenAnalyst, flowed into mixers.

Something caused the market to crash on Wednesday. Wan tweeted of unconfirmed reports by Chinese traders that someone was continually dumping 100BTC batches onto Binance. It is not inconceivable that the freshly mixed coins from the PlusToken scam were being pushed onto exchanges for conversion into fiat.

But of course, we always want a nice simple explanation for any market movement. Something that we can point to, and sagely say… “ah, yes. this was the reason.” because there isn’t a lot of comfort in “just because…”

What’s your theory for the recent bitcoin price dump? Let us know below! 


Image via Bitcoinist Image Library

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Srp 16

Coinbase Custody Acquires Xapo’s Institutional Business

Coinbase Custody today announced that it has acquired Xapo’s institutional business, making it the largest crypto-custodian in the world. The acquisition brings Assets Under Custody (AUC) to over $7 billion, servicing over 120 clients in 14 countries.


Innovation In Cryptocurrency Custody

Xapo is a long-respected name in the world of cryptocurrency custody solutions. It has led the industry in developing security techniques to meet the rigours of institutional clients.

In 2017 it hit the headlines for storing customers’ bitcoin in a fortified ex-military bunker in the Swiss Alps. By May 2018 it was holding around $10 billion in bitcoin for customers across five continents.

CEO, Wences Casares, has long been a champion of Bitcoin, and Xapo’s mission is to make Bitcoin secure and accessible. Casares believes that any investor who doesn’t have at least a one percent position in Bitcoin is being irresponsible.

Coinbase’s Move Into Crypto-Custody

Coinbase Custody started trading a year ago, with a remit to provide secure cryptocurrency storage for institutional investors. According to marketing it combined the ‘battle tested’ cold-storage solutions employed by the Coinbase exchange, with an institutional-grade broker/dealer.

It quickly added a raft of additional crypto-assets to its original four of BTC, ETH, BCH, and LTC. However, there were questions as to whether institutions would immediately trust the offering. Certainly, while the bear market was in full swing, growth in AUC was slow.

It wasn’t until the bulls really started taking control again in May this year, that AUC crossed the $1 billion mark. But since then, growth has been steadier, and with this latest acquisition of Xapo’s institutional business, Coinbase Custody are claiming over $7 billion in held assets.

The Final Hurdle To Institutional Adoption?

There are many who think that crypto-custody is the final hurdle to institutional adoption of bitcoin and cryptocurrency. This area is certainly where a lot of resources are currently being deployed.

Bakkt is still waiting on approval from the New York authorities for its custody solution, before it can start offering its physically backed bitcoin futures products. Fidelity’s move into crypto-custodianship was supposed to remove one of the final barriers to institutional adoption back in March.

Even the South Koreans are getting in on the act, although technically, the legality of cryptocurrency in the country is still in question.

We are still waiting for the expected flood of institutional investors, but steps are certainly being made. Whether their eventual arrival will be a positive thing is another question entirely.

What do you make of this latest Coinbase acquisition? Add your thoughts below!


Images via Shutterstock

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Srp 15

Chinese Ponzi Scam Floods Exchanges And Hits Bitcoin Price

According to Primitive founder, Dovey Wan, the latest Bitcoin sell-off is down to a major Chinese ponzi scheme. Little known outside of China, PlusToken scammed over 200k BTC and 800k ETH, which are now hitting exchanges in batches.


Not Another Bitcoin Ponzi Scam

Started mid-2018, PlusToken was a classic Ponzi scheme offering high-yield investment return. There were four layers of membership structure, offering increasing dividends. By early 2019, it had a claimed 10 million members.

The core team were apprehended by police two months ago and will be in jail for decades, according to Wan. However, the reported $3 billion of cryptocurrency they scammed out of members has not been recovered.

Many of the Bitcoin wallet addresses used are believed to be multi-sig, leading to speculation that some key holders remain at large.

The Bitcoin Sell-Off Began In Early July

Security audit firm, Peckshield, has been monitoring money-flow from the PlusToken wallets, and found that since early-july about 1000 BTC has gone into Huobi and Bittrex exchanges. Funds have been moving in small batches of 50-100 bitcoins per batch.

Unconfirmed reports from Chinese traders suggest that someone has also been consistently dumping 100BTC batches onto Binance. This is also believed to be related to PlusToken.

Not News Until Now

One of the big questions around all this is ‘Why are we only hearing about it now?’.

Again, according to Wan, there are three main reasons that exchanges have not paid attention. The main one being that the scam has not been known outside of China, with the possible exception of South Korea.

Added to this, Chinese exchanges didn’t act because the case has officially been ‘closed’ by Chinese police. Finally, police didn’t work with the exchanges, because cryptocurrency exchanges are officially banned in China.

So What Should We Do?

Both Peckshield and Chainalysis are monitoring the coins involved in the scam, but exchanges must also get involved. There is potentially little that can be done about tokens which have already been cashed out. However, exchanges are able to freeze incoming tokens relating to known scams.

The important thing is to ensure that the relevant parties are aware of the situation. Because, 200,000 BTC flooding the market is bad news for everyone. Unless you missed out on buying sub-$10k Bitcoin last time?

Do you think this scam is the cause of the latest crypto market flash crash? Add your thoughts below.


Images via Shutterstock

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Srp 13

Analyst Looks to Blockchain Data to Explain Why Bitcoin is Still ‘Bullish’

Market analyst Jesus Rodriguez believes that investors should consider blockchain datasets when devising their Bitcoin investment plans.


Blockchain data helps with crypto investing

On August 12, Invector Labs chief scientist, Jesus Rodriguez, took to Hackernoon and made his case as to why he believes Bitcoin remains bullish despite correcting from $13,800. At the time of writing, Bitcoin continues to struggle to overcome $12,000 and technical analysis suggest the digital asset could drop to $10,800 – $10,600 over the short-term. 

According to Rodriguez, the majority of speculation surrounding Bitcoin price has been focused on macroeconomic factors such as the US / China trade-war, global monetary easing and central bank policies that are leading to the devaluation of fiat currencies. 

Last week, President Trump introduced additional tariffs on Chinese goods and the Dow Industrial Average reacted by dropping nearly 800 points. At the same time, volatility has increased across major world indices and China placed the cherry on top of this disastrous sundae by devaluing their currency. 

Meanwhile, Gold and Bitcoin increased in value as investors viewed the assets as a store-of-value and hedge against volatility. 

What does blockchain say about the Bitcoin rally?

While these are incredibly relevant factors that are clearly impacting Bitcoin price, Rodriguez suggests that investors take a deeper look beyond the macroeconomic perspective and analyze blockchain data. 

Looking closer at blockchain data could uncover some interesting details and patterns that shed light on the recent Bitcoin rally. 

According to IntoTheBlock’s blockchain-based data sets, nearly 90% of Bitcoin investors are “in the money”. There are also nearly one million addresses with positions acquired near Bitcoin’s current price and Rodriguez argues that these investors will help “influence the trading activity in the next few days.”

IntoTheBlock’s Break-Even analysis primarily focuses on realized gains and the indicator shows that Bitcoin’s next strong support/resistance is near $10,400. Rodriguez also pointed out that as BTC price rose, so did the number of active addresses and this is a sign of growing strength within the Bitcoin network. 

Rodriguez also attempted to poke a hole in the default explanation that China’s yuan devaluation led to Asian investors taking shelter in Bitcoin. 

Macro is micro when it comes to analyzing Bitcoin price action

Even more interesting is the fact that the majority of ‘new’ Bitcoin investors accumulated the digital asset before the current price rally began.

Essentially Rodriguez is saying that the current macroeconomic factors are reflective of long-term, structural challenges that have long existed in various economics and are just now showing themselves. 

This does not mean that macroeconomic challenges are directly responsible for the majority of BTC price action. In fact, macro-economic factors are short-term price indicators for Bitcoin price action and should not be fully relied upon to predict price movement. 

Roderiguez advises that investors also incorporate analysis of blockchain data like on-chain activity, network hash-rate, volume of large institutional and retail transaction, new address origination and the fluctuations in Bitcoin address openings, closing and transfers at various price points. 

By doing this, investors attain a more comprehensive view of the whole market and are likely to make wiser investment decisions. 

Do you think the current Bitcoin rally is primarily driven by macroeconomic factors? Share your thoughts in the comments below! 


Images from Shutterstock

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Srp 12

Bitcoin Closes Highest Weekly Candle in Over a Year

The weekend has been largely bearish for bitcoin price as it dumped 6% after a long period of consolidation. The move dropped BTC back to support, keeping it range-bound, but the weekly candle close has been the best since early 2018.


Bitcoin Weekly Close Over $11.5k

Markets have remained flat following bitcoin’s $600 dump on Saturday. The plunge took BTC back down to $11,200 before it started trading sideways. Sunday saw another dump as the digital asset dropped down to $11,090 but bounced back from there pretty quickly.

Since then, BTC returned to $11,590 but has been falling back during the Asian trading session following a death cross on the hourly chart. At the time of writing bitcoin was trading just below support at 00.

bitcoin

BTC prices 1-hour chart – Tradingview.com

Bitcoin gains since its big pump last Monday have been eroded as the week has progressed. However, this did not prevent a bullish weekly candle closing just above $11,500 according to Tradingview. Trader and analyst Josh Rager pointed out that a close above $11,474 would result in the highest weekly close in 2019.

Currently under weekly resistance.
Short term support flipped back to resistance on lower time frames.
Close above $11,474 would be highest weekly close in 2019

This is marginally higher than the weekly close in early July but there has not been one this high since early 2018. The daily chart still paints a picture of consolidation as range-bound trading extends into another week.

Despite the bullish weekly close, there could be further downsides in a larger correction. According to analyst ‘Financial Survivalism’ bitcoin could fall below $9k in the next week or two.

Originally I was targeting $8,000 if $BTC brokedown the 2 week bull trendline.
After further analysis I am adjusting that to $8,775

No Reprieve For Altcoins

Bitcoin dominance is still hovering around 70% so there is no reprieve for altcoins yet as most of them are still flat or in decline again. Ethereum has not done much since its dump over the weekend but remains above $200 for now. It is up marginally on the day, trading at $213 but further losses are likely if the longer-term downtrend continues.

Bitcoin Cash has made the biggest move in the top ten with a 5% gain to reach $335. Chainlink and Cosmos are also climbing by around 4%, but these are the only two making a move. The rest are in decline as they have been for most of the past week with IOTA, NEM, and CRO getting hit the hardest.

Will bitcoin price resume its rally this week? Add your thoughts below.


Images via Shutterstock, Twitter @Josh_Rager @Sawcruhteez, Bitcoin trading charts by Tradingview

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Srp 10

McCormack Vs Wright – You Can’t Harm An Already Bad Reputation

Yesterday saw the release of ‘What Bitcoin Did’ podcaster, Peter McCormack’s legal defence against Craig Wright. Wright sued McCormack for libel over tweets suggesting that he wasn’t really Bitcoin’s creator, Satoshi Nakamoto. McCormack’s defence basically states that Wright’s suit is a cynical waste of the court’s time.


Craig Wright – Hoisted With His Own Petard

The legal notice to Wright’s lawyers is mired in legalese, but still manages to be quite an entertaining read. It states that the contention that Wright has or could suffer serious harm to his reputation is fanciful.

The allegation that he fraudulently claimed to be Satoshi Nakamoto, is purely the result of his own actions. In repeatedly publicly promising and conspicuously failing to provide proof to the contrary, he has built himself a negative reputation.

…within the bitcoin and cryptocurrency sector in particular, the allegation of lying is synonymous with your client and he has no reputation in that respect which can be damaged.

The (Impossibly) Reasonable Way Out Of This

The letter goes on to say that there is a way for Wright to get exactly what he says he has always wanted. McCormack will make a public statement withdrawing his allegations that Wright’s claim to be Satoshi is fraudulent. He will also walk away from the proceedings without any contribution to his legal costs so far incurred.

The kicker? The way for Wright to achieve this is to voluntarily provide the proof, within 21 days, that he and Calvin Ayre say they have. They have said that they intend to provide this proof during the proceedings anyway, and providing them voluntarily now would “avoid the wholly unnecessary costs and delay of litigation.”

However, Ayre tweeted in April that they were “just waiting for a volunteer to bankrupt themselves trying to prove a negative and then letting Craig show the proof.”

McCormack’s lawyer points out that:

It would obviously be highly unattractive for a claimant to seek to pursue a libel claim merely in order to ‘bankrupt’ the defendant… Moreover, that cynical posturing underscores the futility of pursuing the claim when the claimant claims he can readily dispose of the issue of truth.

Not Your Keys, You’re Not Satoshi

Failing Wright’s agreement to voluntarily provide the satisfactory and independently verifiable proof that he is Satoshi, McCormack will apply for the case to be struck out.

There were also questions raised as to what connections Wright had to the ‘plaintiff friendly’ jurisdiction of the UK. In his Particulars of Claim he says that he is ‘based’ and ‘domiciled’ in England, but gives a different address to the one he has provided in his other ongoing legal battle in Florida.

This is the line of defence used by Roger Ver, who had Wright’s defamation case against him struck down last week on these grounds.

Interestingly, McCormack only got into this legal argument after openly inviting Wright to sue him. Wright had previously been targeting community member Hodlonaut, known for starting the Lightning Network Torch. This caused many to react, including Binance CEO, CZ, who delisted Wright’s Bitcoin SV form the Binance exchange.

What do think of these latest developments? Let us know your thoughts in the comment section below!


Images via Shutterstock

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Srp 09

Blockstream Bitcoin Mining Services Aim To Enhance Decentralization

Blockstream yesterday announced a brace of new Bitcoin mining services, with an eye firmly on network decentralization. Blockstream Mining is a co-location and hosting service housed in two huge new data-centers, while Blockstream Pool is the world’s first mining pool to use the BetterHash protocol.


Enterprise-Class Bitcoin Mining Facility

The Blockstream Mining product is based around two massive data-centers in Quebec and the U.S. state of Georgia. Blockstream help with delivery logistics, installation, running, and maintenance of clients’ mining equipment. However, the clients control the devices remotely via a control panel giving real-time analytics.

The two data centers account for a combined 300 megawatts of electricity supply. If fully populated with the latest mining ASICs it could provide 7.5% of the total hash power of the Bitcoin network. The service is currently aimed at enterprise and institutional clients, but will in future open up to small businesses and individuals, further improving decentralization.

Blockstream started its mining operations in 2017, concerned that certain mining rig manufacturers were becoming a centralized force. This latest expansion of the service aims to counter this by providing a turnkey solution for co-location and hosting services.

Bitcoin Mining Is Better With BetterHash

Blockstream’s other prong in its quest for improved decentralization of Bitcoin mining is Blockstream Pool. This is claimed to be the world’s first Bitcoin mining pool which utilizes the BetterHash protocol.

The BetterHash protocol allows individual miners in the pool to determine which transactions to include into newly mined blocks. In the majority of mining pools, the pool operator controls which transactions get included. This can increase the risk of potential network attacks, for example, if the operator of a large pool decides to block certain transactions.

Handing this power back to the miners means that the Bitcoin network becomes more decentralized and censorship-resistant.

The Host With The Most

Some may question whether the Blockstream Mining service is promoting less decentralization rather than more. However, Blockstream CSO Samson Mow had this to say:

If anything, Blockstream Mining serves to decentralize the Bitcoin mining ecosystem… We’re self-mining with just a small portion of our available power, with the rest allocated to customers, and we have plans to make the hosting service available to smaller miners that otherwise would not be able to mine effectively.

Combined with the enhanced decentralization brought about through the BetterHash protocol, Blockstream certainly intends to do its bit for decentralization.

Outside of mining, Blockstream is also working hard to improve the Bitcoin network for everyone through its Liquid sidechain project.

Will Blockstream be successful in decentralizing Bitcoin mining? Let us know below! 


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