Bitcoin Halving: What You Need to Know - Investopedia
Bitcoin Halving: What You Need to Know - Investopedia
Ahead of Bitcoin's Halving, these two key metrics are ...
Bitcoin Has Halved—What Now? - Forbes
Bitcoin Value and Mining Difficulty Lets Talk Bitcoin
What Is the Bitcoin Halving and What Will It Do to the ...
The connection between the LTC price surge since mid november and the new Batch of Bitmain Miners.
I think its time that people understand a bit more, and post memes that explain nothing a bit less. There is too many newbies in crypto now who don't understand anything and just think Litecoin is great because its expensive. Take a look at these 3 things: Available Mining hardware The Litecoin mining difficulty The Litecoin price Available Mining Hardware Bitmain sold their last big batch of miners in early summer 2017, since then LTC Miners have been sold out. Suddenly mid november, LTC Miners were available again on Bitmain's Internet site. The Litecoin mining difficulty It takes a while for Bitmain to distribute all their miners, at the end of the summer it seems that the summer batch of miners has found their new owners. The Litecoin Difficulty stopped rising and was steady at a plateau. Roughly 4 ASIC miners were necessary to mine one LTC in 24h until mid november. Its an open secret that Bitmain "tests" their miners before they send them to their clients, and the day they started selling their new batch, they started "testing" it as well. You can see very clear how the difficulty jumped up and is growing steadily ever since. From Friday to Saturday, the LTC difficulty jumped up from 1.7Mio to 1.9Mio, it's the biggest jump in difficulty this year if I haven't overlooked something. Today, the mining profitability outcome/harvest is at almost 50% of what it was before the day Bitmain started "testing" their new miners. Roughly 8 ASIC miners are now necessary to mine one LTC in 24h. The Litecoin price Not accounting for the spikes here and there, the LTC price this summer looked similar to the difficulty chart. During the summer, the price was quite steady at a plateau. This changed though in november. The price started to rise steadily. From Friday to Saturday, the LTC price jumped up 50%, also the biggest jump in a pretty short time that we have seen this year. I hope you are starting to see what pushes the price up lately. Its not the Goku/Vegeta Memes of the new "coalition" between Bitcoin and Litecoin. Its not Charlie Lee's twitter about LTC acceptance at Bitrefill.com. Its a necessary reaction to keep the network save and alive, because if profitability goes down to 0, miners will stop mining. Have a nice weekend and enjoy the price spike. edit: I am not trying to proof that general demand does not push the price up! LTC is available in limited quantities, so of course there is an upward trend with increased demand. I am trying to show you one reason for sudden price increases (and decreases) that many newbies are not aware of. edit2 2 corrections for clarity: changed profitability to outcome/harvest and put brackets around decreases, because my observations are actually that the price has to adjust upwards with increase in difficulty. I have not enough evidence that it goes downwards as well with decreased difficulty. Profitability of LTC mining actually stayed the same since mid november due to the adjustment of the price to the increased difficulty. edit 3 Users are commenting that the difficulty follows the price. I understand very well that when a coin becomes very profitable to mine, people jump on it. But how do you explain this then? Until the 5th of December, the hash rate increased slowly. From 5th to the 8th of December the LTC hash rate increased to 250% of what it was was before. The difficulty jumped up on the 6th of December from 1,3 to 1,7mio. And on the 9th of December from 1,7 to 2,4mio. So it increased to 200%, which means the profitability sunk to 50%. The LTC price was steady until the 8th of December at 95$. From the 8th to the 9th of December it went straight up to 150$. A price spike right after everybody went home or drinking on a friday? The price went up after the difficulty doubled, not before. I'm just reading charts and try to make sense of them. Just saying "no" without having another explanation is just not very convincing.
Cryptocurrencies - a relatively new tool for trading. Pt.1
If you are going to trade in cryptocurrencies, look at what distinguishes them from other assets. https://twim.trade Active reaction to the news At the moment, various news and events are the main factors influencing the rate of cryptocurrency. One positive news or even a short tweet can cause a cryptocurrency to rise several times, and similarly, negative news can bring down the course or launch a long-term deep correction. For example, John McAfee mentioned the XVG coin in his twitter, and XVG price has grown 50 times in a few days. The difficulty is to quickly find the necessary news and correctly assess their impact. To do this, you need to have an understanding of the overall picture in the cryptocurrency market and in the blockchain industry, as well as regularly following the news. The best way to track news is to use Twitter and Bitcointalk.org. Hacks Surely you have heard about hacking into cryptocurrency wallets and cyber attacks on cryptocurrency exchanges: systematic hacking of Mt.Gox, theft of NEM with Coincheck, hacking and theft of bitcoins from the crypto-mining market NiceHash. The more popular the cryptocurrencies and the higher the capitalization of the cryptocurrency market, the more the interest of intruders to them. Unfortunately, no service can guarantee you complete security, but many exchanges have a complex security system, so it’s very difficult to hack into them. The security of your account on a cryptocurrency exchange largely depends on what actions you take for your personal security. High volatility, low liquidity The capitalization of the cryptocurrency market today is approximately 123 billion, Bitcoin alone is $ 67 billion. There are more than 2000 cryptocurrencies, and many of them are being traded at several exchanges, so there are many cryptocurrencies on various trading platforms, the course of which is fairly easy to move significantly for one player. For example, on Poloniex, a fairly large and well-known stock exchange, for the Augur (REP) rate drawdown, the cryptocurrency in the top 50 by capitalization, by 50%, there are only about 12 thousand dollars needed: poloniex.com Probably, the course will quickly return to the previous value, but such a scenario is not unrealistic. If you decide to trade on cryptocurrencies, you should be prepared for such incidents. Therefore, technical analysis and strategies based on it do not always work well for cryptocurrencies: these tools emerged and were refined in a market where the crowd psychology works stably, and one player cannot significantly influence the course. Pumps and dumps Pump and dump is a sharp price movement up or down, respectively. Public sources or even paid chat rooms publish messages calling to buy some cryptocurrency on a particular stock exchange (as a rule, a little-known coin with a low capitalization). Messages about the purchase can be supported by fake news, pictures with technical analysis, estimates of “experts”. The pumps organizers first buy the coin, then announce the pump and sell the coin at an increased price. With a very lucky set of circumstances, you can earn money too, but usually pump participants lose money: after a sharp increase in demand and a rise in price, demand returns to the previous level, and the offer grows (as the pump participants want to exit), and the cryptocurrency rate returns to the previous level. As a rule, everything happens in a matter of minutes. Even after that, the pump can be repeated: the participants of the first pump, who did not have time to sell the coin, publish calls to buy cryptocurrency and try to raise the course in order to exit the transaction with a profit. https://preview.redd.it/8qg98i2mvp021.jpg?width=1200&format=pjpg&auto=webp&s=b45d88df53aa6d660213aeb40ee07df248a21abb >> This is only the first part of this educational article, to continue reading you should wait for the second part in the coming days. Thanks for your attention. #twim team #twimtrade #education #general
As most of you should know, Bitcoin is under attack by multiple actors that try to discredit it by causing a spike in transaction fees and subsequent negative commentary. It is unclear how well coordinated these actors are, but most of them seem to be seeking profits by shifting the Bitcoin scaling debate in their favor. Their methods have become increasingly absurd and aggressive:
Spamming the mempool with bloat transactions. This method alone isn't much of a threat, as it gets increasingly expensive with increasing fees.
Needlessly mining empty blocks. Antpool sometimes does this even when building on blocks many minutes old, suggesting that either Antpool has some extremely effective ASICboost-like cheat or is willing to forgo large profits just to damage Bitcoin.
Abusing BIP9 signalling as a political power grab for miners, to massively delay SegWit roll-out. (Core developers were very careless in choosing this upgrade method. You can't reach 95% consensus on Evolution being a thing; why would you expect it on a topic that involves cryptography, game theory, and politics?)
Hard-forking Bitcoin Cash (BCH) and giving it increased coin printing speed. This works via an "emergency" difficulty adjustment algorithm (EDA) that not only increases hashrate oscillation frequency between chains, but also massively increases the average block speed, and thus inflation until the next BCH block reward halving. The increased BCC creation draws miners away from BTC, causing lowered and fluctuating BTC block rate.
All of these are accompanied by a flamewar-waging horde that constantly draws attention to any problems caused by high fees. Most likely, their goal is to induce a chain reaction between falling BTC price and hashrate that rapidly cuts down BTC block rate, pushing money into BCH, yielding BCH holders gigantic profits. Though my impression is that most of these actors don't really understand what they're doing. Many might end up just reducing their profits from the current Bitcoin hype.
As you might also know, Bitcoin can mount multiple defenses against this, though only two of them are immediately effective:
Fee increases, even on just the current, pre-segwit transactions, make Bitcoin mining profitability a little elastic. This provides some incentive for miners to not hop chains all at the same time.
Some miners/pools, like Slush and BitFury, are reliably supporting Bitcoin even if they have to forgo a small profit. This decreases the oscillations and limits the amount of damage dealt in the short term.
BTC difficulty is responding to the drops in hashpower. It has already decreased a bit; if the current situation continues, the next difficulty adjustment of BTC will be a large step down, raising the bar on BCH's ridiculous inflation-oscillation-attack.
SegWit has activated. Exchanges and wallets could implement SegWit transactions; once that happens, a migration begins that would allow a significant increase in transaction throughput.
And finally, the Lightning Network might cause a decisive end to this conflict, but requires a lot of infrastructure upgrades. Its theoretical capacity and quality completely dwarfs anything happening today.
Time and Segwit2x
Intended or not, the attackers now seem to have fired their entire arsenal. They now have to deal damage before the Bitcoin infrastructure has time to respond. I'd like to know just how much time they have, and whether this civil war could set the stage for a catastrophic Segwit2x fork that results in three or more zombie chains playing catch with the hashrate. Therefore, I'm trying to guess BTC's reaction time-scales. Some ideas:
The next BTC difficulty adjustment has begun its countdown, albeit with slower blocks. Unless the hashrate decrease gets worse, an adjustment should happen within three weeks. This would significantly decrease the fee pressure, giving BTC enough air in the medium term.
Many companies have declared in advance that they are ready for SegWit deployment. Depending on their testing schedule, we could see the beginning of SegWit transactions within weeks, effectively increasing BTC block size. Though this effect may be small at first, it is multiplicative on the block rate (that may return eventually).
The BCH oscillation attack must be executed well. If any big miner doesn't play by the rules and mines blocks that cancel the EDA, the BCH chain becomes sluggish and Bitcoin has extra time for the SegWit rollout. BCH's next EDA stunt is scheduled for this Sunday.
BCH's absurd money printing attack is dependent on its price. If the exchange rate drops below 0.1, the oscillations and inflation on BCH will become extreme, and the EDA timing will significantly limit the oscillation frequency. In such a case, BCH either degenerates or someone stops the oscillation; both cases result in a reduced ability to draw hashrate, ending the attack.
If I see this correctly, BCH users should be frantic to crush bitcoin as soon as possible, because their attack vectors are losing steam over time. And I doubt they want to sit it out and prepare a second charge, because the Lightning network looms on the horizon, which is a competitor their fluctuating 8MB-per-block chain cannot compete with. But what will happen? Do Bitcoiners have the patience to hold their ground for a month or so? Will they be so divided afterwards that Segwit2x is a serious threat? It might take until October to sort out the current weirdness, and by then, the Segwit2x hard fork date is insanely close. As a bottom line, I'd like to remind everyone to not get lost in short-term conflicts. Bitcoin could easily sail on with just two decisions: ignoring the BCH attack/troll fork and reaching a clear consensus on whether or not to hard fork to 2MB non-witness block data. I don't think that either SegWit1x or Segwit2x would be in much trouble on their own, but it is unclear if they can coexist, especially considering the possible hashrate interactions. If an interaction between multiple chains with aggressive decision-making ruins Bitcoin as a brand, nobody wins. Any compromise or delay on a hard fork is better than a hard fork gone wrong.
The debate is not "SHOULD THE BLOCKSIZE BE 1MB VERSUS 1.7MB?". The debate is: "WHO SHOULD DECIDE THE BLOCKSIZE?" (1) Should an obsolete temporary anti-spam hack freeze blocks at 1MB? (2) Should a centralized dev team soft-fork the blocksize to 1.7MB? (3) OR SHOULD THE MARKET DECIDE THE BLOCKSIZE? (354 points, 116 comments)
"Notice how anyone who has even remotely supported on-chain scaling has been censored, hounded, DDoS'd, attacked, slandered & removed from any area of Core influence. Community, business, Hearn, Gavin, Jeff, XT, Classic, Coinbase, Unlimited, ViaBTC, Ver, Jihan, Bitcoin.com, btc" ~ u/randy-lawnmole (176 points, 114 comments)
"You have to understand that Core and their supporters eg Theymos WANT a hardfork to be as messy as possible. This entire time they've been doing their utmost to work AGAINST consensus, and it will continue until they are simply removed from the community like the cancer they are." ~ u/singularity87 (170 points, 28 comments)
3 excellent articles highlighting some of the major problems with SegWit: (1) "Core Segwit – Thinking of upgrading? You need to read this!" by WallStreetTechnologist (2) "SegWit is not great" by Deadalnix (3) "How Software Gets Bloated: From Telephony to Bitcoin" by Emin Gün Sirer (146 points, 59 comments)
Now that BU is overtaking SW, r\bitcoin is in meltdown. The 2nd top post over there (sorted by "worst first" ie "controversial") is full of the most ignorant, confused, brainwashed comments ever seen on r\bitcoin - starting with the erroneous title: "The problem with forking and creating two coins." (142 points, 57 comments)
enough with the blockstream core propaganda : changing the blocksize IS the MORE CAUTIOUS and SAFER approach . if it was done sooner , we would have avoived entirely these unprecedented clycles of network clogging that have caused much frustrations in a lot of actors (173 points, 15 comments)
Dear Theymos, you divided the Bitcoin community. Not Roger, not Gavin, not Mike. It was you. And dear Blockstream and Core team, you helped, not calling out the abhorrent censorship, the unforgivable manipulation, unbecoming of supposed cypherpunks. Or of any decent, civil persons. (566 points, 87 comments)
So, Alice is causing a problem. Alice is then trying to sell you a solution for that problem. Alice now tell that if you are not buying into her solution, you are the cause of the problem. Replace Alice with Greg & Adam.. (139 points, 28 comments)
SegWit+limited on-chain scaling: brought to you by the people that couldn't believe Bitcoin was actually a sound concept. (92 points, 47 comments)
Reality check: today's minor bug caused the bitcoin.com pool to miss out on a $12000 block reward, and was fixed within hours. Core's 1MB blocksize limit has cost the users of bitcoin >$100k per day for the past several months. (270 points, 173 comments)
Top post on /bitcoin about high transaction fees. 709 comments. Every time you click "load more comments," there is nothing there. How many posts are being censored? The manipulation of free discussion by /bitcoin moderators needs to end yesterday. (229 points, 91 comments)
Fantasy land: Thinking that a hard fork will be disastrous to the price, yet thinking that a future average fee of > $1 and average wait times of > 1 day won't be disastrous to the price. (209 points, 70 comments)
"Segwit is a permanent solution to refuse any blocksize increase in the future and move the txs and fees to the LN hubs. The chinese miners are not as stupid as the blockstream core devaluators want them to be." shock_the_stream (150 points, 83 comments)
In response to the "unbiased" ELI5 of Core vs BU and this gem: "Core values trustlessness and decentralization above all. Bitcoin Unlimited values low fees for on-chain transactions above all else." (130 points, 45 comments)
Core's own reasoning doesn't add up: If segwit requires 95% of last 2016 blocks to activate, and their fear of using a hardfork instead of a softfork is "splitting the network", then how does a hardfork with a 95% trigger even come close to potentially splitting the network? (96 points, 130 comments)
I'm more concerned that bitcoin can't change than whether or not we scale in the near future by SF or HF (26 points, 9 comments)
"The best available research right now suggested an upper bound of 4MB. This figure was considering only a subset of concerns, in particular it ignored economic impacts, long term sustainability, and impacts on synchronization time.." nullc (20 points, 4 comments)
At any point in time mining pools could have increased the block reward through forking and yet they haven't. Why? Because it is obvious that the community wouldn't like that and correspondingly the price would plummet (14 points, 14 comments)
Dear Theymos, you divided the Bitcoin community. Not Roger, not Gavin, not Mike. It was you. And dear Blockstream and Core team, you helped, not calling out the abhorrent censorship, the unforgivable manipulation, unbecoming of supposed cypherpunks. Or of any decent, civil persons. by parban333 (566 points, 87 comments)
The debate is not "SHOULD THE BLOCKSIZE BE 1MB VERSUS 1.7MB?". The debate is: "WHO SHOULD DECIDE THE BLOCKSIZE?" (1) Should an obsolete temporary anti-spam hack freeze blocks at 1MB? (2) Should a centralized dev team soft-fork the blocksize to 1.7MB? (3) OR SHOULD THE MARKET DECIDE THE BLOCKSIZE? by ydtm (354 points, 116 comments)
151 points: nicebtc's comment in "One miner loses $12k from BU bug, some Core devs scream. Users pay millions in excessive tx fees over the last year "meh, not a priority"
123 points: 1DrK44np3gMKuvcGeFVv's comment in "One miner loses $12k from BU bug, some Core devs scream. Users pay millions in excessive tx fees over the last year "meh, not a priority"
117 points: cryptovessel's comment in nullc disputes that Satoshi Nakamoto left Gavin in control of Bitcoin, asks for citation, then disappears after such citation is clearly provided. greg maxwell is blatantly a toxic troll and an enemy of Satoshi's Bitcoin.
117 points: seweso's comment in Roger Ver banned for doxing after posting the same thread Prohashing was banned for.
113 points: BitcoinIsTehFuture's comment in Dear Theymos, you divided the Bitcoin community. Not Roger, not Gavin, not Mike. It was you. And dear Blockstream and Core team, you helped, not calling out the abhorrent censorship, the unforgivable manipulation, unbecoming of supposed cypherpunks. Or of any decent, civil persons.
106 points: MagmaHindenburg's comment in bitcoin.com loses 13.2BTC trying to fork the network: Untested and buggy BU creates an oversized block, Many BU node banned, the HF fails • /Bitcoin
98 points: lon102guy's comment in bitcoin.com loses 13.2BTC trying to fork the network: Untested and buggy BU creates an oversized block, Many BU node banned, the HF fails • /Bitcoin
First, even though Bitcoin is usually labelled as a purely speculative asset, we find that standard fundamental factors (usage in trade, money supply and price level) play a role in Bitcoin prices in the long term. Second, from the technical standpoint, the increasing prices of Bitcoin motivate users to become miners. However, the effect is found to be vanishing in time as the specialized mining hardware components have driven the hash rates and difficulty too high. Nonetheless, this is a standard market reaction to an obvious profit opportunity. Third, the prices of bitcoins are driven by investors' interest in the crypto-currency. The relationship is most evident in the long run but during the episodes of explosive prices, the interest drives the prices further up, and during rapid declines, it pushes them further down. Fourth, Bitcoin does not seem to be a safe haven investment. And fifth, even though the USD and CNY markets are tightly connected, we find no clear evidence that the Chinese market influences the USD market.
If miners cannot afford the electricity, they turn off their equipment. Hashing rate falls, perhaps even precipitously. The difficulty adjust to compensate and find a new equilibrium. However, we have never seen a very large hashrate drop in bitcoin and the difficulty adjustment takes 2016 blocks to happen. A large hashrate drop may result in long block discovery times, delaying the difficulty adjustment beyond the usual two weeks. I'm monitoring those two charts (hashrate, difficulty), to see if this scenario plays out because it is the first time this might happen. This is a very big test of the bitcoin difficulty adjustment algorithm and the mining industry and it is a preview of the upcoming (2016) reward-halving event. In essence we have just had a reward halving event (in fiat value terms) that was unanticipated and unplanned. I think it will all work out well and prove the resilience of bitcoin's dynamically adjusting algorithmic regulation, but it's still the most interesting thing I am watching.
De-centralization is one of the prevailing geopolitical and technological themes of this century. The fight for de-centralization of control and information is playing out on the Internet in every country in the world. It is, in my opinion, the most important fight as it will determine the freedom (or lack of) for billions of people. We are heading in a good direction overall. We have replaced kings, despots and tyrants with institutions. Now we are replacing many institutions with protocols and networks, empowering individuals. But those who benefit from centralized control over power will not sit idly by while we take away their power. They use fear and violence to exert control and deepen their power structures. They fool us into submitting to unearned authority and give up our rights and freedoms by exploiting security fears. Bitcoin is only part of the puzzle, but it is a very powerful part.
They can't keep bitcoin offline or easily de-centralize control of keys without severely limiting their liquidity and execution time The most important thing exchanges can do is discourage the use of their accounts as wallets and discourage holding large balances unless actively trading. This of course limits their liquidity, so it is not an easy compromise.
Mining on an algorithm that has "dual purpose" is risky. Mining is not "non productive", it serves to secure the bitcoin network and does so very well. The risk of adding another purpose to the mining is that it introduces a price-externality, a secondary source of value that may distort the incentive structure of the consensus algorithm. For example, if you are finding primes and suddenly a new application is discovered that makes primes very valuable, then the consensus algorithm is now subject to a completely external market for prime numbers that has nothing to do with the security of that blockchain.
There are alt-coins that attempt to do this. See Curecoin, Gridcoin, Primecoin.
Bitcoin is weakly pseudonymous and can be traced perfectly well in targeted and warrant-based investigations. Bitcoin is somewhat resistant to wholesale and indiscriminate surveillance which is both illegal and immoral. There's no need to weaken it's privacy protections. Privacy is consumer protection and breaking privacy never serves consumers, no matter how hard they try to sell it as such. Financial privacy may be seen as a privilege in some countries but it is a matter of human liberty and life/death in dozens of countries. Bitcoin is theirs too and we can't forget that.
To experience the future of money. To gain a glimpse into an exciting technology. To learn about how money could be in the future and also become aware of how limited money and banks are today.
For the "other 6 billion" who don't enjoy international, control-free banking as we do, bitcoin represents an opportunity to become part of a global economy which up till now did not exist. For those users, bitcoin is more than just a curiosity, it might be a doorway to connect to the world.
I've been doing public speaking for more than 20 years. At first I was shy and mediocre. I got better with practice. Nowadays, I speak at events weekly and I try out new concepts and ideas with each speech, extemporaneously. It's all improvised with 80% old content and 20% new "test" content, gradually cycling. A lot of my best ideas are off-the-cuff while I am speaking and I gauge the audience reaction and then repeat them when successful.
You have a great point. I was not aware that I was ageist, though I can see how my comments give that impression. I think it becomes harder for most people to absorb change, especially technological change, as they age. That means that most progress happens because young people introduce and absorb change. However, that effect is counterbalanced by the value of experience (and the risks of youthful inexperience and immaturity). I'm 43 now and I'm probably in between the two experiences. I appreciate your question and will think hard about my possible ageist bias and moderate my tone. I don't mean to dismiss or demean anyone and I apologize that I have done so. Mea culpa.
However, while it took almost 20 years from the day I sent my first email until my mom used her new iPad to send her first email, bitcoin is likely to be adopted on a much more accelerated schedule. After all, there is no need to deploy much infrastructure - you can just download an app.
One of my guiding principles in life is that knowledge must be shared. I am a strong support of open source. Everything I do, in every forum is released under open source licenses, usually CC-BY-SA (creativecommons.org). The book was developed on github in an open community-driven project. I still appreciate it if you buy the book, if you can afford to. Code REDDIT30 will give you a 30% discount on the O'Reilly site linked in the OP.
It will take time. In western developed economies, the use of bitcoin for retail shopping offers only small advantages over credit cards, while being difficult to learn, use and secure by the average user. In the developing world, bitcoin can fill a massive void of banking services but there are infrastructure, UI, device and awareness barriers. These gaps will become narrower over time.
It is actually very difficult to bootstrap a successful currency that is necessary to back the security of the network. It took 3 years for bitcoin to evolve to a level where attacks against the consensus algorithm became very difficult.
Bitcoin has a tremendous "network effect", in my opinion, which may give it an insurmountable early-mover advantage. In technology it is often not the best technology that "wins", but the one that achieves broad enough adoption and recognition early enough. Good enough beats best if deployed broadly.
Last updated: 2015-01-19 18:26 UTC This post was generated by a robot! Send all complaints to epsy.
The latest fad in /bitcoin is that the price of bitcoin doesn't matter. One thread was titled "Sean's Outpost can give meals whether bitcoin is worth $35 or $1200!" That's true, but bitcoin is more complicated than that one use case. I talked about the insane amounts of venture capital being poured into the industry right now a few weeks ago. The price of bitcoin is important for these people because it affects all sorts of businesses. For example, mining businesses can't profit if there is a crash after they design their chips. Exchanges make less money if the price is lower because a lower price can't support high volume. People who build projects on top of the network and who are sitting on donations can fold. Altcoins that are promising can be forked because it is no longer profitable to mine them. Even at higher prices, there was not enough money to go around to prevent most of the VCs from losing on their investments. The piece of the pie that the VCs can earn shrinks as the price of a bitcoin falls. These people have deep pockets, so most of them can survive a brief downturn, but as the network expands, the lower bound price that would precipitate a complete collapse is rising. When bitcoins averaged around $50, there weren't lots of employees getting paid in bitcoins and bankers wanting returns on investment. Now that bitcoins tend to average around $600, the size of the economy has increased significantly. Previously, the price of bitcoins could have dropped to $10 and everyone could still have looked forward to a recovery. Now, the minimum price is much higher (I've said $200) where a cascading chain reaction of business failures would take out the whole industry. In the future, that minimum price will likely rise to $1000, and then to $10,000, and so on. The price falling below $200 or whatever the minimum is doesn't itself signal anything wrong with the promise of bitcoins. Instead, the low price will cause the failure of some critical part of the infrastructure like a major exchange, which could then cause businesses that depend on the exchange to be taken out, and so on. Even if everyone who owns bitcoins believed that the technology would succeed and there were many people spending bitcoins, the businesses would all be forced into bankruptcy simply because other businesses they need to offer their services failed in a chain reaction. This VC bubble is dangerous and the best thing that could happen right now is for the VCs to stop temporarily with their investments so that this does not happen. Otherwise, the industry will end up in a fragile state where there are startups depending on other startups that have business models depending on a base price.
The "technology adoption curve"
One of the popular graphs making the rounds nowadays is the "technology adoption lifecycle" graph at http://setandbma.files.wordpress.com/2012/05/technology-adoption.png. According to the people who agree with the theory, bitcoin is currently in the bottom of that huge valley in the middle of the chart. One writer suggested that bitcoin was somewhere near the top of the curve still, with a long ways to fall down the valley before the technology ends up as a fraction of what it was thought to become. While this chart may be relevant to other technologies, it isn't relevant to bitcoins. The most obvious problem with trying to explain bitcoin adoption using this chart is that there have been many bubbles, but the chart only contains one bubble. It would have been possible to pull out this "technology lifecycle" chart after any bubble in the past few years and state that bitcoins were stuck in the "chasm" and will be permanently damaged. For example, someone could have drawn this graph after the period where bitcoins fell from $50 to $2 and stated that the use of the technology will never be valued at more than $20. Another reason to ignore this chart is that many of the other technologies that are often compared against it didn't follow the chart either. Some people suggest that the Internet followed this chart, because there was a bubble in 2000 that later crashed, and that the high hopes of the Internet transforming daily life never came to be. The way I see it, the Internet has grown far beyond anything imagined in 2000. Whereas pets.com might have failed, Wal-Mart is now losing customers because Internet shopping has become so cheap that it is a bad idea to go to their stores anymore if your goal is to save money. Cell phones have made many people oblivious to the world; I recently compared what it was like to ride the bus when I went to college and what it is now like to ride the same bus system. Now, everyone on the bus is engrossed in their phones and nobody even bothers to look out the windows, and in ten years people will probably be playing video games with their friends in their glasses, oblivious to the world around them. Bitcoins are also not "just another technology." There are some technologies like bitcoin that can completely change the world. The Internet, television, and radio were a few of them, because the way the world worked was fundamentally changed by these technologies. Most of the other technologies listed on these charts, like facebook, self-driving cars, and virtual reality are not things that fundamentally change the way the world works. The economy ticks on without being changed significantly by facebook, but any company that has no Internet connection is obsolete.
Unbelievable deals on PS4s
Newegg has unbelievable deals on Playstation 4s right now. If you pay with bitcoins, you can buy one for $319.99, almost 30% below market rate. These are brand new and sealed, and it's likely that Sony will not lower prices to this rate for at least a year or 1.5 years. If you want to make quick money, you can buy a PS4 and then undercut sellers on Craigslist to pocket 50 bucks. For some reason, the market of these bitcoin-discounted PS4s and the dollar-denominated PS4s is decoupled and there is significant profit to be made. I was trying to figure out what the catch is with these consoles yesterday. Newegg must be losing money on these, because they have a limit of 1 per customer. If they were earning money, there would be no reason to have such a limit. If they were simply offering a loss leader to get people to shop at Newegg or to upsell accessories, then they would offer the same price or close to it in dollars. Therefore, there are three possibilities for this pricing. The first is that Newegg is being killed by so many transaction fees that they can actually afford to discount the PS4s to this insane price rather than give most of their profits to banks. The second is that bitcoins are priced low, and the company is gambling on a 30% loss now to gain more when this panic subsides. The final reason is that they simply want to promote bitcoins as a currency because in the long-run, the money they can save from transaction fees if bitcoin were the world currency far outweighs the losses they are taking on these items now. I will take a risky position and say that #2 has played a role in this sale. If a company were looking to promote bitcoin adoption, and hold some percentage of assets in bitcoins, then the best time to do it would be when prices are very low. They can sell thousands of these consoles and take $30k in losses, but they end up with 1000 bitcoins in return. In the process, there are a certain number of people who bought accessories that are very profitable, there are new customers who will now return to Newegg in the future, the price of bitcoins is likely to rise eventually, and they have encouraged people who otherwise would never have bought bitcoins to do so, so that the transaction fees they pay in the future are more likely to be lower. Someone in the accounting department was tasked with adding together all these probabilities and came up with how much they can discount the units to make a profit in the long term.
How long a transaction takes
I read an article this morning where someone mentioned that the average time a person needs to wait for a transaction to process is five minutes. The number is derived from the incorrect assumption that blocks occur every ten minutes, so if you picked a random point between these ten minute intervals many times, it would be, on average, five minutes away from the next block. Some people also state that it takes ten minutes to process a transaction, which, again, is inaccurate. What's alarming is that journalists for big-name newspapers spread false information to the public when they publish articles about the supposed "10-minute confirmation time." Hashing for the bitcoin network is independent. If people have been hashing for 60 minutes without finding a block, there is no greater chance of finding a block in the next minute than there was 60 minutes ago. Therefore, one cannot say that blocks occur "ten minutes apart," because that isn't always true. Having done lots of work on a block does not mean that the next block is any more likely to be found sooner. The time until the next block can be calculated using an exponential distribution. If the hashrate has not increased or decreased since the last difficulty change, publishing a transaction right now means you can expect for it to be confirmed in about 6.9 minutes, not 5 or 10 minutes. This calculation does not make intuitive sense, but results from the random nature of independent hashing. This is good news for those who mistakenly believe that it will average 10 minutes for a merchant to receive a transaction.
THIS DOCUMENT IS NO LONGER MAINTAINED BUT ONLY PRESENTED FOR HISTORICAL REFERENCE. Version 3 is current as of June 2017. Edit: Some of these risks are slightly outdated (as of mid October): we have gained an additional exchange, for instance. I need to update this document to reflect these changes. However, this is complete to the best of my knowledge: some risks may be reduced but I'm unaware of any new risks. Edit 3: Adding notice about the fork bug and time warp bug here. Edit 4: Updating this page to reflect the final demise of Cryptsy and our current single exchange status again. Edit 5: I hadn't noted explicitly here yet but I should have: given that this has now gone to archive, please send me a message or make a new post here for any additions or corrections you would like to see in this document. Executive summary Nyancoins have weak demand, are vulnerable to being forked, are traded on only one exchange, have inconsistent blocks, do not have a core developer, have the potential for serious bugs, an uncertain legal situation, concentrated ownership, depend upon the Internet, may be addictive, and could make you wealthy, which has been alleged to lead to more problems. Introduction: This is my best attempt to collect every major risk factor from buying Nyancoins, although I can offer no warranty of fitness for this information for any purposes. I believe in honesty and forthrightness. Having this available and obvious is a simple matter of basic decency. Much, hopefully all, of this information has been discussed previously in /nyancoins, but this document in particular is about being up-to-date and central. This page will be updated clearly as appropriate if situations change. If you believe that I am missing something, please note any other major risks you see in the commentsin a pm to coinaday or in a new post to /nyancoins (due to post now in archive mode). Demand: So far, the majority of the buying pressure has been myself. I base this statement on my recollection of the trading history so far this year (all of my trades in NYAN) and the fact that I have acquired more than 50 million coins, somewhere around 25% of the coins, so far, as well as my observations that I have usually had the leading major bid, and usually the leading bid regardless of size. This is an unsustainable situation in the long-run. For my own sake, and in particular right now, I cannot afford to keep powering nyan's rise financially alone. Update: there has been a growth in demand from others, in particular as I became unable to add BTC for bids from my own financial pressures. However, the price fell down to ~10 satoshi during that period. Fork bug: Nyancoins are vulnerable to a fork bug. NYAN2 should solve this, but so far it is only an alpha code draft and not even built. I am stalled on getting a new computer for a build machine for this (or someone stepping in to help with build/test on NYAN2) and expect it may be several months until I can complete this (late Q1 of 2016). Exchanges: Nyancoins are only traded on Cryptsy. If it implodes, Nyancoins will face very serious challenges. The nyanchain and infrastructure will continue to work, but prohashing at least is likely to drop us without a market to sell their block rewards and we could face a chain reaction which took down the entire coin if no one continued to mine or at least keep a copy of the existing blockchain. Nyancoins are now listed on Cryptopia in addition to Cryptsy. This adds a pool and a nother market. Although Cryptopia has relatively small volume, I consider it trustworthy and expect we can rely upon them as our core market for the foreseeable future. There are also questions specifically about Cryptsy, which has some very significant cons along with its advantages (like having a crazy number of obscure coins). Read snarklaser's comment below which pointed out this risk for more information. Cryptopia is now the only exchange for Nyancoins, given Cryptsy has now finally clearly ceased to be a viable exchange. If Cryptopia were to fail somehow, it is likely that this would have significant consequences for Nyancoins. I am not aware of any other exchange which would be likely to list us immediately or soon or which would be a particularly good option. However, there are decentralized exchange technologies, notably CATE, which NYAN2 should be able to support. On-Reddit exchanges are also possible with tipbots, but require trust as they are not atomic. It should be possible to build an "exchangebot" similarly, although I'm not currently aware of one, but my concept would still have the bot as a trusted central party. Atomic cross-chain transactions seem to me like a very promising core technology ultimately for building exchanges which can be more proveably secure. They could also allow exchanges to share a common listing protocol as well without having to trust the other exchanges (at least, beyond the core protocol development and maintenance; tanstaafl). Inconsistent blocks: I haven't done a quantitative analysis of this, but from the beginning of when I started actually using the nyan blockchain, I sometimes noticed that it would be a couple of hours until a transaction went through. When the average block rate is supposed to be one minute, this is pretty crazy. And now we seem to have seen some that are even worse: I had recalled maybe 3-5 hours; these last couple have been more like 12-18 hours. This is obviously a serious deficit. I expect that as we revive we will attract dedicated miners which should prevent this, but it's troubling that it almost seems like so far getting bigger has attracted stronger hit-and-runs rather than attracting long-term miners. If this is not a temporary anomaly and were to continue to get worse, it could really cripple Nyancoins functionally. In a well-functioning system, I would think that a gap longer than an hour between the blocks shouldn't happen. Core developer: Although we have good general tech support in this community and have put up supporting infrastructure, there is not anyone officially currently working on core client code. This could be a problem in the long-run. I am currently working to address this through an updated client based on Litecoin (as of this writing I've compared the original diffs but have not yet started to produce the new version). However, I'm not necessarily official yet and wouldn't consider myself to be until that release is done. If I disappeared like the previous developers and did not release this, eventually a lack of updated client would probably be a problem. However, as far as I know, the current client is fine for now. I'm working on a new one primarily to prove the ability and have that experience in reserve for when we really need an update. Bugs: It is possible that there are bugs in the underlying code. I have never read through all of the bitcoin or nyancoin code, of any version, nor even finished reading the original bitcoin whitepaper (by the way, we oughta make up a nyancoin whitepaper or ten someday), meaning I have no professional or technical knowledge about whether or not the system is fundamentally sound. I've been going based on "it seems to be working, so it's probably fine", which is, shall we say, more of an engineering than scientific approach. Update: I have heard reference to a "time warp" bug vulnerability in the KGW difficulty function which Nyancoins has. I do not know details and my understanding is a fix to this would require a fork to change the difficulty function, so I do not anticipate a fix before NYAN3 (late Q4 2016 activation at best, Q1 2017 seems a reasonable target). I consider this vulnerability to be similar to the fundamental weakness to difficulty spikes after large amounts of hashing jumps on the network. Hostile (or simply passing interest with large capacity) hashing does degrade the performance of the network. Fundamentally, this class of attack can be mitigated with a transaction to 'unstick' the chain after, since the difficulty function will adjust in the next block after enough wall-time has passed since the last block (so only need one high difficulty solve which can be triggered by a transaction fee). Legal: Bitcoin faces uncertain legal situations in almost every country. Nyancoin is even more uncertain, as people tend to consider bitcoin and not address impacts on altcoins. Between the potential tax implications and banking regulations and currency laws, there are a wide variety of ways a person could make a felony-level mistake. This can be somewhat mitigated by merely buying and holding, as you won't be responsible for KYC/AML presumably (although arguably an argument could be made in your purchase), and presumably unrealized capital gains wouldn't be taxable (but I am neither a lawyer nor accountant nor any sort of expert on the relevant accounting laws in any country). Somehow getting legal opinions for Nyancoins in every country would be very useful in my opinion. If Bitcoin and altcoins are well-studied in a given country it should be relatively easy to adapt those opinions and research to Nyancoins, but it would still require some pro bono work in any case. So...hopefully we'll get some lawyer Nekonauts someday who are willing to semi-officially give us an opinion. In the meantime...hope that common sense can save you. If you sell Nyancoins directly, you're going to need to comply with the KYC/AML types of laws of your country. If you're going to do banking operations...may the central bank have mercy on your soul. I think the best advantage we have is the same bitcoin had for its first years: we're too small for anyone to care. But since we plan to grow significantly, we need to be aware of our legal issues upon scale. Which is to say, whether or not you're allowed to sell 10,000 NYAN to your friend probably has a lot to do with whether your friend legally acquired whatever is being offered in exchange, and whether the value of what you get in return is above a certain level or not. I'm not going to try guessing that level precisely because I know I'll be wrong. $1 is probably fine. $10,000 is probably illegal without some significant licensing. I would suggest either not touching fiat or else deliberately capping it without verification after getting an independent local expert legal opinion. concentration: The fact that I hold about 25% of the currently outstanding NYAN could be a major risk factor, particularly if I do not act in the best long-term interests of the strength of Nyancoins. For instance, I could pull my bids, sell only a small part of my holdings, crash the market, and potentially buy a lot of volume for a lower price. While I cannot foresee any circumstance under which I would do this, it is certainly conceivable that I could be financially, legally, or morally obligated to do so if I were to become insolvent. Internet outage: if the Internet goes down, we hit a very nasty scenario. We can't process transactions, and all the miners go into a race to make useless blocks on their own. If the Internet were never to come back up, Nyancoins would be dead. If there is a daylong internet outage, the longest blockchain discovered after, presumably representing the most hashing power dedicated to empty blocks during that outage, will win. So I suppose the block rewards in that case are for having the faith in Nyancoins to keep hashing and storing the blockchain during the day without the Internet. addictive: This was a curiosity to me when I started. Now it's an obsession for me. I'm constantly thinking about how I can help to smooth the path for Nyancoins to grow stronger and better and more valuable. You may find that once you start to realize the impact you can have upon Nyancoins, and that Nyancoins can have upon you, that you start to become addicted as well. It is possible to substitute another addiction in its place, such as dogecoins or pcp, but it is not recommended. Nyancoin addictions are considered 'mostly harmless'. The exception is if you go 'full coinaday' and start to accumulate more than 10% of your assets in Nyancoins. In this, this is essentially a variety of gambling addiction. I would argue that it beats roulette because you can tilt the odds in your favor, but then, I would argue that, wouldn't I? mo' nyan mo' problems: Some people have claimed that more money leads to more problems. Since nyan is money, it follows as a consequence of the conjecture. Should this be the case, your increasing nyan could potentially lead to such problems in the future as: enhanced attention from revenue collection services of all kinds (governmental and private), swarms of fake friends and gold-diggers, excessive risk-taking as a result of feelings of invincibility, an increase in certain varieties of targeted marketing, possible disqualification for asset-based welfare for you (or even your children, for instance college financial assistance), an inability to remember how many houses you own, or other serious problems. Conclusion There are a variety of different risks in buying Nyancoins. I believe by far the most serious one, the only one I'm personally concerned about, is the demand issue. If those of us who have found or come back to NYAN abandon it, it could die. Otherwise, I think it can survive anything, even these occasional crazy long block times. This self-certified infallible message has been brought to you as a Public Service Announcement of the NYAN Public Relations Council, a transparent front organization of notoriously lovable philanthropist and major NYAN hodler coinaday. Edit 1: Adding exchange collapse risk as pointed out by snarklasers. Edit 2: Adding lack of core dev as pointed out on BCT.
One can notice that Bitcoin’s hash rate has increased linearly after June 2019 despite the bear market in the second half of 2019. This is contradictory to the usual correlation of ‘hashrate following price.’ It shows that in the long-run, innovation, preparedness and scale of things are important factors in determining hash rate trends. Bitcoin Hash-Rate Increase. The report notes how ... When it comes to the price, increase in price can lead the market participants to make an investment in hardware that leads to increased hash rate and in effect higher difficulty. If the miners are mining as an alternative to direct investment, they move to bitcoin purchasers hence increasing the demand for bitcoin and its price. If we identify ... Bitcoin halved on May 11, 2020, around 3 pm est. A Bitcoin halving event is when the reward for mining Bitcoin transactions is cut in half. This event also cuts in half Bitcoin's inflation rate ... The bitcoin hashrate, which determines the bitcoin mining difficulty, is now at an all-time high than it ever was.Within one year, it is up by a factor of three. It is estimated that in the last 4 days alone, the mining difficulty has risen by over 8% to now reach 15, 000, 000, 000, 000 ATH. Original (dhimmel):It is no coincidence that the value of bitcoin goes up as the mining difficulty rises. It is also no coincidence that the mining difficulty goes up as the value of bitcoin rises. There is a very tight linkage between the two. To understand why, it is important to first understand how mining affects the difficulty. Mining for profit is very similar to a regular manufacturing ...
Following Bitcoin’s Hash Rate Network Difficulty Is About to Set a New
I see this only increasing firstly because of the compounding (minus the growing mining difficulty) and because I expect a big rise in value for both bitcoin and ethereum. 15/07 Bitcoin reaching the highest hash rate ever, while the mining difficulty is at an all-time high. Chainlink’s spike in price and interest sets the target to the moon. Binance rolling out a ... Bitcoin Mining Hardware CPU's: In the beginning, mining with a CPU was the only way to mine bitcoins. Mining this way via the original Satoshi client is how the bitcoin network started. To read more with regards to bitcoin paper wallet, check out internet site below: http://www.cryptocoinwalletcards.com/ Tags: asic bitcoin miner, asic bitcoi... For context, that’s double what the hash rate was at one year ago and 1,000% higher than the hash rate at Bitcoin’s $20,000 high. Bitcoin’s network difficulty, which regulates how fast ...