vendredi 22 novembre 2019

Explaining the big Bitcoin drop: BTC network stats and technical analysis

Over $20 billion have been wiped off Bitcoin’s market cap in the last few days. The flagship cryptocurrency went from trading around $8,000 on Wednesday to a low of $6,800 today. As the sell-off continues, IntoTheBlock believes that several blockchain analytics factors can explain this drop. Meanwhile, CryptoSlate takes a technical approach.

Bitcoin blockchain analytics

In a blog post, the chief technical officer at IntoTheBlock, Jesus Rodriguez, explained different blockchain patterns, based on the company’s statistical models, that portray an idea about the downturn in the market and where it could be heading next. He stated that blockchain activity could provide insights about what is currently happening and offer clues about the near term future.

According to Rodriguez, the “In/Out Money” model considers the distribution of Bitcoin throughout individual wallets based on the current price. Based on this representation, there are 1 million addresses with balances between $6,600 and $7,350 containing 730,000 BTC, which could serve as support. But, if the sell-off continues, the next significant level of support sits around $4,200 and $6,600, with over 3.6 million addresses carrying nearly 2 million BTC.

On the upside, there is a certain level of resistance between $7,350 and $7,970, since 1.4 million addresses are holding 941,000 BTC. However, the strong resistance level sits between $8,000 and $8,800, with 3 million addresses containing 1.9 million BTC.

IntoTheBlock Volume Concentration Chart
In/Out Money. Source: IntoTheBlock

Even though Bitcoin plunged over 22 percent since last week, the number of Large Transactions with a value of $100,000 or higher has been relatively steady. On Nov. 14, there were almost 13,000 large transactions on the network, while today, there are over 16,000. Rodriguez believes that this is a signal of “confidence and trading activity.”

IntoTheBlock Transactions Larger that 100,000 USD
Large Transactions. Source: IntoTheBlock

This level of “confidence and trading activity” appears to be coming mainly from the western market. Nearly 55 percent of the Bitcoin volume was traded from 10:01 AM to 10:00 PM (UTC), which represents the West.

IntoTheBlock Bitcoin Trading Volume by Regions
Bitcoin Transaction Volume by Geographical Regions. Source: IntoTheBlock

Meanwhile, the eastern market has refrained from trading Bitcoin and moved into stablecoins, such as Tether. This is common during significant retracement in the market as investors look to protect their capital from declining prices.

China’s efforts to “regulate, control, and clamp down cryptocurrency trading” across the nation could also affect the eastern trading activity. As a result, almost 54 percent of Asian investors have moved into stablecoins.

IntoTheBlock Tether Transaction Volume
Tether Transaction Volume by Geographical Regions. Source: IntoTheBlock

BTC technical analysis

The analysis provided by IntoTheBlock’s CTO appears to coincide with what can be seen from a technical perspective on the Bitcoin’s price charts.

Based on the 1-week chart, for instance, the recent drop was anticipated by a descending parallel channel that is developing under this time frame since the week of June 24. Since then, every time BTC reaches the bottom of the channel, it bounces off to the middle or the top. But, when it reaches the top, it falls back to the middle or the bottom.

Bitcoin is now hitting the bottom of the channel at $6,900 once again after retracing from reaching the top on Oct. 26. If this technical formation continues to contain the price of Bitcoin as the current support level is backed by 1 million addresses holding 730,000 BTC, then a rebound to the middle or top of the channel is very likely.

BTC US dollar price chart
BTC/USD by TradingView

TD sequential indicator also adds credibility to the idea of a bounce off current levels. This technical index recently presented a buy signal in the form of a red nine candlestick on both the 1-day and the 12-hour chart. If validated, Bitcoin could rise one to four candlesticks or start a new bullish countdown. A green two candlestick trading above a preceding green one candle could serve as confirmation for an upturn.

If Bitcoin is indeed bound for an upswing, it will face stiff resistance around the 50 percent Fibonacci retracement level. This is also the area where Rodriguez sees 3 million addresses containing 1.9 million BTC, which could put pressure on a potential bullish impulse.

BTC US dollar price chart
BTC/USD by TradingView

It is worth noting that if Bitcoin can break through this resistance cluster, then it would probably resume the uptrend that began earlier this year. This is considering that the descending parallel channel on the 1-week chart is part of a bull flag. The move that took the pioneer cryptocurrency to nearly $14,000 created the flagpole. And, the current consolidation period is developing the flag.

This continuation pattern could result in a breakout in the same direction of the previous trend. By measuring the height of the flagpole, the bull flag estimates a 76.5 percent target to the upside. If validated, Bitcoin could rise to $15,000.

BTC US dollar price chart
BTC/USD by TradingView

Nevertheless, closing below the 65 percent Fibonacci retracement level around $6,900 could invalidate the bullish outlook. If this happens, Bitcoin could push downwards to the 70 or 88.6 percent Fibonacci retracement, between $6,400 and $4,400. As Rodriguez explained, this area could pose a significant level of support, as there are 3.6 million addresses carrying nearly 2 million BTC.

Moving forward

The recent price action that Bitcoin experienced brought out extremely pessimistic views about the future of Bitcoin. Mark Dow, a former US Treasury and International Monetary Fund economist, believes that BTC is “dying.” Additionally, the overall market sentiment turned into “extreme fear,” according to the Crypto Fear and Greed Index (CFGI).

Despite the bearish feeling among investors, Warren Buffett once said:

“Be fearful when others are greedy and greedy when others are fearful.”

Based on historical data, every time the CFGI goes into “extreme fear,” a buying opportunity is presented. Meanwhile, the network statistics and technical analysis previously presented estimate strong support around the current levels. Now, it remains to be seen if Bitcoin would be able to rebound or continue falling to the next level of support around $6,400 or lower.

The post Explaining the big Bitcoin drop: BTC network stats and technical analysis appeared first on CryptoSlate.

Bitcoin.com Accelerates Cryptocurrency Adoption With Racer Endorsement

Bitcoin.com Introduces Cryptocurrency to New Audiences With Racer Endorsement

Luke Vanna and the Bitcoin.com car are competing for top honors in the Australian Toyota 86 Racing Series. Sports partnerships like this can introduce cryptocurrency to new audiences as well as attract more businesses to join the ranks of the many merchants already accepting bitcoin cash across the country.

Also Read: Bitcoin.com to Launch $200 Million BCH Ecosystem Investment Fund

Bitcoin.com in Australian Toyota 86 Racing Series

This weekend, Luke Vanna will be competing in a car exclusively branded with Bitcoin.com’s logo and colors in the final round of the Australian Toyota 86 Racing Series at Newport. The Australian racer currently sits fifth in the championship rankings, and could potentially move into the top three this weekend with 300 points up for grabs. He continually places high in Australian racing ranks, and maintains a steady social media following. These factors present him as a great ambassador for Bitcoin.com’s effort to advertise to new markets.

Over the course of 2019, Luke has been helping build the Bitcoin.com brand across Australia at various race events on the Gold Coast and in Melbourne. He has participated in on the ground promotions where he meets people at public events, and promotes Bitcoin.com through his 16,000+ Instagram fanbase. Additionally, the racer has recently secured the services of the Norwell motorplex to offer attendees the chance to win a prize of a day’s training session at the world class motorway, with Luke being the trainer for the session.

Bitcoin.com Accelerates Cryptocurrency Adoption With Racer Endorsement

“What a privilege it is to be partnered with a global brand like Bitcoin.com. I am looking forward to helping reach the brand across the millions of motorsport race fans here in Australia and throughout Asia,” said Luke Vanna.

The Australian racer has organized events where he interacts with racing fans and introduces them to the world of crypto. At these events, Luke helps fans install the Bitcoin.com Wallet app, and shows them how to add bitcoin cash and begin using it. He has also worked with Bitcoin.com marketing officials to promote BCH to the vendors at the track, encouraging them to accept the cryptocurrency as payment. He’s helped introduce the company to hundreds of thousands of television viewers who watched him during the races with his Bitcoin.com branded car.

Bitcoin Cash Is Skyrocketing in the Land Down Under

Australia is one of the top global hotspots in terms of bitcoin cash adoption. A recent report showed that the number of BCH Australian retail transactions throughout the months of September and October 2019 outpaced every other digital asset by a wide margin. One reason for that is the high concentration of businesses accepting bitcoin cash payments compared to most places around the world. Another cause for the successful BCH adoption rate is the strong and active local community, as evident by hosting what was probably the world’s biggest Bitcoin Cash conference yet in Townsville, North Queensland in September.

Bitcoin.com Accelerates Cryptocurrency Adoption With Racer Endorsement

“Bitcoin.com is excited to expand our marketing in Australia in this partnership with Luke Vanna. Seeing the interest among new customers we are looking to innovative means to reach them, and meeting them wherever they are,” explained Bitcoin.com CEO Stefan Rust. “Bitcoin cash adoption is skyrocketing in Australia, with 92% of all cryptocurrency retail transactions. Bitcoin.com is committed to expanding the vendor reach for bitcoin cash, and partnerships like this one with athletes and racers in non-traditional locations will only attract new merchants to join the existing 200 BCH accepting merchants across Australia, not to mention users looking to spend their BCH with those merchants seeing value in this trustworthy, reputable payment source.”

What do do you think about Bitcoin.com’s endorsement of an Australian racing car driver? Share your thoughts in the comments section below.


Images courtesy of Rhys Vandersyde – Insyde Media.


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Charles Hoskinson says balance check was an overwhelming success

The long-awaited balance snapshot for Cardano’s Shelley incentivized testnet was an overwhelming success. Charles Hoskinson, the CEO of IOHK, said that the company managed to achieve a lot in a short period of time even though it was facing issues during the check.

Charles Hoskinson AMA from Dubai
Charles Hoskinson AMA from Dubai. Source: Youtube screengrab

Successful balance check will enable a smooth network snapshot

It seems that slow and steady does indeed win the race, as Cardano has shown that a careful and calculated approach that learns through trial and error eventually achieves success. After an action-packed few weeks in which we saw the launch of exciting new projects and updates, the balance check for Shelley’s incentivized testnet has finally happened. 

In another surprise YouTube AMA, Charles Hoskinson shared the latest news and updates around Cardano. Hoskinson, who is one of the founders of Ethereum and the CEO of Cardano’s parent company IOHK, doubled down on his belief that blockchain development is a tedious process that cannot yield results without years of work being put into it.

One of the biggest developments in Cardano in the past few months has been the balance check for Shelley’s incentivized testnet. The trial run before the network snapshot that will transfer users’ ADA onto the testnet was an overwhelming success, Hoskinson said. 

The check, which was scheduled for Nov. 12, managed to achieve a lot in a short period of time. Hoskinson said that all of the expected errors and bugs occurred and were promptly resolved by Cardano’s team. Issues stemmed both from Cardano as a 2018 legacy bug was discovered and users who failed to follow the adequate procedure. 

The biggest problem users were faced with as having their wallets show an incorrect balance after the snapshot. 

Even with the bugs that occurred, Hoskinson said that the biggest challenge was getting everything and everyone to work together. Luckily, the balance check managed to accomplish that, he said, adding that the team was happy with the velocity and the state of the software. 

Following eras of Cardano could happen at the same time

While the balance check is just a drop in the bucket that is the development of Shelley, it’s a step in the right direction. Any successful test seems to restore the community’s faith in Cardano, which always seems to be on thin legs due to its slow development process. 

Hoskinson, on the other hand, seems to have extremely ambitious plans for Cardano. One of the main topics he will discuss the upcoming Cardano workshop on Dec. 2 will be the 2020 roadmap. It will be the first time he openly discusses the possibility of launching Shelley and Goguen, two separate eras of Cardano, together.

“We’re fairly optimistic that those things aren’t far apart from each other,” he said, adding that there was a good possibility they would be launched at the same time.

This is a major step for the company. The arrival of Goguen will mean that Basho, the era of Cardano that focuses on scalability and interoperability, will be close behind. All of these updates serve as building blocks that will be used to create a stable foundation for Voltaire, the blockchain’s final era. Voltaire, Hoskinson explained, is about governance and will bring about a built-in voting system that serves both the treasure and updates. 

However, the Cardano community will have to wait at least until Q2 2020 before any major updates about Voltaire are released. The release of Voltaire will happen around the same time when IOHK’s contract to work on Cardano will expire. Hoskinson said that the future of IOHK’s involvement with the project will most likely be decided through votes cast through a Cardano Improvement Proposal Committee (CIP). 

People will be able to interact with CIPs through the newsfeed in the newly released Cardano wallets, he explained, adding that they will be transmitted as transactions on the Cardano blockchain.

Next year is set to be one of the most action-packed ones for Cardano. Hoskinson revealed that the company’s priority for 2020 will be to add features to Cardano without using a lot of coding. Another important pursuit for 2020 will be the development of decentralized applications (dapps) on Cardano. 

Hoskinson only touched on the topic of Ethereum interoperability, saying that it would be discussed in detail during the December summit.

A holistic approach to blockchain

While it was a welcome change of pace to hear some of the concrete developments made by the company, the Cardano community wanted to dive deep into Cardano’s long-term strategy. Many viewers were interested in Cardano’s plans with ADA, its native cryptocurrency. With a stagnating price that lost most of its value following the 2017 ICO boom, many seemed worried about the future of their ADA investments. 

Hoskinson didn’t take kindly to those seeking only the short-term, trading value in cryptocurrencies. He said that Cardano was one of the few, if not the only company that has taken a holistic approach towards transactions on the blockchain and that it has set its sights on changing the world, not getting rick quickly.

When it comes to ADA, Hoskinson seems to believe that there’s a strong connection between ADA as a store of value and ADA as a backbone to the Cardano protocol. ADA’s value will naturally rise as the number of users on the blockchain increases. 

“If the goal is appreciation, it’s achieved through the use of the system.”

For people to use a system it needs to host dapps and enable efficient transactions, he added. Ensuring that Cardano’s development goes in that direction will be the job of the Cardano Foundation and EMURGO

Both entities are already knee-deep in blockchain development. The Cardano Foundation already supports various initiatives that focus on blockchain governance and implementation, especially in Africa

IOHK’s “holistic” approach to blockchain is evident in its relationship with patents. Hoskinson believes that blockchain and crypto companies that hold patents have a warped view of what the industry represents. The point of the crypto industry is to decentralize everything and make sure there is no one person or entity in charge, he said. 

The crypto industry hosts some of the most complex software created anywhere and patenting it would just render it obsolete. 

Hoskinson’s disdain towards patented software was quickly overshadowed by his disdain towards Stellar. The company’s recent token burn was a wrong decision, he told viewers.

“They’re market manipulation on the short term for speculators at the expense of the future of the protocol,” he said, adding that burning tokens is something that could never happen at Cardano. 

It would require Cardano to steal from people, as there is no large supply of ADA sitting around waiting to be burned, he said. While it provided Stellar with a short-term price appreciation, the burned tokens are essentially permanently lost value that could have been used for protocol development.

The post Charles Hoskinson says balance check was an overwhelming success appeared first on CryptoSlate.

HSBC Closes Account Used to Support Hong Kong Protesters

HSBC Closes Account Used to Support Hong Kong Protesters

For months on end, Hong Kong has been the scene of intensive confrontation between pro-democracy activists and its Beijing-supported government. It now seems the financial establishment has taken a side in this conflict. Banking giant HSBC has decided to close an account used to support the protest movement in the special administrative region of China.

Also read: Economic Turmoil in Hong Kong Escalates as Colonial-Era Law Is Imposed

Account Collecting Donations for Demonstrators Suspended

The corporate account was closed earlier this week after HSBC found that the actual activities it was being used for did not match the business purposes stated by the client, The Prime Management Service Ltd. According to local press, the suspension comes after the bank asked the account holder last month to withdraw the balance within 30 days.

The account has been collecting donations for a non-profit organization called Spark Alliance HK. It spent the money to cover legal and medical expenses and provide other aid to anti-government protesters, the South China Morning Post reported. Quoting a banking source, the Alibaba Group-owned newspaper detailed that fundraising was not declared as part of the bank account’s intended use.

HSBC Closes Account Used to Support Hong Kong Protesters

“This client only stated that the account was for a commercial purpose. But in reality it is being used as a platform for raising funds. This doesn’t match the account’s stated purpose,” the anonymous source explained. Large amounts of money have been passing through it on a daily basis and the bank may have had money-laundering concerns, the source said.

Declining to comment on the specific case, an HSBC spokesperson nevertheless noted that the bank regularly reviews its customers’ accounts and added that “If we spot activity differing from the stated purpose of the account, or missing information, we will proactively review all activity, which can also result in account closure.”

The Hong Kong Monetary Authority, the region’s de facto central bank, gave its take on the closure too. Complying with international standards, the institution stressed, commercial banks are required to assess risk and take appropriate action regarding account activity. That, according to the HKMA, should ensure the consistency of their stated purpose and source of funding.

Protests Leader Calls on Banking Giant to Reopen Account

Joshua Wong, leader of the pro-democracy demonstrations in Hong Kong, called on HSBC to reopen the bank account. He took to social media to criticize the financial institution based in Hong Kong’s former colonial power, Britain, for closing the account that was used to support the protest movement against the region’s government backed by the communist regime of the People’s Republic. On Wednesday Wong tweeted:

In another comment, Joshua Wong noted that “It is only until recently that HSBC decided to investigate & close the account, especially following Xi’s threats of ‘crushing bodies and shattering bones’ of protesters in the city last month.” The activist, who has so far been arrested twice for his role in the demonstrations, expressed hope that the bank could reconsider its decision “as it is now effectively putting freedom fighters at risk.”

HSBC’s action comes after the General Secretary of the Communist Party and President of China, Xi Jinping, warned in October that efforts to divide his country “will end in crushed bodies and shattered bones.” His statement sparked new fears of an imminent crackdown on the protests by Hong Kong authorities with support from the government in Beijing.

HSBC Closes Account Used to Support Hong Kong Protesters

The Hong Kong protests were triggered earlier this year by the introduction of a draft law that would allow the local government to detain and extradite people wanted in territories with which Hong Kong does not have extradition agreements. It became clear that these jurisdictions would include Taiwan and also mainland China.

The Fugitive Offenders amendment bill has since been withdrawn but the demonstrations have continued, escalating into violent clashes with the Hong Kong police. The offices of banks, businesses and other institutions with perceived links to the People’s Republic have been attacked. Measures taken against the citizens’ protest movement, including the recent bank account closure, have highlighted the importance of decentralized cryptocurrencies.

What’s your opinion about HSBC closing a bank account associated with the Honk Kong pro-democracy protests? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock.


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Crypto community divided over why the Lightning Network hasn’t seen more adoption

Despite being seen as a cure for all Bitcoin’s problems, the Lightning Network is yet to see major adoption and has recorded less than impressive network stats this year. Public opinion seems to be divided between those who believe its time is yet to come and those who say it never should have come in the first place.

The Lightning Network seems to be stagnating

A solution to Bitcoin’s scalability problem, the Lightning Network was created to increase the transaction throughput of its blockchain network. Its proposition was this—add another layer on top of the Bitcoin blockchain and circumvent the limitations set by Bitcoin’s own design.

The idea of having an additional blockchain layer that would effectively remedy Bitcoin’s growing problems was received as revolutionary. Many believed it will be what brings adoption to the world’s largest cryptocurrency.

And the Lightning Network didn’t fail to deliver—earlier this year, it recorded a record number of active nodes and saw its network capacity grow by almost 20 percent in less than one month.

However, the network’s lack of growth in the second half of the year brought many to question whether its heyday has passed. One of the lead investors at DTC Capital, Spencer Noon, noted that 2019 hasn’t been the “year of the Lightning Network.” In a tweet, Noon posted the network’s stats that showed it has been mostly stagnating throughout the year.

Lightning Network statistics
Lightning Network statistics. Source: Bitcoin Visuals

Lightning Network is a sensitive topic in the crypto community

Noon asked his followers to weigh in on why such a promising project failed to see significant growth. Despite price volatility, this has been a formative year for the crypto industry as the market seemed to be showing serious signs of maturity.

But, that same maturity could be what stifled the Lightning Network. Noon believes the stagnation is a result of having a good product for the wrong market, as Bitcoin‘s value proposition is its ability to act as a stable, long-term investment vehicle.

Crypto analyst Willy Woo agreed with Noon, saying that the network’s biggest problem was that it doesn’t solve a present-day need.


Messari Crypto’s Phil Bonello said that it didn’t satisfy the market’s need for speculation.

However, Lightning Network’s defenders noted that the data Noon shared didn’t paint a complete picture. According to João Almeida, the CTO and founder of OpenNode, the network’s structure allows users to create private channels, which can drastically lower the network’s stats.

Ansel Lindner, the host of Bitcoin and Markets podcast, noted that the network has seen a much higher adoption than shown in Noon’s data. Its lack of growth, he said, was a result of a low market cap.

While hundreds of users joined the discussion and presented valid points for their arguments, it seems that all of them agree on one thing—the Lightning Network still has a long way to go.

The post Crypto community divided over why the Lightning Network hasn’t seen more adoption appeared first on CryptoSlate.

Market Update: Cryptos Shed Billions in Rapid Sell-Off

Market Update: Crypto Markets Bloody Shedding Billions in Sell-Off

Digital currency prices have been dropping in value this week and on November 21 the entire cryptoconomy fell below $200 billion. At the moment, most cryptocurrencies are down between 4-12% in the last 24 hours and 10-25% over the last seven days. Traders are currently pondering what will happen next as prices haven’t been this low since May.

Also Read: The Bank of Google Wants Your Spending Data

Crypto Markets Swim in a Sea of Red

Crypto market prices have dropped substantially this week with much of the losses occuring in the last 48 hours. At the time of writing, the entire cryptoconomy is hovering around $195 billion after dropping below the $200 billion mark this morning. Global trade volume is flat with only $23.4 billion in crypto swaps in a 24-hour period. Right now BTC is swapping for $7,075 per coin with an overall market valuation of around $127 billion or 66% dominance. Most of the BTC trades today are with tether (USDT) which captures 75% of all action. This is followed by USD (9.53%), JPY (6.97%), EUR (2.39%), and KRW (1.34%) pairs against BTC.

Market Update: Cryptos Shed Billions in Rapid Sell-Off

Over the course of the last 24 hours, BTC is down 10.2% and for the week it’s lost 18.2%. Behind BTC is ETH, which has lost 13% today and 20% for the week, trading at $146 per coin. XRP has seen little damage this week as each coin is trading for $0.23 and XRP markets are down 5% today. Lastly, tether (USDT) has bumped BCH out of fourth position because it commands more than two thirds of the cryptoconomy’s trades. Tether has a $4 billion dollar market valuation and $7.9 billion worth of trades today.

Bitcoin Cash (BCH) Market Action

Bitcoin Cash (BCH) markets have seen significant losses in the last 48 hours as well, as the crypto holds the fifth largest market share. At $203 per coin, BCH is down 13% today and 25% for the last seven days. BCH has a market valuation of $3.69 billion and $1 billion in global trade volume. The top trading pair with BCH today is tether (USDT) with more than 69% of all trades. This is followed by BTC (14.99%), USD (10.82%), KRW (2.25%), ETH (0.66%), EUR (0.58%), and JPY (0.43%). BCH has lost all of the gains it gathered during the last week of September and prices haven’t been this low in six months. At press time, BCH is the sixth most traded coin below EOS and above XRP.

Market Update: Cryptos Shed Billions in Rapid Sell-Off

All Eyes on China

On November 21, The Block published a story that said “sources” told the news outlet that Binance’s Shanghai office was raided by the police. According to the report, roughly 50-100 employees worked at the Shanghai office. Many people attributed this news to cryptocurrency prices sliding southbound on Thursday.

However, not too long after the report, the Malta-based exchange Binance denied the police raid and claimed they never had an office in Shanghai. Now Twitter is seeing an argument between Binance CEO Changpeng Zhao (CZ) and team members of the crypto publication over the legitimacy of the article. Following the report, the finance bureau of Shenzhen municipality published findings on 39 unidentified crypto exchanges that will be inspected for illegal activities.

Market Update: Cryptos Shed Billions in Rapid Sell-Off

BTC Shaves Off Months of Gains

This week, Fxpro senior financial analyst Alex Kuptsikevich explained in a note to investors that “[BTC] has almost entirely offset the growth.” BTC managed to capture some fresh FOMO from China, Kuptsikevich said, but that fever is now gone. “Bitcoin has lost more than 5% in the last 24 hours and trades around $7,500 and the decline below the 200-day moving average opens the way to $5K, where the previous consolidation area is located,” Kuptsikevich emphasized. “The crypto community suggests that the fall may be due to the capitulation of the miners, which is considered an extremely bearish signal for the benchmark coin. It means that miners have to sell their assets to continue working or even have to exit the market. The last time Hash Ribbons indicator was inverted Bitcoin started the process of declining from $6K to $3K.” Kuptsikevich’s note to investors further stressed:

The good news is that at least for a while the sale has stopped. If there are no new selling impulses for some time, buyers may start looking at the asset. It is worth mentioning that the benchmark cryptocurrency is in a tight ‘institutional ring.’ These investors are not interested in the technical prospects of the asset, just in price fluctuations, whose triggers will differ. Still, they will have one thing in common: to make the majority move in one direction while opening the positions in the opposite. So it won’t be boring.

Market Update: Cryptos Shed Billions in Rapid Sell-Off

Optimism and Hopium Still Thrive

Despite the strong price downturn, cryptocurrency influencers and heavyweights believe digital asset prices will climb higher. Binance CEO Changpeng Zhao recently explained: “If you look at the fundamental technology and a longer-term view, across a five year or ten year horizon, we’re very confident the industry will get bigger and when the industry gets bigger the prices will go higher — If you look at the short term view, bitcoin and cryptocurrency is a smaller market cap instrument so there will be higher volatility.”

Market Update: Cryptos Shed Billions in Rapid Sell-Off
Binance CEO Changpeng Zhao and venture capitalist Tim Draper.

Bitcoin investor and venture capitalist Tim Draper believes that his prediction of $250k per BTC will still come to fruition. Discussing the subject at the Malta AI & Blockchain Summit, Draper said: “I think bitcoin payment processors are really going to open the floodgates.”

Back to the Norm?

After two days of crypto prices sliding, no one is entirely sure what is going to happen next. At the time of publication, the multifactorial crypto market sentiment analysis index called the Crypto Fear & Greed Index (CFGI) points to “extreme fear.

Market Update: Cryptos Shed Billions in Rapid Sell-Off

Many investors believe the price is just normalizing after a false spike invoked by China’s blockchain push. “This price drop is a technical move; this is where the price was before the news of China’s support of blockchain, which is not crypto,” Joe DiPasquale, chief executive officer of Bitbull Capital said on Thursday. “So, the price of [BTC] is simply returning to normal. However, more downside cannot be ruled out, since the recent drop has turned sentiments to negative.”

Where do you see the cryptocurrency markets heading from here? Let us know what you think about this subject in the comments section below.


Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.” Cryptocurrency prices referenced in this article were recorded at 9.00 a.m. EST.


Images via Shutterstock, Trading View, Bitcoin.com Markets, Getty, Coinlib.io, Wiki Commons, and Pixabay.


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Proof of History is the latest consensus model, but how does it compare to its predecessors?

Surely the greatest irony in the blockchain space is that there has never been any agreement on “the best” consensus model. Bitcoin and Ethereum are widely lauded for pioneering the concepts of blockchain and smart contract platforms respectively, but both also come under heavy criticism for their lack of scalability. The scalability challenge is largely due to their use of the proof-of-work (PoW) consensus method.

Therefore, teams of developers have been focusing for years on devising a different method for achieving consensus among network participants. One that removes the bottlenecks caused by PoW, but still achieves the security of decentralization, while maintaining the right balance of incentivizing honest actors and deterring bad ones.

So far, there have been dozens of attempts at solving this quandary. However, only a few have emerged as main contenders, namely proof-of-stake (PoS) and delegated proof-of-stake (dPoS.)

However, a new horse just entered the race. A blockchain project called Solana is developing a secure, scalable blockchain that can handle up to 50,000 transactions per second on its testnet. How does it achieve this? Through a new consensus method, called Proof of History.

Proof of History, Explained

Proof of History (PoH) aims to lighten the load of the network nodes in processing blocks by providing a means of encoding time itself into the blockchain. In a regular blockchain, reaching consensus over the time a particular block was mined is as much a requirement as reaching consensus over the existence of the transactions in that block. Timestamping is critical because it tells the network (and any observer) that transactions took place in a particular sequence.

In a PoW scenario, the successful block miner is the first to find the correct nonce, which requires a certain amount of computing power to perform. However, PoH uses a newer cryptographic concept called Verifiable Delay Functions (VDFs.) A VDF can only be solved by a single CPU core applying a particular set of sequential steps. No parallel processing is allowed, so it’s easy to define exactly how long it takes to apply those steps. Therefore, the passage of time is evident.

PoH solves the time challenge, and thus reduces the processing weight of the blockchain, making it lighter and faster. Solana combines PoH with a security protocol called Tower Byzantine Fault Tolerance (Tower BFT), which allows participants to stake tokens so they can vote on the validity of a PoH hash. This protocol penalizes bad actors if they vote in favor of a fork that doesn’t match the PoH records.

Furthermore, Solana deploys proof-of-stake (PoS) as a means of determining who can participate as a block validator.

Proof of History vs. The Competition

So how does Proof of History stack up to its predecessors?

Proof-of-Work

There are some similarities between Proof of Work and Proof of History. Mainly, that both methods rely on a defined expenditure of computing power to produce blocks, or hashes as they are known in PoH.

Like Bitcoin and most other PoW blockchains, Solana also uses the SHA-256 algorithm. This may raise the question of whether an ASIC could significantly speed up solving the VDF function in PoH. Solana believes that this isn’t a challenge and that the processing power of most ASICs would be within an acceptable range of what’s available to the wider network.

Because PoH removes the timestamping burden from the network, it results in a far lighter, faster blockchain than anyone has been able to achieve so far using PoW. The incentive mechanisms are protected by combining with Tower BFT.

Proof-of-Stake

Proof of Stake (PoS) has been the long-promised solution to Ethereum’s scalability. In PoS, network participants stake tokens for the chance of being the next block miner and receiving the associated rewards. However, PoS comes with a significant challenge known as “nothing at stake.” In a PoW blockchain, a miner can only mine on one chain at a time, and not on forks. However, in PoS, a miner can stake their tokens on many different forks of the same blockchain.

In Ethereum, which will implement PoS in 2020, this challenge is overcome by introducing a penalty against those miners who vote for the wrong chain. Vitalik Buterin also previously proposed a second solution of penalizing anyone who votes on two different versions of any given block.

By itself, the PoH protocol doesn’t prevent malicious actors. Therefore, Solana deploys Tower BFT to introduce the assurance to network participants that bad actors will be penalized by having their stake “slashed” if they’re found to be voting against PoH.

By itself, PoS is also vulnerable to long-range attacks, whereby earlier participants could hijack the chain by disputing the blocks produced by participants who joined later. Tower BFT prevents such attacks by canonicalizing blocks that have received votes of more than two-thirds of the network.

Furthermore, the block production time is only 400 milliseconds, and the rollback time doubles after each subsequent 400 m/s period elapses. Therefore, after around 12 seconds, the time taken to roll back the network would reach into decades.

Delegated Proof-of-Stake

Delegated proof-of-stake (dPoS) is used by EOS and others to achieve a faster throughput by delegating block production to a small number of network participants. These block producers are elected by token holders. In EOS, there are only 21 block producers that control the network.

The challenges with this became evident almost immediately after EOS launched. Only 21 block producers mean the network is heavily centralized. Furthermore, there’s a risk that voters aggregate together to attempt to manipulate the block producer elections in their favor, as has been alleged with EOS. The protocol relies solely on the voting population to elect block producers who will act in the interests of the network.

Conversely, the PoH/Tower BFT combination prevents bad actors by introducing a powerful disincentive that they’ll have their stake slashed if they’re voting against consensus. This threat enhances security compared to dPoS.

Although the underlying technology is somewhat complex, PoH combined with Tower BFT could prove to be the killer consensus protocol that blockchain has been waiting for. It will need to deliver its promise on Solana’s main net first, then perhaps others will follow. No pun intended, but only time will tell.

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