14 Jun
0
5 reasons Bitcoin price is rising
Reasons Bitcoin Price is rising
The bitcoin price keeps rising and it is reaching the value of $700, growing more than 20% during the weekend.
Today, in fact, the Bitcoin price is $695, according to Coindesk and it seems it doesn’t want to turn back.
Experts are trying to provide several reasons for this rise, including the Chinese Domain and the halving of miners rewards.
Below you can read the 5 reasons Bitcoin price is rising so fast:
Halving of Rewards
In July it will take place the event of the halving of the miners rewards: the mining process, in fact, will be rewarded 12.5 BTC per block, instead of the previous amount of 25 BTC.
This process called halving is aimed at preventing a digital currency inflation by reducing the amount of new currency created over time, until it reaches it maximum amount of 21 million bitcoin ever created.
More interests in the Blockchain
Another reason could be the growing interest in the Blockchain by several worldwide companies such as Microsoft, IBM and more.
As the interest in the different applications of the distributed ledger is growing, more and more people start to approach bitcoin too.
Chinese Domain
As we tried to explain into this blog post, one of the possible reasons of the rise of the Bitcoin Price is the increase of the Chinese domain.
In fact, its price in CNY on the local exchange is growing up quickly, reaching more than the current bitcoin price.
Joe Lee, founder at the trading platform called Magnr, explained:
“Capital flight continues as the IMF (International Monetary Fund) is now signalling warnings at the increasing default risk against China’s corporate debt. China’s economy is changing rapidly and debt fueled growth can only be sustained for so long.”
FIAT Currencies Flow
Another reason why the Bitcoin price is growing could be a fiat currencies flow.
This is the point of view of Chris Burniske, who explained:
“What this implies to me is we have lots of new fiat money flowing into bitcoin, and bitcoin’s price action is not being driven by people swapping out of ether, which we’ve often seen before.”
UK out of Europe
Other bitcoin experts explained that another possible reason could be the fear that the UK could leave the UE.
A recent survey showed that 52% want this split, while 33% prefer that it remains.
This is the same thing happened when it appeared that Greece would leave the European Union: for this reason the bitcoin price hit about $300.
Universal Wallet
If you have to different cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, etc., you need to have different wallets, which is difficult to handle.
This is why HolyTransaction create an Universal wallet where you can store all your digital currencies within a single account.
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7 Jun
0
Halving and Bitcon price: there might be a hard fork problem
Bitcoin price continues to rise during this week, nearing the amount of $600.
In fact, bitcoin established a new positive trend during the past week, growing fast and surpassing $580 the last weekend.
Currently the Bitcoin price is $586, the highest price since August 10th, 2014, when it reached $589.
Bitcoin Price is growing
Previously we offered several reasons for this Bitcoin jump, as in the Chinese Domain article you can read here.
Data from the yuan/bitcoin market shows that the price reached a high of ¥3,866.11 ($589) there, so it would probably keep growing or remain stable.
Other experts in the bitcoin sector expressed different ideas, concerned about the problem that halving could lead to.
Hard Fork Problem
Recently we also read about the hard fork problem caused by the halving of the reward for miners.
In fact, when the halving will occur, the miner reward for new blocks will be lower (from 25 BTC to 12,5), but their expenses for electricity and hardware will remain the same, so their profits will drop.
This could generate a hard fork problem, as miners could leave the Bitcoin core Blockchain to work on other chain to increase their profits again.
In the meantime, in fact, the ethereum price for example surged 50% in a week.
Multicurrency Wallet
Usually, if you have to store different cryptocurrencies (Bitcoin, Ethereum, Peercoin, etc.) you need to have different wallets, which are difficult to manage.
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6 Jun
0
Can the halving event cause a blockchain collapse?
The reward halving will arrive soon and some people believe that this event could boost the Bitcoin price.
But a miner of BitBank is concerned because he fears the halving might lead to a collapse of the entire blockchain validation system.
In fact, founder of the Chinese Bitbank Chandler Guo fears that if the price of bitcoin does not appreciate significantly before or immediately after halving, too much of the hashrate will drop off the network due to unprofitable mining, making transaction verification virtually impossible.
Bitcoin Halving
This event happens every four year: in January 2009 every new block generated a reward of 50 BTC. In 2012 the reward will drop down to 25 BTC.
The reason of the halving existence is that there is a limit of 21 million of Bitcoin to be ever generated by the system, so it exists to keep its price consistent and to protect the cryptocurrency from inflation.
But this drop will cause a lowering in profit margins for miners, that’s why Guo believes that miners who use less efficient hardware will shut down as the reward is cut.
He explained:
“When halving comes the cost of the electricity is the same, so it must shut down. For example, the S3 is working 24 hours, they cost $1, for example, and they can mine $1. So if mining equipment can only mine the electricity payment, they don’t need to work.”
Miners calculate their income as the difference between their reward and their electricity and machines cost; in order to maximize their profit, they need more hashing power at a given electricity cost.
To calculate the hashing power needed, Satoshi Nakamoto created an equation in the code so it can analyze how much hashing power is on the network and increase – or decrease – the difficulty.
This is the reason why Guo is concerned: if more hashing power is added, blocks can be found sooner, increasing profits for miners and speeding up the time at which difficulty must be raised. But now the risk he foresees is exactly the opposite:
“When the difficulty doesn’t change, but the hashing power shuts down immediately, there will be no next block. If, after the halving, the price does not go up, but the prices goes down, there will be heartache. It means no next block, no blockchain, all of the blockchain will be shut down immediately.”
So, if a significant share of the hashing power were to drop off the network, that would slow down the validation of blocks.
That would determine slower transactions, impacting on the confidence of the network. A crisis of confidence would generate a sell-off, causing a fall of the bitcoin price that would push more miners to the shut down, thus further reducing the hashing power and eventually leading to a total collapse.
A Different Perspective
Some other players in the mining business don’t agree with Guo.
That’s the case of Bobby Lee, CEO of BTCC, the third-largest bitcoin mining pool that controls roughly 16% of the hashrate. Lee believes that even though a drop in hashrate is likely to happen, it won’t be as significant as Guo thinks.
“After mining, for sure the hashrate will come down a bit, it will probably come down by 5-10%. It won’t come down by more than 30%. We’ve seen it in other cryptocurrencies that at a block halving, the hashrate does come down. That’s expected,” he explained to Coindesk.
Another of the main mining companies, BitFury, doesn’t seem concerned about the halving.
“The important point is that the hashrate decline will not compromise the security of the network and will not make it susceptible to attack. We also firmly believe the upcoming halving event is good for the industry because it will motivate Bitcoin companies to innovate,” said Valery Vavilov, CEO of BitFury.
One thing is sure: if the price will to rise when the halving occurs, there won’t be a problem, because miners will continue to be rewarded enough to cover their cost and maintain profitability.
Multicurrency Wallet
Normally, if you want to store several different cryptocurrencies (Bitcoin, Ethereum, Peercoin, etc.) you need to have different wallets, which is difficult to manage.
HolyTransaction want to solve this problem, unifying everything in a single account.
So, do you want to store Bitcoin and other cryptocurrencies? Open here your wallet for free.
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3 Jun
0
Bitcoin price future: it is alive and well
How many times did you hear about the death of Bitcoin? About 45 according to a recent twitter post we found very funny.
Well, according to us, Bitcoin seems to be alive and well, and there are lots of positive signs that indicate that this cryptocurrency is not dead as everybody thought.
The Bitcoin price, in fact, is now $549 (according to Bitstamp, or one of the most used exchanges in the world).
Update: Bitcoin price is reaching $700 today, on June 13rd, 2016.
This means that the price rose more than 20% in the last 7 days, reaching a 1 year high, as we can see from the Bitcoin price index of Coindesk.
Reason of the Bitcoin Price jump
We tried to understand the reason behind this jump.
Of course it is hard to find a unique answer, but we saw that probably the Bitcoin price was driven by the Chinese demand, testified by the bitcoin price on the Chinese local exchange, which reached a level of $580 when it was priced $520 on the international markets.
Another important reason could be the halving process, as you can read in this insightful analysis.
Positive news about Bitcoin
But there are other reasons to be positive about Bitcoin, as several companies such as Microsoft recently started to develp their own projects related to the blockchain.
Also, several countries such as Japan started to regulate and recognize bitcoin as an official method of payment.
Furthermore, Switzerland began to accept Bitcoin for Public Services.
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29 May
0
Why the KnCMiners Bankruptcy might be a good news
The Sweden bitcoin mining company called KnCMiner announced its bankruptcy.
KncMiners was one of the greatest mining company who raised $15m in venture funding from Accel and Creandum, among the other investors back in 2015 after only two years of life.
Why KncMiners had to face Bankruptcy
One of the possible reason of this bankruptcy could be the three class-action lawsuit KnCMiner had to face recently.
But CEO Sam Cole denied any relationship between their bankruptcy and these recent lawsuits.
Cole, in fact, argues that the main reason for KnCMiner bankruptcy is the decrease of the bitcoin transaction rewards for miners.
“Effectively our cost of coin – how much we produce the coins for – will be over the market price. The price is now [roughly] $480. With all of our overhead, after July, the cost will be over $480. All of the liabilities we’ll have after that time will be too high”, explained Cole.
Why the Bitcoin Mining Company KnCMiners Bankruptcy might be a positive news
In a centralized economic system currency is issued by central banks who control the emission and the value.
Conversely, in a decentralized economy currency is not controlled by any central authority and this is the reason why – in the Bitcoin case, for example, in his whitepaper Satoshi Nakamoto suggested an algorithm to define when and how many new bitcoin can be created.
According to this algorithm the number of new bitcoins is set to decrease with a 50% reduction every 210000 blocks, or almost 4 years.
As a result, the number of bitcoins will not exceed 21 million.
As the number of bitcoins is set to decrease the same thing happens to the miners reward.
Thanks to a process called halving, the rewards drop down, as it happened back in 2012 when it took down from 50 to 25 BTC.
Now it is set to become 12.5 BTC in July.
For this reason the miners work is not so convenient anymore, so the number of miners is decreasing. Ans this means that the Bitcoin price will grow.
Also, a Bitcoin value is roughly $500, and miners cost of a new Bitcoin is more than $480 in energy and computer tools, so under that price it’s not worth doing it.
Halving process to help Bitcoin rising
 |
| Image Courtesy of Coindesk.com |
As for any scarce product, like gold or oil, the cost of extraction is one of the main elements that determine its price. If it increases, then the miners stops to do their jobs.
As a result the offer is reduced and its value rises.
Read here another interesting article about halving and watch here the countdown to the next reward drop.
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22 Apr
0
THAT’S WHY $440 BITCOIN PRICE IS LOW
Today Daniel Masters, ex trader at JP Morgan, published an interesting article about the bitcoin price on Linkedin.
In this article, Masters comments the upcoming halving of rewards for the miners and its impact on the current bitcoin price.
Back in 2012, the mining activity reached the level of 210,000 blocks mined and the first halving occured, taking rewards down from 50 to 25 BTC.
Right after that, the bitcoin price raised significantly, from $7 to $11 in nine months.
We are now at roughly 409,000 blocks, and the next halving will take place at 420,000, a level that is estimated to be reached by next july.
At that time rewards will lower again, from 25 to 12.5 BTC.
Bitcoin price will rise
According to Masters, it’s reasonable to expect another price rise following this event.
Here is his explanation:
“Prices so far in 2016 have been relatively stable. That tells me that there is enough new investment and real time demand to match the creation of $575m new coin. It seems obvious that if that dollar-sized demand persists, which I believe it will, that the price of bitcoin must rise to meet it”.
In a few words, it’s a simple matter of offer and demand, exactly the same way as it happens in the oil market, where a reduction in production determines a rise in price, given a stable demand.
That’s basically why the current level of $440 is to be considered low.
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9 Feb
0
Infographic: What is Bitcoin Mining?
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29 Oct
0
Infographic: Why Is Decentralized Currency Better?
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5 Oct
0
Bitcoin’s Monthly Recap of September 2015
Welcome to HolyTransaction’s ninth monthly recap for the year 2015. This past month of September has been marked by some pretty developments in old cases and the long awaited release of new products; during that time, the bitcoin price rose from a low of $229.86 on September 1st to a high of $236.12 on September 30th, according to Bitcoin exchange Bitstamp.
Mike Tyson Proud to Be In Bitcoin, Opens Bitcoin ATM in Las Vegas
Weeks ago, Mike Tyson announced that he would be releasing a Tyson branded Bitcoin ATM in Las Vegas. The Lamassu Bitcoin ATM currently sits at the Linq in Vegas, is the 7th in Sin City, and has gathered a lot of attention. Tyson believes that Bitcoin will grow as education on it grows. He commented: “People don’t really understand a currency based on numerical equations. I personally still don’t … but I’m grateful to be a part of the revolution and hoping that my participation in this space will lead to more conversations and help increase knowledge and awareness.”
More Corruption in FBI Silk Road Case As Variety Johns Comes Forward
Variety Johns, the man long associated with working with Ross Ulbricht and Silk Road, has turned himself in and revealed a very convoluted tale. He claims that a corrupt federal agent is threatening the Ulbricht family and is in control of an encrypted Bitcoin wallet with Ross Ulbricht’s bitcoins. Posting to the internet, Variety Johns revealed his real name and the alias of the supposed agent hunting him: Diamond. The years old investigation into Silk Road is still ongoing.
21 Inc. Releases 21 Bitcoin Computer
21 Inc., one of the most well-funded Bitcoin companies in the world, has released its first product: the 21 Bitcoin Computer. At its core, the Bitcoin computer is just a Raspberry Pi 2 with an attached 21 Inc. Bitcoin mining chip that is rather efficient. The Bitcoin computer enables a developer to have full access to the Bitcoin network as a full node. Already, the computer has become the #1 best selling server on Amazon.
R3 Blockchain Initiative Brings 22 International Banks Together
In a sure sign of the times, many big name banks from around the world have committed to working with new Bitcoin company R3. R3 is planning a blockchain development initiative that will update the financial infrastructure that banks use to include blockchain technology, whether or not Bitcoin will be involved remains to be seen. The CEO of R3 stated: “The addition of this new group of banks demonstrates widespread support for innovative distributed ledger solutions across the global financial services community, and we’re delighted to have them on board.”
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6 Aug
0
Dogecoin to allow Litecoin merge mining in network security bid
AuxPoW enables the dogecoin block chain to receive work from other scrypt-based networks. Dogecoin miners will still be able to generate blocks and receive DOGE, but now, litecoin miners will contribute hashing power to the dogecoin network.
The move, announced on the dogecoin subreddit, follows a months-long period of community debate focusing on the question of long-term viability in the dogecoin network. Litecoin creator Charlie Lee suggested the idea of merge mining in April, eliciting mixed reactions from both sides of the conversation.
According to the dogecoin development team, the AuxPoW integration will require a hard fork of the dogecoin block chain. No specific integration date has been given, but the development team said that testing will begin soon.
As explained in the original announcement:
“Our topmost priority has always been to provide a stable platform for the currency and its services and of course its users. We hope that with AuxPoW we can achieve that in a better way than what it currently is like. Our hashrate has been on a decline and we hope that we can gain more of it with the acceptance of proof of work from other chains.”
As expected, community members voiced both enthusiasm and concern for the AuxPoW plan. Yet, advocates for the strategy, including Lee, say that the move will ensure the stability and security of the dogecoin network.
Plan to save dogecoin
AuxPoW is not new – several coins already enable work from other mining networks, with namecoin being the most prominent example. This long-standing reputation as a workable proofing system – and the strength of the litecoin network – has gained the idea support in recent weeks.
In a recent community post on /r/dogecoin, Dogetipbot creator Josh Mohland shared his perspective on the concept, saying that AuxPoW would help solve a key problem with dogecoin: the fact that it was never intended to function as a full-fledged transaction network.
Mohland explained:
“Dogecoin was built to die quickly – none of us expected it to grow into the absurd entity it is today. With that said, there’s absolutely an easy way to save the coin from its certain death (and by death I mean 51% attacked for the lulz), and that’s AuxPoW.”
He went on to call AuxPoW “a simple change” worth the trouble, owing to the fact that the risk of a 51% attack far outweighs perceived costs.
Other community members expressed concern over the idea, saying that the move enables large litecoin pools to crowd out smaller dogecoin miners. Questions were also raised as to whether or not AuxPoW would actually help prevent a 51% attack.
Dogecoin in ‘dire situation’, says Lee
Litecoin creator Lee hailed the announcement, telling CoinDesk that the development team made the right decision during a “dire situation”.
Lee argued that the move comes at the right time given the long-term threat to the dogecoin network – and, as some have pointed out, its falling price. He added that the move provides increased security for dogecoin without any repercussions, removing a source of concern for the network and enabling broader development in the community.
Lee told CoinDesk:
“[The community] can focus on what dogecoin does best (tipping, donations, wow) instead of worrying about defensive mining and network security.”
Image via DailyDoge
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