In an announcement from Bloxroute Labs on the 10th of January, the company noted that they had come to an agreement with the Chinese mining operator, Rawpool Group and Yeecall, a communications software firm. The partnership was announced with the view of Bloxroute having access to both companies resources and using their systems to test the network. Rawpool and Yeecall intend to be the first ones to adopt the Blockchain Distribution Network version one, Bloxroutes offering.
Bloxroute Labs Hunt For Partners To Begin Deployment
Bloxroute has claimed it has an effective solution to the scalability conundrum plaguing the Bitcoin network. It solves this by propagation of blocks in a neutral manner. The company defines its unique solutions in its whitepaper, calling it the Blockchain Distribution Network (BDN). It says that by deploying their BDN, participating nodes are forced into a state of constant consensus. This is because, even when they are processing onchain transactions, the nodes themselves are neutral.
While their product has been ready, the company had been looking for companies to partner with. After quick negotiations both the Rawpool Group and the developers of Yee Chain were onboard and now the next phase of node deployment is expected by the middle of February.
An official statement by the blockchain firm said, “Rawpool and Yee Chain will be among the first adopters of the Bloxroute BDN version one available for deployment in Q1 and will participate in the first testing of the Bloxroute BDN scheduled for February.” After this, the system will be deployed on a larger scale with other miners and users also involved. At this stage, the Bloxroute API is going to handle both Bitcoin as well as Ethereum gateways.
The Only Layer Zero Scalability Solution
It is expected that BDN will release with a fully operational network. From the onset, it will be supported by 15 nodes across the world. Yet, the company expects that by the third quarter of this year it will be able to scale up and deploy up to 50 nodes. It is expected that once the pre-beta testing with its partners is completed, a second test product will be released, in March, which will attract more mining pools to join in.
There is a reason behind such high expectations. Bloxroute asserts their BDN is the “only layer zero scalability solution that solves the scalability problem at its core.” In its whitepaper, it stresses that with mass adoption, the participants in the network will be able to transmit and receive transactions much faster than presently possible.
A spokesperson noted that this is the main reason that attracted its partner, explaining
“This partnership is not only a large step towards scaling blockchains but also will allow Rawpool to immediately hear about and send blocks faster.”
Easy Adoption For Bitcoin [BCH]Cash
Talking about its setup, while mass adoption will certainly help, Bloxroute insists their network is not dependent on it. As a matter of fact, it can be used by any single node, as the underlying protocol of the consensus layer can allow up to 33 transactions per second.
The BDN might actually be more beneficial for BCH miners. This is mainly due to three reasons linked to each member of the partnership. Bloxroute does not charge any fees as no protocol change is needed. Rawpool was one of the largest BCH mining pool until a major market crash in November. Rawpool Groups CEO and founder, David Li have repeatedly hinted about liking the coin. And finally, YeeCall has been known to be friendly toward the BCH ecosystem. Last year its Yee Wallet partnered with the Bitcoin CashAssociation and even airdropped some BCH to its users.
While the news is not industry altering, it must be remembered that small iterations are very important for the overall industry. These are important steps that help to iron out the problems with the tech and find innovative solutions to the myriad problems associated with this game-changing technology.
Crypto Money Managers Unleash Social Media Algos to Predict Bitcoin Volatility
Money managers are hungry for yield. Crypto continues to outperform just about any other asset class making this nascent market a hot-bed for alternative prediction solutions. And social media algos are front and centre of that speculation.
Cryptocurrency prices, like foreign exchange, are largely decentralized providing plenty of opportunities for smart programmers to profit from the difference. But can those same programmers hone their craft to take advantage of a new form of opportunity, social media sentiment analysis? Some seem to think so.
Funds Head-Hunting Algo Programmers At Alarming Rates
Sentiment analysis is not particularly new, but crypto is. And retail investors don’t hang out in private meeting rooms and exclusive restaurants. They hang out on Twitter and a whole host of other digital mediums. Good-quality programmers who can tap this diamond mine are in high demand.
One report revealed that the number of blockchain job postings has soared to 4,086%since 2019. The large majority of those likely data-driven roles. According to PricewaterhouseCoopers, quantitative crypto funds significantly outperform their peers’ thanks to the analysis of online crypto chatter.
Coders with machine learning skills are particularly highly sought after. One Taiwan-based expert even used crowdsourcing to build an analysis algorithm. Mark Howard explains:
“It’s pretty hot right now, any fund that’s worth their salt, they are devoting some of their resources and allocation for sentiment analysis.”
Fake News and Paid Views
If you were thinking about jumping on the bandwagon, realize that sentiment analysis is not the holy grail of all crypto predictive analysis. At least not yet. Platforms like Twitter, Facebook, and Reddit are still plagued with bag-holders and marketers looking for every chance to punt their own coins.
BitSpread, a blockchain asset management advisory in London has built its own social media algo but warns of the dangers. In an interview with Reuters, CEO Cedric Jeanson explained:
“The sentiment itself, what we see on Twitter, can be really geared toward fake news. We are always very cautious about what we’re reading in the news because, most of the time, we’ve seen that there’s a bias.”
Scraping the most relevant data is no easy task. Indeed, getting an accurate picture of what people are trading compared to what they are saying is tricky. Part of Bitspread’s algorithm focuses on cryptocurrency exchange posts that highlight trading positions. Similar to this:
Retail Interest Not Catching up in This Crypto Bull Run
The jury is still out on how successful this approach will be. Despite Facebook’s Libra recently surpassing Bitcoin on crypto Twitter, the latest Google Trends data is not very encouraging.
While Google search interest for Bitcoin was at its highest 2019 level in June, it’s still well off the 2017 highs. Meanwhile, the price has rallied to $14 000, not far from its all-time highs. The data suggests that retail investors may not be driving this bull run as in previous years.
That could ultimately put a spanner in the works for crypto social media algos considering that institutional investors are highly unlikely to post their trades via social media. Either way, it’s early days and the volatility afforded by Bitcoin still offers potential lucrative gains.
Bitcoin Correction to $9,500 Could Be Followed by 20% Drop: Analyst
Bitcoin (BTC) has been absolutely slammed over the past week. Since passing above $13,000 for the second time this year last Wednesday, the crypto has been on a clearly downward-sloping trend.
In fact, as of the time of writing this article, Bitcoin has lost 25% in the past week, falling to as low as $9,300.
Despite the fact that optimists are expecting for bulls to experience some form of short-term reprieve, historical trends and other key indicators predict a further unwinding of the cryptocurrency bull market.
Bitcoin Poised to Hit $7,500
Conceptualized by Trace Mayer, an early Bitcoin investor and funder of Kraken, the Mayer Multiple is a way of determining if BTC is either overbought, fairly valued, or oversold. It is calculated by putting the asset’s current price over its 200-day moving average.
Per an analysis of this indicator (currently sits at 1.6) by CryptoKea, a little-known analyst that accurately called the recent drop to at least $9,700 earlier this month, if you consider the Multiple, the ongoing correction looks much like the first “major correction” of 2017’s bull run.
He notes that if history repeats itself and Bitcoin reverses out of its current short-term bearish trend like it did in 2012 and 2017, it could find support anywhere from $7,148 to $8,700. This corresponds to 1.20 times to 1.46 times of the 200-day moving average, which currently sits at $5,957.
Most likely, however, Kea notes that the “most probable target” as per the use of the Mayer Multiple will be $7,505 — another 20% drop from the current Bitcoin price of $9,600.
This somewhat lines up with the target of $8,000 that other analysts hold. Per previous reports from NewsBTC, Timothy Peterson, a prominent American crypto fund manager, notes that Bitcoin’s current active account figure suggests that BTC is overvalued.
According to Peterson’s model, which takes a 30-day median (as of July 13th) of the number of active accounts on the Bitcoin blockchain, BTC currently has a fair valuation of just above $8,000.
In a tweet issued on Saturday, Josh Rager, a prominent technical analyst and cryptocurrency commentator, looked to this same level. View image on Twitter
Rager notes that a “confluence” of chart data and on-chain data suggests that a pullback “would likely bottom out at $8,000”. As he explained in the chart above, $8,000 acted as a key horizontal support and resistance level in the recent rally and 2018’s crash.
What’s more, there is also a CME Bitcoin futures gap around $8,500, which is one of the last gaps waiting to be filled.
And as Alfonso Esparza, senior market analyst at Oanda Corp, recently told Bloomberg: “[Bitcoin] continues to trade lower as comments from President Trump put downward pressure on the cryptocurrency. It could fall further to $8,000, giving back all the gains made in June.”
Drop Might be Over?
Despite this, one analyst believes that the drop is most likely over. In fact, he drew attention to almost five signs why this may very well be the case, even if it sounds crazy.
Firstly, the one-day Relative Strength Index (RSI) and the Stochastic iteration of this indicator are at their lowest levels since at least February, entering the “oversold” range. The one-day Moving Average Convergence Divergence (MACD) has tapped the zero level, despite the fact that Bitcoin is in a raging bull market according to most analysis.
Also, the Elder’s Forse Index, an indicator meant to exhibit the strength of moves, is at its lowest since November 2018; and historical volatility is almost at 100%, implying a move to the upside to return volatility to levels deemed normal.
Bitcoin Network Is Moving $3 Billion Daily, Up 210% Since April
Bitcoin’s average transaction volume is topping $3 billion per day, data from crypto analytics site Coinmetrics.io reveals as of July 16.
Bitcoin’s Uptrend in Daily Transaction Value Eclipsing Altcoins’
The data — which has been adjusted to remove noise and certain artifacts, per Coinmetrics — shows an impressive uptrend in the USD value for the volume of the coin’s transactions and transfers over the past 90 days.
On April 17, the average daily value was at $1.04 billion as compared with $3.22 billion on July 16, an almost 210% increase.
The top coin has seen a significantly higher spike in volume as compared with ether (ETH), which saw a 77% increase over the same time period — from a daily average of $370 million to $657 million. XRP has seen a still milder uptrend, at 61% — with the value of daily transactions climbing from $152.5 million in mid-April to $245.6 in mid-July.
3-month chart for BTC transactions, transfers, value, adjusted, in USD. Source: Coinmetrics.io
Bitcoin broke the $3 billion daily average mark on July 11, Coinmetrics’ data shows, when the coin was circling the $11,500 price point. Despite trading roughly $2,000 lower as of today — having taken a steep 11.4% hit on the day and over 24% on the week — average daily transaction value has continued to climb.
Commentators have today argued that the coin’s short-term downtrend was triggered by an antagonistic response from the United States government to Facebook’s Libra coin, which has extended to the cryptocurrency space more broadly.
Veteran trader Peter Brandt anticipates that total market cap could now correct by as much as 80% — yet argues that most of the damage will be shouldered by altcoins, not Bitcoin.
On July 7, Cointelegraph reported that Bitcoin’s hash rate had hit a new all-time high of 65.87 EH/s. Nevertheless, despite the week’s price fluctuations, this figure has continued to soar north, reaching almost 73 EH/s to press time.