The co-founder and CEO of decentralized cloud storage network Sia, David Vorick, has predicted that 51% attacks will increase dramatically in 2019. This comes hot on the heels of Ethereum Classic suffering such as an attack, as CCN recently reported.
Sia Dev Portends Increasing Number of 51% Attacks
According to Vorick, who is also Sia’s lead developer, 51% attacks – where a group of miners gains control of more than 50% of the computing power of a network – are now a risk for major cryptocurrencies and not just small cap-coins.
Vorick has blamed fundamental weaknesses in the protocols of the targeted coins for the success of the attacks. Specifically, the protocols are not incentive-compatible, as is the case with Bitcoin:
Bitcoin developers strive for something called incentive compatibility. If a protocol has incentive compatibility, it means that the optimal decision for each individual from their own perspective is also the optimal decision for the group as a whole. When protocols are incentive-compatible, individuals can be completely selfish because those selfish actions will benefit the group as well.
Bitcoin’s Protocol Design
So why not just copy Bitcoin’s protocol design if it’s that secure? According to Vorick, the majority of the cryptocurrencies have done that, but then they made changes which broke the incentive compatibility.
Among the biggest mistakes altcoin developers have made, per Vorick, includes making it possible to use shared hardware. This is because when the same hardware is used to mine multiple coins, incentive compatibilities break down. Incentive compatibility also breaks down when there is a shared algorithm among multiple cryptocurrencies:
When multiple cryptocurrencies share the same proof of work algorithm, the same hardware (even if that hardware is specialized) is able to target any of the cryptocurrencies and this disrupts the incentive compatibility in many of the same ways that ASIC resistance does.
Factors which have enabled 51% attacks include the maturing of hashrate marketplaces, as this has allowed attackers easy and fast access to computing power when attempting to attack.
Reduced Cost of Attacking
Prior to the existence of hashrate marketplaces, attackers would have required an equivalent number of the graphics processing units (GPU) that were defending a cryptocurrency. Expenses incurred to carry out such an attack were prohibitive, and this ensured that GPU coins remained largely safe. The development of hashrate marketplaces has, however, made it possible to hire GPUs for a couple of hours at a fraction of the cost.
Another development that has made shared hardware coins more insecure is the growth of large mining farms. This has particularly been the case for cryptocurrencies whose hashrate comprises several hundred thousand GPUs.
As a solution for the 51% attacks, Vorick has proposed that cryptocurrency exchanges increase confirmation times for deposits. Additionally, Vorick has urged exchanges to adopt more stringent risk management measures while exercising more diligence in choosing the coins they list.
Bitcoin Indicator Shows BTC Poised to Shatter $700,000: Digital Asset Research
As Bitcoin continues to slide, down $1,000 since Monday and dropping just below $10,000, Digital Asset Research, an institutional-grade crypto data and analysis company, has released the results of a new model that predicts Bitcoin will surpass $60,000 in less than a year.
The model is based on the stock-to-flow ratio, which compares the amount of a commodity in circulation divided by the amount produced per year. The ratio is typically used to forecast the price of gold and was popularized in crypto circles by analyst PlanB.
After crunching the numbers, Digital Asset Research says its results are close to those attained by PlanB, indicating BTC could hit $60,592 in May of 2020 before soaring well above half a million in 2024.
“Our findings are broadly supportive of the original analysis: the SF ratio has had explanatory powers (R Square of 91%) and is of sufficient statistical significance (t Stat of 181.3). The model predicts a bitcoin price of $60,592 in May 2020 followed by $732,256 in the 2024 halving.”
The study notes that it could take longer for BTC to cross $60,000 based on the leading crypto’s prior price action. Bitcoin’s bull runs have typically continued to climb after BTC’s halvings, which cut the reward miners earn for powering the network in half every four years.
“While the model predicts $60,595 in May 2020, in the two previous halvings the actual price didn’t reach 100% of model price until well after the halving. Based on an estimated halving date of 5/17/20, that puts model parity sometime in the year 2021 based on a similar lag. In other words, we’re still a ways off from knowing if these predictions will hold.”
Digital Asset Research says that ultimately time will tell if the stock-to-flow ratio will emerge as a leading indicator for predicting the future price of BTC.
“Our reading of the critiques combined our own analysis informs our belief that PlanB’s original research was correct, but perhaps incomplete. Looking at declining premiums to model and rhyming cyclicality lead us to believe that some other term or function is perhaps missing or undiscovered. Or it may simply be the case that Bitcoin as an asset can never be valued, merely priced, in the words of Professor Aswath Damodaran. It does seem that pushing the model at extreme boundaries produces some unbelievable outcomes, but we’re unlikely to be around to see what happens in the year 2140. That fact we’re fairly certain of.
Nevertheless, we find PlanB’s original findings and subsequent model an interesting addition to the discerning crypto investor’s tool kit. We look forward to further critiques and updates to the model and believe that open discussions can push our understanding of this asset forward. We look forward to testing the model with an out sample test at the next Bitcoin halving in May 2020. Until then, stay on target.”
You can check out the full study here.
Ethereum: USD/ETH (ETH=) Reclaims Position Above $200 After Finding Strong Support at $185
Ethereum: USD/ETH (ETH=) Reclaims Position Above $200 After Finding Strong Support at $185
At the time of writing, Ethereum is trading up over 2% at its current price of $200.85, which marks a significant increase from its recent lows of $180 that were set at the time when Bitcoin faced a sharp sell-off that sent it reeling to lows of $9,500.
After tapping $180 last Wednesday, however, ETH was able to swiftly recover to $185, which persisted as a strong level of support until yesterday, which is when the crypto began incurring some upwards momentum that has led it towards its current price levels.
Will ETH Continue Climbing Higher in Week Ahead?
Ethereum’s ability to surge to $200 today may be emblematic of improving technical conditions for the cryptocurrency, as Jacob Canfield – a popular crypto analyst on Twitter – explained in a recent tweet that it marked an upwards break of a downwards trend line on a short time frame.
“A lot of people are asking me about ETHBTC. #ETH / #Ethereum / $ETH Daily – Broke downtrend resistance yesterday. Hasn’t made a higher high. Below. Key S/R level at .025 that needs to be reclaimed. Weekly – Very narrow range back to 2016 levels that needs to hold,” he explained while referring to the below charts.
Although in the short-term it does seem as though ETH may incur some further bullishness, it is important to note that its mid and long-term price action does appear to remain somewhat bearish, and a failure to follow through and extend today’s upwards momentum could lead to further losses.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 224.42.
The projected upper bound is: 226.04.
The projected lower bound is: 168.68.
The projected closing price is: 197.36.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 19 white candles and 31 black candles for a net of 12 black candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 74.0010. This is not an overbought or oversold reading. The last signal was a buy 9 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 42.36. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 2 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -13. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.
Rex Takasugi – TD Profile
FOREX ETH= closed up 0.710 at 199.150. Volume was 70% below average (consolidating) and Bollinger Bands were 22% narrower than normal.
Open High Low Close Volume___
198.770 203.880 196.850 199.150 20,377
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 197.21 231.17 196.67
Volatility: 78 78 86
Volume: 52,952 66,547 58,141
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX ETH= is currently 1.3% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of ETH= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on ETH= and have had this outlook for the last 2 periods.
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Major Bitcoin Move Coming? Bakkt Launch Coincides With Gann Pivots
This week, the Intercontinental Exchange-owned Bakkt announced the date it would finally launch its much-anticipated and long-awaited Bitcoin Futures trading product, and Bitcoin price responded by spiking over $400 over the course of the next few hours, nearly reaching $11,000 before experiencing a pullback.
The date Bakkt launches is already an important date for Bitcoin, considering how bullish the platform is acting as a preferred gateway for institutional investors to gain exposure to Bitcoin. However, that date is also showing important significance as a Gann pivot point – a date in which powerful price movements or trend changes are expected according to Gann theory.
Bakkt Launch Timing Lines Up With Bitcoin Gann Pivot Points
There’s no denying that Bakkt will have a major impact on the Bitcoin market and Bitcoin price as crypto investors rejoice that what the community has speculated for months will be the catalyst that ignites the next bull run is finally ready for launch. Simply confirming the launch date and CTFC approval has been enough to send Bitcoin price rallying nearly $1,000 before it was stopped short just under $11,000 last night.
Related Reading | Can Ancient Math Predict the Next Bitcoin Top at $220K?
Bakkt’s launch date of September 23, also has significance as an important Gann pivot point. According to Mitoshi Kaku, a technical analyst whose analysis regularly uses trading strategies and theories popularized by W.D. Gann, a “legendary trader” known for combining ancient math with astrology to predict price swings not only by direction or target, but the time these movements would occur.
Kaku’s latest chart has been widely discussed by the crypto community for including the key Gann pivot date of September 23, alongside October 7th and the much closer August 26th. The date just so happens to be the same date as the launch of Bakkt.
The most recent Gann date on the analyst’s chart was June 24. On that day, Bitcoin broke through $11,000 and not even 48 hours later reached its local high of $13,800. If an equally significant move is in the cards for Bitcoin, a new all-time could be set, or Bitcoin price could fall to a fresh local low.
Next Pivot in August: Time to Sell or Time to Long BTC?
According to the analyst, the next Gann pivot date of August 25th also holds great significance and could be a “day to long BTC really hard.” He left the idea “unconfirmed’ until closer to the date itself, but then later followed up with a contrarian bearish note saying that it could also be a “time to sell everything.”
Kaku notes that the next Gann pivot is “massive” between August 25 and August 28, and that his intuition as a trader is leaning more bearish by the day, given the reversal setups the trader is seeing in the altcoin market.
Related Reading | Gann Theory Suggests Bitcoin Price at “Do or Die” Moment, Important Pivot Ahead
The analyst further notes that from September through December, which are “monthly pivots” likely starting with the Bakkt launch on September 23, is a time to pay extra close attention to Bitcoin price action.