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Bitcoin (BTC) Should Not Mind Altcoins: Ari Paul

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Bitcoin (BTC) supporters should be neutral or even friendly to altcoins, but be very skeptical of hard forks, commented Ari David Paul, co-founder of BlockTower Capital. But what is worrying is hard forks that challenge the mining of the SHA-256 algorithm.

Ari Paul, who recently joined Hedera Hashgraph, showed a balanced stance toward altcoins in a recent Twitter thread. The comments fall within the discussion of “Bitcoin maximalists”, which came to the forefront as BTC prices far outpaced the performance of altcoins in 2019 markets.

In the final analysis, Paul believes BTC can take over all use cases and technological features proposed by altcoins. But in the short term, altcoins may carry the demand for a certain solution, until it is implemented on the Bitcoin network.

Hard Forks Challenge Bitcoin

Hard forks, on the other hand, are harmful and directly bring down the image of BTC, Paul believes. In 2018, BTC faced off with two major hard forks that reaped the most success – Bitcoin

Cash (BCH), and Bitcoin SV (BSV). Both coins, at some point in their history, have claimed they are the real Bitcoin.

Especially for Bitcoin SV, the message is very pronounced. Project proponents believe it is the real Satoshi vision, while the current BTC asset will flounder, to be replaced by BSV.

Currently, BTC, BCH, and BSV are the leading SHA-256 networks by hash rate. Bitcoin, of course, is at the lead, with unprecedented mining levels. Miners managed to reach a pace of more than 97 million terahashes per second, an absolute record. The BCH and BSV networks only carry around 1 million terahashes per second.

Hashrate Wars

The danger of hard forks using the same hashing mechanism lies in battles for influence, as miners reassign their resources. In the past, this has been a threat to Bitcoin, especially at the time when miners threatened to split off and create a new version of the Bitcoin blockchain, to out-compete the original through more active mining.

But those events, known as the SegWit2X debate, only happened when the Bitcoin mining pace was only a fraction of current activity. Now, miners can afford to launch their machine on any given network and earn block rewards.

Over the past decade, BTC has survived the advent of hundreds of new altcoins. Many of those projects had pretentions they could displace the leader, but this has not happened yet.

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Bitcoin (BTC/USD) forecast and analysis on January 24, 2020

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Cryptocurrency Bitcoin (BTC/USD) is trading at 8563. Cryptocurrency quotes are trading above the moving average with a period of 55. This indicates a bullish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator stripes.

Bitcoin (BTC/USD) forecast and analysis on January 24, 2020

As part of the Bitcoin exchange rate forecast, a test level of 8420 is expected. Where can we expect an attempt to continue the growth of BTC/USD and the further development of the upward trend. The purpose of this movement is the area near the level of 9160. The conservative area for buying Bitcoin is located near the lower border of the Bollinger Bands indicator strip at 8400.

Bitcoin (BTC/USD) forecast and analysis on January 24, 2020

Cancellation of the

option to continue the growth of the Bitcoin exchange rate will be a breakdown of the lower border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair below the area of ​​8320. This will indicate a change in the current trend in favor of the bearish for BTC/USD. In case of breakdown of the upper border of the Bollinger Bands indicator bands, we should expect an acceleration in the fall of cryptocurrency.

Bitcoin (BTC/USD) forecast and analysis on January 24, 2020 implies a test level of 8420. Further, growth is expected to continue to the area above the level of 9160. The conservative buying area is located near the area of ​​8400. The breakdown of the cryptocurrency growth option will be the breakdown of the level of 8320. In this case, we should expect further fall.

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Billionaire investor advises people to stay away from Bitcoin

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  • Ray Dalio said that Bitcoin is too volatile to be a store of wealth, at present. Instead, he suggests a small allocation in gold.
  • He also noted that currently, “cash is trash” and that investors must look for a well-diversified portfolio.

The founder of investment firm Bridgewater Associates, Ray Dalio, has warned people not to get involved with speculative currencies like Bitcoin in 2020. Appearing on CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switzerland, Dalio said:

There’s two purposes of money, a medium of exchange and a store hold of wealth, and Bitcoin is not effective in either of those cases now.

He believes that Bitcoin is too volatile to be a

store of wealth currently. Instead, he suggests a small allocation in gold. 

Because of the volatility, you can’t go next to it. Someday, you know, I would say Libra or something with more stable value has got more potential. But also, who is going to do the buying? Central bankers and others? What are they going to hold as reserves?

What has been tried and true? Are they going to hold digital Bitcoin? They are going to hold gold. That is a reserve currency, and it has been a reserve currency for 1,000 years… A bit of gold is a diversifier, and that’s the advice I can give.

He also noted that currently, “cash is trash” and that investors must look for a well-diversified portfolio. 

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Visa continues to dwarf Bitcoin in this important metric

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Despite optimistic predictions, Bitcoin still has a long way to go before it can compete with companies such as Visa. The fiat currency giant reported transaction volume of over $11.2 trillion in 2018, while Bitcoin network only managed to transact around $2.2 trillion until 2019.

Visa dominates all payment processors with $11 trillion transaction volume

While the crypto industry as a whole seems confident that digital assets will ultimately replace traditional fiat currencies, the reality is that there’s a long way to go before the two can even compete in the same category.

The growing transaction volume of most high-market cap cryptocurrencies definitely shows that major improvements are made. However, most of that growth fades away when compared to the big players in the payment processing industry.

According to its annual performance report, Visa saw a total transaction volume of just over $11.2 trillion. The volume is the sum of both the payment volume and cash volume, with the payment volume being the total monetary value of transactions on Visa-branded cards and payment products, the company explained in the report.

This is a huge increase from the $10.3 trillion the company reported in 2017 and an even bigger increase from the $8.1 trillion in total volume

reported in 2016.

Image showing total volume recorded by Visa in 2016, 2017, and 2018
Image showing total volume recorded by Visa in 2016, 2017, and 2018. (SourceVisa)

Bitcoin still has a long way to go to catch up with Visa

Bitcoin‘s numbers aren’t nearly as impressive as these. However, it’s worth noting that digital asset data can often be misleading and can never be taken at face value. As a Fidelity Digital Assets research put it, one of the most commonly overstated measures is Bitcoin’s transaction volume.

Most data providers use an unspent transaction output (UTXO) system, which doesn’t distinguish between economic and non-economic transactions. Because of that, the difference between the adjusted and unadjusted transaction value figures are often very significant.

According to the report, Bitcoin’s total adjusted transaction value from inception to Dec. 11, 2019, was approximately $2.2 trillion. It’s unadjusted transaction volume, however, stands at approximately $7.5 trillion.

Chart showing the difference between cumulative raw transaction value and the adjusted value
Chart showing the difference between cumulative raw transaction value and the adjusted value. (SourceCoinMetrics)

While the $2.2 trillion is a significant achievement for a system as young and as novel as Bitcoin is, it’s still a long way behind Visa. Bitcoin’s transaction volume was amassed over a period of more than 10 years, while Visa recorded its $11.2 trillion from September 2017 to September 2018.

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