Bitcoin: Global Financial Crisis Worse than 2008 Driving BTC Prices – Danny Masters

Bitcoin breached another milestone this year at its rose above $12750 early on 26th June 2019. Bitcoin has recorded 200% rise since the beginning of April 2019 near $4000. While Facebook’s cryptocurrency announcement on 18th June seems to have acted as a strong positive catalyst to its price, other global economic issues form a larger backdrop.
A Larger Backdrop Than Facebook’s Libra?
While Facebook seems to have reinstated the confidence around decentralized cryptocurrencies, specifically Bitcoin as more than 2.3 billion Facebook users will be introduced to cryptocurrencies. However, the currency has received a lot of criticism from Governments around the world, including the US, France, and the UK. Hence, the launch of the crypto coin is still uncertain.
Bitcoin has grown tremendously as an uncorrelated asset in the wake of a global financial crisis with US-China trade war, the tension in Italy and uncertainty around Brexit, the political turmoil in the Middle Eastern Countries and hyperinflation in Latin America.
Also Read: “I Believe in Bitcoin”, says Edith Yeung As She Talks About Rising Institutional Interest
According to Danny Master, the Chairman of one of the largest cryptocurrency custody platforms, London based, Coinshares Group, noted this is worse than the financial crisis of 2008. He tweeted,
“Today we’re in uncharted territory with central banks & negative interest rates – arguably more so than post ’08 financial crisis. This means policymakers are leaving fewer tools to fight the next downturn that inevitably will occur. Investor psychology is notoriously fickle.”
Therefore, according to him, there is a “larger backdrop” at play there, which is, however, an ominous signal for global markets. Nevertheless, the market capitalization of Bitcoin and the trading volume on it is still far lower than that of traditional markets.
We’re still in the very early stages of the growing asset. Moreover, the institutional money coming in at the moment; however, significant is very low compared to the traditional assets. He tweeted,
Napkin math for CME $BTC futures volume compared to others supports this read… – 1/5th of crude volume – 1/16th of @Bitmex volume – 1/100th of gold volume In my view, we’ve got a long way to go before we can reasonably conclude that institutional money is here for good.
Do you think that Bitcoin will surpass the utility of Gold? Please share your views with us. 
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Source: CoinGape

Bitcoin Mining Report By Coinshares and Fidelity Breaks Rhetoric on Profitability and Geo-fencing

CoinShare released its third edition of Bitcoin Mining Report along with Fidelity Center for Applied Technology. It is an expansive piece of research to address one of the most daunting and rather important aspects of Bitcoin, the mining process.
In a game of supply and demand, supply should account for 50% of the price consideration. However, Bitcoin [BTC] is a speculative asset; hence, it’s a little more complicated than that.
Bitcoin Mining is Profitable, and the Network is Growing
The report suggested that the overall hash rate of the network has increased by 25% in 7 months. Hence, the number of nodes and innovation in the space is continually growing. Moreover, this completely contradicts the assumption that Bitcoin mining is a loss-making business. Because if it were, then miners would have been quitting instead of adding to the process.
“Since our last report of November 2018, the hash rate has grown from approximately 40 EH/s to approximately 50 EH/s, an increase of 25%.”
According to the reports, Bitcoin mining with the given hardware and associated cost is still ‘highly profitable.’ The institutes have considered long term cost associated with the mining process by accounting for the depreciation cost of hardware, electricity cost, the marginal cost of production, cooling cost, and other overheads.
The results reveal that the cost of mining 1 Bitcoin in the range of $6800-$5600 approximately with the current miners. It varies for miners around the world, and the miners also switch between new and old machines due to fluctuations in prices, which varies the cost further. Nevertheless, the process was much costlier as projected in the last report in November 2018.
At current Bitcoin prices, it is profitable by 28%. Furthermore, during the quarter of 2019, the process was yielding an equivalent loss as Bitcoin traded in the $4000 range. Hence, while the half-yearly balance seems to have been maintained with the price, the marginal profit is difficult to estimate.
Geographic Statistics
The report suggested that China continues to dominate mining around the world. The percentage dominance of China was estimated at 60%. The mining industry of China is mainly concentrated in the Sichuan region, which provides cheap hydro-electric power and a habitable climate that reduces the cost of cooling.
Geographic Statistics for Mining (Report) 
Also Read: Bitcoin (BTC) Price Analysis June 7: Enjoys A Cluster of Technical Support Levels
Some of the other countries involved in the process are predominantly New York, UK, Canada, Sweden, Quebec, Norway, Iceland, Armenia, New Foundland and Labrador, Georgia and Iran. The report also estimated that the entire process is run predominantly by renewable energy.
Moreover, the miners are running huge farms and are in it for the long haul. The news around the mining ban in China seems to have slight to no effect on the process in China. Moreover, it is generating enormous profits for the local government. Furthermore, mining is spread out across the world. Hence, the chances of the network going down due to a Government crackdown as bleak.
Disclaimer: Neither the report, not this article should be considered as investment advice. Moreover, the story is also not authorized, but an attempt to understand the extensive process. 
Do you think that more countries would start running nodes? Please share your views with us. 
The post Bitcoin Mining Report By Coinshares and Fidelity Breaks Rhetoric on Profitability and Geo-fencing appeared first on Coingape.
Source: CoinGape

The Bitcoin Network is More Secure and Greener Than Ever

A report into Bitcoin mining has determined that Bitcoin is not the environmental disaster it is often painted as in the media. It turns out that the sophisticated computer units securing the network are mostly being powered by clean, renewable energy.
The revelation comes at the same time that Bitcoin hash rate is close to its all-time high. This means that the network itself is also close to the most secure it has ever been.
Bitcoin Miners Favour Green Energy: Take That, Environmentalists!
It looks like one of the Bitcoin naysayers’ favourite arguments might soon be obsolete. Researchers from CoinShares claim that the network is actually running on around 75 percent renewable energy.
The crypto investment products and research firm have just published the third instalment of its Bitcoin Mining Report.
Much of the report focuses on the profitability of Bitcoin mining. It states that Bitcoin can currently be mined profitably at a price of around $3,300 / BTC.
The report also found the following:

The network was growing in line with five years trends, although mining equipment sophistication is accelerating faster than expected.
Miners prefer areas with abundant hydroelectric power – Scandinavia, The Caucasus, The Pacific North West, Eastern Canada, and Southwestern China. These areas are thought to be favoured because much of the power generated there goes unused.

However, the most interesting bit of the document is the overall estimates of how much of the network relies on renewable energy.
Bitcoin is often attacked by environmentalists as being wasteful. They argue that the fact that the network consumes the same amount of electricity as some nations on the planet is unacceptable. However, such an argument is highly reductionist as it does not take into account just where that energy was sourced from.
The new figures from CoinShares pour water all over the argument that Bitcoin is a natural disaster waiting to happen.
BTC: Clean, Green, And Secure as Ever
At the same time as Bitcoin also being revealed to be much more environmentally sound than most appreciated, it is also close to its all-time high in terms of hash rate.
Image Courtesy of Blockchain.
Hash rate, in layman’s terms, refers to how many times a computer system can guess a string of letters (hash) that allows them to add a block of transactions to the Bitcoin blockchain. Each Bitcoin mining unit will have its own hash rate. The above graph shows all the hash rates of the miners working to secure the network combined. The high hashing power of the network has resulted in the network being the close to the most difficult to attack that it has ever been.
In fact, original Bitcoiner and CasaHODL CTO, Jameson Lopp, highlighted the following potential attack vector as being more expensive to successfully exploit than it has ever been.

The amount of time it would take for an attacker with 100% of the Bitcoin network hashrate to rewrite the entire blockchain has reached an all-time high of over 400 days. pic.twitter.com/kCk8ZKlIqH
— Jameson Lopp (@lopp) June 7, 2019

 
Related Reading: Think Bitcoin is Wasteful? Have You Ever Thought About the True Cost of Fiat?
Featured Image from Shutterstock.
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