Showing posts with label bitcoin. Show all posts
Showing posts with label bitcoin. Show all posts

As Bitcoin Mining Companies Enter 'Unprofitable' Territory, a Potentially MASSIVE Profitable Play Opens Up...

S9 miners, extremely popular mining rigs with almost 8 years in the market, are operating at a loss to anyone located somewhere paying more than 2cents USD per kilowatt-hour in electricity costs. This is most US states.

This was brought to our attention on via tweet from an employee at Core Scientific, a Texas based mining company with stock trading on the NASDAQ stock market under the symbol 'CORZ'  

Crypto companies daily income and net worth can change drastically, fast.  In the case of CORZ, which also holds 8000 BTC, Bitcoin returning to just $30,000 could happen over a single week - and would suddenly turn a company that was losing money into one that gained $80 million more in assets. 

These factors are prime examples why stocks for companies focused entirely on crypto are different than anything Wall Street has seen before. 

Figuring out the value of a mining company isn't as simple as a formula for their hashrate (mining power) = X BTC earned daily + BTC already owned = company value.  The price of Bitcoin isn't the only factor - even the weather can dramatically change profitability, as we covered last week how Texas based mining companies are having to power down during heatwaves. 

Wall Street Debates How To Trade Crypto-Company Stocks...

Because of the factors explained above, we saw Core Scientific with a stock price around $13 just 6 months ago, down to $2 today.

Browsing stock-focused online communities makes one thing clear - stock traders still aren't sure if this represents a company moving towards failure, or chance to buy something with a rare huge potential upsides. 

The Power Play, Where You Don't Buy Bitcoin... and Profits Are Potentially 200% Higher...

So here's what it all comes down to - if you believe Bitcoin will return to or pass $60k again, and believe a stock like Core Scientific will return to $13 when it does (the price it was last time Bitcoin was at $60k) - the stock represents a 5X return on investment when Bitcoin's price only does a 3X.

Which is huge, and seems realistic - but will it?

The same financial press publishing crypto doom and gloom stories currently, will of course, again, hype up 'Bitcoin's comeback' when things go the other way.

So it's safe to say the buzz outlets like Bloomberg, CNBC, and Wall Street Journal will create will bring a boost to crypto related stocks as well. The audience of these publications includes a segment of investors not comfortable enough with tech to ever own crypto, but is willing to buy stocks that allow them to capitalize on a trend.

Here's Why it Isn't as Simple as 'Bitcoin up = Crypto stock up'...

The benefits of Bitcoin's decentralization is highlighted here, these risks apply to stocks but are not a factor for Bitcoin. 

Actually, these risks apply to any company managed by humans. A company can be derailed a number of ways - an inexperienced CEO or Board of Directors, negligence or fraud in the accounting department, a company deciding to issue a large number of additional shares, or bringing in a new key investor and issuing them a large number of shares below market value - all of these can quickly bring a stock price down - but none of then can happen to Bitcoin. 

It's not even as simple as finding a company managed by trustworthy and experienced executives - note that not all of the factors mentioned above would be considered poor company management, some are just part of doing business.

I do not currently own shares of any crypto mining company stocks...

This caught my interest and I immediately wrote this article, haven't moved on anything and still unsure if I will.  The main reason for hesitating is this would mean canceling some of my current open positions to 'buy the dip' on Bitcoin and a couple other coins I'm confident will rise again. 

Share your thoughts on this with us on twitter @TheCryptoPress!

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Author: Ross Davis
Silicon Valley Newsroom
GCP | Breaking Crypto News




Canadian Government's Recent Actions Show Why 'We NEED Bitcoin'...

Saagar makes the case for bitcoin and all crypto currency given the Canadian government's financial crackdown of the Trucker convoy and those who helped fund it .

Saagar Enjetia and co-host Krystal Ball formerly anchored The Hill's daily news broadcast, and now own and host the independent platform 'Breaking Points'.

Video courtesy of Breaking Points

Bitcoin - A Compelling Case for Store of Value....

Bitcoin store of value

Shortly after my first steps into the world of Crypto at the start of 2021, I found myself in a debate over what Bitcoin’s future use and utility may be. At the time, even though I liked to imagine the result of being an early investor in a Bitcoin world, though I wasn’t fully convinced of either ‘digital cash’ or ‘digital store of value’ use case arguments. I was mostly invested in the blockchain technology for the huge volatile returns associated with a developing tech market. 

The person I was debating with (much older and wiser than myself, with plenty experience in investing), continued to ask the question “why Bitcoin? What is the unique utility that will allow it to become a store of value over others?” 

I found this tough to answer definitively as I listed the extensive benefits and qualities of blockchain tech, realizing that many of these qualities are not directly owned by bitcoin. Everyday new coins/tokens, although many being so-called “sh*t coins” and not being layer 1, are listed with the aim of having the same divisibility, transaction speed, low fees, security, anonymity and transparency as the bitcoin network. Though I do not see any of these as better alternative Bitcoin, it did put a dent in my bullish mindset of Bitcoin’s future when thinking of what next best thing can be created in a cryptoverse while it is developing at such fast pace. 

Because of Bitcoin’s volatility and expected adoption rates, the use case of Bitcoin as digital cash is becoming increasing more difficult to picture in the short to mid term. Unless your are “all in” Bitcoin with all of your financial assets, why would you use Bitcoin as everyday cash when you expect it to 10x value in the future? You wouldn’t use 1BTC to buy a car at $40,000 when most investors are confident that 1BTC will be worth $100k in the coming years, possibly sooner. Anyone with a fraction of a Bitcoin is much more likely to ‘hodl’ their asset as a store of value that provides much greater benefit than buying depreciating assets. This example, accepted as unfeasible, allow us to move on from the use case of ‘digital cash’ and approach the ‘store of value’ concept.

For Bitcoin to become a strong ‘store of value’ asset, it must have a form of unique utility superior others...

As I continue, I will list these benefits in bold and draw a conclusion geared towards achieving a store of value.

The ‘store of value’ concept does not allow people to use Bitcoin for everyday transactions, at least until the market has gained mass adoption world wide and the market cap has settled out, reducing volatility on Bitcoin’s expected growth curve. In the meantime, it shows Bitcoin to serve as the best store of value while the world transitions from traditional monitory policies to a digital, decentralized monitory system. 

Means of Exchange: can be related to Carl Menger’s widely accepted theory on the origin of money. Menger, the founder of the Austrian School of Economics,  who’s theory on the origin of money is that each person had different goods required to suit a need, in order to acquire those goods, they had to trade with others. This became difficult as there was not always someone looking to trade for that exact good, leaving their good with no value without demand, a medium of exchange would be required to allow a trade to occur between multiple parties. The is where money became a valuable good according to Menger’s quote: 

“not because they value the goods themselves for direct consumption, but because they believe the goods can be easily exchanged for other goods they wish to consume.”

Within the cryptovesre, Bitcoin is becoming more useful as a means of exchange as it is listed on almost all major crypto exchanges/digital apps and can be very quickly and cheaply converted to most cryptocurrencies/tokens whether it be finance projects, gaming tokens, nft tokens, or centralized stable coins for everyday use. In return, this also allows each of these assets to be returned to a Bitcoin for a store of value very quickly and cheaply when not in use and you do not want your capital to be at risk from other potentially depreciating factors associated with any given token/coin. 

The potential risk associated with any crypto coin or token could be:

  • Inflation - Stable coins that track a centralized currency care susceptible to inflation and decrease in purchasing power over time

  • Market conditions - Any coin that is dependent on the demand of a market/project will always face risk of the supply-demand effect.

  • Competition - Like all aspects of engineering, each project that is build in the crypto space will have competitors trying to improve and better it. Bitcoin has no direct Layer 1 competitors due to its originality of the blockchain network.

This makes Bitcoin an ideal means of exchange between daily use currency/tokens in the future. In the long term, as more and more people move to digital assets, why would I hold my saving in a bank account receiving 0.01% interest while being subjected to 7% inflation when I can uphold my saving’s purchasing power in BTC? 

As is already the case on most exchanges and wallets at present, the total value of asset on the account are summed u and total in BTC, not fiat currency like USD. 

This ability BTC has to be unaffected by the bullet point list above, gives it an inert property above others, that questions the ironic term ‘stable coin’ given to fiat trackers such as US tether. I believe most people will look for ‘store of value’ assets moving to the future.

Rarity: As there are only 21 million Bitcoin available...

The value will always remain high as an increasing number of people discover, learn and use digital currencies. The having reward in the year 2120 is set to be 0.00000018BTC, or 18SATS (satoshis) as it may be called then. For bitcoin to maintain this having method, the value of 1 Bitcoin will truly be astronomical as we will have to see high value in Satoshi’s to continue mining. 

For example: in the year 2040, the reward for minors to mine a block will be cut to 0.19BTC with halving cycles from the current block reward of 6.25BTC. If the value to minors in 2040 is to be just as fruitful in purchase power as It is today, BTC value would have to multiply with a factor of 32 by then. That excludes inflation and the migration of potential cryptocurrency users which I will mention below.

I believe that the combination of the above (cheap and fast means of exchange, originality and rarity) does give bitcoin its own unique utility in the long term timeframe, thus a store of value. This utility will grow in use as the current momentum in the financial world grows towards digital asset control. Other previous stores of value like Gold and precious materials, do have many core uses that made it a desirable store of value but this cannot be moved or exchanged as quickly, cheaply, or freely across borders. Giving such less utility in a world where people want this at a touch of a smartphone.

Momentum will be key to holding up this ‘store of value’ case for Bitcoin...

As I said at the beginning of this note, I firmly believe that blockchain technology will be the next big life changing tech to be used worldwide, similar to the development of the internet. And just like the internet, no one could have predicted how it will be used and what form it will take 40 years down the line. However, aside form all the advantages up for debate, there is a natural momentum shift that will take place. As more people over the years grow up tech savvy and are will be open to understanding and using cryptocurrency, there will be an equal amount of the older generation, who never would get on board with the idea of cryptocurrency, that will be leaving inheritance to the younger generation, likely to be held as savings or investments in some digital form 30-40 years from now.

For example, my parents are still unsure and lack trust in everyday online banking apps, something I use everyday and probably would be in financial distress without. To them, idea of paying with smartphone wallets are very risky and the concept of holding money in a digital wallet on a blockchain is completely mind-blowing, it is condemned at the first mention of it. 

The progression of this is that I’m sure my kids, in 10-15 years from now, will be substantially more tech savvy than my parents and most likely myself as well. They will have a natural exposure and understand to use the crypto world just as is did growing up with the internet. This will inevitably increase the number of blockchain users, bitcoin wallets and contribute heavily to mass adoption world wide, just as the internet did with the more people that use and understand it.

In 1998, according to 'www.internetworldstats.com', internet had approximately 147million users, 3.6% of world population. According to 'earthweb.com', cryptocurrency users are currently sitting just above this at 3.9% of world population. Plenty of headroom for crypto user to grow in the coming years as the above mentioned momentum shift takes place. As of March 2021, the estimated internet worldwide was 5.1Billion (65% world population). 

It is also gradually becoming more common to see previous critics of Bitcoin begin to publicly hedge their bets by allocating a couple percent of their portfolio into the cryptocurrency. 

This natural momentum shift creates a snowball effect in adoption of a bitcoin, with countries, banks, institutions all making headway into the cryptoworld trying to get ahead of the curve. This will result in Bitcoin application and interface becoming more user friendly, greasing the hinges for the incoming herd, just as internet banking has and continues to do.

In conclusion...

Because of all the above factors - I believe this momentum shift will continue to snowball from today, to allow us to reach mass adoption of Bitcoin faster than first thought. Though it may not be anytime soon that it is used for everyday transactions like money, it will be used as store of value to easily facilitate everyday use through other monies. 

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Written By: Guest Author 
Contact: 614Crypto @ Twitter
Disclaimer: Not Financial Advice

Bitcoin Enters the Russia vs Ukraine Conflict - Will Crypto Become a Standard Tool in Future Wars?

Bitcoin in Ukraine and Russia Conflict

Bitcoin has become embroiled in the ongoing crisis between Ukraine and Russia. A recent research revealed how Ukrainian rebel and defense groups have collected bitcoin (BTC) and other cryptocurrencies as donations to fund their activities.

Elliptic, a cryptocurrency research organization, conducted the study. It examines how non-governmental organizations (NGOs) and other advocacy groups in Ukraine might use bitcoin.

According to the report, the total amounts received by the groups and NGOs that were tracked for donations via cryptocurrency was just over a half-million in USD - which the study notes represents a 'small percentage' of the overall incoming funds.

This was likely a test on how beneficial it is to have Bitcoin on hand during a conflict. 

But when you consider the question: is the ability to send unstoppable transactions into a war zone a powerful capability?  Clearly - yes. 

Unfortunately I can already see politicians praising it when used their own military or allies, then calling it 'a tool finance enemy regimes' when it's the other way around.

Crypto Never Has Played a Large Role in Facilitating Otherwise Secret or Illegal Transactions... 

Regular government issued fiat currencies are used 160X more often in crimes compare to cryptocurrencies - a massive difference.

While the media painted Bitcoin as new choice of the criminal underground - many of those criminals learned the heard way that the only reason Bitcoin was being called 'untraceable' is the reporters writing about it didn't know how to to use it.

According to a recent report from blockchain analysis firm Chainalysis, bitcoin was used to launder less than 0.5 percent of the USD 8,600 million that was laundered in 2021 - down 4% from the previous year.

Everything above highlights what we believe will be an emerging trend - continued declining use by illegal actors, and increased usage in cases where a transaction that cannot be stopped or intercepted is needed, but anonymity is not. 

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Author: Mark Pippen
London News Desk 
Breaking Crypto News


Charts Indicate Bitcoin Possibly Repeating History...

Charts suggest there is a decent chance history repeats itself for bitcoin and the cryptocurrency shakes off its recent steep drawdown to mount another rally, based on technical analysis from Tom DeMark.

Charts suggest the selling in the world’s two largest cryptocurrencies may run its course soon, CNBC’s Jim Cramer said Monday, leaning on analysis from veteran technician Tom DeMark.

“When the charts, as interpreted by Tom DeMark, say that both bitcoin and ethereum could be looking at downside trend exhaustion bottoms this week, if not today, I think you need to take him seriously,” the “Mad Money” host said.

“To me, that says it might be too late to sell and you need to consider buying. I know I am, especially if we get a final leg down” added Cramer, who personally owns some ether, which runs on the ethereum blockchain. He previously owned bitcoin, as well.

Bitcoin earlier Monday reached its lowest point since July when it fell to $32,982.11 per token, according to Coin Metrics. However, bitcoin reversed course during the trading day, ultimately moving higher to around $36,000. 

Video Courtesy Of CNBC

The FAST Growing Trend Of Celebrities, Athletes, and Politicians Asking For Their Paycheck In Bitcoin...

While we haven't reached 'Mass Adoption' levels yet, the process is absolutely happening right before our eyes. 

Bitcoin's increasing popularity now has celebrities, athletes, and politicians choosing to take paychecks in Bitcoin...

Video Courtesy Of Fox Business

Bitcoin Network Holds Over $1 TRILLION In Value... and it has NEVER Been Hacked! How It's Creator Knew Attacks Would Come, and How He Prepared...

Bitcoin hacked?

Many people have speculated if there could be some way to create bitcoin's out of thin air by hacking Bitcoin transactions. But these dreams remain nothing more to this day.

In the Bitcoin white paper, Satoshi Nakamoto anticipates attackers who will want to defraud the system, knowing there is always someone greedy who wants the biggest piece of the pie.

However, the Bitcoin white paper explains why it's so unlikely we will ever see a successful hack of bitcoin (or any other type of attack)...

Thirteen years after the white paper's publication, the lessons about how difficult it would be to defraud the network remain relevant.

Amazingly - Satoshi is by all accounts, gone - yet the network has become even more secure on it's own. As the number of Bitcoin miners grows larger by the day, the idea of hacking the system becomes increasingly absurd.

"By convention, the first transaction in a block is a special transaction that starts a new coin owned by the creator of the block. This adds an incentive for nodes to support the network, and provides a way to initially distribute coins into circulation, since there is no central authority to issue them. The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation. In our case, it is CPU time and electricity that is expended." - Satoshi, Bitcoin Whitepaper

This means that a hacker would need many Bitcoin miners to create the conditions that allow to deceive most of the miners that currently work on the network.

It's impossible to give an exact number, but experts estimate a hacker wanting to manipulate Bitcoin's network would need around 1 MILLION miners running modified code to even attempt it - and we're not talking about repurposed old laptops, this would require the most modern, powerful ASIC mining rigs.

How Bitcoin's Security Improves By Itself Every Day....

The network is designed to keep as many copies of the transaction history as possible so that no one can change them, the security of Bitcoin is built on cooperation, or all the computers on the network agreeing on the time and size of a transaction.

In order for a fraudulent miner to even be allowed on the network, they would need to have a valid copy of past transactions as well.  Then they could only attempt to manipulate new transactions they initiated - because the rest of the nodes would never accept a history of new transactions that did not match their own record on the blockchain.

So, the longer Bitcoin exists, the longer the list of previous blocks gets.

What About Standard 'Cracking' Methods?

One classic method of getting past digital security is as old as computers are - cracking, simply trying one password after another.

Bitcoin has this covered as well - it uses an an encryption algorithm called as 'Sha-256' which was designed by the NSA and the National Institute of Standards and Technology.

Take a look at this randomly generated private key, keep this in mind: 1E99423A4ED27608A15A2616A2B0E9E52CED330AC530EDCC32C8FFC6A526AEDD

After a Quadrillion Attempts, You Would Have Only a 0.68% Chance to Have Cracked it...

It's that long and random for a reason. 

Another way to look at this - you could have 1 million computers, each trying a different password every second, and it still could take up to 30,000 YEARS.

So, What Can We Conclude From All This?

First, I think it's safe to say if Bitcoin was to be the target of a hacker, only those with the highest skill levels stand a (small) chance. 

But those people know they would need to dedicate their life to the task - they also know that if they did, they'd still have less than a 1% chance of success.

So if you were in their shoes - would you risk most likely wasting your life by targeting Bitcoin?  Or would you simply continue to go for the countless other places large amounts of funds are stored, on systems you can actually get into?

The combination of time, costs, and odds would lead any reasonably intelligent person to conclude: it just isn't worth it. 

Satoshi once described hacking Bitcoin as new take on the 'gamblers ruin' scenario - where essentially, someone attempting to 'win' at hacking bitcoin is more likely to go broke first.

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Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com

Silicon Valley Newsroom

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