Elon Musk: Bitcoin’s structure is quite brilliant and a better way to transfer value

The founder of PayPal and CEO of Tesla, SpaceX and SolarCity Elon Musk spoke recently about Cryptocurrencies. As always, the opinion of Elon Musk on every single topic is quite interesting. Elon Musk spoke recenty in an interview on the ARK Invest podcast on February 19th and referred to Bitcoin as a quite brilliant structure.

According to him, Digital Currencies are a far better and convenient way to transfer value than pieces of paper. He believes that Digital Currencies and Blockchain technology have a brilliant structure that needs more development, but on the downside Bitcoin is very CPU and Energy expensive and intensive. He stated:

“The Bitcoin structure is quite brilliant… one of the downsides of most Cryptocurrencies is that computationally they are quite energy intensive. So there have to be some kind of constraints on the creation of Digital Currencies. But it’s very energy expensive to create the incremental Bitcoin at this moment.”

Elon Musk is pro-crypto

Elon Musk also added that it wound’t be of Tesla’s interest to involve resources in involving themselves in Crypto and continue to accelerate the advance of sustainable energy. He added:

“Digital Currencies bypass currency controls, which will be fixed in the future. Paper money are going away and Crypto is a far better way to store and transfer value than just pieces of paper, that’s for sure.”

On his own Crypto holdings, Elon Musk tweeted recently that he only owns 0.25 BTC. They were given to him by a friend, but other than that he owns zero Digital Currencies. The Tech community is mostly favorable on the Crypto topic. Twitter CEO Jack Dorsey said earlier this month:

“Bitcoin feels it’s the one that wants to be currency the most, versus others that are doing more general purpose things or distributed computing… I think altcoins have generated some really amazing ideas, but I’m focused on currency and the transactional aspect.”

Bitcoin occupies a special place as a store of value for the whole Digital Currency community. Bitcoin acts as digital gold and it will further cement its spot. Mike Novogratz has recently stated:

“Bitcoin is going to be the digital gold, a place where you have sovereign money, it’s not U.S. money, it’s not Chinese money, it’s sovereign. Sovereignty costs a lot, it should!”

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Crypto Mining Equipment Is Currently No Longer Profitable

Bitmain has recorded the stunning loss of 500 million in Q3 of 2018. The largest maker of crypto mining equipment in the world, did not have the most profitable year. Even though, Bitmain managed to generate revenues of more than $3 billion during Q1-Q3, Q3 was responsible for only $200 million.

This is undeniable proof that the bear market has drastically lowered the demand for crypto mining equipment. Mining rigs are Bitmain’s major product and with crypto mining equipment losing value, this is not good news for the company. The news also comes in a bad time since Bitmain has been planning an IPO on the Hong Kong Stock Exchange.

The loss of $500 million in Q3 of 2018 can now complicate this effort. Charles Li Xiaojia, the CEO of HKEX has already raised concerns with crypto firms. Last month, Xiaojia put into question the sustainability of businesses like Bitmain.  This was mainly due to the huge toll paid by the crypto mining sector because of the prolonged bear market.

Many investors share Xiaojia’s concerns. Their concerns mainly lie with whether or not the business has an actual sustainable business model. They are also very concerned about the huge exposure of crypto mining equipment makers like Bitmain to cryptocurrencies.

Crypto mining equipment and the market state are taking their toll

Bitmain’s IPO plans are most likely heading to the shredder resulted in the ever decreasing fortunes of the company. Additionally, the company’s co-CEOs Jihan Wu and Zhan Ketuan have been relieved of their duties.

Back in January, the South China Morning Post reported that both Jihan and Ketuan are stepping down. Jihan and Ketuan who are also co-founders remain as co-chairs of the company for the present time.

Bitmain hasn’t been restructuring only at the top. The company recently did a huge series of layoffs throughout offices in the entire world.

The year didn’t start off too good for the crypto mining equipment giant as last month, the company shut down a mining operation in Texas. The operation had nearly 8000 functioning crypto mining rigs.

This is a huge stretch of bad news over the last for months for Bitmain. After the $500 million loss announcement, it’s unclear if the company will push ahead with the IPO plans. Even if it does, at this point, chances are slim that the HKEX will allow it.

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BBVA Freeze 5000 Chinese Clients Accounts Without Warning

Cryptocurrencies are still well into their development phase. Even down the road, they probably won’t be used by banks to deny people their own funds. BBVA, the second-largest bank in Spain, recently reminded people how important it will be to have cryptocurrencies in the future.

BBVA, without warning, has closed more than 5000 accounts. Interestingly enough, the majority of the accounts belonged to Chinese clients. The bank denies all claims of anti-Chinese sentiment and says it acted on the country’s anti-money laundering rules.

This is a frightening reminder that banks have the power to immediately block access to people’s money without any warning. On a larger scale when more banks are involved, this scenario will make the great depression look like child’s play.

People really need to understand that in the future this problem will concern them. An independently stored cryptocurrency cannot be frozen, shut down or censored by any government or centralized institution.

Satoshi Nakamoto precisely designed Bitcoin so it could be used WITHOUT the need for a financial institution. Nakamoto knew what many people are now starting to figure out, that banks are not anybody’s ally.

BBVA is not helping the reputation of banks

The BBVA fiasco comes only a few weeks after the Wells Fargo blackout. People who felt safe and untouchable, were instantly and without warning, locked out of their online bank accounts. Inevitably, a time will come where people will have absolutely no choice but to turn to an alternative monetary system.

The Spanish bank is also accused of discrimination. Many Chinese clients were seen protesting on the streets with signs mentioning “Stop banking racism” and “racist BBVA”.

BBVA set up a public apology, but actively denied the accusations about discrimination:

“We are very sorry for the inconvenience caused by our decision to block certain customers’ accounts over the last few days. We are very sensitive to these circumstances and we chose the measures we thought are required to mitigate the impacts. The customers are the heart of our activity and we absolutely and unequivocally reject any form of unjustified discrimination.”

Despite a wide media coverage, the accounts still remain frozen. This is why cryptocurrencies are the monetary system of the future. People’s funds cannot be rejected because of their nationality of because a bank or government decided so. This monetary system will be open 24/7 to every single person on the planet.

A few years ago, back in 2013 the people of Cyprus understood why banks don’t care about people at all. The banks simply decided to confiscate 40% of all deposit funds above $130 000. People with large amounts of money in the banks, simply lost 40% of it, with no explanation.

Many experts even point out to the events in Cyprus as the catalyst for the huge Bitcoin bull run. The United States, Germany, the United Kingdom and Canada all have active laws which allow banks to seize customer funds in the event of a recession.

People who calmly live in the first world and think these events cannot happen there, are simply dead wrong. If the bank simply decides to confiscate your funds, you can’t do anything about it.

Independently stored cryptocurrencies are the future because a third-party has absolutely zero chance of confiscating anything. BBVA’s actions should serve as a warning of what will inevitably happen and it would be smart to listen.

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Bitcoin transaction fees reached their lowest price level since 2015

A recent report from the Blockchain and Digital currency research company Diar shows that transaction fees for Bitcoin (BTC) on-chain transactions are at a new low. Although Bitcoin transaction fees were high in January, the median transactions value in Bitcoin reportedly has dropped. Bitcoin median fees are near the 2015 levels and Diar stated:

“Median Fees are also at levels not seen since 2015 despite the total monthly Bitcoins moved on-chain standing at higher levels than seen through most of 2018.”

Bitcoin transaction fees are at their lowest since 2015

In January, the Blockchain and Cryptocurrency research firm Diar released a report revealing that the value of on-chain transactions of Ethereum (ETH) has reached an all-time high in December of 2018. The value of Ethereum on-chain transactions reached 115 million and Diar stated that:

“In terms of transaction count on-chain the ‘super computer’ has found stability since October bobbing between 16-17 million monthly transactions.”

Last month, Diar stated in another report that Digital currency exchanges closed 2018 with extremely high transaction volumes. The combined trading volume of USD markets on one of the biggest Cryptocurrency exchanges in the world Coinbase increased by more than 20% in 2018, comparing to 2017.

For the same period, Digital Currency Exchanges like Bitfinex and Kraken increased by 50% and more than 190% respectively. One of the most recent reports by Diar stated that since the start of 2019, trading volumes on Crypto exchanges were turbulent, falling to lows and reaching highs.

These changes even reflected on the world’s biggest Crypto exchange Binance. In comparison to December of 2018, the reported trading volume for Binance on the BTC/USD trading pair shrunk by 40%.

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Crypto whales active address holdings increased around 4 times since the beginning of 2018

The Crypto bear market of 2018 was a nightmare for a lot of investors. The whole cryptocurrency market declined by 80% from the all-time high in December of 2017 making every Digital Currency investor’s worst nightmare a reality. Some digital assets lost 90% or more from their valuation and the worst part is that the bear market has continued for a year. This however does not affect Crypto whales who are mostly gaining new riches.

Most likely the bear market has ended and the crypto market is preparing for the next bull run, something that will be remembered for sure. However, during the bear market a lot of investors sold everything in panic and cashed out, leaving their Crypto mostly in the hands of whales. The rich get richer and the same goes with Crypto whales.

When we analyze the Ethereum blockchain, data shows that Crypto whales mostly accumulated more Cryptocurrencies during the downturn and bought at the bottom. Data shows that active wallets of Crypto whales have nearly doubled in size during 2018, thus increasing dramatically in size and holdings.

Crypto whales are growing their Crypto holdings

Nearly 20% of all Ether is in the hands of Crypto whales worth around $3 billion. A big factor for this is the Initial Coin Offering (ICO) boom. Since most of the new Digital currencies are paired with Ethereum, when people dump ICO tokens they eventually dump their Ether too.

Traders that diversified smartly turned their tokens for profit or diversified in long term ERC-20 tokens. Most investors managed to cut their losses, but many failed to do so. A report from 2018 stated:

“The massive growth in Ether holdings by active Crypto whales is most likely the result of traders exiting the trading of tokens, most of which have been paired with Ethereum, which has plummeted by all accounts versus the start of the year.”

The growth of Crypto whale holdings doesn’t relate with the increase in wallets that qualify as Crypto whales. In fact, since the beginning of 2018, active whale wallets have declined by 30%. This is a factor in the increase of the gap between whales and traders. On the other hand, whales had a larger supply of Ether in 2017 holding more than 30 million ETH. This was a third of the Ethereum supply back then.

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Security Breach at Coinmama: What can we Learn

A security breach is always a gateway to disaster. Unfortunately, Coinmama suffered such a breach on February 15th.

The crypto brokerage is one of the largest in the world and has over 1.3 million active users. According to the official statement, 450 000 email addresses and passwords were exposed in the attack. The attack also involved more than 24 websites and 474 million records.

On a more positive side, no cryptocurrencies were stolen from user wallets. Coinmama’s security team is heavily investigating the security breach. Unfortunately, this is not the only security breach which occurred recently.

The security breach is most likely just a stepping stone

A lot of apps, which are not even tied to financial assets have suffered similar attacks. Cofee Meets Bagel and MyFitnessPal recently suffered almost identical attacks. The leader of the Insights research team Ariel Ainhoren, stated that these attacks are used as stepping stones for attacking larger databases with more valuable information.

Most of the affected websites in the security breach were running Postgre SQL database software. When the system was infiltrated, the database was easily downloaded across a large range of sites.

Ainhored said:

“We’re still in the process of analysis. However, it’s our belief that the attackers used a vulnerability which surfaced relatively recently. At the time, it wasn’t noticed and patched by the companies. Of course there is the possibility we’re dealing with an entirely new vulnerability exploit.

None of the websites had known breaches and it seems the attackers were solely responsible for infiltrating the system. We are almost positive that the attackers did not obtain inside information and used it for the security breach.”

What’s interesting is that no personal information on the dark web has been accessed by the attackers. Coinmama instantly urged its users to change their passwords. If Coinmama’s database was acquired by an ill-intentioned buyer, there could have been disastrous consequences. There could have been many unauthorized withdrawals on the wallets which had not enabled the two-factor authorization.

Coinmama quickly stated that it will work hard on the platform’s security measures to prevent such events from repeating. With the passing of QuadrigaCX’s CEO, the Coinmama security breach is another hit to the reputation of the crypto market.

Recent months have shown that more and more people tend to belive that crypto exchanges have very poor internal management systems and security measures. Of course most people tend to overlook the very strong track record of major crypto exchanges.

Despite Binance, Gemini and Coinbase not suffering breaches, the overall level of trust in crypto exchanges is continuing to decline. The growing number of security issues and the market’s current condition have only fueled investors’ doubts.

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Ethereum mining rewards down to their lowest level since the start

Ethereum

Cryptocurrency miners solve complex equations to earn rewards in the form of Crypto. Ethereum miners solve complex equations and thus they earn rewards in the form of newly generated Ether. However a quick analysis of Ethereum’s blockchain through Etherscan and Etherscan released data reveals that Ether rewards are at their lowest level in Ethereum’s existence.

On average, around 20 000 Ether was created daily throughout December 2018. Mid February, Ethereum is creating around 13,350 Ether per day, down from the all-time high of 39 000 in July 2015. Etherscan revealed that the reason for the decrease in Ether creation is the recent increase in Ethereum’s mining difficulty.

Ethereum is moving forward with Constantinople

The difficulty bomb is also called the Ethereum ice age, because it’s the mechanism that increases the Proof of Work (PoW) mining difficulty and decreases the Ether rewards per block. The reason for this implementation is to prevent miners from continuing their mining the Ethereum blockchain after they switch to the long awaited Proof-of-Stake (PoS) algorithm.

The whole Ethereum community is waiting for Proof-of-Stake, but PoS algorithm has been delayed multiple times. This in turn delayed the difficulty bomb through forks and small updates. However, this isn’t the first time that the core developers have delayed things. Recently the Ethereum core developers decided to delay the difficulty bomb by including a code in the next Ethereum hard fork – Constantinople.

Developers have also decided to delay the hard fork Constantinople, becoming a whole sequence of events. Delaying the difficulty bomb means that miners are currently mining at the lower difficulty. To compensate this, Constantinople will do the “thirdening”, reducing the block reward from 3 to 2 Ether.

The update is scheduled for block 7,080,000 which will happen on February 27th. When it happens, the quantity of daily Ether will increase again, because the creation of new blocks will also become easier.

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Crypto Bull Run: The Next One Will be Remembered

A little over a year ago we saw the height of the biggest crypto bull run in history. Nowadays, prices have fallen by roughly 90% and the outlook on crypto is mostly negative.

One Chinese crypto mining pool founder however, says that the next crypto bull run will be even stronger. This points to a Bitcoin price above the all-time high, which is something a lot of experts have trouble seeing right now.

Zhu Fa is a co-founder of the crypto mining pool Poolin. His claim that Bitcoin would surge to about 5 million Chinese yuan is taken by most experts as a joke. After all, every crypto enthusiast would love to have a Bitcoin worth $740 000. The chances of such a development remain slim to say the least, but Fa seems to remain positive.

After all, this turbulence is now lasting well over a year. Crypto bulls like Fa remain positive but in the current market situation, predictions like Fa’s don’t score you a lot of respect. He openly stated:

“In the next crypto bull run, the price of Bitcoin will be between $74K to $740K.”

Such a dramatic rise would result in a market cap of roughly $12 trillion. Currently, Bitcoin’s price record is $20 089 and at the time, the market cap was a little over $326 billion.

Zhu Fa also did not comment on a specific time window. Even if his prediction for the next crypto bull run turns out to be true, it doesn’t seem like it will be in the near future.

There is more than one crypto bull hyped for the next crypto bull run

The Winklevoss twins have also made astronomical price predictions. They have quite frequently compared Bitcoin to gold and predicted that the currency could potentially appreciate against the USD by nearly 4000%. This will lead to a market value of roughly $4 trillion.

Tyler and Cameron Winklevoss have also stated multiple times that Bitcoin will eventually disrupt gold. Despite the currently harsh market conditions, the brothers have remained very optimistic about Bitcoin’s future. After all, the brothers invested massively into Bitcoin when the price was around $120.

Tim Draper, American tech billionaire and venture capitalist made an even bolder prediction last year. He stated that Bitcoin will reach $250K by 2022 and the overall market cap by 2033 will be more than $80 trillion.

Whether or not these predictions are made because the investors want immense profit from the next crypto bull run or they simply believe in the technology is irrelevant.

The key factor to consider here is if an eventual price increase of this magnitude actually occurs, will the newly rich crypto bulls use their gains to help the industry and the ordinary people or will we simply replace one group of wealthy, always-hungry businessmen for another?

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BitTorrent: Can the Purchase by TRON be Considered a Mistake

The purchase of BitTorrent by TRON is shaping up to be a mistake. More than 3300 lawsuits have reportedly been filed against BitTorrent users.

TorrentFreak has collected data from court records in the US. The data shows that in less than 6 months, more than 3300 separate lawsuits were filed. According to the report from TorrentFreak, a large percentage of these cases list a single “John Doe” defendant.

Cases like this usually refer to a lawsuit filed against a person who downloaded content on the P2P BitTorrent protocol. This download was completed without the consent of the content creator.

TRON managed to acquire BitTorrent in an all-cash purchase. The price estimated to be just a little short of $126 million. TRON later launched the BitTorrent Token (BTT) on the Binance LaunchPad. A lot of people are now wondering if these lawsuits will somehow affect TRON.

BitTorrent is not endagering TRON in any way

The majority of the lawsuits are made against single John Does. This means that TRON is not in any way responsible or affected by the ongoing lawsuits. This is relatively a relatively new situation and most people aren’t exactly sure how the law works in cases like these.

Jaliz Maldonado at the National Law review quickly explained that:

“We have two sides. Lawyers, who sue on behalf of artists, content creators and media conglomerates. On the other side are the attorneys who have to defend the majority of people who knowingly or unknowingly downloaded copious amounts of content such as music files, movie files, games, apps, etc. Of course all the downloads occurred with the users not paying for the content in the first place.”

That leaves TRON unaffected since all the copyright infringement cases are filed against individuals. Of course with the lawsuits piling up, this doesn’t help TRON’s reputation. As a parent company TRON needs to take action or this will inevitably result in a decline in usage and demand for the main product.

If users feel they are at risk of being sued when downloading content, they will simply stop using it. Especially in a country like the United States, BitTorrent is bound to become unusable due to the very strict copyright laws.

Of course the huge increase in user activity and popularity of streaming platforms like Netflix and Spotify have pretty much removed the necessity of downloading content with torrent platforms.

The BitTorrent Token however, launched with a great demand from investors. The token sale concluded in a matter of minutes. Analysts however, have suggested that despite the huge interest in BTT, more casual users might encounter difficulties when using the token to perform various activities on the protocol.

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Ripple offered millions of dollars in XRP to attract the best Technology Talent

According to the Ripple LinkedIn profile, the company is looking to hire a small army of engineers, technical developers and experts. This will include a new head of engineering for xCurrent, the biggest competitor for the center of the global payments infrastructure – SWIFT. The company will depend on its large holdings of XRP and offer them as bonuses and salaries to every talented person they hire.

Some engineers revealed the recruiting emails that Ripple sent in the end of 2018. The Engineers were offered a generous salary and bonuses ranging between $2-$3 million worth of XRP tokens. Salaries allegedly varied according to seniority rank, but the bonuses could reach $6 million in XRP. Ripple is trading for $0.30 per XRP so quick calculations show us that $6 million are 20 million XRP tokens.

The tactic is great for Ripple, because engineers receive ownership stake with the XPR bonuses. At the moment Ripple is employing nearly 100 technology experts and engineers, but the company doesn’t want to stop here. They want to hire the best talent out there so they can expand their software as quickly as possible. Ripple added more than 100 new employees in 2018 and they will continue to do so in 2019.

Company representatives stated:

We move fast to acquire the best talent out there, especially considering the highly competitive nature of other startups who want to hire the same specialists and experts.

Ripple is on a hiring spree in the Crypto Bear market

I’m not surprised that Ripple has to go above and beyond in this bear market. Engineers are mostly avoiding Crypto companies from fear and Ripple is forced to offer attractive bonuses. Especially because Ripple is a Silicon Valley startup. For years now, salaries, bonuses and compensations in Silicon Valley have been increasing dramatically. The battle for talent is fierce and companies are forced to pay premium to recruit the best developers.

A notable name in the Crypto sphere, Jon Holmquist spoke recently on the topic. He stated:

No one wants to join Crypto companies for the first time during a bear market. I think that’s more of an industry-wide problem. There’s always a shortage of talent.

But an anonymous developer from the community disagreed, because he was flooded with recruiting emails. He thinks that this smells of desperation and stated:

This is for a developer’s role, which is generally harder to find, but these are really big numbers. It comes across a little bit desperate, but what can you do.

Another developer and entrepreneur, Dave Schukin sent a tweet in June of 2018, saying that Ripple offered him more than $175,000 as a base salary.

Ripple is still looking for software experts with C++ and Java. The company stated:

We are not necessarily looking for blockchain experts. We can always teach domain-specific expertise. We also think it’s important that our engineers carry themselves with humility and are able to think creatively about how to solve hard problems.

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