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What is bitcoin mining? – ALTINVESTORNEWS
Cyptocurrency pegged to electricity price
Meter.ioaims to create a low volatile currency following 10 kwh electricity price. Meter uses a hybrid PoW/PoS solution; PoW mining for stable coin creation and PoS for txn ordering
MTR is stablecoin soft pegged around the global competitive price of 10 kwh electricity
MTRG is the finite supply governance token, which is used by PoS validators to validate transactions.
Pow mining in Meter is as open and decentralized as in Bitcoin but differs from that in Bitcoin in two fundamental ways
Block rewards are dynamic. It’s determined as a function of pow difficulty. The wining Meter miner will earn more MTR if hash rate is high and less MTR if hash rate is low, ensuring a stable cost of production for each MTR at 10 kWh electricity price using mainstream mining equipment
Miner’s don’t validate transactions. They simply compete to solve PoW. Txn ordering is done by PoS validators who secure the network and in return earn txn fees.
All stablecoins must essentialy have stability mechanisms to account for cases where demand is high and where demand is low. MTR has 2 stability mechanisms set to solve this mission. Supply side stability mechanism (long term) First and foremost MTR can’t be produced out of thin air. It’s issuance follows a disciplined monetary policy that solely depends on profit seeking behavior of miners. The only way to issue MTR is via PoW mining. When miners notice that price of MTR is getting higher than the cost to produce them (remember cost of production is always fixed at 10 kwh elec. price = around 0.9-1.2 usd) they will turn on their equipment and start creating new supply. If demand keeps increasing more miners will join, and more MTR will be printed to keep up with demand. Eventually supply will outperfrom the demand and price will get back to equilibrium. When demand is low and MTR price is dropping below 10 kwh elec. price miners will not risk their profit margin to shrink and switch to mine other coins instead of MTR. In return MTR production will stop and no additional MTR will enter circulation. Given that mining is a competitive, open enviroment, price of MTR will eventually equal to the cost to produce it. (Marginal Revenue = Marginal Cost). The long term stability is achieved through this unique and simple mechanism at layer 1 which doesn’t require use of capital inefficient collateral, complicated oracles, seignorage shares or algorithmic rebasing mechanisms. Relative to nation based fiat currencies, switching cost between crytocurrencies is significantly lower. Sudden demand changes in crypto is therefore very common and must be addressed. Huge drop in demand may temporarly cause MTR to get traded below it’s cost of production making pow mining a losing game. How can the system recover from that and restart production? On the contrary, a sudden increase in demand may cause MTR to get traded at a premium making mining temporarly very profitable. Meter has a second layer stability mechanism in order to absorb sudden demand changes. Demand side stability mechanism (short term) An on chain auction (will become live in October 2020) resets every 24 hours offering newly minted fixed number of MTRGs in exchange for bids in MTR. Participants bid at no specific price and at the end of auction recieve MTRG proportional to their percentage of total bid. The main purpose of this auction is to consume MTR. A portion of MTR (initally %60) that is bidded in the auction ends up going to a reserve that is collectively owned by MTRG holders, essentially getting out of circulation. Future use of MTR in Reserve can be decided by governance. The remaining %40 gets gradually distributed to PoS validators as block rewards. This reserve allocation ratio can be adjusted via governance depending on the amount of MTR needed to be removed out of circulation at any point in time. Meter team working to make Meter compatible with other blockchain. In fact both MTR and MTRG can currently be 1:1 bridged to their Ethereum versions as eMTR and eMTRG respectively. In near term, stablecoin MTR is set out on a mission to serve as collateral and a crypto native unit of account for DeFi.
The Strange Birth & History of Monero, Part II: BitMonero
--YOU CAN READ THIS IN SPANISH HERE-- When i first knew about Monero i was hungry of information, and when i found the americanpegasus post about "The Strange Birth & History of Monero" i loved it. I looked for a second part for a while but as there was no trace of it i did my own investigations. Now i've decided it could be a good idea to paste the results here with the same format as americanpegasus did, to help new users looking for info about the "strange birth" of Monero. Bitmonero - a new coin based on CryptoNote technology https://bitcointalk.org/index.php?topic=563821.0 Notable comments in this thread: -1: " Important: this is not a Bytecoin relaunch or not a Bytecoin replacement but a Bytecoin fork. Bytecoin has its own long history, community and stakeholders we don't know much about. I respect them and their decisions even if I don't understand them now. An intention to relaunch coin is always harmfull for everybody involved. Fork is a right way to contribute to community in case you don't agree with decisions already made. - Why did I make fork? - Because there is a number of technical and marketing issues I wanted to do differently. And also because I like ideas and technology and I want it to succeed. I did an announcement ASAP while a lot of details aren't still defined because the earlier it is announced the more people will be able to join. Details will appear as soon as they will be defined and decided. Here are details that are already defined and I don't plan to change this:
New coin will use Bytecoin(BCN)/CryptoNote code base.
New coin is started from scratch (i.e. from genesis block).
Emission schedule has a flatter curve (close to Bitcoin's original curve).
(https://bitcointalk.org/index.php?topic=563821.msg6476068#msg6476068) [TFT breaks out (30th, Apr 2014): he does not recognize community changes] -403: “You did not really fix it. You just ignore every error in the code with your 'update' We should wait for tacotime to confirm that the issue is fixed. PS: We should all use the main thread: Please use main thread: https://bitcointalk.org/index.php?topic=583449.0” (https://bitcointalk.org/index.php?topic=563821.msg6476331#msg6476331) [It is not a secret anymore: TFT and the “rebel” community do not have a good relationship] -480: (https://bitcointalk.org/index.php?topic=563821.msg7384159#msg7384159) [Months back (June 2014) and after a few months of inactivity, TFT comes back and makes public that he will keep working in BitMonero] -487: “Actually, several attempts were made behind the scenes and TFT's continued demand was full admin rights over the Monero repo. Now, what could that be useful for when tacotime already offered push/pull rights? It's certainly not about contributing code - push/pull offers the right to do that without interference or permission. This is basically a repeating pattern of shutting out everyone else, which is ironically what caused him to lose the project in the first place. The tone of that post makes his level of maturity obvious for everyone to see. I might also point out that his contribution to date consists of 10 or so lines of code changed in a header file (to clone BCN). Then a bug 'fix' that actually allowed the chain to be attacked later (now fixed). This was followed by his disappearance. Disproportionate visibility indeed.” (https://bitcointalk.org/index.php?topic=563821.msg7387658#msg7387658) [eizh makes clear they tried to make a deal with TFT] This is basically everything worth reading in this thread. I’ve extracted the most important posts in the whole thread, from first to last page. TFT, Bitmonero and its community are key in the birth of Monero. These are the main conclussions:
BitMonero has a reason to exist. But to justify its existence it doesn’t need just reasons, but also a dedicated team and a participative community.
Thankful_for_today definitely it is not a sociable leader. His posts are scarce, every few days, and he can’t keep up to date with a nascent community really dedicated
TFT is desperate to launch BitMonero, probably to be the first Bytecoin fork and have the “first mover” advantage. He is even about to launch without Windows client.
Due to the rush, TFT has induced a few bugs. The most important one the emission curve.
Bytecoin starts to have some traction, and TFT keeps ignoring community suggestions, so the community has now doubts of BMR future. NoodleDoodle, eizh, David Latapie, Tacotime and smooth among others lead a split, firstly just to change the name and re-publishing the announcement thread, but they will eventually hard-split.
I have already ready a summary of the MRO topic that has a short life of not even 2 days but still has A LOT of interesting info about how the team is being built and what are their opinions on several topics. May i remember you that by then Monero had 1 minute blocks and an emission curve that would have created 86% of the tokens in 2 years. In the next post (will only make it public if i see there's any interest) we will see how and when the team adressed the problems with the emission curve, and when was the miner optimized to take away the probably voluntary obfuscations the code had.
Last week, I made two predictions: that there was no way the price could remain stable past this week, and I believed that the rise would begin on Wednesday as the insiders started trading based on what they knew. By now, it appears clear that the insiders know the exact opposite of what I predicted: that the bids are not going to be astronomical, so one of those predictions may be incorrect, assuming that there isn't a huge rally by the evening. Many people say that markets in bitcoins are random. On the contrary, I believe that everything can be predicted, given enough information. Things only seem random when one does not have enough information to determine why they work that way. This maybe goes all the way down to the quantum level as well; scientists used to think that things like quarks randomly appear and disappear, but many now suspect there is probably a lower level which we do not yet understand. When the price starts to fall without any news, there has to be a reason for that. The last time it happened, we later discovered that some people knew of the auction before it was announced to the public. This time, we don't yet know what we don't know. You should always be concerned when something is happening and there does not appear to be a cause for it. There are definitely people who know more than we do and who are acting upon it. There is a guy in /bitcoin who is going to buy $90k in bitcoins. I wish him luck, but there is no way I would be buying today. There is plenty of money to be made after either the big crash, or once there is confirmation this is temporary.
A crisis moment approaching
I commented on this issue yesterday, but I think it is worth discussing again because it is important enough. What is approaching is a crisis moment for bitcoins, and for cryptocurrencies in general. For as long as I can remember, which is years, all the bitcoin crashes have been associated with external events that did not affect the underlying fundamentals. For example, Mt Gox's incompetence caused several crashes. The Chinese government made laws and took actions to try to kill bitcoins (and failed). The US government issued the initial FinCEN regulations 15 months ago and there was a lot of consternation. Before that, there were high-profile thefts of bitcoins from poorly-designed wallet services, and so on. The only event affecting the fundamentals was the unintentional hard fork in March 2013, but the fork was corrected in hours and was a one-off event that people knew would not repeat. Now, however, there are a lot of danger signs with the acutal protocol and user behavior that are converging, and there are things that people should actually take notice of. First, we have the issue of transaction volume stalling out. I don't agree with those who say that we can chalk it up to Coinbase. Even if Coinbase was processing transactions off-chain, the reason they are doing that is because the 1MB transaction limit is forcing them to because of the fees. Second, we see thousands of merchants adopting bitcoins, and the number of consumers spending them is very low by orders of magnitude (and there are many wallet services, including Coinbase, that make it easy to spend bitcoins now). Third, as I said yesterday, people are still going to Western Union and paying 10% extra, which is a lot of money. We are talking about the same market as the extreme couponers who are willing to spend a day cutting out coupons and searching websites to save $30 on their grocery bill. Yet, these people obviously have no qualm about paying $50 for a $500 money transfer. You can't argue that the reason is "it's too difficult" to use bitcoins - while the bitcoin experience can be made simpler, people who have lots of time, and the will to save money will figure out a way to cut out a few bucks from bills wherever they can. They are not doing that. Other issues that can be examined include the low number of Google searches for bitcoins (the tiny spike the last few days doesn't indicate a recovery). Finally, look at the devastating revelation in /bitcoin that gavinandressen is the only developer actively working on protocol upgrades at the moment. This means more than any of the other reasons to be concerned. It shows that the big payment processors are not willing to significantly invest in protocol development, and it also shows that there could be beauacracy involved that is preventing development from moving forward. Remember, people problems kill projects, not technical ones. There are many pressing issues and bitcoin risks falling behind to another project like NXT, which as I said before, could cause cryptocurrencies to be viewed as a "flavor of the month" instead of a world currency.
Exponential growth is required for the success of bitcoins
Now that I've made the case that we are approaching a crisis moment, let's examine the scenario that could unfold if the auction turns out to have below-market prices. This would turn into a negative feedback loop. Every day the price falls below the auction, the asks in the market fall, and therefore the bids at the auction are going to be even lower. Then, the low price at the auction would signal that Wall Street is not that faithful in bitcoins, and there would obviously be a crash. I believe such a crash would break below the bubble cycle, signaling an end to the traditional pattern of exponential growth (at least for the short-term). Because this crash would be caused by the fundamentals (lack of rapid adoption), rather than some temporary issue like the Chinese government futilely trying to stop free expression, recovery would be slow. The problem is that, unlike several years ago, there is a lot of money invested in the system. When bitcoins were worth $2, nobody was working full-time on them and it was a hobby. These people could afford to continue developing services regardless of the price. Now, there are corporations like Coinbase that have large staffs and million-dollar budgets. These companies could not sustain a prolonged downturn in price and usage. There are also many companies that are developing products that require a higher price, and the VC money will only last for so long. If there is a period where exponential growth stops, then the danger is that companies that were previously expanding suddenly find themselves overstaffed and unable to meet their bills. Layoffs would cause experienced people to move to other industries and never come back, such that if there is a recovery later, new developers need to be hired and they need to learn the protocol from scratch. At the current time, bitcoins cannot sustain a period of prices at levels of the previous cycle.
Mining is also at a crisis point, independently
Miners are coming online at the highest rate ever, with the difficulty expected to approach 18b by the end of the week. That would be the single largest difficulty increase in history. Why people are turning on mining equipment at current prices doesn't make much sense to me, as there is simply no way that all of this equipment is profitable. This is clearly a "mining bubble," where many people spent millions on mining equipment that is not profitable even before it is turned on. I suspect that, even if the auction turns out in the positive, there is going to be a mining crash soon. The difficulty rises are simply not sustainable, even if the price were to rise a lot overnight. We already see a lot of mining companies being sued and under investigation; the next phase of this mining bubble unwinding will be farm operators who overinvested and who declare bankruptcy as the difficulty continues to increase 40% every two weeks. This isn't really relevant to the network's usefulness or to its future, but it is bad news for people who are invested in mining. If I had a cloud hashing contract or owned equipment, I would be selling it immediately, regardless of what I thought was going to happen at the auction.
Days until the auction: 2
Days until July 24: 29
Price to break the lower boundary (according to moral_agent): $540
Has anyone put any research into the effects that "miner-flapping" might have, as txn fees become major mining incentive?
Today, the reward for mining a block is a solid 50BTC. BTC value may rise and fall, but no faster than any other trendy commodity so miners can easily speculate against that to budget their hardware, infrastructure and electricity needs in order to favor profitability. In the future, txn fees will be expected to take on the load of incentive. Some have argued that there is a nash equillibrium to offering a txn fee of 10e-8 bitcoins, the smallest non-zero fee currently possible. Others have argued that the maximum transactions-per-block (or alternately transaction-weight-per-block since some txns weigh more KB than others) will turn each block into a mini auction, where only the highest fee offers will guarantee speedy inclusion into blocks. But what I foresee is that miners will write scripts to monitor the unsettled offers for how much aggregate transaction fee is available (that they can stuff into a single block, of course) and will adjust their power consumption to lower their costs when there are weaker bounties available, and ramp up power consumption when there are bigger fish to fry. However, power consumption to hash ratio is non-linear. Ramping your farm up from 0 to 1Mhash costs a lot more marginal kilowatts than ramping up from 100 to 101Mhash, so the most effective cost savings when bounties are low are to shut.. down.. everything. This is on par with brick and mortar businesses shutting down for the night because running the store costs a lot more than just the paying of a single marginal employee. So game theory benefits the miners shutting down and then ramping up high on a pretty frequent basis, and it benefits nearly all of them doing this fairly regularly... perhaps as often as one cycle per ten minutes. Wouldn't such a cycling or flapping effect have a detrimental impact on the hash difficulty algorithm, in turn leading to volatility and risk for miners seeking profits, or opportunities for attackers ramp up 51%+ of weakened network power to perform double-spend attacks during luls in mining activity? Would it damage the "1 block per 10 minutes" performance curve, leading to long lul times when not enough individual transactions are offering rich fee bounties?
2020 Bitcoin Mining Difficulty Will Only Increase More. Even before the 2020 Bitcoin mining difficulty adjustment occurred, the crypto industry was very busy discussing the effects it could have on the market. The term “difficulty” often use, but few understand how significant it is for Bitcoin. It represents the number of hashes, or necessary solution to a complex mathematical problem ... Individuals can get themselves involved in bitcoin mining in different ways. However, not all of them are profitable. Read more Romania set to auction Bitcoin and Ether confiscated in criminal case ; Ripple (XRP) Breaks Key Support: Indicators Suggest Fresh Test of $0.22 ; Bitcoin rises against USD after Mnuchin promises second stimulus check Auction Guides. Selling property at auction; Buying property at auction; FAQ’s; North West; About; mining . If you think blockchain is something police throw in the road to stop criminals then read on … June 6, 2020 May 19, 2020 by Giles. What is Blockchain all about? The term ‘blockchain’ has become synonymous with cryptocurrencies like Bitcoin, but the phrase actually refers to the ... As the difficulty of computing the hashes for mining has increased and the rewards for mining have diminished, ... once top of the line has come down in price as it is surpassed by newer units and is less profitable due to the rising difficulty of mining. Bitcoin mining pools and cloud mining One sure-fire way to get a consistent return on mining, and one strategy for mining that has grown in ...
CryptoCurrency Mining Difficulty Log Jan 21 2020 Hash Rates of Difficulty
This video is unavailable. Watch Queue Queue Mining bitcoin is not as easy as it might seem. In this video, we highlight the biggest reason that most crypto miners end up losing money. --- This episode is sponsored by Americas Cardroom, the ... #Mining #Ethereum #Cryptocurrency Welcome to the 11th episode of CCMDL , January 21 2020 We go over talk a little about the difficulty of Ethereum , Bitcoin, Monero & LiteCoins difficulty for ... This usually relates to the difficulty of generating a new hash address, also known as mining. This is a variable that the Bitcoin system is using to keep the growth of new Bitcoins on a ... This video is unavailable. Watch Queue Queue