New All-Time High Reached by Bitcoin Hashrate

Willmen Blanco
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New All-Time High Reached by Bitcoin Hashrate

Bitcoin network’s hashrate reached a new all-time high at 83 exahashes. Early in the year, Bitcoin network’s hashrate was around 35 exahashes, showing an increase of 137% over a period of eight months.

In mid-2020, the Bitcoin blockchain network is expected to undergo a mechanism called block reward cut halving, which would reduce the revenue received by BTC miners by 50%.

The halving event substantially decreases the amount of BTC extracted by miners. These cryptocurrencies are placed in the market through exchanges and over-the-counter (OTC) transactions, which puts bearish pressure on BTC price. Historically, the reduction by half of the network’s block rewards was a fundamental catalyst for the cryptocurrency’s price trend in the medium and long-term by decreasing the BTC issuance rate (and thus decreasing the inflation of the offer).

It should be noted that halving also tends to reduce the overall hashrate of a proof-of-work (PoW) network, in line with lower mining revenues. This can make BTC less safe from 51% of attacks.

The increase in Bitcoin network’s hashrate before its halving can show that a growing number of miners intend to extract as much BTC as possible before mid-2020, anticipating the dominant cryptocurrency’s recovery in price.

In July, BKCM founder Brian Kelly stated that many miners have acquired enough capital to finance the next 12 months of operations, to keep the BTC that they extract during 2019 and the first half of 2020.

Kelly talked to miners worldwide, many of who say to have sold enough Bitcoin to spend next year or so. They also explained that they will accumulate Bitcoin, which they are not planning to sell, since the supply of Bitcoin will be cut in half. This is a really simple economy, with much demand but little supply, in which the price increasingly grows.

If miners continue conducting their transactions without selling BTC in exchanges or OTC markets to cover their expenses, it means that they anticipate that Bitcoin price will have a good performance in the medium and long term, despite the recent setback.

For the sixth time this quarter, the price of Bitcoin has fallen below US $10,000, testing a support range between US $9,400 to US $9,700. Several technical analysts said that as the support range for BTC weakens, there is an increasing possibility of BTC testing a stronger support range around US $8,000 in the short term.

Technical analyst Josh Rager reported that Bitcoin price currently remains above the previous low at the daily close. However, if the price collapses, it will go to US $8.7ks. After that, it will go to US $8k, but everyone’s interest in it will make it bounce to or surpass that price. It is required to recover more than US $10,100 so that it will become bullish.

It remains uncertain whether the launch of Bakkt, a physically delivered Bitcoin futures contract, on September 23rd this year, could reverse BTC’s short-term disadvantage, given the weakness that the asset has shown since early August against the US dollar.

Bitcoin, currently in the 1st place by market capitalization, has risen 0.12% in the last few days. At the time of writing this note, BTC has a market capitalization of US $171.93B with a 24-hour volume of US $11.63B.

It is essential that users follow the current status of cryptocurrencies, especially that of Bitcoin. The cryptocurrency par excellence is known for never sleeping, neither must cryptocurrency investors.

By Willmen Blanco

Mexican Deputies Propose to Counteract Fuel Theft Using Blockchain

Maria Rodríguez
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Mexican Deputies Propose to Counteract Fuel Theft Using Blockchain

Blockchain technology would be a tool to have a more transparent public power and avoid crimes that affect different countries.

Mexican lawmakers proposed using blockchain technology to solve a problem that causes huge losses: fuel theft.

Only in 2015, about 2,813 clandestine fuel intakes were detected, an amount that by 2012 was only 620, according to Pemex figures.

A report recently published by BBC indicates that in the most sophisticated operations it is possible to extract gasoline in just seven minutes, and earn about USD 90.000.

Also known as “petro-piracy”, it is estimated that this illegal activity will generate some 133 billion dollars per year.

In this regard, during the forum “New technologies and their effect on the government and the population”, sponsored by the Chamber of Congressmen of Mexico, lawmakers proposed to use blockchain technology to counteract the theft of fuel in the Aztec country.

This idea seeks to achieve two objectives simultaneously: to reduce the cases of fuel theft and boost the use of new technologies to have a more transparent public power.

Deputy Rocío Barrera Badillo, President of the Government and Population Commission, made the proposal.

Barrera said that the implementation of new technologies in the government sector should be used daily to simplify the relationship with citizens, act with transparency and gain space in the security area.

“Not every technological innovation implies large investments. The schemes that take advantage of current encryption technologies are much more secure and transparent”, he said.

The legislator talked about the illegal extraction of gasoline from distribution pipelines and their subsequent smuggling. “For example, blockchain technology would make the fuel route traceable and would be a great tool in the fight against fuel theft. This would bring simplification, reliability, accessibility and safety”.

Finally, the congressman referred to the fast advance of technology in general and the delays that arise to update legislation.

He indicated that it is necessary to establish flexible legal structures adapted to the speed and evolution of technology to reduce the digital divide. “The law cannot be far away of a society in constant evolution, its early application is key before it becomes obsolete”, he said.

Blockchain Use Grows

José Rodríguez, Director of Blockchain Land and Talent Land, was one of the panelists invited to the forum. He talked about the growth of bitcoin as a financial platform and the use of blockchain technology, its associated technology, and its different uses.

The objective is that legislators have clearer ideas about how blockchain could make government processes more efficient and transparent, so that in the future they can legislate in that issue.

During his presentation, called “Bitcoin and Blockchain connecting the world financially”, Rodriguez indicated that new technologies help minimize corruption and money laundering.

“The technology that makes you have the money in a few seconds is an ideal tool for the misuse of money (…) Bitcoin is the only financial system, money and monetary system that in the 10 years and seven months that it has been working has not been possible to counterfeit, it is the only currency that could not be corrupted”, he said.

This is how the use of blockchain begins to be considered not only for different processes of government entities, but also to stop with a crime that affects the profits of the State and the economy of its citizens.

By María Rodríguez

Ethereum (ETH) Considered “Halal” by Muslim Scholars

Willmen Blanco
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Ethereum (ETH) Considered “Halal” by Muslim Scholars

Prominent Muslim scholars and financial advisors published a white paper considering Ethereum “halal,” or permissible, in accordance with Sharia Islamic law. Clarity for Muslim buyers can stimulate an additional demand for the cryptocurrency Ether.

Compliance with Sharia Islamic law has been contemplated in the cryptocurrency market for some time. Virgil Griffith, an American programmer and Head of special products at the Ethereum Foundation, first considered the matter in October 2017. It was first reported that a technical document by Oman Amanie, Islamic Finance and Sharia Advisor, highlights that the cryptocurrency Ether actually adheres to the Sharia Islamic law.

In the Islamic culture, usury, the process of lending money to benefit from the interest generated, is considered “haram” or sinful. Therefore, they only accept profits earned through the appreciation of a physically supported asset, such as real estate or gold, since they comply with Sharia law.

Most cryptocurrencies are considered “haram” because there is not a physical asset that supports them. On the contrary, coins often represent a pseudo investment in a corporation. Since most cryptocurrencies are likely values, as stated by the SEC, the appearance of interest causes a stir among those who are in Islamic finance.

Instead, Ether represents a “utility token” and works like a cryptographic coin that feeds Ethereum, Amanie argued. Therefore, owning ETH is considered “halal.”

That being said, Muslim scholars reserved their thoughts on specific use cases for ETH, since numerous tokens are executed in the protocol. In cases where tokens are used to raise money for businesses, which closely resembles interest, that activity would be considered “haram” in the Islamic culture.

In the most nuanced part of the analysis, the authorities ruled that Ethereum, the proof of work (PoW) and the proof of participation (PoP) comply with the principles of Sharia. However, the PoP, which is the act of “blocking” tokens to receive bet rewards, will still be a matter of debate once ETH2.0 is activated.

Amanie is a much admired voice in the Islamic financial industry. Although the opinion is not final in any way, it still has weight among devout Muslims. Given the fact that there are around 1.8 billion Muslim followers worldwide, this decision could have material ramifications in the demand on ETH.

The ruling is similar to the comments made in March by the President of the United States Stock Exchange Commission (SEC), who stated that Ethereum is closer to a commodity than to a security.

Atif Yaqub, a Muslim blockchain expert who helped explain the technical details to Amanie, concluded that people who are more faith conscious can now participate without any doubt that the emerging technology is fully allowed to be used.

Ethereum, currently in the 2nd place by market capitalization, has risen about 0.33% in the last few days. ETH has a market capitalization of US $ 18.19B with a 24-hour volume of US $ 5.88B.

To conclude, it is observed that business with cryptocurrencies can be done even in extremely conservative cultures such as the Islamic one. As long the activity is supported by a physical asset, it will be considered to be “halal” or permissible.

By Willmen Blanco

Zcash Mining Profitability Falls to Its All-Time Low

Willmen Blanco
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Zcash Mining Profitability Falls to Its All-Time Low

The network’s high hash rate and ZEC low price affected Zcash mining profitability. The previous all-time low was 25% above what it registered last week.

BitInfoCharts notes that the daily mining profitability of ZEC, Zcash native cryptocurrency, is US $0.08 per kilosol per second (KSol/s). This means that an AntMiner Z11 device could produce about US $10 per day in gross income, without considering the cost of on electricity consumption, the Internet service, and the fees charged by the mining pool and mining software used.

Although the figures for Zcash mining profitability are still positive, they reflect its worst time since its origins. These values ​​were not so low even during the market’s collapse in 2018. The lowest figures previously reported in this category for Zcash were US $0.102 per 1 KSol/s per day (25% above current profitability) in early May 2019.

Waves that Sink Mining Profitability of Zcash

After falling in mid-June, Zcash mining profitability has failed to recover to the date. There are two main reasons for this: the increase in Zcash hash rate and the fall in ZEC prices in the cryptocurrency market.

The more mining power added to a network, the greater a cryptocurrency’s mining difficulty. The adjustment of the mining difficulty aims to balance the speed of block production; thus, the higher the hash rate, the greater the difficulty.

Since April 2019, Zcash hash rate and mining difficulty have been growing steadily toward their all-time highs. On August 20th, Zcash hash rate reached 4.7 GSol/s while its mining difficulty was 88.2 million. These values ​​have shown similar ranges in the last three months and do not seem to be declining.

The increase in Zcash hash rate adds a fall in ZEC price, thus aggravating its mining profitability. As explained above, a higher hash rate in the network causes greater difficulty, which reduces the rewards earned by miners. If such rewards in ZEC decrease their price, miners’ profits are doubly affected.

Between April and June 2019, while Zcash hash rate increased, ZEC price in the cryptocurrency market experienced a rebound to US $118.9. However, after that annual record, the value of Zcash native cryptocurrency in the stock market has continued moving downward. This week, ZEC has averaged US $50 per unit, a drop of over 50% in two months.

Mining Profitability in Perspective

Bitcoin mining shows a daily profitability of US $0.23 TH/s, that is, an AntMiner S17 Pro could generate about US $14 per day. The lowest point in Bitcoin mining profitability this year was US $0.13 per 1 TH/s. Regarding Ethereum, its profitability has also remained afloat above its minimum this year (US $0.010 per 1 MH/s) and currently averages US $0.015 for 1 MH/s.

What favors the mining of other cryptocurrencies over Zcash is, mainly, market valuation. Unlike BTC and ETH, ZEC failed to reverse the general fall of July, but it has kept its downward trend. However, it has not yet returned to US $46.23, its lowest price this year.

Zooko Wilcox, founder and CEO of Electric Coin Company, proposed on July 31st that a portion of ZEC mining rewards continues to be used to support the developers’ fund. If not, Zcash risks suffering stagnation at the development level and a potential deterioration of its efficiency.

Undoubtedly, uncertainty about a possible change in a project’s roadmap usually brings market reactions. Regarding Zcash, the dilemma of mining rewards and the developers’ fund is not necessarily the cause of the fall in ZEC price.

By Willmen Blanco

North Korea Denies Any Involvement in $2 Billion Fiat and Crypto Hack

Andres Chavez
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North Korea Denies Any Involvement in $2 Billion Fiat and Crypto Hack

In recent days, a report published by the United Nations (UN) implied that North Korea, a nation with a mysterious and highly controversial government, was behind a hacking attack that, allegedly, netted for said country’s weapons program $2 billion. The attack was directed to banks and cryptocurrency exchanges, and the funds came via fiat currencies and crypto assets.

However, and per a Reuters report, the Asian nation denied any involvement in the hacking of the mentioned institutions, and did it adamantly. It accused a regular political adversary of the nation, the United States, for spreading the rumor.

Accusing the United States of America for Spreading Rumors

Per the Reuters report, which was published earlier in the week, a statement made by the National Coordination Committee of the DPRK for Anti-Money Laundering and Countering the Financing of Terrorism pointed the finger towards America.

“Such a fabrication by the hostile forces is nothing but a sort of a nasty game aimed at tarnishing the image of our Republic and finding justification for sanctions and pressure campaign against the DPRK,” the mentioned institution explained through a spokesperson. KCNA, a local agency ran by the state, was the first to report the piece of news.

The UN report was researched and conducted by impartial, independent experts and presented to the organism’s Security Council North Korea sanctions committee around the end of July.

The Money was Laundered

According to the investigation, North Korea was accused of using “widespread and increasingly sophisticated” hacking attacks in order to gather approximately $2 billion. Purportedly, the money was laundered over the web after being obtained through the major breach.

Specialists are currently investigating “at least 35 reported instances of DPRK actors attacking financial institutions, cryptocurrency exchanges and mining activity designed to earn foreign currency.” These acts were reportedly perpetrated in 17 countries around the world.

It is important to note that numerous North Korean hackers and cybercriminals are currently performing their operations under the Reconnaissance General Bureau, which is a widely known intelligence agency in charge of managing clandestine operations.

Targeting Crypto Platforms

In this case, the United Nations reported that the hackers wanted to target cryptocurrency exchanges because collecting assets in the form of cryptocurrencies would make them harder to trace by the respective authorities investigating the events.

The specific words that could be read in the report were that North Korea was looking “to generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector.”

Lazarus, a widely known hacking association, is said to be working for the North Korean authorities as they aim to gain a hold on the digital space, cleanly or not. The group has been repeatedly linked with famous security breaches and hacking scandals in crypto-related platforms and also in traditional banks. Lazarus was the entity behind the $81 million hack of the Bangladesh Central Bank in 2016, for example.

By Andres Chavez

Bolivar Price Falls Compared with Bitcoin and Exchange Volumes Fall 81 %

Maria Rodríguez
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Bolivar Price Falls Compared with Bitcoin and Exchange Volumes Fall 81 %

Although bitcoin’s price maintained some stability, the value of bitcoin went from VES 97.93 million to VES 166.59 million because of hyperinflation in Venezuela.

In recent weeks, the volume of bitcoin exchange in Venezuela through the peer to peer (P2P) platform LocalBitcoins has reached its lowest levels in all 2019.

The graphics that indicate the data can be identified through Coin Dance, the bitcoin market tracking portal to exchange bitcoins (BTC).

This page registered that during this week, taken from August 24th to August 31st, users have traded through the platform up to a total of 465 BTC.

The previous week, the total amount exchanged was up to 466 BTC, whilst during the week of August 10th, Venezuelan users exchanged 491 BTC, that is, about 26 more bitcoins.

Before these three weeks, only twice the total volume did not reach 500 BTC in LocalBitcoins, as shown in the graph of Coin Dance.

In fact, the lowest volume for Venezuela in the whole year was recorded in the last week of July. That week, users of the platform barely moved 433 bitcoins during that period of time.

The most recent trend has been falling. During February of this year, a week was registered with an exchange of 2,487 BTC through the LocalBitcoins site. The sum of the last August weeks only reaches 2,417 traded bitcoins.

Between February 9th, when the historical maximum of 2,487 BTC exchanged occurred, and the last week, the weekly volume decreased 81.3 %.

Bolivar Depreciation against Bitcoin

Just as the exchange rate of the Sovereign Bolivar national currency (VES) with respect to the US dollar (USD) has fallen, the VES has also maintained a drop rate compared to bitcoin.

Recently, the price of bitcoin compared to the VES increased 94 %. That happened even though the bitcoin price maintained some stability during that period, that is, it did not increase.

However, hyperinflation in Venezuela consumes its national currency, the bolivar, at a sustained rate compared to those of other currencies, such as the dollar and even digital currencies such as BTC.

The value of bitcoin went from VES 97.93 million to VES 166.59 million. This represents an appreciation of 1600 % on the price of BTC in VES.

Currently, 1 VES is not enough to buy 1 satoshi, the minimum fraction of bitcoin. Based on the current average price shown on the Yadio portal, VES 2.24 is required to purchase that minimum fraction.

Advances in Bitcoin Adoption

Despite the decrease in the volume of bitcoin exchanges, in recent weeks there have been advances in the adoption of bitcoin and other cryptocurrencies for payments in Venezuela.

First, one of the country’s largest retail stores, Traki, announced the installation of cryptocurrency outlets in its stores, through an alliance with Pundi X.

Previously, they already received payments in cryptocurrencies with the processor of the Venezuelan Company Cryptobuyer.

Then, the Farmarket pharmacy chain joined the adoption of physical cryptocurrency outlets, with the installation of XPay devices in some of its branches in Caracas city.

The objective of these actions approved so far by the government of Nicolás Maduro would be to encourage the use of petro, the national cryptocurrency, as well as other cryptocurrencies like bitcoin.

By María Rodríguez

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