Category Archives: monero

Criminals Have Found an Alternative to Bitcoin

Many people believe that Bitcoin is the preferred currency of criminals, but experts think that criminals are dropping Bitcoin for other digital currencies.


The Rise of Privacy Coins

In the last couple of years, deep web markets have risen in popularity. The major appeal of such darknet markets is the ability to obtain illegal goods like drugs and weapons in an anonymous way. But the recent technological advancements of law enforcement agencies has made purchasing goods on the darknet riskier.

Silk Road was once the most popular and widely used darknet market. The FBI was able to shut down Silk Road in 2013 after extensively analyzing Bitcoin transactions. Some experts believe that law enforcement agencies are able to track Bitcoin transactions that are involved in criminal activities. Many cryptocurrencies have now been developed that exclusively focus on the privacy aspect. Currently, the most popular privacy coins are Dash, Monero, and Zcash. A recent article by The Age mentioned that Europol has released a report regarding the rise of privacy coins in the criminal world.

Ditching Bitcoin for Privacy Coins

Many darknet markets have decided to no longer accept Bitcoin as a payment method after concerns of tracking possibilities from law enforcement agencies. Blockchain analysis companies like Chainalysis are now able to track illegal activities like money laundering or drug trading. The article by The Age also reports that darknet markets are not the only ones that use privacy coins for illegal activities. Many ransomware attacks have stopped accepting Bitcoin and only request anonymous coins like Monero.

Many analysts are concerned that companies and law enforcement agencies may target privacy coin users even though they are not involved in any illegal activities. A core developer at Monero, Riccardo Spagni, stated the following regarding these concerns:

As a community, we certainly don’t advocate for Monero’s use by criminals. At the same time if you have a decentralised currency, it’s not like you can prevent someone from using it. I imagine that Monero provides massive advantages for criminals over bitcoin, so they would use Monero.

Many institutions, companies, and law enforcement agencies have tried to track privacy coins without much success. Still, it’s not the fault of these privacy coins if criminals decide to use them. It’s like blaming the dollar bill when someone buys some illegal drugs from a pusher on a street corner.

What are your thoughts on the rise of privacy coins? Do you think that more people will start using them instead of Bitcoin? Let us know in the comments below!


Images courtesy of Pixabay and Pexels.

The post Criminals Have Found an Alternative to Bitcoin appeared first on Bitcoinist.com.

Is this Google Chrome Extension Secretly Using Your Device to Mine Cryptocurrency?

An instance of the CoinHive software has been found within a popular application used by thousands of Tumblr users. It’s been secretly mining Monero for an unknown hacker.

With the price of cryptocurrencies reaching new highs in 2017, the incentive for nefarious actors to devise innovative methods of acquiring them is also rising. One such technique uses a program known as CoinHive to secretly mine for digital currencies on the machines of unsuspecting users. According to a post on Bleeping Computer, a Google Chrome extension that streamlines the reblogging process for Tumblr users is the latest software to become compromised in such a way.

IBTimes report that as many as 105,000 users of the software have been discovered to be secretly mining the privacy-focused digital currency, Monero. It’s believed that the choice to mine this particular coin was made due to the anonymity features embedded within its code, as well as the fact that regular computers possess sufficient processing power to successfully solve the algorithms which are required to generate additional coins for those behind the attack.

Many users of Archive Poster have taken to the google Chrome web store, lambasting the software with a series of bad reviews. One user wrote:

“Do not use this extension as it comes loaded with a cryptocurrency mining script. Once installed it makes requests to coinhive which eats up your CPU time and slows your computer down massively. Avoid.”

The developers behind the software, Essence Labs, believe that their program was hacked by someone who had targeted an ex-employee. A representative of the company spoke to PCMag:

“An old team member who was responsible for updating the extension had his Google account compromised… Somehow the extension was hijacked to another Google account. In the meantime we have alerted the users to use a safe version of the extension on a different link.”

This example isn’t the first of covert mining software targeting unsuspecting internet users. In recent months The Pirate Bay, Showtime, Starbucks, and even the UFC’s websites have all been reported to be running CoinHive software to mine cryptocurrency without their visitors’ consent.

Programs like CoinHive were intended to provide a way of monetising internet content. When used with express consent, they offer an opportunity for publishers to provide their services without relying on oppressive levels of advertising. However, examples like those listed above show how easy they make it to infect users’ machines without their knowledge. Without consent from the owner of the machine, the schemes such as the Archive Poster hack are morally suspect. Since they use large percentages of the target machines’ processing power, users might mistake the slowdowns they’ll inevitably experience to some other fault with their machine. This can understandably cause great frustration for computer users who are less experienced with diagnosing system faults.

Originally published at www.newsbtc.com on December 30, 2017.

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Why is MONERO’s price rising?

Which are the behavioral drivers of the privacy-focused XMR coin

By Percy Venegas www.EconomyMonitor.com

Monero’s growth is impressive -yes, that’s a log scale.


Monero: $1M to $3B market cap in 3 years. Source:Coinmarketcap

We studied over 500 days of data using machine learning and 40 data sources as inputs. Why monero is increasing? This is what we’ve learned.

The obvious: the bitcoin link

People often ask if monero is the next bitcoin, and when you ask altcoin pundits why monero is going down or up, what they will tell you is some anecdotical argument relating the incident to bitcoin movements. But this is a relationship that is quantifiable, here is the formula that explains it,

This is one of the first iterations when searching on a space of over 3600M formula evaluations, so we can consider it fairly trivial. But is a different thing to just talk about it than to measure it.


Observed vs. Predicted, Output, Error vs Complexity

Such a model is still imperfect, the error is just too high for any algorithmic trading strategy, and even worst for human traders. That pundit on Twitter is probably overcharging you for access to its Telegram trading group, and he does not even really understand what makes the difference — the real drivers behind investor behavior.

The not so obvious? Actual demand

If we move down the error/complexity Pareto (towards the end of the green line) we begin to find more interesting relationships,

Monero_price = a + b*wma(monero_blockexplorer_1, 70) + c*wma(monero_wallet_1, 4) + d*Bitcoin_price_index*wma(monero_blockexplorer_1, 61) + e*min(f, g*Bitcoin_price_index — h) + i*min(-j*sma(monero_wallet_1, 4), k*Bitcoin_price_index*delay(Bitcoin_price_index, 1) — l*delay(Bitcoin_price_index, 1)) — m*wma(monero_blockexplorer_1, 61) — n*net_neutrality*wma(monero_wallet_1, 4) — o*net_neutrality*min(-p*sma(monero_wallet_1, 4), q*Bitcoin_price_index*delay(Bitcoin_price_index, 1) — r*delay(Bitcoin_price_index, 1))

Here bitcoin is just one more variable (albeit an important one), and the usage of certain services in the Monero economy, and attention towards topics related to the monero coin, begin to play a role in price action. We learn for instance that i)the use of one particular monero offline wallet has a positive effect on price 100% of the time, and, ii)that popular interest about net neutrality has a negative effect 100% of the time — although the relative impact in price is weaker.

What are the behavioral tells

After the price of bitcoin itself, the strongest explanatory power comes from the combined rise of bitcoin and the use of a popular online wallet and a particular block explorer. If we look at the number of models each variable appears in, and the number of occurrences of each variable (across all models), both services appear in roughly half of the models found (28 and 27 out of 56); besides monero and bitcoin prices, usage of the wallet is the variable that appears more often across all models, followed by the use of the block explorer (12 times and 9 times respectively).

The variable that appears the less across models is an offline wallet generator. Prospective users usually look for instructions on how to create a monero wallet, or they use multiwallets (that can hold bitcoin, ether, and monero) because that’s easier and they most likely own other coins already. But it is current holders who will be more knowledgeable and inclined to use an offline wallet for day-to-day activities.

In fact, the numbers here are likely much higher: as user sophistication grow, they might be more prone to use anonymity technology such as onion/garlic routers. And a power-user or large investor would run a monero node and do a lot of this transaction execution and tracking programmatically, so at first, it looks like it is the middle market that is driving demand. Would this mean that the second main driver is increasing activity among current users rather than new demand from outsiders?

The are other signals with weaker descriptive power, including the use of a popular mining pool (it is also common that prospect miners ask which monero pool to join), and the interest for a new browser-based mining technology that is compatible with monero.

But despite the improved level of detail, this is still a simplistic model: we used 40 variables and put the models to compete among them for fitness, but could have easily included many more inputs to reach an arbitrarily high level of complexity (number of terms in the formula), to reduce error.

There one variable with high descriptive power that we have not analyzed yet: popular interest in net neutrality.

A false signal?

Over the course of a year and especially during the last few days, discussion of a possible attempt by the US government to reverse its Net Neutrality position has raised the level of discussion and activism among privacy advocates. The conversation among those who are monero users has so far dismissed the merits of such a concern on technical grounds and practical reasons — mining bandwidth is marginal if compared with the purported government targets, video traffic and the like. But do this really stops monero holders from worrying, specially the ones who are well aware of the risk of censorship?

Distributed ledgers are not fully immune to intervention. The government excerpts power in the entry/exit points of the system, where there is a mismatch between the trustless medium of exchange and the need to trust a party for off-ramping. And with the ability to filter traffic, they could also target nodes. Governments do not need a valid cause, just an alibi.

And this concern is captured by the models. Actually, if we go back a few steps to a less complex formula, our net neutrality signal is already featured in one of the models,

Monero_price = a + b*wma(monero_blockexplorer_1, 71) + c*wma(monero_wallet_1, 4) + d*Bitcoin_price_index*wma(monero_blockexplorer_1, 52) + e*net_neutrality*sma(monero_wallet_1, 4) + f*min(g, h*Bitcoin_price_index — i) — j*sma(monero_wallet_1, 4) — k*wma(monero_blockexplorer_1, 52) — l*net_neutrality*wma(monero_wallet_1, 4)

We can, in fact, visualize the fingerprint of each signal, and corroborate that net neutrality’s is so strong that it reverberates in monero’s price — especially over the last 100 days.


Signal intensity (net neutrality)

Signal intensity (monero)

Imprinting

We should keep in mind the nature of the coin: monero is a cryptonote algorithm, fungible money. This makes it different from tokens and most cryptocurrencies, and this is the kind of insight that most self-proclaimed crypto investment advisors will miss. This goes beyond “what coin you like” in strict valuation terms; those who hold monero are after something else.

What this means is that prospective demand has particular concerns: is monero illegal? is monero really anonymous? and so on. For instance, when looking at the whole 1.5 years period, a competitor (zcash) captures the largest share of attention among related topics, while the recent intention to buy monero in Germany is the latest signal of growing demand.


Volume and growth by semantic signal

In particular, the zcash alternative was one of the topics that captured attention — even before the launch of the coin in late 2016. But monero miners and monero mining is the theme that more consistently creates interest. So there is always this combination of speculative demand and utility awareness.


Momentum by time period

More recently, monero’s price upswings (e.g. Nov 8, after the bitcoin 2x cancellation, and Nov 26, during Thanksgiving) show how the availability of capital to be deployed, and availability of time, have an imprinting effect: technicals (present) ride on top of fundamentals (past). The instrument being traded does not live in isolation: market structure comes to reflect elements of the environment during the short periods when important environmental events gain visibility (e.g. the net neutrality outbursts), but the imprints are also persistent across multiple transitory changes (e.g. when competing technologies such as zcash display temporary flashes of popularity among monero’s prospect users).

Will monero continue to rise?

Talking about monero’s price prediction one thing is clear: for now, monero’s fortune seems tied to bitcoin’s. The matter of whether will monero fall, or will monero grow, can be explained literally by a simple formula -and this behavior is seen as well in the recent selloff of bitcoin (down 20% on Nov 29 after reaching all time highs) which can be argued was a matter of profit taking and affected also monero.

But long-term viability will also depend on what happens with the unresolved tension zcash vs monero, which may affect adoption and excerpt downward pressures in price.

There is also the topic of Kovri, an anonymity technology by the Monero developers, similar to TOR. Many privacy enthusiasts are putting their hopes in this project following rumors of infiltration of US government agents as TOR project volunteers. Kovri itself appeared as an input signal in our modeling.

As we can see, again we come down to an issue of trust. Even a privacy-focused asset and transactional technology, compatible from the ground-up with a network-layer privacy solution, is not perfectly trustless. And speculators are in turn betting on the trust of both the above-average user who is well versed in the technology, and, the privacy enthusiasts who are considering adopting the coin but are concerned about multiple political and economic developments.

If you are interested in privacy clap and let others find this article.

Published by www.EconomyMonitor.com

Daily technical analysis: Monero — October 12 (Monero/USD)

CoinCheckup Technical Analysis

In order to support you and the crypto community with trading decisions, CoinCheckup is serving you with Daily Technical analysis updates for Monero & other Cryptocurrencies.

Note that this report is written on: Oct 12, 2017 03:53AM GMT

Technical Summary Monero: STRONG SELL

Moving Averages: 5 BUY / 7 SELL | Technical Indicators: 0 BUY / 11 SELL

Monero 24 hour Technical Indicators

What is are these indicators (click for more info):RSI, STOCH, STOCHRSI, MACD, ADX, Williams %R, CCI, ATR, Ultimate Oscillator, ROC, Bull/Bear Power

Monero’s Moving Average indicators

What is “moving average” (more info)?

Monero’s Background, Fundamentals, Investment stats & Long-term indicators

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Market Summary for 14 September 2017

  • Market drifted down again, pulling down C3 (-7.0%) and C10 (-6.7%)
  • BTC/USD (-7.4%) fell and moved below $4000; Other coins also dropped from 6% to 8%; XMR/USD (-1.8%) and NEO/USD (-4.7%) were holding at support
  • JPMorgan’s Jamie Dimon claimed that Bitcoin is a fraud; Monero had a scheduled protocol upgrade and enforced RingCT transactions; NEO successfully integrated with Ledger Nano S

Market drifted down again, pulling down C3 and C10 by 7.0% and 6.7%.

BTC/USD fell 7.4% and moved below $4000. Other coins also dropped from 6% to 8%, while XMR/USD and NEO/USD were holding at support with 1.8% and 4.7% only.

JPMorgan’s Jamie Dimon claimed that Bitcoin is a fraud and it would fall harder than the tulip bulbs. This triggered lots fears and a market selloff. Meanwhile, Monero had a scheduled protocol upgrade today, enforcing its RingCT transactions which was proposed earlier this year. On the other hand, NEO successfully integrated with Ledger Nano S, which was one of the most popular requests from the community.

Want to diversify your cryptocurrency portfolio? Visit our website to learn more!



Market Summary for 14 September 2017 was originally published in Cryptomover on Medium, where people are continuing the conversation by highlighting and responding to this story.

Странная история рождения Monero Часть I: Что такое этот Bytecoin?

Перевод – Странная история рождения Monero Часть I: Что такое этот Bytecoin?



Странная история рождения Monero Часть I: Что такое этот Bytecoin? was originally published in Monero-RU on Medium, where people are continuing the conversation by highlighting and responding to this story.

A Eletrohiend é a primeira empresa do Brasil do segmento a aceitar criptomoedas

Ciente do crescimento exponencial do mercado de criptomoedas e blockchain , a Eletrohiend adotou essa idéia e é a primeira empresa do Brasil do segmento a aceitar criptomoedas. Com uma vasta linha de equipamento s tais como projetores, processadores de aúdio para cinema, lentes e filmadoras ,os clientes poderão optar por pagar nas seguintes e-currencys: Bitcoin, Dash , litecoin e Monero. Demais moedas poderão ser avaliadas em casos especiais a pedido do cliente.

www.eletrohiend.com.br

A Eletrohiend é a primeira empresa do Brasil do segmento a aceitar criptomoedas

Ciente do crescimento exponencial do mercado de criptomoedas e blockchain , a Eletrohiend adotou essa idéia e é a primeira empresa do Brasil do segmento a aceitar criptomoedas. Com uma vasta linha de equipamento s tais como projetores, processadores de aúdio para cinema, lentes e filmadoras ,os clientes poderão optar por pagar nas seguintes e-currencys: Bitcoin, Dash , litecoin e Monero. Demais moedas poderão ser avaliadas em casos especiais a pedido do cliente.

www.eletrohiend.com.br

Market Summary for 27 August 2017

  • Market was calm while privacy coins had another rally, causing CM3 (+0.1%) and CM10 (1.2%) to rise
  • DASH/USD (+25.4%) and XMR/USD (+28.1%) rallied again
  • Koreans were extremely positive on both DASH and Monero

Market was calm while privacy coins had another rally, causing CM3 and CM10 to rise 0.1% and 1.2%.

DASH/USD and XMR/USD rallied again with 25.4% and 28.1% respectively. XRP/USD kept falling and drifted down by 3.4% today. Other coins were having small moves between -2% to 1%.

Korean exchange Bithumb were dominating the trading volume of DASH by more than 60%, while the hype of listing Monero continued and pushed up the price.

Want to diversify your cryptocurrency portfolio? Visit our website to learn more!



Market Summary for 27 August 2017 was originally published in Cryptomover on Medium, where people are continuing the conversation by highlighting and responding to this story.

What Is RuffCT and How Will It Affect Monero?

TheMerkle Monero RuffCT

Achieving anonymity with cryptocurrency is not straightforward at all. It often requires either the involvement of third-party service providers or some advanced technology and cryptography. In the case of Monero, anonymity is mainly provided thanks to the use of Ring Confidential Transactions, or RingCT. It appears the developers are looking for ways to further improve upon this technology. A new proposal by Tim Ruffing dubbed “RuffCT” aims to achieve this goal. Now is a good time to look into what all of these changes could mean for Monero.

Taking RingCT to the Next Level

In a research paper written by Tim Ruffing, Viktoria Ronge, Dominique Schroder, and Sri Aravinda Krishnan, the concept of improved Ring Confidential Transactions is proposed. As most Monero users are well aware of, RingCT effectively allows users to hide their XMR transaction amounts. This technology has been implemented for quite some time now and powers nearly 95% of all Monero transactions today. This goes to show the technology is greatly appreciated by XMR supporters who want additional anonymity when using cryptocurrency.

There are other benefits to RingCT-based transactions as well. This technology allows users to not just hide the transaction amount, but also the origin and destination of any transfer. All of this is achieved with “reasonable efficiency” and is done in a trustless manner. There is no need to rely on a third-party service provider to remove taint from coins and successfully obfuscate the origin and destination have been one of the major advancements introduced by Monero developers. However, there is always room for future improvements, which is exactly what this whitepaper aims to achieve.

This technology is currently dubbed “RuffCT” by the Monero developers, even though Tim Ruffing is only one of the four authors regarding this whitepaper. This particular method revolves around using Confidential Transactions combined with sublinear ring signatures.  Implementing this technology would expand the ring signature sizes to over 100,000 although it remains to be seen if such a high number is actually feasible. For now, it seems the current ring sizes in Monero will be greatly expanded although not necessarily to such a scale as originally assumed.

Although this technology sounds quite exciting, Ruffing advises Monero users to remain level-headed for the time being. For now, the signatures are more compact for larger ring sizes. However, the computation time required to verify these “RuffCT” signatures are similar to how larger RingCT verification occurs right now. There is no notable speed advantage to using one over the other, which does not make RuffCT stand out from the current implementation. This is something the team is still working on and it may take a while to figure out how to optimize everything. Reasonable ring sizes right now are somewhere below 1,000 at best.

While still in the early stages of implementation, RuffCT offers significant improvements regarding transaction size. As most cryptocurrency users are well aware of, there is a limited amount of blockchain space for any cryptocurrency. Without a block size increase, there is only so much “space” to contend for. RuffCT will provide a way for Monero to scale to larger rings without requiring larger network blocks or anything of that kind. A lot of work still needs to be done in this regard and peer review by developers is expected to take place as well.

It appears the main limiting factor for the current implementation of RuffCT is CPU power. That is not necessarily a big issue on paper, but it may introduce some other changes to the Monero fee structure if it cannot be resolved. It will be interesting to see if this proposal is implemented in a few months from now. For the time being, the community patiently awaits the release of the whitepaper, which is expected to take place “soon.”

Market Summary for 20 August 2017

  • Undecided major market (CM3 +0.7%), while privacy coins were pumping (CM10 + 2.7%)
  • DASH/USD (+28.9%) and XMR/USD (+19.7%) were leading the market
  • DASH announced partnership with Arizona State University, while huge buying volume were from Koreans

Major market is undecided and hence CM3 was rising by 0.7%. However, privacy coins were pumping and caused CM10 to rally 2.7%.

The rally of BCH/USD was weakening and it was only 6.4% today. LTC/USD has lost its sheen and dropped 3.2%, while XEM/USD began to show some strength and rose up 5.7%. While other coins were not having significant moves, DASH/USD and XMR/USD were leading the marketing by surging 28.9% and 19.7% respectively.

DASH announced a partnership with Arizona State University to launch a “Blockchain Research Lab” for solutions of scalability, mining centralization, Blockchain security and energy efficient mining. On the other hand, the huge volume from Koreans also explained the recent price surge.

Want to diversify your cryptocurrency portfolio? Visit our website to learn more!



Market Summary for 20 August 2017 was originally published in Cryptomover on Medium, where people are continuing the conversation by highlighting and responding to this story.

Market Summary for 20 August 2017

  • Undecided major market (CM3 +0.7%), while privacy coins were pumping (CM10 + 2.7%)
  • DASH/USD (+28.9%) and XMR/USD (+19.7%) were leading the market
  • DASH announced partnership with Arizona State University, while huge buying volume were from Koreans

Major market is undecided and hence CM3 was rising by 0.7%. However, privacy coins were pumping and caused CM10 to rally 2.7%.

The rally of BCH/USD was weakening and it was only 6.4% today. LTC/USD has lost its sheen and dropped 3.2%, while XEM/USD began to show some strength and rose up 5.7%. While other coins were not having significant moves, DASH/USD and XMR/USD were leading the marketing by surging 28.9% and 19.7% respectively.

DASH announced a partnership with Arizona State University to launch a “Blockchain Research Lab” for solutions of scalability, mining centralization, Blockchain security and energy efficient mining. On the other hand, the huge volume from Koreans also explained the recent price surge.

Want to diversify your cryptocurrency portfolio? Visit our website to learn more!



Market Summary for 20 August 2017 was originally published in Cryptomover on Medium, where people are continuing the conversation by highlighting and responding to this story.

Weekly Cryptocurrency Market Outlook August 15

BTCManager’s Weekly Cryptocurrency Outlook highlights the price action and technical indicators on a long-term basis to identify the best opportunities in the largest cryptocurrencies, such as bitcoin, ether, and others.

BTC-USD (Bitstamp)

Bitcoin triggered the Bullish Saucer signal on August 8, breaking above $3339.66, and subsequently went on to establish a new high at $4400 on August 15.

Last week saw bulls dominate, but bears managed to push back, down from the high near $4200 and bringing the close to $4053.87, shown by the chart below.

The market attained our target at $4270.80, the first Fibonacci extension level. We look for a weekly close above $4270.80 to confirm a continuation of the long-term uptrend. On the other hand, support lies at $2980, the previous all-time high, and should provide strong support in the event of a prolonged pullback. Moreover, the conversion line (blue) also offers support at $3115, so we may see a test of this support before any further upside.

The daily timeframe is displayed below, with important supports standing at $3342.99 and $3178.72. The conversion line has held as support for August 15, at $3789.36. The market came within $15 of this critical support, posting a fresh low at $3800, but since then, buyers have managed to bring BTC-USD back above the $4000 handle.

Momentum is still indicated to be bullish by the Awesome Oscillator and the Ichimoku indicator. The conversion line may flatten out in the days ahead and give us an idea of where to place limit buy orders to get in on the uptrend. However, a daily close below the conversion line will point to a higher likelihood of an imminent test of the supports at $3342.99 and $3178.72.

On the 4-hour timeframe, the most recent fractal resistance lies at $4400, so we look to buy once this resistance is broken. On the other hand, a fractal support will form at $3800, suggesting short-term momentum will be skewed to the upside. Based on these fractals, we look to buy on a break above $4400, and sell on a dive below $3800, with a target of around $3350-$3200. A break above $4400 will see the market attempt our next target at $4730.74.

ETH-USD (Kraken)

The weekly price action for ETH-USD is interesting, as it seems to present a bullish setup for next week, but the Ichimoku simultaneously suggests a weakening outlook.

Firstly, the positive side for ether bulls. Notice the Awesome Oscillator, which was red in color and falling in value for five consecutive weeks but this week it has turned green and begun to rise. This is known as a Bullish Saucer and sets up a buy signal for next week; that is, a limit buy at the high of the current week’s candlestick.

Once triggered, we should see ETH-USD invalidate the fractal resistance at $320 and drift toward the all-time high.

On the other hand, a failure of the bullish saucer signal may see ETH-USD dive lower toward $250 and $208, supports highlighted by the conversion and base lines. Notice that the conversion line is moving lower and looks to cross the base line, which would give a weak bearish signal. A fractal resistance is also potentially going to form at $320, so if ether does not manage to regain this level in the next fortnight, a longer-term downtrend will be confirmed. More clarity will be given at the end of the week, once the current weekly candlestick has formed.

BCC-BTC (Bittrex)

Bitcoin Cash might be getting ready to make some large gains against bitcoin.

The daily chart below shows that the conversion line (blue) has moved higher on August 15, suggesting a short-term equilibrium around 0.0934. However, the market remains below an important fractal support at 0.0785. BCC-BTC must regain this level for a bullish outlook.

Once BCC-BTC regains the fractal support, we should look to target 0.0934, with a daily close above the conversion line providing a stronger bullish signal. Given that the conversion line is moving higher, and assuming it continues, we get an indication that the market will also head higher. Also, notice that the lagging line (purple) seems to have bottomed out and is also following the conversion line.

The 4-hour price action shown below indicates that we may see a bullish breakout for bitcoin cash on August 17. The chart shows that the red Ichimoku cloud is very thin for the entirety of August 17’s trading session; a thin cloud suggests very weak resistance, and if BCC-BTC is going to make some strong gains, it is very likely to begin on August 17. On the other hand, since the cloud is red and looks to be getting ready to move lower, we look to sell on a break of the most recent fractal support at 0.0675.

LTC-USD (Bitfinex)

There are two main things to note from the weekly chart of LTC-USD. Firstly, this week’s price action looks to drop below the conversion line, potentially giving a weak bearish signal by August 21. Secondly, the market managed to break to a fresh high above $50, but this high may turn into a fractal resistance.

Notice that the preceding candlesticks have lower lows and lower highs. Therefore, if LTC-USD remains below $50.247 until August 28, we expect further downside, with the base line (red) providing an important support level at $29.60.

On the other hand, a weekly close above the conversion line, that is above $44.04, will keep the long-term uptrend intact. Furthermore, if we see LTC-USD break above $50.247 any time in the next two weekly trading sessions, this will give bullish confirmation. Finally, litecoin failed to close above the resistance at $48.20 last week and a weekly close above this level will also give a strong bullish signal and a reason to enter into a long position.

NEO-BTC (Bittrex)

NEO displayed its largest ever gain in a single week against bitcoin, rising over 100 percent on large volumes, as Forbes‘ August 10 article put a spotlight on the project.

The weekly chart below identifies two possible areas of support where we look to buy NEO-BTC. Since last week’s action was dominated by bulls and the candlestick is almost a bullish Marubozu, we can use the open and 50 percent levels to find an entry to buy. The first support lies at 0.00844130 whereas further support will be found at 0.00493265. Also, notice that bullish momentum should strengthen, as the conversion line is moving higher above the base line and the Awesome Oscillator continues to move higher too.

The daily price action for NEO-BTC is shown below with a Dragonfly Doji looking to form for August 15. This doji candlestick pattern suggests that bulls will continue to dominate, as the low of August 15’s price action was very close to the conversion line, which provides support at 0.0092. If bears manage to take hold, we should see increased buying interest around the supports at 0.0089 and 0.0067. Alternatively, we look to buy once the market breaks the most recent fractal at 0.01199999 or with a daily close above 0.01190.

XMR-USD (Bitfinex)

Monero showed some indecision last week, with a slightly bullish slant, posting a a two month high at $53.43.

However, bears tempered bulls back to $48 by the end of the week. However, like ether, we are seeing a potential opportunity for a long position for the week beginning August 21. Notice that the Awesome Oscillator is forming a bullish saucer, which will be confirmed on August 21.

Moreover, the conversion line has jumped higher compared to last week, suggesting the general market direction will be upward. We look to place limit buy orders near the conversion line at $40.71. A break above the recent high at $53.43 will also necessitate a bullish outlook; by invalidating the fractal resistance that is in progress, we should see an attempt to find a new ceiling by the market, with a further resistance at $58.14.

Finally, we can also examine this week’s candlestick close and compare it to $47.85 for an indication of the long-term momentum of XMR-USD. For instance, a closer higher than $47.85 means that is will be likely XMR-USD continues the upward trend. However, a weekly close below $47.85 could mean that the altcoin will display some weakness.

OMG-BTC (Bittrex)

OmiseGo is a relatively new Ethereum-based token gaining a lot of attention from traders; when judging by the 24 hour volume, it is within the top ten cryptocurrencies.

The daily chart below illustrates a bullish outlook for OMG-BTC, as it looks as if another test of the Fibonacci extension level at 0.00203578 is due. Notice the flat conversion line has held as support. We could place buy limit orders around the conversion line and base line and target the Fibonacci levels at 0.00203578 and 0.00308076.

ARK-BTC (Bittrex)

The altcoin ARK has displayed high volume over the past 24 hours, as well as compared to any other week, shown by the chart below.

At the time of writing, the trading volume for ARK is similar to that of Ethereum Classic and DASH. The weekly price action shows an interesting market structure, with just three fractals formed so far in ARK-BTC’s history.

Two are down fractals (supports) and one is an up fractal (resistance). Notice that the market has tested the fractal resistance at 0.00044206 so far; a sustained break or weekly close above this level will open up the first resistance at 0.00196608. Notice that this is the 50 percent level of the large bearish Marubozu for the week that Bittrex listed the crypto-pair. Given the relatively short history and that the lagging line has broken all of its resistances, 0.00044206 is the nearest resistance given the limited information that we have from the market price and its behaviour.

We also see that the conversion line has started to form an uptrend, moving higher this week. Since the market has remained below the conversion line since mid-June, it could be the week where we get the first close above this important support. However, the market may close a lot higher, given no prior resistances and the increase in the volume, so we suggest buying on a break of the fractal at 0.00044206 or once we get the weekly close, providing it is not too far away from the conversion line.

Market Snapshot

The top ten cryptoassets are shown below by market capitalization and 24-hour volume.

Market Capitalization

24-hour Volume

Source: CoinMarketCap.com

The post Weekly Cryptocurrency Market Outlook August 15 appeared first on BTCMANAGER.

Pecunia populi

or: How I learned to stop worrying, and love a tax integrated national cryptocurrency.

Part 1: lower taxation with better government auditability

Our current economic system has done great things for us. The device you are reading this on is one of them. But, our economic system is not a panacea. We have some real problems, which include:

  • profit shifting
  • cost of tax compliance
  • losses due to unreported taxes
  • the high cost of tax collection
  • government departments failing financial audits, i.e., tax spending being unaccounted for

In this first article in the series, we are going to look at how a cryptocurrency with built-in per transaction taxation can make all these problems disappear. In fact I will argue that nation states should switch as quickly as possible to a per state cryptocurrency with built-in per transaction taxation, and we as the public should demand it, because

  • it lowers tax rates significantly, and
  • greatly improves government fiscal honesty (through auditability).

First, to delve deeper into the problems we are going to take a look at America as a case study. If you look at your own country you should be able to find similar data.

Profit shifting is a major problem. Multinational corporations shift profits into low- and no-tax countries, to reduce their taxes and increase shareholder value. A company like Apple paid as little as 1.9% in taxes on their profits outside the US. In America in 2012 the estimated corporate tax revenue lost due to profit shifting was between $77 billion and $111 billion. Measured against the actual corporate tax revenue of $242 billion that is between 32% and 45% of value lost. What this means for national companies and the population of a nation state, is that this increases the tax burden on them. Furthermore, with profit shifting, poorer countries lose more than rich countries, which increases the burden on those who can least afford it.

In 2012 the rate of change to, and the inherent complexity of, tax laws costs the American economy an estimated $1 trillion. Measured against the total revenue collected by the federal government in that year of $2.5 trillion, this is 40%.

On top of this it is estimated that the US Treasury annually loses out on $450 billion in unreported taxes.

The budget for the US Treasury in 2012 was $128 billion.

So lets summarize these numbers

  • profit shifting tax loss = $ 111 billion
  • unreported taxes = $450 billion
  • cost of collection = $128 billion

If we can reduces these numbers to zero, and measure that against the tax revenue, it results in a potential reduction of 28% in tax rates. This is a strong economic imperative to solve these problems.

To reduce taxation it is not enough to make the process of tax collection fair and effective, how taxes are spent also needs to be improved. Now I’m going to pick on the US military. The Department of Defence cannot account for
$8.5 trillion in tax money doled out to them between 1996 and 2012. If you consider the unaccounted for as losses (you should), then that amount averaged over 6 years could have decreased taxes in 2012 by 57%.

The above taken together would result in a 85% decrease in tax rate.
Just to get a real feel for that: imagine that for every $100 you paid the government last year you put $85 back in your pocket instead.

Our economic imperative has just become a very strong motivator.

So lets see how a cryptocurrency with built-in per transaction taxation can make all these problems disappear, and reduce the taxes you need to pay by 85% :-)

Cryptocurrencies are basically the internet of money. Like cash you don’t need a bank, or another trusted third party, to transact.

I am going to use Monero as an example, because it already exists. Like cash Monero is private. That is if I pay you using Monero, then no-one else can see that transaction. So, transacting in Monero meets our current privacy requirements.

What we are going to do is imagine a Monero+ where every transaction is taxed. I.e., for every transaction x% gets paid to the government. Note that with Monero+ no-one knows you and I did business, but the government has gotten their tax payment automatically and immediately.

To implement Monero+ is “trivial”. Me paying you using a cryptocurrency is already a transaction. All we are doing is automating the addition of a third party, i.e., the tax revenue service.

This makes profit shifting impossible. Because we now automatically tax the transaction instead of the company profit. As long as we are doing business in the currency of our nation state, taxes are paid. Immediately and with zero effort.

This also reduces the cost of compliance to zero. You never need to complete a tax return ever again. Read that sentence again.

Tax interaction is now reduced to

  • Those who have to pay additional taxes, e.g., tobacco, alcohol, sugar, polluters.
  • Those who want to claim taxes back.

Using Monero+ there is no such thing as unreported taxes!

This also means that taxes do not need collecting. I.e., the cost of collecting taxes reduces to zero; it is built into the system. The only costs now are the deviations: those who are taxed extra and those who are claiming back.

So Monero+ gives us our 28% reduction in taxes. Because it is a cryptocurrency it can also give us the other 57%.

Monero is not just like cash, because it is a cryptocurrency it is also its own complete accounting ledger. Lets consider the Department of Defence again: They get allocated a budget in Monero+. When they get audited their Monero+ accounting ledger shows every amount spent, and the people who approved each cent. Who got paid is secret, but who paid is not. With Monero+ individuals can be held accountable. You can even make referencing invoices on Monero+ a requirement for the DoD to make the auditability really simple.

You might wonder how there can be accounting ledgers and privacy at the same time. The short answer is mathematics is amazing. If you are interested in the details please read up on the Monero website.

Please note we are not saying a nation state should adopt Monero, rather a nation state should fork a cryptocurrency like Monero and add per transaction taxation.

In conclusion: a national cryptocurrency with per transaction taxation will greatly increase our tax efficacy and efficiency, and so vastly reduce our tax burden. Monero+ would create a more honest government while we pay a fraction of the taxes we currently do. Imagine what that increase in disposable income will do for your economy. In 2012 in America, combined with the $1 trillion saved from the reduction in tax complexity, Monero+ would’ve meant a disposable income cash injection of roughly $3 trillion with zero negative effect on government efficacy.

In the next article we will investigate how Monero+ would effect our current economy, and what new financial possiblities Monero+ opens up for us.

PS. I cheated. The above tax numbers included property tax, etc. However, the reduction we calculated did not take in to consideration the higher rate of transactions vs reported taxable income which would further reduce the level of taxation. So for a back of the envelope calculation I’m going to call it quits.

No ICO or Outside Investors, Just Community Altruism: How a Ph.D. Mathematician was Onboareded to ‘Future Proof’ Monero

It seems that everyone is in crypto because they have dollar signs in their eyes. ICOs are making a lot of noise in the cybersphere; many projects have no working prototype and want to change the world with just a white paper. Away from the buzz and hype, in the background is Monero showing some real progress; the strong and silent type of the crypto-world. With no ICO, no investor funds, and no appeals to outsiders for money, the cryptocurrency project has quietly hired a Ph.D. Mathematician to help ‘future proof’ Monero, entirely funded by the goodwill of users and community members.

More than 50 individuals contributed 1,153 XMR (worth over $47,000 at the time of writing) in May 2017 to hire a Ph.D. Mathematician for three months up to August 2017, who goes by the name of Brandon Goodell. Monero’s community even overfunded the bid by more than 100 XMR so the promising academic could work toward three goals; to incorporate a zero-knowledge protocol, make a start on post-quantum cryptography and reduce the bloat of the blockchain.

Three Goals to ‘Future Proof’ Monero

Why these three goals? They are pretty ambitious, to say the least, but these are the problems, as Goodell puts it, preventing Monero from winning the ‘crypto arms race.’ According to the Mathematician, ‘unless a protocol is provably zero-knowledge then a non-trivial amount of information is made available by definition.’ Goodell points to the timing of a transaction as an illustration; if someone is able to pinpoint a transaction within two minutes using the block height, a lot of information is revealed from that transaction. Exchanges may be able to determine not only the purchasing habits of its customers but also the which times they tend to purchase.

“You or I may not be clever enough to figure out how to piece that information together, but someone might be clever enough, or an advanced machine learning algorithm crawling the Monero blockchain may be clever enough in a few years.”

A draft paper reviewing zero knowledge protocols is already complete and awaiting peer review, which can be found here. As explained above, integrating a zero-knowledge protocol, it will reduce the effectiveness of which the timing of a transaction can be used to uncover the identity of the user in question and ensure no information is leaked at all. After completion and reflection upon the literature review, the community will then be able to decide best how exactly to adopt this technology to strengthen Monero’s privacy offering further.

While this goal is rather precise, the other research goals still need to be sharpened, such as the quantum proofing goal, as Goodell stated in June, “Secretly I want Monero to be the first quantum-proof cryptocurrency: signatures, hashing algorithm, proof of work. Publicly, I have sincere doubts if PQC will ever be lightweight enough to build a decentralized blockchain that is remotely reasonably sized.”

Goodell Updates the Community for July

On July 27, Goodell delivered his two-month update to the Monero community, highlighting some of the progress made and steps going forward, “My first order of business in September will be to revise and update the research road map and release MRL-002.” The first research road map was released June 12, 2017, which stated the priorities for Monero Research Lab (MRL) and includes the peer-reviewed literature review on zero-knowledge schemes and their applications in cryptocurrencies, due by the end of August. Goodell has also already proposed an algorithm for threshold multi-signatures on Monero and it is currently under testing. After revisions are made to the initial paper, the multi-sig method will also be published in a future Monero Research Bulletin.

For the July update, the majority of Goodell’s effort was directed to an issue that had come up, known as an EABE attack (Eve-Alice-Bob-Eve attack) and is directly related to the need for the research and action on reducing the bloat of the blockchain. If there are very few transactions between two transaction outputs owned by a KYC exchange Eve, then Even can use the KYC knowledge and one-time receiving addresses of her users to reduce the variance in her estimates of culpability in that chain of transactions.

“The problem with EABE? Alice gave Eve her personal identity and allowed Eve to link it to certain one-time addresses of Alice’s. Alice willfully, by using a KYC exchange, sacrificed the anonymity properties granted by stealth addresses. This isn’t really a cryptographic problem; it’s a human behavior problem.”

The solution for a user would be to churn, described by monero.how as, “sending all of your funds to yourself 12 times over. Since Monero will automatically assign five possible sources of funds for every transaction, your funds will be hidden within a theoretical 5^12 = 244 million other transaction funds, which at the time of writing is more than ten times the number in existence.”

Goodell stated that his first-order estimates for using a churn-based solution for EABE suggested that with a ring size of around 10, users can conceal their purchasing habits with at most seven churns. With a ring size of ten, any transaction sent will authorized by ten one-time public keys (outputs); nine are foreign ‘outputs’ used for obfuscation while one belongs to the actual sender. The marginal effect on the number of churns for higher ring sizes diminishes soon enough:

“Bigger ring size, fewer churns, but the effect is rather mild; you still need six churns with a ring size of something like 20. This computation is based solely on the pigeon-hole principle.”

Second-order estimates were obtained according to the hypergeometric distribution and also suggest that ring sizes of 20 or more would be necessary to avoid EABE attacks, “…as minimum ring sizes get bigger than 15-20, "most" old cryptonote transaction outputs are implicated in "most" new randomly fashioned transaction outputs.”

From the estimates provided, a larger minimum ring size means that churning would be effective enough to counter any potential EABE attack, and given that, “the beefy part of our [Monero’s] transactions right now are range proofs, not ring signatures,” increasing the minimum ring size correspondingly “seems like a not-so-bad solution.”

The Mathematician goes on to state that a third order estimate is in progress, “I’m working on a third order estimate right now where an observer sees many transaction outputs bundled into transactions, many of which are bundled into blocks, which are observed over time. The goal is to select system parameters to get close to the "all transaction output" scenario without causing a huge blockchain bloat.”

But Goodell seems to favor setting an arbitrarily large number for ring sizes which would let users send funds to themselves once so that KYC exchanges, for instance, cannot narrow down customer buying habits using the one-time addresses, “Yet, rather than putting effort into detailing a computational model to get precise security bounds on this particular mode of attack, though, it would be far better to set ring sizes to something absurdly large, say ring size = 300 or 3000, and just recommend to users they send funds to themselves once before using with a merchant.”

To realize the goal of efficient ring signatures, Goodell wrote in the July update of the potential for a customized pairings-based cryptography solution:

“Of course, in order to justify ring signatures that large (heck, in order to compute ring sigs that large), we need more efficient ring signatures. I have found at least one set-up for O(sqrt(N)) ring signatures that doesn’t require a trusted set-up, but it uses pairings-based cryptography. I’m currently working on converting this to something more suitable for our purposes.”

To counteract any potential EABE attack, ring signatures need to be more efficient, that is they need to be smaller, and there are a “few hot leads in that regard,” which has taken up the bulk of Goodell’s time in July:

“…it turns out that the best way to protect against EABE is blockchain compression and making signatures and range proofs smaller. Consequently, this idea has taken up the vast majority of my time this past month. I have a few hot leads in that regard.”

Monero Traceability Paper: “…So Far I’m not Seeing a Security Concern Here.”

Two research papers, closely linked to Zcash advisor Andrew Miller,which claimed the traceability of Monero were also mentioned in Goodell’s update, where he finds no reason for security concerns as a result of the research:

“So… to be clear… these guys [Miller, et al. paper] develop a decision rule based on an unfalsifiable hypothesis, then construct a Monte Carlo simulation based on that same unfalsifiable hypothesis, and then showed their decision rule did a good job with their MC simulation. Okay, so far I’m not seeing a security concern here.”

Nevertheless, he did praise the attempt of one of the papers, even though their criticisms were outdated, “The Kumar et al. paper is a little bit better, I actually think somewhat highly of it… they actually try to justify their work, they seem to grasp the idea of sensitivity vs. specificity and that they can’t quite nail down both with Monero. Unfortunately, most of the criticisms from the Kumar paper are no longer relevant (although they certainly were at one time) because now RingCT transactions obfuscate amounts.”

As highlighted by BTCMANAGER in April 2017, many of the criticisms levelled against Monero were just out of date. Goodell reiterated the community’s response at the time, that many arguments were valid but have ‘subtle flaws.’

The research-driven approach is exciting to see, especially since it seems to be preemptively tackling issues in Monero. Goodell will write a formal update at the end of each three-month period and explained that some of the objectives on the research road map are high urgency and will be resolved quickly.

The longer-term goals would be impressive if achieved and it is encouraging to see the bar set so high. Investing in Monero for the long term means not just buying the cryptoasset and holding, but also contributing to projects such as this one, which has funded a Ph.D. Mathematician to help Monero win the ‘crypto arms race.’ In the life of an academic, first you must ‘read, read,… and read’ to build a picture of the available literature, ideas and theories. Then these findings are used to formulate possible solutions and outcomes, meaning that the most exciting times lie ahead for Goodell’s work.

The way the project has done it alone, without the help of outsiders, investors or big business, displays a level of integrity and community cohesion that will ensure Monero remains one of the standout cryptoassets for years to come.

AlphaBay Admin Had $8 Million in Bitcoin and Altcoins, Bragged About Porsche Purchase

According to the verified complaint for forfeiture regarding accused AlphaBay administrator Alexandre Cazes, the alleged criminal mastermind was holding just over $23 million worth of assets at the time of his arrest. Of that total amount, roughly $8.8 million are said to have been held in bitcoin, ether, zcash, and monero. Attorney General Jeff Sessions […]

AlphaBay’s Downtime Unnerves Users: Another Exit Scam?

On July 5, the largest dark net marketplace globally disappeared, with vendors and buyers unable to access their accounts and any bitcoin or cryptocurrency associated with it. Five days later, on July 10, there is no sign of the marketplace coming back. As the largest dark net market, even dwarfing the infamous Silk Road, the site could be experiencing an attack that is has never experienced before but there are other competing explanations.

While the site could be under maintenance, the administrators usually let vendors know beforehand. Some Redditors have posted link claiming to show that cryptocurrency have been drained from AlphaBay wallets. More than 1,400 bitcoin have been transferred to a new wallet addresses, supposedly linked to AlphaBay but the evidence is not conclusive. Furthermore, the less than punctual response by the site’s admin trappy_AB, which was given more than 24 hours after the site was down, it also depressing sentiment amongst the site’s users.

The leading dark net marketplace saw $600,000 to $800,000 in transactions daily earlier in 2017, according to unpublished statistics from Carnegie Mellon University professor Nicolas Christin. This would make AlphaBay about twice as large as the Silk Road when it was shut down in October 2013.

Another fact that points to an exit scam is the relentless addition of altcoins to the marketplace, most of which, apart from monero, were probably hardly used. In March, AlphaBay announced they would add ether functionality and then on July 1, shortly before the site went dark, Zcash was integrated. By attracting flows in these altcoins and announcing their adoption, AlphaBay may have played a smart strategy of pumping these coins and then stealing them all in one fell swoop.

However, it may be too early to call an exit scam. Others claim that law enforcement may have shut down the site but this is questionable for two reasons; first, it is well known that the people behind AlphaBay are of Russian origin, and most likely have servers scattered around Russia, the Ukraine and perhaps some former Soviet republics. Secondly, the sheer size of the marketplace would make it more likely that law enforcement would not attempt to shut down the marketplace, but rather, allow it to continue and gather intelligence.

By shutting down AlphayBay, it does nothing to solve the problem but displaces it to another marketplace. The authorities may have changed their tactics in this regard; instead of targeting and taking down an entire marketplace, they may be aiming to take down large vendors, which would make AlphaBay a prime hunting ground for law enforcement due to the economies of scale it has achieved.  

Rick Holland, Vice President of Strategy for digital risk assessment company Digital Shadows stated:

"Dark web exit scams are nothing new and are quite common. The Evolution market famously ended with the loss of 40,000 bitcoins. These exit scams are one of the risks when conducting business in criminal marketplaces. The increasing value of bitcoin makes exit scams appealing.”

“These exit scams are often the first assumption when a marketplace goes offline, however there are alternatives including intrusions from other criminals, DDoS attacks from competitors, law enforcement interdictions, and even unannounced site maintenance. The Dream and Hansa markets are likely to benefit from any potential Alphabay demise. Digital Shadows is tracking this development and will provide updated analysis as it becomes available.”

The biggest benefactor of the largest illicit marketplace going down are its competitors, and given the profits involved in the drug trade alone, it too much of a stretch to believe that competitors may have paid for a cyberattack against AlphaBay.

Whatever the reason for AlphaBay’s disappearance, they are a host of other marketplaces that will fill the void. As with previous attempts to shut down illicit trade or exit scams, users and vendors will jump ship and many have flocked to other sites with decent reputations, such as Dream and Hansa. However, due to the sheer volume of new registrations, Hansa decided on July 9 to temporarily halt new registrations.

Users are also cautioned to be wary if the site comes back online, as many times in the past, sites have reappeared, only to serve as a honeypot of information on vendors and buyers with bitcoin balances, addresses and identities compromised. There has been no official announcement from law enforcement regarding this story, so we will update our readers as the mystery unravels.

Mining Comes Back to Germany, but all the Good Graphic Cards are Sold out

Surprisingly mining is seeing a revival in Germany after it was declared dead due to high energy prices. The result is that most hardware merchants run out of suitable GPUs – like all over the world. There seems to be just not enough equipment to satisfy miner’s demand.

For many years, everybody was sure that in Germany mining was more or less dead. Due to the energy prices, which are among the highest in the world, it was no longer profitable. If people still mined here, they did it by because they get cheap energy.

However, today mining seems to have a revival in Germany. In the most important German forum for virtual currencies, coinforum.de, a lot of threads about mining emerged last weeks. Usually, people ask which software to use for mining, which graphic cards are best, and how to build a so-called “rig,” a mining-system with several GPU (graphic cards).

Mining is back. Chris of Bitcoin-Live, a long-term German miner, jokes that if the trend holds in Germany will soon replace China as the world’s leading mining place. But only a few miners use Asics to search for Bitcoins. Most use instead graphic cards to find Ether or Monero, the two biggest asic-resistant coins.

One reason for the unexpected comeback of mining might be that it is no longer recognized as just an obscure use of hardware, but more and more as something common. GPU mining has become regularly subject of reports of popular magazines like PC Magazine or PC Games, and the retail merchant Caseking promotes some of its products with the note that it can be perfectly used for mining.

The most important reason, however, is that mining has simply become profitable again.

Yes, you will make profits. At least for now.

It’s not rocket science to calculate the profitability of mining. On one side, you have the costs of your rig and the energy. On the other, you have the revenue.

Chris from Bitcoin-Live demonstrates with a simple example that mining Ethereum can be profitable. A rig for the price of €800 produces 45 megahash in a second and eats 350 Watts. With a price of 29 cents ($0.33) for a kilowatthour, the rig costs €2.44 ($2.79) a day but creates Ether worth €6.35 ($7.25). After running nearly seven months, the rig is paid off. Then it makes a daily profit until it is broken.

This calculation gets even better if you obtain your energy cheaper, be it by generating if by yourself, be it by getting industry rates. However, you need to take into account that the hash rate, especially of Ethereum, increases rapidly.

Mining is a zero sum game. The individual revenue decreases when more people participate. Therefore in the long run mining will always be a business of marginal costs; it will only be profitable when you push the expenses for hardware and energy down to the lowest level possible. This is why hobby mining is doomed to die at places with high energy prices, like Germany, and migrate to locations with low energy prices. This process could be perfectly observed in Bitcoin mining.

So – why is it different this time? Why is Germany mining again, despite the bad conditions? We will find the answer to this question in an astounding observation.

There are just not Enough Graphic Cards in the World

Usually, the difficulty of mining adjusts to the price. If the price of a cryptocurrency increases, more people mine it. So the hash rate increases, and with it the difficulty of mining. The system will always find a balance which reduces the profitability of mining to a very low margin.

Currently, this balance, however, seems lost. Let us look at Ethereum. Since mid-February the price of one ether increased from $18 to just above $400 at peak. It multiplied by a factor greater than 20.Now we look at the difficulty. It also increased, but only from 120 to 900, which is by a factor of 7.5. The values do slightly vary if you change the observation time – but there is no way around the recognition that the difficulty does not catch up with the price.

The astonishing conclusion must be; there are not enough graphic cards in the world to adjust mining difficulty to the price. A look at the availability of the cards most popular for mining confirms this.

Bitcoin-Live maintains a list with the graphic cards best suited for mining. For a long time, these have mostly been cards from the AMD Radeon series, like the RX 580 and 480. These models have evolved to the Yetis of the computer hardware: Everybody assumes they exist, but nobody has seen them. If you browse Amazon and the common German shops for computers in Germany, you will find that these cards are sold out nearly everywhere. Most shops do not even list a date when they will be able again to ship it.

A little better are the perspectives if you look on cards from Nvidia. For a long time Nvidia’s products have been unsuitable for mining, but since the GTX 1060 series Nvidia caught up with AMD. According to rumors, the company took mining into account when it developed the new series.

Graphic cards, however, are only part of the problem. Chris from Bitcoin-Live explains:

“No matter if you search for a GPU, a power supply unit, a small CPU or a mainboard with four or six PCIe ports – it is bloody hard to find something suitable.”

Especially if you want to create large rigs, you will have massive trouble to find hardware like the rare 1000 Watt power supply units.

Merchants Increase Prices, Gamers get Angry

The large merchants for computer hardware already reacted to the increased demand. Chris tells that “often you can only order two or three graphic cards for each shipping address. The hardware merchants try to protect their ‘normal’ clients.”

The non-mining users of graphic cards, like gamers, have often become angry toward the miners. For example, if you look at the comments on some YouTube videos, you find rough words against them: “So you the asshole that’s buying all the gpus….” or “fuck you dude you are the reason people can’t buy the things for their systems.”

Some merchants did also increase the price for mining hardware. In parts, as Chris says, drastically. “Some go as far that I would call it moon prices or usury. Especially when we talk about power supply units.”

And this is only the situation in Germany. In some other countries, it seems to be even more drastic. For example in Russia. Here mining has become so common, that the local markets have long reached a total lack of graphic cards. Hence more and more Russians living abroad started to participate in the import of graphic cards into Russia, a business which suddenly has become surprisingly profitable. Bitcoin.com reports:

“It has been reported that many Russian miners are able to generate up to twice the average monthly wage offered in the labor market, resulting in a huge glut of demand for mining equipment locally. Local media has reported that the number of Russians engaged in cryptocurrency mining has increased by 500 – 700 percent, rendering many GPU retailers unable to meet demand. With consumers purchasing graphics cards by the hundreds, merchants have responded with price hikes of up to 80 percent.”

Similar reports are available for South Africa, where magazines tell of a shortage of graphic cards suitable for mining. Even in the USA, it is nearly impossible for one Motherboard author to get his hands on good graphic cards to try out Ethereum mining.

The world, it seems, has simply not enough graphic cards to satisfy the demand of all the miners.

ZCash, Ether, and Monero Miners Can Now Use Nvidia Pascal GPUs

The impressive rally in digital currencies in the past three months has given the cryptocurrency mining industry a boost. Demand for mining equipment is higher than ever as individuals and companies are looking to profit from the increased value of many cryptocurrencies through mining.

As BTCManager reported on June 9, the shares of the semiconductor firm Advanced Micro Devices (AMD) have skyrocketed due to a surge in demand for its graphics cards, which cryptocurrency miners are increasingly using to  bring more digital currency into existence.  

AMD, however, is not the only publicly-traded technology firm that has benefited from the boom in cryptocurrency mining.

Nvidia Pascal GPUs More Efficient Than AMD’s

California-based Nvidia produces graphics processing units (GPUs) that are primarily using in the gaming space. Recently, however, cryptocurrency miners have increasingly started to purchase Nvidia’s GPUs to boost their mining productivity. More specifically, Nvidia’s Pascal-based GPUs.

Nvidia’s Pascal GPUs, such as the GTX 1060 and the GTX 1070, have demonstrated to be more efficient than their counterparts produced by AMD. According to research conducted by RBC Capital Markets Analyst Mitch Steeves, who compared the cryptocurrency mining performance of Nvidia’s GTX 1070 with AMD’s RX 580 GPU for the digital currency ether, Nvidia’s GPU required 33 percent less power consumption and is, therefore, a much more efficient graphics card for mining than the popular RX 580.

“If we switch to building a full Data Center environment, electrical costs become increasingly more important (Bitcoin environment), and the older NVIDIA GPUs outperform AMD over the course of a year,” Steeves stated.

Nvidia’s Pascal-Based Mining Hardware

To profit from the crypto mining boom, Nvidia has launched mining hardware built using eight Pascal GP106-100 GPUs, which are being referred to as “mining cards.” The mining hardware is targeted at ether, zcash, and monero miners and aims to maximize the productivity and efficiency of the mining process.

The mining equipment uses an Intel Celeron Mobile processor, a 64GB mSATA SSD, 4GB of DDR3 DRAM, and up to 1600W PSU. The power supply unit (PSU) is not included and is listed as optional to allow users to choose what they need for the specific currency they want to mine. Each cryptocurrency has different power requirements when it comes to mining.

For example, to mine Ethereum’s ether, it is recommended to use 1000W PSU, which delivers roughly 200MH/s (+/- 5 percent. To mine zcash, 1050W PSU is recommended, which delivers roughly 2500 Sol/s, while monero mining required around 700W, which delivers roughly 4400 H/s +/- five percent. To run Nvidia’s mining machine, seven six pin 12V power connectors are needed plus eight additional six pin connectors to run the “mining cards.”

Furthermore, the system is setup for passive cooling on the GPUs while the enclosure makes use of five inflow and four outflow higher power system fans to keep the system cooled and functional.

Should the impressive rally in cryptocurrencies continue throughout the year, bitcoin mining equipment producers will see their business flourish as more and more individuals are jumping onto the cryptocurrency mining bandwagon in the hope to make a nice profit.

Weekly Cryptocurrency Market Outlook June 6

BTCManager’s Weekly Cryptocurrency Outlook highlights the price action and technical indicators on a long-term basis to identify the best opportunities in the largest cryptocurrencies, such as bitcoin, ether, and others.

BTC-USD (Bitstamp)

Bitcoin goes for its eighth week of consecutive gains, nearing the psychological $3000 level on June 6. As we have nine near consecutive higher highs since March 20, we expect the bullish run for BTC-USD to peak sometime between June 12 and July 24. A higher high next week will give a strong indication that bulls have reached their limit and a higher likelihood of a reversal into a downward trend. The weekly price action is shown below.

Although we can use the number of record highs to determine when bitcoin will peak, we use the Fibonacci sequence to find out a possible target. The daily price action shown below illustrates that on June 6, BTC-USD broke above the previous all-time high at $2760.10. Accordingly, this opens up the Fibonacci extension level at $3476.14. Also, the psychological $3000 level stands in the way as well.

Also, notice from the chart above that the conversion line (blue) has a sharp gradient and is moving higher, suggesting the direction of the market will continue to be up. Moreover, the Market Facilitation Index is green for June 6, suggesting traders should follow the trend and find optimal entry points into long positions.

The Ichimoku cloud shows that the $2000 to $2200 area will provide an important support zone toward the end of June, which is where BTC-USD may head once bulls have been exhausted and we have seen ten or 11 near consecutive higher highs.  

The monthly price action is bullish, as May’s close was in the upper third of the range, closing above $2260. Therefore, we expect bulls to dominate once again in June. However, a key Fibonacci resistance is anticipated to dampen bullish sentiment around $3041.14. Also, the move higher in BTC-USD is supported by higher volumes, as May saw the highest volumes on the Bitstamp exchange since November 2015, foretelling of continued upward momentum. For instance, after a large influx of volume in November 2015, BTC-USD went on to establish a local high at $778.85 in June 2016.

ETH-USD (Kraken)

Ether has also broken to fresh highs, trading at $267.00 on the Kraken exchange at the time of writing. The next target is the Fibonacci extension level at $284.41, shown below. Further resistance is found at $409.73. Last week, we highlighted a bullish signal for ETH-USD, with a completion of the bullish saucer in the Awesome Oscillator, which gave a buy signal around $230. Another bullish saucer signal looks to be formed on June 6, with a potential trigger to enter into another long position if June 6’s high is broken in the following days. For instance, the daily chart below shows that bullish saucer patter. Once June 6’s high is broken, we should enter long positions immediately, targeting $284.41 and $409.73 over the long term.

Therefore, once June 6’s candlestick closes, we should set a limit buy order at the high of this candle immediately. Notice the previous bullish saucer was triggered the next day and only took a few days to move into a significant profit.

XEM-BTC (Poloniex)

The monthly chart for XEM-BTC shown below illustrates the first bullish signal possible, a crossover of the conversion line (blue) and base line (red), giving an indication of bullish momentum over the long term. Furthermore, we now have two monthly closes higher than the fractal resistance at 0.00002798, confirming long-term bullish momentum.

However, there are also some bearish indications. We may see XEM-BTC test the base line, which provides support around 0.00007000. A monthly close below this level will necessitate a bearish outlook. Also, we see that there is a long upper wick for May’s price action, suggesting that bulls are no longer in control, which gives a high likelihood that the base line will be tested and may even be broken.

The weekly price action is displayed below and shows that the market is at a critical juncture. The base line aligns with the 50 percent Fibonacci retracement level, highlighting strong support around 0.00007133. We look to buy XEM-BTC at the 50 percent and 38.2 percent retracement levels at 0.00007133 and 0.00005516 respectively. However, a weekly close below the base line will point to a bearish outlook and see XEM-BTC drift toward long-term equilibrium as shown by the Ichimoku cloud.

ETC-BTC (Poloniex)

After testing the base line and triggering our suggested buy orders near 0.0032, ETC-BTC went onto establish fresh highs, just missing a test of the all-time high. The weekly chart is displayed below, where the market is nearing support provided by the conversion line and the 50 percent level of the bearish Marubozu candlestick.

We await the weekly close before deciding on positions, as a weekly close below the conversion or base line will point to bearish momentum. On the other hand, we could set limit buy orders around 0.0057 to 0.0052, as the conversion line and base line may offer strong support.

LTC-USD (BTC-e)

LTC-USD saw dominance among bulls last week as buyers moved the price from $22.90 to above $27 by May June 4. However, the weekly close was below the peak of the lagging line (purple), that is below $28.67, so we have yet to obtain a signal for a bullish breakout. Therefore, we look to buy LTC-USD if this week’s close is higher than $28.67, which will open up the all-time high at $36.30. The conversion line (blue) is moving higher suggesting the market will follow. LTC-USD may reach as high as $56.47 if the fractal resistance at $36.30 is broken.

However, volume is falling suggesting that traders are losing interest in litecoin. Also, the Awesome Oscillator looks like it may switch color to red, which will give an early sign of faltering bullish momentum.  

XMR-USD (Kraken)

The daily price action for monero shows that the cryptocurrency is heading for the Fibonacci extension at $63.64, after breaking above the $50 handle for the second time in its short history. The Fibonacci levels are also shown on the chart below, with further resistance found at $72.52. However, a dip back below the Fibonacci level at $49.26 will point to a bearish outlook.

However, momentum is also considered bullish, as on June 6, we get a strong bullish signal with a crossover of the conversion line and base line. Now that the conversion line (blue) is above the base line, we should see an intensification of upward momentum. Moreover, notice the large influx of volume into the Kraken exchange on June 6, which foretells of further appreciation for XMR-USD.

Finally, on June 6, we see that the bullish saucer signal has been triggered, suggesting an entry into a long position around $48.73. A daily close above the resistance at $55.42 will give further bullish confirmation.

ZEC-USD (Kraken)

Following the announcements from JP Morgan and Alphabay regarding Zcash integration, the price of the cryptocurrency has risen significantly and further gains look to be established. If ZEC-USD remains above $250 we should see a lot of potential upside. For instance, the daily chart below shows that ZEC-USD peaked at $300.00 on the aforementioned announcements and currently rests above the Fibonacci level at $249.49 which signals that ZEC-SD will tend toward the Fibonacci resistance at $300.00. Finally, the market remains above the resistance indicated by the lagging line (purple) at $245.73, and if the market maintains above this level, this means moves to the upside are relatively unrestricted, as the lagging line indicates no further resistances, opening up the Fibonacci level at $300.00.

Market participants should anticipate a break of $300 which would see the market be attracted toward the Fibonacci extension level at $432.25. The conversion line offers support around $228, which could be an ideal entry into a long position, however, a daily close below the conversion line will invalidate the bullish outlook.

Weekly (27/05–02/06) News (Bitcoin, Ethereum, Monero, Bitshares)

Top news

Bitcoin

In the news and blogs

Ethereum*

In the news and blogs

Podcast

Protocol

Stuff for developers

Ecosystem

New projects

Project Updates

*Done using materials from http://www.weekinethereum.com and http://dappdaily.com

Ethereum Classic

In the news and blogs

Protocol updates

  • Geth
    • Improve performance for large setups (100k+ accounts)
  • Emerald
    • Base for interface internationalization (i18n)
  • SputnikVM
    • Testing against Geth

Monero

In the news and blogs

Bitshares*

In the news and blogs

  • Bitshares Fee reduction has been proposed by the committee member and approved by the shareholders and has just gone live. All fees have been reduced by around 83%. You can view a comparison of the fee’s before and after HERE
  • ‘This summer’ is HERE along with 53 Million dollars of support for the HERO and a 1 Billion dollar challenge to supporters
  • @stan has attended a conference in Hollywood last weekend. You can view his talk HERE
  • @dantheman has released a whitepaper explaining the DPOS consensus algorithm backing the Graphene toolkit. You can find the post HERE
  • Bitshares to be included on the Jaxx mobile wallets. You can find the official announcement HERE
  • A weekly market update by @virtualgrowth
  • This week’s Bitshares hangout recording and Beyond Bitcoin hangout recording have been published

Protocol updates

Project updates

  • YOYOW — have released a report regarding their crowd sale which has completely sold out in 3 days with the project raising 2000 BTC in the process. You can find the original post HERE

*Done using materials from https://steemit.com/@steempower



Weekly (27/05–02/06) News (Bitcoin, Ethereum, Monero, Bitshares) was originally published in cyber • Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Consensus 2017 Recap

This was my first conference, in fact I have never even been to a Bitcoin meetup before Consensus 2017. A lot of people contacted me, asking if I was going, so I decided to finally risk getting doxed and just go. No regrets.

I was a bit paranoid though, so I just took a burner phone (if my live streams had shitty quality, sorry, it was a cheap phone) with me with no 2FA on, just Telegram, Slack and Twitter basically. That way I could find the other trolls at the conference and live tweet some interesting stuff. I’ve heard from more experienced conference attendees that they often also take burner phones and laptops so it wasn’t that strange.

One thing I did forget at home was an extra battery pack/powerbank for my phone. Thankfully Riccardo was better prepared than me and allowed me to charge my phone on his powerbank (this sounds way more sexual than it actually was).

About the conference:

Let me start by saying that the tickets are (too) expensive. I understand why: if it’s sold out, then you can’t really blame the organizers. It’s in NY, 2,500 tickets were all sold out, I get it. As an individual who doesn’t work for a big company/bank that pays for my tickets, it was expensive. I paid $1,500 as an industry professional. Add to that a hotel for 4–5 days and a flight to and from NY and that easily adds up to $4,000–$5,000. Next year it will be in the Hilton and there will be 5,000 tickets for sale.

I went to register for the conference on Sunday, because I expected there would be a long queue on Monday morning. I was actually surprised that I didn’t even have to show my ID. I could’ve signed in as Barry Silbert if I wanted to.

On Monday morning I was still pretty jet lagged so I woke up at 4:30 AM so by the time that breakfast was served at 7:30 AM, I was quite hungry. It was basically just muffins. I didn’t really have any expectations but my suggestion for people considering going next year: have breakfast before you go to the conference.

The opening show was cringeworthy. In case you missed it you can still watch it here from my live stream (bad quality). I was sitting in the back together with Fran and Tuur and we all had the feeling it was the start of a Onecoin conference.

The first thing that I really wanted to see was “Can Bitcoin Scale?” (live stream starts around 8 mins in). It was an interesting talk with a strong performance by Eric Lombrozo, it was a bit awkward with the news from the “Barry Silbert Bitcoin scaling consensus” just being released right before this debate.

Next up was “Chasing Privacy in Blockchains” (live stream starts at about 1:03:00 in). I missed that one since I had ETC lunch, but according to the people there it was funny due to some clueless remarks by Anne Wallwork. Note that Monero wasn’t on this panel since “Monero was not corporate enough”.

With all the ICO’s going on I decided to go to “Legality and Structure of ICOs” (live stream starts at about 4:37:00 in). It was actually an interesting discussion with Peter Van Valkenburg and Preston Byrne and the room was full.

On Tuesday morning there were the announcements by Blockstack, it’s a really interesting project and they announced some cool stuff.

I also went to see “Bitcoin Beyond $20 Billion: Digital Currency’s Future” with Erik Voorhees and Peter Smith. Peter Smith is a good public speaker, even though I don’t always agree with his views.

Next up was “Digital Currencies: An Emerging Asset Class”. This was an interesting debate. Michael Moro from Genesis Global Trading mentioned that while before they had a lot of millionaires as clients, now they’re seeing more billionaires coming to them as well. Marco Santori commented on the NY Bitlicense: “We have a Soviet situation here in NY because of the Bitlicense.” After the talk there were 20–30 people running to Marco like he was some kind of rock star.

My personal highlight of the conference was the panel “Beyond Bitcoin and Ether — The Long-Tail of Blockchain Assets”. This had representatives from Ripple, Cosmos, Augur, Golem and of course Riccardo Spagni from Monero. He educated the other people on the panel on a lot of different things but the quote of the day was: “There are scammers that don’t realize they are scammers yet.”. At the end of the debate he told everyone to not buy Monero.

There were some interesting talks, but overall I was still a bit disappointed. I think I was just too naive going there. When I walked in the conference I was expecting maybe 70% suits 30% devs/traders/people like me. I think it was more like 95% suits and 5% “other”. Which of course is normal considering the blockchain hype. So it’s also normal that Coindesk focuses more on the 95% of the (clueless) attendees.

Inb4 Pete Rizzo from Coindesk writes me an angry DM. (he’s a nice guy though)

The real value of Consensus:

The previous part might sound a bit negative, but for me it was still a very positive experience. It wasn’t what I expected from it, but the real value for me was meeting people. Almost everyone is there in NY during Consensus and that gives it its real value.

The people within the community are so diverse that you get to meet people with all kinds of different backgrounds. The original plan was to go there to meet up with trader buddies like Phil and Collin and trolls like Samson.

I met so many interesting people. Fran told me about Brock Pierce’s parties. Tuur talked about some interesting plans he had for a future project. I met the Milan based Blockchainlab team (Giacomo, Mir, Gabriele) and had some drinks with them. I also had a lot of fun with Riccardo, the Monero dev.

There was a Blockstream party with an AMA on Monday where you could directly talk with some of the most respected developers in the crypto space. I had a nice chat with Vinny Lingham while walking through NY talking about trading and Civic. I had a dinner with some of the Poloniex people where we discussed the recent influx of new traders. There was an ETC lunch organised by Grayscale on Monday and I met 3 of the ETC devs and had lunch with them on Wednesday,…

There are so many people I’ve met in just 4 days: Pete Rizzo, Brad Chun, Ryan Selkis, Alex Petrov, Eric Lombrozo, Bruce Fenton, Matt deCourcelle, Jimmy Song…

The list is just too long and that’s also kind of my point. It’s the perfect place to do some networking or just meeting people with the same interests.

Other interesting things I learned:

Bitcoin:

There are so many brilliant people working on the development of Bitcoin and Bitcoin-related projects that I’m still very bullish on Bitcoin. Even with the mining pools and certain individuals trying to stall and block progress. Yes, fees are up and actually too high, the price is also up x10. There is no logic behind blocking Segwit besides bad intentions.
What I actually noticed is that someone like Adam Back is more respected in other communities (like ETC, Monero,…) than in some parts of the Bitcoin community which makes no sense.
Everyone wanted a UASF hat, Samson ran out of hats really quick, and it will be interesting to see what happens on the 1st of August.

Ethereum Classic:

I was at the ETC lunch organized by Grayscale. The food wasn’t great but the talks were. I was really impressed by Matt Mazur and Charles Hoskinson. Matt had the difficult task to implement a monetary policy in a coin that already launched and already had 80 million+ coins on the market. Charles is very articulate and manages to explain complex things in a way that everyone can understand them. I also had lunch with a couple of ETC devs on Wednesday, including Matt. They’re very smart guys and I’m glad I got to meet them. I’m long term bullish on it.

Ethereum:

If you think that Ethereum is the real future of crypto and all the ICO’s on it are great and EEA is awesome, you might want to skip this part. These aren’t my opinions, these are opinions of people I talked with at Consensus (and I know I’ll get a lot of angry responses for posting it)

The insanity around ICO’s was a hot topic at Consensus. What I learned from the regulatory panel is that ICO’s which don’t have a working product on launch, are basically scams and they will probably get in a lot of trouble at a later point. I’m not saying that ICO’s with a working product on launch aren’t scams, but at least they put some more effort in than just writing a whitepaper. Take Golem for example: $400 million+ marketcap and not even a properly working product, just because it’s on Ethereum. Elastic for example is a similar project, they raised 700+ BTC in donations but they basically have a superior working product close to launch. Or just think about the Gnosis launch. ICO insanity has to end badly.

Ethereum came up quite a few times during Consensus and never in a positive way. Basically everyone I talked with agrees that Ethereum will split again into multiple chains with the PoS switch, besides the fact that there can potentially be huge issues/bugs with PoS. It’s just way too profitable for the miners at this point to give up on it (see image below where even certain ETH devs agree). So you’ll have the obvious PoW/PoS split at that point. The fact that DAO fork already happened makes it very likely that there will be more similar bailout forks too, when certain people mess up.

Another point that obviously came up was Vitalik. He isn’t nearly as intelligent as he thinks he is or as other people think he is (of course this is subjective, just giving the general sentiment). The people I talked with think it’s mostly due to his lack of experience/age that he’s just too naive. Adam Back for example is on the other side of the spectrum where he has the experience to deal with complex situations to find the right solutions (sorry Adam, not calling you old, just experienced). Common remarks on Vitalik: he doesn’t understand game theory and he doesn’t understand network theory. Developers of other crypto projects also pointed out that the math he used in a 40 page paper on scaling made no sense.

Some of the same people however did speak highly of Vlad and consider him the brains and voice of sanity in the Ethereum project.

Monero:

So I went to my first Monero meetup in NY too during Consensus. I was thoroughly impressed. All the drama aside, they have some really smart people working on their project. As Brad Chun pointed out to me: “There might be less people at Monero meetups, but the people that are there are way more intelligent than in any other type of crypto meetup.” After attending it, I agree. For me it’s definitely a long term hodl now.

Identity on the blockchain projects:

I’ve heard of Civic before, but still I wasn’t really convinced. After talking about Identity projects with Vinny Lingham, Phil Francis and the Poloniex people, I’m now a lot more convinced of its use and its future. I’m not saying Civic will be the main one, there are multiple projects that are trying to do similar things, but overall it’s a very interesting use case and I’m convinced it will make our lives easier and our private data more secure. For exchanges for example it could greatly simplify the verification KYC/AML process which is a serious bottleneck at the moment with all these new people signing up. It’s a very labor-intensive process which could be greatly simplified.

MaidSafe

This was actually quite interesting. A former Maid dev said that they were having so many issues, that the boss told them to rewrite the code from C++ to Rust in 4 weeks. That way they could potentially get extra funding from certain companies if they would write it in Rust. I know they’ve been working on the project for a very long time, but I think like most people I was completely unaware of all the issues and unrealistic expectations they have. It’s summed up here pretty well.

Conclusion:

Overall I would say that coming to the conference is money well spent, even if it’s mostly for the meetings and chats you have outside of the conference itself. Some people actually just go to NY and don’t bother buying a ticket for the conference.

See you at Consensus 2018? Or at least near Consensus 2018 since I’ll definitely be in NY then.

Tip jar: 1FMy1kpeCY7BESwUaVcM5XAy1bmaWJaXKv.

Weekly (20/05–26/05) News (Bitcoin, Ethereum, Monero, Bitshares)

Top news

Bitcoin

In the news and blogs

Ethereum*

In the news and blogs

Podcast

Protocol

New projects

  • Grid + – distributed electricity provider built as a layer above existing grid. See also Alex Miller’s Rice talk
  • Prism – an asset portfolio platform by Shapeshift
  • Dharma Protocol – p2p decentralized lending
  • RocketPool – Ethereum PoS pool in alpha
  • 1protocol: use idle computational power for staking

Project Updates

*Done using materials from http://dappdaily.com

Ethereum Classic

In the news and blogs

Monero

In the news and blogs

Bitshares*

In the news and blogs

Project updates

  • EOSannouncement of a new blockchain operating system designed to support commercial decentralized applications
  • YOYOW – a Graphene based Social Media Platform has launched a crowd-sale this week
  • @peerplays have completed their crowdfund this week reaching tier 3

*Done using materials from https://steemit.com/@steempower



Weekly (20/05–26/05) News (Bitcoin, Ethereum, Monero, Bitshares) was originally published in cyber • Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

BitVal: Measuring Bitcoin Based On Money Laundering

With bitcoin skyrocketing in price and looking to break $3,000 if the current trajectory holds, how much is too much? What is one bitcoin really worth? BitVal, a beta metric, tries to put a valuation measure on the cryptocurrency in a way that makes logical sense.

For stocks, this value is typically derived from the earnings of the underlying firm or company, which is where the price-earnings ratio (P/E) comes from. Since bitcoin is a currency and not a stock, this kind of measurement obviously would not work.

Even using standard measures of currencies (comparing a currency to other currencies in the geographical region) would not work, as bitcoin is a global currency, being used everywhere all the time. So the traditional Purchasing Power Parity approach is no good either, leading BitVal to base their valuation anchor of bitcoin from the amount of money laundering occurring at any given time.

The chart below shows the value of bitcoin based on the BitVal metric, suggesting an average value of just $64.81 for BTC-USD, a far cry from the cryptocurrency’s current price, which exceeds $2400.

To the writer, it seems that this is a faulty metric. Coins like monero are much more suitable for markets like AlphaBay; even ether is being implemented by some vendors. Faster transaction and confirmation times coupled with more advanced security implementations makes altcoins an increasingly popular choice.

Bitcoin will remain at home in these websites for a long time due to its brand recognition and availability, but many users will see it as a legacy type of payment, and opt in favor of the currencies mentioned above.

As time passes by, this metric will become more and more inaccurate, as marketplaces will begin to rely more heavily on privacy-centric coins instead of bitcoin.

The whole act of gathering statistics and data surrounding money laundering is no easy task either, further muddying the waters. Bitval even states that, “…since such money laundering obviously falls outside of the regulatory apparatus there are no good statistics on it.” Regulations like AML and KYC definitely do not make BitVal’s job any easier.

It would probably be more accurate to capture the share of bitcoin transaction that make up the total transactions in the virtual economy or the e-commerce sector. Even though bitcoin got its first break as a currency for the Dark Net, the BitVal measure fails to account for its maturation and adoption among non-criminals for easy, low-cost online purchases and travellers looking to avoid fees for international purchases; for instance, acceptance by heavyweights such as Microsoft and Expedia.com, as well as a recent wave of adoption across Japan.

As time passes, it is likely BitVal will iron out the details, and provide us with a unique way to value the price of bitcoin. Supply and demand will still remain king, but as more countries try to regulate the decentralized currency, BitVal will be one of many metrics attempting to measure the value of the revolutionary asset that is bitcoin.