Intel Is Working on an Energy Efficient Bitcoin Mining System

Intel has obtained a bitcoin mining SHA-256 datapath patent that covers a processor and hardware accelerator. The United States Patent and Trademark Office awarded the patent.

The patented hardware is designed to provide greater mining energy efficiency by reducing the circuit area and power consumption. It achieves this by harnessing a series of hardware accelerators and targets various stages of the hashing process.

The system also features micro-architectural enhancements and utilizes selective hardwiring of parameters to alleviate the recurrence of computations, thereby reducing power consumption by up to 15 percent.

In September, Intel had also filed a related patent application for a bitcoin mining hardware accelerator designed to lower energy consumption per hash while increasing performance per watt. The new innovation was aimed at minimizing the time required to find the 32-bit nonce in a bitcoin block.

The news comes in the wake of a bitcoin price fall that has led many miners to drop out due to diminishing returns. As the market nosedives, companies are working harder to acquire more efficient mining technology to reduce overheads.

Right now, bitcoin mining costs are going down due to the reduction of mining difficulty in tandem with falling hash rates. Thanks to the intellectual brilliance of Satoshi Nakamoto, the pseudonymous entity that developed the bitcoin network, its algorithm adjusts mining difficulty after every 2016 blocks.

As more miners turn off their machines, the process becomes easier and inherently consumes less energy.

 

Crypto Mining

Energy Efficiency a Growing Necessity in Bitcoin Mining

Although bitcoin now changes hands at about $3,400, a significant tumble from the $6,400 rate it held just a month ago, there is hope that more efficient devices and a sustained drop in mining difficulty will begin to favor smaller miners.

As tech companies focus on improving processing power and related technology used in hardware, mining farms have been forced to seek cheaper, renewable energy sources. This is in a bid to reduce energy consumption costs which significantly impact mining profitability.

It is expected that consistent development of more efficient crypto mining hardware by tech companies will stimulate the growth of the industry in the long-term.

(Featured Image Credit: Intel)


This article by Elizabeth Gail was previously published on Coincentral.com

About the Author:

Elizabeth Gail is crypto-enthusiast and a blogger. Her specialties include cryptocurrency news and analysis. When not writing about crypto, she’s out taking part in humanitarian endeavors across the world. You can reach out and engage with her on Twitter and Google Plus.

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2019’s Top Distributed Application Use Cases and Projects

As we move into 2019, it seems a good time to look back over developments from the previous year. In 2018 we’ve seen the launch of EOS and Tron, adding to the existing ecosystem of platforms including EthereumLisk, and Cardano. There is much discussion about the various benefits of these distributed application platforms including security and scalability. However, it’s also interesting to consider the usage of these platforms as a basis for distributed application development.

Here, we look at the most popular distributed application use cases so far. We’ve judged popularity both by user volume, and a number of instances of each use case on the major platforms, as shown on sites such as Dapp Radar and State of the DApps. As the numbers and ratings frequently disagree with one another across different sites, this is a high-level, rather than scientific overview.

Distributed Application Use Cases

1. Gaming and Gambling

Gaming and gambling are one of the most popular distributed application use cases by far, and it’s a broad category. It includes applications as pure games, many of which take advantage of blockchain’s ability to store digital assets in the form of collectibles securely. Cryptokitties was the first to make use of Ethereum’s ERC-721 non-fungible tokens. However, blockchain collectible gaming now also includes EOS Knights and Etheremon.

EOS Knights

Gambling games are also popular. Dice games such as dice2win and Endless Dice frequently feature as some of the most well used.

In addition to pure distributed application games, there are also a few gaming platforms starting to enter the top tables. FunFair is one, an online casino platform that allows anyone to set up as a game operator by staking FUN tokens. Decentraland is another, a decentralized virtual reality universe where you can buy land and build your own businesses powered by the system’s MANA token.

2. Decentralized Exchanges

Decentralized exchanges are becoming more popular. This rise is in no small part due to the ongoing security issues with centralized exchanges and their vulnerability to hackers. The Coincheck heist is one of the biggest ever, and it happened only this year. So it’s hardly surprising that the community is turning to decentralized, non-custodial exchanges as a safer alternative.

IDEX is so far one of the most well-used decentralized exchanges, supporting over 200 ERC-20 tokens. ForkDelta (originally EtherDelta) is another one that features high up on the rankings.

Although it isn’t technically a decentralized exchange but a conversion protocol, Bancor is also frequently found in the top distributed application listings.

Bancor Crypto Wallet

3. Finance

Although exchanges deserve their own distributed application category, within the broader finance area there are many more popular use cases to be found. Stablecoin MakerDAO is among the top-ranking finance applications. Perhaps it’s unsurprising that stablecoins are becoming so popular, given the ongoing bear market.

The decentralized peer-to-peer lending platform Ethlend is another consistently popular finance application, perhaps reflecting the unwillingness of crypto investors to sell their positions while the market is still down.

4. Utilities

Another broad category, but one that has some truly innovative distributed application use cases that go to the heart of what blockchain can do. Utilities include decentralization of computing resources, so here we see projects such as Golem. The Ethereum-based platform aims to create a decentralized supercomputer that can power AI algorithms and graphical rendering processes. In a similar vein is decentralized cloud storage provider, Storj, now also powered by Ethereum.

Another utility-type distributed application is Origin Protocol. Aimed at the sharing economy, this project allows developers to set up their own marketplaces for sharing resources such as cars, accommodation or labor.

5. Predictions

Perhaps also linked to the market, prediction applications form the final category on our list. It seems that crypto enthusiasts are keen on peering into the future, looking ahead to the time when Lambo memes will once again have some context.

Ethereum applications once again make the top spots. Gnosis and Augur are the two most popular prediction platforms across the ranking tables. Both use similar mechanisms of crowdsourcing wisdom about future events.

Insights

We deliberately haven’t listed any hard numbers here. Firstly, as already mentioned, there are various ranking sites and little consistency in user or volume numbers between them. At least in part, this could be because they are not all listing the same dapps.

For example, Dapp Radar shows that there are more than 1500 dapps listed, with 91k daily users.

Dapp Stats

State of the Dapps lists nearly 2400 dapps, but with only around 60k users.

State of the Dapps

So finding a source of truth is somewhat tricky.

One thing that’s striking about this list is that so many of the distributed application examples we’ve pulled from the top ranking lists are built on Ethereum. We can only assume that this is because Ethereum has existed since 2014, whereas platforms like EOS are far newer. This has given distributed application developers more time to create and refine their product. They’ve also had more time for marketing efforts and building user communities.

Over time, it’s likely that developers will start to use the platforms that overcome Ethereum’s challenges, such as scalability. As that happens, dapps from other platforms will begin to rise in popularity.


This article by Sarah Rothrie was previously published on Coincentral.com

About the Author:

Sarah ran away from a corporate job so she could travel the world. After doing that, she found herself a much-loved new career as a freelance blockchain technology writer. She is now a full-time digital nomad, who travels the world while working on her laptop. In addition to writing and researching, she also runs her own websites – find out more at sarahrothrie.com. You can usually locate her somewhere near the food.

 

 

What is a Blockchain Transaction?

You need to understand what a blockchain transaction is before you can invest your money into the crypto market with confidence. These transactions are the backbone of cryptocurrencies. Today, blockchain transactions function in a number of different ways.

A blockchain is a network of computers that stores transactional data in replica across every PC (node) in the system. This data is called a distributed ledger. The data is entered into the chain in intervals known as blocks. Each block is time stamped and its order and transactions verified. This method of storing data in duplicate creates a chain of transactions or in other words, a blockchain.

Blockchain transactions bring huge advantages in terms of transactional speed and transfer fees. A normal bank transfer can take a week to complete. The delays are the result of numerous third-parties operating verification systems. A typical international transaction includes over 36 different third-party organizations.

A Better Alternative

In comparison, cryptocurrency investors can send huge amounts of money for next to nothing. For example, Binance sent $600 million from their exchange wallet to cold storage (offline wallet) for $7 in November 2018. The transaction took under ten minutes to complete.

Attempting the same transaction through the current financial system would take weeks and would cost over 100 times more. The advantages are undeniable. Cryptocurrencies such as Ripple (XRP) intend to bridge the gap between the two markets by providing banks with a blockchain money transfer system that fits into their regulatory requirements.

Ripple via Trustnodes

Irreversible

When blockchain transaction completes, that’s it. There are no refunds, cancellations, or take backs. You can’t alter the data later or even delete the record of the transaction. It’s these traits that give blockchain transactions a huge advantage in the market. The immutable nature of the technology makes it ideal for multiple business sectors including supply chain management, financial services, and government transparency programs.

How Are Blockchain Transactions Approved?

A blockchain transaction’s approval comes from a process known as consensus. Consensus is an agreement between all the nodes on the blockchain as to what is the valid chain. A block adds to the chain once 51 percent of the nodes agree on a transaction’s validity. Nodes compare chains to validate transactions. The longest chain is the valid chain.

This method of verification works well, but it can be corrupted if more than half of your blockchain’s nodes are controlled by one party. Bitcoin’s anonymous creator, Satoshi Nakamoto, warned against these dangers multiple times in the now famous Bitcoin white paper.

Proof of Work

Bitcoin transactions join the blockchain using a form of consensus known as proof of work. The process requires the blockchain nodes to compete against each other to answer a mathematical equation with an answer that starts with four zeros. Different blockchains can use different algorithms. Bitcoin uses the SHA-256 algorithm.

The node that answers the question first gets to add the next block to the blockchain in return for a reward of 12.5 Bitcoin. This process is called mining, and just like mining for gold, there are certain costs associated with the activity.

Originally, when Bitcoin cost pennies, miners received 50 BTC as a reward for adding a block. What’s even crazier is that miners could accomplish these tasks directly from their home PC without the need for any additional hardware. Today, mining is a multibillion-dollar industry.

Nowadays Bitcoin miners utilize high powered ASIC chips to mine BTC more efficiently than ever before. Miners also create large partnerships, or mining pools, to leverage their efforts. Mining pools combine every node’s processing power. The rewards are split-up between nodes based on their computers contributions, also known as hash power.

Your PC can use a lot of energy when processing proof-of-work equations. This growing demand for electrical resources led some cryptocurrencies to develop new, less energy dependent consensus mechanisms.

Proof of Stake

The proof of stake consensus mechanism came about as a direct result of the insane amount of electricity Bitcoin miners gobbled up. To put these concerns into perspective, one report showed that Bitcoin miners used more electricity than the entire country of New Zealand in 2017.

Proof of stake consensus eliminates the need for computers to battle over who is next to add a block to the blockchain. Instead, the protocol chooses nodes randomly or based on their holdings, size, or time in operation. Some coins, such as Peer Coin, use a combination of these factors to decide what node gets to add the next block.

Delegated Proof of Stake

Delegated proof of stake coins require miners to meet certain criteria before they are able to participate as a block validator. The popular cryptocurrency EOS utilizes this consensus mechanism. EOS allows only 21 block validators to operate at a time. This speeds up transactions by reducing the number of nodes needed to approve transactions.

How to Track Transactions

Tracking blockchain transactions is easy. Each blockchain offers some form of block explorer to help you monitor transactions. In the case of Bitcoin, there are multiple block explorers you can use including blockexplorerblockchain, and live.blockcyoher. You can search a transaction by entering in the wallet address or transaction number. Here you can watch your transactions confirmations.

Security Token Blockchain Transactions

Security token transactions differ from regular blockchain transactions because they include another layer of regulatory standards that must be met. These tokens are not transferable at will or to anonymous individuals. Think of security tokens as securities issued on the blockchain. The SEC regulates and monitors these transactions.

Security tokens bridge the gap between the crypto market and traditional investors. They are considered a safer investment when compared to ICOs, because the company issuing the tokens must verify their company, address, management, and financial statement. Security tokens continue to grow in popularity as more firms look to tokenize assets such as real estate and personal equity.

Blockchain Transactions of the Future

Blockchain transactions have come a long way since Laszlo Hanyecz bought two pizzas for 10,000 Bitcoin in 2010. The crypto market continues to evolve as developers continue seeking out new and more efficient ways to conduct blockchain transactions. The future of blockchain transactions looks bright.


This article by David Hamilton was previously published on Coincentral.com

About the Author:

David Hamilton aka DavidtheWriter has published thousands of cryptocurrency related articles. Currently, he resides in the epicenter of the cryptomarket – Puerto Rico. David is a strong advocate for blockchain technologies and financial sovereignty. His website.

When to Buy Bitcoin: A Guide to Stacking Satoshis

Gaining a better understanding of when to buy Bitcoin can help you take your investment strategy to the next level. It has been an interesting year for Bitcoin and the entire cryptocurrency market. The crypto market shed the majority of its 2017 gains this year as market corrections kicked in. These losses left many investors with difficult decisions to make, such as when to sell Bitcoins, and should I buy Bitcoin now? The important thing to remember is that there isn’t one particular style of investing that fits everybody.

Choose Your Strategy

When it comes to investing in Bitcoin, there are a couple of popular strategies to follow. In the end, you may find that a combination works best for you. This is normal and finding the right balance increases your return on investment (ROI) and reduces your stress levels in times of market corrections. Let’s explore two popular Bitcoin trading strategies.

Long-Term: HODL

The Bitcoin HODL (hold on for dear life) community is strong and why wouldn’t it be? Bitcoin is the world’s first successful cryptocurrency. Aside from the fact that it introduced the world to blockchain technology, there is also a social and economic freedom associated with this cryptocurrency.

HODLers believe in Bitcoin’s underlying quest to free the world from a corrupt and nefarious financial system. Additionally, they believe that Bitcoin will always see a rise in value in the long term. Considering that there is fewer than four million Bitcoin left to be mined, the scarcity of this digital asset is undeniable.

Unmined Bitcoins

This is by far the easiest Bitcoin investment strategy to follow. You buy Bitcoin when the price dips and hold it. That’s it. If you review Bitcoin’s price history, anyone who followed this strategy before mid-2017 made out in a big way.

Short-Term: Day Trading

Day trading takes a more active approach to cryptocurrency. Day traders look to make gains based on their market understanding, rather than HODLing their Bitcoin. For these investors, utilizing the best market tools is essential. Advanced market analytics and trading bots are two perfect examples of popular day trading tools that can improve your ROI.

Strengthen Your Position

Day traders earn their profits during times of volatility. A savvy day trader knows how to make a profit, even when the market is collapsing. In a bear market scenario, these traders will strengthen their position. This trading strategy requires you to sell your Bitcoin at the beginning of a market drop and then repurchase Bitcoin at a lower price once the market bottoms out. The result: more Bitcoin. This strategy is easier said than done, however.

Combo Method

Many investors utilize a combination of these tactics to achieve the goal of increasing their Bitcoin holdings. These investors hold their Bitcoin until major market adjustments. As a crypto investor, monitoring new developments in the crypto market is important. In theory, it’s easier to predict a bear market than a bull market.

Remember, the crypto market is still new to many investors and bad media can spread FUD (fear, uncertainty, and doubt), which causes a sell-off by worried investors. For example, if you wake up tomorrow and type Bitcoin into the Google news search engine and the first three pages of stories are negative, it’s likely that this will cause the price of Bitcoin to drop. How much? Nobody knows.

Comparing Market Cycles

Market cycles are like the tides of the ocean. While nobody can guess exactly how powerful the tide will be, they can reference the year’s prior activity to get a general idea of when market activity increases or decreases. Bitcoin is now 10 years old and there is a decade of market research that can be evaluated to obtain a better understanding of Bitcoin’s market cycles.

Bitcoin CoinMarketCap

Recent Market Stabilization

The market appears to be stabilizing with volatility at its lowest levels in years. Does this mean that Bitcoin is stable? Probably not. Bitcoin usually experiences volatility following this type of market behavior. In most cases, a bull market ensues.

The Truth About the Dip

Buy low, sell high. This is the investment axiom that is echoed by experts throughout the crypto space. While it seems easy enough, predicting when the dip is at its lowest point is tricky, to say the least. One of the best strategies is to review the market charts and if the dip is near resistance lines, buy. Resistance lines on a market chart represent points in which the market showed an increase in buying activity, thereby stopping the bear.

Whales Splashing

Following the trading activity of whales within the Bitcoin space is another awesome way to schedule your buying efforts. Bitcoin whales are people that own huge amounts of a Bitcoin. A recent Bloomberg report revealed that just 1,000 people own over 40 percent of all the Bitcoin in existence.

When a whale makes a move, the entire market responds. A report published by Investopedia in September 2018 highlighted this scenario. The report showed how one whale caused a $53 billion Bitcoin sell-off. The moral of the story, watch the whales because they can affect prices dramatically.

Police Auctions

Law enforcement officials are stepping up their crypto confiscations, and if you are looking to invest heavily into cryptocurrency, these scenarios are ideal. Large-scale crypto auctions provide you with the perfect opportunity to get huge sums of crypto at discounted rates.

Longtime crypto investor Tim Draper famously bought nearly 30,000 confiscated Bitcoin from authorities following the Silk Road bust. While Draper refused to give the specific price details paid, a report by Fortune magazine places the average price paid for Bitcoin at around $334.

When to Buy Bitcoin

Learning when to buy Bitcoin comes down to learning what type of crypto investor you want to be. Once you understand your strategy, you know when it makes sense to purchase more Bitcoin, HODL, sell, or strengthen your position. With these concepts in mind, you are now ready to learn how to increase your cryptocurrency portfolio like a pro.


This article by David Hamilton was previously published on Coincentral.com

About the Author:

David Hamilton aka DavidtheWriter has published thousands of cryptocurrency related articles. Currently, he resides in the epicenter of the cryptomarket – Puerto Rico. David is a strong advocate for blockchain technologies and financial sovereignty. Visit his website: MyWebAlien

How to Use a Bitcoin Paper Wallet to Keep Your Crypto Safe

As a crypto investor, it’s paramount that you understand the different ways to keep your Bitcoin safe. While most of the media attention focuses on hardware and software wallet solutions, there is another effective way to store your Satoshis: a Bitcoin paper wallet.

This form of crypto storage is used by some of the biggest Bitcoin investors in the world. The Winklevoss Twins, the world’s first Bitcoin billionaires, reportedly keep their crypto in cold storage on paper wallets. The paper wallets are cut into pieces and stored in different bank safety deposit boxes throughout the country.

Bitcoin Paper Wallet

While this level of security may be a bit of overkill for most people, it does showcase the effectiveness Bitcoin paper wallets bring to the market. Luckily, there are much easier ways to employ a Bitcoin paper wallet strategy.

How a Bitcoin Paper Wallet Works

A Bitcoin paper wallet is a print out of your private keys. By printing out your private key, instead of saving it on your PC, you eliminate online threats. Paper wallets are ideal for HODLers and those with significant amounts of Bitcoin.

Bitcoin paper wallets are considered safer because they can’t be hacked, but they can be lost or stolen. When you store your Bitcoin offline it’s called cold storage. The advantage of cold storage is the elimination of threats from hackers, scammers, and all of those digital thieves lurking in the crypto space.

The main disadvantage of paper wallets is the possibility of losing your private key, and therefore all of your crypto forever. If you lose your paper wallet, say goodbye to your Bitcoin. If someone steals your paper wallet, they now control your Bitcoin. In a paper wallet scenario, protecting your key from prying eyes is critical.

Bitcoin Paper Wallet Disclaimer

If you only have a small amount of Bitcoin, or you trade your crypto often, it’s possible that a paper wallet isn’t the best option for you. Also, if you’re the type of person that’s always losing things or is terrible at keeping track of paperwork, you should avoid paper wallets. In these scenarios, you would want to consider one of the other Bitcoin wallets available in the market.

Types of Paper Wallets

There are two types of Bitcoin paper wallets available. Both keep your Bitcoin stored safely offline, but only one method protects you in the situation where your computer is already infected or currently monitored.

Non-Secure Paper Wallets

Creating a non-secure paper wallet is easy thanks to platforms such as BitAddress. When you open the BitAddress page you’re instructed to move your cursor until a new key is created. After that, select “create a private key” from the options menu. Then choose the paper wallet option. Boom, now you just print out the paper wallet, and you’re good to go. There’s also a 3D barcode that allows you to send and receive Bitcoin directly from your new paper wallet.

BItaddress via Homepage

This process is easy, but it doesn’t do much to protect your crypto if your computer is already compromised. If someone has already breached your system, they now have the information they need to steal your crypto. Also, Windows malware exists that can monitor your computer screen.

On top of all of your onsite security concerns, there’s also the threat that someone hacks BitAddress’s servers. While this hasn’t happened to the company to date, their presence online does make them a target for potential hacks. To be extra careful, follow the secure paper wallet instructions.

Secure Bitcoin Paper Wallet

Creating a secure paper wallet for your Bitcoin is one of the safest storage methods. Your friends might say you’re paranoid, but hey, they don’t understand your passion for Bitcoin. In order to create a Bitcoin paper wallet that is truly secure, you are going to need at least a 4-gigabit flash drive and around an hour.

You will go offline and use a brand new operating system, coupled with the offline version of BitAddress, to create a secure paper wallet in this method. To accomplish these tasks you will need to download:

Start off the process by opening LiLi. Next, insert your flash drive and choose “ISOIMG/ZIP”. You will need to select the Ubuntu ISO file that you have already downloaded. LiLi will ask you if you want to format your flash drive in FAT32. Be sure that only FAT32 is selected and click the installation icon shaped like a lightning bolt. Once Ubuntu is on your flash drive you are now ready to unzip the BitAddress Offline file to your drive.

Download LiLi

Go Offline

The next step is to take your PC offline. The best way to do this is to disable all Wi-Fi, cellular, and Bluetooth connections. Be sure your Ethernet is not plugged in. To be even safer, you can unplug your modem and router. The goal is to eliminate any chance of remote monitoring during the paper wallet creation process.

Open Ubuntu

Restart your computer and boot your PC from your flash drive using the Ubuntu operating system. To do this, you will need to press F1 or F12 during your PC’s startup. A pop-up screen will emerge showing you your boot options. Choose the option that represents your flash drive. Allow Ubuntu to load on your PC.

Ubuntu Operating System

Install Printer

Once Ubuntu is open on your PC, you now need to install your printer. This is done by clicking on the system settings options and scrolling to printers. Next, you will be prompted to add a printer. Add your printer by following the directions provided on-screen and print out a test page to verify everything works correctly.

Open Offline BitAddress and Print Paper Wallet

Now, you need to open a private browsing window in the Firefox browser. Enter in the address bar file://cdrom/bitaddress.org-master/. Then click on the “BitAddress.org.html” link provided. You will be prompted to move your cursor until the number in the top right of the screen reads 0.

You now have your new wallet address and are ready to print out your Bitcoin paper wallet. To do this, select the “paper wallet” option from the menu and follow the print directions.

Paper Wallet Setup

Loading Your Bitcoin Paper Wallet

Your paper wallet will have your public address on the left side. This is the address you can use to load your paper wallet without exposing your stored Bitcoin to the dangers of the internet. The right side of the print out will have a spend 3D barcode, which allows you to send Bitcoin directly from your secure paper wallet.

Keeping Your Crypto Safe

Learning to keep your Bitcoin safe is an important part of becoming a savvy crypto investor. Now that you understand what a Bitcoin paper wallet is and how to create one, you are ready to start storing your crypto fortunes securely.


This article by David Hamilton was previously published on Coincentral.com

About the Author:

David Hamilton aka DavidtheWriter has published thousands of cryptocurrency related articles. Currently, he resides in the epicenter of the cryptomarket – Puerto Rico. David is a strong advocate for blockchain technologies and financial sovereignty. His website: MyWebAlien

Bitcoin Market Nightmares: Whales and HODLers to Blame

Bitcoin has lost over 75 percent of its value within the past year, and many less popular cryptocurrencies are currently on the verge of going completely belly-up. The most recent roller coaster market-plunge occurred within the past month and has left many HODLers and crypto investors strung out.

So What Caused Bitcoin’s Price to Plummet?

To get a logical answer to this question, it is important to first look at the circumstances that led to the 2017 bitcoin price escalation and the ecosystem that existed before its rise. Also worth noting are factors that led to BTC’s precipitous decline at the beginning of the year.

Looking at the period before BTC’s meteoric rise in 2017, Bitcoin was mainly popular among smaller close-knit groups of enthusiasts, and traders who mostly peddled black-market paraphernalia. This millpond ecosystem and the Silk Road marketplace, in particular, are credited for having contributed immensely to bitcoin’s growth during its early stages.

Founded by Ross Ulbricht in 2011, just two years after the invention of Bitcoin, Silk Road’s one million customers primarily relied on bitcoin to transact. This and other related communities are believed to have helped prop up bitcoin’s value as a medium of exchange, at least initially, and enabled it to achieve steady growth through sustained demand.

What triggered the 2017 price upswing was the entry of HODLers and institutional players who had started to take notice of its potential. They triggered an initial price spike led to a series of hikes, catalyzed by a mad dash to acquire the cryptocurrency by mainstream players. The situation was much like the gold-rush days of old. In this instance, the fear of missing out (FOMO) drove demand.

Consequently, bitcoin’s value rose from $1,188 in March 2017 and reached its apex at $19,650 in December, an impressive 1,654 percent price surge in just nine months. The eventual burst in 2018 occurred after market-growth reached unsustainable levels.

This, and what pundits believe to be large-scale price manipulation moves, is blamed for the huge uptick that occurred between the months of August 2017 and February 2018, and the subsequent market slowdown.

Right now, many analysts, including Phillip Nunn, CEO at Wealth Chain Capital, have affirmed that the recent steep market plunge is a result of large-scale price suppression by experienced futures traders and whales. It is believed that some experienced traders and companies profited greatly from the recent price slide after shorting bitcoin futures.

Bitcoin HODL

The Risk of Having Institutional Players at This Stage

The fact that there has been a sharp increase in whales in the bitcoin market in recent months is a worrying predicament and a risk unto itself. Especially now that there is little hope of positive price triggers in the near future, such as a bitcoin ETF (Exchange Traded Funds) approval.

The whales pose a risk to smaller investors because they already possess the resources to manipulate markets. Some have already pumped tens of millions of dollars into the sector and are not prepared to face a recusal. As such, the market should brace itself for waves of sophisticated market manipulation schemes.

It is estimated that only a few hundred people hold about 40 percent of bitcoin and that these people probably know each other and communicate on a regular basis. This means that bitcoin is not as decentralized as it’s been made out to be. In addition, market regulation is still a major challenge and leaves the industry open to exploitation.

Its Use as a Medium of Exchange Greatly Affects Bitcoin’s Value

Bitcoin’s is experiencing a decline as a medium of exchange in commerce. According to a research report published by Bloomberg in August, bitcoin mercantile volumes were down to $60 million from a peak of $411 million in September last year. The news network obtained this data from 17 major crypto merchant-processing services. According to the analysis, customers currently appear to avoid using the cryptocurrency for transactions.

As mentioned earlier, sustained demand for the crypto-coin is fundamental in attaining a stable value. As demand support diminishes, it will become harder to make out a strong cryptocurrency market bottom.

Unlike national currencies, where central banks control value and maintain use and circulation within economies, cryptocurrencies have no such mechanisms.

Ultimately, the bitcoin’s value is likely to stay under the influence of the whales. Of course, some events such as ETFs can influence bitcoin prices. However, these are rare occurrences that have yet to happen and are unlikely to in the near future given the turbulent state of the sector.

Is Bitcoin Doomed?

The bitcoin market is still the largest in the cryptocurrency industry by market capitalization. As things stand, a whole set of industries has been built around it.

Some of the biggest names on Wall Street had already started to push for wider adaptation of the digital currency. Intercontinental Exchange, which owns the New York Stock Exchange is currently working on a bitcoin futures trading platform dubbed Bakkt.

And in October, Fidelity Investments, a wealth management and financial planning behemoth with over 27 million customers, announced plans to offer crypto custodial services to investors. This and related efforts by established companies is bound to positively impact bitcoin’s growth at some point.

What greater integration of bitcoin into world financial systems means for investors is that a sizeable price upswing would have highly magnified effects.


This article by Elizabeth Gail was previously published on Coincentral.com

About the Author:

Elizabeth Gail is crypto-enthusiast and a blogger. Her specialties include cryptocurrency news and analysis. When not writing about crypto, she’s out taking part in humanitarian endeavors across the world. You can reach out and engage with her on Twitter and Google Plus.