Weekly News 49 / 2018 : November Was Hard For Bitcoin

Welcome to December. We hope your holiday celebrations aren’t affected by this year’s price development for cryptocurrencies.

Last month was the worst month for bitcoin in seven years. Bitcoin’s price fell for 37.5%. In the beginning of December bitcoin’s price was about $4 000, which is almost $2 400 less than in the beginning of November.

Last time Bitcoin saw a fall this drastic during a one month period was in August of 2011, when bitcoin’s price fell from $8 to $4.8 with a price drop of 40%.

Nonetheless there seems to be light at the end of this tunnel. According to blockchain it seems that long-time holders are still not selling their bitcoins, and there are indications that the bears are losing their momentum with their bitcoins running out.

If and when the shift happens and bears have sold what their have to sell, it seems inevitable that bitcoin price will continue to rise once again.

In the meantime you can enjoy the weekly news from around the cryptoworld.

Blockchain data seems to indicate that bitcoin price is at least close to reaching its bottom.

Bitcoin Mining Difficulty Fell

Bitcoin’s mining difficulty has seen its second largest drop in history. The mining difficulty dropped in the beginning of the week by 15.1%. The mining difficulty saw its largest fall in 1st of November 2011, when the difficulty dropped by 18 percent.

Bitcoin network adjusts the mining difficulty automatically according to how much hashing power the network has. The more there are miners and the more powerful those miners are, the higher the difficulty automatically becomes. On the other hand if the miners drop from mining, the difficulty adjusts downwards. Reason for this automatic adjustment is to keep the rate of new blocks produced constantly at around one block per 10 minutes.

As bitcoin’s price has fallen during the 2018, mining of bitcoins has become less profitable. This in turn has led more and more miners dropping out of the mining business or at least lowering their hashing power.

Even though the reduction of difficulty is significant and the Bitcoin network has less hashing power behind it than previously, this has little to no effect for an ordinary user. There is still far more than enough hashing power to keep Bitcoin network secure, as it still remains by far the largest project of decentralized computing ever conducted.

Bitcoin mining automatically sets its difficulty, so new blocks are produced at a constant rate. (Image: BeatingBetting.co.uk)

Freelancers Want to Get Paid in Cryptocurrencies

A job requirement firm from U.S. Humans.net has conducted a new survey concerning with how freelancers prefer to be paid. According to the survey 18 percent of freelancers would like to receive all of their payments in cryptocurrencies. Other 11 percent would like to receive part of their payments in cryptos.

The respondents of the study were a randomly selected group of 1 100 people from freelance markets. None of the respondents disclosed any interest in cryptocurrencies prior the survey. Thus the survey could be seen as a positive sign of cryptocurrency adaptation.

The use of cryptocurrencies could benefit freelancers in many ways. Cryptocurrencies can be used to send money instantly to everywhere in the world. As the freelance job market becomes more fractured and global, the need for relatively small international payments rises.

Currently many of the freelancers are using systems such as PayPal, which are quite expensive. PayPal charges at least 2.9% fee for payments inside the United States. For international payments it’s even more expensive. By using bitcoin and other cryptocurrencies, freelancers could save hundreds of dollars in the long run.

Bitcoin can be a useful tool for freelancers, as it can bypass many of the normal limits of global economy and payments with but a fraction of the cost.

Bitcoin Has Been Declared Dead Hundreds of Times

As Bitcoin is facing its bleakest year in ages, media has once again declared Bitcoin dead. Actually it seems that proclaiming the departure of Bitcoin is a common sport for mainstream media, and it has been it for a long time.

According to 99Bitcoins Bitcoin Obituary Tracker, Bitcoin has been declared dead at least 329 times in various media outlets. The Obituary Tracker keeps eye only on English publications, so the actual global number is far higher when considering publications with all other languages.

After Bitcoin went to mainstream news, it has been declared dead at least once a year. First time Bitcoin was declared dead was in December 15 of 2010. Last declaration was in December 3 of 2018.

The statistics also show a connection between obituaries and bitcoin price. When ever the price is going down, media runs experts and analysts to broadcast the imminent death of cryptocurrency. On the other hand media remains relatively silent on the possibility of failure when the markets are on upwards trend. Media seems to live in the moment instead of looking at the larger scale.

For the time being every single prophecy of doom has failed. Bitcoin has been through several difficulties, both economic and technical, and so far it has handled them all. As the result of this, Bitcoin of today is far more robust than the Bitcoin of old.

Though Bitcoin has been declared dead, none of these declarations has yet been even remotely true.

G20 Wants Effective Cryptopolicies

Cryptocurrencies were once again a topic of discussion in the latest G20 Summit in Buenos Aires, which gathered together many of the most important players in the international economic field.

The G20 Summit was to talk about the creation of an open and resilient system for global finance. The system should follow international laws and support a sustainable growth for everyone. Cryptocurrencies and blockchain were introduced as a one possibility.

The G20 Summit members endorse the G20 Financial Inclusion Policy Guide, which provides voluntary policy recommendations to countries and organizations which want to implement the new financial technologies. The participants also stated the need for enforcement of new policies for new fintech, such as ways to monitor transactions, fight against terrorism and money laundering and to ensure proper ways of taxation.

“We will continue to work together to seek a consensus-based solution to address the impacts of the digitalization of the economy on the international tax system with an update in 2019 and a final report by 2020,” a summary of the Summit reads.

The G20 Summit gathered together many important leaders of the world.

U.S. Government Wants to Crack Zcash and Monero

According to a document published by the Department of Homeland Security’s Small Business Innovation Research Program the authorities of United States are looking for ways to crack the privacy of privacy-centric cryptocurrencies, such as Zcash and Monero.

In many ways Bitcoin is unideal for criminal usage. All transactions are open and publicly stored on an immutable blockchain. ZCash and Monero, on the other hand, use several different ways to hide the transactions and users. This has lead to increased usage of these privacy-centric coins in cybercrime, which has naturally called for the attention of officials.

“The proposal calls for solutions that enable law enforcement investigations to perform forensic analysis on blockchain transactions,” the pre-solicitation document reads. The document hints that the government is contemplating ways on how to develop new forensic analysis tools and techniques that could be used to crack the anonymity of the anonymous altcoins.

According to the document the SBIR has formulated a three-stages plan for the development of such technologies. The first part would be the design of a blockchain analysis techniques for Monero and Zcash. The next part would be the testing process. In the third part the new techniques would be integrated to government’s tracking applications.

Zcash and Monero are perceived to be anonymous, and thus preferable to Bitcoin, but now the government wants to be able to crack their anonymity.

Cryptowinter Tests the Resistance of Altcoins

This year’s cryptocurrency winter has been hard for many altcoins. During the last month the total market cap of all cryptocurrencies fell from about $211 billion to about $130 billion, with over 38% fall in the markets.

There are now only 9 cryptocurrencies which have a market cap of more than $1 billion. Of these Bitcoin, Ripple and Ethereum reign supreme. Bitcoin covers of about 54% of the total market cap, with Ripple contributing 14 billion and Ethereum contributing 11 billion. Other cryptocurrencies have far lower market caps, moving in ranges of around $1 – $2.5 billion dollars.

This development is in many ways akin to the price development of bitcoin. During the last year when bitcoin’s price bubbled, many altcoins and ICOs flooded the markets, with many of them having less than hot air behind them. When the bubble broke, many of the weaker, less useful cryptocurrencies went to a downfall.

Bitcoin is still by far the most important of all cryptocurrencies and it’s likely that this will continue long into the future.

Writer Jiri Keronen