Tag: btc

The bitcoin rally: fact or fantasy?

On By mehranmuslimiblogIn Bitcoin, cryptoLeave a comment

Image result for bitcoin

It was perhaps unfortunate that the most recent bitcoin rally happened to coincide with 1st April, also known as April Fool’s Day in a number of countries. The tradition of the day is to see if you can fool people into believing the story you tell them. Some newspapers are expert at it: the UK’s Guardian newspaper is renowned for its April Fool stories, such as the discovery of the island of ‘Sans Serif’, which any printer would immediately have spotted as a hoax. So, it’s unsurprising that there were those who thought the bitcoin rally was also some kind of 1st April joke, as Bloomberg reported.

 

But it wasn’t a joke, as the surge went on past noon on 1st April, the cut-off time after which one cannot play any more pranks. It continued to increase in price with some dips until 9th April, when we saw a almost all the major cryptos go red again, but only slightly.

 

Multiple theories about bitcoin surge

There have been other theories. One analyst, Tone Vay, suggests there is no particular trigger; it’s just normal speculation: “Shorts are liquidated, there were short squeezes, more people jumped onto the hype, and a lot of news media always look for a trigger to cause big drops and big rises. I would say more than half the time they are just trying to match news to something that it did not necessarily need news to happen.” Bloomberg also put forward the idea that it could be down to algorithmic trading. This is a method where automated software detects trends and determines when trades should be made. And Reuters suggested that a 20,000 BTC order was spread across United States-based crypto exchanges Coinbase and Kraken, as well as Luxembourg’s Bitstamp was the trigger for the surge. Some even connected it to the UK’s interminable Brexit situation and to people selling off GBP in case the UK crashes out of the EU and the Pound falls through the floor. Meanwhile the bulls were in the press talking about the end of the so-called ‘Crypto Winter’ and predictions about bitcoin hitting big figures were in the headlines.

 

The problem for the average person looking at the bitcoin market is this: who should you believe? It really is a tough call, even for those who know the market fairly well.

 

Not everyone is bullish on bitcoin

And then there are those who will tell you not to trust in what you are seeing. Brendan Coffey at Forbes claims that the “smart money” expects bitcoin to drop. He points to the  weekly Commitment of Traders  report from the Commodity Futures Trading Commission. This says “says that while small speculators (classified as non-reportable in the report) increased their long positions 18% and shrunk their short positions 27% compared to last week, large traders – hedge funds and other large speculators – raised their short bets almost 45%.” Also, large trader long positions in bitcoin were trimmed back by 24% this week, which is a bearish manoeuvre.

 

What does this mean for the price of bitcoin. Coffey suggests it may not create a big rise or fall. However, he does advise taking a look at the last bitcoin rally in 2017, when bitcoin futures first launched as well. These futures allowed people who were sceptical about bitcoin to bet against it, and he indicates that while we are seeing short-term gains, the longer-term picture may prove more challenging. Why?  He says, “As a purely speculative investment with a heavy amount of non-trading professionals betting on it, bitcoin has tended to display classical chart patterns.” And according to his charts, there is still a “thick blue line of resistance” to overcome. That stands at about $6,000, “but expect the sellers to come in at $5,500 and continue to sell on moves into the $6,200 area,” Coffey says. His reasoning, which is perfectly logical, is that people who “got caught holding bitcoin when it plunged will want to get out with what they put in.”

 

The answer would seem to be that the current bitcoin rally is both fact and fantasy. Yes, we have seen it surge to over $5,000 from hovering around $4,000 just a few days earlier. The fantasy bit? It is going to be some time, if it ever happens, before it reaches $50,000, even if that is the prediction of a crypto guru!

 

 

 

 

 

 

 

 

 

Hollywood pushes fake news to the masses about bitcoin

On By mehranmuslimiblogIn BitcoinLeave a comment

It would seem that nobody in Hollywood understands cryptocurrency, or Hollywood doesn’t care about what it says about cryptocurrencies, it just wants to make money, in dollars, not bitcoin.

Why am I talking about Hollywood? Because Hollywood has just released the film “Crypto” starring Kurt Russell, who you may remember from “Escape from New York,” “The Hateful Eight” and a whole host of other box office favourites. Or, perhaps you think of him as the husband of Goldie Hawn!

The film, which I have not seen yet as will only released in the US on 12th April, pushes a bitcoin for money laundering narrative. It is an approach that the mainstream media has been pushing to the public for some time. It’s the ‘only dodgy people use crypto’ story. It is a bit of a tired story as well, but that didn’t stop the scriptwriters from taking it up and running with it.

According to IMDB, “Crypto” is a crime thriller about a Wall Street banker who gets caught up in a global money-laundering conspiracy involving the Russian mafia and is described as a cyber-thriller. Well, that’s original; bad Russians yet again. And now bad Russians with bitcoin — even more dangerous! The movie’s tagline is “fear is the ultimate currency,” which gives us a further clue about what to expect.

Needless to say, and I have sympathy with this, the crypto-supporting community is not best pleased about the approach Hollywood has taken in this film; its members were hoping for something better. As Samantha Chang notes at CCN,“the trailer has been viewed more than 312,000 times in 24 hours — presumably by crypto fans who recognize that having Hollywood make a bitcoin-centric movie signals that crypto has become mainstream.”

Panned on YouTube by crypto community

They were so deeply disappointed that they have left numerous messages on YouTube, and as you may guess, they are not over-enthusiastic:

“Yes,… it’s here. The dumbest film ever made about something that the writers don’t understand.”

“Russia bad. Crypto bad. Smart people bad unless working for government. Thanks Hollywood, for yet another original plot.”

“I imagine there will be a ten minute tense standoff while they wait for the block chain to verify a transaction. Good times.”

“I like Kurt Russell but I wish I could give this more than one “thumbs down”. It is a movie written by people that do not understand crypto at all — just misinforming the masses.”

I have to agree with the last one, because that sums it up nicely. Great actors — lousy plotline. Try to do better Hollywood.

Is Google making the blockchain searchable?

On By mehranmuslimiblogIn Bitcoin, Blockchain, UncategorizedLeave a comment

I came across an interesting article on Forbes the other day by Michael del Castillo. He tells a story about data scientist Allen Day, a former Google employee, who while looking at some of the tools he developed there, saw something puzzling. What he saw was “a mysterious concerted usage of artificial intelligence on the blockchain for Ethereum.”

Day was able to look into its blockchain and see a “whole bunch” of “autonomous agents” moving funds around “in an automated fashion.” Although Day has no idea who created the AI, he suspects “they could be the agents of cryptocurrency exchanges trading among themselves in order to artificially inflate ether’s price.”

Day also remarked that he didn’t believe this was the work of a single exchange, but is rather a group effort. Part of Day’s job is anticipating demand for a product before it even exists, and in the light of what he has seen, he believes that making the blockchain more accessible is the next big thing.

Let’s not forget that Google made the Internet more usable, bringing it billions in revenue, and if Day is correct in his predictions it could have another major pay day by making the blockchain searchable. Del Castillo says if it does, “the world will know whether blockchain’s real usage is living up to its hype.”

Day has already been working on this with a team of open-source developers, who have been loading data for bitcoin and ethereum blockchains into Google’s big data analytics platform called BigQuery. And, with the help of lead developer Evgeny Medvedev, he created a suite of sophisticated software to search the data.

Day is hoping that his project, known as Blockchain ETL (extract, transform, load) will bring Google’s revenues from cloud computing services up to the level of Amazon and Microsoft. Google is some way behind both of them, but it will struggle to match Amazon’s revenues of $27 billion from cloud services, because Amazon has been in the blockchain game since 2018 with a suite of tools for building and managing distributed ledgers. And Microsoft got into the space in 2015, when it released tools for ethereum’s blockchain. These two companies are focused on making it easier to build blockchain apps, whereas Day wants to reveal how blockchains are actually being used, and by whom.

Day has been demonstrating how his Blockchain ETL could function by examining the hard fork that created bitcoin cash (BCH) from bitcoin. “I’m very interested to quantify what’s happening so that we can see where the legitimate use cases are for blockchain,” Day says. “Then we can move to the next use case and develop out what these technologies are really appropriate for.”

Day is now expanding beyond bitcoin and ethereum. Litecoin, zcash, dash, bitcoin cash, ethereum classic and dogecoin are being added to BigQuery.

It seems Google is waking up to blockchain and is now powering ahead by filing numerous patents related to the blockchain. The company is also encouraging its developers to build apps on the ethereum blockchain, and GV, Google’s investment division has made some investments in crypto-related startups.

The surprising ways mining crypto can be profitable

On By mehranmuslimiblogIn Bitcoin, BlockchainLeave a comment

Crypto miners are rewarded for processing transactions. All you need to be a miner is a rack of high-speed computers and access to electricity. Of course, a lot has been said about the latter: the consumption of energy needed to run the software and hardware on a large scale is astronomical in cost. In fact, some mining outfits are consuming the same amount of electricity as a small country. That’s why so many are based in the cold wastes of the Arctic Circle where lower temperatures keep the machines cooler and therefore reduce energy consumption.

When mining started, people could do it on machines at home, but that didn’t last long. The potential to make big bucks meant that competition increased and miners purchased massively powerful computers while scaling up their operations to remain profitable.

Then bitcoin crashed and this reduced the ability of miners to make a profit, and legal crypto mining using electricity at market rates is now becoming increasingly unfeasible, even in those places like Iceland.

Mining can still be profitable

But there are still opportunities for profitable mining. One way is to find subsidised electricity. For example, In Washington State, hydroelectric power generates far more energy than locals can consume, thus attracting a booming business in crypto mining. Instead of exporting it to other states, miners could buy it. This is a legal model. The other forms of profitable mining are certainly not.

The first of the illegal mining options is to steal electricity. That is what used to happen in the early days, but energy companies have got wise to that and there have been some prosecutions for theft in China and the USA.

Another mining model is cryptojacking. This has outperformed ransomware as a form of obtaining crypto. How does it work? A hacker introduces crypto mining software onto a target victim’s computer without their knowledge, thus generating crypto for the hacker while stealing processor cycles and electricity from the victim.

And there we have the current crypto mining scenario. As Jason Bloomberg writes at Forbes: “For all the crypto fanatics out there, therefore, there is a reason to take heart — there’s no way crypto values will ever drop far enough for mining to cease. Organized crime wouldn’t let that happen.”