Connect with us

Bitcoin

Crypto TREND – Fifth Edition

Published

on

As we expected, since publishing Crypto TREND we have received many questions from readers. In this edition we will answer the most common one.

What kind of changes are coming that could be game changers in the cryptocurrency sector?

One of the biggest changes that will impact the cryptocurrency world is an alternative method of block validation called Proof of Stake (PoS). We will try to keep this explanation fairly high level, but it is important to have a conceptual understanding of what the difference is and why it is a significant factor.

Remember that the underlying technology with digital currencies is called blockchain and most of the current digital currencies use a validation protocol called Proof of Work (PoW).

With traditional methods of payment, you need to trust a third party, such as Visa, Interact, or a bank, or a cheque clearing house to settle your transaction. These trusted entities are “centralized”, meaning they keep their own private ledger which stores the transaction’s history and balance of each account. They will show the transactions to you, and you must agree that it is correct, or launch a dispute. Only the parties to the transaction ever see it.

With Bitcoin and most other digital currencies, the ledgers are “decentralized”, meaning everyone on the network gets a copy, so no one has to trust a third party, such as a bank, because anyone can directly verify the information. This verification process is called “distributed consensus.”

PoW requires that “work” be done in order to validate a new transaction for entry on the blockchain. With cryptocurrencies, that validation is done by “miners”, who must solve complex algorithmic problems. As the algorithmic problems become more complex, these “miners” need more expensive and more powerful computers to solve the problems ahead of everyone else. “Mining” computers are often specialized, typically using ASIC chips (Application Specific Integrated Circuits), which are more adept and faster at solving these difficult puzzles.

Here is the process:

  • Transactions are bundled together in a ‘block’.
  • The miners verify that the transactions within each block are legitimate by solving the hashing algorithm puzzle, known as the “proof of work problem”.
  • The first miner to solve the block’s “proof of work problem” is rewarded with a small amount of cryptocurrency.
  • Once verified, the transactions are stored in the public blockchain across the entire network.
  • As the number of transactions and miners increase, the difficulty of solving the hashing problems also increases.

Although PoW helped get blockchain and decentralized, trustless digital currencies off the ground, it has some real shortcomings, especially with the amount of electricity these miners are consuming trying to solve the “proof of work problems” as fast as possible. According to Digiconomist’s Bitcoin Energy Consumption Index, Bitcoin miners are using more energy than 159 countries, including Ireland. As the price of each Bitcoin rises, more and more miners try to solve the problems, consuming even more energy.

All of that power consumption just to validate the transactions has motivated many in the digital currency space to seek out alternative method of validating the blocks, and the leading candidate is a method called “Proof of Stake” (PoS).

PoS is still an algorithm, and the purpose is the same as in the proof of work, but the process to reach the goal is quite different. With PoS, there are no miners, but instead we have “validators.” PoS relies on trust and the knowledge that all the people who are validating transactions have skin in the game.

This way, instead of utilizing energy to answer PoW puzzles, a PoS validator is limited to validating a percentage of transactions that is reflective of his or her ownership stake. For instance, a validator who owns 3% of the Ether available can theoretically validate only 3% of the blocks.

In PoW, the chances of you solving the proof of work problem depends on how much computing power you have. With PoS, it depends on how much cryptocurrency you have at “stake”. The higher the stake you have, the higher the chances that you solve the block. Instead of winning crypto coins, the winning validator receives transaction fees.

Validators enter their stake by ‘locking up’ a portion of their fund tokens. Should they try to do something malicious against the network, like creating an ‘invalid block’, their stake or security deposit will be forfeited. If they do their job and do not violate the network, but do not win the right to validate the block, they will get their stake or deposit back.

If you understand the basic difference between PoW and PoS, that is all you need to know. Only those who plan to be miners or validators need to understand all the ins and outs of these two validation methods. Most of the general public who wish to possess cryptocurrencies will simply buy them through an exchange, and not participate in the actual mining or validating of block transactions.

Most in the crypto sector believe that in order for digital currencies to survive long-term, digital tokens must switch over to a PoS model. At the time of writing this post, Ethereum is the second largest digital currency behind Bitcoin and their development team has been working on their PoS algorithm called “Casper” over the last few years. It is expected that we will see Casper implemented in 2018, putting Ethereum ahead of all the other large cryptocurrencies.

As we have seen previously in this sector, major events such as a successful implementation of Casper could send Ethereum’s prices much higher. We’ll be keeping you updated in future issues of Crypto TREND.

Stay tuned!

google news

Bitcoin

Did Turkey’s President Say “We Are In A War Against Bitcoin”? An Investigation

Published

on

War against Bitcoin, people with Turkish flags

Is President Erdogan so out of touch with what’s happening around him that he declared war against Bitcoin? Or is this a case of “lost in translation” and quotes out of context? An article titled “We are in a war against bitcoin,” says Turkey’s president” has been making the rounds over at Bitcoin-Twitter, receiving both mockery and rightful criticism. However, we noticed a crucial detail: the article doesn’t contain a direct quote from Erdogan. That’s suspect.

Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course

Armed with an iron will and Google Translate, NewsBTC explored the issue and came to unexpected conclusions. 

Let’s fall into the rabbit hole.

Is It War Against Bitcoin Or War Against Cryptocurrencies? 

The original article cited a mainstream and generally trusted source, an article in Turkish at Bloomberght titled “Erdogan: We have a separate war against cryptocurrencies.” Reportedly, the president held a Youth Meeting Program, so his audience for this was students from all over the country. They were discussing the Digital Turkish Lira, the country’s proposed CBDC, and one of the participants asked about their current views on cryptocurrencies:

“Erdoğan said that they do not have a problem of opening up to crypto money, on the contrary, they have a separate war and struggle against them.

Erdogan said, “We will not give them such a premium, nor will we. Because we will continue on our way with our money, which is our fundamental identity in this matter.”

He never even mentions a war against Bitcoin. Remember, this is a Google translation and some info might’ve been lost. However, the discrepancies are there. The President says they “do not have a problem” with crypto, but that “on the contrary, they have a separate war and struggle against them.” On the contrary to what? And do notice, it’s not a direct quote either. In the actual Erdogan quote, he says nothing about a war against Bitcoin.

We need more data. Let’s consult other sources.

What Did President Erdogan Say Exactly?

A quick search leads us to The New Arab. They don’t quote the President directly, but their translation makes much clearer the intent of what he said:

“Erdogan claimed that the country “definitely” doesn’t have a problem with the spread of digital assets.     

However, that Turkey would carry on with its own money, which he believes is part of the national identity.”

They don’t have a problem with the spread of digital assets because they’re preparing their CBDC, and their way to sell it is that money is “part of the national identity.” Got it. But, what about this war against Bitcoin thing?

A second search leads us to Newsbit, who seemingly quote a much more clear-headed President Erdogan directly:

“We have absolutely no intention of embracing cryptocurrencies,” the president replied, adding: “On the contrary, we have a war against them. We would never support cryptocurrencies. Because we continue with our own currency that has its own identity.”

Ok, now we know that Erdogan never said anything about a war against Bitcoin and always referred to cryptocurrencies. And that, in code, he was always talking about the Digital Turkish Lira. However, did he really say all that? That quote seems suspiciously close to the original Bloomberg quote, and that one wasn’t literal. If the President said everything that clearly, why wouldn’t Bloomberg quote him?

BTC price chart for 09/20/2021 on Exmo | Source: BTC/USD on TradingView.com

Time To Consult Primary Sources

Luckily for us, Newsbit linked to the Anadolu Agency, a Turkish state-run news agency. This is as close to primary sources as we’re going to get. A report on the whole event that only casually mentions cryptocurrencies at the end. Is the quote present in that report? What did President Erdogan say exactly? Well, according to the Anadolu Agency:

“Erdoğan said that they do not have a problem of opening up to crypto money, on the contrary, they have a separate war and struggle against them.

Erdogan said, “We will not give them such a premium, nor will we. Because we will continue on our way with our money, which is our fundamental identity in this matter.”

Related Reading | Turkey’s Economic Turmoil Shows Bitcoin Is a Better Bet Than Emerging Markets

That’s right! The same exact quote with the same exact wording that Bloomberg used at the beginning. So, Bloomberg literally copied and pasted their article. And Newsbit’s supposed quote is just a rewording of that phrase. We don’t know exactly what President Erdogan said, but at least his intention is clear: Yes to his CBDC. War on cryptocurrencies. And we know for sure he never said anything about a war against Bitcoin.

Cryptocurrencies and Bitcoin are not synonymous, journalists.

Featured Image by Faruk Melik ÇEVİK on Unsplash - Charts by TradingView

google news
Continue Reading

Bitcoin

With Bitfinex Integration, Can the Bulls Drive the Price for Polygon (MATIC)?

Published

on

With Bitfinex Integration, Can the Bulls Drive the Price for Polygon (MATIC)?
  • Twitter’s Altcoin Sherpa endorsed MATIC.
  • Polygon said MATIC token would soon be available on Bitfinex.

Since the market sell-off on September 7, MATIC has been attempting to regain its initial bullish momentum. Although lower highs outlined its positive trend, traders were unable to maintain prices.

Its recent rise from $1.20 may be beneficial if another higher high forms. Bulls would lose out if the market closed below the 23.6 percent Fibonacci threshold. According to CoinMarketCap,  Polygon price is $1.19 USD with a 24-hour trading volume of $1,143,929,659 USD.

Closing over $1.50 would have solidified an uptrend, but that wasn’t the case yet. A pair of red candlesticks on the charts signalled the end of MATIC’s next upcycle.

While MATIC’s trend is perplexing, the signs have improved. On September 15, the RSI climbed above the half-line and briefly into the overbought zone, indicating a bullish rebound. Bulls held sway as the RSI found support around the mid-line.

A Positive Trend Maybe Anticipated

Twitter’s Altcoin Sherpa endorsed MATIC. Despite the token’s current consolidation, prediction is of significant increases in the following run. As per the tweet, it expects MATIC to hit $1.75 on the next leg up.

MATIC was trying to build an uptrend following a double top formation, but market watchers were sceptical. The bulls had an advantage in each case, and a win is not out of the question. A positive trend may be anticipated if MATIC rebounds back from the 38.2% Fibonacci level and reaches $1.50.

Polygon just tweeted that MATIC token would soon be available on Bitfinex. It’s one of the oldest and most reputed liquid exchanges.

Thanks to Bitfinex’s integration, users will access MATIC on all major exchanges, including Coinbase and Binance. Also, it can act as a catalyst to bring back the lost momentum for MATIC.

google news
Continue Reading

Bitcoin

SushiSwap Fails to Break Major Resistance Area, Can it Break-Through?

Published

on

SushiSwap Fails to Break Major Resistance Area, Can it Break-Through?