Schnoor/Taproot Could Improve Bitcoin Privacy and Scaling – CoinDesk

If the privacy and scaling upgrade Schnorr/Taproot makes it into bitcoin (BTC), it could pave the way for advanced and heretofore impossible projects. That is, as they say, good for bitcoin.

Schnorr/Taproot has made a great deal of progress recently, moving from a theoretical privacy and scaling idea into actual code. But while the community is very excited about its future, the change is rather confusing. Why? Because it bundles together several different technologies proposed over the years and each one is technically and conceptually unique.

First, there are Merklized Abstract Syntax Trees (MASTs), a smart contract technology developers have been talking about since 2013. Then we add Schnorr signatures, a scaling change first proposed in 2015 by Pieter Wuille, and finally Taproot, a privacy technology built on top of both, proposed in 2018 by Greg Maxwell.

Privacy and scaling are two things bitcoin still lacks. But as badly as these changes are needed, massive updates like this one are hard and, as such, are few and far between in bitcoin.

One thorny issue is simply deciding what would go into the upgrade.

"I think the biggest struggle in the process was to come up with the exact set of features to deploy at the same time," Blockstream researcher Tim Ruffing told CoinDesk.

Here's a rundown of what changes made the cut, and what didn't.

How big is this update?

First, we must remember this update is helpful but it's not a magic pill that instantly morphs bitcoin into a super-scalable and private currency, as experts debated on Twitter recently.

"It's the right thing to do these improvements but they won't suddenly make bitcoin a private currency," Ruffing said.

There will be some clear improvements. First, more complex types of transactions will be easier to use. In the most typical transaction, one person "signs" a transaction, proving he or she owns the bitcoin and can send it. "Multi-signature" (multi-sig) transactions, on the other hand, require more than one person to sign a transaction. This update will make it easier for multi-sig users.

"It's likely that more wallets will support multi-sig because it's cheaper and more private with BIP-taproot," Blockstream researcher Jonas Nick told CoinDesk.

Multi-signature has many important use cases. First, the multi-sig dependent lightning network could potentially speed up and scale payments for bitcoin, solving massive issues with the digital currency. If lightning proves to be the future of bitcoin, this improvement could have a large impact by making these transactions smaller in size and cheaper to process.

Further, multi-sig transactions using the new technology will look the same as normal transactions. So even though the bitcoin blockchain is public and anyone can easily look up a particular transaction, with this technology viewers will have no idea that these transactions actually represent lightning channels.

"Lightning channel openings and cooperatives are indistinguishable on the blockchain from normal payments. This also means that opening a lightning channel is just as expensive as a normal payment," Nick said.

Finally, the change would pave the way for other improvements that weren't possible before. One such possible next step is the addition of "cross-input aggregation," another way of scaling bitcoin by as much as 25 to 30 percent.

Schnorr for more efficient signatures

Understanding these upgrades requires some understanding of how bitcoin works. Only with the right "private key" (like an access code) can someone "sign" a transaction, thereby sending bitcoin to someone else. This process produces a "signature" that is attached to the transaction. The beauty is that anyone in the world can verify that this signature was produced by the right key

We touched on a more complicated version of this, multi-signature transactions, where more than one person is required to sign a transaction. When such a transaction is signed using ECDSA (bitcoin's current signature algorithm), it produces a separate signature for each person.

But this might be unnecessary. With the help of Schnorr signatures, it is possible to squash all of this data into a single signature using key aggregation.

The biggest struggle in the process was to come up with the exact set of features to deploy at the same time.

This makes the special type of bitcoin transaction smaller in size -- to the tune of 30 to 75 percent, according to Bitcoin Optech, an organization that helps bitcoin businesses adopt new scaling technologies like Schnorr/Taproot.

These sorts of scaling technologies are important because downloading the full bitcoin blockchain is the most secure and trust-minimizing way of using bitcoin. But that process requires more than 300 gigabytes of storage space.

Schnorr signatures also allow for something called "batch validation," making it possible to verify that multiple signatures are valid, saving time.

But just as important is what this upgrade leaves out in terms of Schnorr.

Developers have long proposed using "cross-input signature aggregation" to build Schnorr signatures into bitcoin transactions. Usually, each transaction requires more than one signature, one for each "input," which is roughly equivalent to one bill out of a handful of them passed over to a cashier.

But what if we could squash all these signatures for every transaction together?

Schnorr signatures theoretically allow for this. But this feature will have to wait for another time, as developers are still working through some security problems with adding this to bitcoin. Though with Schnorr added as a signature option in bitcoin, this kind of functionality will be one step closer.

"This could be done in a future upgrade," Ruffing said.

MASTs: better smart contracts

Merkelized Abstract Syntax Trees (MASTs) aren't in the name of the upcoming bitcoin upgrade, but it's still a cool technology that developers have been talking about for a long time.

MASTs improve smart contracts in bitcoin, making it easier for users to set more complicated conditions for a transaction.

Think back to the multi-signature option we talked about earlier, where two people instead of just one need to sign a transaction. Then imagine a situation in which you want to say a bitcoin can't be retrieved until after a certain date. A user might want to combine these conditions at once. That's where MASTs come in.

Right now, when one of these scripts is "redeemed" the full script is squashed into a transaction, taking up a lot of room and showing the whole world what conditions the user used to lock up the bitcoin.

MASTs arrange these conditions in a new way that looks like a tree. Each branch of the tree holds a different condition a user could meet to spend the bitcoin. Then, only a hash of the tip of the tree is included in the bitcoin blockchain instead of all the script conditions.

This is more private because only the script used will hit the blockchain. All in all, MASTs make it much easier and cheaper to lock up bitcoin with these more complicated rulesets.

Taproot gives a privacy boost

Taproot builds on MASTs and Schnorr to create smart contracts with better privacy.

Generally, right now, transactions with complex scripts using MAST would really stand out on the blockchain. Even if MAST itself is more privacy-preserving, the format is a bit different for these transactions so it's easy to tell if someone is using a script or not.

Using the magic of signature aggregation Schnorr provides, Taproot would make these transactions look just like normal transactions.

But it doesn't work for every MAST contract, only for cooperative spends, where one branch of the Merkle tree is a multi-sig transaction, which is successfully used. If any of the other branches are used, then this privacy benefit disappears.

That said, developers expect the cooperative spend use case will be the most common use.

Then there's Tapscript, which could make it easier to make further improvements to the scripts we've talked about in the future. "While the BIP-tapscript changes don't immediately benefit the average bitcoin user, they are designed to make updates to the script system easier in the future," Nick said.

Right now, developers are battle testing this bundle of new technologies. So far no major problems have been found, but developers are making it the best they can before they try to add it to bitcoin with a soft fork.

"Just recently we've suggested a few minor changes to make the Schnorr signing algorithm more resistant to implementation mistakes and physical attacks," Nick said. As developers grow and expand bitcoin's technology, its changes like these that will truly make the platform usable for developers and financial professionals alike.

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Schnoor/Taproot Could Improve Bitcoin Privacy and Scaling - CoinDesk

Bitcoin price | index, chart and news | WorldCoinIndex


Bitcoin is the worlds first virtual digital currency underpinned by a completely decentralized blockchain technology also known as the Distributed Ledger Technology (DLT). Bitcoin was first created in 2009 by an anonymous identity of Satoshi Nakamoto. Bitcoin allows for peer-to-peer transactions and is completely free of any third-party involvement like financial institutions or central banks. The Bitcoins blockchain network maintains a history of all the transactions made and facilitates instant funds transfer with minimal transaction fees required to cover the cost of network operation. The total supply of Bitcoin is fixed at 21 million coins and its smallest fractional unit is called as Satoshi. Each Satoshi is a hundred millionth of a Bitcoin which means 100,000,000 Santoshi = 1 BTC. Bitcoins are generated by a process known as mining which involves solving of complex mathematical algorithms. The miners involved in the mining process look after the Bitcoin network security and validate each transactions taking place on the network. Bitcoin can be exchanged with other digital currencies or fiat currencies. Bitcoin is used as a means of payment by over 100,000 vendors and merchants.

Bitcoin is the worlds first cryptocurrency which works on a completely decentralized network known as the blockchain. The blockchain network consists a link of blocks that are secured using cryptography and record all the transactions. Bitcoin was first presented to the world in 2009 by an anonymous identity known as Satoshi Nakamoto. As Bitcoin works on a decentralized network, it is completely free from the involvement of third-party financial institutions or central banks. The Bitcoin blockchain facilitates instant peer-to-peer transactions at minimum transactions fees required to maintain the network. The total number of Bitcoins is fixed at 21 million with its smallest unit being referred to as Satoshi. Each Satoshi represents a hundred millionth part of Bitcoin which means that 100,000,000 Santoshi = 1 BTC. Additional Bitcoins are generated by a process known as mining. Bitcoins are mined by professional miners solving complex computational equations. For each Bitcoin mined, the miners are rewarded with either more coins or transaction fees. The miners also validate all transactions on the Bitcoin network as well as look after the network security. Bitcoin can be exchanged with fiat currencies or other digital currencies. There are over 100,000 merchants and vendors accepting Bitcoin all over the world.

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Bitcoin Lost Roughly 50% Of Its Value In A Day – Forbes

Bitcoin prices plummeted today, driven lower by various factors. (Photo by Chesnot/Getty Images)

Bitcoin prices plummeted today, shedding approximately half of their value as global markets were afflicted by widespread panic and liquidity problems.

The digital currency fell to as little as $3,867.09, CoinDesk figures show.

At this point, the cryptocurrency had plunged 49.6% from its price of more than $7,600 at the start of the day, and was trading at its lowest in almost a year, additional CoinDesk data reveals.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

When explaining bitcoins extreme price decline, analysts emphasized concerns surrounding the coronavirus and a global liquidity crunch.

Further, several market observers pointed to Asian trading as fuelling the digital currencys sharp losses over the last several hours.

Most of crypto is driven by the Asian market, said Marouane Garcon, managing director of crypto-to-crypto derivatives platformAmulet. The threat of coronavirus is greater over there.

Joe DiPasquale, CEO of cryptocurrency hedge fund managerBitBull Capital, also weighed in, stating that as Asia woke up to the market crash, it helped drive prices down further.

John Iadeluca, founder & CEO of multi-strategy fundBanz Capital, emphasized the importance of trading activity in South Korea.

When investors in the East Asian nation woke up several hours ago and began their day, they realized the destruction that the global financial markets caused while it was their night time, he stated.

The psychological stance as well as global virus pandemic are playing perfectly into one another to see cash as the only possible current safe haven, said Iadeluca.

While this latest drop may look dire for bitcoin, there may also be a silver lining, according to Michael Conn, founder and managing partner of financial services firm Quail Creek Ventures,

He stated that while the liquidity crunch continues, the current situation is an overreaction and will lead to buying opportunities in the near future, he said.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.

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Bitcoin Lost Roughly 50% Of Its Value In A Day - Forbes

Bitcoin Price Briefly Dips to 12-Month Low in Overnight Trading – CoinDesk – Coindesk

Bitcoin (BTC) has made a quick bounce from a dip to below $4,000 seen early on Friday.

The cryptocurrency is currently trading near $5,415, up around 40 percent from the low of $3,867 reached around 02:15 UTC. That was the lowest level since March 25, 2019, according to CoinDesks Bitcoin Price Index.

Equity markets are also flashing green alongside the slight recovery for bitcoin.

S&P 500 futures are currently reporting more than 3 percent gains, while the Euro Stoxx 50 index the eurozones benchmark index has added more than 2 percent to its value.

Asian markets had gapped lower at the open, tracking the overnight losses on Wall Street, but recovered a major portion of the losses before the closing bell.

Year-to-date losses

While bitcoins recovery looks impressive, the cryptocurrency is still down by more than $2,000 from levels near $8,000 seen early on Thursday.

Bitcoin is now reporting a 27 percent loss on a year-to-date basis after showing gains of 46 percent just a month ago when the cryptocurrency was trading near $10,500.

Back then, bitcoin was outshining gold by a notable margin, as the yellow metal was flashing a 6 percent gain for 2020. However, as of March 13, gold is back on top with a 7.5 percent year-to-date gain.

The yearly gains were shed as the cryptocurrency plummeted by nearly 39 percent on Thursday during the relentless coronavirus-led sell-off in risk assets. The resulting liquidity crisis was accentuated by a massive long squeeze (forced liquidations) on prominent crypto derivatives exchanges such as BitMEX.

Corrective bounce?

Bitcoins sudden crash to $3,867 from $8,000 looked overstretched as per technical studies.

The latest bitcoin correction has pushed BTC to oversold levels last seen in September 2019 and November 2019, co-founder and partner at Morgan Creek Digital Jason A. Williams tweeted today.

Indeed, the widely tracked relative strength index (RSI), which oscillates between zero to 100, had dropped to 15 the lowest since November 2018. A below-30 reading indicates the cryptocurrency is oversold.

As a result, the rise seen over the last few hours could be an oversold bounce," which occurs when investors view a preceding sell-off as too severe and ease selling pressure by squaring off short positions.

Focus on risk sentiment

Bitcoin will regain poise with risk assets, which will start seeing a sustainable recovery once there is stabilization in the coronavirus infection curve, Mike Alfred, co-founder, and CEO of Digital Assets Data told CoinDesk.

As per the latest reports, coronavirus continues to spread in Europe and the U.S. Therefore, the current uptick in the equity markets could be a chart-driven bounce or investors may have taken heart from the Federal Reserves decision to inject $1.4 trillion worth of liquidity into the financial system.

If the recovery gathers momentum during the U.S. trading hours, bitcoin could very well find acceptance above $6,000 once more.

However, as long as the virus outbreak shows no signs of slowing down, the risk of further downside moves in equities and bitcoin would remain high.

Still, dips below $5,000 would be transient, according to Alfred, as there is too much fundamental demand from long-term holders investors who bought bitcoins before the massive rally from $6,000 to $20,000 seen in the fourth quarter of 2017 and during the last five weeks of 2018.

Currently, there are 12.19 million addresses that acquired coins below $5,700, according to blockchain intelligence firmIntoTheBlock.

These players could increase their exposure on price drops below $5,000, especially with the miners' reward halving (a bitcoin supply cut) due in two months.

Alfred said the price range of $2,500 to $5,000 offers incredible value for investors.

Bottom in?

The bear market, which began at the end of 2013, ran out of steam at the 200-week average in 2015. Back then, the average was placed near $220.

The sell-off from the record high of $20,000 reached in December 2017 also ended at the 200-week MA in December 2018.

The long lower wick attached to the current weekly candle suggests seller exhaustion below the 200-week average. If history is a guide, bitcoin looks to have found a bottom below $4,000.

That does not necessarily imply a v-shaped recovery to $10,000. If the equities resume their sell-off, prices might revisit sub-$5,000 levels.

Disclosure:The author holds no cryptocurrency at the time of writing.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Price Briefly Dips to 12-Month Low in Overnight Trading - CoinDesk - Coindesk

Cyperpunk Myths and Bitcoin in Real Life with Udi Wetheimer – Coindesk

CoinDesk reporter Leigh Cuen is joined by VR meetup organizer Udi Wertheimer to talk about how bitcoin (BTC) fits into the broader cypherpunk movement.

The cypherpunk movement has expanded far beyond the 2,000 people who subscribed to mailing lists in the 1990s. In 2018, Entrepreneur reported there are more than 8,000 posts on Bitcointalk every day, while Coinbase garnered millions of user accounts. Such experimental technology is no longer the realm of just a few thousand geeks.

However, across the board, even in 2020 cypherpunk projects rarely exceed a few dozen regular contributors. For example, Exiledsurfer, an event organizer and hacker space co-founder from the Parallele Polis collective, said his space in Vienna was inspired by a collective in Prague that collects roughly $5,000 a month in cryptocurrency from members to share a venue. Likewise, the Vienna chapter accepts dues in DAI, monero and bitcoin, just to name a few.

Were a crypto pure organization, Exiledsurfer said. This will be an alternative asset class or, in a hundred years, there will by three guys in a garage in Topeka, Kansas, tweaking on a 2020 computer to keep the chain alive, just like people tweak on old cars.

The cypherpunk movement appears to be growing, albeit slowly.

I still get people every week, young people and programmers who say they want to give their lives to this thing, cypherpunk icon Amir Taaki said, underscoring why he believes the movement will only succeed through groups with structured training methods.

Theres a yearning need for this...we can build our own financial networks outside of the control of the state, Taaki said of the academy he plans to launch in Barcelona.

How do all of these pieces that were working on fit together to serve a higher goal? Whats our narrative? Taaki said.

Yet, even as a cypherpunk technology aficionado, Wertheimer disagrees with such collectivist views of our narrative or pure projects.

I dont think we need bitcoin evangelists, Wertheimer said. Well talk about why he views the ideological movement as divorced from user groups that may now utilize cypherpunk technology.

Want more? Read my article about how bitcoin compares to the early days of the internet.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Despite Bitcoin Price Dips, Crypto Is a Safe Haven in the Middle East – CoinDesk – CoinDesk

Although its difficult to quantify demand for bitcoin (BTC) in informal markets across the Middle East, small-scale traders from Lebanon to Yemen say interest in bitcoin as a safe-haven asset, not a speculative asset, is stronger than ever.

Rami Mohammad Ali, a bitcoin miner and trader based in the Palestinian area of East Jerusalem, said the sell side of the local peer-to-peer market dried up and the buy side exploded in March.

So far, hes sold a cumulative total of 30 bitcoin to 90 customers. Thats a significant increase from September 2019, when he said he sold roughly 20 bitcoin a month to 50 customers.

The appeal of holding value in bitcoin, he said, is that people can access the money any time they need it.

This appears to be true across the region. One anonymous Syrian trader with family in Lebanon said small Lebanese business owners are struggling to pay their invoices abroad. So, among the few Lebanese with family abroad and the necessary computer skills, some now buy [bitcoin] locally with cash and liquidate it abroad through friends and family to pay their invoices.

In fact, some Middle Eastern bitcoin traders reported relative newbies are learning quickly and looking to buy bitcoin this week, as global prices dip.

Meanwhile, in Tehran, an anonymous Iranian bitcoiner said people now tend to keep their assets in gold, dollars and housing, plus a little bitcoin. Due to the coronavirus outbreak in Iran, the economic situation has gotten progressively worse. This means fewer public bitcoin meetups and quieter trades among a population with even less faith in national institutions. Small-scale bitcoin mining is now commonplace, locals say, despite the challenges faced by industrial operations.

Bitcoin is a revolutionary product but it needs a few more revolutions, the Tehran-based bitcoiner said. In the past, people thought bitcoin was a new type of scam. Now bitcoin is more trusted.

The analytics firm Gate Trade estimated there are now more than 30 Iranian companies using bitcoin, instead of fiat, for cross-border deals. But a Gate Trade spokesperson declined to specify which companies because the greatest barrier to bitcoin adoption in the Middle East appears to be international sanctions. That challenge isnt limited to Iran.

Yemeni bitcoin trader Mohammed Alsobhi said roughly five civilians continue to buy a small amount of bitcoin each month. The bitcoin market in Yemen is much smaller and quieter than most in the region due to the widespread censorship of telecommunication networks. But there is interest among locals knowledgeable about computer science.

"If I had the capabilities available in developed countries, I would have made great progress in this field," Alsobhi said of selling bitcoin in his war-torn nation. "Most companies that deal globally are excluding Yemen."

He said he hopes people in Yemen will gain access to crypto markets for trading opportunities. But, he added, war is the biggest barrier to bitcoin adoption in his country because of sanctions. For example, due to compliance concerns, he said people in Yemen cannot download wallets via Google Play.

Crypto-curious civilians are barred from the system as the sanctions collateral damage.

Yemen offers a microcosm of the global challenges civilians face using decentralized monetary networks.

Stepping back, a currency war emerged from Yemens civil war between Iran-backed Houthi rebels, which conquered the former capital city of Sanaa, and the Saudi-aligned Central Bank of Yemen, now in Aden. Yemenites dont trust either side. Yemeni activist Tawakkol Karman recently accused President Abd Rabbuh Mansur Hadi of being just another pawn under the Saudi occupation.

As such, sanctions have ripple effects for civilians trapped between failing banks and warring parties. Yemens United Nations representative, Abdullah Al-Saadi, accused the Houthi militants of consorting with the ultimate target of U.S. sanctions, the armed forces of Iran.

The militias continue to welcome Iranian experts and receive military support and weapons from Iran, Al-Saadi said in a U.N. Security Council meeting in February.

With widespread reports of Houthi looting and the ongoing humanitarian crisis, the idea of digital cash appeals to some tech-savvy Yemenites in urban areas.

Most of the population of Yemen is in [Houthi]-controlled areas, and are engaged in the bulk of economic activity in the country, said Hassan Al-Haifi, an ex-banker based in Sanaa. Cryptocurrency or e-money could help Yemenites under a formidable siege and blockade. Sana'a would be favorable to a more autonomous currency regime.

Ben Freeman, a former Goldman Sachs oil trader and CEO of Creo Commodities, said cryptocurrencys value in the region relies on being decentralized and censorship-resistant. He doesnt believe bitcoins current volatility has any impact on that value proposition, especially in light of the risk Yemens civil war presents for Saudi Arabian oil production.

Extreme market sell-offs generally hit most asset classes as assets are sold to generate collateral for losing positions, Freeman said. If institutions break down, and bitcoin is independent to any institution or government oversight, then well start to see more flight to bitcoin as an asset class.

The hurdles preventing local adoption in the Middle East arent the lack of opportunity or demand; they are primarily the byproduct of political conditions. In Yemen and Iran, bitcoiners may need to avoid both domestic and international compliance risks. Most fintech companies overlook Lebanon and the Palestinian territories, even without sanctions. As such, there are few comprehensive or clear datasets related to usage beyond global (and heavily regulated) crypto exchanges.

This makes local markets hard to quantify. Still, it doesnt appear that broader market dips reduced demand on the ground for over-the-counter (OTC) trades. Institutional players fleeing bitcoin have little impact on demand from grassroots Middle Eastern networks. To the contrary, lower prices present an opportunity for buyers in emerging markets.

Bitcoin transactions in Iran increased [in 2020], compared to previous years, the Tehran-based bitcoiner said. But the slope seems gentle.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Despite Bitcoin Price Dips, Crypto Is a Safe Haven in the Middle East - CoinDesk - CoinDesk

New Bank Of England Governor Sent Bitcoin Buyers A Stark Warning – Forbes

Bitcoin crashed this week, losing almost 50% of its value in a little over a weekwith some thinking it could fall even further before finding a firm floor.

The bitcoin price, well known to be highly volatile, had climbed over $10,000 last month before crashing back in the face of broader market turmoil caused by the spreading coronavirushitting lows of just under $4,000 per bitcoin before rebounding to around $5,000.

Ahead of bitcoin's massive sell-off this week, the incoming Bank of England governor, Andrew Bailey, warned that bitcoin investors need to "be prepared to lose all [their] money"adding his voice to a raft of bitcoin warnings from top government officials and regulators.

Andrew Bailey, the incoming Bank of England governor, has previously said that owning bitcoin is ... [+] similar to gambling.

"Theres no guarantee of the value of bitcoin," Bailey, who will begin his term as Bank of England governor tomorrow, told the U.K.'s Treasury select committee at the beginning of the month, where he was defending his record as head of the country's Financial Conduct Authority watchdog, adding bitcoin "hasn't caught on that much."

"I've said publicly because we were concerned about itif you want to buy bitcoin, be prepared to lose all your money," Bailey said. "If you want to buy it, fine, but understand that what you've got has no intrinsic value. It might have extrinsic value, but no intrinsic value."

Bailey, who served as the deputy governor of the Bank of England from 2013 to 2016, has previously slammed bitcoin and other cryptocurrencies, comparing bitcoin investors to gamblers in 2017 because "[bitcoin] is not a currency" and is "a very volatile commodity in terms of its pricing."

Bitcoin's sudden sell-off has caused chaos within the bitcoin and cryptocurrency community, with one veteran trader warning the bitcoin price could crash below $1,000 per bitcoina level not seen since bitcoin's epic 2017 rally sent the bitcoin price from under $1,000 to around $20,000 in under 12 months.

Elsewhere, bitcoin bull and hedge fund multi-millionaire Mike Novogratzsaid he fears confidence in bitcoin has "evaporated."

The bitcoin price has given up all of its 2020 gains over the last week, falling back to levels not ... [+] seen since early last year.

Bitcoin's massive crashthis week has been put down to global market turmoil sparked by oil cartel Opec's failure to agree to a supply cut last weekend, sending the oil price to historic lowsbut some think bitcoin's move lower could have its origins elsewhere.

Opec, lead by Saudi Arabia, had wanted to cut oil production due to weaker demand caused by spreading coronavirus but some members, including Russia, torpedoed the plan.

Meanwhile, Bailey said the Bank of England would move quickly to soften the economic impact of the coronavirus outbreak under his leadership.

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New Bank Of England Governor Sent Bitcoin Buyers A Stark Warning - Forbes

2 Months Ago, Andreas Antonopoulos Explained Why Bitcoin Would Crash – Cointelegraph

Bitcoin (BTC) falling as a result of financial turmoil was obvious to one of the spaces leading speakers and educators he predicted it just two months ago.

Speaking on the What Bitcoin Did podcast on Jan. 3, the impact of a recession or similar event was obvious to Andreas Antonopoulos.

What most people dont realize I think is that, in the beginning at least, crypto will crash hard, he explained.

And the reason it will crash hard is because a lot of the venture capital, corporate investments and private investment from individuals that is based on cheap money and disposable income and excess cash in portfolios etc., like in any other part of the economy, will dry up.

That scenario forecast this weeks market mania to an uncanny degree. After some markets saw their worst day since 1987, Bitcoin followed by tanking 60% to lows of around $3,600 on some exchanges.

While commentators are scrambling to explain the phenomenon, Antonopoulos appeared to have already catered to such a scenario.

When people get scared, when there is a recession like that, they pull back their investments, and theyre going to pull back from crypto too, he continued.

Bitcoin derivatives trading volumes with March 12 spike. Source: Skew.com

He noted that Bitcoin alone in January required around $18 million of buys per day just to keep price parity.

From that perspective, I think the first order effect that happens if we have a recession is crypto crashes because all the liquidity dries up which is a classic effect and symptom of a recession.

Thereafter, Bitcoin has the chance to emerge as a safe haven, but the relative difficulty of accessing and storing for non-technical investors could form hurdles to adoption and price stability.

Antonopoulos concluded:

All of those things are really a symptom of the fact that we have a small lifeboat and a very, very large number of people who need saving.

BTC/USD managed to recoup some of Thursdays monumental losses the next day, but at press time still traded down 9%.

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2 Months Ago, Andreas Antonopoulos Explained Why Bitcoin Would Crash - Cointelegraph

Lost Your Bitcoin? Here Is How You Can Recover It – Bitcoinist

A programmer has released a tool that can recover lost Bitcoins using partial key data. The program simplifies what can be a painstaking and frustrating process when wallet data has become damaged or corrupted. Other tricks may also be employed to find lost funds.

Redditor u/Coding_Enthusiast recently released the tool, which he calls the FinderOuter. Although not the first program designed to recover lost key data, it simplifies the process. The FinderOuter has a simple interface that enables the user to enter the partial information for Base-58 or Base-16 private keys. It then recovers the entire key.

The open-source tool can be downloaded from Github. The author intends to add more features, such as the ability to use partially known information to recover full BIP-based seed phrases and passwords.

There is no shortage of potential users of this software, as missing information is responsible for many lost Bitcoins. In fact, by some estimates, as much as twenty-five percent of all existing Bitcoins are currently inaccessible.

It is next to impossible to recover missing private keys without a partial amount of information, yet not every case of lost Bitcoins is hopeless. For example, computer crashes have often been responsible for losing funds, but many tools exist, both hardware and software, that can restore failed hard drives.

Also, files believed to be corrupted are often easily recoverable. In fact, it is common for different hardware or operating systems to read data believed to be hopelessly lost. The same is true of files that have been deleted, as tools designed to recover erased data have been around for decades.

Any crypto investment strategy should start with a plan to properly store funds for the long-term. Simply put, the best way to restore lost Bitcoins is to never lose them in the first place. Unfortunately, the mishandling of cryptocurrency is all-too-common.

Cold storage, generally via hardware wallets, has long been considered the best means to protect against loss. However, recovery phrases for these devices must still be carefully written down and stored in a very secure location. Cryptocurrency should never be kept on exchanges, nor should wallet data be kept on any device without adequate backup.

Also, substantial amounts of cryptocurrency have now been lost because owners have died without providing needed recovery information. Thus, this possibility should be factored into any long-term investment plan.

Have you lost any or all of your bitcoins? Tell us in the comments below.

Image via Shutterstock


Lost Your Bitcoin? Here Is How You Can Recover It - Bitcoinist

Bitcoin & Gold Are Doing the Same Thing in Coronavirus Crisis: Pomp – Cointelegraph

On March 14, Tyler Winklevoss, the co-founder and CEO of Gemini and prominent early Bitcoin investor, took to Twitter to defend Bitcoin despite the recent market crash.

In the tweet, Tyler emphasizes that Bitcoin is still in its infancy, stating:

If bitcoin isn't gold 2.0, then what is it? The fact that it's not acting how you might expect only underscores just how early it is.

Supporting Winklevoss assertion, Anthony Pompliano, the co-founder and partner at Morgan Creek Digital, has attributed the recent crypto market meltdown to a broader liquidity crisis coursing through the global economy. He said:

Bitcoin and gold are doing the same thing, just as you would expect them to in a liquidity crisis..they go down. Same thing happened to gold during liquidity crisis of 2008 too.

As in 2008, the metals markets have suffered enormous losses as a result of the current liquidity crisis, with gold futures falling 4.25% and silver futures crashing 8% in a single day on Indias markets. Over the past week, gold is down about 10% compared to Bitcoins (BTC) 50% while becoming increasingly correlated since January.

Bitcoin-gold realized correlation. Source: Skew

In a recent episode of his Off the Chain podcast, Pomp argues that the shutting down of economic activity in response to the COVID-19 coronavirus pandemic has sparked a liquidity crisis driving down the prices of Bitcoin and gold despite their status as a safe-haven asset.

A liquidity crisis means that investors all rush to the exit doors at the same time, but there are so many more sellers than buyers that investors actually have a hard time offloading their assets for cash. Quite literally, investors begin aggressively lowering the price they are willing to accept for each asset in exchange for the cash which they are desperately seeking right now.

Pomp points to the 30% crash in the price of gold during the 2008 global financial crisis, stating: This [wasnt] because gold is a bad store of value or that it had lost safe-haven status after 5,000 years. It [was] because gold has a liquid market and investors needed liquidity over anything else.

Despite golds sudden drop in price, the Morgan Creek Digital co-founder notes that the price of gold nearly tripled in five years from $650 in 2006 to more than $1,800 in 2011 as concerns regarding U.S. monetary policy, inflation, and debt increasingly gripped the markets.

Simply, gold served as a store of value and safe-haven asset over the full timeline of the crisis, but it succumbed to the liquidity crisis during the worst 6 months. This is what I believe is happening to Bitcoin right now.

Pomp asserts that most investors who were holding Bitcoin for cash likely sold over the last week driving the huge losses recently sustained across the crypto markets.

While hesitating to guarantee that BTC will not see deeper local price lows, Pomp speculates that most investors who are still holding Bitcoin are holders of last resort who will not sell their BTC.

Regardless of price movements in the USD exchange value, the holders of last resort wont sell their Bitcoin. They are strong hands. They cant be shaken out of their belief. In fact, they are likely to be buying Bitcoin on these large price drops, rather than selling. They are exchanging USD for Bitcoin right now.

Further, Pompliano expects that the upcoming halving will coincide with the introduction of monetary stimulus measures and may further drive an influx of investors seeking safe-haven exposure.

Predicting interest rate cuts and quantitative easing, Pomp expects that investors will soon seek to weather the liquidity crisis by seeking exposure to sound money and safe-haven assets, adding:

Both gold and Bitcoin should do incredibly well during this time period.

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Bitcoin & Gold Are Doing the Same Thing in Coronavirus Crisis: Pomp - Cointelegraph

Here’s How Bitcoin’s Current Supply Would Look Like in 3D – Bitcoinist

Bitcoin is experiencing one of the most challenging periods in its twelve-year history, but lets leave the panic aside and imagine what the largest crypto would look like if it were physical.

Most regulators and government officials prefer to refer to Bitcoin as virtual currency, and for very good reasons the cryptocurrency supply resides on servers rather than our pockets and suitcases. Thanks to the magic of blockchain, we can transfer crypto at any distance without middlemen.

But what if Bitcoins were physical and we could put all of them in a pile? In order to visualize it, we used the metallic Bitcoin souvenir sold on online stores like AliExpress. This is what it looks like:

Most of these coins have a thickness of 3 mm and a diameter of 40 mm. Considering that Bitcoins circulating supply is just over 18 million, here is how much space youd need if you planned to hold all the physical coins in a vault:

Thats pretty compact, right? In this image created by our graphic designer, each bloc has 500 coins in height. For each of the three complete blocs, there are 100 coins in length and another 100 in width. Thus, a complete bloc has a total of 5 million coins.

Here is the same visualization from another angle:

If Bitcoin looked like a penny, then all of its market cap would be about a fifth of this:

This is the Penny Harvest Field, an exhibition at Rockefeller Center, featuring an estimated 100 million pennies worth $1 million. You can watch it from different angles here.

Bitcoin is often referred to as digital gold for its capability to store value. But how much space would you need for all the gold mined in history?

Last year, the World Gold Council estimated that all the gold ever mined weighed 190,040 tons, though other estimates may vary by up to 20%.

Here is an older image of all of the worlds mined gold when it was estimated to be at 166,500 tons. The cube with the dimensions of 20.5 meters would take much more space than the Bitcoins from our visualization:

Nevertheless, if it were all melted, it would fit within an Olympic Swimming Pool. Here are other interesting gold visualizations.

As for the US dollars, if you were to keep all them in cash, youd need even more room. Here is the visualization of one trillion USD:

Its worth mentioning that those pallets are double-stacked and are made of $100 bills.

To understand how much space you would need, you should know that the M0 money supply indicator, which includes all the physical dollars, is currently just below $3.5 trillion.

What do you think about our Bitcoin visualization? Share your thoughts in the comments section!

Images via Shutterstock, Bitcoinist: Caplevatchi Igor, AliExpress, Travelvista.net, Demonocracy.info, Pagetutor.com

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Here's How Bitcoin's Current Supply Would Look Like in 3D - Bitcoinist

Three things central bankers can learn from Bitcoin – MIT Technology Review

For central bankers, the game changed last summer when Facebook unveiled its proposal for Libra. Many have responded by seriously exploring whether and how they should issue their own digital money.

Arguably, though, the more fundamental change is more than a decade old. It was Bitcoin that first made it possible to transfer digital value without the need for an intermediary, a model that competes directly with the traditional financial system. The networks resilience against attackers suggests there is another way of setting up the system.

Last weekend at the MIT Bitcoin Expo held on campus in Cambridge, Massachusetts, I sat down with experts familiar with central banking as well as cryptocurrency. We discussed the practical concerns central bankers should be considering as they begin to design their own digital money systems. One common theme: central bankers have plenty to learn from Bitcoin.

Sign up for the Chain Letter blockchains, cryptocurrencies, and why they matter

Security can be achieved through resilience.

The US Federal Reserve has no current plans to issue a central bank digital currency (CBDC). But if it ever did, nine out of the top 10 requirements would pertain to security, said Bob Bench, director of applied fintech research at the Boston Fed. Because the second that thing goes live, he said, its the most attacked program in the world.

Bitcoin, with its mix of transparency, cryptography, and economic incentives, has something to teach central bankers about data security, according to Robleh Ali, a research scientist at the MIT Media Labs Digital Currency Initiative. Its a system that exists in a very hostile environment, and its proved to be resilient to that, said Ali. Its also a fundamentally different way of achieving security compared with how it is done in the traditional system: Rather than try to hide the data behind walls, its trying to make the system so its inherently resilient.

Keep it simple.

CBDCs can be thought of as third-generation digital currencies, said Ali. If Bitcoin is the first generation, Ethereum and other so-called smart-contract platforms, which include relatively complicated programming languages, can be seen as the second generation. While it may be tempting to add even more bells and whistles to a CBDC system, that would be the wrong approach, Ali said, because the more complexity you have, the more opportunities you give attackers to break in. What you want in the third generation is a much simpler system even than Bitcoin, he said. Its more about taking things away than adding things, and I think in terms of making it secure, that should be the mindset.

Privacy is going to be very tricky.

Ali said he expects not all central banks that choose to issue digital currency will use the same system, but many will likely pursue a hybrid between blockchain-based cryptocurrencies like Bitcoin and more traditional, centralized systems.

Such permissioned blockchain systems, also called distributed ledger technologies, could give central banks new tools, like the ability to program the currency to perform specific functions, said Sonja Davidovic, an economist at the International Monetary Fund. For instance, it may let banks automate their responses to certain kinds of economic changes and give central bankers more precise control over the money supply. They would also have much more detailed visibility into the goings-on in their respective economies. Theres a problem, however, said Davidovic: We havent really seen yet how privacy could be protected.

Bitcoin privacy is tricky. Though users are pseudonymous, its public accounting ledger, called the blockchain, makes all transactions traceable. How would a blockchain-based CBDC system keep transaction data private? How would it represent people on the blockchain? Unless the system allows only small transactions, users will have to identify themselves somehow in order to comply with anti-money-laundering rules. How will their identity data be protected from theft, fraud, or even government surveillance?

In the cryptocurrency world, so-called privacy coins like Zcash and Monero, which use advanced cryptographic techniques to hide blockchain transaction data from public view, have arisen as alternatives to Bitcoin. But even if central banks are able to do something similar, it still might be possible to construct profiles of people based on their metadata, said Davidovic: Im not entirely sure that this is a problem that technology alone can solve.

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Three things central bankers can learn from Bitcoin - MIT Technology Review

Top 5 Tools to Help You Invest in Bitcoin – Bitcoinist

With global markets spiraling across the board from oil and stocks to crypto you may not want to invest in bitcoin right now. That said, if you believe in its long-term potential, pro-investors will always tell you to buy the dip.

Warren Buffett maintains that the best time to invest is in a climate of fearand its pretty scary out there right now. He may not be rushing out to buy Bitcoin, but you can bet hes eyeing up other assets at a knocked-down price. If you want to take his lead, check out these top five tools to help.

Hands down, if youre going to invest in bitcoin or any other cryptos for that matter, you need to have a Telegram account. Theres a myriad of information on this behemoth social media platform and you can join a specific group, get news, ask questions, and find out the general market sentiment.

Check out some of the top Telegram crypto groups here for trading, chatting, trolling and, most of all, for seeing what to expect when you invest in bitcoin.

Arguably, if you just want to invest in bitcoin and hold for the long term, you may not need to get too deep into TradingView.

But if you do want to understand more about what caused certain volatile moves, find out what price calls top analysts are making in the space, and even become part of a community, this is a top tool for all that.

Google Authenticator is a must-have app on your mobile phone if you open up an account with an exchange like Coinbase and activate 2FA. Its much more convenient than receiving a text message to your phone number since you may change the sim or be unable to receive texts when you travel.

With Google authenticator, you wont have that problem. Its free and you just scan the QR code once to receive a unique code each time you log in, adding protection to your funds.

While enabling 2FA is definitely a good start, its much better to keep your funds in cold storage if youre going to invest in bitcoin for the long haul. Some folks prefer Trezor with its wide touch screen while others are firm believers in Ledger.

Being able to link the Nano X with your mobile phone and make transactions on the go is definitely a cool feature. But Trezors Gray Corazon is definitely a thing of beauty. Ultimately, which interface you prefer is down to personal taste, but the correct storing of your bitcoin is essential.

Love it or hate it, Twitter is an absolute must if you want to stay informed about the latest going on in the cryptocurrency space. Youll find out so much from reading the comments of key players in the industry and take part in some heated debates.

Watch out though! Crypto Twitter is not for the faint-hearted. In fact, it can be downright toxic at timesand addictive. So just like with bitcoin, never invest more time (or money) than you can afford to lose.

What tools do you use when investing in crypto? Let us know in the comments below!

Images via Shutterstock, Twitter @blockfolio

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Top 5 Tools to Help You Invest in Bitcoin - Bitcoinist

Investors Can Hedge Long-Term Risk With New 2-Year Bitcoin Derivatives – CoinDesk – Coindesk

Quedex, a Gibraltar-regulated derivatives exchange, recently launched a bitcoin contract with the longest expiration date in crypto.

The CEO of Quedex Bitcoin Derivatives Exchange, Wiktor Gromniak, told CoinDesk the firm had experienced a surge in investor interest in its new BTCUSD contract, which expires in December 2021 and only became tradable last Friday.

Quedex volumes surged past a record $5 million on Saturday, beating the previous all-time high of $2 million reached in February, according to the exchange.

"The new December 2021 products account for about 5 to 15 percent of total volume on the exchange ... we see it as relatively high and promising for a product which [has been] live for less than a week," Gromniak said. "What's interesting is that the new December 2021 expiry options are the most popular among options products."

Quedex's total volumes peaked at over $16 million between March 6 and March 13, more than the exchange's $9.8 million weekly average. Over the same timeframe, volumes for the December 2021 contracts came in at $1.2 million with most activity taking place on Thursday, where volumes peaked at nearly $900,000, according to Gromniak.

Operating since 2016, Quedex is regulated by the Gibraltar Financial Services Commission and offers various bitcoin-denominated products. As well as the two-year product, the exchange also offers contracts with expiries ranging from a week, to a month, to a quarter. Clients can also use a margin trading facility that comes with up to 10 times leverage.

The new contract's launch came before the coronavirus pandemic triggered mass sell-offs across both traditional and crypto markets. Contrary to the widely held safe-haven narrative, bitcoin's (BTC) price dropped to a 10-month low on Thursday, taking many traders completely unawares. Forced liquidations of long positions on derivatives exchange BitMEX have soared past $700 million, adding further downward pressure to the spot price.

While volatility is likely to continue for contracts with short term expiries, Gromniak attributes surging interest in his longer-dated products to investors trying to hedge their long-term exposure. Contracts with longer expiry dates, such as in two years' time, are not influenced by market downtrends such as the one sparked by the coronavirus, he said.

Previously, exchanges OKEx and FTX had the longest-reaching contracts that expired in December 2020. The longest contracts available on Deribit lists expire in September. Gromniak said Quedex would consider adding contracts with even longer expiration dates, but added the company would wait to see first if there was sufficient demand from the market.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.


Investors Can Hedge Long-Term Risk With New 2-Year Bitcoin Derivatives - CoinDesk - Coindesk

Attempts to Increase Bitcoin’s Supply Would End Up With Another "Bitcoin" – Cryptonews

A famous painting by a Belgian Surrealist artist, Ren Magritte. It says: This is not a pipe.

Bitcoin's supply cap is one of its biggest selling points. Limiting the network to almost 21 million BTC, the cap makes Bitcoin a deflationary currency.

Naturally, people have been questioning whether it might be possible to remove this cap. In theory, by simply submitting a pull request to Bitcoin Core's GitHub, a hosting service that is most often used for code, repository, a developer could potentially have the cap's removal introduced into a future version of Bitcoin.

But according to Bitcoin developers and other industry players, the likelihood of this happening is very low. Yes, its technically feasible, but at least now there's an enormous social consensus against such removal. Even if such a pull request goes through, most likely it would end up with another version of Bitcoin while the original cryptocurrency would still have its supply cap.

The most recent debate kicked off with a tweet from Angela Walch, a research fellow at the UCL Centre for Blockchain Technologies.

As Walch points out, there are only so many reasons why a pull request to update Bitcoin Core's code can be rejected by an editor. These include duplication of effort, disregard for formatting rules, being too unfocused or too broad, being technically unsound, not providing proper motivation or addressing backward compatibility.

However, another cause for rejection is the failure to comply with Bitcoin's philosophy. It's here that Walch's suggestion falls down, since a raised or unlimited supply cap would almost certainly depart from this philosophy, and it would almost certainly confront widespread opposition from Bitcoin developers.

"In order for a pull request to be accepted, it first needs to go through peer review," explains Benedict Chan, the chief technical officer for BitGo.

"A change to the supply cap would represent a significant modification to the behavior of the software properties, and would likely generate substantial discussion and pushback "NACK"s [negative-acknowledgments]. Without clear consensus, no Bitcoin core maintainer would merge it into the code repository."

But even if Bitcoin developers were to insert the removal of the cap into a new Bitcoin Core version, this doesn't necessarily mean that Bitcoin would have its cap removed.

"Once the new release is distributed, different stakeholders - users, miners, and various organizations that service the industry (exchanges and wallet providers) must all download and run it," says Benedict Chan.

Watch the latest reports by Block TV.

"These stakeholders are incentivized to verify the behavior of the code, understand what they are running, and (hopefully) act in a manner that will be positive for themselves and Bitcoin. They may not see the removal of the supply cap as an improvement, and thus not move forward to run it."

In other words, even if the developers release a new version of Bitcoin without the supply cap, the people who actually run Bitcoin may refuse to use it.

Guardian Circle CEO/Co-founder Mark Jeffrey agrees.

"If a change of this magnitude WERE to somehow make it through the Bitcoin developer community, there would be a revolt at the miner and exchange level," he says. "I'd expect a major fork to occur, and I would expect the market to largely rally around the fork where the 21m cap was preserved."

A fork into two separate cryptocurrencies would occur, and this leads CEO and co-founder of Bull Bitcoin, Francis Pouliot, to argue that the forked cryptocurrency without the 21 million supply cap would no longer be Bitcoin.

He tells Cryptonews.com, "Bitcoin's supply cap cannot be lifted, because whatever shitcoin is airdropped to existing Bitcoin users, even if its promoters call it Bitcoin, will be incompatible with the existing Bitcoin network and therefore would not be Bitcoin."

Meanwhile, there is another Bitcoin supply cap-related narrative, popular among the Bitcoin skeptics and in the camp of altcoins and altchains.

For example, Emin Gn Sirer, CEO of AVA Labs, the developer of the AVA blockchain, says that an alteration to the 21 million cap might be necessary after three more Bitcoin mining reward halvings due to security reasons.

"As the amount of awards given to the miners dwindles down, the security of the network will drop, he says, forecasting massive double-spend attacks targeting exchanges and suggesting that removing the supply cap would solve this.

However, Bitcoiners say that Sirer is wrong and halving block rewards wont weaken Bitcoins security. Read about it here.

Originally posted here:

Attempts to Increase Bitcoin's Supply Would End Up With Another "Bitcoin" - Cryptonews

What the Oil Market Says About Bitcoin’s ‘Safe Haven’ Status – CoinDesk – Coindesk

Mondays historic financial tumult reached beyond stocks, sinking commodities and even bitcoin markets.

I dont think any asset is safe right now except cash, U.S. dollars, said Ali Khedery, formerly Exxons senior Middle East adviser and now CEO of U.S.-based strategy firm Dragoman Ventures.

While bitcoin (BTC) prices dropped nearly 10 percent over the weekend, Saudi Arabia slashed its export oil prices when Russia refused to support an Organization of the Petroleum Exporting Countries (OPEC) effort to reduce oil production. Coronavirus quarantines mean fewer cars on the road, economic slowdown and less demand for oil, experts warn.

Matt Smith, director of commodity research at ClipperData, described the current state as an oversupplied oil market where Saudi Arabia made a drastic move, harming everyones bottom line, in an effort to to get Russia back to the negotiating table.

Smith said it will be difficult for nations to reconfigure their supply chains to circumnavigate the oversaturated market. Although nations like Iran appear to be interested in using the bitcoin mining industry to turn cheap power into global assets, both Smith and Khedery agree theres no serious interest in bitcoin as a market alternative any time soon.

In times of crisis, all markets correlate, Smith said, arguing the dip contradicts bitcoins safe haven narrative.

Plus, an anonymous bitcoin mining farm operator in Iran said many operations are stalled by regulatory setbacks such as penalty fees for subsidized electricity. Bitcoiners may be thrilled about the potential to turn surplus energy into bitcoin, but so far it doesnt appear as though OPEC members are prioritizing mining infrastructure for that approach. The Iranian miner said the local industry doesnt appear to have any connection to strategies for abating a broader market crisis, at least none civilians are aware of.

Yet, if the oil market continues to plummet, Khedery said, It may cause Iran, Iraq and Venezuela to collapse.

Iran is in deep trouble, Khedery added, speaking of the oil-exporting nation hampered by both sanctions and a coronavirus outbreak.

Regardless, bitcoin bulls remain unfazed. Electric Capital co-founder Avichal Garg tweeted bitcoin may become a safe haven asset in the future. Bitcoin-focused investor Tuur Demeester said he expects the broader market chaos to increase bitcoins dominance on exchanges.

What you want in a period of crisis is options, Demeester said. Youll be attracted to an asset thats liquid. There are some people who are being forced to sell [bitcoin]. But, overall were in a very healthy [bitcoin] market.

Likewise, Gabor Gurbacs, director of digital asset strategies at VanEck/MVIS, said adopting a bitcoin strategy is in the best interest of any country heavily involved in energy markets.

While for now the petrodollar system remains dominant and the U.S. dollar outperforms other currencies, sovereign nations are increasingly searching for alternatives, Gurbacs said, adding the safe haven narrative hasnt been disproven because bitcoin is a relatively young asset and its not a full-fledged store of value yet.

There were, indeed, rumors at the World Economic Forum in January that some nations are actively looking for alternative currencies to settle energy market trades. But such forum participants generally dismissed bitcoin as too nascent, and alternative fiat systems as a poor substitute for the dollar, at least so far.

The Russians and Chinese have been trying for years. And failing, it seems, Khedery said.

Regarding the proverbial petrodollar, he added nations cant displace [USD] until there is a viable alternative.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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What the Oil Market Says About Bitcoin's 'Safe Haven' Status - CoinDesk - Coindesk

Bitcoin and the coronavirus: bulls vs bears – Decrypt

The coronavirus: cases are now above 120,000 worldwide, and the World Health Organization has officially determined its a pandemic. Its torn families apart, tanked the global economy, and world leaders are calling it the biggest global crisis in decades.

So, uh, hows the coronavirus affecting crypto? Though some claim that Bitcoin doesnt track regular marketsthis week it did. Just as global markets sharply dropped this week, on early Friday morning, the price of Bitcoin sunk to its lowest since March, 2019, valued at $4,106, according to metrics site CoinMarketCap. Like global markets, its recovered slightly, now valued at around $5,425.

So, are people getting rid of magic money so they can feed themselves under quarantine? Or will Bitcoins price pump back up as global markets decline, proving it to be a safe haven after all? We asked the crypto-experts, in the latest edition of Bulls vs Bears.

Eric Wall, CIO at crypto investment firm Arcane Assets, told Decrypt that this short-term volatility is down to people de-risking their portfoliocryptos a risky asset, even when the economys doing well. But in the longer term, Wall said, coronavirus-related stimulus packages from governments are likely to further bankrupt fiat's reputation as a form of store-of-value.

He thinks that the crisis will reveal to investors that cryptocurrencies represent the only non-inflatable monetary asset that exist in a digital form that we have access to. COVID-19 is a much greater stress test to the fiat currency system than to cryptocurrencies, Wall pointed out: In a way, they're excellently positioned to benefit from this tragedy.

In a way, [cryptocurrencies are] excellently positioned to benefit from this tragedy.

Eric Wall

Jack O'Holleran, CEO of SKALE Labs, a decentralized application startup, thinks its business as usual for Bitcoin, except we're doing more virtual events and less handshaking. He acknowledges that public market drops will certainly affect new financings in crypto and overall assets flowing in, but that crypto wont feel the economic shock as much as the travel, oil, and gas industries.

If anything, the funding shortages that follow the coronavirus will cut the fat off of the crypto economy, allowing well funded and well executing projects to come out of this in an even stronger position."

Mike Alfred, CEO and Co-Founder of Digital Assets Data, which builds software for crypto hedge funds, told Decrypt that Bitcoin is setting up for a very bullish 18-20 months, and I don't think coronavirus will have any long term impacts on it. He thinks that Bitcoin has behaved well amidst coronavirus scares; some days it appears to be correlating with certain assets, but in the long run it is not correlated with anything, he said.

If anything, Alfred said, the recent interest rate cuts are bullish for Bitcoin, as they create more liquidity for investors. And in 2020, Bitcoin has the highest daily average price over any year of its existence, he said. Granted, 2020 hasnt lasted that long, but this further supports a more bullish backdrop for the upcoming Bitcoin halvingwhen, in mid-May 2020, the supply of Bitcoins issued as mining rewards will cut in half. (Some think the halving will lead to a price bump for Bitcoin.)

Dan Schatt, CEO of Cred, a crypto loans company, told Decrypt that the euphoria that had been predicted in the run-up to Bitcoins May halving looks to have been dampened. He pointed out that governments around the world are creating fiscal stimulus packages, including the delivery of so-called helicopter money. But aside from further rate cuts, which are already historically low, theres not a lot else that policymakers can do, he said. He expects high volatility over the next few weeks, though thinks that the market will pick up following the Bitcoin halving.

Brian McCabe, Head of Market Insights at Paxful, a peer-to-peer crypto marketplace, takes a cautious approach. He thinks that Bitcoin could benefit from economic pain caused in countries that must pay debt back in the US dollar.

If the coronavirus continues to weaken local currencies and makes the dollar stronger, McCabe said, money will continue to flow out of these economies and their relative debt will increase. That could lead to Bitcoin once again becoming the alternative, if these economies continue to come under pressure and people are unable to preserve wealth in their own currency.

But equally, McCabe said, Margin calls and investors losing money in equities and other higher-risk markets should lead to more people having to close positions in Bitcoin to reduce overall risk exposure. He notes that its a similar flight to safety to that which caused the yield on US 30-year treasury bonds to reach a record all-time low this week.

David Gerard, blockchain critic and author of Attack of the 50 Foot Blockchain, pointed to the impact of the coronavirus on crypto conferences. Conferences are important for generating buzz around coins and new crypto financial instruments as well, Gerard said. Video can replace the main sessions, but it can't replace the "hallway track"meeting people you didn't expect to and talking, he said.

The death of conferences is not, of course, fatal to crypto, but if companies cant meet investors, then business cant flow, and deals wont be made. Decisions might be postponed until the conference circuit is revived, whenever that may be.

Of course, with Bitcoin forming such a minor part of the global economy, cryptos future may be out of the hands of a group of pundits. According to Ido Sadeh Man, founder and chairman at the board of Saga, a reserve-backed global currency: "If coronavirus teaches us anything is that we live in a hyper-globalized world, whether we like it or not. The exact same virus in the 1980's would have been a Chinese crisis, not a global one."

Sure, Man adds, in such unstable times, people seek first to regain the security they feel is not provided by their national institutions. But perhaps a truly international currency like Bitcoin will show its worth. As uncorrelated as it maybe, Bitcoin may reside in the side of crisis opportunities, he said.

But one things for sure, as Sinjin David Jung, founder and Managing Director at the International Blockchain Monetary Reserve, a social impact economic development reserve and advisory, pointed out: There are no bulls or bears when the entire global economy is being brought down to its knees as the very issue of life and death now take center stage.

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Bitcoin and the coronavirus: bulls vs bears - Decrypt

While the Crypto Market Was Hemorrhaging Value, These Tokens Mooned – Bitcoin News

Why do certain altcoins moon? Its a question that all crypto holders have pondered at some stage while enviously eyeing the ascent of a token that wasnt even on their radar, let alone their portfolio. If the performance of obscure tokens in a bull market is discombobulating, how to explain such breakouts in a deep bear market? Over the last seven days, a minority of digital assets have inexplicably posted impressive gains.

Also read: Sending Cash to Friends and Family Through Bitcoin ATMs Is Safer Than Crowding Bank Offices During Pandemic

Over the past week, while the crypto market was shedding half its value, a handful of coins picked the worst time to perform their best. These obscure low cap and low volume cryptos witnessed the sort of gains that havent been seen since the halcyon days of 2017. In hindsight, these coins would have provided a rare chance to profit in this most turbulent of weeks. However, the devil is in the details, as they say, and on closer inspection, not all of these gainers were as profitable as their percentage increase would suggest.

Youve probably never heard of Finexbox, a Hong Kong-based P2P exchange, any more than youll have heard of The Stone Coin (TSC). If the data is to be believed, however, TSC is up 17,700% for the last seven days, thanks to $45M of trade on Finexbox. Your skepticism is warranted.

Uranus (URAC) is another coin thats inextricably enjoyed a good week. The token which puts the ass in digital asset is up 580% for the week, thanks to steady trading on Bittrex and Hotbit.

The trade volume for most of the altcoins in the green this week is pitifully low, as is to be expected. As a result, many of the percentage gains can be discounted as they were achieved in illiquid markets where a single buy order can be enough to make the price jump. This includes monero classic (XMC), up 195% and tradable on Hitbtc and Gate.io, and Universe (UNI), up 46% with volume of $362,000.

The most legit looking asset thats positive for this week is polkadot (DOT), which is swapping for $118 a token and is up 27%. Other legitimate cryptos that have outperformed the market include gifto (GTO), up 20%, after which the remaining coins in profit are almost exclusively stablecoins, whose minor deviation above their dollar peg attests to their demand. A record $100 billion of stablecoins was traded on March 14 according to stablecoinindex.com, with USDT leading the way, followed by USDC and TUSD.

For traders seeking winners from the graveyard of dead and dying altcoins, there is a subset of remaining candidates that stands out. This niche group of tokens has performed very well over the past week. XRPBEAR is the FTX-issued token for shorting XRP with 3x leverage. Its up 17% for the week. Its counterpart BNBBEAR is up 27%, ETHBEAR is up 40%, and BEAR for shorting BTC 3x is up 10%. You know youre in a bear market when the best performing tokens are those that were designed to thrive in a sea of red.

Do you think the worst of the market downturn is over, or are we just getting started? Let us know in the comments section below.

Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the money.

Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see whats happening in the industry.

Kai's been manipulating words for a living since 2009 and bought his first bitcoin at $12. It's long gone. He specializes in writing about darknet markets, onchain privacy, and counter-surveillance in the digital age.


While the Crypto Market Was Hemorrhaging Value, These Tokens Mooned - Bitcoin News

The Fight for $5k and the Bitcoin Bull is on Price Analysis – CryptoGlobe

Its really time for Bitcoin (BTC) to put up or shut up, as markets around the world continue collapsing in the face of COVID-19 reactions. Bitcoin in particular is on its knees, shaving the skin off of the final uptrend that can possibly save it from pure oblivion, around $5k.

Starting the weekly, we see that Bitcoin is just now fighting to hold a level that is probably one of the most critical levels in its entire price history. This level surrounds a multi-year uptrend, the Bitcoin Bull as some people call it.

BTC chart by TradingView

Less important, there is also a significant support/resistance level here, as well as the 200-week moving average. The deep buy wick that we have already seen is, perhaps, some glimmer of hope that the level can ultimately survive.

Turning to the monthly something Ive never done here we can note two things. The first is that, if support around $5k is lost, the next major inflection/support zone is down squarely at $3k.

BTC chart by TradingView

The second thing is the notable volume gap we see from about $6.1k to $4.6k. For our purposes, this is a good thing, as it increases the likelihood that Bitcoin will be able to remain in this zone for the rest of 2020. This is because volume gaps tend to want to be filled and tend to attract trading although, by the same token, we might be worried about the volume gap at $3k as well.

Finally, if we take a look at Bitcoin and altcoin dominance, we see that the previous trends have been fractured with no new one emerging yet. The previous risk-on trend Bitcoin down, alts up has clearly been halted with Bitcoin coursing up again from 61%, and altcoins holding at 7%.

BTC chart by TradingView

Anecdotally, we might expect alts to continue back down and Bitcoin up, as risk flies away from all markets as fast as it can crypto proving to be no exception, so far.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photovia Pixabay.com

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The Fight for $5k and the Bitcoin Bull is on Price Analysis - CryptoGlobe

Crypto Exchanges Overwhelmed on Bitcoin’s Most Volatile Day of the Year – Bitcoin News

Binance chief Changpeng Zhao referred to it as Bloodbath day, and many in the cryptosphere will echo those sentiments, as fallout from the COVID-19 pandemic reverberates through global markets. As crypto exchanges were thronged by frantic traders looking to capitalize on or seek refuge from the unprecedented market dump, several platforms buckled under the pressure.

Also read: Market Update: Global Economy Jolts Bitcoin, Overall Crypto Cap Loses $50B

A panic-stricken sell-off of bitcoin and other risk-on digital assets has led to a number of crypto exchanges experiencing outages. On Thursday, March 12, Binances CZ noted that the platforms load was 5x greater than all previous peaks. The exchange was handling 146,500 messages per second, with a 30GB/s market data push from a lone source. Aside from the occasional glitch, Zhao says systems appear to be holding up for now. Kraken was also briefly down earlier today.

Over on Bitmex, the Seychelles-based exchange experienced the most liquidations in 16 months: $702 million worth, $698 million of which were longs. The Ethereum network, meanwhile, has been toiling under heavy network congestion, with gas prices spiking to as high as $3.70 today, and transactions waiting hours to be processed. Binance has temporarily increased withdrawal fees for ETH and ERC20 tokens.

Network activity has been driven up by traders seeking to sell their holdings and under-collateralized defi positions being forcibly liquidated. ETH also nosedived by 35%, its most significant one-day decline since 2018. The price of BTC, meanwhile, fell below $6,000 for the first time since May while altcoins also plummeted. Against this wild backdrop, we have a halving on the horizon.

The theory that bitcoin might be a safe haven as oil, stocks, equities and bond yields plunge has been disproved: but even gold, widely viewed as the ultimate safe haven asset, dropped by more than 1% on Changpeng Zhaos aptly-titled Bloodbath Day. Most crypto traders are seeking refuge by switching into stablecoins while knife-catchers have been buying up cheap coins in anticipation of the next rally. Volatility remains a traders best friend. As Bitmexs Arthur Hayes put it, I know all you HODLers say you love cheap coins, but will you really back up the truck if the S&P is flirting with 2,000? We shall see. He added:

The time to back up the truck is when the futures basis goes flat or negative. That will signal an evaporation of optimism. Then you must surf the tidal wave of free money, and begin buying crypto with both hands. First fill your Bitcoin handbags, then acquire all the other dog shit even CRipple might pop. Long live volatility, and stay healthy.

To say the economy has experienced turbulence in the wake of coronavirus would be a gross understatement. Assets are in virtual freefall across traditional and crypto markets, with pledges by the Fed and the Bank of England to cut interest rates seeming to have little effect.

Cruise liner and airline stocks have been some of the worst hit, with Boeings stock dropping 50% from last year. Numerous flights have been cancelled, and President Trump has announced a travel ban on 26 European countries in an attempt to contain the virus. Italy, one of the worst-hit countries, has come to an eerie standstill, all shops and restaurants except pharmacies and food outlets closed to the public. Many believe their own nations will soon follow suit, as infection spreads at a frightening pace.

Although the short-term outlook for bitcoin remains bearish, and sentiments like keep calm and HODL have been doing the rounds on Crypto Twitter, the sense of frenzy is impossible to ignore. As Messaris Ryan Selkis urged, Its ugly today, but this too shall pass. Stay safe. Keep building.

Where do you see the crypto markets heading from here? Let us know in the comments section below.

Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see whats happening in the industry.

Kai's been manipulating words for a living since 2009 and bought his first bitcoin at $12. It's long gone. He specializes in writing about darknet markets, onchain privacy, and counter-surveillance in the digital age.

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Crypto Exchanges Overwhelmed on Bitcoin's Most Volatile Day of the Year - Bitcoin News