Mining

Russian Official: Cryptocurrency Bill Completed — Effects on Payments, Exchanges, Miners

04/04/2020 by Idelto Editor

The chairman of the Russian State Duma Committee on Financial Markets has confirmed that the bill which provides the regulatory framework for cryptocurrencies in Russia has been completed. The official explained key features of the bill, including how cryptocurrency exchanges and miners will be regulated. However, the bill’s adoption has been delayed due to the coronavirus pandemic.

Also read: IMF Declares Global Recession, 80 Countries Request Help, Trillions of Dollars Needed

Work on Russia’s Cryptocurrency Regulation Completed

Anatoly Aksakov, Chairman of the State Duma Committee on Financial Markets, has confirmed that work on the law “On Digital Financial Assets” has been completed, Russian media RBC reported this week. Aksakov, who is also the deputy of the State Duma of the Federal Assembly of the Russian Federation, has been overseeing the drafting of the bill.

The chairman explained that the bill provides the definition of cryptocurrencies and prohibits their use as a means of payment, elaborating:

We came to the conclusion that it is necessary to define these tools but to prohibit their use as a means of payment. The law will define digital financial assets, the procedure for their issue and circulation. It will also include the issue and circulation of digital assets secured by goods.

While noting that cryptocurrency mining is not mentioned in the bill, Aksakov stressed that it “is a type of business that produces value,” so it should be taxed. In addition, he clarified that the new law will not interfere with crypto exchanges if they do not violate any directives, but their activities will be regulated.

Impact of Coronavirus Outbreak on Russian Crypto Bill

While work on the bill to regulate cryptocurrencies in Russia is done, Aksakov explained that its adoption has been delayed due to the coronavirus pandemic, “probably until the end of spring.” The official indicated that “Because of the coronavirus, all legislative processes have slowed down, the focus of attention has switched to priority measures to combat the pandemic,” the publication conveyed.

The bill “On Digital Financial Assets” was first submitted to the State Duma in March 2018. Aksakov said several times in the past that the bill was ready. However, he later explained that due to irreconcilable disagreements in the government regarding this new type of asset, the bill was repeatedly amended and its adoption subsequently delayed. The central bank, for example, has opposed its legalization.

What do you think of the Russian crypto bill? Let us know in the comments section below.

The post Russian Official: Cryptocurrency Bill Completed — Effects on Payments, Exchanges, Miners appeared first on Bitcoin News.

The Bitcoin Cash Halving Countdown – 50% Less Block Reward in 4 Days

04/04/2020 by Idelto Editor

The Bitcoin Cash (BCH) network will face a halving in four days and many BCH proponents are getting ready for the big day. Unfortunately, the covid-19 outbreak has overshadowed the halving and BCH has dropped in value by roughly 30% since the end of February.

Also Read: Bitcoin Halving Will Drop Inflation Rate Lower Than Central Banks’ 2% Target Reference

Bitcoin Cash Will Experience a Halving in 4 Days – Block Rewards to Drop by 50%

BCH supporters are getting ready for the big halving day, at least the best they can since most of the world has been stuck at home due to the coronavirus. So far, roughly 87.4% of the 21 million BCH available are in circulation and there’s around 18,366,500 BCH at the time of publication. Every four years, the BCH network sees a reward halving as the system’s rules are meant to make the issuance rate harder.

The Bitcoin Cash halving will take place in four days on or around Passover, April 8. Typically, there’s about 1,800 BCH mined per day, which gives the chain an inflation rate of 3.6%. Bitcoin cash miners finding a block on the BCH network today get approximately 12.5 BCH, but after the halving they will only get 6.25 coins.

The Bitcoin Cash network’s drop in issuance will change the inflation rate to an estimated 1.8% per annum. The mathematical and probable monetary system is a stark contrast to the unpredictable monetary system that the world’s central banks provide. Central banks, like the Federal Reserve, claim to keep the inflation rate at 2%, but reports from shadowstats.com note that the real U.S. rate could be as high as 10%. No one knows how bad the inflation rate will get now that central banks worldwide have started creating trillions in fiat currencies out of thin air.

The Fed’s schemes are completely different from the issuance rate Satoshi Nakamoto designed and the 1.8% per annum inflation rate for BCH will continue to get better. For instance, by the end of 2024, it is estimated that the BCH inflation rate will be around 1.1% and it will drop to 0.9% the very next year. By the end of 2028, around 20.5 million BCH should be mined by then and the inflation rate is expected to be about 0.5%.

Four days before the halving, there’s around 3.63 exahash per second (EH/s) mining the Bitcoin Cash chain. On Friday, there are 10 different mining pools hashing away at the BCH chain. This includes operations like Antpool, Viabtc, Bitcoin.com, Btc.top, P2pool, Huobi, Poolin, Mining-Dutch, Btc.com, and Prohashing. Antpool captures the most hashpower on April 3, with 32% of the overall hashrate, while 6.5% of the hashrate is mined by stealth miners.

Miners have about 8,500 coins left to mine and there are about 680 blocks left until the halving. BCH difficulty is around 486,638,039,618 and mining profitability between BTC and BCH has been less volatile lately. At the time of writing, it is 1.6% more profitable to mine the BTC blockchain and BTC miners face a halving in 39 days.

Interesting Times Ahead

BCH fans are excited about the upcoming halving and a number of proponents discussed the subject two days ago, when there were six days left until the halving. Electron Cash developer Calin Culianu (Nilac the grim) said that he hopes things work out for the best. “Lord help us make it through these all-around crazy times better than we were entering into them,” Culianu wrote. “Interesting times ahead indeed,” Reddit user Jackandjill22 responded. The following day, Poolin executive Alejandro De La Torre tweeted:

Only five days to go for the bitcoin cash halving. This is an event to monitor, might be indicative of what’s to come with the bitcoin halving.

With the covid-19 outbreak, it’s likely that there won’t be any Bitcoin Cash halving parties come April 8. Most people will be monitoring the BCH reward reduction from home and they will surely be watching the price and the hashrate after the halving kicks in. If you are interested in reading about specific halving countdown websites for every Bitcoin branch reward reduction, then check out this article on the subject.

What do you think about the upcoming BCH halving? Let us know in the comments section below.

The post The Bitcoin Cash Halving Countdown – 50% Less Block Reward in 4 Days appeared first on Bitcoin News.

Bitcoin Halving Capitulation: ‘Mining Death Spirals Don’t Happen in Real Life,’ Says Report

31/03/2020 by Idelto Editor

As the bitcoin halving approaches, crypto-mining ‘death spirals’ and miner capitulation have become prominent topics among digital currency enthusiasts. Despite the trending discussions, Coinshares head of research Christopher Bendiksen published a study that says “[bitcoin] mining death spirals do not actually happen in real life” and the speculation is a “highly theoretical edge case.”

Also read: ‘Bull Run May Not Come Immediately After Bitcoin Halving,’ Says Bitmain’s Jihan Wu

Bitcoin Halving, Death Spirals, and Miner Capitulation

After approximately 210,000 blocks are mined on BTC’s blockchain, the network’s block subsidy halves and after May 13, BTC miners will get 6.25 coins instead of 12.5. The halving event happens roughly every four years and the upcoming one, in particular, has caused crypto enthusiasts to speculate on what will happen after the event. Moreover, the recent covid-19 outbreak has caused economic calamity worldwide, as cryptocurrency prices were largely affected by fears of a looming recession.

Because of these two factors combined, crypto speculators and haters think that miners will be “doomed” after the halving and there will be massive miner capitulation. A few individuals and headlines have called the theoretical event a crypto-mining ‘death spiral’ and people assume BTC miners will face catastrophe. However, a recent research study from the firm Coinshares disagrees with this argument and the company’s head of research called the fears “highly theoretical edge cases without any historical real-world precedent.”

In the report called “Why Bitcoin Miners Will Keep Mining,” Christopher Bendiksen talks about how current BTC prices are down more than 50% from the 2020 highs. The researcher details that this means miners have lost 50% of their income and a few “high-cost producers will now be unprofitable.” “When miners turn cashflow negative they will turn off their gear and hashrate will fall,” Bendiksen said. News.Bitcoin.com recently reported on how the hashrate had fallen from the 136 exahash per second (EH/s) high at the end of February, to 75EH/s after the market rout on March 12. The close to 45% hashrate reduction caused the network’s difficulty adjustment to drop to the second-lowest point in history. Bendiksen’s report discusses how the difficulty adjustment algorithm (DAA) is a key element within the BTC network.

In the death spiral scenario, Bendiksen stressed that some people believe that a big enough hashrate drop would slow down block times and eventually “grind the network to a halt since no new blocks are mined.” “This, in turn, will cause prices to drop further causing more miners to shut down until no one is left mining and the price hits zero,” Bendiksen wrote. The Coinshares head of research, however, doesn’t think this situation is plausible in the real world and thinks it only lives in people’s theoretical discussions. Coinshare’s report is also similar to the question answered by bitcoin researcher and evangelist, Andreas Antonopoulos, who discussed mining death spirals on Youtube. “Part of the reason that’s unlikely to happen is that miners have a much more long-term perspective,” Antonopoulos noted in the video.

Mining Death Spiral and the Network Grinding to a Halt Are Highly Theoretical Edge Cases

The Coinshares researcher also explained how in a rare, edge-case scenario it would take an awful lot of factors like gaming the DAA with precision and dumping on market prices at the same time. “In real life though, markets don’t move like that,” Bendiksen’s report highlights.

“On top of that there are operational concerns on the part of miners that prevent shutdowns on such rapid timelines,” Bendiksen wrote. “Powering down a several hundred-megawatt mine is not a matter of pulling a socket plug — you would risk severely damaging the local grid. Moreover, many miners have offtake agreements that mandate that they continue their draw for as long as they are able to pay their contracted bills. The point is: even when bitcoin prices significantly fall (which happens pretty much every year) or the mining reward is halved (which happens at predetermined time intervals), the physical and operational realities of the mining network are such that drawdowns in hashrate take time,” the report states. Bendiksen’s research further notes:

In practice, hashrate reductions are therefore always smoothly caught by the dynamic difficulty adjustment and block frequencies never get anywhere near ‘crisis levels’ (whatever that even means).

Bendiksen and Coinshares believe that the network was designed to handle these exact situations and they are confident things will be fine going forward. “Because of the design choices we’ve explained above the mining network has never failed to produce blocks. The difficulty has reset downwards many times — sometimes dramatically as the result of a pullback in price (the November/December 2018 is an excellent example to study), but never has the network ground to a halt or even come anywhere close to it,” Bendiksen’s report concludes.

What do you think about the Coinshares mining report and death spirals? Let us know in the comments below.

The post Bitcoin Halving Capitulation: ‘Mining Death Spirals Don’t Happen in Real Life,’ Says Report appeared first on Bitcoin News.

Bitcoin Mining Roundup: BTC Regains 100 Exahash, Miners Close Shop, Pre-Halving Shake-Up

30/03/2020 by Idelto Editor

In 44 days, BTC miners will face the third reward halving as the block subsidy will soon shrink from 12.5 to 6.25 coins per block. Following the market carnage in mid-March, BTC’s hashrate plummeted 44% to a 2020 low of 75 exahash per second (EH/s). Since then the hashrate has climbed back above 100EH/s, but profitability between SHA256 networks like BCH and BSV has been a lot more erratic than usual.

Also read: Bitcoin Hashrate Down 45% – Miners Witness Second-Largest Difficulty Drop in History

BTC Recaptures 100 Exahash – SHA256 Miners Bounce from Network to Network Chasing Profits

Three halvings are just around the corner and people monitoring these networks have been noticing a lot more action within the SHA256 mining ecosystem. The market downturn after March 12, stemming from the covid-19 scare, has caused a massive revenue shift for individuals and organizations mining bitcoins. News.Bitcoin.com recently reported on how bitcoin miners have been selling more coins than they have been generating. Moreover, at the same time, the BTC hashrate lost 44% of its processing power and the network saw the second-largest difficulty drop in history. Now there’s only 44 days left until BTC’s subsidy halving, as the chain will halve on or around May 13. Since news.Bitcoin.com’s report three days ago, BTC miners have managed to jump back above the 100EH/s mark.

At the time of publication, bitcoinsv (BSV) miners have 2.4EH/s of hashpower and the network is expected to halve in ten days. Bitcoin cash (BCH) has around 3.4EH/s hashing away at the network and BCH miners will face a halving in eight days. With the significant price drop and the BTC difficulty drop that followed, all three networks have been seeing much longer time frames when it comes to miners shifting between networks for profits on each network.

Miners who are mining 2-3 of the most valuable SHA256 chains are bouncing back and forth depending on each chain’s profitability. For instance, from March 13 through the 21st, the profitability between BTC and BCH was considerable and favoring BCH. Similarly, after March 21, the opposite was true for about a week and miners moved hashpower over to BTC for a while. With all three halvings expected to happen roughly around the same time frame, the events make speculators believe that the trend of miners bouncing back and forth will continue to increase.

While DPW Holdings Closes a 28MW Operation, Hive Acquires a 30MW Facility

The price drop that affected all three SHA256 networks (BTC, BCH, and BSV) has caused a number of mining operations to close up shop or make an acquisition. On March 18, DPW Holdings revealed that because of the adverse effects of the covid-19 outbreak, the firm’s subsidiary mining farm Digital Farms would be closing indefinitely. The company filed an update with the U.S. Securities and Exchange Commission (SEC) about the decision to shut down operations. The report notes that Digital Farms shut down 28 megawatts (MW) of power “due to the unprecedented market conditions domestically and internationally.”

Following the closure of Digital Farms, Hive Blockchain Technologies Ltd (TSX.V:HIVE) announced the acquisition of a mining operation with 30MW of power. The facility uses “low-cost green power” and resides in Lachute, Quebec. “The acquisition provides us with an advanced, operating Bitcoin mining facility ready to transition to next-generation mining hardware with access to some of the lowest-cost electricity on the planet,” Frank Holmes, interim executive chairman of Hive told the press on Monday. “The facility is powered entirely by renewable hydroelectricity, thereby maintaining our 100% green energy powered operations globally,” the Hive executive further remarked.

Montana Officials Extend Renewable Energy Guidelines for Bitcoin Miners

Just recently, Coinshares data and many other researchers have reported roughly 74% of bitcoin mining operations are leveraging some form of renewable energy. While mining bitcoins continues to grow popular, the state of Montana has seen a lot of miners setting up shop in the region.

On March 27, officials in Missoula County, Montana proposed extending a guideline that requires miners operating in the state to use renewable energy sources. The proposal passed unanimously among the Missoula County Board of Commissioners and it will last until April 3, 2021.

16nm Chip and S9 Extinction?

A recent research report by Securities Daily’s Xing Meng reveals that older mining units like Bimain’s S9 (14TH/s) may not survive with bitcoin prices so low and with the upcoming reward halving. The mining operation F2pool has already reported that an estimated 2.3 million Antminer S9s have been shut off to-date.

Securities Daily’s Xing Meng and F2pool’s data shows that 16nm-powered mining rigs that have been the standard since 2016 face extinction. Although, the recent adjustment in BTC’s difficulty has allowed 16nm powered units like the S9s to continue until the halving. According to data, right now an S9 with 14/THs and $0.04 per kWh, will lose $11 a day. This data indicates that electricity prices would have to be near free for S9s to continue going forward after the halving.

The current global economy fears mixed with the upcoming halvings on all three SHA256 networks, will surely make things in crypto-land more eventful. Signs of stress and large swings in mining profitability and hashrate, indicate that miners are likely simply trying to survive the best they can. For the last few years, bitcoin mining has been extremely competitive and the competition and stress will likely grow exponentially after these three halvings are said and done.

What do you think about the challenges miners face with the current price and upcoming halving? Let us know in the comments below.

The post Bitcoin Mining Roundup: BTC Regains 100 Exahash, Miners Close Shop, Pre-Halving Shake-Up appeared first on Bitcoin News.

Bitcoin Miners Are Selling Coins Faster Than They Can Generate Them

27/03/2020 by Idelto Editor

According to data sites and a number of observers, bitcoin miners are selling coins faster than they can produce them. Ever since the market downturn on March 12 and the week of falling prices that followed, bitcoin miners have been struggling.

Also read: Bitcoin Hashrate Down 45% – Miners Witness Second-Largest Difficulty Drop in History

Miners Sell More Bitcoin Than They Generate

On March 26, news.Bitcoin.com reported on how miners witnessed 45% of the overall hashrate shaved since Feb. 29 and miners also dealt with the second largest difficulty drop in history. Now according data from the analytical crypto website bytetree.com’s generation vs. first spend chart shows that bitcoin miners are selling a lot more than they are generating. There’s been a big shift since 3-6 months ago, when miners looked as though they were hoarding in preparation for the upcoming reward halving. Those hoards saved six months ago maybe keeping mining operations afloat, while they sell fresh coinbase rewards today.

Question: Who on Earth is crazy enough to be selling #bitcoin now?

Answer: Miners.

Relax, they’re making money and spreading bitcoin to the world. Soon they’ll have half as much to sell each day.

4 years later, they’ll have half as much again

— Arman The Parman (Bitcoin Moses) (@parman_the) March 25, 2020

Since then, however, statistics show that BTC prices jumped from $3,800 per coin to $6,700 on March 26. During more than 80% of that time period, miners sold way more coins than what they are producing at today’s issuance rate. Some bitcoiners think the shift is a “bullish” signal, while others think this belief is pure “hopium.”

Bytetree.com’s data reveals when the coins were first generated and the period of time that follows from when those same bitcoins are spent. Even though the price is one of the largest factors within the mining industry, most people don’t understand that there’s a great number of operations that used leveraged borrowing to mine bitcoins last year. Some mining operations that borrowed to fund their operations were probably liquidated and likely contributed to the 45% hashrate loss.

Bytetree.com’s generation vs. first spend chart. A great example of miners losing out is how the mining operation Digital Farms shut down indefinitely due to the economic carnage caused by the covid-19 outbreak. “Digital Farms’ cryptocurrency mining operations have been suspended indefinitely, primarily due to the sharp decline in the market price for bitcoin,” the announcement reads.

A Few Observers Believe Miner Sell-Off Is a Bullish Sign

Since ‘Black Thursday’ began and up until today, a large swathe of smaller mining operations shut down. This is because, during the last two years, financial services have appeared that allow mining operations to borrow capital and mining rigs in an attempt to profit later. Instead of helping miners curb risk and profit, lenders liquidated these miners who could not pay their loans after the big price dip. Charlie Morris, bytetree.com’s founder believes that the situation is bullish for bitcoin and tweeted about the current events on Wednesday. Morris tweeted:

Bitcoin miners today sold 2,788 against 1,588 mined. Slamming the market, yet the market takes it. That is bullish.

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“47 days until selling pressure from miners cuts in half,” another individual tweeted observing the miners sell-off. “This is the primary source of sell pressure on the price of bitcoin — Time to drop some ballast and see how high we fly,” he added.

Further, not too long ago the crypto firm Tradeblock published a research report that estimates BTC prices need to be at least $12,500 by the time the network halves. Otherwise, miners will suffer a whole lot more than they are today, because revenues will be chopped in half instantly.

What do you think about miners selling bitcoins faster than they can create them? Let us know in the comments below.

The post Bitcoin Miners Are Selling Coins Faster Than They Can Generate Them appeared first on Bitcoin News.