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Bitcoin [BTC] mining difficulty rises by 10%: sees an upward trend for the first time since October 2018

Priya

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Bitcoin [BTC] mining difficulty rises by 10%: sees an upward trend for the first time since October 2018
Source: Unsplash

Bitcoin [BTC], the very first cryptocurrency with the largest market share, is shining brightly as the coin marks another milestone today. The coin has been in the spotlight since it reached its all-time high in the month of December 2017, drawing the attention of well-known influencers, institutions, and media across the globe. However, the coin faced criticism as the price of the biggest currency witnessed a downward trend throughout 2018.

At present, the coin is trading at its price range of 2017, before the bull rally that placed the coin’s valuation nearing a whopping $20,000. As the price continued to slump in 2018, there were several critics claiming that the cryptocurrency is going to enter a death spiral, taking into consideration the price of the cryptocurrency slumping below the mining cost. Additionally, the professor of Santa Clara University, Atulya Sarin stated that the coin will be valued at $0 as a result of the death spiral phenomenon.

This was soon followed by several influencers in the space dismissing the possibility of the phenomenon including Andreas Antonopoulos, the author of Mastering Bitcoin. In one of his Youtube sessions, the author had explained the death spiral phenomenon and the reasons it is less likely to happen.

According to the fundamentals, the Bitcoin mining difficulty is calculated based in the blocks mined, i.e., after every 2016 blocks are mined, resulting in the difficulty being adjusted every two weeks. So, if there is a significant drop in the hash power with only half the miners participating, then it would result in the blocks being issued every 20 minutes instead of every 10 minutes, prolonging the time taken to adjust the mining difficulty.

This, in turn, would result in mining becoming less profitable leading to several miners taking the exit route. However, the loop continues as the miners’ exit would cause a massive drop in the hash rate, thus resulting in an even slower block issuance, creating a death spiral.

Now, according to the latest report, Bitcoin’s mining difficulty has increased for the first time since October 2018. Additionally, the difficulty has seen a rise in double digits, i.e., 10%.

Bitcoin mining difficulty chart | Source: Blockchain

Bitcoin mining difficulty chart | Source: Blockchain

Bitcoin mining difficulty change | Source: Bitcoin wisdom

Bitcoin mining difficulty change | Source: Bitcoin wisdom

Alistair Milne, a Bitcoin evangelist said:

“Remember the Bitcoin mining death spiral FUD? Mining difficulty just adjusted +10%”

CryptoCoinMaker, a Twitterati said:

“Miners either have much cheaper electricity than I, or they think a bounce is coming”

Kirkins, another Twitterati said:

“Strange mining cost increased 10% despite bear market”





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

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Facebook’s Libra ‘sounds an awful lot like Proof-of-Stake’ and will ‘run into Ethereum’s problems,’ claims Jameson Lopp

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Facebook's Libra 'sounds an awful lot like Proof-of-Stake' and will 'run into Ethereum's problems' claims Bitcoin engineer, Jameson Lopp
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Facebook’s “The Libra Blockchain” whitepaper has created quite a frenzy, not only in the cryptocurrency ecosystem, but also with U.S. government officials. Some people claim that Libra is not a blockchain, while others claim that it is going to kill Ripple, XRP and other similar blockchains. However, Jameson Lopp had a different view, claiming that the Libra blockchain has not solved massive problems that Ethereum has.

Lopp in his Medium article dissected the whitepaper and stated that the Libra Blockchain will be controlled by a set of authorities in a top-down fashion and that it will eventually move from a permissioned to a permissionless blockchain. The blockchain will offer a global currency – Libra coin, which will be backed “with a basket of bank deposits and treasuries from high-quality central banks.”

Since the whitepaper mentions that it will eventually move towards a permissionless and an open system, Lopp speculates that it “sounds an awful lot like Proof of Stake” and like Ethereum, it will face the same problems. He said,

“Apparently the plan is to open up membership after 5 years and hopefully they’ll have figured out Proof of Stake by then… I expect they’ll run into the same problems as Ethereum!”

Lopp added that “Calibra Wallet,” which is used to store the Libra coins, is the only wallet that can hold the coins for now and that it will require strict KYC/AML compliance. Since the blockchain conveniently replaces “stablecoin” for “resources,” Lopp speculates that it will concentrate more on smart contracts since it is built on a custom smart contract programming language called “Move”.

In addition to facing similar problems as those faced by Ethereum, the Libra Blockchain is facing more issues from a political and a regulatory standpoint. There was a lot of speculation even before Facebook dropped the whitepaper.

According to Reuters, United States House Financial Services Committee Chairwoman Maxine Waters issued a statement to halt/pause any and all developments on the project, until and after the Congress and other regulatory bodies have finished reviewing it. A senior Republican, Patrick McHenry, is also calling for a hearing on Facebook’s new cryptocurrency.





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