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Bitcoin [BTC] reorg is never happening, claims Blockstream CEO after Binance shelves reorg idea

Akash Anand

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Bitcoin [BTC] reorg is never happening, claims Blockstream CEO after Binance shelves reorg idea
Source: Pixabay

Several hacks and frauds in the world of cryptocurrencies have forced many in the space to take countermeasures to safeguard the assets from malicious practices. The latest hack that targeted Binance, the world’s largest cryptocurrency exchange in terms of volume, was another blow to the industry’s push towards mainstream adoption. The hack resulted in the loss of 7000 BTC, resulting in the hashtag #fundsarenotsafu going viral.

Post the hack, Changpeng Zhao, CEO of Binance, stated that he was considering a reorg of the Bitcoin chain, which was later shelved due to the cons outweighing the pros. CZ, as he is more popularly called, was not the only one against the reorg. Adam Back, CEO of Blockstream shared the same opinion as well. Back tweeted,

“A Bitcoin reorg is just not happening, and I doubt any Bitcoin industry, miners nor developers considered it either. Recall 2014 $473mil, 2016 bitfinex hack $72mil, 2019 binance $40mil etc. #NotHappening”

It can be speculated that Back is also citing the cons listed out by CZ, cons that were extensively covered by the cryptoverse. CZ reasoned,

“cons: 1 we may damage credibility of BTC, 2 we may cause a split in both the bitcoin network and community. Both of these damages seems to out-weigh $40m revenge. 3 the hackers did demonstrate certain weak points in our design and user confusion, that was not obvious before.”

There were many inquiries on Back’s tweet too, with many asking about the steps that needed to be taken to make reorg more impossible. Back replied that “mining in some portion to holdings” is one method by which reorg can be stopped. The Bitcoin ecosystem was none too happy with Binance’s consideration of a reorg. This was evidenced by Twitter user @sighodl’s tweet,

“The sheer ignorance of the head of the biggest exchange when it comes to the tech and game theory of bitcoin is mind boggling.”





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Bitcoin

Bitcoin’s on-chain/off-chain valuation indicators the key point of focus as coin heads to $13,000

Akash Anand

Published

on

Bitcoin's on-chain/off-chain valuation indicators they key point of focus as crypto heads towards $13,000
Source: Pixabay

With the rise in Bitcoin’s price, the rest of the cryptocurrency market has followed suit by displaying a green trend across the board. In a recent series of tweets by popular cryptocurrency analyst Adam Tache, users were informed about the top Bitcoin on-chain and off-chain valuation indicators, derived from on-chain valuation models.

The analysis touched on the Mayer Multiple created by dividing the price by the all-important – 200 day moving average. The current average Mayer Multiple stands at a figure of 1.39, which may climb higher. Looking at previous figures, the normal Mayer Multiple figures stated that if the value shoots up to 2.4, then Bitcoin eventually retraces back to a comfortable 1.5. The Mayer Multiple is usually considered as the original indicator used to clock the valuation of Bitcoin.

Another major indicator discussed in the thread was the NVT Ratio invented by Willy Woo, Partner at Adaptive Fund. The indicator is used to calculate Bitcoin’s prominence or value in the cryptocurrency space by evaluating the amount transacted on the blockchain as a “proxy for investment flow and bear and bull market cycles.”

At the moment, the NVT ratio for Bitcoin is in an abnormal region compared to the start of previous bullish patterns. The NVT ratio was above the “bear market” separator, which meant that the cryptocurrency was overbought. When Bitcoin is overbought, it usually means that the buying pressure is much higher than the selling pressure. Adam Tache opined,

“NVT signaling overbought is likely due to a number of factors — namely the proliferation of exchange-based, purely off-chain txs driving short-term price action.”

The analysis also pointed out the liveliness of the Bitcoin indicator created by Tamas Blummer. The indicator showed the inverse count of lost or ‘HODLed’ Bitcoin, while stating that when the ratio increases, long-terms holders of the cryptocurrency decrease their positions. The indicator conveyed accumulation of Bitcoin when the ratio decreased.





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