This article was originally published by 8btc and written by Lylian Teng.

One of the world’s largest cryptocurrency exchanges, Binance, has announced a plan to launch an open blockchain project called “Venus,” an initiative to develop localized stablecoins and digital assets pegged to fiat currencies across the globe.

As per the announcement published on August 19, 2019, the localized stablecoin initiative will leverage the exchange’s existing infrastructure (such as its public chain Binance Chain and cross-border payment systems), wide user base and established global compliance measures.

Bearing a similar vision to social media giant Facebook’s Libra, Venus, defined as a “regional version of Libra,” aims to break down financial hegemony and reshape the world’s financial system, which enables latecomers to have more initiative and stability in finance, as well as enhance the economic efficiency of countries.

The exchange says it is seeking “partnerships with governments, corporations, technology companies, and other cryptocurrency companies and projects involved in the larger blockchain ecosystem, to empower developed and developing countries to spur new currencies.”

“We believe that in the near and long term, stablecoins will progressively replace traditional fiat currencies in countries around the world, and bring a new and balanced standard of the digital economy.” said He Yi, Binance co-founder and CMO.

In its Chinese version of the announcement, the exchange notes that,

“Libras are growing at an exponential rate and will reshape the world financial system, bringing changes more than the internet. Instead of resisting change and losing the opportunity, it is better to embrace the change. Under the planned economic system, the successful experience of Shenzhen’s bold exploration of market economy is a good case. At the same time, Libras need to be developed in an orderly manner under the regulatory framework.”

In conclusion, it added three suggestions for Chinese regulators:

  1. The central government should establish the core strategic position of the blockchain industry and stablecoins in the future financial system.
  2. Regulators should establish a regulatory sandbox within a certain scope and pilot payment and settlement services based on stablecoins.
  3. Regulators should allow private enterprises to issue digital stablecoins and develop cross-border payment and settlement systems.

Prior to this announcement, Zhou Xiaochuan, the former governor of the People’s Bank of China, stated that Libra represents the trend of digital currencies, and that China should take precautions and undertake policy research. 

Following that, Huawei founder Ren Zhengfei said that China can issue a libra-like currency to take the lead in the blockchain sector. Given these positive signals, the exchange is responding and acting fast. Its co-founder, He Yi, said that Venus is the “one-belt-one-road version of Libra.”

The post Binance Announces New Stablecoin Venus appeared first on Bitcoin Magazine.

The Blockstream Satellite might just be the Lightning Network killer app. Until recently, it was a pretty, cypherpunk experiment which ham radio enthusiasts would use to either synchronize their Bitcoin full nodes in areas with no internet connection, or send instant and cheap messages in space. But thanks to the efforts of Blockstream engineer Grubles, there is now a Twitter bot which relays all text and image transmissions to the @satnode account.

The result of this social media communication experiment has been astounding, as hundreds of Lightning enthusiasts have started to take advantage of the cheap and private messages. For amounts as little as 10 satoshis (a rough estimate of the average cost), anybody can have their thoughts broadcasted via satellite, stored on the hard drives of enthusiasts around the world, and also published on Twitter to the followers of satnode.

“There are roughly 126 million daily active users of Twitter, so using the bot to relay messages means all of those people have access to the information users broadcast via Blockstream Satellite now,” Grubles told Bitcoin Magazine

“If you are unable to setup a satellite dish to receive the data directly from the Blockstream Satellite network, you can still receive the data via Twitter and share the messages among your followers or even discuss the content of the messages. I saw that there was an opportunity to increase the visibility to the messages people broadcast via the Satellite network and relaying the messages to the Twitter user base is a great way to do so.” 

Inspired by Hodlonaut’s popular #LNTrustChain, people are passing another torch via satellite.

From a sociological perspective, it’s interesting to observe how bitcoiners decide to make use of their ability to communicate with others via satellite. A quick look at the Twitter page reveals that people have created lotteries, torches that they pass, and even micro blogs. Sometimes they use their extended privilege to free expression in order to compliment or praise somebody, other times they take shots at individuals they perceive as being unethical, and there are instances when messages concern personal reflections on Bitcoin and society at large. 

Regardless of the meaning or purpose bitcoiners find in the satellite, all the activity generates buzz around the technology and lots of nocoiners can be introduced to the concept thanks to the Twitter integration. 

According to Grubles, the intentions and potential are greater and cover cases of censorship or network shutdowns, where access to means of communication is vital. “The Satellite API can actually be used for more than text messages. Any arbitrary data can be broadcasted over the Satellite network such as images or files. Messaging is, of course, an important use case, which would be particularly useful in regions without access to traditional internet infrastructure, so that they could receive weather updates or other important information.” 

How to Pay With Lightning to Send Messages to the Blockstream Satellite

For the purpose of this article, we sent a test message via Blockstream Satellite and took a screenshot to reveal every step, so the process becomes easy to follow. By accessing the “Transmissions” section on the website, you are able to see all the sent, queued and pending messages. However, for privacy considerations, you can only observe the metadata concerning the satellite communication. Therefore, you can’t associate one particular message with an IP address, Lightning wallet or any kind of information that may compromise the privacy of the sender. It’s a smart way of protecting free speech that is absolutely necessary for people living under oppressive regimes.

This is the simple interface which Blockstream offers to satellite communication enthusiasts.

In order to send a message, you must press the “Broadcast a Transmission” button and proceed with the instructions. If you’ve previously sent a message and want to check its status, you should use the “Manage Transmission” function.

Once you press the button which enables you to broadcast, you will be greeted with the first step of the process. Here you can either upload a file but to a maximum size of 10kb (a very small picture of text file), or type in a message. For convenience, our message was “Read Bitcoin Magazine and buy a ticket for the Bitcoin2020 Conference: https://www.bitcoin2020conference.com.” 

This is the step where you type in the message you want to broadcast.

In the next section, you will have to bid for your message’s priority. The minimum amount is 50 milisatoshis/byte, and the price you pay gets more expensive if you use more characters or choose to upload a larger file. It’s also interesting to note that, in my personal experience, the bid for an instant message was never greater than 52 msats. In this particular case, the bare minimum worked, thanks to a less intense network activity.

For verification purposes, you receive an ID and an authentication code that you can use in the “Manage Transmission” section.

Before you finish the process and finally have your message broadcasted, you must pay. In our specific case, the cost of the transaction was as low as 6 satoshis. We scanned the QR code with a Lightning Wallet, and, in just a few seconds, everything was validated. 

Satellite messages are unfairly cheap!

The Blockstream Satellite sent the message, and the Twitter bot instantly published it, so its 2,118 followers were able to read the invitation to attend the Bitcoin2020 conference. 

The Bitcoin2020 conference has been advertised to 2,118 people for only 6 satoshis.

However, due to the small price and incredible ease of use, one can’t help but wonder if the satellite can be used to spam messages. Are the fees too low to deter bad actors from abusing the system? 

According to Blockstream engineer Grubles, the company is confident in its queueing implementation. It even plans to increase the bandwidth for greater output: “I think the current queueing system works well. If a backlog of data occurs, users can choose to expedite their data to be broadcasted by paying a higher fee per byte. We also plan on increasing the available bandwidth for both the core Bitcoin block download service and for the Satellite API.”

Killer App or Just a Fad?

The Twitter integration of the satellite transmissions has been quite a killer LApp throughout the last couple of weeks. Lightning enthusiasts have sent all sorts of messages, and most of them didn’t seem to serve a clear purpose other than experimentation or for fun. Therefore, one can’t help but wonder if this is just a fad like Satoshi’s Place and every other popular application that we’ve seen. 

In Grubles’ opinion, the use case applies best to those who really need to communicate with the outside world; the full potential of the technology is yet to be seen: “We have some ideas for what’s next for Blockstream Satellite — especially the messaging use case. I think that it’s more than a fad. We’re connecting previously disconnected regions with not only Bitcoin data but any user-broadcasted data. Anyone without access to the internet can receive this data for free. It’s transformative, in my opinion, and we’ve yet to see the full effect this service will have.”

A version of this article has been uploaded for transmission to the Blockstream satellite.

The post Messaging via Blockstream’s Satellite: Lightning’s Killer App? appeared first on Bitcoin Magazine.

This article was originally published by 8btc and written by Lylian Teng.

Canaan Creative, one of the world’s largest bitcoin mining machine manufacturers, has filed an application for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC), people with knowledge of the matter disclosed.

According to the source, the AvalonMiner manufacturer has secretly filed its application with the SEC and reportedly aims to raise $200 million. It makes Canaan the first of China’s “big three” mining machine giants to move forward with a U.S. IPO application. 8btc has reached out to Canaan, but the company made no comment on the move.

The filing confirmed a January report from Bloomberg that the company was considering an IPO on U.S. soil. The move comes weeks after Canaan’s rival bitcoin miner makers, Bitmain and Ebang, were also reportedly seeking to go public in the U.S., with the former aiming to raise $300 million to $400 million through the shares sale in the U.S. Prior to this, Bitmain, Canaan and Ebang all failed in IPO attempts based in Hong Kong.

The trio’s U.S. IPO plans come as the bitcoin miner mega-sellers report soaring demand for mining machines amid the bitcoin rally that’s been running since April 2019. But it is still unknown whether this kind of business will be wanted in the U.S. capital market, especially after the hesitation from Hong Kong.

Based on the financial figures included in its Hong Kong IPO filing, the gross profit of Canaan Inc. in 2015, 2016 and 2017 was roughly $2 million (13.88 million yuan), $19 million (132 million yuan) and $88 million (604 million yuan), respectively.

Financial figures from Canaan, shown in the company’s prospectus for its Hong Kong IPO filing. 

Founded in 2013, Hangzhou-based Canaan is known for producing China’s first bitcoin mining machine — AvalonMiner, which features customized, super-fast ASIC chips and marked the end of computer-based mining. In its recent funding round, the company reportedly raised several hundred million dollars, with its valuation standing at several billion dollars. According to the Hurun Greater China Unicorn Index 2018 released this January, Canaan was valued at roughly $2.2 billion (15 billion yuan).

Canaan’s road to an IPO has been full of twists and turns. The company had tried to list on the Shenzhen Stock Exchange via a backdoor listing in 2016, but the plan was canceled after failing to satisfy the regulatory requirements. In August 2017, the company submitted a listing application to the National Equities Exchange and Quotations, but ultimately it retreated from the domestic market under an unfriendly policy environment in March 2018. In May 2017, Canaan made a comeback targeting the Hong Kong market, but it let its IPO application lapse six months later.

The post Chinese Miner Manufacturer Canaan Files IPO With $200 Million Goal appeared first on Bitcoin Magazine.

This article was originally published by 8btc and written by Olusegun Ogundeji.

Over 17,850,575 bitcoin have been mined at the time of writing, meaning that 85 percent of the top cryptocurrency’s expected total supply (21 million) is already in circulation. 

Though the next Bitcoin reward halving — when the coin reward will decrease from its current 12.5 to 6.25 bitcoin at every 10-minute block generation time — is not expected until May 18, 2020 (in approximately 290 days), about 524,425 of the 3,149,425 total bitcoin left to mine will have been mined by then, leaving the space with just five years (until 2024) to mine almost 9 percent of the available 15 percent of the total supply remaining.

The time it takes to mine a certain amount of bitcoin increases exponentially by design. About every four years, the number of bitcoin generated per block mined gets cut in half. It started in 2009 with 50 BTC per block mined. By 2012, it got cut in half to 25 and then to 12.5 by 2016.

However, despite the tightening supply, the cryptocurrency’s ecosystem seems to be getting bigger, owing to scaling improvements and news of increasing adoption globally. Bitcoin is on the verge of seeing more transactions conducted on its network in 2019 than in any other year in history, according to ShakePay, the Canadian platform that allows users to buy and sell bitcoin. Also, there is an increase in the number of Bitcoin wallets being created daily (about 41 million in total, currently) while approximately 4 million bitcoin is assumed to be lost or unspendable thus reducing the effective available supply.

Implications of the Reducing Bitcoin Supply 

The network effects of sidechains (e.g., Blockstream’s Liquid Network) and anonymous bitcoin transactions using offchain payment protocols (e.g., the Lightning Network, which is reportedly responsible for up to 10 percent of total transactions) could continue to grow — pushing the acceleration in Bitcoin’s chart growth over the next few years.

The sidechain and off-chain channels will also be handy for making small payments in the event that the bitcoin price rises significantly, forcing high transaction fees on users. Their promises of faster settlements, confidential transactions and sophisticated multisig security will make them a darling of the growing Bitcoin ecosystem.

The market is seeking more powerful Bitcoin miners while their manufacturers, such as Bitmain and Canaan, work to increase their production capacity. At the same time, as more mining equipment focuses on the Bitcoin network, the difficulty rate — which currently stands at over 9T — will rise even faster, thus making the mining process harder.

In the coming years, bitcoin holders may not lose their purchasing power as it is increasingly used as a representation of value, leveraging its finite, decentralized and secure nature. With regards to bitcoin’s relationship with other cryptocurrencies, there may be a greater shift in the attention of speculators to altcoins as bitcoin becomes more stable.

The post Implications for Bitcoin Now That 85 Percent of Supply Has Been Mined appeared first on Bitcoin Magazine.

FTX, a new cryptocurrency derivatives exchange and trading platform, has raised $8 million in a funding round led by blockchain-focused fund Proof of Capital, Consensus Lab, FBG and Galois Capital.

Proof of Capital is a $50 million venture capital (VC) fund launched in April 2019 by partners from Horizons Ventures, Greylock Partners and 500 Startups, and backed by the likes of HTC and YouTube co-founder Steve Chen.

The fund invests in early-stage blockchain startups with a focus on fintech, infrastructure, hardware and consumer products, and made one investment prior to FTX in Ubanx, an API banking infrastructure for fiat-to-crypto exchange in Latin America.

Chris McCann, managing partner at Proof of Capital, said in a statement that his firm will help FTX go to market in Asia.

Developed by a team of former traders at Jane Street, Susquehanna and Optiver, FTX is a new crypto exchange and trading exchange offering futures contracts, leveraged tokens and an over-the-counter (OTC) portal. The platform promises to be “powerful enough for professional trading firms and intuitive enough for first-time users,” according to the company’s website, and claims more than $300 million in total trading volume since its launch.

FTX is currently expanding its team; it recently hired former employees of Huobi, Kraken and Circle, with more to come, Sam Bankman-Fried, co-founder and CEO of FTX Trading, wrote in a blog update on August 5, 2019.

It is now focusing on expanding its userbase and has started rolling out user acquisition strategies in Eastern Europe, Southeast Asia, Taiwan and Australia. 

“We have some pretty badass team members from Jane Street, Optiver, Susquehanna, Google and Facebook but we’re planning to hire to grow the team, especially in Hong Kong,” Bankman-Fried told Bitcoin Magazine

“Hong Kong is the financial hub of Asia so it will give us even more financial talent and fresh blood. We want to hire the best people from both traditional and decentralized financial institutions and expand our userbase globally. We are looking into hashrate futures and many other products to come.”

FTX’s origins trace back to 2017, when the team set out to build Alameda Research, a global trading platform which now claims to trade up to $1 billion per day and manage over $100 million in digital assets.

“Our CTO Gary Wang was tasked with writing an entire quantitative trading firm’s software — from algorithms to front end UIs to trading systems to API connections — more or less autonomously. That software, combined with our experience at companies like Jane Street and Google, is what inspired FTX,” Bankman-Fried said. “We designed FTX for ourselves but as it evolved, we realized our platform has the potential to help other traders tap into derivatives and futures in a way that wasn’t before possible.

Charting Bitcoin and Shitcoin Indices

According to Bankman-Fried, FTX’s biggest differentiator is that the platform focuses on making complex financial products more accessible to the average trader.

“It’s much of the reason we created investment vehicles like FTX BTC, a bitcoin futures product that lets traders speculate on the future price of bitcoin, and FTX SHIT, a ‘shitcoin’ index containing a basket of small-cap cryptocurrencies so traders can more effectively hedge risk and create new opportunities,” he said.

Shitcoin Index Perpetual Future (SHIT-PERP)

The company says its proprietary technology and trading features make the trading platform “one of the most liquid cryptocurrency exchanges in the market.”

FTX says its liquidation engine prevents clawbacks by slowly closing overleveraged positions while minimizing market impact, and its backstop liquidity provider system prevents accounts from going below bankruptcy level by automating liquidating and closing down at-risk accounts.

In addition to futures contracts, FTX offers three leveraged tokens for every underlying token or index listed on FTX: BULL (3x), BEAR (-3x) and HEDGE (-1x).

Each of these has an associated account on FTX that takes leveraged positions on the perpetual futures and can be created/redeemed for its share of the assets of that account. These tokens can be withdrawn from FTX as ERC-20 tokens.

Finally, FTX’s 24/7 OTC portal, powered by quant trading firm Alameda Research, allows investors to make OTC trades on over 20 coins with no fees and instant settlement.

The FTX ecosystem has its own native utility token, FTT, which provides holders with a number of benefits including weekly buying and burning of fees, lower trading fees, OTC rebates and collateral for futures trading.

The post Crypto Derivatives Trading Platform FTX Raises $8 Million appeared first on Bitcoin Magazine.

FTX, a new cryptocurrency derivatives exchange and trading platform, has raised $8 million in a funding round led by blockchain-focused fund Proof of Capital, Consensus Lab, FBG and Galois Capital.

Proof of Capital is a $50 million venture capital (VC) fund launched in April 2019 by partners from Horizons Ventures, Greylock Partners and 500 Startups, and backed by the likes of HTC and YouTube co-founder Steve Chen.

The fund invests in early-stage blockchain startups with a focus on fintech, infrastructure, hardware and consumer products, and made one investment prior to FTX in Ubanx, an API banking infrastructure for fiat-to-crypto exchange in Latin America.

Chris McCann, managing partner at Proof of Capital, said in a statement that his firm will help FTX go to market in Asia.

Developed by a team of former traders at Jane Street, Susquehanna and Optiver, FTX is a new crypto exchange and trading exchange offering futures contracts, leveraged tokens and an over-the-counter (OTC) portal. The platform promises to be “powerful enough for professional trading firms and intuitive enough for first-time users,” according to the company’s website, and claims more than $300 million in total trading volume since its launch.

FTX is currently expanding its team; it recently hired former employees of Huobi, Kraken and Circle, with more to come, Sam Bankman-Fried, co-founder and CEO of FTX Trading, wrote in a blog update on August 5, 2019.

It is now focusing on expanding its userbase and has started rolling out user acquisition strategies in Eastern Europe, Southeast Asia, Taiwan and Australia. 

“We have some pretty badass team members from Jane Street, Optiver, Susquehanna, Google and Facebook but we’re planning to hire to grow the team, especially in Hong Kong,” Bankman-Fried told Bitcoin Magazine

“Hong Kong is the financial hub of Asia so it will give us even more financial talent and fresh blood. We want to hire the best people from both traditional and decentralized financial institutions and expand our userbase globally. We are looking into hashrate futures and many other products to come.”

FTX’s origins trace back to 2017, when the team set out to build Alameda Research, a global trading platform which now claims to trade up to $1 billion per day and manage over $100 million in digital assets.

“Our CTO Gary Wang was tasked with writing an entire quantitative trading firm’s software — from algorithms to front end UIs to trading systems to API connections — more or less autonomously. That software, combined with our experience at companies like Jane Street and Google, is what inspired FTX,” Bankman-Fried said. “We designed FTX for ourselves but as it evolved, we realized our platform has the potential to help other traders tap into derivatives and futures in a way that wasn’t before possible.

Charting Bitcoin and Shitcoin Indices

According to Bankman-Fried, FTX’s biggest differentiator is that the platform focuses on making complex financial products more accessible to the average trader.

“It’s much of the reason we created investment vehicles like FTX BTC, a bitcoin futures product that lets traders speculate on the future price of bitcoin, and FTX SHIT, a ‘shitcoin’ index containing a basket of small-cap cryptocurrencies so traders can more effectively hedge risk and create new opportunities,” he said.

Shitcoin Index Perpetual Future (SHIT-PERP)

The company says its proprietary technology and trading features make the trading platform “one of the most liquid cryptocurrency exchanges in the market.”

FTX says its liquidation engine prevents clawbacks by slowly closing overleveraged positions while minimizing market impact, and its backstop liquidity provider system prevents accounts from going below bankruptcy level by automating liquidating and closing down at-risk accounts.

In addition to futures contracts, FTX offers three leveraged tokens for every underlying token or index listed on FTX: BULL (3x), BEAR (-3x) and HEDGE (-1x).

Each of these has an associated account on FTX that takes leveraged positions on the perpetual futures and can be created/redeemed for its share of the assets of that account. These tokens can be withdrawn from FTX as ERC-20 tokens.

Finally, FTX’s 24/7 OTC portal, powered by quant trading firm Alameda Research, allows investors to make OTC trades on over 20 coins with no fees and instant settlement.

The FTX ecosystem has its own native utility token, FTT, which provides holders with a number of benefits including weekly buying and burning of fees, lower trading fees, OTC rebates and collateral for futures trading.

The post Crypto Derivatives Trading Platform FTX Raises $8 Million appeared first on Bitcoin Magazine.

Charles Hoskinson’s new block explorer has made Bitcoin into a planet.

Seriously. The latest project from Hoskinson’s engineering company, IOHK, dubbed Symphony 2.0, portrays Bitcoin’s mempool “as a gravitational swell,” with the entirety of the blockchain’s ledger wrapped around this core like the rings of Saturn. On these rings, blockgazers hover over a 3-D representation of Bitcoin’s entire transaction history and can examine block data in both physical and numerical forms.

“The Symphony project began with a question: how do we represent blockchain technology in a way that is stimulating, entertaining, and audio-visually engaging for a wider audience, technical and non-technical,” the project’s website reads. “In other words, how do we explain the abstract and give form to the formless. Starting as a single project, Symphony has grown to become several creative initiatives.”

The final answer, apparently, is a stunning galactic representation of Bitcoin’s structure and a planetary view of its components.

Visual and Symphonic Representation

As viewers enter the simulation, they’re given a rundown of how blocks and the mempool are represented, as well as live facts about how many unconfirmed transactions and mined blocks are on the network. 

Hovering through the vacuum of space, as you approach the latest block, you’ll be greeted by crystalline towers whose height and brightness represent the transaction value and ratio of the sender’s wallet’s spent and unspent coins, respectively. You can view blocks from an aerial, side-by-side or underneath view, all surrounded by the deep, cosmically swirled and star-studded blackness of space. The simulation, which is updated in real time from Blockchain.com’s block explorer, also displays all of the usual block information on a sidebar for easy reading.

To enrich the sci-fi vibes the block explorer gives off, the crystal transaction towers don’t just look good — they sound good, too. Each crystal resonates with sound “based on the value, spent output and fee of each transaction.” As you move to a new block, you’ll notice its Merkle tree sends a pulse through its crystals, striking them by the order of when each transaction was signed. From the chain reaction comes an intense symphonic resonance, something equivalent to the droning of a thousand digital bells, pealing in every pitch and tone imaginable. The end result is that each block has a completely unique sound. With 584,000-plus blocks to explorer — and another one added every 10 minutes or so — this variety is nearly inexhaustible.

“The unique sound signature that plays when you visit a block consists of each transaction producing eight sine waves (a fundamental pitch and seven harmonics),” according to the website. “The fundamental pitch is determined by the transaction value, and the amount of randomness added to the harmonics partials is controlled by the fee-to-value ratio of the transaction.”

Another neat feature, as if the others aren’t enough, is the block explorer’s free-flight mode. Using your keyboard and mouse to navigate, you can orbit the blockchain untethered to any block in particular, giving you full view of the rendering and its artificial universe.

Because the model bears so much data and is updated in real time, it’s best suited for newer, more powerful graphics cards, though you can experience the block explorer in both high- or medium-quality depending on your hardware. If your GPU is lower quality, the simulation will lag a bit, and in its current state, the free-flight can be sluggish.

The project is open source, allowing anyone to get involved or build on the model. It also has a VR component, which Symphony will feature on its international tour of events to showcase the new project.

The post New Block Explorer Creates Sonorous, Galactic Experience of Bitcoin Blockchain appeared first on Bitcoin Magazine.

The University of Cambridge’s Judge Business School just released what might be the most statistically sound and feature-rich model on Bitcoin’s power consumption to date.

The Cambridge Bitcoin Electricity Consumption Index (CBECI) provides estimates for Bitcoin’s real-time and annual electrical appetite with a live data feed that updates every 30 seconds. These data points are divided into three categories: upper bound, estimated and lower bound consumption. Together, they give a liberal, average and conservative spread for Bitcoin’s actual power use. 

CBECI’s team provide all three figures in order to weigh all possibilities, crunching a hodgepodge of various network and mining data. The estimated figure — currently at 7.5 GW for real-time and 53 TWh for annualized consumption — is the tool’s best guess for an accurate appraisal of Bitcoin mining’s electrical cost.

Methodology 

Cambridge partly structured its model after a comprehensive research study by Marc Bevand on the energy efficiency and market presence of ASICs. 

Bevand pooled data from popular mining hardware manufacturers — some, like Genesis, were more generous with their products’ information — and, using the network’s hashrate to gauge how many miners could be running, used this ASIC data to derive an estimate of the blockchain’s total electricity consumption.

Bevand breaks his numbers down into an upper-bound category that assumes miners are using the least efficient hardware available, a lower-bound category which figures they use one of the top-three most efficient ASICs, and an estimated category that meets in a more realistic middle. 

The Cambridge model also follows a similar logic in comparing hashrate, hardware efficiency and profitability, but it then factors in the efficiency of the data centers that house mining farms and the average cost of their electricity. Its lower-bound model, for instance, assumes that miners are utilizing the most efficient hardware possible and that their facilities operate with a 1.01 power usage efficiency (PUE). The upper bound assumes the opposite and a 1.2 PUE. For its best-guess estimate, Cambridge takes an average of the hardware efficiency of the other two models and applies a 1.1 PUE. Each model then assumes the global average price for electricity is $0.05 kWh (a value derived from “in-depth conversations with miners worldwide,” the post reads).

Cambridge concludes its report with the model’s limitations: Assuming an average global electricity cost doesn’t account for dynamic factors like region and seasonal circumstances, and the mining specifications manufacturers provide might not be wholly accurate (Cambridge may not have been privy to data from the most efficient hardware, either).

Measuring Up

Visually, Bitcoin’s annualized electrical appetite looks like this:

Source: University of Cambridge’s Judge Business School

On the tool’s website, you can adjust the average electricity costs to play with the model — if you raise it to the max at $0.20, for instance, the estimated power consumption drops to 32 TWh, while dropping it to $0.01 raises it to 62 TWh. 

If you were worried about using 53 TWh per year to secure the internet’s endogenous monetary system, Cambridge also offers a comparison section to see how Bitcoin stacks up to some of the world’s other electrical needs.

On average, 25,082 TWh of energy are produced every year and 20,863 TWh of this is consumed. Bitcoin accounts for 0.21 percent and 0.24 percent of this total energy, respectively. The study also makes the pointed observation that idle devices left on in U.S. households each year could power the entire Bitcoin network four times over. 

Oh, and Bitcoin could power all tea kettles in the U.K. for 11 years (or 1.5 in the EU and U.K.).

It also compares Bitcoin’s use alongside other countries’, and yes, Bitcoin uses about as much power as a small country (Switzerland or Nigeria, for instance). 

But let’s put this into perspective with other industries: Gold mining, according to figures cited in a 2014 CoinDesk article, consumes 131 TWh each year, and this doesn’t include recycling and refining processes for jewelry. Between ATMs, branches, transportation and server uptime, banks and credit card companies burn roughly 100 TWh annually. We haven’t factored in the internet yet, either, which Standford Research Fellow Jon Koomey estimates might account for 10 percent of the world’s total electricity consumption. 

That’s 50 times what Bitcoin puts out, and yet no one questions whether that’s worth it.

The post The Cost of Sound Money: New Tool Tracks Bitcoin’s Energy Consumption appeared first on Bitcoin Magazine.

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The Chicago Board Options Exchange (Cboe) announced that it will not list upcoming Cboe Bitcoin (“XBT”) futures contracts for trading in March 2019.

The Cboe Futures Exchange said that the company is “assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading,” stating that it has no intention to list additional contracts for trading relating to the cryptocurrency.

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Though it is not confirmed, the reason behind Cboe’s futures closing might be due to its underperformance in comparison to CME’s futures contracts.

chart.png

“The Cboe contracts weren’t delivering a lot of volumes anyway. The dominant player on Wall Street remains the CME Group, whose Bitcoin futures remain in play,” Mati Greenspan, senior market analyst at eToro, told Bitcoin Magazine.

The Chicago Board Options Exchange first listed its Bitcoin futures on December 10, 2017, preceding the listing of the Chicago Mercantile Exchange’s futures on December 17 of the same year. The two contracts went live shortly before the price of bitcoin began to dip from its all-time high of over $19,000.

After listing its Bitcoin futures, Cboe filed multiple times with the U.S. Securities and Exchange Commission (SEC) for the approval of several Bitcoin ETFs, none of which have been approved.

Critics of the Cboe futures, which were cash-settled contracts (no physical delivery of bitcoin), claimed that the financial activity that these types of contracts created had a negative impact on Bitcoin because they did not involve the movement and transfer of physical bitcoins on-chain, therefore suppressing its price.

“They are both cash settled, meaning that two players trade against each other based on the price, and the loser forks over USD to the winner, so bitcoin is never moved by this market,” said Greenspan

This article originally appeared on Bitcoin Magazine.

Bitcoin Price Analysis

Bitcoin remains in its tightly coiled range as the market continues its sideways trend for the third week in a row. While macro support has been tested three times recently, we have yet to test the overhanging macro resistance:

Figure_1 (8).png

Figure 1: BTC-USD, Daily Candles, Narrow Range

The blue zone outlined above shows a very strong zone of support that, over the last few weeks, has seen three strong tests and has led to a slowly upward-drifting market consolidation. Since re-establishing support, the market has yet to see a meaningful retest of the overhead resistance outlined above in the red dashed and solid lines. The immediate resistance sitting overhead has, historically, been a highly volatile period where supply has manifested and stifled any bullish pressure:

Figure_2 (2).png

Figure 2: BTC-USD, Daily Candles, Three Rejections

The black level outlined above represents the preliminary level that the market had tested prior to shoving to the red macro resistance levels. In Figure 2, we can see three clear tests followed immediately by three rejections. And now, after finding support on a major, macro level (the blue zone), we seem to be meandering upward into the immediate overhead black resistance.

This current move is considerably different from the prior moves. The three prior tests occurred very violently and were matched with overwhelmingly violent selling responses. Our fourth test, however, has been a slow, persistent grind. Upward drifts like this are often signs of weakening supply and, consequently, a weakening resistance level.

While it is still early to tell and we have yet to actually establish support on this level, the early signs of bearish exhaustion are starting to surface as we make our way upward. If we manage to test and find support on the black level, it seems logical that the next step would be to test the level in the low $4,000s that has been rejected so many times previously.

Because we are stuck in the middle of a range, the market is pseudo-agnostic in terms of its market bias. It’s a bit of a no-man’s-land, so to speak. If we do see a rejection of our overhead level, we can fully expect a retest of the macro, blue support zone shown above. A failure to hold the blue zone would undoubtedly yield a test of our macro lows in the low $3,000s.

We need to see a bullish close either above our current resistance or below our current macro support before any meaningful market movement is realized. Until then, it is just chop-city as we ping-pong back and forth between the upper and lower boundaries of our range.

Summary:

  1. Bitcoin has continued to consolidate within its narrow range.
  2. The consolidation has an upward tilt to it that is causing us to slowly grind through a macro resistance level that has seen three strong rejections over the last three months.
  3. If we fail to break the overhead resistance and find support, we can expect a macro retest of the support level in the mid $3,000s. However, if we break out and find support, we can expect to see, at minimum, a retest of the low $4,000 area.

Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Inc related sites do not necessarily reflect the opinion of BTC Inc and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

This article originally appeared on Bitcoin Magazine.