A Question Of ‘Charity’?

In a move which has sparked suspicion among cryptocurrency figures, data from the past seven days of block mining shows Bitmain mining blocks of under 1 megabyte – smaller than SegWit blocks mined by other pools.

“AntPool no longer includes SegWit txs in Bitcoin (BTC) blocks,” one Twitter account confirmed October 30.

If there are enough non-SW transactions to fill up Core’s 1MB base blocks and they pay higher fees than the SW transactions, why should (it) be charitable?

The curious statistics contrast with Bitmain’s desire to increase the Bitcoin block size limit as an alternative to the off-chain scaling options favored by SegWit proponents.

The apparent conflict was not lost on the industry, the research team of Hong Kong-based trading platform BitMEX also highlighting the sub-megabyte blocks on Twitter.

Worst Of Both Worlds

Reactions to BitMEX included claims Bitmain, through excluding SegWit, could continue to use the highly-controversial Covert ASICBoost mining technique it had previously claimed was “not practical.”

Last month, the company began rolling out Overt ASICBoost for its Antminer hardware family, a move which similarly drew suspicion from commentators.

In a further nuance meanwhile, Blockstream’s Warren Togami noted that despite non-SegWit blocks ostensibly having a higher fee attached, the blocks Antpool had chosen to mine in fact contained less in fees than the SegWit blocks it was avoiding.

Bitmain continues to hold a monopoly on Bitcoin mining through control of Antpool and BTC.com, the latter regularly mining the most blocks on a given day.

The proportion of transactions using SegWit had continued to climb in recent months, reaching an all-time high of 48 percent in early October before dropping.

What do you think about Antpool’s mining behavior? Let us know in the comments below!

Graphics chip manufacturing giant Nvidia saw huge growth in late 2017 and throughout most of 2018 as demand for its high-end Graphics Processing Units (GPUs), used for cryptocurrency mining, skyrocketed. The recent bear market has caused demand for GPUs to dwindle, leaving Nvidia to readjust its strategy.

Nvidia In Its Heyday

It seems Nvidia is throwing in the towel on the development and production of its cryptocurrency mining focused graphics cards and chips.

Nvidia has seen some explosive growth over the last few years and is currently seeing a 68% increase in value in the past year alone (indicated below in yellow), although this week the stock price has slipped almost eight percent (indicated below in red).

Nvidia’s biggest rival, Advanced Micro Devices (AMD), also saw record highs recently, gaining more than 100% in just the past quarter.

Nvidia was especially successful riding the waves of the huge cryptocurrency boom of November and December, gaining an impressive 42% from November 2017 to its all-time high of $267 per share in June 2018 (indicated below in blue).

Demand for its highest-end GeForce series GPUs surged as the price of Bitcoin 00 shot from $5,800 to almost $20,000 in the span of 1 month — creating a buying frenzy from miners and resellers looking to cash in on the crypto-craze.

The recent market downturn, however, has left Nvidia with a lot of unexpected extra stock due to fading interest and market sentiment. Nvidia and AMD must be prepared to adapt their business models and plans to suit a prolonged cryptocurrency bear market.

Nvidia said it had expected about $100 million in sales of chips bought by currency miners in the fiscal second quarter. Instead, the total was $18 million in the period, and that revenue is likely to disappear entirely going forward.

Planning For The Future

Nvidia CEO Jensen Huang plans to trim cryptocurrency mining production out of the budget.

In a conference call yesterday, Huang spoke about moving down new avenues and focusing on Nvidia’s strengths for the remainder of the year.

Although cryptocurrency mining helped give Nvidia a short-term boost in revenue and market value, the company cannot continue to keep up in competition with mining goliaths, like the Chinese-owned Bitmain. Bitmain produces and uses ASIC miners that are able to mine much more efficiently than the best Nvidia cards.

Nvidia will instead build upon their strengths, particularly in the computer gaming, artificial intelligence, and data processing sectors.

Graphics card junkies are on the edge of their seats for the upcoming Geforce 20 series chips, with new Turing chip architecture. First looks at the chips are claiming the top of the line Geforce RTX Titan can outperform Nvidia’s current top card, the 1080 Ti, by 50 percent.

Despite a small tumble this quarter, the future still seems bright for Nvidia.

What do you think about Nvidia’s exit from cryptocurrency mining production? Will the company still continue to gain value in 2018? Let us know your thoughts in the comments below!

bloXroute Labs and a team of Northwestern University students believe Bitcoin’s biggest problem, scalability, can be solved without affecting its chief virtue — decentralization.

Northwestern and bloXroute Labs Are Working to Solve Scalability Issue

Critics have always identified the limited number of transactions that Bitcoin’s 00 network can process as its most significant problem. They point out that this is what has prevented Bitcoin from becoming the most effective form of payment in the world.

Several techniques have been and are currently being implemented to address the issue of scalability and high transaction fees. Nevertheless, they are not good enough to compete today with Visa, for example.

bloXroute Labs identifies the problem that affects Bitcoin and other cryptocurrencies’ networks, as follows:

Specifically, they employ a trustless P2P network model to propagate transactions and blocks, which does not scale as the volume of transactions increases, a fact research has shown time and again. Indeed, if blocks and transactions were to be instantly propagated, immense blocks could have been mined at a rapid pace, until the limitation of designated processing units and flash storage arrays was reached.

Now, a team comprised of bloXroute Labs engineers and students and academics of Northwestern University believe they have found a trustless scheme to overcome this scalability bottleneck. According to Watch Market:

The Northwestern University proposal attempts to address some of those issues by creating an infrastructure that compresses the information on the blockchain before sending, with the propagation being it will go faster.

In this regard, bloXroute Labs proposes bloXroute, a transport layer that would run underneath, allowing Bitcoin and all cryptocurrencies to scale to thousands of chain transactions per second.

According to the whitepaper entitled bloXroute: A Scalable Trustless Blockchain Distribution Network,”

“bloXroute allows to safely increase the block size and to cut down the time interval between blocks, without increasing the risk of forks, and provides real-time support for immediate transactions with zero-confirmation (0-conf).”

The whitepaper stresses that by using bloXroute, the network becomes even more decentralized because it requires neither consensus nor a protocol change beyond adjusting system parameters.

Technological Advances Are Fueling Bitcoin Optimism

Novel technological initiatives that include SegWit, Lightning Network, and Atomic Multi-Path Payments over Lightning, and new features in Bitcoin Core 0.16.0, are also promising to help to address Bitcoin’s scalability issue.

For example, Lightning Network is growing and enabling faster transactions among nodes. As of this writing, Lightning Network boasts over 3,000 nodes, with a capacity of about 82 bitcoins.

The Northwestern University team started working in this project in March 2018, and claims to be moving forward to solving the scaling issue. According to Sarit Markovich, professor of strategy at Kellogg School of Management at Northwestern University,

“We are scaling at 100 times better than what Bitcoin 00 is doing now. And we are hoping for 1,000.”

Do you think the newest technological innovations are helping to solve cryptocurrencies’ scalability issues? Let us know in the comments below!

As Bitcoin mining becomes more expensive and is criticized as being detrimental to the environment, several initiatives are being put forward to reverse this situation. The latest move comes from Brookstone Partners, which involves building a 900-megawatt wind farm in Morocco dedicated to mining Bitcoin.

Bitcoin Mining To Minimize Carbon Footprint

Critics have always argued that Bitcoin mining is a threat to the environment. They point out that cryptocurrency mining consumes huge amounts of electricity, often citing the fact that the Bitcoin network consumes more power than the Republic of Ireland.

Indeed, Digiconomist estimates that Bitcoin consumes more power than some countries, such as the Czech Republic, Chile, and Austria.

Moreover, Bitcoin energy consumption continues to grow relentlessly. By the end of 2018, the Bitcoin network could be using over 125 terawatt-hours per year, as the chart below forecasts. A terawatt is a unit of power that equals one trillion watts:

However, Bitcoin’s biggest problem is its carbon footprint. According to Digiconomist:

Bitcoin’s biggest problem is not even its massive energy consumption, but that the network is mostly fueled by coal-fired power plants in China. Coal-based electricity is available at very low rates in this country. Even with a conservative emission factor, this results in an extreme carbon footprint for each unique Bitcoin transaction.

Mining Bitcoins Using Clean, Low-Cost Renewable Energy

The planned giant 900-megawatt wind farm to mine Bitcoin will be built in North Africa, Bloombergreports. The site chosen for the farm is at a remote Moroccan location, in Dakhla, on the edge of the Sahara Desert, by the Atlantic Ocean. According to Soluna’s website:

Soluna aims to address this problem by building computing centers powered by environmentally clean, utility-scale renewable green energy. Our mission is to power the crypto-economy with clean, low-cost renewable energy. To do this, we are building a blockchain infrastructure and mining company that owns its own renewable energy resources.

Brookstone is a private equity firm with its headquarters in New York. It specializes in strategic acquisitions, add-on acquisitions, and growth capital. The firm also focuses on middle market investments in public and private companies.

Bitcoin enthusiasts are encouraged to learn about Brookstone Partners’ initiative, which involves converting wind energy into valuable electrical energy to mine cryptocurrencies. Wind is considered the cheapest energy source available.

How do you think using alternate energy sources such as wind will impact Bitcoin mining? Let us know in the comments below!

California-based 3G Venture II has paid $13 million for a significant portion of an old Intel chip plant in Colorado Springs, which it intends of turn into a new bitcoin mining operation.

Mining Farms Opening Around the World

Miners have been flocking to cities that offer cheap electricity to reduce costs and increase profits, and it looks like Colorado Springs may join the list. At just 7.94 cents per kilowatt-hour, the town’s commercial electricity rates are more than 21% lower than the national average. City leaders have been using these lower prices to entice new businesses into the area – and it appears to be working. Walmart and FedEx both have data centers in the area which require large amounts of electricity to run. Bitcoin mining farms have similar power needs, making Colorado Springs a great place to set up shop.

Much of the town’s economy is based in the high-tech sector, with companies like Verizon and Hewlett-Packard setting up offices. In 2000, Intel opened a 1.4 million square foot semiconductor plant in the area that boasted an extensive electricity network – including its own substation and two separate power feeds – among other features. A several years-long decline in the industry caused Intel to close down the plant in 2009 and there it has remained abandoned – until now.

California-based 3G Venture II has purchased a “large portion” of the old Intel plant and – according to city economic development leaders – plans to convert it into a bitcoin mining operation. With a purchase price of $13 million, the acquisition includes 30 acres of land and more than 700,000 square feet spread across four buildings. Three of the buildings – 85,000 square feet in total – will be used for the actual mining operation. The company intends to lease space in the remaining building – a huge 4-story, 640,000 square foot facility – to industrial tenants.

Cheap energy and size of the facility aside, one of the primary factors that drew the interest of 3G Venture II’s owner, John Chen, was its power infrastructure. The on-site substation and dual separate power feeds are a huge boon for any mining operation. Without it, a similar operation might have to spend hundreds of thousands of dollars more in order to achieve the same setup.

Hashrate Follows Price?

Cryptocurrency mining has really taken off in the past year, with new, with increasingly more efficient hardware hitting the market every few months. Bitcoin is mined using pieces of hardware known as ASICs, or Application Specific Integrated Circuits. These machines can perform mining calculations thousands of times faster than consumer grade hardware, making them an attractive choice for people looking to open large-scale operations. In addition to hardware costs, miners also need to worry about the electrical costs of running that many machines – hence the exodus to locations with cheaper electricity and cooler climates.

Bitcoin’s current bear trend doesn’t seem to discourage miners, however. Since January, the price has fallen well over 60 percent. yet the hash rate – the total computing power of the network – has nearly tripled from 13 EH/s to just around 37 EH/s. The hash rate is a good indicator of the overall security of the network – the higher the hash rate, the more difficult it is for someone to launch an attack.

One would think that a more secure network would be more valuable, but the market doesn’t really seem to care. We’ll see how the price reacts to this consistent hash power increase over the next few months.

What do you think about these large-scale mining operations? Do you think the current bitcoin mining landscape is too centralized? Let us know in the comments below!

Altcoin mining has gained huge popularity over the past year as people use high-end GPUs to secure networks, and major computer part makers are taking notice, developing products for this emerging market. Now a manufacturer has released a motherboard that can support 20 GPUs.

Better Hardware for Miners

ASUS announced the H370 Mining Master earlier this week, boasting the ability to support a whopping 20 graphics cards. This motherboard is specifically built for cryptocurrency miners, and the design was done in a way that allows for much more efficient connectivity by letting USB riser cables plug directly into the PCB ports rather than PCIe.

This motherboard aims to make maintenance on fickle GPU mining rigs much easier, as the company stated that this new format is much better than adding GPUs via PCIe. This motherboard also has drastic improvements to diagnostics, an essential tool for miners.

The mining industry already has a razor-thin profit margin, and if your cards aren’t hashing what they’re supposed to be hashing, you’re losing money. High uptime is one of the top concerns for all miners.

Price Spikes for PC Hardware

Ever since the initial big altcoin boom in early/ mid-2017, GPU shortages have been commonplace for most popular online retailers. As manufacturers struggle to keep up with demand, GPU prices have risen hundreds of dollars for top-of-the-line hardware. Gamers have been outraged as well, as they’ve been unable to get the components needed for the latest, and most graphics-intensive, games at reasonable prices.

Along with the price gouging, however, cryptocurrency mining has opened a huge potential market for existing hardware manufacturers. Rumor has it that NVIDIA and AMD are working to build their own cryptocurrency mining ASICs to compete with current Bitcoin mining companies. The addition of two major tech giants would definitely provide some much-needed market competition.

Are you mining any coins on your home PC? Are you interested in a motherboard that supports a whopping 20 GPUs? Let us know in the comments below!

Based on analysis of the bitcoin mining economy, the world’s most well-known cryptocurrency could reach as high as $64,000 USD by the end of next year.

Bitcoin Miners Do the Selling

According to independent research boutique Fundstrat, which provides market strategy and sector research, the bitcoin mining boom could potentially send the dominant cryptocurrency by market capitalization to upwards of $64,000 USD by the end of 2019. States the company’s head of research, Sam Doctor, in a report:

We believe the current path of hash power growth supports a BTC price of about $36,000 by 2019 year end, with a $20,000-$64,000 range.

Bitcoin is infamously volatile, creating FOMOers and naysayers on what feels like a weekly basis. Nevertheless, Fundstrat believes the economics behind bitcoin mining create key support levels — since bitcoin miners are less likely to sell their rewards during market downturns, and more likely to cash out during bull runs. Explained Doctor in a conference call to CNBC on Thursday:

The primary net sellers, in our view, are bitcoin miners, and the rest are transactions between investors.

We believe breakeven mining costs provide a support level for $BTC, as #miners – main natural #Crypto sellers – reduce selling at low $BTCUSD price. Based on expected computing hashpower and breakeven cost growth, that could imply #Bitcoin price of $36,000 by 2019 year end. pic.twitter.com/CVwIWNz8Lr

Fundstrat has estimated that the current cash break-even price Antminer S7 models is $6,003 USD per bitcoin. The newer and more powerful Antminer S9, however, features a much lower break-even point at $2,368 USD. Both popular pieces of bitcoin mining hardware are manufactured by Bitmain, which boasted an operating profit between 3 billion USD to 4 billion USD in 2017. Doctor said:

The release of the next generation of rig hardware should trigger a new round of capex as well as hash power growth, which could accelerate if BTC price appreciates.

According to CBNC, Fundstrat co-founder Tom Lee is the only major Wall Street strategist to cover Bitcoin.

Lee previously predicted last July that Bitcoin may reach $20,000 to $55,000 by 2022. At the time of that prediction, bitcoin was trading at $2,540. Lee also noted that bitcoin could become a viable substitute for gold.

Do you think bitcoin can reach upwards of 64,000 USD by the end of next year? Do you think the miners’ break-even point is indeed a key support level? Be sure to let us know what you think in the comments below!

Marko Kobal, co-founder of NiceHash, the Slovenian startup that serves as a marketplace for matching spare computing power to miners, stepped down from his role as CEO last week. This comes just weeks after NiceHash lost over $60 million to a high profile cyber attack.

Christmas came early for many Bitcoin enthusiasts this year, reaping huge gains from Bitcoin’s meteoric price surge in the first half of December. For NiceHash, however, the month of December was anything but merry as the execution of a high profile hack on December 6th resulted in the theft of over 4000 bitcoins worth an estimated $63 million. At press time, those bitcoins have yet to be recovered.

Now, just a few short weeks later, a new development in the NiceHash saga unfolds with last week’s announcement that CEO Marko Kobal would be stepping down to give way to new management. Kobal, who will be replaced by Zdravko Poljašević, has been with NiceHash since 2014 in its early. He stepped down from his role in the Slovenian startup, which lets people rent their computers’ extra processing power to users who want to use it o mine bitcoin and other cryptocurrencies.

Confirming His Resignation

Kobal announced his resignation on LinkedIn last week, stating that he was “incredibly privileged to share in the excitement of growing NiceHash,” and that he “shall now stand aside and allow new management to lead the organization through its next, exciting period of growth.”

As part of the terms of Kobal’s resignation, he has agreed to sell his 45% stake in NiceHash. Part of Kobal’s stake is being acquired by an outside investor, with the remaining balance to be purchased by NiceHash’s majority owner, H-Bit.

Restoring Bitcoin Balances

Understandably, there is concern among NiceHash’s users, however, the company is making great gains toward setting things right. The site is currently back online and users are free to mine and make profits once again. In an announcement posted on its website, NiceHash announced plans to reimburse users for their stolen funds:

Our community is very important to us and given the loyalty of our users, we want to make sure that everyone is fully reimbursed after what happened. This has been under discussion since the day of the hack.

We have now been able to reserve the funds required to restore balances from a group of international investors in our business. The exact date of reimbursement for old balances will be announced by January 31, 2018. We need this interim period to ensure all legal paperwork is processed correctly, so please be patient while we do this.

What is your opinion on NiceHash’s handling of the hack and its aftermath? Do you think that they will be able to move forward after this? Let us know in the comments below.

Bitcoin mining has exploded in Venezuela due to the country’s massive hyperinflation. Now the Venezuelan government is requiring bitcoin miners to join an online registry.

It seems that the misery of the Venezuelan people knows no end. The South American country’s economy has been hammered by massive hyperinflation due to the policies of the authoritarian government, now headed by President Nicolas Maduro. Many people, both poor and rich, have turned to mining Bitcoin in order to survive. Now a further clampdown is coming as the Venezuelan government is requiring bitcoin miners to join an online registry.

Sign Up … Or Else

The announcement of the new registry was made at a recent press conference by Carlos Vargas, the newly appointed “superintendent of Venezuelan cryptocurrency.” Bitcoin miners will have to start registering with the government on December 22nd when the online registry goes live.

Of the information that the government is looking for, Vargas says:

We want to know who they are, we want to know where they are, we want to know what equipment they are using.

Those in favor of the registry say that it will offer legal protections to bitcoin miners. Currently, the government has been cracking down on miners, such as the recent police raid on December 9th that saw the confiscation of 21 mining computers and the arrest of their 31-year-old owner. The police have charged the bitcoin miner with exchange fraud, computer crimes, damage to the national electric system, financing terrorism, and money laundering. (I’m surprised they didn’t throw in jaywalking while they were at it.)

What Could Go Wrong?

The people of Venezuela have been hammered by the socialist economic policies of the country’s last few administrations. Basic necessities, such as food and medical supplies, are non-existent, and inflation has reached over 4000% this year. Such circumstances have forced people to turn to Bitcoin in order to get the items they need to actually survive, and the situation is not getting any better. Weekly bitcoin trading in Venezuela has skyrocketed from $225,000 early in the year to a staggering $2.1 million in the first week of December.

As soon as the people turned to bitcoin mining, extortion and theft by the authorities have happened. Many individuals have had their mining rigs confiscated by police and federal authorities, only to have those authorities use the machines to mine bitcoins for themselves. One miner recently gave up 11 of his 20 machines in lieu of a $20,000 bribe, and insult has been added to injury as the officials who stole his machines now contact him for technical advice.

So, what could go wrong with an online registry for bitcoin miners? The most obvious is that the government will be able to do a mass confiscation once a full list has been compiled. The government of Venezuela has nationalized (forcibly taken over) hundreds of businesses, which has led to the vast majority of them failing.

As David Fernando Lopez Torres, who moved his mining farm from Venezuela to San Francisco, notes:

If I were still in Venezuela, there’s no way I would sign up. If they weren’t protecting miners’ rights without a registry, how can they trust that they would protect their rights with a registry? First they need to publicize what the registry will be used for, because we can’t trust their intentions.

The likely result of the new online registry is that the majority of bitcoin miners will move even further underground. You would have to be stark-raving mad to believe that a corrupt government will honor any agreement to allow bitcoin miners to legally operate in peace. Either new taxes will be imposed upon the miners or the government will outright confiscate the equipment. Either way, the government will take the bounty of bitcoin mining for themselves.

A dictatorial president, a national government who has seized hundreds of legal businesses, economic policies that have ravaged the country, and massive corruption all point to a really bad outcome for those who sign up for the registry. But at least Venezuela will have the Petro, their own national cryptocurrency!

What do you think about the compulsory registry for bitcoin miners in Venezuela? Would you sign up? Let us know your thoughts in the comments below.

According to a recent report by security intelligence group RedLock, hackers were able to breach into the Amazon Cloud services of two companies in order to mine Bitcoin.

Amazon Cloud Used for Bitcoin Mining

In a recent article, Business Insider reported that hackers were able to hack into the AWS cloud services’ infrastructure of two companies in order to mine Bitcoin. According to the security firm RedLock, the two affected companies were Aviva and Gemalto. The security firm was somewhat surprised by the hack since the hackers didn’t target any sensitive data of either company. The hackers were only interested to access the Amazon Cloud servers in order to mine cryptocurrencies by executing a bitcoin mining command.

The report further states:

Upon deeper analysis, the team discovered that hackers were executing a bitcoin mining command from one of the Kubernetes containers. The instance had effectively been turned into a parasitic bot that was performing nefarious activity over the internet.

Hackers are usually known for breaching into digital enterprise infrastructure in order to steal sensitive data like social security numbers, credit card numbers, emails, passwords etc.

Cryptocurrency Mining Boom

Cryptocurrency mining has become a very competitive industry in the last couple of years. After the market capitalization “exploded” in 2017 and reached the record-breaking sum of $176 billion, more and more companies started mining cryptocurrencies. Bitcoin and Ethereum received the most attention from miners, as both reached their all-time high price of $5031 and $400 respectively.

The Bitcoin mining difficulty increased by almost 10 million Th/s from last year and Ethereum managed to reach a daily hash rate of 100,000 GH/s. The Ethereum hash rate might not stay this high for very long, since the Ethereum development team is planning to transition the Ethereum protocol from Proof-of-Work to Proof-of-Stake, effectively disabling Ethereum mining for cryptocurrency miners. Expert and analysts expect that current Ethereum miners will point their hash power to the next profitable cryptocurrency.

Do you think that more hackers will try to gain access to hardware in order to mine Bitcoin? Let us know in the comments below!

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