Bitcoin's surging hashrate is not enough - AMBCrypto

Warning: Blockchain difficulty adjustment affecting price movements

Below are notable difficulty adjustments when hash rate fell and block times become slower for Bitcoin.
  1. 26 Mar 2020 [difficulty adjustment -15.95%, avg block time 11min 54secs]. On the 28th price crashed from $6674 to $6138 ( -8%).
  2. 8 Nov 2019 [difficulty adjustment -7.1%, avg block time 10min 46secs]. On the same day price crashed from $9234 to $8783 ( -4.88%).
  3. The next big adjustment was around Nov to Dec 2018 and there were 3 big adjustments with high block times.

Current situation:
We are 1 day 10 hours from the next difficulty adjustment. Projected difficulty adjustment is -5.61% (https://fork.lol/pow/retarget), which could indicate a small dip. However, take note that the date of last adjustment was the 5th and the 3rd halving was on the 11th, between the 5th to the 11th there was increased hashrate from miners trying to mine the final week of 12.5btc that offset the really slow block times after the halving. Therefore it will be the next difficulty adjustment after the one on the 20th that will completely reflect the slower block times after the halving. Currently the median block time taken on the 17th was around 14min (-28.5% difficulty adjustment).
For people who do not understand blockchain, basically with the Bitcoin 3rd halving, mining profitability fell for a lot of miners and they probably turned off their miners therefore the blockchain mining time became considerably slower which is reflected with slow transaction speed and higher fees as seen currently. Bitcoin sellers moving their BTC from wallet to an exchange are faced with slow transaction speed and therefore the sell pressure of BTC fell considerably which will attribute to the current price increase. There is a correlation between sell pressure and blockchain congestion (the size of the correlation is undetermined).
There is going to be a race. A race between BTC price hiking high enough to attract more miners to reduce avg block times versus the closing window of roughly 2 weeks before the next difficulty adjustment. If the price does not jump high enough, the next difficulty adjustment in the first week of June could signal a huge dip.
I am not an expert. I just did some research on the above and wanted to share with fellow Bitcoin compatriots so that we can tread with caution and not lose our shirts. I do not plan to short BTC but I will exit my BTC positions if I expect double digit negative difficulty adjustment in early June.
Please visit the original post here https://www.reddit.com/Bitcoin/comments/gm23pe/warning_blockchain_difficulty_adjustment/
There are pictures in the original post as well as 2nd halving evidence with pics. I could not post pics here. If possible please upvote the original post, a lot of people downvote it. Not sure why people downvote it, maybe veterans attempting to hide information from newcomers to fleece them of their shirt.

Update 1:>! As of writing, I have opened a small short position on Bitcoin. Stop loss around 10k, estimated take profit around 8500. The reason is because the difficulty adjustment in the next 20 hours, even though is just -5% roughly is still significant. I direct you to look into all the difficulty adjustments in the last 2 years and you will know how rare it is. The ones I caught were all listed at the very top of the post. Since it is my first time shorting BTC, I take this as a learning opportunity so that I will have some experience to face the bigger difficulty adjustment in the first week of June. Analysis into execution, even in failure I am happy.!<
Update 2: The difficulty adjustment (DA) happened roughly 6 hours ago and the sell pressure from -6% DA did not seem to be affecting the market much. However, please take a look now at the estimation for the next DA.
On https://bitcoin.clarkmoody.com/dashboard/ it is estimated to be -25%.
On https://fork.lol/pow/retarget estimated to be -18%.
On https://www.blockchain.com/charts/median-confirmation-time the median block time for the last day was 16.8min.
My original proposition that the true DA of the halving can only be realized in the next DA stands and that it will be considerable. The increased sell pressure from that DA will be highly significant. That is why there is a race by current miners to get the BTC price up high enough to attract more miners to not have the DA drop too much.
Update 3: Current BTC price at $9100 ( ~39 hours after DA). Then again BTC could have dropped from all sorts of reason. However the coincidence with the DA and with all the past DA is just too high to simply shrug off as irrelevant. Anyways past result cannot predict future ones, stay safe with the trading. Will no longer check on this post.
References:
Difficulty adjustment dates taken from https://btc.com/stats/diff
Bitcoin graph history for price movement taken from coinmarketcap.
Median confirmation time (block time) taken from https://www.blockchain.com/charts/median-confirmation-time

Credits to people who assisted the analysis:
kairepaire for pointing out faster block times between 5th-11th.
babies_eater for https://fork.lol/pow/retarget
moes_tavern_wifi for https://bitcoin.clarkmoody.com/dashboard/
Pantamis for https://diff.cryptothis.com/
submitted by theforwardbrain to BitcoinMarkets [link] [comments]

Warning: Blockchain difficulty adjustment affecting price movement

Warning: Blockchain difficulty adjustment affecting price movement
Below are notable difficulty adjustments when hash rate fell and block times become slower for Bitcoin.
  1. 26 Mar 2020 [difficulty adjustment -15.95%, avg block time 11min 54secs]. On the 28th price crashed from $6674 to $6138 ( -8%).
  2. 8 Nov 2019 [difficulty adjustment -7.1%, avg block time 10min 46secs]. On the same day price crashed from $9234 to $8783 ( -4.88%).
  3. The next big adjustment was around Nov to Dec 2018 and there were 3 big adjustments with high block times.
  • 19 Dec 2018 [-9.56%, avg block time 11min 3secs]
  • 3 Dec 2018 [-15.13%, avg block time 11min 47secs]
  • 17 Nov 2018 [-7.39%, avg block time 10min 48secs]
  • There was huge drop off starting on 14th Nov all the way to a bottom on 14-15th Dec ($6351 to $3288 around -48%).

Current situation:
We are 1 day 10 hours from the next difficulty adjustment. Projected difficulty adjustment is -5.61% (https://fork.lol/pow/retarget), which could indicate a small dip. However, take note that the date of last adjustment was the 5th and the 3rd halving was on the 11th, between the 5th to the 11th there was increased hashrate from miners trying to mine the final week of 12.5btc that offset the really slow block times after the halving. Therefore it will be the next difficulty adjustment after the one on the 20th that will completely reflect the slower block times after the halving. Currently the median block time taken on the 17th was around 14min (-28.5% difficulty adjustment).

https://preview.redd.it/ysnv85wh0lz41.jpg?width=597&format=pjpg&auto=webp&s=e130b077f9dc2fc9d02666ef89e6f9249a05f535
For people who do not understand blockchain, basically with the Bitcoin 3rd halving, mining profitability fell for a lot of miners and they probably turned off their miners therefore the blockchain mining time became considerably slower which is reflected with slow transaction speed and higher fees as seen currently. Bitcoin sellers moving their BTC from wallet to an exchange are faced with slow transaction speed and therefore the sell pressure of BTC fell considerably which will attribute to the current price increase. There is a correlation between sell pressure and blockchain congestion (the size of the correlation is undetermined).
There is going to be a race. A race between BTC price hiking high enough to attract more miners to reduce avg block times versus the closing window of roughly 2 weeks before the next difficulty adjustment. If the price does not jump high enough, the next difficulty adjustment in the first week of June could signal a huge dip.
I am not an expert. I just did some research on the above and wanted to share with fellow Bitcoin compatriots so that we can tread with caution and not lose our shirts. I do not plan to short BTC but I will exit my BTC positions if I expect double digit negative difficulty adjustment in early June.

Bitcoin 2nd halving evidence:

2nd halving falls between the 5th and the 19th adjustment so it is only reflected on the 3rd of Aug difficulty adjustment ( -5.43%).

See the dip on the 3rd of August. Price fell from $600 to $533 about 11% drop.
Update 1:>! As of writing, I have opened a small short position on Bitcoin. Stop loss around 10k, estimated take profit around 8500. The reason is because the difficulty adjustment in the next 20 hours, even though is just -5% roughly is still significant. I direct you to look into all the difficulty adjustments in the last 2 years and you will know how rare it is. The ones I caught were all listed at the very top of the post. Since it is my first time shorting BTC, I take this as a learning opportunity so that I will have some experience to face the bigger difficulty adjustment in the first week of June. Analysis into execution, even in failure I am happy.!<
Update 2: The difficulty adjustment (DA) happened roughly 6 hours ago and the sell pressure from -6% DA did not seem to be affecting the market much. However, please take a look now at the estimation for the next DA.
On https://bitcoin.clarkmoody.com/dashboard/ it is estimated to be -25%.
On https://fork.lol/pow/retarget estimated to be -18%.
On https://www.blockchain.com/charts/median-confirmation-time the median block time for the last day was 16.8min.
My original proposition that the true DA of the halving can only be realized in the next DA stands and that it will be considerable. The increased sell pressure from that DA will be highly significant. That is why there is a race by current miners to get the BTC price up high enough to attract more miners to not have the DA drop too much.
References:
Difficulty adjustment dates taken from https://btc.com/stats/diff
Bitcoin graph history for price movement taken from coinmarketcap.
Median confirmation time (block time) taken from https://www.blockchain.com/charts/median-confirmation-time

Credits to people who assisted the analysis:
kairepaire for pointing out faster block times between 5th-11th.
babies_eater for https://fork.lol/pow/retarget
moes_tavern_wifi for https://bitcoin.clarkmoody.com/dashboard/
Pantamis for https://diff.cryptothis.com/
submitted by theforwardbrain to Bitcoin [link] [comments]

Bitcoin 2017 a Comprehensive Timeline

Some of the most notable news and events over the past year:
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submitted by BitcoinChronicler to btc [link] [comments]

Petrodollar, Fiat Currencies, Foreign reserves and whether a gold backed currency is a solution? And will David do a segment on this on TDPS?

I am no economist. Though I have recently got interested in all this mumbo jumbo. I have researched extensively on the geopolitics of China. Through that, the geopolitics of Russia came up. Through which Putin's attempt to bypass IMF and World Bank and the Dollar to bypass US sanctions came up. When I looked into how that all would work, I ended up with the mess of information and the muddle of thoughts I am in now. This is my understanding of the matter from my research. I could be completely wrong with regards to some things here or all of them. However, like many of my posts, this too is a mental exercise to inform other people, get them thinking about it and gaining information myself and correcting my own misunderstandings on matters. Therefore I would like as much well informed, sane and serious discussion on it as possible.
in 1944, all the countries entered into the Bretton Woods Agreement which basically said that all of the world’s currencies would be backed by the US Dollar and the US dollar would be backed by gold and any country could convert their currency into US dollars and then redeem US gold in exchange for that at the rate of 35 dollars per ounce of gold. Since US had the largest gold reserves at the time (75% of the entire world's gold), everyone agreed. This also allowed US treasury to fix exchange rates of dollar into different currencies and set the interest rates for inter-banking transactions etc. However, the multiple wars of the US during the ’60s caused domestic inflation in the US and the value of Dollar to fall. This caused panic in all the countries and they started redeeming gold from US treasury. The US gold fell from 20,000 tonnes to 8100 tonnes very quickly. Thus, in 1971, Nixon closed the gold window i.e. he suspended the ability of any nation to redeem US gold against dollars and took the gold backing off of the US Dollar. While that allowed US to retain its gold reserves, it made the need of the US dollar among other countries non existent. So everyone started to move away from the Dollar. After that, US economy started to spiral and the price of gold became 135 dollars per ounce. On top of that, the Arab world hiked the oil prices. Now, the US desperately needed to stabilize the spiral. So they brokered a deal with the Saudis that the oil producers would not only trade oil in nothing but US Dollars and convince the OPEC (the middle eastern, north African and other oil producing countries) to do the same but also invest their (OPEC’s) oil profits in US treasury by buying US Treasury bonds. This basically means that they (OPEC) are buying out US debt. Not only this, US is printing Dollars against the amount of Foreign investments in the US treasury which is made by Oil producing nations which are their oil profits. So basically, profits from every barrel sold by OPEC make way to the US treasury and become the value against which dollars is printed. Ultimately, more the profits in oil, stronger the dollar and lesser the profits in oil, weaker the dollar. Thus US gets a double benefit out of every barrel of oil in a way. In exchange the US would sell them (Saudis) advance weapons and all the gold they demanded. (So basically weapons and gold sale in exchange for trading oil in dollars props up US dollar. Gold is still propping up US dollar indirectly by forcing the oil producers to trade in dollars). Thus the petrodollar was born. This caused the world to need US dollar again. If you wanted to buy oil, you needed US dollar by either converting your currency or by selling stuff to the US. The latter is more preferred as it is cheaper than exchanging your currency and also grows your economy. So once again, US became the benchmark of international trade since no country can hope to grow its economy without using energy aka oil and you can’t have oil without US dollars. As long as all these countries need oil, US can just print Dollars out of thin air and balance it against oil barrels (as explained above) without actually even owning a single drop of oil. (Other countries need to own the gold that they balance their currency against). US does not need to control oil, they just need to control the currency it is traded in to keep their economy afloat. (more on that later in US foreign policy). Similarly, US brokered a deal with the Latin American countries to not only trade in the US Dollar but also to give precedence to US, EU and Japanese products in trade. So if more and more countries decide to shun the dollar and trade in other currencies, this would eventually cause OPEC to switch as well and Dollar could collapse.
How? Well, US is basically just printing enormous amounts of money out of thin air. This money is being used domestically and to a much larger extent, globally. If international oil trade in dollar stops, people stop needing the dollar and use their own currency. So all the internationally circulating dollars would come back to US. Now that is just too many dollars against very little amount in the treasury and that would cause hyperinflation and economic spiral. However, the logical next step would be to just destroy the excess dollars coming in from abroad and that would keep the country’s economy afloat. While that is okay but remember, what is the dollar being printed against? The foreign investments in the treasury which are the profits from the oil trade in dollars. That would go away as well essentially leaving nothing in the treasury against which the dollar is valued. Hence, dollar will literally not be worth the money it is printed on.
Second, since US currency is basically a petrodollar, its power depends on the control of oil. So right now, whoever controls middle east has major power. Today, Saudi Arabia controls the Middle East and US controls Saudi Arabia. US-Saudi brotherhood sort of makes it impossible for other countries to have an influence over this. Russia has tried for decades to establish a strong foothold in the middle east but has been unsuccessful. It has also dictated the US foreign policy far the last 5 decades. Like I said, US needs to control not the oil reserves but the currency oil is traded in. Hence all the wars we hear that were for oil, were not actually for oil per se but intimidation tactics against countries that announced that they would no longer accept the dollar as a currency in international oil trade. Egs When the Ayatollah of Iran announced their intention to denounce dollars in oil trade and use their own currency instead, US backed Iraq to go to war with Iran and even provided the Weapons of mass destruction to use on Iran that they later used as an excuse to invade Iraq and prosecuted Saddam Hussein for. When Iraq invaded Kuwait ( a major producer of oil) to be able to pay their loans to Kuwait and then later asked for Euro to be used for oil trade rather than Petrodollar, US invaded Iraq. When Gaddafi asked gold based Dinar instead of US dollars for oil trade, US invaded Libya. When Chavez did the same, Us staged a coup in Venezuela. However, starting a non-petro currency would break this link and oil and Middle east would become less relevant for Economic power and only be of interest for energy concerns. It is still important but less so than an economic and geopolitical chessboard of US that it is today. It may actually be a solution to achieving peace in the middle east.
However, another thing that happens is the Middle East controls prices of oil which is tied to the Dollar. Recently, the Middle East (OPEC or basically Saudi Arabia) has decided to drop the international prices for their own economic reasons. Now, the countries that have oil production as a major source of revenue and trade in dollars eg many N African countries, Venezuela have seen their economy completely destabilize and destroyed. These countries are sick of US and Saudi controlling the markets in a way that affects other countries adversely. Hence, for these countries, switching to the international trading system of a gold based currency will cause their economies to stabilize.
The international reserves of EU etc, on the other hand, have seen increased holdings by the OPEC countries and have been worried about increasing power of these countries in the international banking system. They would be only too glad to get rid of these holdings.
Now, non Dollar currency would cause a fall in the US dollar value. In lieu of that, here is another thing that needs to be considered. A lot of the developing countries have international trade deficits. Now these trade deficits can be in the currency of the country to whom the debt is owed or any other internationally accepted currency eg. the Dollar. If the debt is in dollars, the conversions and interest rates of borrowing are determined according to the rules of the US treasury. Again, the rates in the US treasury are linked to the value of the dollar. Most countries giving out loans prefer to do so in dollars as historically the Dollar is strong and trusted not to collapse and hence the money they owe is safe. The countries taking loans also convert their debts to dollars as it is easier and the country to whom the debt is owed cannot just up and change the value of the debt owed by manipulating their currency as the dollar has determined the conversion into other currencies at fixed rates, so it is safe for everyone. However, there is a slight problem with this. If you owe a debt of 1 dollar to someone, when you pay the debt, it will depend on the value of the dollar to your currency at that particular instant. So if the dollar has gotten stronger wrt to your currency, you shall have to pay more money and if the dollar has gotten weaker, you will owe less money in your currency. Hence the fall of the dollar would be beneficial for the countries who owe a debt in dollars and bad for the countries who have loaned out debt in dollars.
Also, taking debt in dollars becomes cheaper if the value of the dollar falls since the US treasury interest rates are directly tied to dollars, hence it becomes cheaper to borrow in dollars. Also, as I said, if it grows weaker still, yo will owe less money.
One more thing to consider regarding fall of the Dollar is this. Until now, the oil producers have been buying US treasury bonds due to the Bretton Woods deal. Other countries and US and other corporations do so too. Now, the US treasury gives a fixed rate of interest to those investing in the treasury. This rate, in turn, is linked to the value of the dollar. Stronger the dollar, more the interest on US Treasury bonds and more the foreign countries invest in it. Now this means that these foreign countries would much rather invest their money in US Treasury at an assured fixed rate of interest than investing it in 3rd world countries and take a risk of maybe losing it. However, if the value of the dollar were to fall, the countries would much rather draw out of the US treasury and invest more in the startups in different countries, domestically etc.
The other side of the same coin would be the countries dependent on US investment. Should the value of the dollar fall, the investment being received from the US would be of a lesser value.
On the other hand, there is one more thing. Like I said, investments in dollars are governed by the US treasury rules. Now, basically, US banks have cut the taxes on money transfer and conversion, artificially keeping them very low to fuel the domestic and world trade etc. If the dollar were to collapse, people wouldn’t trade in dollars. They would trade in other currencies. The inter banking across the world would be then governed by the rules of the currency you trade in, for eg, BRICS nations will follow the tariffs etc of the Shanghai Bank where most of the reserves are held. So that effect would then depend on the rules of the bank you deal with and that can be detrimental or beneficial depending on the bank’s policies compared to the dollar.
Also, countries having holdings in the US treasury would lose the entire value of their foreign reserves. On the other hand countries like BRICS who have their reserves in other international banks would retain the value of their foreign reserves in those banks.
What does this mean?
Let's consider a currency X. X would also fall with the fall of the dollar in its current state. Now, we usually run around with the perception that X is backed by gold, That’s not true. The truth is 99% of today’s currencies US Dollar, Euro, Yen, all of them are fiat currencies i.e. their value is not determined by the gold they hold but by the economic strength of the government and the trust of the world in that currency. Only an average of 4–7% of any country’s currency is today, backed by gold. US Dollar - 4.5%, Similarly X lets say is - 5%. The rest is held in the terms of foreign reserves in other countries like in the form of US Dollar (for X lets say, its around 70%) in US treasury bonds, in world bank or IMF, in other currencies ( lets say for X its around 25%) and other foreign reserves etc. Currently, if you have X1000, only X50 is gold, around X670, is held in the form of US dollars and X280 in other currencies. You might ask why is that? Well, remember the Bretton Woods agreement. At that time US had 75% of the world’s gold which backed dollar and dollar backed other currencies so most of the currency of any country was backed directly or indirectly by dollar by gold. Now, it is difficult to keep gold in your country so it was convenient for other countries to just hold foreign reserves in dollars especially with the fixed exchange rates they provided. Hence more and more portion of their currency was being held in dollars. However, after Nixon shock of 1971, dollar removed its gold backing. So, automatically all other currencies that were backed by the dollar (99% of the world currencies) also became fiat currencies as a result. However, the dollar was still good and trusted so no one thought much of it, especially since dollars were being printed out of thin air. However, now with the prospect of the trust in dollar fading, this has started to worry some experts. Because of the senseless printing of dollars and in exchange all the fiat currencies, the total amount of currency can nowhere near be compensated by the gold reserves even if all the gold in the world was put together. It would form not more than 10% of the currency in the world. Now, putting this disturbing detail aside, if Dollar were to collapse, X670 of your X1000 would become worthless, too. So, it isn’t wise to hold US dollars, is it? No its, not and many countries have woken up to that fact.
China has been secretly amassing large amounts of gold. OPEC countries have started removing their capital from US treasury. See, these oil producers have been receiving US gold in exchange for trading oil in US dollars and have accumulated holdings in other countries’ treasuries. Now with all the crazy gold, they have received they have bought material assets like real estate etc even in other countries. Now, they can simply sell out their US treasury bonds and buy more assets such as gold and real estate from it, which they have been doing in the recent years. Now, this will start depleting the treasury and cause the fall in the value of the dollar, in turn, causing other countries to withdraw and invest elsewhere. That, coupled with Russia and China doing trade in Roubles and Yuan, India and Iraq trading oil outside of dollar, Germany and China trading outside of Dollar, the strengthening of BRICS bank etc, Dollar has been showing a steady decline.
[Edit :the petrodollar is based on a commodity that is being depleted. Oil reserves are declining and the world is moving towards other sources - gree energy, nuclear energy etc. So the petrodollar decline is destined. However, what would US do next? US could shift to backing the dollar with nuclear reserves or some new crazy idea out of someone's hat. That will, inevitably affect all other countries.
Which brings us to: The thing that worries most nations is this - having international trade and foreign reserves in dollars gives US a single handed say on their economies. Just like Nixon's unilateral decision changed the fate of all currencies, other decisions by it can also change their economies. US can dictate their rules and if you don't follow them - sanctions. This is one of the major reasons Putin has teamed up with China - in order to bypass US sanctions. By passing Dollar would take away the power of the US to unilaterally change the playing field. So the countries want to take back the power of making decisions in their own hands.]
On the other hand, China's attempt to start a gold backed currency may not pan out because like I said all the gold in the world is not sufficient to back all the currencies in the world. Also, since most currencies still have a large amount of dollar backing, fall of the dollar would make that percent of the currency valueless and therefore even have a reserve in another foreign currency could still cause a fall in X currency though it might be a little mitigated. On the other hand, fiat currencies are run by the investors' trust in the currency. So even if the dollar falls, a fiat currency with foreign reserves in the dollar may not fall because the confidence in that currency is still high. Sadly, such a currency would be Chinese Yuan (or am I wrong about that?). So, the policy to fix this? I am still trying to work on that solution. Though I have come to believe that neither the fiat currencies nor the gold backed currency are a solution. Maybe taking gold, platinum, silver and other precious metals together would be a basis. Maybe Us could switch from oil backing (oil will deplete in a few years anyway) to nuclear reserves happen. That would be a similar thing, just the power would no longer be in the hands of the middle east. I don't know. This is a post in evolution. My thoughts on this are still in evolution and I would really like some economists to come and hold a serious, well informed and sane discussion on this.
That’s all I can think of for now, I will add more when it occurs to me.
In addition to this, there has a very interesting discussion on Bitcoins in this relation which I will summarize below:
The discussion started with the question: do you think blockchain technologies like bitcoin could mitigate the lack of total amount of gold in the world?
The following points came up:
I don't think that is possible. Bitcoins, too, are created out of thin air. Though there is a cap on the total number of bitcoins to be created (21 million), this is high in the debate to accommodate the need for more transactions. If the rules were changed and more bitcoins were generated, it would have the same effect as the dollar.
The value of the bit coin, too, depends on the willingness of everyone to use Bitcoin as a currency. So it is basically a more extreme version of a dollar with additional problems. Bitcoin suffers extensive volatility. It is very unstable to use as a reliable replacement currency.
In my understanding, Bitcoin uses people/their computers computing problems (computing problems is a method to verify the transactions happening through block chain) as a sort of cost for earning/mining the Bitcoins in an indirect fashion. That would be similar to if one were to link the value of a currency with the productivity of the country. That is liable to fluctuation and hence there would be extreme fluctuation in the value of the currency as well.
Now bit coin has no determined exchange rate. It has no backing in terms of gold or dollars or real estate or anything. It has a value that the collective consensus agrees its value to be and that fluctuates massively, even more than stock exchange. If people start selling bitcoins, its value falls, if they start buying bitcoins, its value rises. It is a form of virtual stock exchange on steroids. It runs simply on basis of faith. So while many traders do accept bitcoins, they still maintain actual currencies as the primary mode of transaction.
One thing I like about bitcoin is that it bypasses the banking system and hence makes transactions everywhere much easier. It also takes off the effect of the governmental fiscal/monetary policies on affecting the world. However, other policies can still affect it. Eg. internet security policies, massive firewalls etc.
Next, another problem with it being decentralized is that there is no mechanism or body to resolve disputes. I mentioned a firewall. China has a massive firewall that causes Chinese Bitcoin network to get disconnected from the rest of the world for days. So, the Chinese keep carrying out transactions in a different virtual world and the rest of the world is in a different virtual world.When the worlds collide after a couple of days, the issues are not resolvable and there is no one to settle disputes.
The format of the bitcoin is this. Right now it pays block benefits to miners that form 99% of their revenue. Later, as the number of bitcoins to be mined decreases, this is to be replaced by a transaction fees revenue. Now, the number of people using it is low. Therefore the transaction cost would go very high making the transactions in bitcoins costlier and decreasing the number of transactions taking place in it and devaluing the currency. And the people sort of in control of its policy are split on how to handle that issue.
Next, there are other currencies like Ethereum etc that are coming up and we see Chinese investing much more in Ethereum than in Bitcoin. Now, again, even Ethereum has no intrinsic value and there is no way to determine the value of one currency against another.
Next, there is again the problem of founding currencies on currencies. Like with the dollar backing all currencies of the world, there are people creating currencies backed by existing cryptocurrencies eg Kin over Ethereum. This again causes pegging of currencies to another one and hence presents the dollar problem in a digital format.
Next, Bitcoin seriously threatens political power and banks. Hence, it will suffer a severe backlash from them. While they cannot control the blockchain, they can change internet and capital policies and control the ends of the chain and levy backward taxes etc and hence manipulate these as well.
Also, as the number of bitcoins is limited, the number of people mining it is less and a trend of hoarders and squatters is emerging even with Bitcoin. When Bitcoin started you could just mine bitcoins using your CPU and GPU. The amount you earn depends on the number of transactions you verify through solving problems. Therefore the more problems you solve per minute, the more bitcoins you earn per minute. Therefore the more speedy and memory savvy your equipment and faster your internet speeds, the more bitcoins you earn. Sadly, with the increasing competition in the Bit-world and the flood of greedy/opportunistic Chinese among other people swarming the cryptocurrency markets, the equipment required to mine bitcoins is getting more and more expensive which concentrates the ability of mining in the hands of people who are ready to seriously invest in expensive and high-speed hardware. This would again lead to a sort of centralization of power with the people holding bitcoins and they can internally manipulate the currency which would then again cause people to lose the appeal and defeat the whole purpose of it. It also increases the risks of 51% attacks, again something that will cause bitcoiners to abandon ship. Also, if bitcoin is going to cut the rewards for mining, it will be less and less profitable or even profitable for miners and hence they will stop mining and maybe sell off the Bitcoins.
Also with the sort of disarray in the management of the bit-system, some of the transactions are taking hours and even days to go through creating more and more hassles for the users.
Plus, what happens if the servers in your area are down or there is a power outage due to some reason and bitcoin is the only currency in the world?
Also, Bitcoin runs on the collective ledger kept around the world of all transactions happened and happening in real time. One cannot use most Bit-Wallets without downloading all of this data. The data increases with every new user and every minute Bitcoin is in use. As time passes and Bit-users grow, this data will reach gigantic proportions. This again puts limitations on Bitcoin to be more and more feasible for people who can afford to invest in expensive hardware that can store massive amounts of data. Since that would decrease the number of users, the overall number of users in the bit-system will be maintained within a certain range because of this. Since the pool of people and transactions will be less, the transaction fees charged to keep paying benefits will become higher causing lesser transactions the currency to collapse.
So, the currency is young and there are so many things to consider. It also needs to evolve a lot before it can be even universally be accepted as a currency. I cannot say whether it could replace the currency systems or not, whether it should replace them or not. You will find very strong opinions on either side. I believe it will have a parallel role for about a decade before such a question can come close to a possible answer. Trends will be clearer after some time. All I can give you is my opinion for in what context bitcoin should use.
IMO it might be wiser to use Bitcoin as a transaction currency instead of a primary currency. What I mean by that is, unpeg the currencies from the dollar, allow the free market to decide the value of your currency and the exchange rates and determine the absolute value of a bitcoin-like currency. Then make a bitcoin-like currency which can be both virtual and physical that is universally accepted for trade wherein it is just a means of exchange in cases of international trade. Also, let everyone (countries) using it have a say in the administrative decisions of it.
Moreover, a world currency will never be possible. Weaker economies require a weaker currency for their benefit and stronger economies require stronger currencies for their benefit. When you have a common currency with different economic strength countries, you end up with something like the crisis in Greece because of the Euro. There is a lot to consider for that.
Free Floating exchange rates also came up.
In addition to that, before 1944, the world was linked to gold standard. So that allowed for easy capital mobility and currencies were not dependent on currency. After Bretton woods, the problem was pegging of the currencies to US Dollar which tied all the currencies to the fate of the dollar. So its not that even a fixed rate system can't work, it can, maybe not in the form of gold standard but some other form. Th problem is there shouldn't be too much power in the hands of one person.
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While I do think in today's scenario, free float would work but that restricts trade and while it will be beneficial for countries like China and even Germany which are producers and will help them to boom domestic market it will not be welcomed by the west as they are dependent on trade to provide for their basic needs and local production and increased difficulty of trade by free float would increase their cost of living tremendously. Don't you think? Thoughts in evolution.
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Unless there is a universal trading currency that is decentralized and controlled by equal votes by every country using it and has a set value. So, it would be something like a dollar but maybe rooted to an anchor for value like in olden days it was gold. It could be something else now, a proportionate part of which can be held in the reserves of different countries and allows for easy trade and exchange across the globe but prevents the monopoly of one country.
submitted by concernadian to thedavidpakmanshow [link] [comments]

Bitcoin Mining Difficulty is a Myth!!! Genesis Mining and big Bitcoin difficulty Update Bitcoin mining in South Africa Bitcoin Miner Software - how to mine bitcoins faster !? Following Bitcoin’s Hash Rate Network Difficulty Is About to Set a New MAKING MONEY MINING BITCOINS - See How Some People Are Getting RICH from BITCOIN Miners

Bitcoin’s hashrate hit a new ATH recently. In fact, the total hashrate has hit quite a few ATHs this year, with the same noted to be $144.03M TH/s, at the time of writing. However, while historically this points to a price hike in the future, it may not be the case this time. Since the […] The move was made possible by Bitcoin’s difficulty lowering, in order to make mining more economical for network participants. Hash rate refers to the computing power which miners devote to validating the Bitcoin blockchain. The higher the number of hashes per second, the more implied power there is. Hash rate goes hand in hand with difficulty, which is an expression of how intensive it is ... The difficulty of mining a Bitcoin block ramped up by 3.6% today, marking an all-time high for the network. But the adjustment does put additional pressure on miners. While not the most significant leap in difficulty adjustment history, the 3.6% hike brought Bitcoin's total network difficulty to a record high of 17.56 trillion (T). The last ... The mining hash rate has started to increase for Bitcoin. ⠀ Bitcoin price: $9,720 ⠀ Key BTC resistance levels: $9,783, $10,000, $10,287, $10,432 ⠀ Key BTC support levels: $9,500, $9,363, $9,000, $8,952 *Price at the time of writing. Bitcoin saw a small 2% price hike over the last week of trading as the coin currently trades at $9,740. The cryptocurrency started June off by soaring into ... The difficulty of mining a Bitcoin block ramped up by 3.6% today, marking an all-time high for the network. But the adjustment does put additional pressure on miners. While not the most significant leap in difficulty adjustment history, the 3.6% hike brought Bitcoin's total network difficulty to a record high of 17.56 trillion (T). The last ...

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Bitcoin Mining Difficulty is a Myth!!!

Today we will look at the Bixbit mining firmware for mining Bitcoin, Bitcoin Cash, Bitcoin SV, and any other coins on the sha-256 mining algorithm. We will also review Bitcoin mining difficulty ... Join Genesis Mining here: https://www.genesis-mining.com Here is the promo code to get 3% discount: QqNvn3 Join me on Facebook page: https://www.facebook.com... Take a look inside of my Lifestyle Galaxy dashboard to check my profits from my bitcoin mining contract. Monthly updates. Want to start mining your own bitco... With the increase in mining difficulty rate, the fixed rate of ONE to EUR increases as well. At DealShaker fixed rate of 20.65 EUR = 1 ONE, you are now able to purchase goods and services for 10 ... The BTC difficulty rate is far too high to make any ROI mining with the GPU in your Mac and BTC mining requires dedicated hardware (ASIC) that's both expensive and constrained. xtremeTech has done ...

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