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Inside Bitcoin

Inside Bitcoin (Sep 16th, 2019)

Happy Monday! I hope you had a good weekend. Today's news is pretty interesting, but I like the analysis pieces. You should be really enlightened after reading about Bitcoin valuation and volatility and China's digital currency.

Of course, don't forget about the Bitcoiner list on Twitter. More on the way.

-- Allen

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Market Watch: Top five gainers today are VeChain, Quant, Metaverse ETP (the biggest loser on Friday), THETA, and Synthetix Network Token. Bottom feeders: MonaCoin, Aurora, NEM, Dragon Coins, and Cosmos (rode high last week and top gainer last Monday). Among the top five, Ethereum busted out with some major gains this past week.

  • Bitcoin: $10,236 (⬇️ 1.07%) // $183.6 billion market cap.
  • Ethereum: $191.96 (⬆️ 1.50%) // $20.68 billion market cap.
  • XRP: $0.26 (⬇️ 1.23%) // $11.2 billion market cap.
  • Bitcoin Cash: $304.89 (⬇️ 0.43%) // $5.48 billion market cap.
  • Top 100 Winner: VeChain: $0.004 (⬆️ 7.89%) // $223.1 million market cap.
  • Top 100 Loser: MonaCoin: $1.20 (⬇️ 11.99%) // $9.077 million market cap.

Prices are as of 12:09 p.m. EDT.

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1. Bitcoin's two-week average hash rate hit an all-time high of 85 exahashes per second (EH/s) at about 19:00 UTC on Friday, according to BTC.com. The blockchain's mining difficulty adjusts roughly every two weeks in order to keep the block production time to 10 minutes, says CoinDesk writer Wolfie Zhao. It's estimated that 600,000 new ASIC miners with an average hashing power of 55 tera hashes per second (TH/s) were deployed within the last three months. ASIC miners sell in the range of $1,500 to $2,500, so if these calculations are correct, the leading ASIC miner manufacturers--Bitmain, Canaan, InnoSilicon, and MicroBT--could have made $1 billion in revenue in the last three months. -- COINDESK

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2. According to a Chinese news report, the country's digital currency is being positioned as a substitute for M0, which, in economic lingo, means the total value of the money supply available in the economy at any point in time. Other money supply categories include M1, M2, and M3. In essence, each category is successively less liquid than the next with M1 representing the physical money supply, therefore being the most liquid and useful for cash transactions. By dividing M0 by M2, economists can determine the ratio of people in a national economy who rely on cash for payments. China's M0/M2 ratio is the third lowest, behind only the UK and Hong Kong, at 3.79 percent. By contrast, the U.S.'s is 21.92 percent, one of the highest in the world, indicating its citizens rely on cash 5.8 times more than the Chinese. These numbers could indicate that China's Central Bank Digital Currency could be planned as a mobile payment replacement system in China, says author Henry He. -- VENTURE BEAT

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3. CoinDesk Director of Research Noelle Acheson says Bitcoin is getting less volatile. In finance, there is more than one way to measure deviation. In the world of crypto, it makes a huge difference whether low liquidity leads to volatility or volatility leads to low liquidity. Acheson challenges common assumptions regarding the valuation of Bitcoin and volatility by comparing standard deviation with median absolute deviation. She then turns her attention of Bitcoin's value asserting that the main driver of value is sentiment. Comparing it to gold, she says it's "radical uncertainty" that causes bitcoin's volatility to be so much lower than that of the precious metal. -- COINDESK

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4. XRP investor @Crypto_Bitlord tweeted to his 100,000 followers plans to fork Ripple's XRP token. The tweet appears to be more of a troll than a real threat, but highlights growing discord in the XRP community. Ripple has been selling large amounts of its currency to fund operations and invest in other firms. It's estimated that Ripple Labs owns about 60 percent of the 100 billion XRP that have been created to date. Other investors believe the dumping practice has been hurting their investments. Last month, a petition to stop Ripple dumping was posted at Change.org asking for 5,000 signatures. -- COIN TELEGRAPH

Do you think Ripple will hard fork, and would it succeed if it did? Email me at allen.taylor@inside.com and let me know.

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5. The amount of Ethereum gas is currently at an all-time high, according to its 14-day moving average. In 2017, Ethereum gas usage followed price closely, but since then it has decoupled. The fees are still too high for decentralized finance. As Ethereum developers near the rollout of ETH 2.0, gas usage indicates a network positive. It also means that it's time for an upgrade, and if the blockchain can keep up the current momentum, it should transition to proof-of-stake seamlessly, according to Be in Crypto blogger Anton Lucian. Gas usage is expected to continue expanding through 2020, but that could slow down DApp development until Ethereum solves its scaling issues. -- BE IN CRYPTO

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6. BlockFi has nixed its minimum deposit requirements on its BlockFi Interest Account (BIA) so that it can pay interest on all account holdings. BlockFi will pay interest on Bitcoin, Ether, and the Gemini Dollar (GUSD) going forward. The crypto lender will also allow one free withdrawal each month for account holders. Also, early withdrawal fees are being dropped. However, GUSD minimum withdrawals will remain at 0.003 BTC and 0.056 ETH. -- CRYPTO BRIEFING

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7. ConsenSys is introducing a new decentralized finance product called Codefi. ConsenSys Co-head of Global Fintech Lex Sokolon compared Codefi with Twilio and Stripe in that it serves businesses that need to process payment data. There are four parts to Codefi: Data, networks, assets, and payments. The product is 100 percent in-house, allowing ConsenSys to retain all of the revenues generated from the product. The product will be rolled out as a "controlled release." -- COINDESK

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9. Bank for International Settlements Principal Economist Raphael Auer suggested embedded supervision as a new low-cost compliance method for regulating blockchain-based financial markets. Making use of machine learning and tokenization, embedded supervision aims to monitor the financial industry with more efficiency through decentralization while reducing the need for firms to collect, verify, and deliver data. -- THE BLOCK

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10. eToro is introducing programming language Lira to enhance derivatives trading in crypto markets. The goal is to enable the development of new derivative products on the Ethereum blockchain while reducing associated risks. The programming language is being used on eToro's new demo trading platform eToroX Labs. Lira is an open-source programming language. The language can be used for "domain-specific" purposes and allows counterparties to write, verify, and collect on the terms and conditions of a self-executing contract. -- CROWDFUND INSIDER

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Inside Bitcoin is written and curated by award-winning journalist and former newspaper editor Allen Taylor. Recognized by the Dallas Bar Association three times for excellence in legal reporting, Allen has since gone on to author, edit, or ghostwrite several white papers, books and e-books, and over 10,000 blog posts for clients ranging from small business owners to global management companies and corporate executives. Learn more about him on LinkedIn.

Editor: David Stegon (senior editor at Inside, whose reporting experience includes cryptocurrency and technology).

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