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39% Price Surge Sees Bitcoin Cash Whales Decrease

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At the end of July this year, Bitcoin Cash (BCH) saw a price surge of 39%. The result of this, is a minimum of 10 BCH wales have outright left the network, probably selling or trading away their millions’ in holdings.

Loss Of Ten BCH Whales

Ali Martinez stands as a trader and technical analyst, and showed data from Santiment, a data analytics site, in a recent tweet.

This data makes it clear that the number of investors that hold anything between 10,000 and 100,000 BCH, which is about $3-30 million in value, has dropped down by ten since the 1st of August, 2020.  This massive drop in price comes just after the token surged 38.7% in value. The coin saw a three-month high of $311.34 by the end of July, having been $224.46 on the 17th of July prior. This, obviously, heavily implies that BCH wales, at least ten of them, have sold their respective holdings.

Australian Crypto Merchants See Trade with BCH Surging 97%

Flaws In The Machine

As it stands now, BCH is the fifth-largest cryptocurrency out there by virtue of market capitalization, recording a market cap of $5.6 billion. Trailing just under it, the Chainlink (LINK) crypto stands with a capitalization of $4.6 billion. As it stands now, BCH stands with a value of $307.84 in value, having gone up in the past 24 hours.

Bitcoin Cash stands with a strange predicament, as the network itself is vulnerable to 51% attacks. This is due to its use of the SHA256D algorithm, which is the same as Bitcoin’s. However, where Bitcoin has massive reserves of hashing power, making it next to impossible for such a coordinated 51% attack, BCH holds only 5% of BTC’s hashing power. This, in turn, has made it susceptible to 51% attacks, which it’s suffered in the past.

Innovations Ever Onward

The BCH community was quick to try and plug this vulnerability, however, and have already proposed to change the algorithm as part of its November upgrade. It was on the 6th of August when the developers finally proposed a compromise between two proposed solutions. This compromise will see the introduction of “Aserti3-2d” difficult adjustment within the network, as proposed by Jonathan Toomin, a lead BCHN Maintainer. Alongside this, a new infrastructure funding plan will be implemented, as well.

What this means for the future of BCH is unclear. It’s no secret that BCH has had a few rough patches, but this doesn’t mean some innovations could see the cryptocurrency recover and reach new heights.

Source: https://insidebitcoins.com/news/39-price-surge-sees-bitcoin-cash-whales-decrease

Blockchain

Bitfinex Adds Support for Bigger Lightning Payment Channels

Bitfinex claims its three Lightning channels—that have the capacity for five Bitcoin each—are the biggest in the network yet.

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Crypto exchange Bitfinex has launched support for “wider” Bitcoin (BTC) Lightning Network (Lightning) payment channels, dubbed Wumbo, that bypass the hardcoded capacity limitation of standard ones, according to an announcement today.

At launch, Bitfinex has opened three Wumbo channels with each having a capacity of five Bitcoin. The exchange said these are the network’s biggest channels so far.

“Bitfinex sees a huge potential in these larger channels, so we are bringing the Wumbo channels support to Bitfinex Lightning Nodes!” said the announcement, adding that they “will give our users the ability to deposit and withdraw large amounts of Bitcoin quickly and cheaply, thus allowing them to take advantage of trading opportunities.” 

How does Wumbo improve Lightning?

The Lightning Network is a “second-layer solution” built on top of the Bitcoin blockchain that processes Bitcoin transactions “off-chain.” It’s designed to make cheaper and faster transactions (hence the name).

In Lightning’s early days, when the network was still young and the horrors of hacker attacks unknown, the developers intentionally limited how much Bitcoin could be kept inside a Lightning payment channel—0.1677 BTC to be precise—to discourage node operators from holding large amounts of Bitcoin in a single channel or on a single node.

Bitcoin’s Lightning Network aims to make Bitcoin more scalable. Image: Unsplash.

Today, as Lightning has become more mature, this limitation is slowly turning into a relic of the past. To bypass it, so-called Wumbo channels have been created, allowing nodes to service larger transactions and higher volumes, according to developer Lightning Labs.

The exchange added that this support will also allow retailers and service providers to expand the range of applications they can build as well as goods and services they can offer. This is partly thanks to the Wumbo channels’ ability to reduce on-chain fees and overhead required to support a larger number of smaller channels.

“With this support, the general public will have the ability to open channels up to 2 Bitcoin capacity with either of our nodes. A number of initial retailers and wallet providers like Bitrefill, Lightning Markets and Lightning Labs, [will have] the ability to open channels with up to 5 Bitcoin capacity,” Bitfinex added.

Looks like Lightning is getting faster.

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Is Bitcoin’s growth conservative or real?

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132 days post the third halving and Bitcoin is trading at $10450. The price has recovered nearly 25% from the post halving dip, it hit a high of 43.7% ROI last month. The ROI growth is in line with post halving prediction with YTD of 54%.

Is Bitcoin's growth Conservative or Real?

Source: Ecoinometrics

Though there is scope for real growth in price, above December 2017 level, the growth cannot be entirely attributed to the pandemic or Bitcoin’s correlation with Gold, Silver or the USD. There are several triggers along the way that led to the boost in price. 

DeFi’s explosive growth did for Bitcoin what ICOs did back in 2017. Before the ICO bubble burst, when top ICO projects like Filecoin, Namecoin, and Tezos raised funds from investors, they were held in Bitcoin and this significantly increased the demand for Bitcoin on spot exchanges. The investment raised by these ICO projects was held in Bitcoin wallets on exchanges or offline and this added to the scarcity in supply, by driving demand across exchanges, globally. 

With $9.77 billion locked in DeFi and projects like Yield Farming that have surpassed Bitcoin’s price, DeFi’s TVL is giving a boost for the demand of top cryptocurrencies like Bitcoin and Ethereum. The increased demand along with scarce supply may drive the price to 2017 levels by the end of 2020. Bitcoin Influencer A Pompliano is quoted commenting on the scarcity of supply in an interview with ET.com

“Any time that you have got an asset that has scarce supply, people are going to be interested because as we know if the supply is capped and demand increases, of course, the price goes up”

This scarcity is visible on exchanges, where Bitcoin inflow is the lowest in 180 days.

Is Bitcoin's growth Conservative or Real?

Source: Chainalysis

When the inflow goes up on exchanges, based on trigger events like increased open interest by institutional investors on CME or movement of BTC by HODLers/ Whales, the price may fluctuate based on our position in the market cycle. 

Based on the Ecoinometrics chart above, there is scope for growth beyond the $19k price level and this depends on the next price rally. Institutional investors like MicroStrategy can drive the price higher by creating demand for the asset and its options/ futures. Growth attained post triggers will continue to be conservative, however, it is not as conservative as Gold or Stocks, hence the rewards are higher in the current phase of the market cycle. When the price hits the $19k level, then growth may get real.

Source: https://eng.ambcrypto.com/is-bitcoins-growth-conservative-or-real

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The great unbanking: How DeFi is completing the job Bitcoin started

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In a broad sense, 2020 has been the year of the COVID-19 pandemic. As it charges toward 1 million deaths and over 30 million infections, governments have been found wanting. Our institutions have crumbled, leaders reacted too slowly, and all of the systems both in place and newly created to protect us — healthcare, aged care, testing, protective equipment supply chains, contact tracing, etc. — have collapsed. But 2020 has also very much been the year of decentralized finance, which has come to be known as DeFi.

DeFi is crypto

To understand why DeFi has captured the imagination of the entire crypto landscape is to understand that it is less about the outrageous returns offered to yield farmers and more about the future possibilities it presents.

Cryptocurrency, and the technology behind it, has always been about future possibilities.

When Bitcoin (BTC) was born to little fanfare in 2009, it was quickly recognized by those familiar with it as having the potential to be the future of money. 11 years on, Bitcoin, with its decentralized global system of nodes and miners keeping the network operational and secure, has met its promise and more.

Not only is it a reliable and fast way for people to permissionlessly send money to each other, it has also become a genuine enterprise-grade investment vehicle, and its investment worthiness appears to be growing. Large and enterprise owners are holding onto it in anticipation of capital growth.

“Bitcoin as an investment vehicle” aside, it remains, in essence, money — a new currency for a new, hyper-connected world.

Bitcoin and/or DeFi

“Bitcoin as money” still works like money insofar as it still relies on a financial ecosystem around it to keep it alive. But that ecosystem is somewhat limited; it consists of those that secure the network on which transactions are transmitted (miners and node operators), wallets, and exchanges where it can be exchanged for other digital and, increasingly, fiat assets.

But a financial services architecture as we know it incorporates a whole lot more in terms of functionality: lending, borrowing, earning interest, paying interest, investing, etc. Bitcoin was never intended to cater to all those mechanisms — but DeFi is.

The next logical step in the evolution of crypto’s gradual assumption of the roles played by traditional finance is being taken by the growing Ethereum-based decentralized finance ecosystem.

DeFi, in many ways, is Bitcoin 2.0. And for that reason, DeFi — although based on Ethereum’s composability and smart contract functionality — furthers the Bitcoin narrative into the future that Bitcoin first allowed us to believe in. With each new DeFi protocol, that future is closing in on us: a world without banks as we have come to know them.

DeFi demonstrates the complementary nature of Ethereum to Bitcoin. By recreating the financial system not from within but from the outside, Ethereum is hosting a movement that completes the circle Bitcoin started.

The vampires aren’t even that bad

Our banking system is as broken as our COVID-19 response was, but can DeFi actually replace it? The DeFi subsector’s most vocal critics would point to the emergence of food-meme protocols SushiSwap, Cream and Yam, along with many others, to suggest the movement resembles more of a circus than a legitimate threat to a giant financial services sector.

Those protocols are considered vampire forks, which are forks of existing protocols, designed to suck liquidity from them. If vampire forks are destructive — and there is no certainty they are — a seminal Rolling Stone article helps put them into perspective. When running through the central role Goldman Sachs played in virtually every financial collapse of the last century, Matt Taibbi called the behemoth:

“The great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

DeFi’s vampires probably serve to further the ecosystem by stress-testing it. Legacy finance’s vampires have had only one function: to take money from everyone else to strengthen themselves.

From the Great Depression, to the dot-com bubble and burst, to the housing crisis, the “great vampire squid” had self-serving financial destruction in mind and its tentacles on virtually every lever that produced those catastrophic episodes in our recent economic histories.

The sector as a whole has long since stopped serving most of our needs. Checking accounts no longer pay interest, accessing money costs money, and large enterprises find financing easy, while small and medium enterprises are left floundering. Try getting a mortgage as an independent contractor without benefits or job security.

Bitcoin democratized money by freeing us from it in its legacy form. Now, DeFi has captured the imagination of the crypto world as its natural extension — not just the democratization of money but the democratization of finance, promising a seismic shift in the way people bank in the future.

That seismic shift will confer benefits on society we could only have dreamed of a decade ago.

Enter the great unbanking.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Paul de Havilland is a fan of disruptive technology and an active investor in startups. He has experience covering both traditional and emerging asset classes and also pens columns on politics and the development sector. His passions include the violin and opera.

Source: https://cointelegraph.com/news/the-great-unbanking-how-defi-is-completing-the-job-bitcoin-started

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