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BTC and LTC Halving ‘Shock’ May Be Mitigated by Merged Mining: Report

Block reward halving “shock” at Bitcoin and Litecoin could be mitigated by merged mining, according to Binance Research.

The effect of block reward halvings for both Bitcoin (BTC) and Litecoin (BTC) mining could be mitigated by merged mining, according to a report by a research arm of major crypto exchange Binance released on July 12.

Following Charlie Lee’s prediction that some miners may shut down Litecoin mining after the halving, which is expected to take place on Aug. 5, 2019, Binance Research analyzed the potential of so-called merged mining to retain incentives for crypto miners.

Merged mining is a practice of using the work done for one blockchain, or parent blockchain, on other smaller child blockchains by implementing Auxiliary Proof of Work (AuxPoW). To date, there are three major examples of merged mining, including Bitcoin blockchain-parented Namecoin (NMC), Litecoin-merged Dogecoin (DOGE), and Myriadcoin (XMY) which is merged with both LTC and BTC.

In the new report, Binance Research concluded that merged mining could “potentially provide and opportunity” to increase mining rewards in the light of future block reward halving scheduled for both Litecoin and Bitcoin. Alongside, other smaller chains could also potentially move to AuxPoW in order to support a higher level of network security while reducing the need for a separate mining set, the firm added.

At the same time, Binance Research warned about the potential shortcomings of merged mining from both a miner’s and a project team’s perspectives. Miners may not be incentivized to support child blockchains due to a significant level of operations costs as well as a potential decline in the given coin’s market price.

From the perspective of a project team working on a PoW crypto-asset, risks include dependency on the parent blockchain and new potential attack vectors.

In the report, Binance Research also considered Dogecoin, which has been operating for about six years to date, as the most successful example of merged mining. After Dogecoin adopted the merged mining model in August 2014, the coin’s mining hashrate increased by 1,500% while also showing correlation with Litecoin’s hash rate. According to the report, almost 90% of Dogecoin’s total hash rate derives from large Litecoin mining pools as of July 2019.

On July 5, Binance exchange listed Dogecoin on its crypto trading platform. On the same day, the exchange released its “2019 Q2 Crypto-Correlations Review,” stating that Dogecoin has become less correlated with other cryptos in Q2 2019, alongside with Bitcoin. However, the coin has continued to be significantly correlated with Litecoin, mostly due to the shared mining of two coins, the firm wrote.

On July 9, mining difficulty of bitcoin has reached a new all-time high by hitting a 9.06 trillion at an average hash rate of 64.85 quintillions per second (EH/s).

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At-Least 70% Of Bitcoin (BTC) Miners May Shutdown By Q4 2020

Bitcoin BTC halving, Mining

With less than 320 days to go to the much-awaited Bitcoin halving event, it’s not clear what will happen to the miners and the price of Bitcoin. However, since the mining rewards are likely to decrease, miners may end up switching off their rigs due to projected losses.

The halving event is hard-coded into the Bitcoin protocol and is meant to reduce the amount miners earn for keeping the Bitcoin network in check. Next year’s halving event will reduce the amount earned by miners from the current 12.5 Bitcoin to 6.25 Bitcoin per block.

Tone Vays, a crypto analyst, notes that:

“Technically, everything is in play until the end of 2010, after that sub $5,000 is not likely. Worst case scenario: prices drop to $5K into the halving, then after the halving 70 percent of miners shut down due to negative revenue, Bitcoin spirals down in price but then rises from the dead!”

Bitcoin (BTC) Will Eclipse Altcoins

Additionally, the analyst predicts that the halving will help Bitcoin make considerable strides in its price, something that will eclipse Litecoin (LTC), Bitcoin Cash (BCH), among other altcoins cementing its role in the ecosystem. According to Tone, “they will never be a store of value and will depreciate against BTC.”

However, others have a different take on the effect of the Bitcoin halving event scheduled for May 2020. For example, Expsycho, a Twitter user, opines that the halving will have the opposite of Vay’s prediction.

Bitcoin. Bitcoin will pump 6 months before halving because people will have
Fomo, as Litecoin has Then just after, it will dump.”

But, What Happened In Previous Halving Events?

While it’s hard to predict what will happen
when Bitcoin halves for the third time since it was created in 2019, previous
similar events spell hope.

For instance, during Bitcoins first halving in Nov 2012, the price responded positively to reach a high of $1,000. Unfortunately, the effect was felt close to 12 months after the halving. Additionally, after Bitcoin underwent its second halving in 2016. Close to 12 months later, prices surged to as high as $20,000 in Q4 2017.

Unfortunately, the price did not maintain the momentum and fell sharply in 2018. However, this seems to be the norm. In 2012, during the first halving, the price reached its peak only to lose its grip and fall back. But when it came back, it surpassed its previous high.

According to Garrick Hileman, co-founder,
Mosaic:

“Cryptocurrency markets are often very event drive, and as we get closer to the next halving, Bitcoin’s price will receive a boost from those anticipating the forthcoming reduction in new supply. In the months leading-up to the last two halving events, we saw Bitcoin’s price steadily trend upward, and then power higher following the reward halving.”

Even If Miners Leave, Those Who Hold On Have a Chance

While reducing the amount miners earn on the Bitcoin network is likely to discourage miners, a lower hash rate translates to a lower the mining difficulty. Consequently, less electrical and computing power will be required to mine a new Bitcoin. As such, those who will be bold enough to remain will still make profits.

The post At-Least 70% Of Bitcoin (BTC) Miners May Shutdown By Q4 2020 appeared first on Ethereum World News.

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4 Big Reasons Bitcoin’s Price Will Probably Not Stop at $20K This Time

As Bitcoin’s price soared past the key $10K, the main factors driving the rally this time around are much different than they were in late 2017.

As bitcoin’s price keeps setting new yearly highs, the question on everyone’s mind right now is whether it’s different this time. Let’s take a closer look at why this rally is nothing like the “bubble” in 2017.

Bitcoin all-time performance

Bitcoin all-time performance. Source: coin360.com

As many experts pointed out, BTC going above the key psychological $10,000 mark is likely to trigger FOMO (i.e., fear of missing out), according to Fundstrat’s Tom Lee, who adds that bitcoin can now easily take out its all-time highs.

Other market analysts, such as Tone Vays, however, disagree. He told Cointelegraph:

“I actually don’t think it’s important at al. The $10,000 benchmark did nothing to slow down price back in 2017. And it looks like it did nothing to slow down the prices here in 2019.”

Institutions, not retail, in the driver’s seat

Bitcoin broke through into the mainstream in late 2017. At the time, its historic surge to nearly $20,000 was driven mainly by retail investors. This time, however, the public is still largely on the sidelines, according to Google Trends.

In fact, the number of Google searches for “bitcoin” is only around 10% of what they were in 2017. In other words, retail investor FOMO has not even started yet, which may suggest that BTC price could go much higher than last time.

On the other hand, institutional demand for bitcoin has soared. As of June 17, open interest at CME Group saw 5,311 contracts totalling 26,555 BTC, or approximately $246 million — dwarfing the volumes during the 2017 price peak.

“CME Bitcoin futures (BTC) shows growing signs of institutional interest,” CME Group tweeted June 18.

“BTC open interest rose by a record 643 contracts in a single day, establishing a new all-time high of 5,311 contracts on June 17 (26,555 equivalent bitcoin; ~$250M notional).”

Other indicators, such as the GBTC price premium as well as record volume for bitcoin derivatives exchange BitMEX (on a Saturday!), also suggests that “smart money” is pouring in.

Network fundamentals better than ever

As Cointelegraph reported on Friday, hash rate hit a new all-time high at over 65,000,000 TH/s. In other words, Bitcoin is more secure than ever and would require an unfathomable amount of computing power to affect the network.

Bitcoin network Hash Rate

Bitcoin network Hash Rate. Source: blockchain.com

Meanwhile, other fundamentals have also grown in lockstep with hash rate. Daily on-chain transaction volume, block size and other metrics are also confirming that more people than ever are using bitcoin.

Additionally, network transaction fees have remained relatively low compared to 2017, with optimizations like SegWit and off-chain scaling solutions like the Lightning network helping ease congestion.

Bitcoin reward halving still 11 months away

The latest rally to five figures is also happening way before the Bitcoin block reward halving set for May 2020. This is when mining block rewards will be cut from 12.5 to 6.25 BTC, thus reducing the bitcoins minted by miners who are naturally market sellers.

Interestingly, the previous halving event occurred in the summer of 2016 — or more than a year before the price skyrocketed.This time, however, BTC/USD appears to be front-running the event, as the halving is still 333 days away.

A popular bitcoin market analyst known as PlanB suggests that investors may not be waiting this time around for the expected reduction in supply. He added:

“Front running would be in line with Efficient Market Hypothesis: if you believe S2F and that BTC will be $50k May 2020, why wait?”

The bigger macroeconomic picture

Of course, intraday BTC price moves are not as important for low time preference investors. These “hodlers” are confident that bitcoin — with its fixed supply — will outperform fiat currencies, whose supply is growing at an accelerating pace over the long term.

On June 18, European Central Bank head Mario Draghi hinted that a monetary stimulus is on the way if the economy doesn’t improve. This is an increasingly dovish tone that was applauded by the financial sector.

At the same time, Draghi was criticized by United States President Donald Trump, who said this would spark unfair European competition against the U.S., whose Federal Reserve bank is also suggesting it will hold off on raising interest rates.

Morgan Creek co-founder Anthony Pompliano tweeted that this will make bitcoin even more scarce as interest rates go lower and more fiat currency is created:

“Cut rates.

Print money.

Make BTC more scarce.

Long Bitcoin, Short the Bankers!”

Therefore, the biggest macroeconomic picture looks bright for bitcoin investors who are dumping ever-depreciating fiat currencies for hard-capped “digital gold.”

What’s more, investors are starting to not only realize that bitcoin’s supply is fixed and transparent, but it’s also the world’s first neutral, open-access money that no authority can control.

In other words, what the internet did to information, bitcoin is starting to do to money.

Historic BTC market cycles, rising institutional interest alongside an increasingly robust network fundamentals, as well as the confirmed depreciating value of fiat currencies, could all propel bitcoin’s price orders of magnitude higher than in 2017.

Crypto markets one-week performance

Crypto markets one-week performance. Source: coin360.com

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Litecoin Closing on BCH as Halving FOMO Pumps LTC

Litecoin LTC Flip XRP

There has been very little action for the majority of
cryptocurrencies over the past day or two. Bitcoin’s consolidation has left the
rest of the altcoins in limbo. There are a couple moving though and Litecoin
keeps strengthening as fundamentals push LTC even higher.

Crypto markets have barely moved in the past couple of days
as Bitcoin teeters on the edge of a big correction. There is always a bit of
fomo going on though and Litecoin is getting it with another 10 percent gained
today.

With less than 60 days to go before the LTC halving event, Litecoin is
looking strong. Over the past few hours it has surged from just over $100 to
$112 according to tradingview.com.

litecoin

Momentum is building as the premise of reduced supply and
increased demand and mining difficulty in less than two months drives prices
higher. Scarcity is a big driver of demand and with almost 74% of all Litecoins already minted
there is only 21.8 million left to be mined. Many have advocated that the
silver to Bitcoin’s gold should really be priced at around 10 percent of BTC.
This would put Litecoin at $780 at current prices.

Back to reality, resistance currently lies around $120 which
is where LTC topped out during the recent run late last month. It is the
highest price Litecoin has reached in 2019 and an epic 300 percent higher than
it was trading at on January 1st.

Daily volume has reached $4.7 billion which has sent market
cap hurtling towards $7 billion. At the time of writing LTC was only $100k or
so behind Bitcoin Cash so a flippening for fourth could well be imminent. EOS
has dumped in recent days and is now over $1 billion in market cap behind
Litecoin.

Network hash rate
is also at an all-time high and is likely to increase over the next 60 days.
According to the charts hash rate is currently 373.918 Thash/s which is the
total amount of computing resources dedicated to the network. According to the official
website
the increase may be caused by the rumored new L5 Bitmain ASIC
Scrypt miner that has been hinted at online.

If Bitcoin
corrects further as expected
, Litecoin may well drop back below $100, but
it won’t stay there for long. There is every possibility that it could double
from current prices as we approach August. The fomo is pretty strong leading up
to a halving event as past events have shown.

The post Litecoin Closing on BCH as Halving FOMO Pumps LTC appeared first on Ethereum World News.

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Litecoin (LTC) Leading in $10 Billion Crypto Market Surge

A crypto correction that started
a couple of days ago
was quickly quashed when Bitcoin found support and moved
back towards $8k once again. Since then the altcoins have been on fire with
some, such as Litecoin, surging ahead of the pack.

Another $10 Billion Back into Crypto

From a low of $243 billion yesterday crypto market
capitalization has pumped to a high of $254 billion before stabilizing at
around $250 billion where things currently sit. Daily volume has surpassed $80
billion once again which is extremely bullish. May has seen some of the highest
volumes on record and they have been maintained which has kept markets buoyant.

Total market cap 24 hours – coinmarketcap.com

Bitcoin has made it back over $8k one again, hitting an
intraday high of $8,140 according to Coinmarketcap.com. The
bullish sentiment has resulted in a further 2 percent gain from Bitcoin which
has yet to have any real pullback in this current rally. After spending the
majority of April at around $5,300 BTC has found a new resistance zone around
$8,000. Its market dominance is currently 56.6 percent and the altcoins are
leading the digital race today.

Litecoin Ignited in 20% Pump

Litecoin is one of the top performing altcoins at the time of writing. It has surged from $88 to $104 over the past day and reached its highest level for almost a year. There is massive resistance at $100 which LTC has already hit last week. A move above it could send the ‘silver of crypto’ surging in a parabolic pump mirroring that of December 2017. LTC has trounced EOS to take fifth spot with a market cap now exceeding $6.4 billion.

The halving
event in 73 days
is likely to be driving early momentum for LTC which is
bound to trade a lot higher as August approaches. Coin scarcity and increased
demand could push prices back to their all-time highs of $370.

Binance Coin is also trading well and has just made a new
all-time high at $34. A 7 percent surge on the day has been the result of the
world’s top exchange announcing margin trading features. Though it can’t catch
Litecoin at the moment, EOS
has made 8 percent and is up to $6.50 at the time of writing.

The momentum for crypto markets is holding and May is
shaping up to be another month of solid gains. Crypto market cap has doubled
since the beginning of the year indicating that things have finally lifted off
the bottom and the bulls are running the show now.

The post Litecoin (LTC) Leading in $10 Billion Crypto Market Surge appeared first on Ethereum World News.

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Will Verge (XVG) Imminent Halving Approach Add To Its Bullishness?

The old dull Jack seems to be up in the air now. Things are beginning to form the right shape for Verge after a recent nosedive. The Cryptocoin has been moving from one development to another, boasting with confidence to shut the mouth of skeptics. Today Verge is out again to announce a good news. The altcoin on its Twitter page revealed that its block reward halving is on the way.

“The Verge block reward halving is just in days away.”

“Verge will be halving at block 2,124,000.”

The expected halving of the altcoin’s block reward will make the quantity of new XVG earned by miners with each block transaction reduced, to be precise, half the present amount.

According to the release, Verge noted that it is part of its “predictable, transparent monetary policy.”

In response to the tweet, many twitterian lovers of the altcoin have shown excitement to the new approach averring that it is a welcomed development.

How Will The Halving Affect Verge (XVG)?

The Wednesday, May 9 halving, surely will reduce the quantity of XVG in circulation since the reward of miners will be halved, creating scarcity of XVG in the market.

Most expectedly, scarcity created by decrease in mining reward could boost the price of a coin as the demand rise up with a reduced supply level.

Therefore, it is projected that the initiation of the halving approach designed by the Verge community will be an addition to the altcoin, creating more attention from the public.

How Verge Managed Its Recent Predicament.

It is no news again that Verge has turned a new leave, adding more and more value to itself after an unexpected fall which surrounded the unveiling of its mystery partnership, although some had down talked the partnership as being unnecessary.

Verge rose out of criticism, to better its previous condition. Verge, after unveiling the mystery partnership had featured in series of development amongst which CoinPayment and Abra lies.

In my own opinion, I think Verge is on a trip to Damascus. If it gets to Damascus, there is better, and more hope for Verge, beyond the sky!