Experts Explain Blockchains

Experts Explain Blockchains

There is a lot of confusion about what blockchains are. In this article, we try to address some of the misconceptions surrounding blockchains and to bring clarification on the matter by turning to expert opinion

Blockchain is not the underlying technology of Bitcoin

The bitcoin blockchain is what the bitcoin network produces using an innovative consensus protocol. The novelty of this protocol lies in decentralization. A decentralized system is one where parties act independently to establish the universal truth.

Blockchains are more than simply databases

While blockchains do record and store data, calling blockchains a database is greatly underestimating them. Blockchains enable decentralized control over data. Involved parties now do not need to trust each other or an intermediary, they only need to trust the code.

Bitcoin introduced the first blockchain, a new data structure, but this is not the only thing a blockchain is. Blockchains combine cryptography, economics, and distributed systems to bring a new way of establishing the truthful chain of events.

Blockchains cannot be hacked

The bitcoin proof-of-work protocol determines consensus by measuring the amount of computational power dedicated to a particular history of transactions. To compromise such a system, a malicious party will have to control more than half of the total computational power. According to various sources, the bitcoin network consumes 1% of all the world’s energy production. This effectively means that attacking the bitcoin network will require around 1% of the world’s energy production.

It is essential that people understand blockchains are not only a new way of storing data. The real innovation is decentralized consensus, which brings data record and storage to new levels of transparency, immutability, and security.


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Bitcoin Price Forces Small Miners Out, Untagged Wallets Dump $20M

Miners made the biggest withdrawal of funds in 2019, just as Bitcoin price was fighting its last to keep above $8,000. The accelerated selling of rewards may look like an episode of miners capitulating. Bitcoin Price Forces Miners to Sell The sum of $20 million looks small in comparison to the entire BTC activity, which is above $19 billion per day. However, miners selling their current rewards is a signal that their faith in bitcoin price is shaken. 2/ Untagged miner wallets saw $20M of net outflows. While it might not sound like a lot, comparatively, it is the 2nd largest single day of net outflows from untagged wallets in 2019 in USD terms. — elias.eth (@eliasimos) November 20, 2019 Larger miners may afford to finance their operations, but small ones may be pressed to close doors, if bitcoin price falls too far down. Currently, miners produce more than 96 quintillion hashes per second, as the network rate is near its peak. However, most blocks go to the largest pools, and small miners grab a fraction of the rewards. It is possible that small miners are starting to give up, adding to the selling pressure on the market. At current BTC prices of $7,987.88, the profitability of Antminer S9 is not appealing – bringing an annual loss of around $567. Investing in new, more powerful ASIC is happening only gradually, and is seen as a factor in the health of the Bitcoin network. Halving to Discourage Smaller Miners Miners moving away is an expected event after the halving, which is expected around May 15. At that point, pools will compete for just 900 BTC in rewards per day. With a bearish outlook, it is possible some miners may have decided to fold months before the halving. Everyone's bearish, shorting 2.5k drop, miners capitulateThey say crypto is dead againAnybody alive? — Crypto₿irb (@crypto_birb) November 19, 2019 Predictions include large-scale “whale” transactions moving between wallets, as miners tend to sell on OTC markets. Miners will slowly start to capitulate and large transactions will be recorded on chain as capitulation happens, these will be large OTC deals being finalized Shorts will close and the start of the next bull run becomes fact, targetting prices well beyond $200K — Bitcoin 𝕵ack (@BTC_JackSparrow) November 19, 2019 The Bitcoin difficulty moved down with a tiny correction during Thursday’s recalculation. The cut in difficulty is not enough to warrant a much greater ease in mining. But if more miners give up or switch off the equipment, the remaining ones will have a greater chance at winning blocks. The Bitcoin network is still secured by more than 9,300 nodes, though the decentralization is partial, as some nodes use cloud services and do not rely on independent hardware. The Bitcoin network still carries more than 300,000 transactions per day. For BTC, mining activity also shrank toward the end of 2018, as prices tumbled from $6,000 to a bottom of around $3,200. December predictions see miners capitulating, as bitcoin price backtracks further. What do you think about miners giving up on BTC? Share your thoughts in the comments section below! Images via Shutterstock, Twitter @BTC_JackSparrow @Eliasimos @Crypto_birb The post Bitcoin Price Forces Small Miners Out, Untagged Wallets Dump $20M appeared first on

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