Tag: Bitcoin Cash

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Cryptocurrencies

Most Important Cryptocurrencies Apart From Bitcoin

As the most popular and successful cryptocurrency, Bitcoin enjoys most of the spotlight. For this reason, it’s easy for most people to think that cryptocurrency is synonymous with Bitcoin. Indeed, a YouGov study reported 75% of US adults knew about Bitcoin, while other cryptocurrencies such as Bitcoin Cash and Ethereum were each known by less than 30% of the population. 

As the most popular and successful cryptocurrency, Bitcoin enjoys most of the spotlight. For this reason, it’s easy for most people to think that cryptocurrency is synonymous with Bitcoin. Indeed, a YouGov study reported 75% of US adults knew about Bitcoin, while other cryptocurrencies such as Bitcoin Cash and Ethereum were each known by less than 30% of the population. 

As the most popular and successful cryptocurrency, Bitcoin enjoys most of the spotlight. For this reason, it’s easy for most people to think that cryptocurrency is synonymous with Bitcoin. Indeed, a YouGov study reported 75% of US adults knew about Bitcoin, while other cryptocurrencies such as Bitcoin Cash and Ethereum were each known by less than 30% of the population. 

If you’re an aspiring user of cryptocurrencies, or simply interested in that world, it’s important to acquaint yourself with other forces in the space. This article takes a look at other cryptocurrencies that have proved themselves worthy of attention and, of course, investor money. But before we get into that, let’s do a refresher on this new and exciting asset class. 

What are Cryptocurrencies? 

It’s necessary to do a recap of what cryptocurrencies are because many people associate the word cryptocurrency with just Bitcoin. So, when we are talking about cryptocurrencies and altcoins, what do we mean? A cryptocurrency, at its most basic definition, is a purely digital and internet-based currency that’s secured with modern cryptography and utilizes a ledger that is distributed across network participants. The most common type of distributed ledger is a blockchain. The blockchain concept always existed in the computer space but was only actualized in 2009 by the creator of Bitcoin, Satoshi Nakamoto.

The ‘crypto’ in cryptocurrency refers to the cryptography that is used to encrypt and hence secure cryptocurrencies and transactions. Cryptocurrencies subscribe to the tenet of decentralization, which means free from state manipulation or control and self-issuance. Cryptocurrencies are designed as code – almost always open source, with in-built mechanisms for issuance. These mechanisms vary from one cryptocurrency to another. 

As you probably already know, Bitcoin is the first-ever and most successful of cryptocurrencies. All other cryptocurrencies apart from bitcoin are collectively referred to as altcoins. Currently, there are more than 5,000 altcoins, according to Coinmarketcap. The total market valuation of cryptocurrencies is currently 269 billion, with Bitcoin taking the lion’s share with 62.3 billion in market valuation. Many of these coins have been designed to improve on Bitcoin in one way or another – either on security or speed or ease of storage (e.g., in terms of space). 

With that background, let’s look at some of the most important cryptocurrencies apart from Bitcoin.

1. Ethereum (ETH) 

Ethereum is a cryptocurrency and blockchain launched in 2015. The project is the brainchild of Vitalik Buterin, a Russian-Canadian programmer. Industry experts view Ethereum is the next most important crypto after Bitcoin. Let’s examine why. 

Ethereum is the next cryptocurrency that brought a ground-breaking product into the blockchain space. The project is more than a digital finance platform. Its main objective is to be a decentralized applications and smart contracts platform. Decentralized applications (DApps) are a new kind of application that can run without downtime and are free from control, manipulation, and censorship by a third party.

Smart contracts are a new kind of contract – not unlike the traditional contracts, but this time is purely digital, self-enforcing, unalterable, and completely transparent to all relevant parties. 

Applications on the Ethereum platform are powered by its native token called ether (ETH). Ether is the currency in which people using the Ethereum blockchain pay in transaction fees. As an investor, you can also use Ether as a store of value. Ether is the second most successful cryptocurrency after Bitcoin – even though it trails behind the dominant currency considerably.

In 2014, Ethereum launched a pre-sale (an initial coin offering ICO) to fund the project. The effort was incredibly successful and is credited with helping usher in the age of the ICO. Ethereum has also weathered one of the biggest security breaches in the history of cryptocurrency – the DAO attack in 2016. This attack led to the split of the Ethereum blockchain, birthing Ethereum (ETH) Ethereum Classic (ETC). As of July 18, 2020, ETH has a market capitalization of $26 billion, and one ETH is going for $232.93.

2. Ripple (XRP)

Launched in 2012, Ripple is a cryptocurrency and a real-time digital payments network. The project was created by Chris Larsen and Jed McCaleb.

Ripple’s protocol facilitates the global, peer-to-peer, decentralized, and real-time exchange and transfer of money in any currency, whether it’s the US dollar, Japanese Yen, Bitcoin, Ethereum, and so on. XRP can settle transactions within 3 to 5 seconds. 

XRP is the platform-specific asset of the Ripple network. Individuals can exchange XRP between each other without the need for an intermediary. It’s the go-between currency in any exchange that happens on the Ripple network. 

Ripple’s transaction confirmation mechanism differs from that of Bitcoin in that it does not utilize ‘mining.’ All XRP tokens were ‘pre-mined’ or ‘minted’ before launch, meaning there is no release of new coins over time. Indeed, Ripple ‘burns’ XRP tokens immediately after they facilitate a transaction, in a bid to avoid inflation. Ripple’s no-mining approach is a massive save on power, and it also considerably aids the network to achieve incomparably faster transactions. 

For a long time, XRP occupied the third spot in the crypto market. However, it has been knocked down to the fourth spot. As of July 18, 2020, XRP is trading at $0. 194295, with a market cap of $8.6 billion.

3. Litecoin (LTC)

Litecoin is a cryptocurrency that is modeled after Bitcoin but aims to be more lightweight and scalable. It was launched in 2011 and is a brainchild of former MIT graduate and Google engineer Charlie Lee. 

Litecoin is often called the “silver to bitcoin’s gold.” It’s a “lite” version of Bitcoin only with more coins, faster transactions, and a different hashing algorithm. While Bitcoin uses the SHA-256 algorithm, Litecoin utilizes one known as “Scrypt.” 

Another difference is Bitcoin’s circulation can never exceed 21 million, while Litecoin is designed to help 84 million coins. This might not mean much for either currency in terms of real-world usage since both are divisible to very tiny amounts. Litecoin is also way faster in terms of transaction confirmation time. While Bitcoin’s transactions can take up to 10 minutes, Litecoin takes about 2.5 minutes. Litecoin is also one of the cryptocurrencies that have enjoyed significant merchant adoption. 

So how is Litecoin performing today? Well, as of July 18, 2020, Litecoin traded at $41.95, with a market cap and rank of 2.7 billion and #9 respectively.

4. Chainlink (LINK)

Launched in September 2017, Chainlink, a project by FinTech company SmartContract Chainlink Limited SEZC, has seen the success that few cryptocurrencies do within such a short period. Perhaps this is because of its unique proposition of providing an oracle system that allows on-chain contracts to utilize external data, greatly expanding the capability of smart contracts. 

Courtesy of this feature, Chainlink has deep-running relationships with a lot of other innovative blockchain projects, a factor that’s given it a leg-up in the space. Some of these partnerships include Synthetix, Loopring, Aave, Ampleforth, and Binance. The project has also managed to secure other significant partnerships out of the blockchain space, including Google, Oracle, Gartner, Brave New Coin, and Web3 Foundation. 

Thus far, Chainlink has no competitor, and this has given it the dominance as far as its selling point is concerned. As of July 19, 2018, Chainlink’s price was $7.96, and, with a market cap of 2.8 billion, it was the 8th largest cryptocurrency.

 

Categories
Crypto Market Analysis Forex Elliott Wave Forex Signals

Bitcoin Cash Prepares for a New Rally

The price of Bitcoin Cash (BCH/USD) is preparing to develop a new rally that could take it to beat the previous highs of March, located in the area of 352.96.

The price of Bitcoin Cash (BCH/USD) is preparing to develop a new rally that could take it to beat the previous highs of March, located in the area of 352.96.

The price of Bitcoin Cash (BCH/USD) is preparing to develop a new rally that could take it to beat the previous highs of March, located in the area of 352.96.

BCH/USD, in its 4-hour chart, shows the advance of a potential upward impulsive sequence that began when the price found its bottom at level 133.67 last March 13th.

From the previous chart, we observe the price action advancing in its wave ((iv)) of Minute degree labeled in black. At the same time, this ongoing structural series is forming the internal segment corresponding to wave (c) of the Minuette degree identified in blue.

The wave (c) in progress began at the top of April 30th, located at level 275.95, when Bitcoin Cash completed its wave (b).

The internal structure of the wave (c) shows the intraday downward trendline joining the sequence of lower highs, which leads us to conclude that the short-term sentiment maintains on the bearish side.

On the other hand, according to the Elliott wave theory, for the long-term structural series to be a valid impulsive sequence, the wave ((iv)) must not penetrate the area of wave ((i)).

In this context, the corrective downward movement currently being developed by BCH/USD should not fall below the 200 level, which corresponds to the top of the wave ((i)).

On the other hand, one of the aspects that consider both the alternation principle and the construction of the extended wave indicates that an extended wave will be preceded or followed by a complex corrective structure.

Considering this Elliott wave concept, from the 4-hour chart, we observe that the current corrective sequence shows a level of complexity higher than the complexity level developed by wave ((ii)). Consequently, once the structural series of wave ((iv)) will complete, BCH/USD should perform a new upward impulsive movement that should present the characteristic of an extended wave, which could surpass the level 352.

In conclusion, as long as the wave ((iv)) of Minute degree does not finish, our preferred positioning will remain neutral, waiting for confirmation to enter on the bullish side that allows incorporation to the wave ((v)).

Categories
Forex Assets

Analyzing The BCH/USD Crypto-Fiat Pair

Introduction

Introduction

Introduction

BCH/USD is a cryptocurrency abbreviated for the Bitcoin Cash against the US Dollar. This is the highest traded cryptocurrency in terms of volume. Also, it is a 24/7 market. Note that, Bitcoin Cash is not the same Bitcoin; both are two different cryptocurrencies.

Understanding BCH/USD

The price of BCH/USD represents the value of the US Dollar that makes up one Bitcoin Cash. It is quoted as 1 BCH per X USD. For example, if the value of BCH/USD is 234.06, these many US Dollars are required to purchase one Bitcoin Cash.

BCH/USD Specifications 

Spread

Spread is the difference between the bid and the ask price. Spread is different with different brokers and the type of execution model they use. Below are the ECN & STP values for the BCH/USD pair.

Spread on ECN: 400 pips (4.00 USD) | Spread on STP: 450 pips (4.50 USD)

Fee

A Fee is a commission paid on each position a trader takes and closes. This fee is charged only by ECN brokers. The slippage for each lot traded is a pip. The seems to be less because one lot accounts for only 1 BCH.

Slippage

Slippage is the difference between the price demanded by the trader and the price given by the broker. There are two reasons for slippage to occur:

  • High market volatility
  • Broker’s execution speed

Trading Range in BCH/USD

A Trading range is the representation of the volatility in BCH/USD for different timeframes. The numbers help in determining the approximate risk and reward on a trade.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

BCH/USD Cost as a Percent of the Trading Range

A Fee is a variable that varies as the volatility of the market changes. Below are tables depicting the variation in the costs with the change in the volatility.

ECN Model Account

Spread = 400 | Slippage = 10 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 10 + 400 + 1 = 411

STP Model Account

Spread = 450 | Slippage = 10 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 10 + 450 + 0 = 460

Trading the BCH/USD

As mentioned, BCH/USD is currently the most traded cryptocurrency in the market. Therefore, one can expect enough volatility and liquidity. The volatility in BCH/USD is very high. For example, the minimum volatility on the 1H timeframe is 20, while the maximum is 118 on the same timeframe, which is five times the minimum. Hence, this makes this pair highly volatile and risky as well.

So, it is ideal for traders to trade when the volatility is between the average values. The volatility during such times is neither too high nor too low. Also, the costs aren’t too high. If traders wish to reduce costs even further, they could trade via limit or stop orders instead of market orders, as this would completely cut the slippage on the trade. The cost variations when the trades are executed either by limit or stop is given below.

ECN Model Account (Using Limit Orders)

Spread = 400 | Slippage = 0 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 0 + 400 + 1 = 401

Categories
Crypto Daily Topic

Bitcoin Cash ABC vs. Bitcoin Cash SV – Examining the Bitcoin Cash Hash War

The debate about Bitcoin’s scalability began almost with its very inception. A few years later, that debate tore the Bitcoin community right down the middle. The core of the matter was Bitcoin’s 1MB block size. Satoshi wrote a 1MB limit on the code to prevent the block size from being up to miners’ discretion, which […]

The debate about Bitcoin’s scalability began almost with its very inception. A few years later, that debate tore the Bitcoin community right down the middle. The core of the matter was Bitcoin’s 1MB block size. Satoshi wrote a 1MB limit on the code to prevent the block size from being up to miners’ discretion, which […]

The debate about Bitcoin’s scalability began almost with its very inception. A few years later, that debate tore the Bitcoin community right down the middle. The core of the matter was Bitcoin’s 1MB block size. Satoshi wrote a 1MB limit on the code to prevent the block size from being up to miners’ discretion, which would lead to some miners producing bigger blocks than others and potentially causing the chain to split.

However, Satoshi certainly didn’t envision the firestorms that would later erupt out of this issue. As transaction volumes increased on the chain, it became clear that some things needed to change. But what would change, and how, was the main bone of contention in the community.

This contention gave birth to the Bitcoin Cash hard fork, which, paradoxically, later split into Bitcoin Cash ABC and Bitcoin Satoshi’s Vision – for the same reasons Bitcoin Cash had split from Bitcoin.

What was the lead up to this perplexing chain of events? Let’s dive into the famous ‘hash war,’ how it began, its implications, and its conclusion.

What is Bitcoin Cash, and Its Origin? 

Before we delve into Bitcoin cash and its origin, we need to look at the events that precipitated its creation. These events are the scalability issues facing Bitcoin and the disagreements among ‘factions’ in its camp as to how to address them. 

Bitcoin’s block size limit of 1MB meant that as the network grew in popularity and more people used the network, the network became clogged, leading to slow transactions and high transaction fees. It also meant the network couldn’t compete with payment models like Visa, which processes thousands of transactions per second, as compared to Bitcoin’s seven transactions per second. 

This issue meant a scaling solution had to be created. The problem is the Bitcoin community couldn’t come to a consensus as to how it would be done. One group wanted to maintain the 1MB block sizes and look for a scaling solution that would operate off of the main blockchain. The other group wanted to increase the block size and allow for more transactions in each block while keeping transaction fees low. However, this idea was met with censorship and indignation from the other group.

In 2017, Bitcoin had achieved mainstream status, and its popularity had grown more than ever. The foreseen transactions backlog that would slow down the network were now a reality. Network users were already complaining of several days waiting time before their transactions could be confirmed. For your transaction to be confirmed fast, you had to pay higher transaction fees. This also meant that Bitcoin could not be relied upon to conduct everyday transactions like micropayments. 

At this point, one camp suggested ‘Bitcoin Unlimited,’ an upgrade to increase block sizes. The other camp suggested a Segregated Witness (SegWit), an off-chain technology that would retain the block size, but also allow for faster transactions. 

However, Bitcoin Unlimited meant the network had to hard-fork, which meant the new version would not be compatible with the older version, and users all over the world would have to migrate to the new version. The SegWit camp preferred to maintain the status quo and maintain Satoshi’s version, whilst working on a solution that wouldn’t necessitate hard-forking. Bitcoin Unlimited also meant that miners with large processing power would have an unfair advantage over those with limited resources – which was against the democratization that Satoshi envisioned. 

The SegWit’s camp idea was to ‘segregate’ some part of the transaction (mainly transaction signatures) and store it outside the main chain, hence creating more space in each block. SegWit proponents viewed it as a less risky approach. However, the opposite camp saw it as a temporary solution to a permanent problem. 

The 2017 Hard Fork and SegWit2x

On August, 1, 207, the vast majority of Bitcoin miners indicated their support for SegWit2x. SegWit2x meant a potential implementation of SegWit with an agreement to later increase the block size limit to 2MB. 

However, a pseudonymous contributor going by ‘Shaolin Fry’ suggested a user-activated soft fork (UASF) that would implement SegWit without the contribution of miners. A UASF would comprise users, Bitcoin exchanges, and Bitcoin businesses. Since the users outnumber miners, it was clear a SegWit implementation was going to be effected without the participation of miners. (Miners were against SegWit because it would supposedly expose a ‘covert’ algorithm that ASIC mining machines were using to boost their processing speeds). 

Even then, a part of the community was not satisfied with SegWit – electing to initiate a hard fork of the Bitcoin chain. The new blockchain was called Bitcoin Cash, and it has an 8MB block size compared with Bitcoin’s 1MB. Bitcoin Cash went on to become one of the most successful cryptocurrencies, entering the top ten in terms of market capitalization. 

Bitcoin Cash developers envisioned a blockchain that allowed faster transactions and hence be used as a payment system for everyday transactions. The argument was Bitcoin can be an investment asset, but Bitcoin Cash can be a cheaper and faster payment model as compared to the traditional system. This, they argued, was what Satoshi had intended. 

One Year Later, More Block Size Limit Wars 

When the world thought the Bitcoin block size push-and-pull was over, Bitcoin Cash itself split into Bitcoin Cash ABC (ABC for Adjustable Blocksize Cap) and Bitcoin Cash SV (SV for Satoshi’s vision). Bitcoin Cash ABC proponents wanted to further increase the block size as well as enable the running of smart contracts on the platform. 

Bitcoin Cash ABC (BCH ABC) has implemented some changes such as Canonical Transaction Ordering Route (CTOR). CTOR means that transactions are arranged by following a dictionary sequence, as opposed to the Topological Transaction Ordering Route (TTOR) used by Bitcoin. CTOR is supposedly a more effective and elegant way of arranging transactions. Bitcoin Cash ABC also maintained the simpler name ‘Bitcoin Cash.’ 

But not everyone was enthusiastic about the idea of making the BCH blockchain a smart contracts platform. The leader of the anti-BCH ABC crowd was Craig Wright, a controversial figure who insists he’s the original creator of Bitcoin (earning himself the pejorative moniker ‘Faketoshi’). Another vocal critic of BCH ABC was Calvin Ayre, owner of the powerful mining entity, Coingeek. On his part, Ayre argued that miners would not pick up CTOR. 

The anti-BCH ABC camp led to the creation of Bitcoin SV. The BSV camp argued that it represented the true vision of Satoshi Nakamoto. The new version also had some upgrades to facilitate faster transactions. 

The two most prominent figures in the BCH camp were Roger Ver and Jihan Wu. Ver is the owner of Bitcoin.com, the Bitcoin exchange, while Jihan Wu is the co-founder of Bitmain, a Bitcoin hardware manufacturer owner of mining company Antpool. 

Hash Wars

After the hard forks, what followed next was a battle on who would get to keep the BCH ticker. With both sides having heavyweight owners of mining companies, a ferocious war was impending. Each side used their mining power on their chains to push liquidity of each crypto in the market – hence the name ‘hash rate war.’

Soon, however, the hash war came to naught – with both sides burning millions of dollars into a mining contest that incurred losses amounting to millions, for both forks. According to bitcoinist.com, BCHSV incurred a loss of $2.2 million, while accruing a negative profit margin of 441%.On its part, BCHABC incurred $1.3 million in losses and a negative profit margin of 51%.

Both sides also implemented replay protection on their respective chains to prevent accidental use of coins on both chains by users.

The hash wars also hurt the whole cryptocurrency market. Bitcoin, in particular, tanked to its lowest level that year. And major crypto exchanges like Coinbase, Kraken, and Bittrex assigned the BCH ticker to the BCHABC hard fork.

The BSV side soon agreed to let go of the ‘Bitcoin Cash’ name as well as the BCH ticker and reluctantly agreed to adopt the name ‘Bitcoin SV’ and the BSV ticker.

The two coins went on to compete against each other in the market, just like any other cryptocurrencies.

Bitcoin Cash VS Bitcoin SV Today

After the war between the two coins, Bitcoin Cash stayed ahead in terms of price and market capitalization. Some crypto exchanges like Kraken and Binance have gone on to delist BSV.

BSV surprised everyone in early 2020 by surging past 300% to a price of $372 and briefly overtaking Bitcoin Cash to become the fourth largest crypto by market cap. Many people speculated the rise in BSV is attributable to Craig Wright’s current legal woes – which have helped increased publicity for the coin.

But BCH has since reclaimed its position over BSV. As of January 27, 2020, BCH is trading at $368.55, with a market cap of $6, 724, 517, 583, while BSV is trading for $284.05 with a market cap of $5, 176, 171, 633.

Final Thoughts

We don’t know who Satoshi is, but we’re certain he didn’t anticipate, neither would he have liked the acrimonious factions that arose out of his 1MB block size idea, and one that threatened to bring Bitcoin on its knees. Thankfully, Bitcoin has since rebounded from the hash war implications, as have the two hard forks that arose out of it. We can only wait and see future dynamics playing between both hard forks. 

 

Categories
Cryptocurrencies

Breaking Down SegWit – A step by step guide

SegWit is one admittedly complex concept in the blockchain world. Most crypto veterans probably still have no idea what it is or what it’s really about. And for those just

SegWit is one admittedly complex concept in the blockchain world. Most crypto veterans probably still have no idea what it is or what it’s really about. And for those just

SegWit is one admittedly complex concept in the blockchain world. Most crypto veterans probably still have no idea what it is or what it’s really about. And for those just now entering the blockchain sphere – it can be confusing even to begin wrapping your head around it.

Whichever the case, it’s essential to get it right – especially if you’re planning to interact with Bitcoin and other cryptocurrencies such as Litecoin.

The good thing is we help you take care of this in this article. So let’s discover what SegWit is, how it came to be, what it holds for the crypto market place, and more.

What is SegWit?

Segwit is the name given to a Bitcoin protocol upgrade developed in 2015 and implemented in August. 23, 2017. It was designed as a solution to the scalability of Bitcoin and other cryptocurrencies with a similar model, like Litecoin.

Bitcoin confirms a new block every 10 minutes, with each block only able to hold a certain number of transactions. Bitcoin’s block size is only 1MB – and this limits the number of transactions that can be confirmed for every block. As a result, the Bitcoin blockchain only processes an average of about seven transactions per second (TPS). This pales in comparison to other payment systems like Visa and PayPal, which handles 1700 TPS and 193 TPS, respectively.

SegWit’s bright idea is to increase the block size on the blockchain by removing digital signatures from transactions. When certain parts of a transaction are removed, it frees up space for more transaction throughput on the chain.

Segregate here means to separate, and witnesses are the signatures. So, SegWit is shorthand for “segregated witness,” which means to separate signatures from transaction data.

The SegWit idea originated with Bitcoin developer Pieter Wuille and was developed by him together with other developers, resulting in it being implemented as a soft fork in 2017 on the Bitcoin network. This upgrade brought a number of benefits for the blockchain network – including improving transaction speeds and increasing block capacity. It also solves the so-called transaction malleability issue – which we’ll discuss below, right after we deconstruct the ‘soft fork.’

What Is A Soft Fork?

Any software needs updates to improve its functionality or fix performance issues. In the cryptocurrency world, such updates or changes are known as forks.

A soft fork is a blockchain update that doesn’t split the chain into two.

In other words, a soft fork is an upgrade that is backward compatible with the previous software. A soft fork does not need nodes in the network to upgrade so as to follow the same network since all blocks on the ‘new’ blockchain follows the same consensus rules (a set of rules that all nodes usually enforce to validate a block and its transactions). In other words, a soft fork is backward compatible because old nodes will still recognize the new blocks on the upgraded blockchain.

A soft fork requires a majority of miners (nodes) to activate it so that it becomes operational. SegWit is one such type of a soft fork – it’s compatible with the old version of the Bitcoin blockchain.

What is Transaction Malleability, and Why is Fixing it Important?

Transaction malleability is a flaw in Bitcoin’s code that allowed bad actors to potentially change transaction signatures. Changing here means altering the unique ID of every Bitcoin transaction before it’s verified on the network. 

If someone tampers with a transaction signature, it could cause a transaction between two parties to be corrupted. Now, we know records on the Bitcoin blockchain are immutable, i.e., they can never be changed or altered. This resulted in invalid transactions being stored forever on the blockchain.

Signatures are the only way a transactions’ unique ID can be modified. SegWit came along and removed the need for a signature to be on a transaction. Even if someone alters the signature, the unique ID remains the same. The signature will still be checked, but this time not when calculating a transaction’s fingerprint, or identifier.  

SegWit’s Implementation Issues

After SegWit went live, its implementation was anything but immediate. Even today, the protocol is yet to be fully adopted by network participants. This is due to several reasons – including the different motivations of different users on the network. It’s also because it’s not mandatory, and some participants are okay with the original Bitcoin protocol.

Another reason is that there are different participants in the Bitcoin ecosystem playing various roles – so implementation of any new protocol is not exactly automatic. For example, the Bitcoin network relies heavily on wallets in which users will store their private and public addresses.

There are also crypto exchanges and other players in the ecosystem who need to upgrade their systems and hence ‘facilitate’ any changes in the network. For an upgrade to be adopted, all these organizations need to embrace it, and this doesn’t always pan out favorably.

A new software update would change the way transactions are carried out on the network. This might be good news for Bitcoin believers – but not necessarily for corporate interests. Consider, for example, the investment in billions of some of these companies. There is high motivation to maintain the status quo and not ‘rock the boat.’

There is also the question of wallets that were not able to support the protocol immediately. It took a while before some of the most widely used wallets – like Trezor and Wallet, could enable it.

There’s also the issue of miners. SegWit was designed to go live if a supermajority of miners signaled support for it. However, the larger portion of the miner community refused to activate the protocol. This is because SegWit was incompatible with a mining optimization software known as AsicBoost that they were using.

The miners’ refusal led to an interesting showdown. Bitcoin enthusiasts rallied around an idea called User Activated Soft Fork (UASF) – which meant they would activate the protocol on their own Bitcoin nodes if miners did not. The UASF would have split the Bitcoin network into two – one with SegWit and another without. The resulting outcome was not going to be favorable for anyone – which is probably why a few days before the UASF ‘deadline’, miners caved in and activated the protocol.

SegWit’s Adoption Challenges and Current Status

SegWit’s “backward-compatible” status, i.e., ensuring network participants who haven’t upgraded to it can coexist with those who have, means some participants have not been in too much of a hurry to adopt it.

Most Bitcoin-businesses, as well, would rather focus on customer acquisition than implementing not such necessary technologies. Rusty Russell, a blockchain developer at the blockchain company Blockstream, echoed this to the crypto news website Coindesk in 2018. He said that the priority for startups was “optimizing for growth and not implementing cool new tech.”

Implementing SegWit is also quite an involving task – both time-wise and financially. Founder of the crypto exchange Gemini, Tyler Winklevoss owned to this in a Reddit Q&A earlier this year. He said retrofitting wallets to accommodate SegWit was a “very tricky procedure” that required designing “a new hot wallet from the ground up.”

Nevertheless, SegWit has, over time, gained traction, thanks to Bitcoin increasing in value and a subsequent increase in transaction fees. For this, users are more inclined to use efficient, SegWit-enabled solutions. Businesses have noticed this shift and are now being forced to adapt.

For instance, in October of 2019, Bitcoin Segwit had reached usage rates of 56.82%, and Litecoin Segwit had hit 75%. These are encouraging figures that point to increased adoption of the protocol in the future.

Pros of SegWit

Solves the issue of transaction malleability

Facilitates faster transactions on the blockchain since waiting time is reduced 

Makes bitcoin transactions cheaper – faster transactions mean lower transaction fees

Helps Bitcoin and other cryptocurrencies achieve better scalability

Reduces the size of each individual transaction 

Helps new and exciting developments like the lightning network

Cons of SegWit

SegWit’s idea relies on eliminating some data off the blockchain. Some Bitcoiners believe keeping data off the blockchain is in itself a failure – like admitting the bitcoin model can’t stand on its ‘own feet.’

Miners now get lesser transaction fees for every individual transaction

SegWit’s implementation is a complex process that wallets have to do on their own. Some may not have enough resources to do it or may not get it right the first time

The implementation means more resources being used overall – owing to the increase in block capacity, transactions, bandwidth, and so on

The off-chain containing signature data will need to be maintained by miners as well. Unlike the blockchain where they get block rewards and a fraction of transaction fees, there is no reward for maintaining SegWit

Some in the Bitcoin community believe it’s a short term fix to a long term problem. They argue that it doesn’t really solve the scalability problem and that only changes to the blockchain size and changing how transactions are processed on the blockchain will really help Bitcoin to scale

The protocol has caused divisions in the Bitcoin community, leading to ‘forking wars,’ with the hard fork Bitcoin Cash resulting out of this

Conclusion

SegWit is a fundamental change to the Bitcoin ecosystem and one that sets the stage for further upgrades down the road. Removing the need to include identifying information on transactions on-chain brings several benefits such as more and faster transactions, fixing the thorny malleable transactions issue, and more.

But despite it being a promising, innovative solution – its adoption has been rather slow. Some people welcome it as an improvement to the world’s most popular cryptocurrency, while others think it highlights Bitcoin’s shortcomings. However, recent statistics show a marked improvement – something encouraging for its proponents. And from the current trend – its adoption looks set to go only forward. Let’s wait for what the future holds for both camps.

Categories
Crypto Guides

Understanding The Basics Of Bitcoin Cash

Introduction 
As the name suggests, one can easily conclude that Bitcoin Cash is forked from the original Bitcoin protocol. It is also called as Bcash and is created in 2017.

Introduction 
As the name suggests, one can easily conclude that Bitcoin Cash is forked from the original Bitcoin protocol. It is also called as Bcash and is created in 2017.

Introduction 

As the name suggests, one can easily conclude that Bitcoin Cash is forked from the original Bitcoin protocol. It is also called as Bcash and is created in 2017. A Mining pool known as ‘ViaBTC’ proposed the name Bitcoin Cash for this cryptocurrency. In 2018, Bcash was further split into Bitcoin Cash ABC and Bitcoin SV (Satoshi Vision). This coin is traded in the cryptocurrency exchanges with BCH as the symbol.

Objective

The central vision of Satoshi Nakamoto to invent cryptocurrency is to enable the usage of the cryptos in day to day transactions. That, too, without any central authority having control over the same. As Bitcoin gained traction, the transaction fees, and the validation of the transaction started taking longer than usual. This unusual time to validate the transaction didn’t make it suitable for the day to day transactions. Hence the industry experts, after much deliberation, decided to fork the original Bitcoin protocol and create a new coin.

How is the BCH different from Bitcoin?

The block time, i.e., the time take for the generation of each block by validating the transactions, is 10 minutes, which is typically the same as Bitcoin protocol. But the block size, i.e., the number of transactions that a block can hold is around 1 MB for the Bitcoin network at the time in 2017 (when the network was forked to create BCH), but the block size of a block in BCH is designed to be 8 MB to 32 MB. The number of transactions that the BCH protocol can hold during a test in September 2018 surged to more than 25,000 transactions per second, giving fierce competition to traditional operations performed by VISA and Mastercard per second. Bitcoin Cash also doesn’t incorporate Segregated Witness (SegWit), a protocol in which the Bitcoin network used to increase the number of transactions per block. (Segregated Witness is an implementation in the system to remove metadata of the block to increase the block size)

Consensus

BCH also uses a POW consensus algorithm, just like Bitcoin protocol. Both Bitcoin and BCH are capped at 21 million coins. The complexity of the challenge proposed by the network changes for every 2016 blocks as they both use an algorithm with similar complexity for mining the coins.

Market Capitalization

Bitcoin Cash stands at the fifth place in terms of market cap with $3.8 Billion in value while the price of each coin being $210.51 (as on 23/10/2019). The 24-hour trading volume is $1.6 Billion, with a supply of ~18 Million BCH coins in the market.

Price History

In August 2017, the coin started trading for the first time at $294.60. By January 1st, 2018, it was trading at $2534.82, which is around 760% increase compared with the initial inception. The surge in pricing is due to the crypto boom between November and December 2017. By January 16th, it saw a decline of 26% and traded at $1,772. From then on, this coin had a continuous decrease till November 2018, when the currency split into two medals.

BCH had a tremendous growth as the block size started at 8 MB and reached 32 MB at present as per the plan during its inception. This makes this crypto, a viable currency for day to day transactions.

Categories
Cryptocurrencies

Bitcoin Cash (BCH) – Everything You Need to Know

We cannot talk about Bitcoin Cash without understanding the fundamentals of Bitcoin. Bitcoin was created in response to the financial crisis of 2008/2009. Satoshi Nakamoto, the creator of this revolutionary

We cannot talk about Bitcoin Cash without understanding the fundamentals of Bitcoin. Bitcoin was created in response to the financial crisis of 2008/2009. Satoshi Nakamoto, the creator of this revolutionary

We cannot talk about Bitcoin Cash without understanding the fundamentals of Bitcoin. Bitcoin was created in response to the financial crisis of 2008/2009. Satoshi Nakamoto, the creator of this revolutionary network, envisioned a world where people would transact financially without the need for intermediaries. Bitcoin did not just eliminate intermediaries in financial transactions. It also made transactions more secure, convenient, and faster.

However, scalability issues, slow transaction speeds, and extortionate transaction costs associated with BTC prompted some stakeholders to discuss proactive measures to counter rising resistance from different quarters and competition from emerging solutions. This led to the ultimate birth of BCH – or bitcoin cash.

The Birth of Bitcoin Cash

Bitcoin Cash was launched in August 2017 by the Bitcoin network as its hard fork, with the primary objective of improving scalability. A hard fork is simply an alternative of the original coin – the BTC. And since the alternative – in this case, the Bitcoin cash- could not be accepted by 100% of the users, there was a split. And this led to the birth of the Bitcoin Cash.

In this case, Bitcoin cash is similar to the original bitcoin, but not necessarily identical. Bitcoin cash was born as a result of the recommended updates to the BTC’s protocol that were not agreed upon by everyone.

To understand the need for BCH, we need to pause a little and reflect on some of Bitcoin’s limitations: the block size and scalability issues. Well, as you may know, transactions on the Bitcoin network are confirmed in blocks. And a single block is confirmed every 10 minutes. The maximum size of each block is 1Mega Bite, which can only hold a maximum of 2700 transactions. This, in turn, limits the Bitcoin network to about 2700 transactions every 10 min, which translates to 4.6 transactions per second.

Comparing that to the VISA network that processes 1700 transactions per second, you will understand just why Bitcoin scalability was an issue. As a result, two separate camps emerged with solutions to this scalability. One camp suggested the need to have the block size increased from the current 1mb to 8mb. Such that the network would be eight times faster. The second camp was against the whole idea of increasing the block size and instead looked for solutions to optimize transaction size handling. This debate went on for a while and eventually led to the proponents of a bigger block size creating the Bitcoin cash.

BCH key achievements

☑️Bitcoin Cash has comparatively cheaper transaction fees, estimated at $0.20 per transfer. That means people will save a lot of money, unlike with Bitcoin, which charges around $1 per transaction. It should be remembered that charges once shot up to an all-time high of $30 per transaction on the bitcoin network.

☑️Bitcoin Cash is way faster in processing transfers, so you won’t have to wait for an hour for a transaction to confirm.

☑️With Bitcoin Cash, more people can transact at the same time as it is capable of processing numerous transactions per second – 116 transactions per second. That is not the case with Bitcoin.

The above features have been made possible as a result of the Bitcoin Cash block expanding to 8 times larger than a Bitcoin block. This has consequently made BCH not only cheaper and faster than BTC but also a lot more scalable. That would explain why more people are adopting BCH as their preferred cryptocurrency in a fast-developing digital market.

Valuation of Cryptocurrencies – Bitcoin Cash Vs. Bitcoin

As a novice, you may be wondering where cryptocurrencies derive their actual value. Naturally, cryptocurrencies such as BCH and BTC get their value from their levels of adaptation, and that includes their use and demand.

Analyzing them from the points of growth in value as well as ROI, these two currencies hold substantial value. Bitcoin has been around for much longer and is more valuable, but Bitcoin Cash has been consistently gaining users, and hence, its value has continued to soar.

Bitcoin Cash may be one of the newest entrants into the market, but how it sought to address the drawbacks associated with “established cryptocurrencies” can only suggest good times ahead. First and foremost, scaling issues synonymous with Bitcoin are considered a major turn off to potential investors, and the fact that Bitcoin Cash conclusively addressed them comes as good news from every perspective you look at it.

The projection on the ground spells dark times ahead for Bitcoin unless their developers work harder in fixing the issues pointed out. In the meantime, Bitcoin Cash will continue serving as the popular choice for more people who would wish to transact with reliable cryptocurrency.

Conclusion 

Given how the globe is embracing crypto technology as an alternative to traditional banking and trade, structural advancements on Bitcoin Cash (and other cryptocurrencies) are inevitable. As we grasp with the growth of the digital scene, everything points towards a convenient, cost-effective way of transacting. Whether BCH will eventually attain its goal as the ultimate solution or not, we have already seen and experienced its purpose in wholesome. Save for the wars of recognition, all that seems to matter is how far or how strong BCH will hold on, and how it will push other currencies to follow suit in simplifying money transfer and trade in general for generations to come. 

So far, so good. The lines are being drawn on the distinction between Bitcoin and Bitcoin Cash. It doesn’t matter who produces the goods, but what the world needs is a reliable, consistent currency that puts the interests of the masses first. 

 

Categories
Crypto Market Analysis

Daily Crypto Update 26.06.2018 – Stagnation May Cause Another Low

General Overview

Market Cap: $253,329,490,428

24h Vol: $18,385,228,119

BTC Dominance: 42.0%

In the last 24 hours, evaluation of the crypto market cap has been stagnating and is on the same levels as on yesterday’s open. It went a bit higher to 258,595,000,000$ but since that high, it has been steadily declining.

Real Trade News:

The market is showing mixed colours, with an average percentage change among top 100 coins ranging from 1-3%. The biggest gainer is Theta Token which increased by 23%.

Real Trade News

In the last 24 hours, there are three news headlines that can impact the market. First by its significance is that  Tether (USDT), has issued 250 million more tokens yesterday, according to data from Omni Explorer.

While it is still unclear whether Tether is printing their coins on there own, or investors are purchasing USDT and they increased the supply in a proper 1:1 ratio, one thing is certain – more Tethers mean that Bitcoin’s price is going up.

One of the headlines that could impact the market negatively is that Hyun Song Shin, economic adviser at The Bank for International Settlements’ (BIS), said that cryptocurrencies should be treated the same as stocks and bonds, Business Times reported June 25.

“If people pay to hold the tokens for financial gain, then arguably they should be treated as a security and come under the same rigorous documentation requirements and regulation as other securities offered to investors for a return.”

And the last of the three significant headlines is that cryptocurrency with a market capitalisation of $2.7 billion, Tron (TRX),  has activated its mainnet following a migration to its independent public blockchain, according to a blog post published June 25. This could impact the price of Tron positively.

Analysis

TRX/USD

From yesterday’s opening at 0.04271$, the price of Tron has decreased by 3.84% as the price is currently sitting at 0.041$



As you can see from the hourly chart, the price action is currently in a triangle and it looks like the breakout is near. Judging by the steepness of the triangle resistance line, the breakout is going to be from the downside, which means that the fundamental news may not impact the price just yet.

Market sentiment 

Tron is in the sell zone.

Oscillators signal a sell, and moving averages signal a strong one.

Pivot points

S3 0.036658 
S2 0.039447 
S1 0.040771
P 0.042236 
R1 0.043560 
R2 0.045025 
R3 0.047814

ETH/USD

In the last 24 hours, the price of Ethereum has decreased by 1.3%, which is not significant as the price is hovering around the same levels since yesterday’s open.



As you can see from the hourly chart, the price action is in an ascending channel in which it is correcting after the last low. The price found support at the descending channels resistance (purple line) yesterday, but we are yet to see how far can the price go before another drop.

Market sentiment

Ethereum is in the sell zone.

Oscillators are on sell, and moving averages signal a strong sell.

Pivot points

S3 401.33 
S2 430.45 
S1 444.73 
P 459.57 
R1 473.85 
R2 488.69 
R3 517.81

BCH/USD

From yesterday the price of Bitcoin Cash hasn’t changed at all as the price is still hovering at around 748$.



As you can see from the hourly chart, the price is hovering at the baseline support 1, as it is consolidating after the recent low and verifying that support level.

Market sentiment 

Hourly chart technicals are the same as two prior ones – sell.

Oscillators are on sell and moving averages on a strong one.

Pivot points

S3 663.0
S2 709.2 
S1 731.0 
P 755.4 
R1 777.2 
R2 801.6 
R3 847.8

 Conclusion

Real Trade News: After the recent low, the prices have recovered a bit, but that recovery was short-lived as the prices are now stagnating and even decreasing a bit. As the low had a V shape that is common at the bottom in the markets, I was convinced that the low was the bottom for a short-term recovery. Now, a day later and after analysing the charts, I am not so sure anymore. We might see another low in the following days, so be careful not to fall into the trap of thinking the market has to do something (has to recover after a steep low)- it doesn’t have to do anything.

Categories
Crypto Market Analysis

Bitcoin Cash Long Again?

Market Cap. $21.76B

Circulating Supply: 17.09M BCH

Max Supply: 21M BCH

Volume (24%) $1.95B

 

Bitcoin Cash (BCH)

The BCH/USD signaled an exhaustion since yesterday, so the current drop is somehow natural. Price dropped as much as 1227 today and now is pressuring a very strong dynamic support (resistance turned into support). We could have a great buying opportunity in the upcoming days if the rate will test and retest the near-term support levels and will stay above.

Bitcoin Cash (BCH) chart

The rate has finally managed to break above the 50% Fibonacci line of the descending pitchfork and now is retesting it. Price has shown an oversold when has failed to stabilize below the median line (ML) after many breakdown attempts.

Technically, the BCH/USD it was expected to approach and reach the upper median line (UML) of the descending pitchfork. Right now is very important to see if we’ll have a valid breakout above the 50% Fibonacci line  (descending dotted line).

Bitcoin Cash could drop in the upcoming days after the failure to close on the 250% Fibonacci line and near the 1567 static resistance.

Price has also made a false breakout above the 23.6% retracement level, which has signaled an exhaustion. It could drop along the 50% Fibonacci line till will reach and retest the upper median line (uml) of the ascending pitchfork or even the median line (ml).

Conclusion

You can go long again after the retests and after a significant increase. It could climb at least till the upper median line (UML) if will have enough energy to make a valid breakout above the sliding line (SL).

©Forex.Academy