Week 8 - 2020 News Recap
Are High Bitcoin Fees Related to Increased Price of BTC?
Bitcoin is seeing the best start of the year in 2020 in the last seven years, starting from a bit above 7,000$ per one BTC and rising to touch 10,300$ in the course of the first two months of 2020. As far as the mainstream adoption concerned, the latest data provided by Blockchain.com suggests that Bitcoin didn’t mark any peaks in 2020 by far in this sector – still, the price of Bitcoin is evidently peaking, showcasing extraordinary performance with the beginning of 2020. Economists and market analysts claim that there are numerous factors in the economy that are actually driving the price of Bitcoin up despite insignificant changes in mainstream adoption. One of those factors is said to be the buying pressure triggered by the upcoming Bitcoin halving, taking place in May 2020, which is the time when the mining rewards for BTC will be reduced by 50%.
Other analysts suggest that there is a growing institutional demand for Bitcoin, which might be one of the main factors that would explain almost an uninterrupted growth in the price of Bitcoin during January and February 2020. With the halving of BTC mining rewards, fees for transacting Bitcoin should rise as a consequence, which leads to a possible correlation between higher fees and increased price of Bitcoin in the market. As Joseph C. Wang noted when creating a model of evaluation for Bitcoin is the fact that the value of the biggest crypto wasn’t determined by transaction volumes and activities, but is rather related to the willingness of Bitcoin holders to pull BTC out of circulation and keep it as savings. Wang further applied the equation MV = PQ, based on the equation originally proposed in 1911 by Irving Fisher, where M would represent nominal money, V would stand for velocity, P is always 1 and Q would represent the index of real expenditure.
Decentralized Lending Protocol bZx Recorded Two Hack Attacks in a Single Week
Decentralized Lending Protocol bZx saw two successful hack attacks in a single week, which took close to one million dollars from the platform in a hit that could be described as more than intense. According to the official report released by the representatives of bZx, the first ever attack on the protocol took place on February 14th during the time bZx team was attending ETHDenver industry event. The second attack came 4 days later on February 18th according to the news portal The Block. The attacker targeted ETH and wrapped BTC (WBTC), using multiple DeFi protocols to lend and swap major quantities of Ethereum and wrapped Bitcoin.
On that occasion, the attacker manipulated leveraged trades while meddling with prices and profits, initially taking 10,000 loaned ETH from the decentralized protocol dYdX, using 1.46 million dollars – the equivalent to 5,500 ETH at the time of the attack, all in order to collateralize 112 units of the WBTC loan worth over 1 million dollars. The second attack was allegedly performed with Oracles according to the official message of bZx CVO. Hackers and attackers are regularly updating their methods, which is how their attacks are more likely to turn out as successful. According to TrendMicro, a cybersecurity firm, their recent discovery revealed that a hacking group called Outlaw has been successfully updating their toolkits for stealing data from enterprises for over 6 months.
Another Split for Bitcoin Cash Community
Another split seems to be pending among BCH users and Bitcoin Cash community after the initial Bitcoin’s fork has had its network split to Bitcoin SV and Bitcoin ABC. Bitcoin ABC users are once again looking at a proposal for another system update that could lead to the third fork in line for the Bitcoin Cash community. After Bitcoin ABC confirmed a proposal to implement a forceful miner tax that should be implemented with the next Bitcoin ABC client upgrade, a part of the Bitcoin Cash community came to a disagreement regarding the mentioned proposal.
Bitcoin ABC represents a node client for BCH and is used by half of the network, and has announced that the proposed BTC.TOP miner tax will be used and reduced from 12.5% to 5%. With the mentioned proposal, Bitcoin ABC has become one of the primary beneficiaries of the confirmed and proposed tax. The opposition is seen in another node client, Bitcoin Unlimited, that has no benefits from the confirmed tax update, which is why Bitcoin Unlimited didn’t go forward with accepting this proposal. Even though miners consider this tax update to be a beneficial change for Bitcoin Cash network, many community members and BCH node clients doesn’t seem to agree, which may ultimately lead to yet another split for the Bitcoin Cash community.
Secrets Behind 133,000 Ethereum Names
While Ethereum Name Service allows ETH users to send and receive money in a smooth and effortless way, it also makes it simple for the eyes of the curious to take a sneak peek into what lies behind these Ethereum names. Out of curiosity, Decrypt analyzed 133,000 different Ethereum names and balances related to these names. By using blockchain, Decrypt discovered that it is quite possible to spy on people through Ethereum names, and even discover their real identities even though users wouldn’t merge their private data with Ethereum Name Service.
Decrypt even managed to discover some high-profile names through the use of this service, also succeeding in tracing movements of different users and accessing their business deals. Ethereum Name Service is designed to enable easy and simple sending and receiving of cryptocurrency and it replaces the characters from your ETH address with a name. What Decrypt discovered and made into a public note is the fact that some major privacy issues emerged on the cost of creating a user-friendly environment through this service. Speaking in favor of how popular this service is, ETH users have spent over 1.7 million dollars-worth of ETH just on buying Ethereum names.
Can Reddit Comments Pose as Bitcoin Signals
As suggested by a startup named ChartStar, Reddit comments can serve as bullish signals for the price of Bitcoin and trends affecting the biggest cryptocurrency in the market of digital assets. ChartStar noted by analyzing subreddits, or Reddit channels commenting Bitcoin trading and commenting while including the word “bullish” that the rise of Bitcoin during the first seven weeks of 2020 could be related to Reddit comments to the extent where it appeared that channels on Reddit could pose as signals for BTC bullish trends. However, when Reddit comments on Bitcoin being bullish reached a peak in the seventh week of the year, the price of BTC declined.
Still, ChartStar confirms that Reddit comments could serve as signals, where increased enthusiasm and hype should signal traders about the asset being overbought. As ChartStar is building a charting tool for stocks similar to TradingView, while they are looking for new tools that would help traders develop winning strategies. In conclusion, increased optimism on Reddit should be followed by a price decline.