If China’s interfering with hash rate and mining pools, then Bitcoin just proved its resilience
The Week in review
with Jason Deane
Things that hadn’t happened this time last week:
◼ Plans for a Bitcoin City to be built on the back of a volcano based Bitcoin bond in El Salvador
◼ Estonia’s LHV bank becomes the first in that country to allow Bitcoin purchases
◼ Latin American E-Commerce Giant Mercado Libre puts Bitcoin on its balance sheet and announces it will begin accepting cryptocurrency
This, of course, is just a small selection of events that demonstrate just how quickly Bitcoin’s adoption rates are accelerating and just one of those subjects is enough to more than fill this morning’s weekly summary.
However, as I shuffled into my office early this morning with the first coffee of the day, I was confronted by two charts that rather took me by surprise and immediately presented me with the direction of today’s commentary – a breaking news item. Even though my Friday morning pieces are usually a leisurely stroll through the week’s events, it seems pertinent to break protocol and write about it.
The two charts were the Bitcoin price and the Bitcoin hashrate charts which were both showing a dramatic real time drop. In fact, at the time of writing, Bitcoin had dropped six per cent in around an hour, while the hashrate had dropped around 16 per cent (from recent average) in the hours immediately preceding. What was happening?
Some quick research and messaging my colleagues in the Bitcoin mining world revealed that this may be linked to further mining related shut downs by the Chinese government. It seems the major pools of viaBTC, Poolin, F2Pool, Binance and BTCcom suddenly experienced connection interruptions. The only thing they all had in common was their DNS was provided by Alibaba Cloud, a Chinese owned operation. All had stopped resolving.
In other words, even though all the miners were almost certainly working as usual, their hash power wasn’t getting through, resulting in an artificially low global hashrate. The markets appear to have immediately overreacted and there may be choppy waters ahead, at least for a while.
Of course, the irony is that this small technical issue, resolved by simply moving to a non-Chinese DNS service, actually demonstrates just how resilient the Bitcoin network is and not how fragile it is. Take out the biggest mining pools and the network still works exactly as intended? That’s impressive.
Try doing that with any other monetary network and we’re straight back to “Sorry mate, cash only, card machine’s down”.
Just sayin’.
Have a great weekend!
Jason
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Yesterday’s Crypto AM Daily in association with Luno
In the markets
The Bitcoin economy
*Definitions and insights can be found at https://bytetree.com/insights/
Total crypto market cap
The total capitalisation of the entire cryptocurrency market at time of writing is currently $2,622,587,539,636, up from $2,586,046,553,723.
What Bitcoin did yesterday
We closed yesterday, November 25 2021, at a price of $58,927.89, down from $57,206.37 the day before. The daily high yesterday was $59,367.97 and the daily low was $57,146.69.
This time last year, the price of Bitcoin closed the day at $17,108.40. In 2019, it closed at $7,531.66.
Bitcoin market capitalisation
Bitcoin’s market capitalisation at time of writing is $1.087 trillion. To put it into context, the market cap of gold is $11.446 trillion and Tesla is $1.12 trillion.
Bitcoin market capitalisation
Bitcoin’s market capitalisation at time of writing is $1.087 trillion. To put it into context, the market cap of gold is $11.446 trillion and Tesla is $1.12 trillion.
Volatility
The price volatility of Bitcoin over the last 30 days is 42.55%.
Fear and Greed Index
Market sentiment today is 47, in Fear.
Bitcoin’s market dominance
Bitcoin’s market dominance today is 42.19. Its lowest ever recorded dominance was 37.09 on January 8 2018.
Relative Strength Index (RSI)
The daily RSI is currently 45.13. Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price – an RSI reading of 30 or below indicates an oversold or undervalued condition.
Convince your Nan: Soundbite of the day
“We are currently conducting extensive research into the asset class… in an era of inflation, it could be a potentially good place to invest.”
$46.8bn pension fund in Australia looking to invest in Bitcoin
What they said yesterday
It’s about sovereignty…
What are you thankful for?
“Everyone’s doing it”…
Crypto AM: Editor’s picks
New cryptocurrency named ‘JRR Token’ blocked by lawyers for Lord of the Rings creator Tolkien
El Salvador to build Bitcoin city at base of volcano
Bitcoin’s long-awaited Taproot upgrade has arrived
NFTs set to fund new cryptocurrency movie
El Salvador begins mining Bitcoin using volcanic energy
Binance probed over suspected insider trading
Crypto AM: Features
Crypto AM: Spotlight
Crypto AM: Founders Series
Crypto AM: Industry Voices
Crypto AM: Contributors
Crypto AM: In Conversation with James Bowater
Crypto AM: Tomorrow’s Money with Gavin S Brown
Crypto AM: Mixing in the Metaverse with Dr Chris Kacher
Crypto AM: Visions of the Future, Past & Present with Alex Lightman
Crypto AM: Tiptoe through the Crypto with Monty Munford
Crypto AM: Taking a Byte out of Digital Assets with Jonny Fry
Crypto AM: Parliamentary Special
Part one of two – April 2021
Part two of two – April 2021
Five-part series – March 2021
Day one…
Day two…
Day three…
Day four…
Day five…
Crypto AM: Events
Cautionary Notes