Difficulty Adjustment on Horizon: Are Miners Going to Save Bitcoin After All?

Organised as a weekly newsletter, it presents an overview of the current international blockchain debate. You may find below a selection of the best ideas from the most influential media.

Difficulty Adjustment on Horizon: Are Miners Going to Save Bitcoin After All? Miners have been attributed to much of the price decline from the US$6,000 range, and they may very well be responsible. When miners flocked to Bitcoin Cash before the SV fork to chase double rewards, Bitcoin started to tumble. As prices continued to drop, so did the number of miners forging blocks. However, they still may be the saving grace that turns the entire market around. The Bitcoin hashrate briefly reached an all-time high of over 60 exahash per second (EH/s) on November 1, before free-falling to recent lows of 35 EH/s, a drop that almost resulted in a halving of hashrate on the network. The total hashrate represents the composite computing power of every miner on the network. As more and more miners swapped chains or shut off completely, this number continued to dwindle. Initially, the hashrate reduction was almost undoubtedly caused by the upcoming Bitcoin Cash fork. Miners speculated that the fork would lead to bonus profits, as they will have accumulated two coins versus one. Additionally, players with stake in the fork also moved hashrate to reinforce their favored chain. Unfortunately, with the price of Bitcoin in free-fall, miners continued to ditch the Bitcoin blockchain after the November 15 fork. Hashrate continued to fall steadily as unprofitable mining rigs were shut down and miners facing capitulation were forced to sell their units. This occurrence marked a major point of discontent among Bitcoin bulls. With less power going into creating new Bitcoin, the value behind the work of each coin fell, justifying lower and lower price floors for BTC. December 17, 2018 by Zane Huffman READ FULL ARTICLE https://nulltx.com/difficulty-adjustment-on-horizon-are-miners-going-to-save-bitcoin-after-all

Bitcoin is plunging, but at least you can write your losses off your taxes Anyone who bought into a high-flying cryptocurrency earlier this year is more than likely tearing their hair out right about now. The major cryptocurrencies, including bitcoin, bitcoin cash, litecoin and ethereum, have crashed to lows not seen in two years. Bitcoin slid below $3,250 this week—a value it last saw in the summer of 2017. For anyone who's regretting putting their money in the 21st-century version of tulip bulbs, there's a silver lining: At least you can write off the losses on your taxes. The IRS put out guidance in 2014 letting taxpayers know that cryptocurrencies are considered capital assets by the government, meaning you must pay taxes on the gains. However, the reverse is also true. Taxpayers can write off losses on investments, up to $3,000 for any given year. This includes stocks, bonds, or property, which is how the government views cryptocurrencies. "Last year, I literally had ten clients running into me at year-end telling me how much money they were making in bitcoin," said Jonathan Medows, managing partner at Medows CPA, a New York accounting firm. A few months later, he said, those clients were coming in to mope. There's a few things taxpayers need to do if they're considering cutting their losses. First, those losses need to be realized. That means the de-valued cryptocurrency needs to be sold (not held on to in hopes that it will recover). Exchanging cryptocoins for something else has the same effect. So, if you use bitcoin to buy a car or a cup of coffee, you'll have to account for the difference in value between when you acquired the currency and when you exchanged it. December 14, 2018 by Irina Ivanova READ FULL ARTICLE https://www.cbsnews.com/news/bitcoin-price-is-plunging-but-at-least-you-can-write-investment-losses-off-your-taxes

The Lightning Network's First ERC-20 to Bitcoin Atomic Swap Has Taken Place At the December 7, 2018, TenX Summit, a group of developers showcased an industry first: an atomic swap on the Lightning Network between a non-native asset, TenX’s PAY token, and a native asset, bitcoin. By non-native, the team is referring to an asset/coin that is not the base currency for the network. For Ethereum, for example, the native asset is ether, while any token that is built on the protocol is considered a non-native asset. CoBloX, a TenX research and development lab, is responsible for the achievement. Demonstrating their work to a tightly packed audience of summit goers, the team used the Lightning Network and their open-source software COMIT to swap 10 PAY for 71,240 satoshis. The team published a blog post on December 12, 2018, to confirm the news and satify what it calls “the gossip factory” of he-said-she-said following the summit. In the post, the team delves into their process, explaining outright that this swap was not as simple as the first-ever ether and bitcoin atomic swap on the Lightning Network, which they tested nearly six months ago. Whereas this swap’s hashed time lock contract (HTLC) only required a single use smart contract, the PAY to bitcoin swap took an extra step. Reason being, the PAY token itself is managed with an additional smart contract known as the transfer ownership function. Because of this, the HTLC had to be separated into two transactions: one to deploy the swap contract and another as a transfer call for the PAY tokens. “Unfortunately, we couldn’t figure out how to combine these two steps. The ERC20 transfer function uses msg.sender for authentication. However, calling transfer from a contract deployment sets msg.sender to the address of the yet-to-be-deployed contract which obviously has no tokens,” the blog post reads. December 12, 2018 by Colin Harper READ FULL ARTICLE https://bitcoinmagazine.com/articles/worlds-first-erc-20-and-bitcoin-atomic-swap-has-taken-place

ONEROOT and BXA Announce Global Blockchain Payment Solution Hosted at ONEROOT’s office in Shanghai, the BXA (Blockchain Exchange Alliance) Press Conference was destined to delight after the partnership announcement that the two companies recently made. The announcement saw BXA become the majority shareholder of ONEROOT and ONEROOT gain shares in BXA to form a solid partnership that will provide a solid base for the two companies infrastructure development plans. BXA is already valued at billions of dollars and controls BTC Korea, the parent company of Bithumb – the largest exchange in South Korea. The company’s investment has elevated ONEROOT’s valuation into the hundreds of millions of dollars. By utilizing the talents of both teams, BXA and ONEROOT aim to create a  smart economy with efficient value transfer which would provide users with a complete range of digital financial services. They can achieve this by creating a network of exchanges with shared order books and liquidity pools, thus solving many of the problems that small exchanges face. The two companies are eager to maintain compliance in all jurisdictions in which they operate. In fact, BXA already has 12 established local entities globally. These are located in the USA, Japan, the UK, Canada, Australia, New Zealand, Singapore, South Korea, Hongkong, Thailand, Mexico, and Peru. Not only that, but BXA have already acquired, or are in the process of acquiring, fiat currency gateways and licensing in ten other countries putting them in prime position to provide global financial services. What makes this partnership so important is that ONEROOT will provide technical solutions that allow BXA members from different countries and regions to share transaction data securely and settle transactions quickly. This network effect will give BXA the largest order books and deepest liquidity pool, allowing them to become a truly global financial entity. Tony Sun (Sun Yingjun), chairman of the ONEROOT Foundation, said, “Blockchain is still in its infancy, and the lack of infrastructure has impeded the development of digital economy. Since its inception, ONEROOT has been focusing on infrastructure construction and the promotion of blockchain technology application. It is the shared philosophy that helps the establishment of cooperation between BXA and ONEROOT.” December 18, 2018 by Aubrey Hansen READ FULL ARTICLE https://www.the-blockchain.com/2018/12/18/oneroot-and-bxa-announce-global-blockchain-payment-solution/

Bitcoin Encounters Strong Support, Climbing Close To 12% Bitcoin prices recovered today, rising more than 10% as the digital currency benefited from strong support near the $3,000 level. The cryptocurrency climbed to as much as $3,579.81 around 3:45 p.m. EST, according to CoinDesk bitcoin price data. At this price point, bitcoin had appreciated roughly 11.7% from the start of the day and approximately 14.7% from its 2018 low of $3,122.34, which was reached on Saturday. [Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.] Technical Price Movements These gains were driven by technical developments, noted Jon Pearlstone, publisher of the newsletter CryptoPatterns. "After threatening to drop below support at the $3000 level twice, for the first time in two weeks, Bitcoin showed a strong move higher with solid volume," he stated. The $3,000 price has long provided key support for Bitcoin, noted Mati Greenspan, senior market analyst for eToro. "This level acted as a strong resistance during the bull run of 2017 and it took about two months to break it back then," he emphasized. The Bear Market Isn't Over While bitcoin's recent recovery is certainly a positive development for digital currency enthusiasts, investors have a long way to go before declaring the bear market over, said Pearlstone. He emphasized that going forward, market observers should remember the following: The indicators to watch for now are 1) Follow through -- eveyone sees today's buying and increased volume.  Are there buyers willing to join the party now and keep price above $3500? and 2) Hit bullish targets -- will buyers join in and take price up to test first level resistance at $4250 or the 2018 trend line currently at the $5000 level? Pearlstone concluded that "while it's best to be cautious, this move higher from a key level is definitely worth watching closely." Dec 17, 2018 by Charles Bovaird READ FULL ARTICLE https://www.forbes.com/sites/cbovaird/2018/12/17/bitcoin-encounters-strong-support-climbing-close-to-12

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