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Proof-of-Work

Want to work in crypto? University programs can give job seekers a leg up

There is a skills gap in the blockchain industry, and universities worldwide have created programs to help produce the next generation of blockchain professionals.

As talk of the Bitcoin halving, exchange-traded funds and other macro factors seem to point to the beginning of the next bull market cycle for crypto, many might be considering starting a career in this space. It happens to many people involved with Bitcoin (BTC), blockchain or cryptocurrencies. 

At first, they are “investors” researching and buying assets in a new digital asset class. For some, this turns into a desire to enter the decentralized ledger technology and blockchain industry. Many have decided to find paths to employment and acquire the skills necessary to jump into careers in this space.

Since the beginning of the blockchain and cryptocurrency industry, most people have found jobs through informal connections or demonstrable skills.

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One-hour Bitcoin block times: What do they mean and are they frequent?

Extended Bitcoin block times have been in the headlines recently, but are they really that big of a deal — or even very common?

A Bitcoin (BTC) block that took over an hour to mine made headlines earlier in November. This is despite Bitcoin’s core protocol being written to aim to mine a block every 10 minutes.

Block 815,690 is the latest outlier to generate press speculation. This block took one hour and nine minutes to mine on Nov. 7. Public interest in an hour-plus confirmation time is not a singular event. Roughly once or twice a year, a media outlet picks up on a long block validation event and decides to run with the story.

On Oct. 17, 2022, a prominent crypto news site reported on a block that took one hour and 25 minutes to mine, which spurred a flurry of similar reports. As the story spread widely on social media, some fans reveled in the relative speed of their favored centralized altcoin.

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Bitcoin’s many deaths: Is crypto market past ‘point of no return?’

Bitcoin has been declared dead more times than you’d think amid downswings in the market, but it’s always managed to bounce back.

Bitcoin and the broader crypto market have been gleefully declared dead more than a few times during bear markets, but some experts say it would take a genuinely extreme set of events for it to truly die.

According to 99Bitcoins — a website that, among other things, tracks how many times Bitcoin (BTC) has been declared dead by mainstream media outlets — the largest crypto by market cap has died 474 times since 2010.

Often, the proclamation is met with cheering by crypto skeptics as evidence that BTC is not a viable asset, but it might not be so simple to kill off crypto — at least according to some experts in the space.

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Bitcoin is of ‘national strategic importance’ says US Space Force officer

U.S. Space Force Major Jason Lowery wants the U.S. military to prioritize the investigation of proof-of-work systems like Bitcoin for the country’s defense.

The United States needs to formally investigate using proof-of-work networks such as Bitcoin (BTC) to protect the country from cyber-inflicted warfare, according to Jason Lowery, a member of the United States Space Force.

In a four-page letter to the U.S.

“As a result, this misconception underplays the technology’s broad strategic significance for cybersecurity, and consequently, national security.”

The Defense Innovation Board is an independent advisory board set up to bring the technological innovation and best practices of Silicon Valley to the U.S.

Lowery used the letter to urge the board to advise the Secretary of Defense to investigate the "national strategic importance” of PoW systems like Bitcoin.

In his letter, Lowery explained that a proof-of-work system like Bitcoin could work to deter adversaries from cyberattacks due to the “steep costs” of a physically resource-intensive computer in the same way military assets help to deter military attacks against the country.

“Proof-of-work mirrors the physical security and deterrence strategies utilized in other domains like land, sea, air, and space,” but instead, it does it in the digital domain, Lowery explained.

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Vitalik Buterin Warns CBDCs Moving in Wrong Direction, Calls Them ‘Front Ends’ for the Banking System: Report

Vitalik Buterin Warns CBDCs Moving in Wrong Direction, Calls Them ‘Front Ends’ for the Banking System: Report

Ethereum (ETH) co-creator Vitalik Buterin reportedly says that central bank digital currencies (CBDCs) are not developing in the way he had once hoped for. In a new interview with CNBC, Buterin says that he was once more optimistic about CBDCs, but now he believes they have mostly become “front ends” for the traditional banking system. […]

The post Vitalik Buterin Warns CBDCs Moving in Wrong Direction, Calls Them ‘Front Ends’ for the Banking System: Report appeared first on The Daily Hodl.

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Grayscale officially abandons post-Merge PoW Ethereum tokens

One year after the Ethereum Merge, Grayscale has finally taken a decision to abandon all the rights to proof-of-work Ethereum tokens.

Major cryptocurrency investment firm Grayscale has finally taken a decision to abandon all the rights to the post-Merge proof-of-work (PoW) Ethereum tokens (ETHPoW).

Announcing the news on Sept. 18, Grayscale said that the firm has “irrevocably abandoned” all the rights to ETHPoW tokens on behalf of the record date shareholders of each product.

After thorough review, Grayscale determined that the ETHPoW tokens have not developed meaningful liquidity, while the products’ custodian doesn’t support such tokens. The firm wrote:

“As such, it is not possible to exercise the rights to acquire and sell the ETHPoW tokens, and on behalf of the record date shareholders, Grayscale is abandoning the rights to these assets.”

Grayscale’s decision to drop the rights for ETHPoW tokens comes more than a year after the Ethereum Merge, an event that marked Ethereum’s full transition from PoW to proof-of-stake (PoS). The Merge occurred on Sept. 15, 2022, forking the Ethereum blockchain into main PoS-based Ether (ETH) and minor PoW-based EthereumPoW (ETHW) tokens.

In the aftermath of the Merge, Grayscale was considering whether the company should acquire EthereumPoW and sell ETHW on behalf of the record date shareholders. 180 days after the Merge, the company took another six months to make a decision on whether to acquire those PoW tokens, citing uncertainty regarding the support of ETHW tokens by digital asset custodians and trading venues.

Related: Ethereum Merge anniversary — 99% energy drop but centralization fears linger

Unlike Grayscale, some cryptocurrency investment firms like ETC Group have attempted to launch dedicated EthereumPoW exchange-traded products (ETPs). ETC Group eventually terminated its PoW-based ZETW ETP just six weeks after the launch, citing the absence of eligible custody providers.

The news on Grayscale’s ETHW decision came one day before The Wall Street Journal reported that the firm has launched a new Ether futures exchange-traded fund, citing a filing with the Securities and Exchange Commission. Cointelegraph hasn’t been able to locate a related SEC filing online. Grayscale did not immediately respond to Cointelegraph’s request for comment.

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The last Bitcoin: What will happen once all BTC are mined?

According to some experts, miners will always be essential to the Bitcoin ecosystem, even after mining the last coins.

Satoshi Nakamoto mined the genesis block on Jan. 3, 2009, minting the first 50 Bitcoin (BTC) in history and kicking off what would become a billion-dollar industry centered around mining crypto. However, with a cap on Bitcoin supply, the fate of miners after the last coins are issued is unclear. 

Bitcoin is created through mining, a process involving computer hardware to solve complex mathematical problems and verify transactions on the blockchain network. For their efforts, miners are rewarded with a predetermined amount of BTC for each block of transactions.

According to the Blockchain Council, more than 19 million BTC has been awarded to miners in block rewards, and according to Nakamoto’s white paper, only 21 million are available. Once this cap is reached, miners will no longer receive rewards for verifying transactions.

Speaking to Cointelegraph, Nick Hansen, founder and CEO of Bitcoin mining firm Luxor Mining, says that despite the loss of block rewards, miners will continue to play an essential role in verifying and recording transactions on the blockchain, but how they are compensated will evolve. 

Currently, successfully validating a new block on the blockchain rewards miners with 6.25 BTC, worth about $188,381 at the time of writing, according to CoinGecko. Miners also receive transaction fees.

According to calculations shared in a May 1 tweet from on-chain analytics firm Glassnode, since 2010, fees and block rewards have netted miners over $50 billion.

Hansen believes transaction fees will eventually become the primary incentive for miners to continue long after the last BTC is mined. 

“That’s why as transaction fees become an increasingly important part of Bitcoin mining economics, understanding transaction fee dynamics and forecasting them into the future becomes even more critical,” he said, adding:

“Thus, it’s important to see fees increase over time, something that Bitcoin Ordinals, as of late, has helped with, for example.”

However, this shift is still likely years away, given that nobody currently mining will be alive when the last BTC block reward is received.

It will be a long wait to find out

According to Hansen, based on the block discovery rate and the halving process, which occurs roughly every four years — or every 210,000 blocks of transactions — the last BTC will most likely be mined around 2140.

A Bitcoin halving is a planned reduction in the rewards that miners receive, with the next one currently predicted to occur around April 2024. This will reduce the reward for each block to 3.125 BTC or roughly $94,190 at the time of writing.

In theory, by limiting the supply of BTC, each coin’s value should increase as demand increases and supply remains fixed.

Hansen says the price of BTC in 2140 will depend on unpredictable factors such as market demand, the regulatory environment, technological advancements and macroeconomic factors.

“The fact that all Bitcoin is in circulation may create scarcity, but whether this scarcity will translate to price increases is subject to market dynamics,” he said.

“As we look to a future where all Bitcoin has been mined, it’s important to remember that Bitcoin was designed with this endgame in mind.

“The tapering off of block rewards and shift toward transaction fees are intrinsic to the protocol, and represent an ingenious solution to ensuring the ongoing security and viability of the network,” Hansen added.

Related: Rising BTC transaction fees are a good thing, Bitcoin educator shares

Jaran Mellerud, a research analyst from Hashrate Index, told Cointelegraph that as Bitcoin adoption and usage grows, transaction fees will drastically increase and become the primary source of revenue for mining firms.

Mellerud said that, by the time the last BTC is issued, the block subsidy will have already been so minuscule that it will not significantly impact the coin supply.

“Due to the huge block space demand relative to the scarce block space supply, transaction fees will have to skyrocket in a future scenario of hyperbitcoinization,” he said, adding:

“If you don’t believe there will be sufficiently high transaction fees in the future to justify the existence of mining, you don’t really believe in Bitcoin.”

What about fiat

By the time the last Bitcoin is mined, Mellerud believes its value won’t be measured in United States dollars or other fiat currencies.

He speculates that by then, fiat money systems will have long since collapsed, and Bitcoin could be the successor, becoming the standard unit of account globally.

“Under such circumstances, the only valid way to measure the purchasing power of Bitcoin is by looking at how much energy a Bitcoin or satoshi can purchase,” Mellerud said.

“Just as we currently measure the purchasing power of the U.S. dollar in energy terms, barrels of oil,” he added.

A collapse of fiat money systems has long been predicted, spurred on by the many problems facing the traditional financial system. As recently as March 2023, Silicon Valley Bank collapsed due to a liquidity crisis, with Signature Bank and Silvergate Bank following.

Related: The first-world debt crisis means you can expect more pain ahead

Before the March 2023 banking crisis, a February survey conducted by business intelligence firm Morning Consult and commissioned by crypto exchange Coinbase found most respondents were already disillusioned with the global financial system.

A large portion of respondents are disillusioned with the global financial system and want change. Source: Morning Consult

Bitcoin might not be the same in 120 years

Speaking to Cointelegraph, Pat White, co-founder and CEO of digital asset platform Bitwave, believes miners will remain a critical part of the ecosystem, but not all will survive, with some shutting down in the face of mounting costs. 

According to a March 24 report from Glassnode, since 2010, miners have already been experiencing long periods of unprofitability, with only 47% of trading days being profitable.

According to data from Glassnode, miners have already been experiencing long periods of unprofitability. Source: Glassnode

“I think it’s conceivable we’ll see some miners shut down or other manipulation techniques used in an effort to drive up fees,” White said, adding: 

“But I also imagine that will happen well before the last Bitcoin is mined since the last few halvings will get the block rewards down to the satoshi level.”

However, White also says “a lot can happen in 120 years,” and BTC could fundamentally change over the next century.

White believes that by 2140, quantum computers will likely have broken the core encryption under Bitcoin, though he says engineers working on it have long known it’s not quantum-secure.

“That shouldn’t necessarily scare people because of this quantum security issue. Between now and 2140, there will have to be a major reworking of Bitcoin from the encryption layer upward,” he said. 

“At that point, the Bitcoin developer community will be able to assess whether or not we’re actually on track to have a functioning transaction fee-based network or if additional Bitcoin mining is necessary to ensure the security of the network,” White added.

White further speculates that while Satoshi Nakamoto’s white paper states that 21 million BTC is the supply cap and the single most concrete rule, none of us will likely be alive by 2140 to enforce that rule.

He believes crypto boils down to coding and consensus; if the community thinks the transaction fee incentive is insufficient to keep the network secure, future miners could theoretically extend the BTC hard cap beyond 21 million.

Related: $160K at next halving? Model counts down to new Bitcoin all-time high

What effect this could have on the price isn’t clear, but either way, White thinks that the price of Bitcoin will stabilize at some global inflation-reflecting price point, and the major price movement will occur at some time in the next 120 years if one or more nations seriously pick it up as their reserve currency.

In that instance, he says it will “likely be independent of Bitcoin mining schedules,” and it would be the most solidifying moment to drive up the price of BTC.

Related: US law protects institutions and exposes retail investors — Rep. Torres

“There are things we can’t even imagine that might impact Bitcoin — wars and energy crises obviously — but what if we’re a true multiplanetary species by then and we have to extend the block production time to support solar system-level communication speeds,” White said.

“What I always find important is to focus on the hardest problems we’re seeing today and do what we can to solve them. That might mean solving for payments or digital ownership, or banking the unbanked — these are the problems to focus on now,” he added.

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Crypto industry ‘destined’ to be BTC-focused due to regulators: Michael Saylor

The MicroStrategy co-founder believes crypto-related regulatory enforcement action will play in Bitcoin's favor.

Enforcement actions on cryptocurrency firms by regulators in the United States could result in a Bitcoin (BTC)-focused industry that will push its price over $250,000, according to MicroStrategy co-founder Michael Saylor.

In a June 13 Bloomberg interview, the Bitcoin bull explained recent enforcement actions from the Securities and Exchange Commission (SEC) will eventually play in Bitcoin’s favor — the only crypto excluded from being a security by SEC chair Gary Gensler.

Saylor added U.S. regulators "don't see a legitimate path forward for cryptocurrencies" adding "they don't have any love" for stablecoins, crypto-tokens or crypto-based derivatives.

Saylor said crypto exchanges would be the catalysts behind the significant price surge:

“[The SEC’s] view is crypto exchanges should trade and hold pure digital commodities like Bitcoin and so the entire industry is kind of destined to be rationalized down to a Bitcoin-focused industry with maybe a half a dozen to a dozen other proof of work tokens.”

“The next logical step is for Bitcoin to 10x from here and then 10x again,” he claimed.

Saylor noted Bitcoin’s market share increased from 40% to 48% in 2023 which may be attributed in part to the SEC’s enforcement activity and having now labeled 68 cryptocurrencies as securities — none of which are proof-of-work.

In the future, Saylor believes this dominance will increase to 80% as “mega institutional money” will flow into crypto after “confusion and anxiety” over crypto disappears.

Saylor and other Bitcoin-centric advocates have been met with considerable criticism, however.

Anthony Sassano, host of The Daily Gwei recently called out “Bitcoiners” that are pleased to see the SEC file lawsuits against Coinbase and other exchanges that list tokens considered to be unregistered securities by the SEC.

Ethereum-based wallet MetaMask and many others also believe a “multichain future” is inevitable because different blockchains serve different purposes.

Related: Bitcoin price can ‘easily’ hit $20K in next 4 months — Philip Swift

Mike McGlone, senior macro strategist at Bloomberg Intelligence explained in early May that a “deflationary bust” is impacting the commodities market and bank deposits — and that crypto may be the next domino to fall.

In January, economist Lyn Alden told Cointelegraph there is “considerable danger ahead” for Bitcoin in the second half of 2023, stating that when the U.S. resolves its debt issue, significant liquidity will be pulled out of markets:

“At that point, both the Treasury and Fed will be sucking liquidity out of the system, and that would create a vulnerable time for risk assets in general, including BTC.”

Magazine: $3.4B of Bitcoin in a popcorn tin — The Silk Road hacker’s story

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Bitcoin Network Hits 75% Progress Towards Next Reward Halving

Bitcoin Network Hits 75% Progress Towards Next Reward HalvingAt 11:06 a.m. Eastern Time (ET) on April 29, 2023, at block height 787,500, the number of blocks left to discover until the next Bitcoin blockchain halving is now fewer than 52,500 blocks. This means the network has progressed 75% through the 210,000-block halving cycle, which will ultimately result in a reduction of the block […]

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Satoshi’s Math: How Bitcoin’s Use of Mathematical Tools Ensures System Consistency

Satoshi’s Math: How Bitcoin’s Use of Mathematical Tools Ensures System ConsistencyOver 14 years ago, Satoshi Nakamoto unveiled the Bitcoin network to the world, creating the very first triple-entry bookkeeping system known to mankind. This technological wonder, with a current market value of $540 billion, ingeniously integrates encryption and mathematical formulas to fortify its security. In this exploration, we delve into two of the mathematical choices […]

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