Bakkt Acquires Turnkey Platform Apex Crypto to Bolster Digital Asset Footprint

November 4, 2022 Bitcoin.com

What is Bitcoin hash rate and why does it matter?

October 5, 2022 Coin Telegraph

Bitcoin

Cryptocurrency’s hash rate measures a blockchain network’s processing power to process transactions.

How does the hash rate affect Bitcoin price?

The main drivers of Bitcoin’s price include computational power, mining profitability and network difficulty. Since miners are compensated in Bitcoin while incurring costs in local currencies, the hash rate follows the price.

That said, the more computational power the Bitcoin network employs, the higher its value is. Moreover, rational miners are only willing to mine BTC if it is profitable, which implicitly means that any other cryptocurrency with no demand for it would have zero value and miners would redirect its resources elsewhere.

Additionally, the network difficulty can be used as a stand-in for total mining power. This premise is explicitly backed by the algorithm governing the Bitcoin network, meaning that difficulty readjusts to make up for declining or in the opposite scenario, mitigate the impact of growing mining power.

Fluctuations in the price of Bitcoin are significant not only for purely speculative reasons but also for how it affects the energy consumption of the Bitcoin network and how miners that power the Bitcoin infrastructure will behave in the future. In addition, there has long been a belief that the hash rate, or the total number of computations performed by Bitcoin miners, and the price of BTC are related.

Nonetheless, this notion might seem incorrect as a manufacturer’s level of effort in producing a good or service has no bearing on the price consumers pay since producers are price-takers in competitive marketplaces. On the contrary, this might not be true for the Bitcoin market, though, because there are only a few mining pool operators to coordinate their operations to control the market price. Furthermore, the inelastic nature of the Bitcoin supply and the intense competition in the mining industry might drive miners to act differently.

Purchase a licence for this article. Powered by SharpShark.

How does Bitcoin’s hash rate work?

The SHA-256 cryptographic hashing function, which converts any input data into a 256-bit string (the hash), is one of the technologies using which Bitcoin measures its hash rate. Due to the one-way nature of this function, it is simple to determine the hash from an input but not the other way around.

A hash rate, which can be expressed in billions, trillions, quadrillions and quintillions, is a measurement of how many calculations can be carried out each second. For instance, a hash rate of 1BH/s indicates that one billion estimates can be made each second. But, how is Bitcoin’s hash rate measured? Exahashes per second (EH/s) that are equivalent to one quintillion hashes are used to express the hash rate of BTC. By comparing the average time between mined blocks with the network difficulty at a particular time, the overall network hash rate may be roughly calculated.

So, what is mining difficulty? The mining challenge refers to how tough it is for miners to generate a hash lower than the desired hash, which is accomplished by lowering the hashed block header’s numerical value. On average, a new block (Bitcoin) is found every ten minutes. However, if BTC is discovered less frequently than the average time, the difficulty decreases or vice-versa.

Furthermore, it is essential to note that the Bitcoin network’s mining difficulty is automatically changed after 2,016 blocks have been mined. Therefore, depending on the number of miners and their total hashing power in the mining network, the difficulty can be adjusted either higher or downwards. So, what is Bitcoin’s current hash rate?

Although the precise hashing power of Bitcoin is unknown, it can be inferred from the number of blocks currently being mined and the level of block difficulty. So, how to monitor Bitcoin’s hash rate? Blockhain.com offers estimates about Bitcoin’s current hash rate, which is 224.383m TH/s as of September 25, 2022.

Why is hash rate important?

A crucial indicator of a blockchain network’s strength, specifically its security, is its hash rate.

So, what happens if Bitcoin’s hash rate increases? The hash rate rises as more machines are devoted by legitimate miners to finding the next block, signifying that the network's total computational power is high and it is difficult for malicious actors to interfere with the network. Nonetheless, the majority hash rate controller could reverse his payments by reorganizing payments, leading to double-spending issues due to a fall in the network’s hash rate.

Now, what happens if Bitcoin’s hash rate decreases? A decrease in hash rate exposes the network to cyber criminals and crypto heists due to the low cost of executing a 51% attack. In addition, a lower hash rate makes cryptocurrency less decentralized, posing a considerable risk to crypto investors. To safeguard its users against losing funds, crypto platforms could stop trading or delist a currency if the hash rate suddenly drops. So, Is a high hash rate a good measure of a network’s security?

Similar to the majority of PoW crypto, a more significant hash rate is thought to be better for the overall security and stability of the blockchain network as it means more energy costs, more miners and more time is needed to take over the network.

What is Bitcoin’s hash rate?

The amount of processing and computing power being given to the network through mining is referred to as Bitcoin’s hash rate. A fixed-length alphanumeric code representing any length of words, messages, or data is called a “hash.”

Blockchain technology is the foundation of Bitcoin (BTC) and many other cryptocurrencies. The Bitcoin network is formed by blocks that form a chain dependent on one another. Blocks are akin to files containing information about the most recent transactions made throughout the network.

Smaller blocks require fewer processing resources to validate (or vice-versa) since they behave like data files. Hashing comes into play in this situation. Confirming the integrity of the network transactions is known as “hashing” a block and BTC is given to network or hashing participants as a reward. So, what does hash rate mean for miners and crypto investors?

Calculating a hash rate might assist individual miners in forecasting their profitability. However, as cryptocurrencies are mined with various types of mining equipment, the hash rate of each machine differs. Since varying levels of processing speed, memory and power are needed for mining, the network hash rate increases when mining equipment is upgraded or vice-versa.

Because the network is designed to release a specific quantity of Bitcoin at a time, however, a more robust network does not necessarily lead to BTC being mined more quickly.

The number of miners in the network, mining difficulty and, ultimately, miner profitability are all impacted by changes in hashing power. In addition, the mining challenge rises when more miners join the network because it takes more guesses per second to solve the complex mathematical equation and get the block reward. As a result, the hash rate rises as the difficulty of the Bitcoin network does. Similarly, the hash rate is a crucial indicator for cryptocurrency investors of how secure a cryptocurrency’s proof-of-work (PoW) network may be against hackers. That said, network attacks become more expensive and challenging as the hash rate increases.

Robinhood and Circle Partner to Let Exchange and Wallet Users Utilize the Stablecoin USDC

September 29, 2022 Bitcoin.com

Congress demands crypto payments notification from DOS when helping Ukraine

September 20, 2022 Coin Telegraph

bills

The bill amendment demands the Secretary of State submit reports to congressional committees explaining why the DOS made the determination to pay out rewards in cryptocurrency.

A new bill demanding a congressional notification prior to payments of the United States Department of State (DOS) rewards using cryptocurrencies surfaced as the U.S. Congress raised concerns about the evasion of sanctions.

The Rewards for Justice Program, a counterterrorism rewards program run by the Secretary of State, offers rewards for information that prevents international terrorism. Citing examples of Russia and Belarus as previously sanctioned regimes that have used cryptocurrencies to circumvent sanctions, the bill H. R. 7338 demands that:

“The Secretary of State shall notify the appropriate congressional committees not later than 15 days before paying out a reward in cryptocurrency.”

Congress highlighted the United Nations’ findings that 12 million Ukrainian residents would need humanitarian assistance and that cryptocurrencies have “been used as an effective cross-border payment tool to send millions to the Ukrainian Government, Ukrainian army, and Ukrainian refugees with limited access to financial services.”

The bill amendment demands the Secretary of State submit reports to congressional committees explaining why the DOS made the decision to pay out rewards in cryptocurrency.

If signed into law, the bill will require the DOS to list each crypto payments that were previously provided. Moreover, the federal department will also need to provide evidence as to why cryptocurrency payments would encourage whistleblowers to share intel when compared to rewarding with the US dollar or other prizes.

In doing so, the DOS must showcase an analysis of how crypto rewards could undermine the dollar’s dominance as the global reserve currency.

Following US president Joe Biden’s executive order on Ensuring Responsible Development of Digital Assets, federal agencies joined hands in publishing a fact sheet to articulate a clear framework for responsible digital asset development.

The “first-ever” fact sheet published by the White House consisted of seven sections, namely (1) Protecting Consumers, Investors, and Businesses; (2) Promoting Access to Safe, Affordable Financial Services; (3) Fostering Financial Stability; (4) Advancing Responsible Innovation; (5) Reinforcing Our Global Financial Leadership and Competitiveness; (6) Fighting Illicit Finance and (7) Exploring a U.S. Central Bank Digital Currency (CBDC).

While some of the sections don’t contain any particularly new information, federal agencies recommend the creation of a federal framework for nonbank payment providers in addition to encouraging the adoption of instant payment systems like FedNow, which is expected to launch in 2023.

Staking on Polkadot, explained

September 5, 2022 Coin Telegraph

Blockchain

There's a big buzz around staking right now — but when it comes to Polkadot, there's a big difference between exchanges.

Are there any other limitations to consider?

Yes — as your funds may need to be locked up in order for rewards to be generated.

With some non-custodial staking providers, you need to delegate a minimum of 120 DOT in order to stake — that's worth about $840 at the time of writing. Worse still, failing to withdraw rewards regularly can mean they vanish after just 12 weeks.

In some cases, you can lose your rewards and end up paying punishing fees if you try to redeem your DOT early, too.

XGo does things differently and says it offers staking rewards for DOT balances of up to $10,000 through its Superfluid rewards mechanism.

The project's founders say they want to offer exciting products as they make a foray into centralized finance — and give retail crypto users the options they deserve.

Learn more about XGo

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

Doesn't staking impact liquidity?

It can do — and in some cases, you may have to lock up your DOT for 120 days.

A lot can happen in 120 days — case in point, DOT fell from an all-time high of $55 to lows of $17 over this timeframe… down 69%. This painfully shows why it's important to assess your options, and consider staking providers where you can earn yield without enduring long lock-up periods and helplessly watching your crypto plunge in value.

In some cases, it can take 28 days to unbond from a validator node — while in others, you can choose between fixed periods of 30, 60, 90 or 120 days.

But XGo is completely rethinking this approach. This platform offers no lock-ups on withdrawals and no unbonding period, meaning you're fully in control. Better still, rewards are paid out daily — and you can transfer your assets at any time.

Given how there's heightened fear in the crypto markets, and a lot of uncertainty driven by the Federal Reserve's mission to increase interest rates and tackle red-hot inflation, this much-needed flexibility helps keep HODLers in the driving seat.

What type of yield is on offer for stakers?

This can vary from one platform to another — but it's crucial to check that the yield is sustainable.

Before the recent crypto contagion set in, many investors were wooed by sky-high returns that ultimately proved unsustainable. As a result, thousands of customers at multiple platforms now remain locked out of their accounts — with withdrawals frozen. While it is possible to get interest rates that beat what's on offer at mainstream banks, it's important to tread carefully and go with a trading platform you can trust.

Across mainstream brands, the yield for Polkadot staking varies between 9% and 16.5%. That's quite a large spread — and as you would expect, each proposition comes with a distinctive range of pros and cons. In order to secure greater gains, some investors use staked $DOT derivatives — or lock it into liquidity pools. While growing your savings in this way may seem tempting at first, it's important to remember it isn't without risk.

The old adage in investing circles is that you should only invest what you're prepared to lose. In crypto circles, what really matters is understanding the nuts and bolts of how things work, and whether it's sustainable. You should also consider the lock-up periods that are associated with different staking propositions.

And what's the difference between validators and nominators?

It's quite expensive to become a validator on Polkadot — but this doesn't mean you can't get involved in the staking process.

The latest figures suggest that node operators need to have 2 million DOT staked by delegators in order to operate — and at the time of writing, that's worth $14 million.

Each delegator also needs to stake a minimum of 120 DOT in order to win the right to participate in the block validation process.

It's important to note that Polkadot does things slightly differently because it implements a Nominated Proof-of-Stake mechanism.

This encourages DOT holders to become nominators, and they'll be tasked with picking up to 16 others as validator candidates. Everyone then locks up their tokens to get rewards.

As Polkadot's website concerns, fairness is a key consideration: "The staking system pays out rewards essentially equally to all validators regardless of stake. Having more stake on a validator does not influence the amount of block rewards it receives."

Of course, for crypto enthusiasts with limited technical knowledge — or those with little time — staking through exchanges instead can be a tantalizing proposition.

What makes Polkadot different from other Proof-of-Stake networks?

This is a platform that focuses on inter-blockchain communication — ensuring that different networks can talk to one another.

Polkadot was established by Gavin Wood — and if that name sounds familiar, there's a good reason why. He co-founded Ethereum and created the Solidity smart contract language.

A key difference with Polkadot lies in how highly customizable Layer 1 blockchains can be established using this infrastructure… and they won't be siloed from the ecosystem.

At the beating heart of this network are validators responsible for governance and security, as well as ensuring that "parachains" remain in constant communication.

When Polkadot was formed, key decision choices were made that have helped make the ecosystem what it is today. A crucial difference concerns the wide variation of pooling options that are available to users — eliminating the high barriers to entry that often stop validator nodes from receiving staking rewards.

Axie Infinity Surpasses $4 Billion in All-Time Sales, Team Removes SLP Rewards From Classic Game Mode

August 13, 2022 Bitcoin.com

Bitpay Reveals Prepaid Cardholders Can Get up to 15% Cash Back Rewards via Select Retailers

August 11, 2022 Bitcoin.com

Reddit partners with FTX to enable ETH gas fees for community points

August 9, 2022 Coin Telegraph

Coin Telegraph

With the new integration, Reddit users will be able to purchase Ether from supported Reddit apps via FTX’s payment and exchange infrastructure platform FTX Pay.

After moving away from Bitcoin (BTC) payments years ago, online forum Reddit now seems to be inching closer to embracing cryptocurrency payments via a new partnership with the FTX exchange.

Sam Bankman-Fried’s crypto exchange FTX and Reddit announced in a joint statement on Tuesday that the platform intends to integrate Reddit’s Community Points in the United States, the European Union, Australia and other markets.

The partnership features the integration of FTX Pay as a payment and crypto exchange solution to unlock new crypto-enabled perks for Reddit Community Points. Introduced in May 2020, Reddit Community Points are a measure of reputation in communities or subreddits, allowing users to own a piece of their favorite communities.

“As a unit of ownership, points capture some of the value of their community. They can be spent on premium features and are used as a measure of reputation in the community,” Reddit said when launching the Community Points two years ago. Reddit Community Points are based on Arbitrum, one of the most Ethereum scaling solutions.

With the new integration, users will be able to purchase Ether (ETH) from supported Reddit apps via FTX’s payment and exchange infrastructure platform FTX Pay. The cryptocurrency can be used to pay blockchain gas fees, or network fees for their Community Points transactions on-chain.

“We're always working to empower communities and introduce new ways to use Reddit, and decentralized, self-sustaining blockchain technology allows us to do that. By working with FTX, we're able to do this at scale,” Reddit staff software engineer Niraj Sheth said.

Bankman-Fried noted that the partnership with Reddit marks FTX s commitment to empower online communities to harness the power of blockchain. “FTX Pay's payment and exchange infrastructure integrates with Reddit Community Points, making the customer experience a more seamless process,” he added.

The news comes amid Arbitrum developer Offchain Labs launching the Arbitrum Nova chain on Tuesday. Arbitrum Nova, the second chain launched in the Arbitrum ecosystem, is designed to serve as the premier solution for Web3 gaming and social applications. Apart from Reddit and FTX, other firms like Google Cloud, Consensys, P2P and QuickNode participated in the launch by becoming inaugural members of Nova's “Data Availability Committee.”

One of the most popular websites in the United States, Reddit has been largely involved in the crypto and blockchain industry for many years. The discussion platform is known for once allowing users to pay for their premium membership in Bitcoin but removing the opportunity in 2018.

Reddit co-founder Alexis Ohanian has been widely involved in crypto, launching a $100 million Web3 investment fund last year. Ohanian subsequently launched another $200 million Web3 and social media fund in collaboration with the Ethereum scaling solution Polygon.

Bitcoin network difficulty drops to 27.693T as hash rate eyes recovery

July 23, 2022 Coin Telegraph

Bitcoin mining

The reduced difficulty allows Bitcoin miners to confirm transactions using lower resources, enabling smaller miners a fighting chance to earn the mining rewards.

The difficulty in mining a block of Bitcoin (BTC) was reduced further by 5% to 27.693 trillion as network difficulty maintains its three-month-long downward streak ever since reaching an all-time high of 31.251 trillion back in May 2022.

Network difficulty is a means devised by Bitcoin creator Satoshi Nakamoto to ensure the legitimacy of all transactions using raw computing power. The reduced difficulty allows Bitcoin miners to confirm transactions using lower resources, enabling smaller miners a fighting chance to earn the mining rewards.

Despite the minor setback, zooming out on blockchain.com’s data reveals that Bitcoin continues to operate as the most resilient and immutable blockchain network. While the difficulty adjustment is directly proportional to the hashing power of miners, the total hash rate (TH/s) recovered 3.2% along similar timelines, as shown below.

At its peak, the Bitcoin hash rate reached an all-time high of 231.428 exahash per second (EH/s) when BTC prices fell to $25,000 last month in June — raising momentary concerns around extensive power usage.

Ever since China banned all crypto trading and mining operations in June 2021, the United States picked up slack in becoming the highest contributor to the global Bitcoin hash rate. However, Chinese miners resumed operations in September 2021. According to Statista data, the US represents 37.84% of the global hash rate, followed by China at 21.11% and Kazakhstan at 13.22%.

Previously, Cointelegraph reported that meteoric drop in GPU prices have opened up a small window of opportunity for small-time miners to procure a piece of more powerful and efficient mining equipment. That being said, miners see falling GPU prices as a means to offset their operational costs amid an ongoing bear market.

Easing up concerns related to exorbitant power usage, a report released by the Bitcoin Mining Council uncovered that nearly 60% of the electricity used for BTC mining comes from sustainable sources.

In Q2 2022, #Bitcoin mining efficiency surged 46% YoY, and sustainable power mix reached 59.5%, above 50% for the 5th quarter in a row. The network was 137% more secure YoY, only using 63% more energy. It is hard to find an industry more clean & efficient.https://t.co/gqYn8qew9R
— Michael Saylor⚡️ (@saylor) July 19, 2022

The study also found that BTC mining accounted for just 0.09% of the 34.8 billion metric tons of carbon emissions estimated to be produced globally and consumed just 0.15% of the global energy supply.

Nonfungible airdrops: Could NFA become the next big acronym in the crypto space?

June 23, 2022 Coin Telegraph

Airdrop

Airdrops are a great marketing tool, but they can have downsides for crypto projects and investors alike. Is there a way around this?

Airdrops have become the bread and butter of the crypto world — for good reason.

They're an indispensable marketing tool for up-and-coming projects that want to create a buzz around their ecosystems.

Done right, distributing free tokens to the public can help elevate demand — and unlock big benefits for recipients. After all, if these altcoins end up being listed on major exchanges at a later date, their value could explode.

Unfortunately though, downsides have started to emerge. These campaigns aren't just reaching enthusiasts who passionately believe in what a project has to offer, but "airdrop hunters" who are merely scouring for ways to turn a quick profit.

Airdrop hunters typically want to sell off the tokens they've received for free — as soon as they can. And for cryptocurrency projects at their very early stages, this can be bad news — undermining carefully cultivated tokenomics and causing the value of a coin to fall.

The current bear market has also unearthed another problem. Many projects are now postponing the schedules for unlocking new tokens — waiting until the economic climate improves slightly. And while this is usually in the best interests of a project and their investors in the long run, it can be disappointing news for those who won tokens in an airdrop. Why? Because they're no longer able to freely trade or liquidate the digital assets they're entitled to.

So… what's the answer? Can airdrops be revitalized, eliminating some of the downsides that have emerged in recent years? And is there a way for hodlers to benefit — even if they haven't got their hands on tokens just yet?

How NFTs can shake up airdrops

Right now, projects are attempting to walk this tightrope between gaining publicity and engaging in marketing strategies that could damage their ecosystems. How can you get new users to follow a Telegram or Twitter account in order to be eligible for an airdrop, and incentivize them to stay involved with the community long term?

Nonfungible airdrops — otherwise known as NFAs — could be the answer here. And, as you might expect, they incorporate some of the technology relied upon by NFTs to generate a "win-win" situation for projects and airdrop winners alike.

NFAs aim to represent the true value of an airdrop reward when an initial DEX offering (otherwise known as an IDO) takes place. This is achieved through a model that's not too dissimilar to a futures contract — an agreement to buy or sell assets that will be activated at a future date.

The only difference is that the project owner releasing the NFA makes a promise to deliver the token or other digital assets on a future launch date. And as each airdrop winner ends up receiving different rewards under this model, there's a one-of-a-kind gift that's nonfungible.

In this scenario, the nonfungible airdrop will boast a mechanism that allows holders to claim their tokens when a project launches — in effect, capturing the value of future tokens. Alternatively, it is possible to achieve instant returns by trading this NFA on a peer-to-peer marketplace. What makes this concept so compelling is that those who opt for an immediate transaction will miss out on perks in the long run.

Nonfungible airdrops can be equipped with exclusive avatars and special benefits, such as discounts and free trials on the goods and services offered by a crypto project. Holders could also be granted exclusive early access to future features — and better still, their tokens will be waiting for them when they launch.

Have your cake and eat it

Arken Finance says it is the mastermind of the world's first nonfungible airdrop, a concept that has the potential to shake up the DeFi landscape immeasurably.

The DeFi trading portal can be found across eight networks — and its goal is to arm investors with a greater number of trading tools, all while reducing friction.

Arken had commenced an airdrop campaign back in November 2021, but this was postponed as the markets began to cool. Now, it's pioneered NFAs as a way of igniting excitement about its future plans without falling into the common pitfalls of airdrops that have surfaced.

Now, 2,000 winners of its trading competition have been rewarded with their very own NFA — each storing a different amount of tokens, and each with different benefits. They'll be able to reclaim this cryptocurrency at a later date, but there's plenty of exclusive advantages to keep them occupied in the meantime.

"The team strongly believes in this application and is confident that this technology can be marketed to DeFi project owners in the future," Arken said in a recent blog post.

And while enthusiasts may have missed out on the chance to own one of the first-ever NFAs during the initial airdrop, the project says subsequent rounds are planned in the future.

Some of the perks include an exemption from fees for the first 24 hours of a trading competition — and NFA holders will have their own special tier in the contest. On this mini-competitive track, they'll subsequently be entitled to separate rewards. In addition, exclusive insights and fast-lane customer support is provided through a VIP Discord channel, and owners will have a front-row seat to the premium features that Arken Finance has in the pipeline.

It's a bold experiment, and one that could unleash new levels of loyalty in crypto projects that are getting off the ground for the first time. And for those who win airdrops, it delivers far more than tokens. Not only will they have a status symbol in the form of distinctive avatars that few members of the community own, but they'll get an enhanced experience through VIP channels and front-of-the-line customer support. For those who really believe in a project's potential, that's gold dust in itself.

There's excitement as Arken Finance's cutting-edge experiment continues — and the project's hoping that "NFA" will be the next acronym to become prolific in cryptocurrency circles.

Learn more about Arken Finance

Rewards