Category Archives: Bitcoin

Bitcoin’s price hit $5000 last week. It’s still a dumb investment – Los Angeles Times

Late last week, I noticed a spike in what we might think of as a certain financial index. It wasnt the trading in a financial instrument per se, but in the online traffic in a column I had written in December 2013. The column examined the recent crash in the price of bitcoins, which had plummeted to $600 from $1,200 in just two days. The headline read:

The bitcoin crash of 2013: Dont you feel silly now?

What was causing the spike in readership of that piece more than three years later was that the price of bitcoins was surging toward $5,000, a point it breached during the day on Friday. A few bitcoin true believers had dug out that old story and were, metaphorically, waving it in my face. Tweets citing the piece and asking if it wasnt me who should be feeling silly came pouring into my Twitter feed. Suddenly I was a meme.

So heres my short answer. No, I dont feel silly, but vindicated. If the recent run-up in bitcoin price proves anything, its that the virtual currency is still a dumb investment.

Not only that, but the surge undermines the case for bitcoins ostensibly chief purpose, as a medium of exchange. To understand why, we can start by scrutinizing the recent bitcoin surge or as financial historians might view it, the bubble.

First, the surge is of very recent vintage. From the end of 2013 through January this year, bitcoin as an investment was essentially dead money: Leaving aside some peaks and valleys, it traded in the $800 to $900 range in December 2013, and about the same in December 2016. (Im using coindesk.com price quotes as a benchmark.) Bitcoin crossed the $1,000 barrier in earnest around the end of January and really took off at the end of March. From then through last week, bitcoin quintupled in price. Since bitcoins were introduced only in 2009, the surge represents only a narrow sliver of a very brief lifespan. Tulips live longer.

Whats more, Fridays peak was gone by Saturday, when the price fell to as low as about $4,600. Thats a drop of 8% in a matter of hours. Is that significant? Think of it this way: If the Dow Jones Industrial Average fell by 8% in a day, that would be a plunge of more than 1,700 points. Most market participants, its safe to say, would regard a one-day collapse of that magnitude as cataclysmic. Since Saturday, by the way, bitcoin has continued to head lower. As I write, its quoted at about $4,350.

Bitcoins will undoubtedly rise in quoted value again, and also fall again, I wrote in 2013. The one inevitability about them is their volatility, to which there’s no end in sight.

Thats still true. As an investment, therefore, bitcoin is not for the average household. Even professional plungers might quail at such a volatile financial instrument.

What about people using bitcoin as a medium of exchange? Among bitcoins virtues, ostensibly, is that its anonymous, and theoretically easy to convert into or out of national currencies. This makes it relatively convenient for anyone needing to move financial assets around, out of the eyesight of government foreign exchange regulators, tax authorities or law enforcement agencies. The infamous Silk Road black market for drugs took payment exclusively in bitcoins until it was busted in 2013, for example. Ransomware perpetrators, who lock up institutions computers until theyre paid off, typically prefer bitcoins.

Bitcoin is popular among businesspersons in places such as Greece, Spain and China, where the impulse to get capital out of the country confronts strict government policies aimed at keeping it in. You can buy bitcoins from home and convert it into dollars, sterling or euros. These transactions are anonymous and electronic, typically performed via a virtual wallet maintained at a bitcoin exchange firm. Your capital exists in cyberspace, everywhere and nowhere like Schrodingers quantum cat, until you convert it into a recognized currency and deposit it in a safe offshore account.

Yet most bitcoin value appears to be held by investors, not used for trading or capital flight. Thats the conclusion of a research team headed by Susan Athey of Stanford. In an August 2016 paper, the researchers observed that the risk of bitcoin investing derives from the fact that its almost entirely virtual, with its supply governed if thats the right word by a mathematical algorithm. (Bitcoins are created by users of supercomputers solving an increasingly complex mathematical puzzle; by its terms, the supply of bitcoins can never exceed 21 million.)

Since Bitcoin is not backed by an underlying asset and instead has a fully fluctuating exchange rate. they wrote, there is substantial risk about its future value. Under those circumstances, speculative bubbles can form given many of the fluctuations that have occurred with Bitcoin exchange rates, the idea of bubbles seems salient. We may be in one right now.

That should give pause to anyone using bitcoins to transfer value. Consider yourself a Chinese or Greek business person using bitcoins to spirit, say, $50,000 in your local currency abroad. You convert that to 10 bitcoins at the peak last week; if you wait more than a day to convert it out of bitcoins, you get only $45,000 back. Wait until today, and youre down to $43,000. Thats a sizable transaction tax.

Factor in the instability of bitcoin exchange firms, which have experienced a string of failures, technical problems and government seizures tied to criminal activity for almost as long as there have been bitcoins. The bitcoin thesis is that its mathematical underpinning eliminates the need to rely on trust relationships with ones transaction counterpart, as long as one trusts the algorithm. But when the firm holding your wallet shuts down, who do you trust then?

This may be why bitcoin still accounts for a minuscule proportion of financial transactions worldwide. The capitalization of the bitcoin market that is, the 16.5 million bitcoins in existence multiplied by $4,350 each comes to just under $71.8 billion. The worldwide stock of broad money, which includes notes, coins and financial accounts, was placed at $82 trillion by the CIA as of the end of 2016. In market cap, bitcoin ranked just ahead of the Romanian leu, in 60th place and that was only after its quintupling in price this year. For comparisons sake, the market value of all U.S. dollars alone as of Dec. 31 was $13.2 trillion.

Coindesk

Oh, sure, let’s rely on bitcoin as a global reserve currency: The price action in bitcoin since July 2010 shows extreme volatility.

Oh, sure, let’s rely on bitcoin as a global reserve currency: The price action in bitcoin since July 2010 shows extreme volatility. (Coindesk)

What bitcoin has that the Romanian currency lacks is a fan base that sees it in ideological terms. These fanatics believe that its a viable alternative to what they call fiat money, which is currency subject to central bank buying and selling. The central banks, they further believe, are devoted to maintaining inflation, which can only sap those currencies of their value over time.

What they dont acknowledge, however, is that bitcoin is even more vulnerable to externalities such as government policies. Experts seeking to explain this years bitcoin bubble have pointed to factors including a speculative hysteria akin to the tulip mania of the 1600s or the South Sea bubble of the 1700s; and more welcoming policies enacted in Japan and Korea. On the other side of the cliff, however, the subsequent fall in prices has been blamed in part on a hostile policy issued by the central bank of China.

The real value of bitcoin may reside not in the price of these virtual coins, but the underlying technology, which is known as the blockchain. Blockchains, put simply, are ledgers or databases that arent maintained by a government agency, corporation or other centralized authority, but their community of users. Theyre encrypted to prevent unauthorized or secret tampering, which makes them especially secure. Bitcoin can be viewed as blockchains proof of concept.

Indeed, bitcoin is facing competition from other virtual currencies purporting to exploit blockchain more effectively. Investors are pouring into the blockchain space, hoping to get in on the ground floor of a technology with broader application for business and government than merely as a way to move money around.

That doesnt mean those investors have much faith in the market price of bitcoin. As is often the case in financial markets the real money is to be made via investments for which the actual value of the underlying asset is irrelevant. (Thats why brokers prefer to take a commission on every transaction, regardless of its price.)

As I wrote in 2013, bitcoin may well rise in price, but it may also fall after all, its done both, big time, in the last week. As an investor you may end up getting rich. But you may also end up looking very, very silly. Whether the price is $1,000 or $5,000, that will always be true.

Keep up to date with Michael Hiltzik. Follow @hiltzikm on Twitter, see his Facebook page, or email michael.hiltzik@latimes.com.

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Bitcoin’s price hit $5000 last week. It’s still a dumb investment – Los Angeles Times

Why Beanie Babies make for a better investment than bitcoin – MarketWatch

At least Beanie Babies have the alternative use for kids to play with. David Merkel

Safe to say the Aleph blogs David Merkel is not a fan of digital currencies.

In his latest bearish slam lobbed at bitcoin BTCUSD, +1.21% Where money goes to die, he explained why he believes most of the players in the crypto market will eventually disappear along with the fortunes of late-to-the-party speculators.

The lure of free money brings out the worst economic behavior in people, Merkel wrote. That goes double when people see others who they deem less competent than themselves seemingly making lots of money when they are not.

He says that digital currencies have three primary weaknesses: Theyve got no intrinsic value, cant be used to settle all debts public and private, and are less secure than insured bank deposits.

While bitcoin, as is typically the case these days, managed to shake off the declines brought on by an announced crypto crackdown in China, Merkel didnt back away from his grim outlook.

In fact, he gave China credit for trying to limit the emergence of new cryptos.

A good argument could be made that they all should be made illegal, he wrote in his blog post. Its almost like we let any promoter set up his own Madoff-like scheme, and sell them to speculators.

Of course, theres no shortage of fervent bitcoin backers whod quickly dismiss Merkels argument, like one crypto exec who recently said he sees bitcoin potentially reaching $250,000.

To get an idea of just how explosive the growth in cryptocurrencies has been, check out this chart from Visual Capitalist:

Sure, its certainly been an amazing ride for those getting in at the right time, but pain awaits those chasing similar returns, according to Merkel.

New asset classes that have never been through a failure cycle tend to produce the greatest amounts of panic when they finally fail. And, all asset classes eventually go through failure, he wrote. Ultimately, most of the cryptocurrencies will go out at zero. Dont say I didnt warn you.

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Why Beanie Babies make for a better investment than bitcoin – MarketWatch

IRS Eyes Profits From Bitcoin and Bitcoin Cash Investments – Investopedia

Perhaps one of the biggest draws of cryptocurrencies like Bitcoin has been its murky tax status. Throughout the history of the industry there have been few if any set procedures and guidelines regarding the leading digital currency, prompting investors to wonder whether profits from their mining and investing in this area could be seen as “free cash” from the perspective of the IRS. Now, a report by Coin Telegraph suggests that it may not be so easy, although the results are yet to be determined. The IRS will reportedly examine how cryptocurrencies like Bitcoin should be treated with regard to income taxation.

When it comes to taxing, the fact that Bitcoin has recently split into two different currencies has some speculating that the tax implications may be favorable for investors. Earlier in the summer, Bitcoin developers and miners reached an agreement to adopt a new set of protocols, one result of which was that Bitcoin “forked” into two different currencies: the original Bitcoin, as well as a newer “Bitcoin Cash.” The newer currency aims to have a faster verification process by virtue of its larger blocks, enabling more users to conduct a larger number of transactions without clogging the network and slowing down processing times.

Investors holding Bitcoin prior to the fork received Bitcoin Cash at the time of the fork, provided that their wallets or exchanges of choice supported the divide. The nature of the split has some wondering if they will be taxed or not.

There aren’t preexisting guidelines on how Bitcoin and Bitcoin Cash are taxed, but analysts do seem to agree that there are applicable taxes on sales of either or both of the two currencies. If an owner of Bitcoin Cash sells his holdings and receives the profit as capital gains income, it is taxable.

According to the Notice 2014-21 from the IRS, “virtual currency is treated as property for US federal tax purposes.” This means that transactions on digital properties like cryptocurrencies can be taxed as well. To the IRS, it seems that Bitcoin is a capital asset which can be subject to short-term capital gains (if sold after less than a year) or long-term capital gains if sold for a longer duration. The tax rate will be 15-20% based on the value as determined by the fair market price.

The vigilance of the IRS regarding cryptocurrency profits may require that many investors change their approach to taxes. Because specific tax law may differ from state to state, it’s perhaps most helpful to speak with an accountant familiar with the local procedures in order to ensure compliance, particularly for those who deal in cryptocurrencies.

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IRS Eyes Profits From Bitcoin and Bitcoin Cash Investments – Investopedia

Sequoia, IDG to Invest in China Bitcoin Mining Giant – Bloomberg

Sequoia Capital and IDG Capital are investing in Beijing-based Bitmain Technologies Ltd., the worlds largest bitcoin mining organization, according to people familiar with the matter.

Bitmain is raising $50 million from several venture firms to boost its profile among mainstream investors, said one of the people, who asked not to be named because the matter is private. Sequoia and the other firms also plan to provide the company with more guidance on management, the people said.

Bitmain, which produces chips and machines for mining bitcoin and operates its own mining facilities, has benefited from the rise in the currencys market value, now about $75 billion. The startup told Bloomberg TV in August that its own valuation is in the billions and its weighing a possible initial public offering. Bitmain has said that its planning toproduce chips for artificial intelligence and invest in mining facilities in the U.S.

Bitmain, Sequoia and IDG didnt respond to email queries about the investment.

Inside Bitmains bitcoin mining facility in Ordos, Inner Mongolia.

Photographer: Qilai Shen/Bloomberg

The company led by founders Wu Jihan and Micree Zhan has been at the center of disputes over how to expand use of the cryptocurrency. Operating the largest mining collective — a network of computers that verify transactions made on the bitcoin distributed ledger– Wu has championed the idea of increasing block sizes of the network that were previously capped at 1 megabyte to enable faster transactions. Opponents have criticized the proposals for giving miners too much power and came up with alternative proposals.

A split occurred within the community in August, causing bitcoin to become two currencies– the original bitcoin and an offshoot called bitcoin cash.

As Bitcoin Risks Big Split, Along Comes Minor One: QuickTake Q&A

With assistance by Yuji Nakamura

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Sequoia, IDG to Invest in China Bitcoin Mining Giant – Bloomberg

Bitcoin Price Drops By Over $250 as Crypto Markets Lose Billions – CoinDesk

Just two days after achieving a historic high of over $5,000 on September 2, bitcoin’s price has plummeted to below $4,400.

The notable sell-off the biggest in the crypto markets since July 15 began immediately after the record high of $5,013.91had been reached Saturday,and has continuedtoday, according to data from CoinDesk’s Bitcoin Price Index.

Starting the session at$4,631, the digital asset traded sideways for a time (with a high of $4,636), until around 07:00 UTC, when a sharp drop was observed taking bitcoin to a low of $4,345 for the session.

At press time, the price had recovereda tad to$4,367 a drop of 5.7 percent ($263) for the day so far.

The downwards movement reflects a general drop in the cryptocurrency markets.

A glance at CoinMarketCap data reveals that most digital assets are down today, with only a couple of cryptocurrencies showing in the green.

Amid losses across allthe top 10cryptocurrencies, notably, ethereum is down 14.53 percent, litecoin is down 15.37 percent, and monero has dropped 12 percent.

Looking at the markets as a whole, since reaching a record high of around $180 billion, the combined market cap for all cryptocurrencies is now $152 billion a drop of $28 billion.

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The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [emailprotected].

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Bitcoin Price Drops By Over $250 as Crypto Markets Lose Billions – CoinDesk

Searching for the future of currency, major companies try Bitcoin technology – PBS NewsHour

HARI SREENIVASAN: Im walking on Wall Street with author Don Tapscott. Hes written a dozen books on technology and sees one that could change everything around us. Hes not the only believer. While the Dow Jones Industrial Average is up about 20 percent in the past year, Bitcoin, a digital currency, is up more than 700 percent, with a total value of near $80 billion. Thats more than American Express. The surge has people wondering whether Bitcoin is in a bubble.

For Tapscott, that question is missing the real story.

DON TAPSCOTT, AUTHOR BLOCKCHAIN REVOLUTION: The real pony here is the underlying technology called the blockchain.

HARI SREENIVASAN: Tapscott and his son co-wrote a book called Blockchain Revolution, named after the technology that supports bitcoin and other so-called cryptocurrencies. Theyre called that because of the cryptography, or computer code, that makes them secure.

Tapscott says the technology is the key to creating trust in peer-to-peer transactions, like sending or receiving money without a bank or a credit card company in between.

DON TAPSCOTT: Trust is achieved not by a big intermediary; its achieved by cryptography, by collaboration and by some clever code.

HARI SREENIVASAN: Heres how the blockchain works: when you send or receive an asset, the transaction is recorded in a global, public ledger. A network of millions of computers store copies of that ledger and work to validate new transactions in blocks. When each block is verified, its sealed and connected to the preceding block, which in turn is connected to every block that has ever been validated, creating a secure blockchain.

DON TAPSCOTT: There is now an immutable record of that transaction. And if I wanted to go and hack that transaction, say to use that money to pay somebody else, Id have to hack that block, plus the previous block, in the entire history of commerce on that block chain, not just on one computer, but across millions of computers simultaneously all using the highest level of cryptography while the most powerful computing resource in the world is watching me. The way I like to think of it is that is a blockchain is a highly processed thing sort of like a chicken nugget, and if you wanted to hack it, itd be like turning a chicken nugget back into a chicken. Now someday someone will be able to do that. But for now, its going to be tough.

HARI SREENIVASAN: Tapscott predicts these global ledgers, or blockchains, could affect several parts of the economy during the next decade, in particular, the financial industry.

HARI SREENIVASAN: In a blockchain future, what happens to the New York Stock Exchange?

DON TAPSCOTT: Well, a likely scenario is it becomes a fabulous museum, and it is a beautiful building when you think about it. But buying and selling a stock can be done peer-to-peer now using new blockchain platforms.

HARI SREENIVASAN: He says routine transactions, like using a credit card or making online payments with PayPal or Venmo, could be replaced with instant, peer-to-peer blockchain transactions, speeding up how long it takes and shrinking the costs.

DON TAPSCOTT: Think about something like you tap your card in a Starbucks and a bunch of messages go through different companies. Some of them using, you know, 30-year-old technology, and three days later, a settlement occurs. Well, if all of that were on a blockchain there would be no three-day delay. The payment and the settlement is the same activity. So it would happen instantly and in a secure way. So thats either going to disintermediate those players, or if those players are smart, theyll embrace this technology to speed up the whole metabolism of the financial industry.

HARI SREENIVASAN: Beyond upending financial transactions, Tapscott imagines a future where a blockchain could be used to transfer any kind of asset, from a users personal data to intellectual property.

Some of that has already begun. This is Consensys, a technology start-up in Brooklyn, New York. Joseph Lubin founded Consensys and helped develop the Ethereum blockchain, the second biggest blockchain in the world after Bitcoin. Ethereum launched in 2015.

JOSEPH LUBIN, CONSENSYS: Ethereum is by far the most powerful blockchain platform out there. It has the most expressive programming language.

HARI SREENIVASAN: Meaning Ethereum can do something pretty radical: it allows for what are known as smart contracts to be built into the code. So it can also transfer a set of instructions or conditions.

DON TAPSCOTT: Its kind of like what it sounds like its a contract that self-executes, and it has a payment system built into it. Sort of like a contract that has built in lawyers and governments and a bank account.

HARI SREENIVASAN: At Consensys, one project applies this idea to music.

JESSE GRUSHAK: Click buy album

HARI SREENIVASAN: Jesse Grushack is the founder of ujo, a music platform for artists to distribute their music through the blockchain. Artists decide what price to sell their music and pocket more from their intellectual property.

JESSE GRUSHAK, UJO MUSIC: Were looking at how to make the music industry more efficient, but at the end of the day, our top level goal is getting artists paid more for their work and all their creative content.

HARI SREENIVASAN: But ujo is not yet easy to use. There is only one album on the platform, and it requires users to buy music with ether, the cryptocurrency used on the Ethereum blockchain.

JESSE GRUSHAK: The blockchain is still in its infancy right now. Its still kind of in the Netscape phase, really, of the internet. You dont have that AOL, you dont have that landing page that opens the world up to you. Its still a little nerdy, its still a little technical but were working really hard to kind of make it usable, make the user experience seamless because really this technology we want to be in the hands of everyone.

HARI SREENIVASAN: When he said, a little nerdy, he wasnt kidding. In order to get an idea, I went out and bought some crypto-currencies online and the process was not easy. Certainly not as easy as going to the bank to get cash or calling a stockbroker to buy a stock. But then, using my first email account in the early 90s, that wasnt easy either.

DON TAPSCOTT: I think were in 1994. And in 94, we had the internet and most people were using it for a single application, email. And thats kind of like Bitcoin is today. The application is called a currency, but were starting to see the rise of the web as we did in 94. A general purpose platform for building applications that changed many, many industries.

HARI SREENIVASAN: Youve literally written the book on the blockchain. How do you know that this is actually working, that people are believing in this, investing in this, understanding the potential in this?

DON TAPSCOTT: In every single industry now, companies are starting to implement pilots to explore how this technology can change their operations.

HARI SREENIVASAN: Tapscott points to retailer Walmart, which has done a pilot using a blockchain to track food safety, and manufacturer Foxconn, which is experimenting with using a blockchain to track its supply chain.

Still, this blockchain believer acknowledges it has a lot left to prove.

HARI SREENIVASAN: Theres several critics out there that kind of look at this and say, This is like tulip mania. This cryptocurrency stuff, this is a bubble, bigger than Ive ever seen before. Theres a bunch of people that dont know a thing about whats going on that just want to see something go up.

DON TAPSCOTT: Well, for sure theres a hype cycle that were into now. But the biggest impact will be that blockchain itself is going to change the fundamental operations of banks, of retail companies of supply chains, of manufacturing companies, of governments, and of every institution in society.

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Searching for the future of currency, major companies try Bitcoin technology – PBS NewsHour

Bitcoin $5,000: Currency Hits New Record High | Fortune.com – Fortune

The price of the world’s best known digital currency briefly crossed the $5,000 mark on a major index for the first time on Friday evening ET, before retreating about 5% in subsequent hours.

The idea of Bitcoin breaking the symbolic milestone of $5,000 would have been unthinkable to most people at the start 2017, when the price topped $1,000 for the first time. If you’re keeping track, the digital currency is up 500% this year, and nearly 2200% since mid-2015, when it was in the doldrums at around $220.

There appears to be no single reason for the recent run-up. Instead, it can likely be explained by the same factors driving this year’s cryptocurrency bull run: Publicity-driven speculation; New financial products creating unprecedented liquidity; Trading surges in Asian markets; Institutional investors treating digital currency as a permanent new asset class.

Meanwhile, the $5,000 milestone is likely to trigger a new round of chatter that Bitcoin and other cryptocurrencies are in a bubble and vulnerable to a major price collapse. Bitcoin has experienced a series of spectacular crashes in the past (most recently in 2014 when it dropped around 75%) but has always recovered.

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Finally, it should be noted that Bitcoin crossed $5,000 on an index used by the trade publication Coindesk, but not by other major indexes. This is significant because Coindesk’s BPI index includes prices from several Asian exchanges, where prices are typically higher than US or European one. Here’s a screenshot showing the milestone (the time shown is GMT):

A more conservative price estimate can be found on an index created by the Winkelvoss twins, are among the world’s biggest holders of Bitcoin. Known as the Winkdex, the index only draws data from U.S.-dollar denominated exchanges. As you can see, the index’s calculation shows how Bitcoin prices approached the $5,000 mark, but did not break it:

Bitcoin is not the only cryptocurrency to achieve new highs this week. Ethereum nearly crossed the $400 mark for the first time while another smaller rival, Litecoin, briefly broke through the $90 mark.

As of Saturday late morning ET, Bitcoin was trading between $4,500 and $4,600.

This is part of Fortunes new initiative, The Ledger, a trusted news source at the intersection of tech and finance. For more on The Ledger, click here.

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Bitcoin $5,000: Currency Hits New Record High | Fortune.com – Fortune

Bitcoin Drops Below $5000 as Crypto Markets See $13 Billion Sell-Off – CoinDesk

It’s the biggest sell-off since mid-July.

At press time, the total value of all publicly traded cryptocurrencies was $166 billion, a figure that was down more than 7 percent from a high of nearly $180 billion last night.

That’s when bitcoin, surging on technical improvements and growing investor optimism, topped $5,000 on the CoinDesk Bitcoin Price Index for the first time.

The decline was similar to what was observed on bitcoin, with average global prices declining from a high of $5,013.91 to a low of $4,619.97, a more than $250 decline.

Overall, it was the largest sell-off in the cryptocurrency markets since July 15, when the total value of the asset class plunged roughly 12 percent from $72 billion to $63 billion. However, that decline was part of a multi-day sell-off that saw prices drop more than 25 percent on what was then concern over bitcoin’s technical roadmap.

At press time, market observers seemed split on how to read the market movement.

In remarksto CoinDesk, some stated it might be too early to say the market has peaked given the recent upswell in institutional interest and the finite nature of new cryptocurrency creation.

On the latter point, some went so far to speculate the decline could be a “bear trap,” one that quickly opens the door for larger gains.

“Since bitcoin is getting a lot of media attention lately a lot of people are looking for a moment to enter the market,” Bram Ceelen, founder of cryptocurrency brokerage AnyCoin, told CoinDesk.

Others pointed to declines in July and May as evidence the market has still retracted, even during its 2017 rally, and that further declines were possible.

Money in mousetrap image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [emailprotected].

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Bitcoin Drops Below $5000 as Crypto Markets See $13 Billion Sell-Off – CoinDesk

Bitcoin Mempool is Empty and High Transaction Fees are no Longer Required – newsBTC

It appears as if the Bitcoin mempool is virtually empty once again. This is a positive development for anyone looking to move BTC on the network. Up until this point, there have been several issues with transaction delays. However, it appears those problems are finally coming to an end as we speak. Users should adjust their transaction fees accordingly to avoid overpaying. Theres no reason to pay too much, after all.

It is good to see the Bitcoin mempool clear itself out. More specifically, now is the best time to move Bitcoin on the network. An empty mempool means fees can be kept to an absolute minimum. That is good news for the network as a whole. Bitcoin miners may not like this development too much, though. Their earnings will decrease slightly when network fees drop off. Then again, we have seen multiple incidents involving an overly full mempool these past few months.

The positive side to all of this is how theres no need for high transaction fees. Using the default setting in ones wallet should be just fine. However, it appears some wallets are still charging too much as we speak. It is worth the effort to manually adjust fees whenever possible. Wallet estimation tools are still pretty awful to this very day. It is unclear if this situation will change anytime soon, though. Using the default Bitcoin Core client may be ones best option in this regard for the time being.

This also shows how there is no spam attack against the Bitcoin network right now. Many people had feared that would happen eventually, but it turns out things are just fine for now. This situation may change at any given moment, though. Spam transactions can be launched in mere minutes and flood the network pretty quickly as a result. For now, the mempool is still empty and continues to be for some time to come, hopefully. It has been around 30 days since we last had an empty Bitcoin transaction backlog.

With Bitcoin Cash effectively splitting off, it seems those high fees are a thing of the past now. Everyone who wants bigger block sizes can effectively switch over to BCH. Everyone else hopes for either SegWit or SegWit2x to make a big difference in the coming months. It will be interesting to see how this situation will play out in the long run. It is now up to wallet developers to successfully lower their network fees properly. Whether or not what will happen, remains a big mystery for the time being.

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Bitcoin Mempool is Empty and High Transaction Fees are no Longer Required – newsBTC

Literally just one huge chart showing bitcoin’s incredible rise to $4800 – MarketWatch

Eight days.

Thats how long it took bitcoin BTCUSD, -5.34% back in April 2013, to rise from $100 for a single bitcoin to $200.

Fast forward four years and the cryptocurrency has reached an all-time high of $4,890.40 and has been scaling $100 milestones in a matter of hours on a routine basis. On Tuesday morning, the price of a single bitcoin was around $4,400; by Tuesday afternoon it had shot up to briefly top $4,700 for the first time. Friday, it scaled above $4,800 and has $4,900 in its sights.

While these milestones have become lesser and lesser accomplishments as bitcoin has continued to blaze along its upward path bitcoin would now only need to rise 2.1% to go from $4,800 to $4,900, compared with 100% when it doubled to $200 it is also indicative of just how astonishingly fast the digital currency has been rising this year. So fast we were barely able to fit all the milestones onto this whopper of a chart.

Vote: What will we see first: Dow 30,000 or bitcoin $30,000?

Also read: 22 internet memes that let you relive bitcoins historic rise

If that chart isnt making bitcoins staggering ascent abundantly clear, here are some more stats that should do the job:

One year ago, on Aug. 31, 2016, bitcoin was trading at $576.

Which means bitcoin is up over 740% over the past 12 months.

It closed 2016 trading at about $954.

So, thus far in 2017, it is up over 400%.

Bitcoin started the month of August at $2,738.

And has hit record after record this month, surging 77%.

There have been nine days in 2017, five in August alone, in which bitcoin has scaled past several $100 milestones in a single day.

At current levels, bitcoin has a market cap of $79.38 billion, larger than such companies as Starbucks Corp. SBUX, +0.13% and American Express Co. AXP, +0.05%

(Bitcoin prices according to CoinDesk.)

This is where well remind you that as the elder sibling of the cryptocurrency gang, bitcoins numbers actually pale in comparison to some of its brethren:

Ether has soared more than 4,600% this year. Its total market cap stands at $36.7 billion.

Bitcoin Cash, an offspring created in response to bitcoins transaction-size issue, has a market cap of $10.4 billion. (Though it is down about 26% from an all-time high above $860, hit on Aug. 19.)

Ripple, at about $0.25, is up nearly 3,900% this year. Market cap at latest check: $9.5 billion.

Litecoin, at about $79, is up over 1,800% since the beginning of this year, when it was trading at just over $4. Its market cap now stands at just over $4.1 billion.

Despite the records, cryptocurrency trading has been extremely volatile this year. Bitcoin recently dropped more than 10%, briefly putting it into correction territory before it subsequently rebounded. Still…

The combined market cap of all digital currencies is above $175 billion, according to CoinMarketCap.

And it has grown by more than $20 billion in the past eight days.

At current levels, the crypto market cap amounts to nearly one-tenth the value of the physical stock of official gold.

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Literally just one huge chart showing bitcoin’s incredible rise to $4800 – MarketWatch