The Greatest Myths about Crypto Currencies and Bitcoin loophole

In the series “The biggest myths about crypto currencies” we would like to take a closer look at the 10 most common claims concerning crypto currencies and their chances and risks. We will daily a new myth vorknöpfen and check this for correctness.

The volatility of crypto currencies makes Bitcoin loophole investments unattractive

One of the arguments frequently put forward against investing in Bitcoin loophole crypto currencies is: “There are such high price fluctuations and nobody knows what it will look like tomorrow, in a week or in a month. Let’s leave it at that.” But are the price developments on the Bitcoin loophole crypto market really a reason to decide against crypto investments? Let’s take a closer look at the situation.

In fact, the high volatility in the markets cannot be dismissed at the moment. The total market capitalisation of all crypto currencies has increased fifteenfold since the beginning of this year alone – this corresponds to an increase of 1400 %. If you pull out the Bitcoin as a crypto pioneer, you still have a value increase of more than 6,000 euros, when it rose from a market value of about 800 euros in January of this year to a temporary all-time high of 7,000 euros.

However, these absolute figures do not speak for themselves. So one cannot imagine the price rise of Bitcoin and other crypto currencies as a linear straight line, which begins at a certain starting point and then continuously points upwards. Rather, volatility means a constant up and down, including phases of stagnation. Critics might say that it is precisely these uncertainties that make crypto investments more difficult, since one can never know which point in time is best for getting started or when one should possibly wait for a price correction.

High volatility can also bring advantages for investors

Day traders in particular, who are willing to buy and sell their coins at any time, can make quick profits through high fluctuations. In addition, larger swings are almost always associated with external events such as regulatory measures or an imminent technical innovation. Those who are always informed and in the picture therefore have a clear advantage and can better classify volatility.

In addition, it is not written in stone that this high volatility will continue in the future. Despite the radical increase, the crypto market is still comparatively low capitalized and very susceptible to sudden changes in direction. There is reason to believe that volatility will return to normal with higher market capitalisation and possibly return to 2015 and 2016 ratios – in those years Bitcoin had lower volatility than oil and gas.

In summary, while the problem of volatility is real, it may not necessarily be a problem on closer inspection. Fluctuations can also benefit the investor, and they will become smaller as crypto currencies continue to exist. And despite all the fluctuations, Bitcoin and Co. have always set out for a new high after each trough. The long-term development thus points upwards, which could also give long-term or risk-averse investors security.

Bitcoin ABC – Bitcoin Cash Hard Fork scheduled for November

Apparently, the Bitcoin cash community is facing a hard fork. The part of the Bitcoin cash community that is pushing the network upgrade and gathering under the name Bitcoin ABC promises to make better use of the Bitcoin cash protocol and on-chain solutions.

There is disagreement in the Bitcoin Cash community. A part of the community has released Bitcoin ABC 0.18.0 in the hope that the Bitcoin Cash ecosystem will flourish. Their vision is “to create a solid monetary system that can be used by anyone in the world.” In addition, her Bitcoin Cash Network upgrade is a technology that not only has the potential to change civilization, but also “dramatically increases” people’s freedom and prosperity. Those who want to participate should upgrade to Bitcoin ABC version 0.18.0 as soon as possible.

What does Bitcoin secret promise?

Here are the technical innovations of the supposedly better Bitcoin secret Cash in detail: The new opcode OP_CHECKDATASIG. This should improve the BCH script language so that messages can also be validated outside the blockchain. With this you should be able to perform both Oracle and Cross Chain Atomic Contracts.

But the Bitcoin ABC client is not the only innovation in the Bitcoin Cash environment. From the house of nChain, best known for his Chief Scientist Craig Wright, comes a full node implementation called Bitcoin SV. “Satoshi’s Vision” (SV) has set itself the goal of restoring the “original Bitcoin protocol”.

In contrast to the new OpCode, the plan is to reintroduce old Satoshi Op codes (OP_MUL, OP_LSHIFT, OP_RSHIFT and OP_INVERT), which are completely arithmetic operations. The maximum number of possible opcodes per script should be increased and the block size increased to 128 MB.

A possible split?

This announcement not only contradicts the Bitcoin ABC update, but has also been controversially discussed in the Bitcoin cash community: In addition to the patents advanced by nChain, it is the concentration of the hash rate in the hands of Coingeek that is pushing critics. This mining pool, which fully supports the protocol changes around Bitcoin SV, currently represents 30 percent of the hashing power in the Bitcoin Cash network.

As briefly outlined in the latest Tech-ECHO, the community reacted rather cautiously. With the announcement of the 0.18.0 version of Bitcoin ABC, there is now concern about another chain split:

Disagreement is not uncommon in and around Bitcoin Cash. Roger Ver’s project is repeatedly criticized for the fact that the Full Nodes are not really decentralized. Even the idea of taking action against transaction fees with “Miners Choice” did not meet with a positive response everywhere in the community.

It was only in May that the Bitcoin Cash network carried out a hard fork to increase the block size to 32 MB. The Bitcoin ABC network upgrade is scheduled for November 15th.

The kiss of death: Bitcoin, BitMEX and Manipulation

Anthony Pompliano, founder and partner of Morgan Creek Digital Assets, and Travis Kling, founder and CIO of Ikigai Asset Management, held an in-depth discussion on the state of the Bitcoin ecosystem. The interview explains why Kling believes BitMEX is the deathblow for Bitcoin & Co. and what quantum crime is all about. Anthony Pompliano and Travis Kling talk about the Bitcoin ecosystem. About manipulation, Jenga and quantum crime.

Disclaimer: The following text consists of excerpts from a podcast translated from English. They reflect the views of the speakers and do not necessarily reflect the views of the author or BTC-ECHO. First, the two talk about the leverage of BitMEX and how large fish use it to exclude small piers.

Bitcoin, BitMEX and the Kiss of Death

Travis Kling (T): You can now go long and short at Ripple, Tron, Bitcoin Cash, EOS and Cardano. And this with up to 20-fold leverage for some of them, 50-fold for others. And quantitatively, a listing on BitMEX has been the kiss of death so far.

Anthony Pompliano (P): What do you think this is doing to the market?

T: What it has achieved so far is that you can now get prices in two ways.

P: Because before you could only go long.

The worst kind of liquidity

T: Well, you could shorten on BitMEX, but there wasn’t enough liquidity. And now there is just a lot of liquidity on BitMEX […]. Apart from that – and I’m glad you mentioned that – it’s the worst kind of liquidity.

P: Why?

T: That’s at the heart of it. There are extremely big investors, Wall Street guys, like –

P: Like your old world.

T Yes, yes, yes. Not explicitly Point 72, but –

P: That kind of people.

T: Like this kind of people, right. The best in the industry in quantitative terms. I don’t want to name names. One of them rhymes with “lump”. The other rhymes with “BE raw”. So these guys do a liquidity modeling on BitMEX. And the way it works, they contact the network three times a second. […]. And then – I’m not one hundred percent sure how they do it – they can see exactly at which point which prices come about. In relation to the specific volume at the moment and in relation to the bid ask. I think they can take advantage of the leverage used for that specific trade at that particular moment three times per second.

P: Wow.

T: And then they can find out where the stops are. And then they can find out where the stops are accumulating.

P: And then full throttle.