Many cryptos have hit yearly lows this week, but their price is stabilizing. Ethereum (ETH) has experienced the biggest sell-off in its history, while Bitcoin’s (BTC) price went to October 2017 levels.
The news has been equally turbulent around the world. In China, miners have been selling unprofitable rigs as scrap metal. Norwegian miners no longer have access to cheap electricity. And in the Bitcoin Cash (BCH) fork war, the number of victims continues to rise.
Ethereum (ETH) this week experienced the biggest sell-off in its history. On November 21 the price of ETH plummeted all the way down to $126. It has since recovered a bit, and is now trading at around $135.
ETH seems to be trading in a falling wedge, and might end up testing the top of the wedge in the weeks ahead. The question remains if it will manage to break the wedge.
The news concerning Ethereum’s development hasn’t been great lately. Unfortunately, the Constantinople update has been postponed. This update is supposed to delay the difficulty adjustment time-bomb and reduce the block reward to 2 ETH. The postponed Proof of Stake change and scalability are still pressing issues.
Many Ethereum miners across the globe are feeling the heat of the bear market, and are looking for more profitable coins to mine.
Bitcoin Cash: Hash war
Many threats were made, mostly by Craig Wright, about selling off Bitcoin to fund the SV chain’s hash war with the ABC chain. Thus, the community believes Bitcoin Cash whales are responsible for the movement of large quantities of BTC from wallets to exchanges, and the subsequent drop in price.
However, Calvin Ayre, the largest BCHSV miner, has offered a truce to the ABC team’s leaders, Roger Ver and Jihan Wu. Ayre wrote that if ABC gives up the claim for BCH ticker, SV will stop claiming it as well. In that case, SV won’t attack ABC and won’t sue them for manipulating customers’ BTC hash.
Nobody, including @ProfFaustus has any interest in chains that do not scale. Accepting my offer would have Craig completely out of the ABC chain. If not, hash war continues until the cheating transient hash is gone. #BitcoinSV #SatoshiVisionhttps://t.co/3IeLyzSHvP
— Calvin Ayre (@CalvinAyre) November 20, 2018
However, ABC has shown that it’s ready to dedicate more hash to mine its chain, and is leading on the hash front. It remains to be seen how much more money Ayre is ready to burn in this war, but now it appears he’s having second thoughts.
— Roger Ver (@rogerkver) November 20, 2018
Crypto exchanges have obviously taken note of the hash rates and are mostly dedicating BCH ticker to the ABC chain. ABC’s price is now considered to be BCH’s price on the majority of exchanges, such as Coinbase and Binance. This lead was probably the reason Ver refused the truce, saying: “Don’t negotiate with extortionists.”
Ayre continued with his threats afterward:
I will release the private docs I received next week at the conference once they become public. Amaury, Roger, Jihan, Jess Powell, Kraken and others named. Their life is going to get more exciting. Market manipulation and more.
— Calvin Ayre (@CalvinAyre) November 21, 2018
BCH ticker and price
After the high level of volatility since November 16 and a large drop from $315 to $195, the price of BCHABC has stabilized somewhat to around $230 over the past two days.
Bitcoin Cash SV, on the other hand, fell in value to as little as $50. SV did a reorg of blocks due to an accidental mini-fork caused by an attempt to spam (stress-test) their own network. Some believe this has shown the downside of larger blocks.
Professor Emin Gun Sirer reacted by saying:
The miner who overwrote block 557301 was the same miner who wrote it in the first place. This should not be possible in a decentralized system. You can only invalidate your own block and create a new tail if you’re the majority miner. BSV is a centralized coin.
He also warned that this shows how good nodes can issue conflicting statements.
In a PoS system, this would be known as equivocation and lead to slashing, ie. loss of staked funds.
Although it seems like ABC is winning battle after battle, the SV team has continued to question the sustainability of ABC’s current hash rate. Experts, such as Andreas Antonopoulos, have criticized ABC’s 10 block reorg protection, while others have denounced it for being too centralized.
Bitcoin (BTC) mining: No more cheap electricity for Norwegians, Chinese selling rigs as scrap
Mining BTC in Norway has been unprofitable lately due to the coin’s low price. The industry suffered a further blow yesterday with the announcement that miners’ electricity subsidies will be scrapped.
“It requires a lot of energy and generates large greenhouse gas emissions globally,” a Norwegian parliamentary representative said.
From January 2019, miners will have to pay the normal electricity tax. Instead of 0.48 øre, they will need to pay 16.58 øre per kilowatt. It currently costs around $7,700 to produce one BTC in Norway.
On the other side of the world, Chinese miners are selling old ASIC machines for a fraction of their original value, many of which for scrap metal and parts. You can purchase old ASICs for as little as $15. Larger mining farms that enjoy subsidized electricity are buying the machines in bulk.
The electricity cost is more than the mining bitcoin output, Miners have to sell the miningmachines such as M3 or T9. pic.twitter.com/NSeIDMHYIj
— DiscusFish (@bitfish1) November 21, 2018
The price of BTC has now stabilized around $4,560 after a shocking drop from $5,650 to $4,350 on November 19 and 20.