Tag Archives: btc

Bitcoin’s SegWit2x fork postponed indefinitely

With only a week to go before its planned implementation, yesterday’s announcement that Bitcoin’s planned SegWit2x fork is being shelved indefinitely came as somewhat of a surprise.

Ultimately this is good news. Bitcoin is already confusing enough to the average individual without another fork caused by lack of community consensus added to the mix—especially in the wake of the (very) recent Bitcoin Cash and Bitcoin Gold forks. Many view these recent forks as nothing more than scams designed to create wealth “out of thin air” by creating duplicate coins, and killing SegWit2x instead of further fracturing Bitcoin sends the right message.

The way that the SegWit2x saga unfolded still leaves a bad taste in my mouth, however. I suspect that the six individuals responsible for SegWit2x and its cancellation became quite a bit wealthier collectively over the past 24 hours. Judging from cryptocurrency pricing trends over the past couple weeks, quite a few investors have been shifting their funds from altcoins to BTC in anticipation of their “free” SegWit2x coins on the fork date. In the hours following the announcement that SegWit2x was dead, BTC dropped about 10%—and predictably, altcoins started rising steadily as people began converting their BTC back into other coins. Timing the cancellation announcement so close to the planned implementation (with Bitcoin’s price at an all-time high) probably made some insiders rich at the expense of the masses (like this unfortunate soul). Welcome to unregulated markets!

Bitcoin soars past $4000 to new all-time high

Bitcoin is currently trading at over $4,100 on Coinbase and most other major exchanges, after climbing nearly $500 over the past 24 hours. The current price represents a ~600% increase compared to just one year ago!

The relatively uneventful hard fork on August 1st, combined with the recent consensus to lock in SegWit (which paves the way for the Lightning Network) must have investors feeling bullish. Successful activation of SegWit (and later, Lightning) should remedy many of Bitcoin’s recent scalability issues, at least in the short term.

Coinbase reverses position; will support bitcoin cash after all

Coinbase just published an update that details an apparent change of heart on bitcoin cash: they’re working on supporting it by the start of 2018.

This means that if you have any bitcoin that you left in Coinbase’s hands during the hard fork a couple days ago, you’ll get your fair share of created bitcoin cash after all. Eventually, anyway—your bitcoin cash will be available to you whenever Coinbase officially launches support for the new coin in the coming months.

This is good news—Coinbase’s previous position no doubt left many of their customers feeling as though the popular exchange was openly stealing from them.

Reminder: get your bitcoin out of Coinbase before August 1st!

If you have any bitcoin stored at Coinbase or any other online exchange, it’s probably a good idea to move it into a private wallet that you control ASAP.

On August 1st, the Bitcoin network will likely fork into two separate blockchains—which will create a new currency in the process. Everyone that owns bitcoin will automatically receive an equivalent amount of the new currency, called “Bitcoin Cash” (BCC)—but this is only guaranteed to happen for you if you control the private key to the wallet address where your BTC is stored on August 1st. In other words, if you leave your BTC on an exchange during the fork, you’ll be at the mercy of the exchange as to whether or not they decide to give you the BCC that is created from the split.

Coinbase has already publicly stated that they’re taking the ethically questionable stance of not transferring the newly-created BCC to customers that trust them to hold their BTC during the fork. Other exchanges, such as Bittrex, have explicitly told their customers that they’ll be credited with whatever BCC their BTC generates. If you want the BCC that you’re entitled to, and have any doubt as to where your exchange stands, make sure that you transfer your BTC to your own private wallet at some point before Tuesday!

Given that the futures price for BCC is currently hovering around $400/coin, and many people expect it to end up somewhere between 10-20% of BTC’s value after the fork, there is potentially a lot of money at stake for people with sizable bitcoin holdings.

Is this another cryptocurrency bubble?

No doubt most of you have been following the explosive increase in cryptocurrency valuations over the past month. The price of one ether has risen about 400% in the past 30 days. The value of Bitcoin has doubled over the same period, with a single coin trading at an all-time high of nearly $2,500. Litecoin has similarly more than doubled in value.

In short, it’s starting to feel like late 2013 again. For those of you that weren’t around the last time this happened, this isn’t the first time that we’ve seen runaway valuations on cryptocurrency. In the span of 30 days between late October and November of 2013, Bitcoin saw its value increase roughly 500% to a then-high of over $1,000. Over that same one-month period in 2013, Litecoin saw a meteoric ~2500% (!) rise from about $2 to nearly $50.

If you were in the cryptocurrency game back then, you may remember that I urged caution to potential investors as digital currency prices continued to set new price records daily. Less than a month after I published my 2013 correction prediction, prices started to decline, and a few months later they were back to roughly pre-bubble levels. Lots of folks that bought BTC or LTC during the insane price run-up decided to panic sell on the way down, and some people lost a considerable amount of money.

I write this simply to remind everyone to stay sane when it comes to investing in cryptocurrency, especially if you’re thinking about committing money that you really can’t afford to lose. Price increases like the ones that we’re currently witnessing aren’t normal, and are mostly being driven by speculative greed—not new developments or adoption (and for evidence of this claim, look no further than the recent ~1000% price increase on Dogecoin, an essentially joke currency that’s been dormant for three years). When prices eventually reach a level that can’t be sustained (and admittedly, there might be quite a bit of additional increase before that!), expect a sell-off to follow.

Somewhat related: this is why I like mining. If I’m investing $1,500 today and use it to buy ETH directly, then I’ll be really disappointed if the price drops to zero tomorrow, as I’ve lost 100% of my investment. If I build a $1,500 mining rig with the expectation that I’m going to mine ETH and eventually turn a profit, then I’ll certainly be disappointed if the ETH price drops to zero tomorrow—but I’ll still have $1,500 worth of computer hardware that I can re-purpose or sell.

Bitcoin price hits all-time high

Bitcoin has gained about 15% in value over the past week, putting it at over $1,450 on Coinbase currently. That’s higher than any point since its inception!

Ethereum and Litecoin are both also doing quite well. ETH is up roughly 50% compared to just one week ago, and LTC has nearly quadrupled in value since the start of 2017.

What’s driving the recent spike in cryptocurrency valuation? Other than the imminent SegWit activation for Litecoin, there doesn’t seem to be any big news that should be driving prices up at this pace. Are people reacting to political uncertainty around the world by converting some of their fiat currency into digital cash? I’m honestly not sure—but it’s certainly interesting to follow!