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The sole purpose of this post is to give an outline of the things happening in crypto during the outbreak of Corona. The article is meant to share information and doesn't support any coin and is not meant to instigate FUD in the community.
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The Convoluted Story of Crypto and CoronavirusThe recent Coronavirus outbreak in China has brought businesses to a standstill. It cost hundreds of lives and sent shockwaves to the entire world. On the other hand, the cryptocurrency market witnessed huge gains in early February and took a nose-dive in the last week. These series of events does bug everybody if the epidemic is impacting crypto. In this short post, ChangeHero will reveal what is happening to crypto amid this epidemic.
According to the World Health Organization Coronovirus disease (COVID-19), was first reported in Wuhan, China on 31 December 2019. A Bloomberg report suggests that there are 82,302 confirmed cases and 2,802 deaths worldwide, but China has been the most affected. In measures to contain the spread, the Chinese government has locked down cities and restricted the free movement of people which made the factories and businesses to shut the doors. The steep in the factory output has taken a toll on the Chinese economy and also threatened the global economy. Industries such as manufacturing, oil and gas, tourism and supply chain suffered the most. In the same vein, crypto is also not immune to this virus.
China has a history of crackdowns on cryptocurrencies and exchanges. On the contrary, they are spearheading the blockchain adoption race and working towards digital currency, quickly go through this article for more info about China and cryptocurrencies. Moreover, the top five mining companies — AntPool, BTC.com, BTC.top, F2 Pool and ViaBTC are based in China. These firms control almost 60% of the hash power in the Bitcoin network. Mining farms are the first to be affected by the outbreak and a few representatives of these firms expressed their concerns on Social Media. Many stated that the government has cut off the electricity, supplies and also drove away workers from mining facilities. It reflected in the difficulty of bitcoin mining, a measure which indicates the effort required to solve the math in finding the block. This measure is adjusted once every two weeks and in the last difficulty correction, the measure rose only by 0.52% which is significantly lesser than the previous corrections of 4.67 and 7.08.
Mining may soon turn out to be a not so profitable activity, credits to the Bitcoin Halving. Bitcoin will undergo its third halving event somewhere around May and the block reward will be slashed to 6.25 BTC. It leads to tougher and unfavourable economic conditions. To boost their chances of surviving, miners are gearing up with advanced machines. Yet again, China is one of the largest suppliers of the mining equipment. Coronavirus outbreak has also locked up the doors of the factories and the companies have postponed the deliveries. Although there is a significant impact on the crypto mining industry in China, Bitcoin hash rate has seen a negligible change.
To restrain the spread of the virus, the Chinese government has halted the distribution of Yuan worth almost a Billion Dollars. Meanwhile, the S&P 500 Index and other traditional markets have also recorded their worst performances due to the epidemic. Crypto community was quick to react and hinted that digital currency can fix this. Big names in the crypto sphere like Binance and Tron have also pledged support to the coronavirus victims. Moreover, the epidemic has spread a sense of terror amongst the community and led to the cancellation and postponing of the conferences and public events.
Amidst the crisis, CoronaCoin, an ERC-20 token was launched with the ticker NCOV. Though the website states that the token is meant for charity, it’s approach has shocked the crypto community. The cryptocurrency has a total supply equal to the world’s population and the tokens will be burnt every 48 hours, proportionate to the number of casualties. The concept of investors benefitting with the spread of the virus poses serious moral questions on this project.
Impact on the crypto
Bitcoin kickstarted the new decade with a massive bull run and crossed the ten thousand dollar mark in early February. Many have contributed this to the upcoming halving and some connected it to the coronavirus outbreak. Things didn’t fare well long for crypto and the whole market crashed and lost a whopping 50 Billion Dollars in the last week of February. The epidemic has indeed affected the people and processes behind the crypto industry but it is still unclear if there is a correlation between the coronavirus and the crypto market prices. Nevertheless, the notion of Bitcoin as a safe haven during the crisis still exists but hasn’t been proven yet, at least for now. We hope the crisis will end soon and peace be restored. Until then, all our strength to the effected, families and businesses around.
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To account for this sliding hash rate, the Bitcoin network just saw its second-largest negative mining difficulty adjustment ever seen. This makes it highly lucrative for miners based in the West, who can now mine blocks with greater ease due to the decreasing concentration of mining power in China. Bitcoin’s rapidly rising price has not matched its hash rate – which is a somewhat unusual occurrence. While the network’s transaction volume and utilization rates remain incredibly high, the tera-hashes per second being performed by the network have collapsed over the past few days. Some believe that this could be due to the end of Bitcoin Just Saw Its 2nd Largest Negative Mining Difficulty Adjustment Ever. Bitcoin btcusd. By TeamMMG On Nov 4, 2020. Share. Bitcoin’s rapidly rising price has not matched its hash rate – which is a somewhat unusual occurrence. While the network’s transaction volume and utilization rates remain incredibly high, the tera-hashes per second being performed by the network have collapsed ... On 27 June, the data published on the website of a Luxembourg based Bitcoin block explorer service, Blockchain, revealed that the level of difficulty of mining is at an all-time high. This seems to be an indication of the fact that Bitcoin mining is becoming competitive for block rewards. This new record has surpassed the […] Bitcoin mining involves three variables: the block, the mining difficulty and a random number. Here’s how it all comes together: Here’s how it all comes together: Imagine our block consists of ... Bitcoin Mining. Bitcoin is digitally created through a process known as mining. This term is actually reflective of the record-keeping service which is the blockchain. Those who mine Bitcoin are essentially tasked with keeping the blockchain accurately maintained. They do this by verifying transactions which are collectively known as a block. As a reward for mining Bitcoin, the miner receives ... ASICs for bitcoin were introduced in 2013 and, as of November 2017, they are the best processors available for mining bitcoin and they outperform FPGAs in power consumption. Mining pools. To offset the difficulty of mining a block, miners started organizing in pools or cloud mining networks. Whenever a miner in one of these pools solves a block ... Bitcoin mining has hit an all-time high, becoming more competitive. According to Blockchain.com, this difficulty is apparent in the level of competition for block rewards among miners. Mining Becoming More Competitive Bitcoin mining difficulty, which measures how hard it is to earn rewards while mining Bitcoin, has hit a record high of over 7.93 trillion. Bitcoin Just Saw Its 2nd Largest Negative Mining Difficulty Adjustment Ever 1 hour ago; Bitcoin breaches $14,000 on election day, up 1,900% compared to 2016 2 hours ago; Bitcoin surpasses $14k: negative funding shows it can still run higher 3 hours ago ... Bitcoin mining is an interesting way of trying to make a few bitcoin tokens on the side, but it also serves a very important purpose in maintaining and keeping the bitcoin blockchain secure. Unlike regular fiat currencies (such as Malaysian ringgit or US dollars) bitcoin assets are not controlled by a central government or bank, and new bitcoin (BTC) cannot be printed and issued like paper money.
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