Darryn Pollock

Bitcoin Price Plummeting But Mining Operations Keep Increasing

While Bitcoin's price plummets, its mining operation is hitting new highs in what seems to be contrary to what would be expected in such a lull
Bitcoin Price Plummeting But Mining Operations Keep Increasing

Bitcoin’s price and its mining operation have always had some sort of correlation as for miners, there is much more profit to be made when the price of the cryptocurrency is up. Thus, it is expected that in a lull in price, there will be a cooling off of mining - but this is not the case.

Information about Bitcoin’s hashrate seems to show that the mining operations are breaking more and more records in terms of the heavy mining that is going on, and this is during a time where profitability is not as high due to a Bitcoin price that dipped below $6,000 recently.

Big mining expense

If we delve into the mining breakdown as it stands, it seems the correlation of more mining and lower price is confusing.

The current Bitcoin network hashrate is 35,366,943,171 GH/s. If the whole network was composed of s9 miners, by Antmain, a specific piece of hardware designed solely to mine cryptocurrency. (which are far from the worst, energy efficiency-wise), it would mean 252 621 022 asics, consuming 1.4 kilowatt each or 3 536 694 in total. That is roughly 0.000002 percent of the global consumption.

The cost of mining, in terms of its energy consumption and the damage to the environment, has been highly publicised. Places like Iceland have become such a hub of mining that the electricity used just for cryptocurrency outweighs their population’s general needs.

The energy usage has been estimated to be equal to the usage of the whole of Singapore, a country of 5.6 mln people. It brings the rate of carbon dioxide emissions from Bitcoin up to 23.2 mln metric tons per year. And it’s not showing any signs of slowing down.

Then, looking at it, the current average global cost of mining one Bitcoin is around $5,700-$5,800 at the average energy price of $0.08 for one kilowatt-hour. So, looking at that, when Bitcoin dipped towards the $5,800 mark earlier this week, it made mining almost pointless for those sitting on the average cost.

Why the growth

There is another battle going on that does not involve the miners and trying to stay in the profitability window for Bitcoin, but rather the battle is between the miners and the regulators.

Most of Bitcoin’s mining power comes from China where electricity is cheaper than the average and could explain why the hash rate is increasing even with the average profit line coming closer to the expense line.

However, the Chinese government is looking to crack down on the mining operations in its country and has already started dishing out harsh penalties for those caught out.

Profitability still up

Regardless of the profitability window, and even the risks from government interference, Bitcoin mining is still profitable even today. Mining generates about $6.3 bln a year in revenue at current rates but costs roughly $2.3 bln to run. That means Bitcoin price can drop by half and mining will still be a winning proposition.

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📈 Pricewise Vaido Veek

Bitcoin & Cardano Are on the Triangle, Ethereum Has to Fight With Trendlines: Crypto Price Analysis Update, Sept. 17, 2018

Pricewise
Bitcoin is on the “descending triangle,” Ethereum has to fight with trendlines and Cardano is on the “ascending triangle”
Bitcoin & Cardano Are on the Triangle, Ethereum Has to Fight With Trendlines: Crypto Price Analysis Update, Sept. 17, 2018

*** Please note the analysis below is not investment advice. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of U.Today. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin is on the “descending triangle”

Over the weekend we moved sideways between the strong areas. Our resistance was the March low at $6,533 and our support was the April low at $6,425. We break downwards from the older counter trendline which is not so remarkable anymore because there are other and newer counter trendlines, but still it could be a small sign.

The weekly candle closes just below the round number at $6,498, so, Bitcoin took down two out of four major resistance levels between the $6,425-$6,533.

Remember we had two weeks ago the "engulfing" candlestick pattern which indicates that we could get another leg down but we didn't. So, this will show us a little bullish hold/momentum on the BTC chart and if you remember, in August, we had a pretty strong monthly candle close (let's say a sloppy "hammer") which could be the reason why we didn't fall further because this monthly candle indicates a little bullishness on the Bitcoin.

image

On the four-hour chart, Bitcoin has drawn a bearish chart pattern “descending triangle.” It is pulled from the bodies and soon, it is ready to make a breakout.

The triangle means that we have breakout opportunities to either direction, descending means that we have just a slight advantage to break downwards so, a candle close below the 'currently the main counter trendline' and below the April low level will be a sign that we go downwards (red triangle is the confirmation area). Bullish confirmation would be a candle close above the "descending triangle" and above the March low. Then we got bullish momentum from the chart pattern breakout and if we take down all the major resistance levels from this area then this could be another momentum sign. So, a close above the $6,533 could mean another leg upwards (green box on the chart) and a close below the counter trendline could mean another leg downwards (red triangle).

Ethereum (ETH/USD) has to fight with the trendlines

Overall, the altcoins show us a nice and steady climb upwards which will be a good sign for the whole market. Currently, like Bitcoin, Ethereum has to fight against the strong resistance. The Ethereum price is around $218 and just above us are two trendlines: the longer and smoother since April 1, 2018, and the trendline since July 29 (pulled from bodies). Those trendlines make a cross just above the current price, plus we have a 'naked' resistance area (orange box) and we approaching into the 100 EMA which starts to work as a resistance.

image

So, after we calculate those criteria we got a pretty significant resistance level. If we want to beat that then Bitcoin definitely has to make a breakout upwards from the triangle then the other altcoins could find the momentum and should follow this move upwards. If we don't catch this momentum then we might go and test the lower levels and the next supports are the orange area below us and the round number $200.

Cardano (ADA/USD) is on the “ascending triangle”

On Friday, we said that Cardano has attempted to break the resistance four times. Now, we have 10(!) failed attempts to break this round number at $0.07. We haven't got a four-hour candle close above the mentioned level so, we can say that this level is pretty significant if we want to see a bullish leg upwards but luckily, we have bullish sings.

image

Unlike Bitcoin, the Cardano shows us a bullish chart pattern- "ascending triangle." If we get a candle close above the round number and above the triangle then definitely, we see a nice bullish move because the price is pushed together and ready to explode.

If Cardano breaks this key level then you already know our targets but let's repeat those. Our targets are based on Fibonacci retracement levels (pulled from  and previous support levels: Sept. 5th-Sept. 12th):

  1. Around $0.08- as you see from the current example the round number starts to work as a resistance, in this area, there is also the Fibonacci retracement level of 38 percent and strong support/resistance area (red box).
  2. Around $0.089- in this area, we have a previously worked resistance level and the perfect Fibonacci retracement level of 62 percent.

If Cardano and the whole market don't find the momentum and if we get a breakout downwards from the triangle then we may go to retest the 'old' support level (from Sept. 12th) at $0.061. To secure your portfolio the selling sign would be a close below the triangle (at least four-hour candle close).

📈 Pricewise
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📈 Pricewise Daniel Osten

Fresh Capital Inflow Helps Crypto Market Grow, Altcoins Feed Off Bitcoin

Pricewise
Bitcoin wants to break free: $9,000 is left behind, but a strong resistance lies ahead. Altcoins have some time to grow
Fresh Capital Inflow Helps Crypto Market Grow, Altcoins Feed Off Bitcoin

After a short pause, the celebrations in the altcoin camp continues. By the beginning of Thursday, we can see moderate growth for all assets, with the exception of only a few coins including Verge, TRON and Stellar, but even those fell back just a few percent. This growth looks forced- it’s difficult to move upward for a long time without fallbacks, heavy coins feel the gravity more, but a trend is a trend and has to be reckoned with.

And what about Bitcoin? It seems that the father has become a blood donor for the children- its dominance makes up 35.9 percent at the time of writing. Since the beginning of the year, Bitcoin has already lost more than 10 percent of the market share. However, there is no doubt that it will eventually return all losses, redeeming the altcoins’ debt with interest.

Here is the remarkable part- despite the drop in dominance, Bitcoin price itself has been growing slowly over the last 24 hours. From this discrepancy, we conclude that the market is not just stewing in its own juices, but has new players with fresh capital.

IOTA’s turn to get some positive news hype

Thanks to this, total capitalization has grown by another $20 bln and now amounts to $440 bln, which is a record since the beginning of March. Among the top 10 coins, Bitcoin Cash has shown the best results with an increase of 13 percent, boosted by the news of being added to the London Block Exchange, and is followed by IOTA which has displaced TRON in ninth place. The coin grew an impressive 20 percent aided by the announcement of IOTA Ecosystem- a “home” for developers and members of the project’s community.

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BTC/USD

In the context of a generally positive mood, Bitcoin is growing as well, although it would make more sense if it fell. Buyers are not allowing the asset’s price to fall significantly, but it’s far from setting local records. It is hard to say right now whether this is a plan by some higher powers that need a stable Bitcoin to guarantee altcoin growth. In any case, the descending channel has been broken. We left just its upper boundary on the chart- most likely, we will see testing of this mirror level.

BTC / USD, Bitfinex, 4 Hour Chart

On the new markup, first of all, we draw the readers’ attention to the ABC triangle, the activation of which will determine the future fate of not only Bitcoin but the entire market.

While prices are inside the triangle, we do not advise any purchase-sale transactions- this should only be done if one of the triangle facets is broken.

In the course of the day, we are likely to see a test of the upper facet at the level of $9,300-$9,350. If the resistance proves to be strong enough, Bitcoin will be testing the opposite side at $8,900 where the former descending channel will remind us of itself.

If the bears persevere, the set of decline targets  $8,800 - $ 8,560 - $ 8,400 will become relevant. They all correspond to values of the Fibonacci grid, as well as to mirror levels. In the case of the triangle breaking upward, the nearest prospective target, aside from the previous local maximum at $9,750, will be $10,500.

BCH/USD

The surge in purchase volumes over the past 24 hours confirms investors' interest in Bitcoin Cash. Having formed the "double bottom" figure with a minimum of $1,230, the asset began the next growth stage and is attempting to overcome the previous high at $1,580. We believe that lateral trading will move to the upper level, which will become the launching pad for further movement.

BCH / USD, Bitfinex, 4 Hour Chart

The prospective goal of bulls is clearly seen at $1,800: it is confirmed by the mirror level, and by the 1.618 value of the Fibonacci extension, and by the boundary of the symmetrical figure, which suggests itself as the zone for the new lateral trading. The triple confirmation inspires confidence, but let's not forget that Bitcoin Cash trading is playing crypto on hard mode. Moreover, as usual, a lot depends on the original Bitcoin. In case of negative developments, a fallback to the level of $1,300 is possible. Therefore, once again, we recommend that readers refrain from trading until the situation becomes clear.

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ETH/USD

Ethereum buyers have attained an important achievement- the price was returned to the long-term ascending channel, formed in early April. Now, in case of correction, a price drop to $535 looks unlikely, but $575 remains possible. In order to stay within the channel, the bulls will need to do their best. Because of its steep slope, slowing down is not permissible, so Ethereum investors need to pray for continued Bitcoin growth.

ETH / USD, Bitfinex, 4 Hour Chart

In the case of a continued upward movement, the prospective target that we indicated earlier, $800, gets closer. For greater accuracy, we constructed a Fibonacci extension and got a target range of $780-$800. At the moment, Ethereum is looking better than the market, trading volumes remain stable. In case of correction, we recommend increasing long positions.

XRP/USD

Storm clouds are beginning to lift over Ripple investors. However, while the price is in the lower register of the ascending channel, it is premature, just as in the case of Ethereum, to say that the threat has passed completely. The safe margin of movement from the current price of $0.87 is insignificant - only $0.02, while the critical level coincides with the 0.382 value of the Fibonacci retracement and the intersection of the ascending and the descending channels.

XRP / USD, Bitfinex, 4 Hour Chart

 

In addition to the immediate growth target of $0.96-$1, the Fibonacci expansion points to a prospective target of $1.085, but it’s a hefty 25 percent away, so its attainment in the next few days is extremely unlikely. We believe that until the end of the weekend, the trading range will be $0.85-$ 0.92, at best.

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Cryptotips George Shnurenko

Cryptocurrency and Taxes, All You Need to Know

💡 Cryptotips
Do you have to pay tax on cryptocurrency? Let’s find out
Cryptocurrency and Taxes, All You Need to Know
Contents

Do you have to pay tax on cryptocurrency? How does the government calculate taxes on cryptocurrency? Does day trading incur taxes on cryptocurrency? Many people have varying opinions when it comes to the management of cryptocurrency assets. The astronomical performance since the emergence of crypto and Blockchain technology has caused a paradigm shift in the financial market.

Now, investors are faced with the challenge of how they can file their taxes. It will help to study how cryptocurrencies are categorized. Are your digital assets considered as traditional currencies or assets like stocks or bonds? Let’s find out.

How does the IRS treat cryptocurrency?

When it comes to taxes and cryptocurrency, the IRS considers your digital asset as a property. What is the implication of this? This means that cryptocurrencies are treated like gold, real estate or other raw materials. For this reason, the rules which apply to transacting these properties also apply to cryptocurrency.

To understand the gravity of the situation, the IRS recently released a statement on how they tax cryptocurrency. This statement clearly answers the question, “Do you have to pay taxes on cryptocurrency?” According to the release, if anyone is pronounced guilty of tax evasion, such an individual could face up to five years in prison and/or a fine of $250,000.

This also means that you’ll be required to report gains and transactions, although you must meet a certain threshold before you can get access to some of these reports. To give you an idea, Coinbase will only provide you with a statement similar to the 1099 tax form if you’ve realized $20,000 in profit or you’ve completed 200 transactions.

What IRS Requires from Cryptocurrency Assets Owners

What do you need to submit to the IRS?

1. Information on when you bought the cryptocurrency

2. How much you paid for the cryptocurrency (in USD or its equivalent)

3. When you sold the asset

4. What you received on the sale.

Breaking down cryptocurrency tax

It is worth noting that only your gains on cryptocurrency are taxed. If you buy, hold or transfer cryptocurrency, these events are not seen as taxable and you are absolved of any tax evasion charge. Also, if you receive cryptocurrency as a gift, you are exempt from tax, however, if the value of this gift exceeds that of the stipulated Gift Tax, you are required to file for taxes.

How to pay taxes on cryptocurrency gains

Now that trading cryptocurrency is fast becoming a norm, just like stock trading, certain rules apply. As earlier mentioned, your cryptocurrency is considered a stock and it is taxed as such. Hence, if you purchase one Bitcoin for $6,000 and then it appreciates in value to $6,200, and you trade this Bitcoin for $6,200 worth of Ethereum, the profit is now taxable.

“But I didn’t get any cash!” Well, that’s not what the IRS considers. This is why it’s important to keep a record of your transactions because if you do not, the IRS is permitted to charge you a ridiculously high rate. You will need to calculate the cost basis of your holdings to know how much you should pay.

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How is the cost basis determined?

Your cost basis includes the purchase price, the transaction fees, commissions (if applicable), and other costs. Based on this rationale, the cost basis is calculated as the

Price of Purchase + Transaction Fees + Commissions + Miscellaneous Quantity of Holding

Hence, to see if you incurred a loss or made a profit, simply calculate the Sale Price using this formula,

GainLoss= Sale Price-Cost basis

Taxes on short-term capital gains

Short-term capital gains is a common source of tax and this is becoming increasingly prevalent in recent years. Short-term capital gains occur when a cryptocurrency asset which you hold for less than a year and then sell brings in profit. How do you report taxes on cryptocurrency gains? The tax is calculated at your marginal tax rate and it depends on your status. Below is a table detailing the marginal tax brackets for 2018.

Marginal tax bracket
Figure 1: Marginal tax bracket. Source (<a href="https://cryptoslate.com/cryptocurrency-taxes/">https://cryptoslate.com/cryptocurrency-taxes/</a>)

Here’s an illustration of how to pay taxes on cryptocurrency gains.

As an individual, Mr. K. made $60,000 in 2017. However, in that year, he traded during the Bitcoin bubble, bought Bitcoin for $1000 and sold it for $9,000. This increases Mr. K’s earning to $68,000. The marginal rate then applies to the earnings, and 22 percent is taken.

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How to reduce your cryptocurrency tax

1. Invest in crypto for the long run

Short-term cryptocurrency gains incur the highest tax. Try to hold for over a year and see the drastic tax reduction you enjoy on your profits. In a way, we can say the patient dog eats the fattest bone. Long-term thinking does not only being reduced taxes, but it also helps you earn more on your crypto investments. Remember that these assets are highly volatile and irrational fluctuations can deceive you.

2. Avoid the urge to convert crypto profits to crypto purchase

Your tax bracket and the duration of holding the cryptocurrency plays a huge part when talking about the amount paid in tax. If you realize a significant return on your sale, it is advisable to keep the money as a conventional currency rather than investing in another hot cryptocurrency.

3. Document all your crypto transactions

If it is possible, hire a virtual assistant to open a spreadsheet where you can input and see the transactions as they are being completed. This is especially needed when you are using various exchanges or when you transact volumes. Failure to report this completely might be seen as tax fraud and you don’t want that, do you?

4. Hire a qualified tax attorney

Do you own back taxes? There’s no need to be scared. Just play it safe and cautious, the safest thing you can do is to hire a lawyer who will help you file and ensure that you don’t go to jail.

Conclusion

It is more important to apply the strategies learned and utilize them to properly file your taxes and avoid heavy fines or jail sentences. Also, it was reported that only about 802 people reported their cryptocurrency profits and earnings to the IRS, don’t be among the majority of people who will be punished.

Cryptotips
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Exchanges Guide George Shnurenko

Coinex Guide

🎓 Exchanges Guide
CoinEx has been on the market for less than a year, but it already made some buzz in the cryptocurrency world because of heavy emphasis on Bitcoin Cash from the beginning
Coinex Guide
Contents

What is CoinEx?

Choosing a new cryptocurrency exchange often comes with big advantages in the form of lower fees and numerous altcoins that are not featured on any big and reputable platforms. However, you should be also aware of the risks that are associated with new exchanges, so do not make haste and weight all pros and cons before depositing your money.
CoinEx is a UK-based exchange that appeared in late 2017. It is available all over the world 24/7. While currently being an underdog, this exchange can potentially elbow out some of the biggest sharks in the business because of its innovative features. As of July 2018, it is currently the 25
th biggest exchange on the market (according to coinmarketcap.com) with daily a trading volume that has recently reached $62,5 million. Hopefully, CoinEx will be more successful than its namesake CoinEX.pw which hasn’t recovered after a major hack back in 2014.

Is this a trustworthy platform or just another honeypot like Coinex.pro? CoinEx is inextricably connected to the Chinese mining pool ViaBTC (the 6
th largest mining pool in the world). It was launched by ViaBTC last December following the China’s infamous crypto crackdown that obfuscated the fate of many local exchanges. ViaBTC was forced to adhere to the new law and close its exchange, but in a couple of months, the company made a comeback with CoinEx. In an attempt to circumvent the ban issued by the Chinese government, the new exchange was founded in the UK while being currently based in Hong Kong. There is also Coinex Pallavaram exchange (India) which offers Coinex Forex services.

CoinEx Review

The platform is suitable both for beginners and advanced users, but the fact that you can only trade here without leverage may be disappointing for some active traders who are looking for big gains. Still, while going through this CoinEx review, let’s point out some of its main advantages:

Fast Transactions

Its multi-process matching engine is considered to be one of CoinEx’s major advantages, since it is able to process thousands of transactions in a blink of an eye. Thus, it helps to avoid one of the main issues which is currently associated with Bitcoin (BTC) – long and pricy transactions.

Protection of Funds

CoinEx offers an 100% assurance of each client’s funds. Basically, it means that all the assets can be withdrawn at any time when a user makes such a request while it is impossible to use them somewhere else.

Top-tier Security

CoinEx is able to provide top-notch protection by implementing numerous security protocols (including advanced SSL protocols). The user’s safety is also enhanced by the usage of cold multisig wallets and enabling 2FA. While all exchanges tenaciously make an emphasis on security issues, it is important to remember that hacking attacks are still quite mundane, so extreme safety should be a top priority while choosing an exchange.

 

Trading Opportunities

Despite the absence of leverage trading, CoinEx can still be considered a high-profile trading platform. TradingView powered chars provide traders with in-depth analysis of the current situation on the market.

 

Like the majority of other exchanges, CoinEx only hosts C2C trading while not allowing fiat currencies. What coins does CoinEx support? This exchange features a big number of altcoins like CoinEx Stellar (XLM) while it is particularly remarkable because it is considered to be the first exchange that made Bitcoin Cash (BCH) its bar currency, thus increasing the chances of potential slow flippening. A solid focus on Bitcoin Cash that despite going mainstream still remains in the shadow of its bigger brother helps to single out CoinEx among other new exchanges. Choosing Bitcoin Cash as their base currency allows the company to accelerate the speed of transactions and improve the overall performance.

CoinEx has also issued its own ERC20 token that is simply called CoinEx Token (CET). Users with CET get access to certain limited features along with other exclusive rights like a CoinEx vote. The value of CoinEx cryptocurrency is currency about $0,1.

How to Use CoinEx?

As of now, the CoinEx exchange is available for all traders at coinex.com. Here’s a quick guide on how to use it for absolute beginners:

  1. Obviously, the very first thing that you have to do is to click the ‘Sign Up’ button and fill out the following form.
     

    sign_Up form

     

  2. Now go to the ‘Trade’ section where you can see the list of all available assets in the top-left corner.
     

    the trade section


    Similarly to other exchanges, there is also a candlestick chart in the middle of the page. While there is an English version of the site, there is no available translation for some functioning texts like chart indicators that are not translated, so it might be quite challenging to use them for non-Chinese speakers.
    Below this chart you can place a limit order or a market order with the help of this corresponding form. Pay attention to the fact that there is a 50% discount for those who obtain CoinEx’s native token CET.

  3. If you want to engage in trade-driven mining, simply go to the ‘Mining’ section. Only those users who provide their ID scans are able to do this.
     

    mining

     

CoinEx Fees

As mentioned above, new exchanges try to attract customers by offering them low fees. In fact, CoinEx fees are extremely low. Only takers are charged with 0.1% fee while CoinEx is completely free for makers. However, there are still small withdrawals fees for all the currencies except for Bitcoin Cash (BCH). Go to CoinEx website for additional information.

 

Exchanges Guide
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