Mempool Empties After Reaching to 95 Million Unconfirmed Transactions Post-Halving

Bitcoin price is keeping stable around $9,500 and the network is also coming back to the levels it was before the halving.

The week before last, the average bitcoin transaction fees soared to nearly $7. The fee remained below $1 except for during the times of extreme volatility in the market such as at the end of June in 2019 when BTC price jumped to $13,900 or during the peak of the 2017 bull rally.

Since its peak on May 20th, the bitcoin average transaction fee has been on a constant decline and is currently at $2.25.

The tremendous increase in bitcoin transaction fees of over 160% in May came after the halving. The historic event resulted in the hash rate declining and block finding time to surge above 14 minutes as such pushing the fees higher.

Moreover, as we reported, a mysterious entity, most probably the crypto exchange Coinbase consolidated outputs at the highest fee rates which drove up fees for everyone.

The number of transactions waiting to be confirmed also contributed to this. On the day of halving, the mempool had 935k transactions which peaked at almost 95 million on May 21st. High mempool size indicates more network traffic that results in longer than average confirmation time and higher priority fees.

But 10 days after that and we are back to normal levels, as per blockchain.com.

This backlog has been clearing for over a week now. With the next difficulty adjustment expected to be another downwards of nearly 11% later this week, it will only make finding blocks that much easier, balancing things out.

“3 weeks after the Bitcoin halving the mempool is almost empty again, 1 sat transaction confirming. No mining death spiral, even though we lost nearly 50% of the hashrate, it’s bouncing back, next difficulty adjustment down less than 10%,” said Whale Panda. “Bitcoin working like it was designed to.”

Just like fees and block time, the hash rate of the network is back above 100 Th/s, up from 83 Th/s on May 14.

Also, the rainy season in Sichuan, China, one of the hottest spots for Bitcoin mining, will push down the cost of electricity to about 0.10 RMB/kWh ($0.014 USD) which will help the hash rate to further recover.

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Author: AnTy

OMG Network Partners With Bitfinex To Add Tether (USDT) Stablecoin On The Plasma Sidechain

OMG network becomes the first sidechain ever to add USDT capability aiming to improve the scalability and reduce costs of transaction on the platform. In the official announcement released on June 1, 2020, OMG Network announced a partnership with Tether’s sister company, Bitfinex Inc., to successfully integrate of the stablecoin on OMG’s Plasma sidechain.

Tether (USDT) becomes the latest token to join the OMG Network’s, once called OmiseGo, Plasma sidechain. The partnership between OMG Network and Bitfinex, adding the stablecoin, aims at “reducing the confirmation times, making payments faster, and lowering the transaction costs” on the Ethereum network. The upgrades will not affect the security of the platform – statement says it will operate at “the same level of security as Ethereum”. CEO at OMG Network, Vansa Chatikavanij.

“Today, we’re excited to announce the launch of the OMG Network that supports thousands of transactions per second and reduces transaction costs to a third of Ethereum.”

OMG Plasma sidechain to solve scalability issues

Ethereum has seen increased gas prices over the past few weeks as reported by BEG as the network’s usage reached an all-time high in anticipation of the Ethereum 2.0 launch. ETH currently offers a capped number of transactions per second at 7-15 TPS causing lags when there is high traffic on the network. USDT is currently approaching 50% of the total transactions on Ethereum and Bitfinex is looking to let off some pressure to an Ethereum sidechain.

Addition of USDT will solve most of the issues with Ethereum – improving scalability and reducing volatility on the platform.

Paolo Ardoino, CTO at Bitfinex, supported Vansa’s statements saying the reduction of fees and scalable platform “allows traders to react faster to trading opportunities.” He further says,

“By migrating USDt value transfers to the OMG Network, we save costs, drive performance improvements, and relieve pressure on the root chain. This is good for Bitfinex, our users, and the entire Ethereum ecosystem.”

OMG Network mainnet test launches

OMG Network, a platform based on the Ethereum network also announced the launch of its mainnet test on June 1. The new blockchain iteration of its Minimal Viable Plasma design will introduce a “Tesuji Plasma architecture” and employ a “proof-of-authority” (PoA) consensus mechanism.

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Author: Lujan Odera

Hong Kong Residents Rushing to US Dollars as the US-China Cold War Intensifies

China is moving closer to impose a new national security law in Hong Kong following months of violent pro-democracy protests last year.

This has expats and anyone who can afford to flee Hong Kong and move to other countries. Amidst this, the residents of Hong Kong have been exchanging more and more of their HKD holdings into US Dollars at banks and money exchange counters.

This rush for USD is forcing many exchangers in Hong Kong to turn away hundreds of customers after they ran out of currency amidst the fears that the US could end the preferential status of the city.

Last week, President Donald Trump said the US will end its preferential treatment of Hong Kong as a customs and travel territory from the rest of China. This announcement came just days after the Secretary of State Mike Pompeo said Hong Kong was no longer autonomous from China to warrant special treatment.

China said on Monday that any attempt by the US to harm China will be met with countermeasures.

“Any words or actions by the U.S. that harm China’s interests will meet with China’s firm counterattack,” said Chinese foreign ministry spokesman Zhao Lijian.

HKD’s 36-year-old peg to the US dollar

There are also fears that the Trump administration might break the 36-year-old peg system that fixes the exchange rate of currency at 7.8 Hong Kong dollars per US dollar. HKD was first pegged to USD in 1983.

City’s finance secretary Paul Chan said on Monday that they have no plans to change its currency peg to US dollar and the Asian financial hub hasn’t seen any “obvious” capital outflows yet.

The Hong Kong Monetary Authority (HKMA) along with local banks and investors, all can buy and sell US dollars in the open market.

Moreover, a temporary repurchase agreement was introduced by the US Federal Reserve in March that made it easier for central banks to get USD. This arrangement which is to last six months is part of the efforts to combat the economic effects triggered by COVID-19.

In April, the HKMA introduced a $10 billion liquidity facility to provide all 162 banks in the city with access to USD made available by the Fed.

US dollar is out of stock

Last week, the demand for US currency surged after Chain’s new legislation endorsed to craft a law for Hong Kong that would criminalize acts and activities of secession, subversion of state power, terrorism, and foreign interference.

In response, HK residents rushed to convert their local currency into US dollars, which they view as more stable.

Demand for currency actually increased 10 times last week. More and more customers are looking to switch large sums, “hundreds of thousands or even millions of Hong Kong dollars – at a time.”

“The US dollar is out of stock everywhere. We’ve offered every last bit of our supplies to our customers,” said Eric Wong Wai-lam, who runs Rich Bird Currency Exchange in Sham Shui Po and was forced to turn away 600 customers.

Residents are also looking for alternatives like the pound, Euro, and Australian dollar. “People will take anything you have,” he said.

City’s largest banks, HSBC also had some of the automated teller machines run out of US dollars.

Increased adoption for Bitcoin and Stablecoins

Last year, when protests surged in Hong Kong, the city turned to bitcoin, which traded at a premium. On Paxful, the demand for BTC in the city has been growing throughout 2020 which like last time could see another spike.

Now that there are uncertainties over the city’s economic future, Hong Kong residents may flock to the decentralized, censorship-resistant cryptocurrency and even to USD pegged stablecoins which have been seeing immense adoption during the recent market sell-off.

During the first quarter of 2020, as the USD became a hot commodity so did the stablecoin in the crypto market. One of the reasons for the increased adoption of USD-pegged digital currencies was the global shortage of US dollars.

Moreover, the stock and crypto market could see the effect of the US-China jitters, although for now, both are stable.

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Author: AnTy

Bitcoin S2F Model Prints the First “Red” Dot Marking the Start of the Bull Market

In 2020 so far, Bitcoin is up 30% while trading at $9,500, starting June with 0.76% losses.

In May, BTC went through ups and downs and made several attempts to take over the $10k level. But overall it remained in the range of $8,500 and $10,000 which continued to get tighter.

After 10.58% of losses in the first quarter of 2020, in the second quarter so far, we are up 48.56%.

As per the Relative Strength Indicator, bitcoin is currently neutral at a reading of 55, the same as market segments with the Crypto Fear and Greed Index having a reading of 50.

However, the good thing is the popular stock to flow model has printed the first red dot, indicating we are at the beginning of a bull run.

The updated S2F chart which has been expected since the third block reward halving last month points to the starting of the next 18-months bitcoin price cycle with its top at $100,000 by the end of 2021, as analyst PlanB has previously pointed out.

However, along the way, bitcoin will go though some pullbacks as occurred in the previous cycles as well.

As we reported, there are a number of factors working in favor of a new bull market. The institutional interest is growing, with Grayscale consuming more bitcoin than what is being created while supply is already entering the market at half the pace it was before halving.

Bitcoin investors are also preferring to holding than looking to sell their BTC in the near future.

No $1 million for Bitcoin

While Bitcoin is making its way to a new bull market, John McAfee, the eccentric billionaire who predicted in 2018 that bitcoin would reach $1 million by the end of 2020 or he will “eat my dick on national television”, dismissed it this weekend.

“What idiot could believe such nonsense?” said the 74-year-old about his prediction which is “the most crippled crypto-tech.”

He called out people to “wake up” on twitter adding “If Bitcoin ever hit $1 mil, it’s market cap would be greater than the GDP of the entire North American Continent.”

“Whale Fucking is a thousand times more likely to make its way onto the Olympics Stage,” than Bitcoin skyrocketing 10,426% from its current level, stated McAfee.

As a matter of fact, the first bitcoin rally from late 2012 to 2014 was 10,000%. However, the percentage of gains has been dropping after that with every bull run.

McAfee actually long maintained his $1 million prediction for bitcoin only to say in January this year that it was “a ruse to onboard new users” adding, “It’s an ancient technology. All know it.”

This time he had this to say, “Are you one of the persons who did not see the absurd humor in it?”

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Author: AnTy