Miner capitulation at $7,600? 98% of Bitcoin miners fail to verify network transactions

If Bitcoin falls to $7,600, miners will face capitulation again.

The past week has been brutal for Bitcoin traders, with Bitcoin closing its weekly chart today. A bearish signal has appeared on the weekly chart, with the current weekly candle engulfing the previous three positive candles. As prices continue to fluctuate without major fluctuations, it seems that a more terrifying downtrend is approaching.

Bitcoin: Weekly Trend

The combination of a drop in hash rate and falling prices has wreaked havoc across the entire cryptocurrency ecosystem. If this continues, then important levels to watch include $8,212, $7,667, $6,853, and $6,475.
Although it is unlikely that the price will reach $6,400 in the near term, one should prepare for it.

In addition, the Fibonacci indicator stretches from the mid-December low to the mid-February high, showing an important position to watch. Currently, the price is slightly above the $8,461 support level, which also happens to be the 0.5 Fibonacci level. Usually, this is a critical level, and a break above this level will lead to a vertical break and a sharp decline.

The current situation of Bitcoin miners

The number of first spent Bitcoins is an important metric that tracks the number of Bitcoins that were withdrawn from miner wallets during this period. This metric typically soars during periods of miner capitulation. The last time this happened was in December 2018, when the Bitcoin price fell below its fair value and fell sharply.

It is worth noting that this indicator has also been increasing in early 2020.

Weekly summary

A break below the 0.5 Fib level at $8,461 would be devastating. While this seems unlikely, it should be noted that BTC has been stuck between two trend lines since 2017. Since the price has touched the top end of this structure, it is safe to assume that the price will reach or touch the other extreme, which is around $7,667.

This will cause miners to capitulate once again, as witnessed in late 2019.

As for the breakthrough of this pattern, it is too early to tell. However, when the price approaches the top of the pattern, the direction of the next breakthrough can be estimated according to the situation at that time.

For now, it is better to wait for volatility to show up rather than get stuck in swing trades or short-term trades that go against you.

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Microsoft updates Edge browser to protect against malicious cryptocurrency mining programs

As malicious web-based cryptocurrency miners have proliferated across the global internet over the past two years, Microsoft has begun taking action to protect users of its Edge web browser from malware.

In a blog post on Thursday, the tech giant said it has enabled a new feature that will spot and block downloads of “potentially unwanted applications” (PUAs), such as malicious crypto-mining plugins or adware.

Cryptojackers use code hidden on websites or downloaded to users' devices to harness computer processing power to mine for cryptocurrency.

Ordinary users have been complaining that when they download free software from the Internet, they often install some "disreputable" applications at the same time, and Microsoft has now added this feature.

The new feature — available in Edge versions starting with 80.0.338.0 — is turned off by default, but can be turned on in the Privacy and Services settings panel.

As Microsoft puts it, "potentially unwanted applications" PUAs like miners can slow down a user's computer. They can also cause excessive fan noise and overheating while stealing the victim's computing power in the background to perform remote cryptocurrency mining tasks.

Although users complain that free software sites are full of cryptojackers, they can also find apparently legitimate sources. A year ago, Symantec discovered that eight Windows apps on the Microsoft Store were hosting Coinhive scripts, a commonly deployed script for mining monero (XMR) cryptocurrency. After receiving an alert from Microsoft, the apps were removed from the site.

Skybox Security said in a 2018 report that crypto-mining malware has replaced ransomware as the weapon of choice for cyber criminals. The company’s data indicated that cryptojacking accounted for 32% of all cyber attacks at the time.

“Our goal is to help users get the apps they want while enabling them to maintain control over their devices and experiences,” Microsoft said of its new miner-blocking feature.

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98% of Bitcoin miners fail to verify network transactions

In an interview with British media The Telegraph, Alex de Vries, founder of Digiconomist, made a harsh assessment of the huge amount of electricity resources consumed by Bitcoin mining and the utilization of Bitcoin mining machines.

According to De Vries, a single Bitcoin transaction consumes as much electricity as powering an average UK home for 59 days, 780,650 Visa transactions, or 52,043 hours of streaming on YouTube.

The article asserts that Bitcoin mining generates nearly $5.9 billion in annual revenues - with around 4 billion mining units competing for a share of the world's block mining rewards. By the end of August 2019, Bitcoin miners were estimated to have generated $14 billion in profits since the technology's inception.

De Vries asserts that 98% of Bitcoin mining equipment will never verify a transaction, resulting in huge and unproductive electricity expenditures. “They participate in a massive mining reward event, and every 10 minutes one lucky person starts producing the next block,” he said.

“What’s shocking is that the average lifespan of a Bitcoin miner is a year and a half, because we have newer generations of machines that are better at doing these transaction validations. That means 98% of the equipment is not able to validate transactions during its lifetime, and therefore doesn’t really earn a reward. So the rest of the equipment is just running pointlessly for a few years, consuming energy and generating heat, and then it’s wasted because there’s no way to repurpose them. It’s crazy.”

There are many factual problems with De Vries’s statements. He failed to substantiate his claim that there are 4 billion active Bitcoin mining devices on the Bitcoin network. Cointelegraph’s internal calculations suggest that the number is closer to 2.5 million. De Vries also asserted that miners who fail to successfully release new blocks are wasting energy. However, this does not take into account the dynamics of Bitcoin mining pools and ignores the benefits that large hashing power brings to the security of the Bitcoin network. (Golden Finance)

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