This week on Planet Bitcoin - 2 September 2016

Friday 02 September 2016

Time marches on, but bitcoin is still having a slow summer.

There’s been nothing major to report on the bitcoin markets for the last week. August was characterised by very little of any note happening, save for the Bitfinex hack a month ago. After the dust from the immediate aftermath of that settled, there’s been negligible volatility.


For the last week, and much of the last month, bitcoin has tracked along the $570 line, straying a little above and below it but showing barely any of its signature volatility and betraying no sign it’s about to make a big move one way or another. Those who draw lines on charts point to a support level around $560, below which further falls are likely. Equally, the longer it stays above that level, the more likely the next move is upwards.

The overall picture is positive, for a number of reasons. Firstly, with the reduction of block rewards after the halving, free supply is lower and there is necessarily less sell pressure. Secondly, SegWit is long overdue but is now on preliminary release. Six months after it was originally scheduled (back in April), we might eventually have something that makes a difference to the network. More broadly still, there is a huge amount of interest around blockchain technology, and this can only be good for awareness of bitcoin itself.

Around the cryptoverse

Monero has enjoyed a stellar week, soaring in value by 100% - and appreciating three-fold from its recent base. This is partly to do with its acceptance by a couple of notable darkmarkets, which are recognising the shortcomings of bitcoin in terms of traceability. Monero employs ring signatures to obscure transactions. Speculators then drove the price up far beyond any ‘organic’ demand from the drugs markets.

Ethereum and Ethereum Classic continue their dance, with Classic enjoying around 14% of both market cap and hashrate of its parent. This is down slightly on recent weeks, but barely enough to prove it is going out of fashion. Any change is still within the margin of error.

Finally, there was some interesting news last week that Ramen noodles were replacing tobacco as the preferred currency in jails. The lesson for bitcoin is that moving to another currency is unusual but possible - but that currency will probably need to offer something not just quantitatively but qualitatively different.

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