Once upon a time: Bitcoin.

In this week of November 2018, we are seeing Bitcoin, which for a long time remained in the $ 6400 range after a very strong speculative rise, dropped below $ 4700.

The currency has already reached other levels, but has remained firm in a "support", which has just been broken to levels of almost 1 year ago.

What could have happened to the coin to fall so much? Was it Bitcoin Cash? The reason behind all this can be quite different.

In these weeks, there was the "hard fork" of Bitcoin Cash. A "hard fork" is similar to an update of the software, of the blockchain, in the way that transactions are handled by network nodes, and by miners.

When you have software on your machine, and there is a new update, just install and go, and you will start using the most updated version. However, in the mining world, it is not that simple, since the adoption of updating software depends on a mass update of the network, at the same time, so that new blocks can continue to be processed.

There are "hard forks" of hundreds of coins every day, as well as that of Monero, who did not make any price changes, not even in the currency itself, that is, a "hard fork" can be considered only as the failure side and side of success. In the failure, the currency continues to use the old network, and in success, it starts to use improvements, which, in general, can make the currencies more valuable, due to having a better, more robust, more secure technology, among others.

So a hard fork upgrade is beneficial in every way, and there is no reason for a fork to affect other currencies significantly.

However, we had a huge division of the Bitcoin Cash team, where a fork was expected after 1 year of its launch, always aiming at its improvements in a continuous and progressive way, and ended up generating 2 more forks at the same time: Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision), in addition to the old Bitcoin Cash (which in certain cases, if there are some nodes running on, the currency ends up being active without updating).

This split could not be as fatal as mentioning one of the developers of Bitcoin Cash ABC to ask BTC miners to stop mining to help mine the new currency's network, saying that $ 1000 in BTC would not scare him.

One of those responsible for Bitcoin Cash, who calls himself the real "Satoshi Nakamoto", asks to stop mining BTC, and that $ 1000 BTC does not scare him.

So Bitcoin, which has been in a straight line for a long time, started to oscillate downwards, and broke the so-called "support" in the financial market, which is the minimum value in the last times of the chart, and recently falling more than 15% (it was fluctuating at most 0.65% per day in the last few days).

Whenever there is low volatility, low demand for buying / selling, which is volume, a certain attention to any movement, no matter how small, is crucial for people to start selling the coins, and today, 11/19, there was an immense volume in dollar-indexed currencies, such as USDT (Tether), TrueUSD, and similar ones (which have dollar reserves in US banks for the same amount issued in digital version) and this shows that people are leaving BTC and other currencies to guarantee their current value, for fear of further falls.

This caused a chain reaction greater than expected, even falling with the value of the BCH itself:

Exchange HitBTC showing up to 40% drop in Bitcoin SV.

What can happen to Bitcoin? The reality is that no one knows, but that we are in a moment of great collapse against the expectation of increase until the end of this year, which has just been broken by a huge indecision of the future of the cryptos, which still live with much speculation.

As long as speculation drops currencies in this way, we will never have anything really useful for real transactions, losing its value from its main functionality.

Another very relevant item is that Bitcoin, for more than its very high recent high reaching $ 19,000 in February 2018, and up to its value of $ 6500, the network's difficulty has only increased, ensuring that the currency has its greatest value than it really costs, but at this moment, we had a drop in difficulty in the network, showing a large outflow of miners from the network.

This was the biggest fall of miners ever in the Bitcoin network, and this may have been the main cause of loss of currency support, and if the upward trend in difficulty breaks down (the greater the difficulty, the more miners believe in network, currency, future earnings), we will see even more significant declines.

No comments