Cryptographer and computer scientist Nick Szabo, has presented in his Twitter account a study on the "risk-benefit" ratio of different assets. The study used a Sharpe Ratio over four years Hodl period.

According to this study, Bitcoin is the best positioned, maintaining an average ratio of 3 in the last four years. Behind them are the US stocks, with an average ratio of 2, and gold, which has gone from the last positions in 2016 to the third in the 2020 ratio.

The worst placed asset category is emerging currencies, which with an average ratio of -2 lags far behind the others.

The crypto board reaches the end of the week with the bears securing the market control they gained yesterday in mid-session.

The structure of the moving averages already indicated that the upward turning process that began on January 10th was going to be quite time-consuming. The magnitude of the downward movements in the second half of 2019 had separated the moving averages a lot.

ETH/BTC is trading at the price level of 0.01895and is down by -1.65%. On the 4-hour chart, the spot price is piercing the EMA50. If Ethereum loses this support, the drop will accelerate to the 0.0185 level.

Above the current price, the first resistance level is at 0.0197, then the second at 0.0200 and the third one at 0.0205.

Below the current price, the first support level is at 0.0185, then the second at 0.0185 and the third one at 0.0182.

The MACD on the 4-hour chart is supported directly by the indicator's zero levels. The moving averages are sloping downward and are moving away from it, suggesting an acceleration of the trend.

The DMI on the 4-hour chart shows the bearish-bought pair in equilibrium. Both sides of the market are above the ADX line, a setup that facilitates violent resolutions.

BTC/USD is currently trading at $8243and confirms the loss of support at $8400. The EMA50 and SMA100 averages continue to fall and forecast that the end of the downtrend could be on the first week of February.

Above the current price, the first resistance level is at $8400, then the second at $8500 and the third one at $8800.

Below the current price, the first support level is at $8200, then the second at $8000 and the third one at $7900.

The MACD on the 4-hour chart is losing its downward slope, indicating the end of the impulse phase of the movement. The terminal phase can easily take the price below $8000.

The DMI on the 4-hour chart confirms the end of the bearish momentum phase. Bears are preparing to drill down the ADX line. The bulls are very reactive to any upward movement and break the downward trend.

ETH/USD is currently trading at $156.09after finding support at the SMA100. The support point coincides with the 38.2% level of the Fibonacci retracement system and the same system indicates that the 50% level at $150 is very likely to be visited.

Above the current price, the first resistance level is at $161, then the second at $165 and the third at $170.

Below the current price, the first support level is at $155, then the second at $150 and the third one at $143 (61.8% level of the Fibonacci retracement system).

The MACD on the 4-hour chart is increasing its openness and is tilting further down, so we can expect an acceleration of the price's decline.

The DMI on the 4-hour chart shows that the bearish trend is increasing. The bulls are not reacting and continue to lose strength.

XRP/USD is currently trading at $0.215 and accelerating the downward movement that began this week. The current price coincides with the 50% level of the Fibonacci retracement system. The next support, according to this tool, is at the 0.205 price level, 61.8% of the Fibonacci retracement system.

Above the current price, the first resistance level is at $0.218, then the second at $0.223 and the third one at $0.235.

Below the current price, the first support level is at $0.205, then the second at $0.20 and the third one at $0.19.

The MACD on the 4-hour chart shows an acceleration of the downward movement. The MACD on the 4-hour chart shows an acceleration of the downward movement.

The DMI on the 4-hour chart shows that the bearish trend is increasing and the bearish momentum is strong. The bulls are not reacting and continue to lose momentum.

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Top 3 Price Prediction Bitcoin, Ethereum, XRP: Bears take over and draw a bloody moon - FXStreet

Bitcoin could nearly double in price by years end, according to a panel of fintech leaders convened by financial comparison website Finder.

The panel of 13 in Finders Cryptocurrency report suggest Bitcoin could be worth as much as USD$8,589 by March 31 and USD$14,275 by the end of the year.Key findings:

Bitcoin value to increase 19% by March 31 and 98% by years end, according to fintech panellists82% believe the halvening will boost the price of BitcoinPanel positive on Bitcoin, Ethereum and Tezos / most negative on TRON, EOS, and Litecoin77% say stable coins, such as Facebooks Libra, threaten national monetary sovereignty82% of panellists, including founder of Draper Associates, Tim Draper, believe the halvening will boost the price of Bitcoin.It [Bitcoin] becomes more valuable as the usage and costs to make it go up, he said.

Fred Schebesta, Co-founder of Finder and HiveEx, believes Bitcoin will hit $22,000 by years end.

If we see a continued consistency and no prolonged downward manipulation, I forecast Bitcoin will almost triple by the end of 2020.

Managing Director of Digital Capital Management, Ben Richie, who had the highest end-of-year price prediction ($34,500), said geopolitical and economic uncertainty will boost Bitcoins value.

investors will look to some alternative assets to shield from these events, and cryptocurrencies is likely to be a benefactor, he said.

Overall the panel was net positive on just three cryptocurrencies, Bitcoin, Ethereum and Tezos. It was most negative on TRON, EOS and Litecoin.

University of Canberras Dr. John Hawkins was negative on all 11 cryptocurrencies.

None of these cryptocurrencies have made any substantial progress in becoming payments instruments and may face stronger rivals in 2020 such as Libra and then central bank cryptocurrencies, he said.

Despite speculation Facebooks Libra wont eventuate, 85% of panellists, including Dr. at the University of New South Wales, Elvira, Soji, think it will launch.

It will launch in a very limited way, and governments will look much more seriously into central bank digital cash, she said.

The report also reveals the majority of panellists (77%) believe stable coins, such as Facebooks Libra, threaten the monetary sovereignty of nations.

Ritchie noted that we are only now really starting to experiment with money, and the threat to nations will be a bi-product of their lack of adoption to change.

Technologist Joseph Raczynski went as far as to say there is a bit of an arms race to develop a widely held crypto that can be used around the world.

You can view the full report here

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Bitcoin 'to increase 98% in value by end of year' - Netimperative

An interim proprietary injunction has been granted by the English High Court over a bitcoin ransom payment paid to a third-party wallet.

The case was brought by an English insurer (requesting anonymity) against four defendants, consisting of unknown cyber-extortionists (as well as three other parties who respectively hold and/or trade Bitcoins). The claim related to a customer of the Insurer whose data and systems had been encrypted and bitcoin ransom payment demanded.

After some negotiation, the Insurer agreed to pay the ransom (equal to $950,000) in return for the decryption tool. Following the payment of the ransom and the provision of the decryption tool, further investigations were undertaken on behalf of the insurer as to the destination of the ransom with the ultimate aim of recovering the Bitcoins by way of a restitutionary or equitable remedy.

Whilst some of the Bitcoins were transferred into fiat currency, a substantial proportion of the Bitcoins (96) were transferred to a specific address; this address is linked to the exchange known as Bitfinex, operated by the third and fourth defendants. The insurer sought a proprietary injunction over those Bitcoins, as the initial step in looking to recover them via the courts.

The judge was satisfied that the test for a proprietary injunction over the Bitcoins against each of the four defendants was satisfied. A fundamental element of the decision was the conclusion that crypto assets, such as Bitcoin, are property for the purposes of English law and therefore can be the subject-matter of a proprietary injunction.

While historically it has been very difficult to recover ransom payments, the case highlights the potential for corporations to recover these payments via the courts (or, at the very least, to obtain interim relief in respect of them). The decision should certainly be borne in mind by any corporations who become the subject of a targeted and substantial ransom demand and in circumstances where the ransom is paid and is subsequently traceable.

Given the typical speed in which ransom crypto assets are transferred / dissipated, in order to increase any potential for the recovery of such assets, it would be advisable for those considering making such an application, to act with expediency.

Read the original here:
Interim proprietary injunction granted over bitcoin cyber extortion payment - Data Protection Report

Over the last 10 years, the Bitcoin ecosystem has attracted developers to dedicate thousands of hours to improve and revamp most of its underlying codebase. Yet, Bitcoin (BTC) is largely the same. The reason for this is that its core set of consensus rules that define its monetary properties, such as its algorithmic inflation and hard-coded supply, remain unchanged.

Time and time again, factions have attempted to change these core properties, but all hostile takeovers thus far have failed. Its often a painful process but one that highlights and solidifies two of Bitcoins biggest virtues: No single party can dictate how Bitcoin evolves; and the absence of centralized control protects Bitcoins monetary properties.

The values that make Bitcoin a popular phenomenon are also those that make developing software atop Bitcoin more challenging than any other digital asset. Developers are limited to what theyre able to transform in order to not undermine its apparatus as a store of value.

Nonetheless, as well see from the examples below, innovation in Bitcoin is possible. It requires creativity and patience.

Since changing Bitcoins core layer requires a quasi-political process that may infringe upon its monetary properties, innovation is often implemented as modules. This development is similar to that of the internet's protocol suite, where layers of different protocols specialize in specific functions. Emails were handled by SMTP, files by FTP, web pages by HTTP, user addressing by IP and packet routing by TCP. Each of these protocols has evolved over time to create the experience we have today.

Spencer Bogart of Blockchain Capital has captured this development succinctly: We are now witnessing the beginning of Bitcoins own protocol suite. The inflexibility of Bitcoins core layer has birthed several additional protocols that specialize in various applications, like Lightnings BOLT standard for payment channels. Innovation is both vibrant and relatively safe, as this layered approach minimizes potential risks.

The diagram below is an attempt to map all relatively new initiatives and showcases a more complete representation of Bitcoins technology stack. It is not exhaustive and does not signal any endorsement for specific initiatives. It is, nevertheless, impressive to see that innovation being pushed on all fronts from Layer 2 technologies to emerging smart contract solutions.

There has been a lot of talk lately about the rate of adoption of the Lightning Network, Bitcoins most prominent Layer 2 technology. Critics often point to an apparent decline in the number of channels and total BTC locked when evaluating Lightnings user adoption. Yet, these metrics arent the most definitive measurement of adoption.

Related: What Is Lightning Network And How It Works

One of the most underrated virtues of the Lightning Network is its straightforward privacy properties. Since Lightning does not rely on global state reconciliation i.e., its own blockchain users can transact privately over using additional techniques and network overlays, like Tor. Activity happening within private channels is not captured by popular Lightning explorers. As such, an increase in private usage of Lightning has resulted in a decrease in what can be publicly measured, leading observers to erroneously conclude that adoption is down. While it is true that Lightning must overcome substantial usability barriers before it can enjoy wide adoption, using misleading metrics to make assertions about the current state of the network serves few.

Another recent development in the field of Layer 2 privacy was the creation of WhatSat, a private messaging system atop Lightning. This project is a modification of the Lightning Network Daemon (LND) that allows the relayers of private messages, who connect the entities communicating, to be compensated for their services via micropayments. This decentralized, censorship-and-spam-resistant chat was enabled by innovations in the LND itself, such as recent improvements in the lightning-onion, Lightnings own onion routing protocol.

There are several other projects leveraging Lightnings private micropayment capabilities for numerous applications from a Lightning-powered cloud computing VPS to an image hosting service that shares ad revenue via microtransactions. More generally, we define Layer 2 as a suite of applications that can use Bitcoins base layer as a court where exogenous events are reconciled and disputes are settled. As such, the theme of data anchoring on Bitcoins blockchain goes beyond Lightning, with companies like Microsoft pioneering a decentralized ID system atop Bitcoin.

There are projects attempting to bring back expressive smart contract functionality to Bitcoin in a safe and responsible way. This is a significant development because, starting in 2010, several of the original Bitcoin opcodes the operations that determine what Bitcoin is able to compute were removed from the protocol. This came after a series of bugs were revealed, which led Satoshi to disable some of the functionality of Script, Bitcoins programming language.

Over the years, it became clear that there are non-trivial security risks that accompany highly-expressive smart contracts. The common rule of thumb is that the more functionality is introduced to a virtual machine the collective verification mechanism that processes opcodes the more unpredictable its programs will be. More recently, however, we have seen new approaches to smart contract architecture that can minimize unpredictability and also provide vast functionality.

The devise of a new approach to Bitcoin smart contracts called Merklized Abstract Syntax Trees (MAST) has since triggered a new wave of supporting technologies for Bitcoin smart contracts. Taproot is one of the most prominent implementations of the MAST structure that enables an entire application to be expressed as a Merkle Tree, whereby each branch of the tree represents a different execution outcome.

Another interesting innovation that has recently resurfaced is a new architecture for the implementation of covenants, or spend conditions, on Bitcoin transactions. Originally proposed as a thought experiment by Greg Maxwell back in 2013, covenants are an approach to limit the way balances can be spent, even as their custody changes. Although the idea has existed for nearly six years, covenants were impractical to be implemented before the advent of Taproot. Currently, a new opcode called OP_CHECKTEMPLATEVERIFY formerly known as OP_SECURETHEBAG is leveraging this new technology to potentially enable covenants to be safely implemented in Bitcoin.

At first glance, covenants are incredibly useful in the context of lending and perhaps Bitcoin-based derivatives as they enable the creation of policies, like clawbacks, to be implemented on specific BTC balances. But their potential impact on the usability of Bitcoin goes vastly beyond lending. Covenants can allow for the implementation of things like Bitcoin Vaults, which, in the context of custody, provide the equivalent of a second private key that allows someone that has been hacked to freeze stolen funds.

In essence, Schnorr signatures are the technological primitive that make all of these new approaches to smart contracts possible. And there are even edgier techniques being currently theorized, such as Scriptless Scripts, which could enable fully private and scalable Bitcoin smart contracts to be represented as digital signatures as opposed to opcodes. These new approaches may enable novel smart contract applications to be built atop Bitcoin.

There have also been some interesting developments in mining protocols, especially those used by mining pool constituents. Even though the issue of centralization in Bitcoin mining is often wildly exaggerated, it is true that there are power structures retained by mining pool operators that can be further decentralized.

Namely, pool operators can decide what transactions will be mined by all pool constituents, which grants them considerable power. Over time, some operators have abused this power by censoring transactions, mining empty blocks and reallocating hashing without the authorization of constituents.

Changes to mining protocols have aimed to subvert the control that mining pool operators can have on deciding what transactions are mined. One of the most substantial changes coming to Bitcoin mining is the second version of Stratum, the most popular protocol used in mining pools. Stratum V2 is a complete overhaul that implements BetterHash, a secondary protocol that enables mining pool constituents to decide the composition of the block they will mine not the other way around.

Another development that should contribute to more stability is reignited interest in hash rates and difficulty derivatives. These can be particularly useful for mining operations that wish to hedge against hash rate fluctuations and difficulty readjustments.

Contrary to some arguments out there, there are a host of emerging protocols that can bring optional privacy into Bitcoin. That being said, it is likely that privacy in Bitcoin will continue to be more of an art than a science for years to come.

More generally, the biggest impediment to private transactions across digital assets is that most solutions are half-baked. Privacy assets that focus on transaction-graph privacy often neglect network-level privacy, and vice versa. Both vectors suffer from a lack of maturity and usage, which makes transactions easier to de-shield via statistical traceability analysis at either the peer-to-peer (P2P) network layer or the blockchain layer.

Thankfully, there are several projects that are pushing boundaries on both fronts.

When it comes to transaction-graph privacy, solutions like P2EP and CheckTemplateVerify are interesting because privacy becomes a by-product of efficiency. As novel approaches to CoinJoin, these solutions can increase the adoption of private transactions by users that are solely motivated by lower transaction fees. As CoinJoins, their privacy guarantees are still suboptimal, but unshielded sent amounts can be beneficial, as they preserve the auditability of Bitcoins supply.

If lower transaction fees become a motivator and lead to an increase in Bitcoins anonymity set the percentage of UTXOs that are CoinJoin outputs de-anonymization via statistical analysis will be even more subjective than it already is.

There has also been considerable progress in the privacy of P2P communications, with protocols like Dandelion being tested across crypto networks. Another notable development is Erlay, an alternative transaction relay protocol that increases the efficiency of private communications and reduces the overhead of running a node. Erlay is an important improvement since its efficiency gains enable more users to more easily complete IBD and continuously validate the chain, especially in countries where ISPs impose caps on bandwidth.

These examples are only a handful of initiatives in play to transform the Bitcoin framework. Bitcoin, in its totality, is a constantly evolving suite of protocols.

While evolution within a relatively strict set of rules and values can be challenging for developers, the layered approach that weve seen unfold is what makes gradual, effective change possible. Minimizing politicism within Bitcoin and protecting its fundamental monetary properties are necessary parts of the process. Developers are learning how to work within these bounds in a meaningful fashion.

The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Lucas Nuzzi, director of technology of Digital Asset Research. He heads up DARs research arm, developing original reports and insights on all areas of the cryptocurrency ecosystem. Widely regarded throughout the digital asset community as an expert on blockchain and distributed systems, Lucas has contributed to several major publications. Prior to co-founding DAR in 2017, he was a blockchain researcher and consultant for a handful of years.

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The Evolution of Bitcoin's Technology Stack - Cointelegraph

Bitcoin is looking to repeat a technical pattern that crashed its price to $3,120 in late 2018.

The leading cryptocurrency by valuation made a rebound from levels near $13,920 during June 2019. It plunged by more than 53 percent in the later sessions, falling to establish a local bottom towards $6,410. Entering January 2020, an upside recovery pushed bitcoins rate to a swing top of $9,190.

The latest move uphill improved the cryptocurrencys interim bullish bias. Analysts predicted further gains, expecting that investors would consider bitcoin as a haven against gloomy macroeconomic sentiments, including the Federal Reserves injection of $500 billion into the repo market that could raise demand for hedging assets.

Nevertheless, a dreaded technical indicator is giving an alarming view of the bitcoin market. It shows that the cryptocurrencys recent gains are a part of a more prominent drop that may come later and crash the price to as low as $2,300.

So it appears, the bitcoins latest price cycle is strikingly similar to the one it formed upon establishing circa $20,000 as its all-time high.

Cycle 1 in the chart below shows the price corrected wildly upon the top formation. It made lower highs on each move upward while maintaining the long-term selling outlook. As it did, bitcoin also formed a Death Cross when its long-term moving average (blacked) closed below its near-term moving average (blued).

Bitcoin mirroring its bearish moves of 2018 in 2020 | Source: TradingView.com, BitMEX

The cryptocurrency later struggled to move above the blued wave. And the more the price stayed below it, the higher the selling sentiment grew. Nine months after the formation of the Death Cross, the bitcoin-to-dollar exchange rate had totaled it plunge by 83.78 percent.

Cycle 2 appears like a dwarfed version of Cycle 1. Bitcoin is forming lower highs after forming a local top. Its move downward has remade the Death Cross. And, at last, the price is struggling to break above the blued wave the long-term moving average as is visible in bulls latest efforts.

The two widely distanced yet identical cycles serves a warning sign: Bitcoins downtrend is far from over and its price could at least plunged by 83 percent. That would bring the bears downside target close to circa $2,300.

Observing bitcoin on a larger timeframe, such as a weekly one, improves the cryptocurrencys bullish scenario. As covered by NewsBTC earlier, the price has jumped above its 50-weekly MA (blacked), a bias-defining technical support/resistance.

Bitcoin closed above 200-weekly SMA to confirm a long-term bullish bias | Source: TradingView.com, Coinbase

Meanwhile, on the daily chart, defending the same 50-period support could reduce the possibility of a breakdown towards $2,300.

Read the original here:
Bitcoin Indicator that Crashed Price to $3.1K Returns: The Dreaded Death Cross - newsBTC