Available Bitcoin, Czech washing machine FTX and crypto as salvation. A Week in the Crypt #10

Available Bitcoin, Czech washing machine FTX and crypto as salvation. A Week in the Crypt #10
Available Bitcoin, Czech washing machine FTX and crypto as salvation. A Week in the Crypt #10

Bitcoin mining difficulty has dropped

What many analysts have been expecting for some time has become a reality. Some Bitcoin miners find mining stops paying and disconnect their machines from the network. In response, mining difficulty dropped by 7.32%. This latest difficulty adjustment, which occurred at block 766,080, was the biggest drop since July 2021, when Chinese miners were disconnected from the network due to a mining ban in their country. At the time, China was the largest Bitcoin mining center in the world.

The mining difficulty is automatically adjusted every 14 days, or every 2016 blocks, according to the total performance of all computers involved, so that the time required to mine one block is ten minutes on average. A simple rule applies: the more computers mine, the higher the difficulty and vice versa.

Miners are catching up with the fall in the price of Bitcoin. As recently as last November, they collected over 60,000 dollars (about 1.5 million crowns) for one mined bitcoin, and today it is less than 17,000 dollars (425,000 crowns). The situation was worsened by the supply of new, more powerful miners and the arrival of new miners who started their projects many months ago and only launched them in the fall. From the beginning of August until the last upward adjustment of the difficulty, the overall performance of the network and the difficulty of mining increased by approximately one third.

According to analysts, it is now necessary to use state-of-the-art miners for profitable Bitcoin mining and to keep the price of electricity lower than eight cents per kWh (about two crowns).

Bankrupt FTX sent millions to the Czech Republic

The server got some interesting information this week iRozhlas.cz. According to his findings, the FTX Foundation sent 107 million crowns to the Czech Republic for the purchase and operation of a chateau in Hostačov, a small village in the Havlíčkobrod region. This happened just four months before the FTX crash.

The castle was bought by Irena Kotíková, respectively the association European Summer Program on Rationality. Mrs. Kotíková claims that she applied to FTX for a grant for an international education center and simply received it. On the first attempt. So far, she says she is not afraid that the collapse of FTX could also affect her project at the castle, but she is ready to return the money if she is called upon to do so.

According to him, he has a slightly different opinion iRadio the chief economist of the BH Securities consulting firm Štěpán Křeček, who is convinced that the castle and other properties could only be bought thanks to the fact that fraud was committed on FTX clients. Therefore, FTX clients should also be compensated from the sale of these assets. How will this turn out?

Grayscale in trouble

And we’re not done with FTX yet. The bankrupt exchange will quite possibly drag down another big name: Grayscale Bitcoin Trust (GBTC). This fund is (was?) popular especially among large investment firms, which allowed them to buy “bitcoin” in compliance with all rules and regulations.

Why the quotes? If I simplify it a lot, GBTC is a fund that sells its shares and one share = one real bitcoin stored somewhere with Grayscale. The main trick is that the buyer does not have to understand bitcoin, does not have to deal with its storage or taxation after the sale, because he is buying a share in the fund. And that is a standard financial instrument that every financier knows and understands.

Logically, the price of one GBTC should be equal to the price of BTC, but the opposite is true. In the climax bullmarket institutions were willing to pay even more for one GBTC than for Bitcoin. They were willing to pay a premium because they believed that everything would grow to heaven. As we already know, the exact opposite has happened and the price of Bitcoin has fallen by roughly a quarter over the past year. However, GBTC has a much bigger problem and is trading at almost 50% of the price of Bitcoin on the spot markets; on Thursday, GBTC shares fell to a new record low -47.2% against Bitcoin.

Popular commenter Bitfinex’ed aptly commented on Twitter: “Grayscale will be in real trouble if they have to show where all the bitcoins covering the sold GBTC are.”

If you are wondering whether it would be worth buying this “Bitcoin” at 50% of the price, it is more likely not. There is a real threat that Grayscale may be the next one not to survive this year’s crypto winter.

Strike and bitcoin helps in Africa

Most people in the western world don’t quite understand the need for bitcoin, because in our part of the world government money works quite well. But what works in our country is, for example, often unattainable science fiction for the inhabitants of Africa, and it is precisely these people who can be helped by the new product from Strike.

On Tuesday, it introduced the new Send Globally service, which allows American users to send money to Africa instantly and cheaply. Most Americans or Europeans probably cannot imagine well enough the difficulty of sending money earned in America to a family in Africa. In addition to the fact that it takes a long time, companies charge huge fees for this, so foreign workers work a good part of the month just to be able to send money home.

The new thing from Strike allows them to send money using the Lightning Network (a superstructure on top of Bitcoin) at literally lightning speed and for a minimal fee. It is also important that if people do not want to, they will not come into contact with Bitcoin. The transfer takes place in such a way that at the sender, dollars are exchanged for bitcoin, which is sent to the recipient, and it is then converted into the local currency. Bitcoin is here only in the role of a kind of intermediary, thanks to which the transfer works immediately and very cheaply.

The service is currently available in Nigeria, Kenya and Ghana, but Strike plans to expand it to other countries.

Iran blocks accounts of non-hijab women and Nigeria forces CBDC by force

And we will stay outside the western world for a while. We look at other countries where bitcoin is practically a necessity for residents if they don’t want to lose their savings and maintain their privacy.

In Iran, you can easily lose your money by disobeying the state’s regulations. The government plans to introduce new penalties for women who don’t wear the hijab in public and wants to freeze their bank accounts after two warnings.

Hossein Jalali, a member of the Islamic Consultative Assembly’s cultural commission, told Iranian media on Tuesday that an SMS will be sent to those who are not veiled, urging them to respect the law and wear the hijab. Then comes the warning phase and eventually their bank account can be frozen.

Although you can send money to Nigeria via Strike, you may not be able to withdraw it from an ATM. The government decided to force the unpopular digital state money (CBDC) on all people, and the local central bank reduced the daily limit for withdrawing cash from ATMs to about USD 45 (CZK 1,125) and the weekly limit to $225 (CZK 5,625). Any amount above these limits will be charged five or ten percent, respectively, the central bank said.

The rulers of both Iran and Nigeria certainly didn’t intend it, but they couldn’t have done more to popularize Bitcoin.

A quick note at the end: A bankruptcy judge has ordered the return of $44 million (1.1 billion crowns) in cryptocurrencies to customers of the bankrupt Celsius lending platform. It sounds like good news, but it’s just the proverbial drop in the ocean; Celsius to its clients he messed up billions of dollars, so this new regulation is certainly not cause for great celebration.

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