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The U.S. economy is projected to grow 3.1% this year as more government spending and tax cuts help propel an expansion, the Congressional Budget Office said Monday.
But the robust run of growth may stall as early as next year, with the U.S. economy expected to slow in 2019 and during the following…
Idaho police are starting to enforce a new law targeting slow drivers hanging out in the passing lanes of highways. Two drivers have been cited as of July 27 for driving too slowly in the left lane since the law took effect July 1, the Idaho Press reported Monday. Idaho…
The U.S. economic expansion rolled along and labor markets tightened in June and early July, even as tariffs heightened concern among manufacturers and boosted some producer prices, according to the Federal Reserve Board’s latest company survey.
The central bank’s Beige Book economic report, based…
Cryptocurrencies – Thematic Research, a report recently issued by Global Data, is attempting to smash what it views as myths and huge untruths about the hype surrounding crypto. Among their findings, the company concludes cryptocurrencies are expensive, slow, mostly unspendable, and cannot scale to meet their projected demand.
Cryptocurrencies Expensive, Slow, Unspendable, Cannot Scale
Talk about kicking a fellow when he’s down (assuming cryptocurrencies are male). London-based research firm, founded in 2006, Global Data, released a 34 page study on exactly why they believe crypto won’t ever live up to its hype or promise.
Its Chief Analyst, Gary Barnett, gets to the heart of the matter, “Many of the most basic claims made by proponents of cryptocurrencies simply are not true. We are told that cryptocurrencies speed transfers up, that they help to eliminate middlemen and that they are free of cost, but none of this is true.” Anecdotes abound as to the veracity of his claim, especially as it relates to bitcoin core (BTC), the world’s most popular cryptocurrency, and the most well known. The ecosystem has famously chosen to employ ‘middlemen,’ the very same Satoshi Nakamoto’s white paper was written to avoid, such as banks (Coinbase) and other exchanges that are allowed to hold full control over a user’s coins and tokens.
“Cryptocurrency transactions are not free,” Mr. Barnett continues. “For example, at its peak the per transaction cost for bitcoin exceeded $ 50, which is not exactly a great way to buy $ 25 worth of groceries. While the cost per transaction hovers around $ 1 when the bitcoin network is not under load, it will inevitably rise if transaction volumes grow again.” Here again, the whipping boy is BTC, and no mention is made of viable alternatives in this regard like bitcoin cash (BCH) or others.
Perhaps most damning, when considering just what the ‘currency’ part of cryptocurrency means, Mr. Barnett fires “no cryptocurrency is widely accepted and transacted. The number of retailers and businesses that accept cryptocurrencies as payment for goods and services is vanishingly small, and those that do typically report very low volumes of cryptocurrency transactions by comparison to other means of payment.” This somewhat begs the question, but it might require Mr. Barnett and Global Data to be a little hipper when it comes to the more recent history of BTC in particular. Enthusiasts have taken nuanced sides as to the importance of claims like Mr. Barnett’s, and the differences are so profound in the crypto space entire projects exist to prove the others wrong. Plus, it is early days with regard to merchant adoption — constant mainstream media hectoring, along with governments the world over threatening ever tighter regulation, doesn’t help matters.
The Scaling Issue Continues to Haunt
Global Data hammers home a key bugaboo with regard to crypto, scaling. For ‘big blockers,’ this issue seems to trump most. With the advent of bitcoin cash (BCH), larger blocks allow for more transactions, less congestion, and ultimately lower fees and faster confirmations, at least in theory and so far.
Nevertheless, the report concludes “cryptocurrencies cannot scale. The Visa payment network is capable of supporting 24,000 transactions per second (tps) at peak rates and regularly averages in the region of 1,500 tps. Bitcoin, meanwhile, struggles to achieve a transaction rate over 10 tps, while bitcoin cash can handle around 60 tps. The only cryptocurrency which comes close to Visa’s average is Ripple, which is capable of 1,500 tps.”
And so, mainstream research firms such as Global Data are left to muse about the current state of crypto valuations. As “currently applied to cryptocurrencies,” Mr. Barnett stresses, they “have no basis in fact; cryptocurrencies represent a classic bubble, in which valuations are purely the result of speculation on the likely behavior of the market rather than a clear-eyed assessment of underlying value.” No mention is made of it being only near a decade in arriving at valuations, and how currencies such as BTC are up thousands of percents since their inception. Bubble doesn’t seem, yet, to describe crypto prices well.
The report’s lone sober take, though still mired in mainstream cynicism and assumptions, comes as a preface. “In fairness,” researchers note, “all currencies are a confidence trick. The US dollar, British pound, and the Euro all depend on nothing more than market confidence for their value. The extent to which a currency works effectively is a function of a range of factors and this report sets out to determine whether cryptocurrencies represent a serious alternative to the established fiat currencies.” Few crypto proponents would claim decentralized money to be quite there, but, then again, government money has had a huge head start.
Is crypto a failed, over-hyped experiment? Let us know in the comments section below.
Images via the Pixabay, Global Data, Shutterstock.
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President Trump signed an executive order in April designed to help rein in public assistance spending – including Medicaid – for able-bodied people with low incomes.
Going shopping today? Consider this: A whale died Friday in Thailand from having ingested 80 plastic bags weighing some 18 pounds, CNN reports. Thai officials say locals in Southern Thailand noticed the short-fin male pilot whale looking sick and floating oddly earlier this week, so government veterinarians and people from…
Authorities raided a Nashville-area PetSmart on Thursday, seizing hamsters, mice, and a guinea pig, WSMV reports. According to the Tennessean , PETA says it received photos and videos from a PetSmart employee showing store managers “repeatedly refusing to provide sick, injured, and dying animals with veterinary care in order to keep…
Hiring surged last month as U.S. employers generated the most new jobs since mid-2016, the Labor Department said Friday, but wage growth slowed as long-awaited gains in worker pay have yet to take permanent hold.
The unemployment rate held steady at 4.1%, the lowest since 2000, as the labor force…
From wrecking the environment to making it harder to search for alien life, cryptocurrency mining has been blamed for a multitude of sins. But to cause time itself to slow down is a fresh charge and one which, on the surface, sounds impossible. Something strange is happening in Central Europe right now: clocks are running slow, and not by fractions of a second, but entire minutes. Could large scale crypto mining be responsible or is it being made a convenient scapegoat?
Overclocked Miners May Be Slowing the Clocks
Ever since mid January, the Continental European Power System has been experiencing anomalies. This huge belt of 25 countries, running from Spain to Turkey and from Poland to the Netherlands, has been subject to “a continuous system frequency deviation from the mean value of 50 Hz” reports the European Network of Transmission System Operators for Electricity (ENTSO-E). The location of the disturbance has been identified – Kosovo and Serbia – but the cause has not.
The power deviations that have been affecting electrical frequencies have had the weird knock-on effect of delaying clocks that calculate their time based on the frequency of the power system. As a result, these are running at “a delay of close to six minutes”. It’s unclear exactly how this slowdown manifests itself, over what period, and whether these clocks can be manually adjusted to show the correct time. What is clear is that the power drain responsible for this anomaly is huge: 113 GWh, which is equivalent to the power consumption of Greenland for six months. Central heating timers and oven clocks are among the systems affected.
The Search for a Culprit Intensifies
ENTSO-E is clearly unhappy about the missing power and its strange side effects. In fact it’s seething, but is literally powerless to act. The situation, it acknowledges, is largely a political one that would require the cooperation of the countries suspected of causing the huge power drain. On the Swiss Grid website, the current deviation from 50 Hz can be viewed in real time. At the time of publication it was sitting at 49.970 Hz, causing a grid time deviation of 345 seconds. The site explains: “There are still many clocks which go by the frequency in the electricity grid. If the frequency is higher, they go faster. If the frequency is lower, they go more slowly.”
The question of what could be siphoning off electricity on such a grand scale remains unresolved. It could be a top secret project involving a particle accelerator akin to the Large Hadron Collider. It could be government impropriety or incompetence. Or it could be crypto miners. Suspicions are falling on the latter option. Electricity rates in Serbia and Kosovo are among Europe’s cheapest, with the price of mining one bitcoin in these regions estimated to be $ 3,133, placing them on a par with China. “The first step [to resolving the issues] is to cease the deviation,” writes ENTSO-E. “The second step is to compensate for the missing amount of energy.” Crypto miners could yet be exonerated of all charges. But until the culprit can be identified, an enormous rogue mining operation remains a strong possibility.
Do you think crypto miners could be responsible for the power drain, or are they a convenient scapegoat? Let us know in the comments section below.
Images courtesy of Shutterstock, and Swiss Grid.
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The post Europe’s Clocks Are Running Slow and Crypto Mining Is Being Blamed appeared first on Bitcoin News.