Commerzbank embarrasses itself with anti-Bitcoin letter

Februar 25, 2021

Commerzbank disgraces itself with anti-Bitcoin letter

Crypto-scepticism is a tradition in the banking sector. Commerzbank is sticking to this tradition and reveals one thing in particular in an „Insight Report“: gaps in education.

Bitcoin and Commerzbank are unlikely to get off on the right foot any time soon. In an „Insight Report“, the major bank presents its critical view of the asset and reveals some gaps in its knowledge. The prejudices are the same old ones: Bitcoin is used for money laundering, has no intrinsic Crypto Engine value and the crypto market shows parallels to the tulip mania.

Commerzbank dissects Bitcoin

Bitcoin is not money: this is the damning verdict of the report „Precious Metals vs. Cryptocurrencies“, which voices the same concerns that have been heard since the beginning of the Bitcoin Blockchain. Even if Commerzbank makes the right arguments, the core statement of the report misses the reality.

The report suggests that Bitcoin is a shadow currency that opens the door to money laundering and terrorist financing. The underlying blockchain technology is „completely anonymous, with all its advantages and disadvantages“. A still widespread fallacy: Blockchain technology is not anonymous, but pseudonymous.

All transactions are visible to all network participants at all times. The Bitcoin Blockchain is a transparent database in which money flows can be traced – even for law enforcement agencies. KYC procedures make it easy to trace illegal money flows back to the originator. Even if criminals can take a diversion via Mixer or privacy coins like Monero, the crypto ecosystem is not the black hole it is often portrayed as. If one wants to find a scapegoat, fiat money remains the most popular money laundering vehicle.

Bitcoin without „ideal value“?

Commerzbank sees another point of criticism in the alleged misrepresentation of Bitcoin as a digital gold version. Due to the corona-induced „ultra-expansive monetary policy“, investors are fleeing to safe havens to protect themselves against inflation. Bitcoin, however, does not live up to this status, as it lacks „the use value and also the ideal value“.

The precious metal, on the other hand, has „always had a high sentimental value“, which is due to the fact that „gold cannot be multiplied at will and its extraction is associated with corresponding extraction costs“. The thesis that Bitcoin has no sentimental value is all the more remarkable in view of this conclusion, since the same premises also apply to Bitcoin. After all, the mining costs for Bitcoin are reflected in the proof-of-work process and can be measured in terms of the computing power expended.

Bitcoin Hashrate Sets New Record

Januar 16, 2021

The hashrate of Bitcoin, has increased considerably due to the incorporation of new miners to the Blockchain network of that currency.

The computing power, or Bitcoin hashrate, has reached a new all-time high, which translates into increased activity. At the same time, the difficulty of the Blockchain network to process blocks, has also increased above its highest figure.

This scenario is presented as an increase in the connections of new Crypto Trader review equipment in the network. These are probably the ASICs that have been acquired by large mining companies in North America.

It should be remembered that firms such as Marathon, Riot Blockchain and others have made massive purchases in recent months. Likewise, it is important to highlight that the price of the most popular crypto-currency has recovered from the sharp drop at the beginning of the week and is once again close to 40K.

The 100 Richest Bitcoin Addresses

What is the importance of hashrate and the difficulty of Bitcoin?

One of the strongest indicators of the health of the Bitcoin network is the state of its hashrate. This indicates, when it’s high, that a large number of miners have joined the competition to process blocks, which makes the network more robust and more complex and secure against possible attacks. In short, it decentralizes it to a greater extent.

When the hashrate decreases, it means that there are disconnections and the network becomes more vulnerable. In that sense, the growth of the computing power of the last days can be considered as a sign that the mining business is proliferating and developing in an optimal way.

On the other hand, the incorporation of new miners, makes the mathematical algorithms to process blocks to be solved faster. In response, the network adjusts the difficulty of these algorithms to make them more complex. Consequently, the goal is to maintain the 10-minute average per block, regardless of the number of miners.

The difficulty of the Bitcoin network is adjusted every 2,016 blocks (about two weeks), so that mining is easier if the hashrate is low or harder if it’s high.
Currently, the Bitcoin hash rate is 151.7 EH/s. Source: Blockchain.comCurrently, the Bitcoin hashrate stands at 151.7 EH/s.

What happens if a Bitcoin ETF is approved in the US?

A rapidly growing business

At the moment, the difficulty of Bitcoin’s Blockchain network is 20.61T. Its last adjustment was on January 9th at the level of block 665,280. The next adjustment will be on block 667,296 approximately on January 23rd. If Bitcoin’s computing power keeps increasing, the difficulty will rise again.

It should be noted that the last major difficulty setting was on October 17, 2020. At that time the network reached 20.00T. Since then it had fallen due to a respective drop in Bitcoin hashrate at the end of the rainy season in some provinces of China.

As reported in CryptoTrend, the winter in China allows the energy value in some provinces to decrease. Excess hydroelectric power allows many miners to migrate to provinces like Sichuan. At the end of the monsoon, the miners are disconnected. This makes the hashrate go up and down several times a year.

At present, according to the graphs on Blockchain.com, Bitcoin’s hashrate is 151.7 EH/s.

All of this, as already mentioned, ensures that the Bitcoin network is in the best condition to operate. The mining business continues to expand and more miners are joining the race to get as many coins as possible.

Facts to keep in mind