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Bitcoin Gold Developer Is Allegedly Profiting from a Hidden Fee

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Bitcoin vs. bitcoin cash

Controversy surrounding the Bitcoin Gold (BTG) project intensified Thursday after it was uncovered that the algorithm’s developer has been allegedly profiting from a hidden fee. The news is just the latest setback for a project that has failed to win over investors.

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BTG Mining Pool Fee

Rumors circulating on Bitcointalk suggest that Bitcoin Gold developer Martin Kuvandzhiev allegedly integrated a 0.5% fee into a BTG mining pool that was then directed to his cryptocurrency wallet. It was later reported by CCN and others that some mining pools removed the code as it became publicly available. This is what some members of Bitcointalk suggested in their daily musings on or about Nov. 15.

Without getting overly technical, the fee appears to have been hard-coded into the z-nomp fork, which means this was a concerted effort to raise the 0.5% revenue.  Kuvandzhiev said he was aware of the embedded fee and decided not to integrate it into the main code. However, there has been no concerted effort to remove it, either.

Kuvandzhiev responded to the allegations in an interview with Bitcoin.com, where he said the code was open source all along and that it wasn’t hidden from pools that wanted to remove it.

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A fee of “0.5% for a regular miner is less than a $1 a month,” he said. “Don’t act like it is too much. The other software has 1-2% fees and are closed source…”

The developer also clarified Bitcoin Gold’s premine period, which is generally known to be 8,000 blocks. Kuvandzhiev said that 60% of it is time-locked for the next three years.

Controversies Abound

Bitcoin Gold has been at the center of controversy since its developers announced plans to fork the blockchain several months ago. The hard fork was kept tightly under wraps by the protocol’s backers, leading many in the cryptocurrency community to question its integrity.

The project, which is being led by Jack Liao of LightningASIC, was intended to democratize the blockchain’s lucrative mining structure. But a failure to publicize the fork and the private mining of tens of thousands of blocks raised suspicion that Bitcoin Gold was a way for its developers to enrich themselves. An unfinished proof-of-work implementation was also raised as a potential flag.

BTG forked in late October, but officially launched this past weekend. Its value plunged immediately after the network survived an alleged attack by hackers shortly after launching.

BTG Price Levels

The ensuing controversy has left a major dent in Bitcoin Gold, with the value of the digital currency falling more than 7% on Thursday. At press time, it was seen trading at $151 on daily volumes of $29.2 million.

Prices exceeded $500 after the cryptocurrency went live during the weekend. However, it didn’t take long for prices to halve before continuing lower to their present values.

With current levels in mind, BTG has an overall market cap of $2.3 billion. According to data obtained from CoinMarketCap, much of the turnover has occurred on the Bitfinex exchange.

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Trading recommendation: Lisk/Bitcoin

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The best way to trade a range-bound market is to buy at the lower end of the range and sell at the upper end. If the range is large and well established, it offers us a good risk to reward objective. We believe that LSK/BTC fits the bill and offers us an attractive opportunity to buy at the support and sell at the resistance.

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Key points

  1. LSK/BTC has formed a large trading range.
  2. Buy at the lower end of the range.
  3. Sell at the upper end of the range.

Weekly chart

LSK/BTC has been trading in a large range of $0.00046 on the lower end and $0.0016 on the upper end. On three occasions, the cryptocurrency pair has bounced off the supports. Similarly, it has returned from the $0.0016 levels thrice. The range is well defined. Currently, price is trying to rebound after breaking below the lower end of the range last week. We believe that a buy at current levels offers us a low-risk and high-reward trading opportunity.

Daily chart

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On December 07, the cryptocurrency pair broke below the support of $0.00046. However, the very next day, it climbed back into the range, which is a positive indication. This shows that the bulls want to keep the range intact. However, the rally from the lows hit a roadblock at the 20-day EMA.

Currently, LSK/BTC is again pulling back towards the lower end of the range. If the support holds, we believe that the digital currency will again rally to the upper end of the range. Therefore, we suggest buying 50% of the desired allocation close to $0.00050 levels. Remaining 50% of the position should be purchased once the digital currency breaks out of $0.00068. The profit objective is a rally to the upper end of the range at $0.0016. The trade should be closed if the virtual currency breaks down and sustains below the lower end of the range. This is a long-term trade.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Trade Recommendation: XMR/BTC Pair Throwback

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The XMR/BTC market (Monero) has been in downtrend on the hourly chart after posting a high of 0.0225 on December 6 and failing to hold critical support at 0.02. It went to as low as 0.0145 on December 8 before respecting RSI at 32 where it established support. The market used the new support level to rally and generate one higher low after the other. It recently attempted to reclaim support at 0.02 but was repelled by bears. Currently, the market is trading around 0.019 levels where it appears to have created another higher low.

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Technical analysis shows a large reversal pattern in the hourly chart that can take the XMR/BTC pair to 0.025. Even though the market failed to breach resistance at 0.02, investors should not see it as a failed breakout. What we’re seeing is a throwback which is a temporary retreat in price. Throwbacks are common in breakout plays and are often seen as a bullish signal. The next time the market attempts to breach 0.02 resistance, it has a much better chance of breaking it with conviction.

The strategy is to buy breakout at 0.02 with immediate stop at 0.0189.

Hourly XMR/BTC Chart on Poloniex

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As of this writing, XMR/BTC is trading at 0.018714 on Poloniex.

Summary of Strategy

Buy: breakout at 0.02

Target: 0.025

Stop: move below 0.0189 after buying breakout at 0.02.

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Trade Recommendation: FCT/BTC Bullish Reversal

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The market reach its all-time high back in June this year when FTC/BTC (Factom) reached 0.01463162. Unfortunately, the pair wasn’t able to sustain its momentum. It created a lower high several days later at 0.01066744 which signalled investors to take profits or cut their losses. As a result, the market tumbled and lost 93.17% in value from its all-time high. Such a tremendous loss would have created an atmosphere of despair in the market. Usually, that’s when the savviest traders come in.

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Technical analysis reveals that the worst is behind the pair. FCT/BTC touched support at 0.001 on the daily chart twice and respected it on both occasions. This is a good indication that the market has found a reliable support level. In addition, hourly chart shows that a large reversal pattern is underway. The pair may have retreated when it nearly touched 0.002, but it generated a new higher low in the process at 0.00156566. The throwback is a bullish signal that enables the pair to gather momentum to break resistance at 0.002.

The strategy is buy on breakout at 0.002. Breach that level and the market reclaims 0.003. Sell that level because it is a strong resistance.

Hourly FCT/BTC Chart on Poloniex

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As of this writing, FCT/BTC is trading at 0.001738 on Poloniex.

Summary of Strategy

Buy: breakout at 0.002

Target: 0.003

Stop: move below 0.0018 after buying breakout at 0.002.  

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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