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Something that people dont normally consider: when someone says BSV or BTC what is it that you think of? Is it the coin which is traded on an exchange? Is it the platform, upon which people develop blockchain applications? Is it the peer-to-peer network of nodes? Or is it the software that runs said nodes?

Well if you are not sure, then rest-assured you are probably part of the vast majority. It is the hope of this article to clear some of this up, as the crypto industry is rife with many misunderstandings and misdirections, of which this is one of the most common. After we have cleared up the differences between these, I wish to turn to the issue of chain splits (sometimes called forks), which may occur when the nodes of the network do not come to majority consensus on what the ledger state should be. Why is this relevant? Well, as we all know, chain splits are very disruptive to blockchains, leading to splitting of the developer community, and battles over which side gets to keep the standing token ticker symbol. Why is understanding chain splits important? Well, because as blockchains in general become integrated into the common law of society, we need to arm ourselves with the knowledge on how the implementation of law will affect the operations of blockchains.

Up until this point, the narrative that has been pandered is that blockchains, due to their decentralized nature, live completely supra-legal, and outside of the reach and understanding of common laws. This cannot be further from the truth, as given enough time, laws has a way of catching up with whatever technology or society can invent. There were no airline safety laws before the time of the Wright brothers, nor were there laws against using radioactive radium in toothpaste at the turn of the century, but would it have been reasonable for scientists to argue that laws surrounding the harm done by invisible forces such as radiation poisoning could never be devised? Well by that same reasoning crypto proponents have been claiming for years that laws could never be enforced against a decentralized network such as those employed by blockchains and people to this day still believe it. And this is relevant and topical considering the upcoming clash between the common wisdom of crypto and the law in the cases surrounding Craig Wrights claim for his stolen bitcoins. But first, lets clear up some terminology.

What is BSV, BTC?

BSV is a ticker symbol that represents a protocol, and the Bitcoin SV node is simply software for a node which is compatible with that protocol. Similarly BTC is a protocol, and BTC-Core is node software that adheres to the BTC protocol. Of the protocols, BSV is the closest to the original Bitcoin protocol as described in the original Bitcoin white paper, as it does not include any of the changes that were pushed into the BTC or BCH protocols in order to support different higher layer protocols and platforms1 such as Lightning Network. The BSV protocol function by function is closest to what Bitcoin was in 2009. With that understanding, Bitcoin SV is just what happens to be the most prevalent node software available presently, but it is by no means the only one. In fact, there are several other node softwares available for those who do not wish to use the official version, including ones implemented in Go, Rust, and an upcoming one called Teranode, which promises to be able to process terabyte sized blocks. No matter the node software you run, however, as long as it adheres to the open protocol of BSV, BTC, or BCH, your node will remain in sync or in consensus with other nodes that run on that protocol.

Seen in this light, chain splits are just a simple matter of some servers falling out of consensus with each other, and not being able to follow the chain. If they fail to upgrade their software to the version that the miners (henceforth referred to as block producers) are running, then they simply never receive any new blocks, and to them, the blockchain will have essentially stopped. They may see plenty of transactions and traffic on their network, but blocks will simply never come. Listening-only nodes have no ability to cause a chain or ledger to split. They have no power whatsoever, as they are listen-only.

A chain split is when the block producing nodes dont all agree on the rules. When a significant proportion of the producing nodes are running incompatible software, with incompatible protocol rulesets, then a potential for chain split exists. This is what happened twice in the pastfirst, when BTC split away from Bitcoin with the introduction of the SegWit change, and then later, when BCH introduced a change to enable tokens which the majority did not accept. In each of these past splits, the protocol which remained the closest to the original ruleset had to change the ticker symbol of their token, due to the fact that the exchanges where tokens were traded were confused over which of the token ledgers would use the existing ticker symbol, and which would be given a new one. However, generally speaking a chain split is unlikely (because it is costly2) to result when a majority of the block producers are in agreement with which version of the node software they will run, and therefore which ruleset they will support.

From the perspective software, BSV, BTC, and BCH node software is simply a set of protocol rules to follow, and different block producers running different software will result in seeing different versions of the ledger. The effect of this is that with every ledger split, a new token is created3 or airdropped. This is how the current situation came to be, with 3 major tokens all claiming to be Bitcoin. But it is only upon the examination of the protocol and ruleset that they enforce that one can start to form an opinion of which is the closest match to what bitcoin truly is. Contrary to popular belief, it is not necessarily the ledger token that the exchanges have decided to award the legacy ticker symbol to. The exchanges, after all, do not get to decide what a product is.

Therefore, if bitcoin is just a protocol, and not the network, or a coin, then the BSV node is just the version of software that you run, and what software you run determines what version of the ledger you see. What this means is when the time comes for law enforcement to effect the freezing of coins, whether it be to stop the proceeds of criminal activity or to recover lost funds, all that is required is for a majority of block producing nodes to be running the version of software that will honor the confiscation of frozen coins. And given that any sort of confiscation transaction cannot be created unless a majority of block producers agree on the status of the coins in question, there will be nary a chance for a chain split. The current method for effecting the freezing and re-issuance of coins by court order while implemented only in the BSV node software, was written to be compatible with BTC node software, so it is conceivable that block producers could contract developers to patch the BTC node software with the necessary changes in order to comply with the asset recovery process. Whether or not authorities will be able to compel a majority of the block producers to upgrade their software, will be a different matter, and an issue that will be played out in the real world, and not on the blockchain. But that, is for the lawyers to worry about. Not the technologists, or the users.

Jerry Chan

WallStreetTechnologist

***

Notes:

[1] Arguably because they were tooted as a solution to the false scaling problem of bitcoin, which BSV solved simply by reverting to the original bitcoin rules.

[2] in order to support a chain split, the minority side must constantly burn cash in producing blocks which may have no future value, perpetually.

[3] although which is the new token and which is the old token is indeterminate and up for endless pointless debate.

Watch: Heres how Bitcoin works as a base layer for other blockchains

New to Bitcoin? Check out CoinGeeksBitcoin for Beginnerssection, the ultimate resource guide to learn more about Bitcoinas originally envisioned by Satoshi Nakamotoand blockchain.

Go here to see the original:

Difference between Bitcoin software, network, and protocol - CoinGeek

Bitcoin (BTC) enters the last week of March in uncertain territory as a strong weekly close still keeps $30,000 out of reach.

The largest cryptocurrency has sealed seven days of practically flat performance despite some volatility in between as the market seeks fresh direction. Where could it go next?

In what was a week of more surprises from the macroeconomy, BTC/USD spent much time reacting to decisions from the United States Federal Reserve and associated commentary.

Next up, however, is a period of relative calm, followed by a key monthly close, which analysis says could see the start of a new bullish trend.

Bitcoin is currently up 20% for March, meaning that the coming days will decide the strength of the ongoing recovery from multi-year lows.

Cointelegraph takes a look at five key topics to bear in mind during the final week of what has been a volatile month.

Bitcoin managed to close the week with a modest flourish, returning to the $28,000 mark, data from Cointelegraph Markets Pro and TradingViewshows.

This meant that BTC/USD stayed practically unmoved versus the weekend prior, delivering some impressive stability despite the periods of volatility which occurred in the intervening period.

Nonetheless, concerns are brewing that the market may struggle to preserve current levels.

In a fresh analysis on March 27, popular Twitter account IncomeSharks flagged on-balance volume (OBV) as a telltale sign of decreasing momentum.

Just hard to ignore the weak OBV at resistance, price at resistance, and the lack of demand at these prices, it commented alongside a chart.

Trader and analyst Rekt Capital agreed that a retracement would be healthy for Bitcoin should it enter.

If BTC continues to struggle to break beyond $28,700 then a healthy dip may need to occur to gain fresh buyer interest at lower levels, he tweeted on the day.

Over the weekend, Rekt Capital had flagged that price point as a critical area to watchwhile remaining upbeat about the longer-term trend.

BTC/USD, he forecast, will confirm a breakout from its bear market at the end of March, provided the monthly close preserves the 200-week moving average (WMA) as support.

The 200WMA currently stands at around $25,500, giving bulls room for a modest dip.

Similarly level-headed, but on shorter timeframes, is trader Crypto Tony, who eyed $27,700 and $26,600 to hold on the day.

We have yet to lose the EQ at $27,700 on a 4 hour time frame, so the doomsday tweets can take a break, he summarized, referring to the point in a range where buy and sell pressure is balanced.

Unlike last week, the final days of March are not slated to deliver surprises from the U.S. macroeconomic realm.

That is not to say that a curveball will not appear, but the rest of the month is comparatively quiet in terms of macro data releases.

The one key exception could be the March 31 release of the Personal Consumption Expenditures Index (PCE), which holds crucial insights into U.S. inflation trends.

US PCE inflation numbers are due this week - last month this data caused a volatile move lower in risk, markets commentator Tedtalksmacro commented.

Should Bitcoin react to PCE data that comes in outside expectations, the results could make for a volatile weekend just a day before the monthly close.

Any new developments in the ongoing banking crisis would add uncertainty into the mix, and the risk is there contagion remains in Europe, while the defunct Silicon Valley Bank (SVB) found a buyer overnight.

Having hiked interest rates despite the crisis, the Fed is on a diverging path when it comes to interest rates, and further hikes could come, it says. In contrast, markets hold the opposite opinion due to the stress already induced by prior rate increases.

Much tighter financial conditions and ongoing signs of bank stress are major reasons why the market thinks the Fed will be forced to abandon their plans, analysis platform Mosaic Asset explained in the latest edition of its updates series, The Market Mosaic, on March 26.

Related:Crypto winter can take a toll on hodlers mental health

Mosaic further warned that historically, risk assets performed worse immediately following news of a rate hike policy pivot.

If the Fed does pause the rate hiking campaign, it will signal growing concerns that the central bank is breaking something in the capital markets. But also consider that the Fed has a track record of adjusting policy only when its too late, it continued.

It added that as a result, in past bear markets the steepest stock market declines happened after the Fed pivots to a pause or outright rate cuts.

Bitcoin hodlers are setting new records under current conditions and laying the foundations for a supply shock in the process.

The latest data from on-chain analytics firm Glassnode shows that the amount of the available BTC supply, which has not left its wallet in two years or longer, is now at all-time highs.

As of March 27, more than 52.5% of all mined BTC has stayed dormant since at least March 2021, with owners not selling or transferring during the ensuing bear market.

Address numbers are also in up only mode, with the number of wallets holding 0.1 BTC or more setting new records on the day.

Likewise, wallets with a non-zero balanceare more plentiful than ever, with 45,388,865 in existence as of March 27.

The numbers feed into an existing narrative over what will happen to BTC price action during the next wave of mainstream consumer interest.

With so much of the supply now ferreted away into cold storage, any rush for BTC could spark the realization that one of the worlds hardest assets is already too scarce.

According to Glassnode, the overall BTC balance held by major exchanges remains near its lowest in five years.

For some, BTC price action is right on track for repeating past cycles, setting a new all-time high in the process.

Among them is Tedtalksmacro, who notes that the timing of the November multi-year lows on BTC/USD was more or less perfect.

Since then, a rally that began in January has stuck, and there have been no signs yet that fresh macro lows will appear to take out the $15,600 floor from November 2022.

~390 days until the next BTC halving, Tedtalksmacro wrote on March 27, referencing a dedicated thread about Bitcoins performance from the end of January.

BTC price is thus sticking to historical precedent by bottoming more than 400 days before its next block subsidy halving.

Tedtalksmacro, meanwhile, is not the only popular commentator taking halving cycle timing into account when it comes to price.

Earlier this month, Rekt Capital estimated that the next all-time high should be in around 18 months.

It takes BTC around 900 days to rally from Downtrend breakout to Bull Market top, he explained.

As with last week, a potential thorn remains in the side of Bitcoins bull run, which comes from investors themselves.

Related:XRP, LTC, XMR and AVAX show bullish signs as Bitcoin battles to hold $28K

Despite the volatility over the Fed rate hike and inability to push closer to $30,000, Bitcoin has seen the kind of sentiment absent since its late 2021 all-time highs.

According to the Crypto Fear & Greed Index, greed presently characterizes market sentiment in crypto more broadly.

On March 21, the Indexs score hit 68/100, the most since November 2021, and has continued to circle the mid-60s since.

While not near extreme levels, the higher the Index rises into greed, the more likely a market correction will occur.

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

Continued here:

Will BTC ditch the bear market? 5 things to know in Bitcoin this week - Cointelegraph

Bitcoin options traders expect a catalyst in the asset to boost the volatility in the assets price. Closing in on the quarterly settlement of Bitcoin options, the investor sentiment is relatively neutral. BTC nosedived below the $27,000 level in the absence of a new narrative in Bitcoin.

Also read: Ethereum price steadies above $1,700 as ETH holders grow confident ahead of token unlock

Bitcoin, the largest asset by market capitalization continues to experience fluctuations while other altcoins are experiencing a liquidity crunch. Analysts at the options data intelligence tracker Blofin Academy note that with the upcoming quarterly settlement of the crypto market, Bitcoin could experience volatility.

Implied Volatility(IV) has entered a dormant state as seen in the chart below. IV is the markets expectation of volatility and formally it is one standard deviation range of expected movement of an asset's price over the course of a year.

Investor sentiment is leaning towards neutral, while in the case of Ethereum it is slightly bearish according to Blofin Academys analysts.

Amidst the rising uncertainty among crypto market participants, BTC nosedived below the $27,000 level earlier today. The largest asset by market capital is exchanging hands at $26,959.

In the absence of a catalyst and a narrative, options traders expect Bitcoin price volatility to decline or remain relatively low. @tedtalksmacro, a crypto analyst argues that Bitcoins ongoing consolidation is part of the assets run up to its new all-time high.

The expert compared the current trading environment to the period between September and November 2019. The analysts target for Bitcoins all-time high is nearly $100,000.

Excerpt from:

Bitcoin options traders await a catalyst in the asset as BTC slips below $27,000 - FXStreet

Bitcoin price declined and retested the $26,500 support. BTC must stay above the $26,500 support to avoid more losses in the coming sessions.

Bitcoin price failed to gain strength above the $28,200 resistance zone. BTC formed a short-term top and reacted to the downside below the $27,500 support zone.

There was a clear move below the $27,200 support zone and the price even broke the $27,000 support. It retested the key $26,500 support zone. A low is formed near $26,491 and the price is now consolidating losses. There was a minor increase above the 23.6% Fib retracement level of the downward move from the $28,240 swing high to $26,491 low.

Bitcoin price is now trading below $27,500 and the 100 hourly simple moving average. There is also a major bearish trend line forming with resistance near $27,700 on the hourly chart of the BTC/USD pair.

On the upside, an immediate resistance is near the $27,350 level. It is near the 50% Fib retracement level of the downward move from the $28,240 swing high to $26,491 low. The next major resistance is near the $27,700 zone, the trend line, and the 100 hourly simple moving average.

Source: BTCUSD on TradingView.com

A close above the trend line resistance might send the price towards the $28,200 support. In the stated case, the price could rise towards the $28,800 resistance, above which the price might gain bullish momentum.

If bitcoin price fails to clear the $27,700 resistance, it could start another decline. An immediate support on the downside is near the $26,500 zone.

The next major support is near the $26,500 zone. A downside break below the $26,500 support might send the price towards the $25,800 support zone. The next major support is near the $25,200 level.

Technical indicators:

Hourly MACD The MACD is now losing pace in the bearish zone.

Hourly RSI (Relative Strength Index) The RSI for BTC/USD is now below the 50 level.

Major Support Levels $26,650, followed by $26,500.

Major Resistance Levels $27,350, $27,700 and $28,200.

Originally posted here:

Bitcoin Price Revisits Key Support, Can Bulls Save The Day? - NewsBTC

NEW YORK, March 24 (Reuters Breakingviews) - Almost one year ago, billionaire Peter Thiel threw $100 bills into the crowd from the stage at a cryptocurrency conference in Miami, likening fiat currency to toilet paper and touting bitcoin as the best alternative. Thiel has said that central banks are "bankrupt" and that the fiat money regime is coming to an end. Since his Miami proclamations, bitcoins price has fallen by nearly 40%, though in the last few weeks after Silicon Valley Banks failure it has had a resurgence. That suggests people think that Thiel is onto something. Those following his advice are sorely misled.

Thiels venture capital fund quietly dumped almost all its own holdings shortly before that Miami speech, according to the Financial Times. But others are buying. Former Andreessen Horowitz investor Balaji Srinivasan made a bet with a pseudonymous Twitter user last week that bitcoin would reach $1 million in the next three months while hyperinflation takes hold. At first glance, his prediction seems wildly optimistic but directionally reasonable bitcoin has surged by over 35% since SVBs collapse on March 10. The tech-heavy Nasdaq Composite Index (.IXIC) and gold both rose less than 10%.

The philosophy behind that surge is that cryptocurrency will replace government-backed dollars. The trouble is bitcoin has benefitted precisely because of actions taken by central banks. The Federal Reserve, by the faith and good standing of the U.S. government, has stepped up to stabilize the system with new programs. Fed Chair Jerome Powell has also tempered his comments about plans to raise rates. Whats more, bitcoin may never have surpassed $60,000 to reach its highest-ever price level in 2021 had the Fed not kept interest rates consistently low. Its the prospect of lower rates not the lack of government stability that is opening the door to riskier bets like those on bitcoin.

The second snag is that contrary to Srinivasan and Thiels claims, bitcoin is too volatile to protect investors against inflation by preserving its purchasing power over long periods of time. U.S. inflation continues to spike even as the Fed raises rates. Gold is a tangible asset, unlike bitcoin, and thats precisely what makes it an inflation hedge. In theory, as the price for goods goes up, gold follows. If investors hope to inoculate their portfolios against a weakening dollar, they should heed Thiels actions, not his words.

Follow @AnitaRamaswamy on Twitter

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

CONTEXT NEWS

Bitcoins price has appreciated by over 35% since Silicon Valley Bank collapsed on March 10, while the Nasdaq Composite Index has traded up less than 5% over the same period, according to data from Refinitiv. Bitcoins price is up nearly 70% in 2023.

Editing by Lauren Silva Laughlin and Sharon Lam

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Continued here:

Breakingviews - Bitcoin is a solution looking for a problem - Reuters