Another month has passed us by, and with it comes another newsletter from the HardBlock team to recount the talking points from the month of May.
Bitcoin’s price may soon bounce back
The price of bitcoin has historically undergone fairly quick price drops (and price increases) throughout its existence. The fluctuation in the bitcoin price we witnessed throughout May is fairly typical correction behaviour.
Bitcoin opened the month of May trading at around $57,700 USD (approx. $74,560 AUD). It closed at around $37,000 USD (approx. $47,875 AUD).
Despite the price correction throughout May, it is worth noting the following:
- Bitcoin is still up some 20% since the start of the year
- Bitcoin’s price closed at the end of May 2020 sat at approximately $9,690 (approx. $12,570 AUD).
- 76% of bitcoin holders are still in profit:
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The bigger picture is that bitcoin is here to stay and is a part of a technical revolution that is still in its early stages:
Cryptocurrency investors cashing in big during the pandemic | Finance Report - YouTube
The power debate and bitcoin mining
Throughout May, the narrative around bitcoin mining power usage was thrust into the spotlight.
Whilst it’s irrefutable that the bitcoin network consumes a large amount of energy, it appears the debate has framed bitcoin as being inherently wasteful.
It’s worth noting that the banking system and gold industry require greater amounts of power consumption. This was cross-compared to bitcoin in a paper released this month by Galaxy Digital. Unlike the banking system and gold industry bitcoin has unique features, that the aforementioned do not possess:
- Easily transferable and storable since it’s virtual
- Decentralised
- A completely open and transparent monetary system, with payments not needing to be authorised or closed by a third-party participant
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Bitcoin’s consensus utilises a proof-of-work mechanism, which was mainly implemented to withstand network attacks, provide security and exchange cost for reward (energy consumption for newly minted bitcoin).
The challenge of sourcing energy from clean and renewable resources is one that the whole planet faces, not just bitcoin. Finding renewable solutions is a long-term focus for both bitcoin and other industries.
Iris Energy is one such local company trying to work towards mining the bitcoin network with cheap renewable energy. Iris themselves own and maintain data infrastructure that mines the bitcoin which is then converted into cash. The more that fossil fuels can be replaced by sustainable and renewable energy companies, the better the public perception of bitcoin can be.
Whether bitcoin is a useful consumption of energy is a very subjective question. It does however pay to always do your own research.
Taproot activation
Bitcoin will soon be going through its most significant update since the SegWit update back in 2017.
Readers may have heard about the Taproot upgrade which is undergoing activation as a Speedy Trial period during which bitcoin miners can signal readiness. The target for Taproot activation is 90% acceptance with miners currently signalling above the 90% requirement.
Taproot will ensure greater privacy for multi-signature payments, more efficiency for smart contract scripting as well as lower transaction fees.
Would you trade 10,000 Bitcoins for 2 Pizzas? Well, one guy did
The stories of early bitcoin adopters who either lost or spent a large amount of it when it was under $100 add to the lore and mystique of bitcoin. Jeremy Sturdivant was the first to exchange bitcoin for a real-world good or service from another man called Laszlo Hanyecz, in this case it was 2 pizzas in exchange for 10,000 bitcoins, which is now worth approximately $470 million AUD.
Sturdivant’s noble purchase of 2 pizzas back in 2010 has inspired a Bitcoin Pizza Day celebration on the same date (22 May).
Bitcoin powers an Indy 500 race car to a 5th place finish
A suped-up Chevrolet was spotted at the Indy 500, covered in the orange-spotted bitcoin logo. The racer Ed Carpenter faced 5th out of 33 participants. In a humorous moment during the race, a PNC-Bank sponsored racecar was seen coming to a stop when it ran out of fuel. Onlookers noticed that Carptenter’s bitcoin sponsored racecar overtook it.
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Well, that's all we've got for you this month, and we look forward to providing you with more Bitcoin news in June.
Happy Hodling,
HardBlock Team