Would you be willing to overpay to have your stalled Bitcoin transaction processed more quickly? Data shows that you most certainly would.

The use of Replace by fee a transaction feature on the Bitcoin network that allows increasing the fee once the transaction is submitted more than doubled in 2021, in what may be a sign that Bitcoin adoption has also led to increased competition among users to put their transactions on the next block.

According to statistics compiled by Bitcoinops, the use of Replace by Fee transactions rose from 14% to 28% so far this year.

The data shows that out of every 144 Bitcoin blocks, almost a third of the transactions had used the fee-boosting option first implemented in 2016 when GreenAddress (now Green Wallet) started to support this solution.

The use of Replace By Fee did not have a far-reaching impact during its first years of existence. In 2018, it managed to beat the goal of 5% of transactions, and it would take another two years to reach the usability of 10% of BTC transactions.

As early as the third quarter of 2020, the story changed. The user base increased, the cryptocurrency boom hit the institutional world, and people started sending Bitcoin like crazy. The proportion of Replace by Fee transactions touched 15% in October 2020, 20% in April 2021, and closed the year nearing 30%, with a peak of 27.5%.

The trend is clear. The number of RBF transactions is increasing and does not seem to have a clear percentile ceiling in the short term.

On the other hand, in terms of daily transactions processed, the network has fallen well below the peak of nearly 450K reached in 2019. Currently, about 260K are processed every day, which already represents an increase in Bitcoin activity of almost 20% since June of this year, when transactions fell to less than 200K per day in the midst of a price recession.

RBF usage is an essential statistic in terms of usability as it shows a growing interest in fast transaction processing. As more businesses begin to deliver a more bitcoin-friendly face, options like Replace by Fee or Child Pays For Parent help create a more flexible system for users.

For example, a payment processor, exchange, or service provider can require up to 6 block confirmations to accept a payment. The fee calculation is already something that many wallets offer automatically. Still, in case of an error and urgency on the part of a buyer the use of Replace by Fee can save the user from unexpectedly long waiting times.

And if paying more for a faster Bitcoin transaction seems insulting to your new bitcoin-loving friend, perhaps it would be a good idea to keep them away from the more popular NFT projects and DeFi protocols.

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Use of Replace By Fee in Bitcoin Transactions Skyrocketed in 2021 - CryptoPotato

Crackdowns on bitcoin (BTC) and crypto activity are partially about high surveillance and control.

Reportedly, the countries where crypto activity is restricted or banned at some scale right now are China, Turkey, Russia, Vietnam, Bolivia, Algeria, Colombia, Nigeria, Egypt, Indonesia, Iran, India, Nepal, and North Macedonia.

The pattern that prevails amongst most of these bans portrays authoritarian regimes and the depreciation of fiat currencies. Theres also the narrative behind the bans, using almost the same excuses and fearing the power of bitcoin the power in hands of the people in similar ways.

The Human Rights Foundation has reported that half of the worlds population lives under an authoritarian regime.

Tyranny is the root of poverty, war, and torture.

As this is the reality of our world, people urge to find ways to survive it, face it, surpass it. The decentralization of BTC currently represents the most useful economic tool to many citizens worldwide, thus its gaining huge traction and has started to be used as a replacement for cash.

Cash used to represent a certain level of freedom from corrupted systems and banks, but its downfall has increased since the pandemic. The digital era of finance has begun and the ones in power dont feel safe if they are not in control of the blockchain, the epicenter of innovation nowadays.

Naturally, regimes will only accept the innovation they can control and use in their favor.

In Turkey, the ban against cryptocurrencies came as investors and the common people started to adopt BTC and other digital coins to face the rapidly increasing inflation and weak national currency. What the president described as a way to stabilize the Turkish lira, investors saw as a blow to the country.

Similarly, Reuters reported that the Indian government is aiming for a general prohibition on all activities by any individual on mining, generating, holding, selling, (or) dealing in cryptocurrencies, which includes its use as a store of value and a unit of account.

The new Indian measures reportedly will open the possibilities for arrest without a warrant for any crypto user and they might be held without the option of bail. They also plan to crack down on crypto advertisements.

When the lastest China ban on crypto happened, the Financial Times reported how it affected a coffee shop that was famous for accepting bitcoin as payment:

a barista there told me it had been several years since customers could pay with it. You cant even come here to talk about it, he says.

And a Chinese official told the FT that the country no longer needs bitcoin because they have their own digital currency now.

In this scenario, saying that people do need bitcoin is the same as saying that people do need freedom.

Related Reading |Swedish Regulators Propose PoW Mining Ban. State-Owned Power Company Defends It

What regimes publicly say they fear is never what theyre actually afraid of.

Authoritarianism fears freedom freedom to choose, freedom of speech, the lack of surveillance, losing power and control. Naturally, they fear bitcoins pseudonymity, how its censorship-resistant, the fact that it can be used as a hedge against a depreciating national currency.

These countrys central banks want to be the only ones able to fix monetary issues by activating policies. The thing is, if those policies worked in favor of people most of the time, then BTC adoption wouldnt be so big and represent a risk to the banks: because those people wouldnt need it as much.

But thats not the reality, thus crypto users want to stick it to the banks. They also want control over their own investments and spendings, and the banks want that same control back.

However, do these bans really work? Can they fully ban crypto? In the second part of this article, well address these questions reviewing 2021 scenarios, plus different approaches to crypto by other tyrannies like Venezuelas.

Related Reading |Unpacking The Effects Of Chinas Bitcoin Ban On Investors

Read more from the original source:
Crypto Regulations Newsletter: A Tale Of Tyrannies & Bitcoin (1/2) - bitcoinist.com

With Bitcoins price falling to as low as $47,450, losing over 8% in the last three days the anticipation of a New Year rally seemed to wither away. A move under the $50,000 support triggered selling which was followed by another price pullback under the $48,000 support where Bitcoin traded at the time of writing.

Ahead of the Friday expiry of 124.7K options contracts, the recent slump under the $48K level could lead the top asset either way.

Options market heated

The combined trading volume of Bitcoin and Ethereum options increased +443% in 2021 to $387 billion for the year as of December 27. Last year, BTC and ETH options saw a combined trading volume of over $71 billion.

Source: TheBlock

Over the last week alone OI has seen an increase of some $2.5 billion, primarily led by traders on Binance. Even though Futures OI is still away from all-time highs, rapid increases in leverage can indicate a clustering of stop-losses and liquidation levels in close proximity to the current price.

Data from Glassnode further presented how this leverage rise can add higher probabilities to a potential short, or long squeeze in the near term.

A general decline in trading volume is typically seen towards year end, however, on a 7-day average basis, futures market volumes have seen a YTD decline of 16%. Thinner volume and rising OI in a concentrated exchange is a combination that can be favorable to at least a localized leverage squeeze over the coming weeks.

With the BTC leverage ratio at ATH levels, the possibility of a correction to flush out all the excess leverage was in play as prices slumped.

HODLers still sitting tight

Historically, the market saw 32% supply-in-loss at $29K bottom in July, while currently, 26% of the BTC supply is in the loss territory. Nonetheless, some long-term holders havent touched their BTC in over five years, with over 23% of BTCs 21 million supply remaining untouched in the period.

For now, long-term holders marginally trimmed their BTC positions in recent weeks, despite prices falling by almost $20,000, or -24.4%, since the BTC ATH. The supply held by investors only dropped to 13.3 million from 13.4 million, a small change relative to the sharp price drop.

Source: Glassnode

Analyst Rekt Capital, highlighted Bitcoins revisit to the 21-week EMA at which the coin faced rejection. Historically, BTC has performed downside wicks into the orange area during this red retest so theres a possibility of another revisit to the lower $44K level, unless the 21-week EMA is established as support in the near term.

If the $40K-$42K range is retested it could likely become a local bottom for the midterm but for now with the year-end Options expiry in place and the possibility of a leverage squeeze BTCs price could visit lower levels in the days to come.

Originally posted here:
With a Bitcoin leverage squeeze in play, the price could be headed this way - AMBCrypto News

The government of Iran has ordered a shutdown of cryptocurrency mining across the country over fears that the power consumed by miners would overload the countrys shaky power grid and lead to blackouts.This is the second time the government hasclosed downcryptocurrency mining this year.

Mostafa Rajabi Mashhadi, the director of Irans state-run Grid Management Company,indicated thatthe ban would last until March 6, 2022. He estimated that more thantwo hundredmegawatts of power would be freed up for other uses from the ban.

Mashhadi also suggested that Iranian authorities would intensify a crackdown against unlicensed cryptocurrency miners operating in secret, who consume an estimatedsix hundredmegawatts of electricity and whose output far exceeds the officially recognized miners.

Cryptocurrency mining, particularly Bitcoin mining, is popular in Iran. The countrys ease of access to natural gas has led to extremely cheap electricity, making mining in Iran more economically viable than in many other areas. Moreover, Western sanctions against Iran are unable to prevent cryptocurrency mining, which has beenused as a source of fundsby the government in Tehran in the past.

Mining increased in Iran in mid-2020 after China, which had previously been the worlds leader in Bitcoin mining,banned the practice, leading some operators to resume the practice in other nations. At the same time, the country experienced aseries of blackouts, leading in turn to an increase in protests against the government. The need to preserve power and restore stability led authorities in Tehran to ban mining for the first time.

The current plan to ban mining comes in conjunction with several other energy-saving measures, such as the shutdown of street lights in some areas at certain times. Tehran has also pushed for additional means of power generation, which Mashhadi projected would lead to a 60 percent increase in available power during the upcoming summer.

Electricity consumption in Iran is often highest during the winter. The daily gas demand for Iranian households ismostly used to power heating. Ithas increased to 570 million cubic meters per day, an unprecedented amount in the countrys recorded history of energy consumption. The National Iranian Gas Company announced in a statement last week that it had maxed out its natural gas production ateight hundredmillion cubic meters per day, forcing reductions in supply to other areas, such as offices and industry.

TrevorFilsethis a current and foreign affairs writer for theNational Interest.

Image: Reuters

Excerpt from:
Iran Bans Bitcoin Mining (Again) - The National Interest

Bitcoin (BTC) whales are the center of attention again this week as large transactions flow back to exchanges.

Data from on-chain analytics platform CryptoQuant on Dec. 24 shows that relatively, whales are increasing their presence as potential sellers.

According to CryptoQuants Exchange Whale Ratio indicator, the proportion of large inflows to exchanges out of total inflows is now at a one-year high.

Inflows sped up significantly as BTC/USD rose to $51,000 overnight on Thursday, and the implication could be that large-volume investors plan to take profits at the top end of Bitcoins current range.

It is better to watch out until BTC breaks $51k levels, one CryptoQuant analyst cautioned.

Despite misgivings, Bitcoin managed to preserve its higher levels into Friday, these previously forming a key line in the sand for bullish sentiment to return.

Whales, meanwhile, are not new potential sellers. As Cointelegraph reported earlier in the month, larger investors have diverged from smaller retail hodlers in terms of buying behavior.

CryptoQuant and others confirm that this is still the case, with exchange withdrawals conversely reflecting peak accumulation similar to September before the breakout to $69,000 all-time highs.

Related:Missed out on hot crypto stocks in 2021? It paid just to buy Bitcoin and Ethereum, data shows

Miners, too, are holding onto their newly released coins from block subsidies, with their reserves now at six-month highs.

Miners own more BTC than when BTC was at $69k, in fact, they added back all the BTC they net distributed since the drop from $69k, contributor Venturefounder noted.

Read the rest here:
Bitcoin needs to clear $51K to reduce the chance of new sell-off from BTC whales - Cointelegraph

The pro-bitcoin U.S. Senator Cynthia Lummis has reportedly unveiled her plan to introduce a comprehensive crypto bill that will cover everything from how cryptocurrencies are taxed and categorized to consumer protections. The bill will also propose creating a new entity to oversee the digital asset market.

U.S. Senator Cynthia Lummis is reportedly preparing to introduce a comprehensive crypto bill next year. The Republican senator from Wyoming explained that the bill will cover everything from how cryptocurrencies are taxed and categorized to consumer protections, Bloomberg reported Thursday.

The bill will provide clear guidance on which asset class a particular asset belongs to and will also establish a framework to regulate stablecoins, a senior aide for the senator told the news outlet. In addition, it will propose creating a new entity to oversee the crypto market that will operate under the joint jurisdiction of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

Lummis is a member of the Senate Banking Committee. She has repeatedly said that bitcoin is a great store of value. The senator recently confirmed that she owns about five bitcoins and has no plan to sell them. Her BTC is part of a broad portfolio that includes her familys cattle ranches.

In October, Lummis said in Congress: Thank God for bitcoin, and other non-fiat currencies, that transcends the irresponsibility of governments, including our own.

Several bills have already been introduced in Congress with the intention of regulating the crypto sector. In August, U.S. Rep. Don Beyer introduced the Digital Asset Market Structure and Investor Protection Act. The bill provides the SEC with authority over digital asset securities and the CFTC with authority over digital assets.

In April, the U.S. House of Representatives passed a bill introduced by pro-bitcoin Congressman Patrick McHenry which requires the SEC and the CFTC to establish a working group focused on digital assets.

In August, two U.S. lawmakers urged the chairman of the SEC and the acting chairman of the CFTC to establish a joint working group for the regulation of crypto assets. Other efforts to regulate the crypto industry include the Digital Commodity Exchange Act of 2020 (DCEA) and the Crypto-Currency Act of 2020.

What do you think about Senator Lummis planning to introduce a comprehensive cryptocurrency bill? Let us know in the comments section below.

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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