As expected – Bitcoin “finally” drops by 11 percent, whales book profits

Bitcoin’s recent downturn meets the expectations of many experts, who see a major hurdle at $20,000.

Within minutes, Bitcoin (BTC) has slipped by $1,000 on today, November 26th, making the “long overdue” return of the price at $19,500 a reality.

As the data from Cointelegraph Markets and TradingView show, Bitcoin suffered a sharp decline on Wednesday morning.

Having previously climbed almost to $19,500, the market-leading crypto currency initially entered a sideways Bitcoin Profit movement, which then turned into a downturn to $17,250. This puts the daily loss at just under 5%.

Many analysts had warned in recent days that such a response was long overdue. Among them were CNBC presenter Brian Kelly and crypto-trader Tone Vays, the latter even predicted a crash to $14,000.

Several key figures had also indicated that losses were imminent. One of the clearest warnings came from the so-called “Crypto Fear and Greed Index”, as the “fear barometer” was at record levels in November regarding the “greed” of crypto investors.

Whales want to write off profits?

The sudden downturn, which was therefore not very unexpected, came at the same time as large volumes of BTC were shifted to crypto exchanges. This could indicate that many of the larger investors want to write off their profits near the Bitcoin record high of $20,000.

The average value of capital inflows to crypto exchanges has increased in the last few hours. From this we can deduce that the major investors (whales) are moving their Bitcoin to crypto exchanges,” as Ki Young Ju, founder of the crypto market research portal CryptoQuant, summarises the situation on Twitter. And further:

“However, the long-term figures show that the pressure to buy continues. So I think that in a few days, it will still be able to climb above 20,000 US dollars.

The fundamentals of Bitcoin underline this optimism, with the mining deficit expected to be adjusted by 7.3% in the coming days, which could lead to a further increase in the hashrate of the related block chain.

At the time of going to press, the Bitcoin exchange rate is close to USD 17,900 after a small recovery.

The introduction of a new “censored” Bitcoin mining pool has caused concern among some Bitcoiners. They believe that it could be a harbinger of future developments.

Will Bitcoin soon be threatened with censorship by regulatory authorities? And why should it be bad at all to exclude so-called “bad actors” from the network?

In this article we will take a closer look at the latest developments in the Bitcoin mining scene and look for answers to the above questions.

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First BTC mining pool tests censorship on Bitcoin

The blockchain analysis platform BlockSeer has introduced the private beta version of a new Bitcoin mining pool (Blockseer Mining Pool), which censors transactions from blacklisted BTC wallets .

The pool will use BlockSeer’s and Walletscore’s labeling data along with other verified sources, such as the United States Office of Foreign Assets Control (OFAC) blacklist for crypto, to identify BTC transactions that it does not want to process. The pool also requires all miners to go through Know-Your-Customer (KYC) protocols. DMG’s COO Sheldon Bennett stated:

The pool is focused on not getting transactions from known nefarious wallets that use this medium in a way that continues to tarnish the reputation of cryptocurrencies, particularly Bitcoin, in the mainstream and impede widespread adoption.

Why such developments are a ‘slippery development’

Former Monero lead developer Riccardo Spagni (@fluffypony) noted on Twitter that this could be the start of a slippery development. He speculated that bitcoin mining pools’ transaction censorship could spread due to pressure from regulators. He indicated that this was a cause for concern. Regulators who look at this and think it is a good idea to take action ‘for extreme cases like the OFAC crypto list’ could make censorship on Bitcoin enforceable.

Instead , Spagni suggested that more privacy on Bitcoin would prevent this, adding:

Things like p2pool & Stratum v2 make it practically unenforceable and I’d rather rely on it than on a hope & prayer.

P2pool is a decentralized bitcoin mining pool that was founded in 2011. Braiins’ Stratum V2 draft is a complete overhaul that BetterHash implements. BetterHash is a secondary protocol that allows the constituents of the mining pool to decide on the composition of the block they will mine, rather than allowing pools to control which transactions are included in each block. This should make pool censorship impossible. According to Braiins co-founder Jan Capek, the draft has yet to be formally examined. However, he will receive grants from Square Crypto for further development.

Wallet Scrutiny website founder Leo Wandersleb commented that this “slippery development” of censorship will lead to a soft fork where pools that follow this approach will refuse to “build on blocks that don’t use their filters” .