Have Bitmain and Binance signalled the death of Bitcoin and mining coins?
Two massive cryptocurrency news stories broke on the 24th of December 2018 with Binance announcing the long awaited addition of XRP base pairings (a.k.a. quote pairs) followed by the rumoured announcement from Bitmain that it was to sack 50% of their staff including the entire Copernicus (Bitcoin Cash Development) team.
The Bitmain exit strategy and the 51% attack on Bitcoin
It has long been talked about that Bitmain were preparing an exit strategy by launching a multi-billion dollar IPO on the Hong Kong stock exchange. Due to regulatory doubts their IPO has thankfully not been approved. But with last weeks announcement that Bitmain is to close their entire Israeli operation and with yesterdays news in Chinese media that their BCH developoment team are among those being fired, this news is very worrying.
There have also been many fears that Bitmain may lead a 51% attack on Bitcoin, Ethereum and Bitcoin cash. Due to the centralisation of crypto mining within a small handful of Chinese miners and with Bitmain having already passed the 51% hashing rate for Bitcoin mining the fears for Bitcoin (and the entire cryptocurrency ecosystem if protective steps are not taken) are growing. And with a large number of other crypto mining companies already going bankrupt, shutting down or exit scamming (shutting operations and leaving large unpaid electricity and tax bills unpaid) the fears only worsen.
Further reading: The Slow But Inevitable Death of Bitcoin
Regulatory clarity, Bakkt delays and ETF rejections
Many in the crypto mining community have (ironically) hedged their hopes for a market wide recovery on Wall Street, banks, stock exchanges and other institutional investors (the antithesis of what Bitcoin once stood for) coming in and saving Bitcoin. However with Bitcoin, Ethereum and BCH mining and ownership being centralised in China it appears no Bitcoin ETF will ever be approved. Government regulations are slowly coming to light and with POW (proof of work) mining being a massive environmental disaster it is likely that regulators will side with the far more environmentally sound cryptocurrency projects. And with that we have to wonder where the likes of Bakkt, Nasdaq etc will be heading once they end their “delays”.
Binance, XRP and TRX
Binance finally announced the addition of XRP trading pairs yesterday and it is strongly rumoured that Binance will be a key player in the xRapid ecosystem once they have their fiat gateways in place. It can also be argued the relationship they have with key members of the Ripple team and with the precise timing of their announcement – coinciding with Ethereum almost taking back second spot by market cap – is a signal that Binance have laid down their own marker for the future of the crypto landscape.
Binance are a street smart and pro-active exchange and their place at the head of the pack is well deserved and down to hard work, careful planning and unsurpassed strategy. This is a company that is not going to let a few bad actors destroy the entire crypto space in the short term and in adding XRP trading pairs they are putting in place a safety net for the short and long term health of the ecosystem. Whether Binance is 100% innocent remains to be seen though with accusations of wash trading ripe at the moment.
The Ripple team on the other hand have been working tirelessly with regulators around the globe, aiming to protect investors of all legitimate crypto projects as well as their own native currency XRP. And more and more crypto exchanges are seeing the speed, low cost, low carbon footprint and the scaleability of XRP as the ideal crypto to use as their base pairing and a couple of exchanges immediately followed in Binances footsteps in making their own announcements of XRP as base currency.
It is no coincidence also that TRX was chosen as one of the first XRP pairs on Binance. The Tron team follow the same business model as Ripple, working with the regulators as well as investing heavily in building out their platform, growing an impressive team and working hard to make a quality working product and growing high profile partnerships not to mention their charitable philosophy. (Update: we are not 100% sure about the ethics of Justin Sun and the Tron Foundation anymore and are currently delving much deeper into them and will release a new article or two in due course).
What does 2019 have in store for us then?
There are still a huge number of unknowns moving forward. And the short term may provide us with a number of surprises nobody has seen coming. But it is not out of the question to wonder when rather than if XRP will surpass BTC and when (not if) Tron will overtake Ethereum. These projects (XRP and TRX) already have a giant respective lead in terms of speed, cost, scaleability, development and marketing teams, active customers, use cases and of course working products and it can only be hoped that these two along with the forward thinking Binance can lead the other legitimate cryptocurrencies into a whole new era and finally leave behind the speculation era and the wasteful mining philosophy. The original vision of Satoshi Nakamoto died many years ago and it is time for cryptos to grow up and be respected.
Since this blog post was originally posted it has come to light that Bitmain have given up hope of every entering to the stock market via IPO. The former directors of Bitmain have also left (with a very lucrative golden handshake (sounds awfully like an exit scam)) and the Bitmain holdings have also been leaked showing that they have sold off most of their Bitcoin holdings, yet another clear signal the kings of Bitcoin see no future in holding BTC long term and further explains the continual market wide crypto crashes.
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