EncryptoTel weekly digest 18.06.20
Venture market after the pandemic, miners leave China and the US technological crisis
Survey: most investors expect startups to lose value
The NFX Investment Fund published the results of a survey of investors and startups about the consequences of a pandemic for the venture capital market. Most investors expect a drop in project costs by 20–60%, while 41.8% of the respondents believe that the fall will be about 20–40%, and the rest guessed for 40–60%. Thus, the average expectation of a fall is 40.1%.
Startups who took part in the survey said that they coped well with the crisis (46% have a drop in revenue, while revenue of 24% even increased). But almost half of the startups had to raise capital earlier than they had previously planned. 74% of startups believe that after the crisis they will work mostly or completely remotely.
Report: China loses dominance in Bitcoin mining
According to a new TokenInsight report, China is losing its leadership position in Bitcoin mining. The report cites data from the Center for Alternative Finance at the University of Cambridge, according to which the share of Chinese miners in total energy consumption decreased from 75.63% in September 2019 to 65.08% by the end of April 2020. The share of energy consumption of bitcoin miners located in the USA the same period increased from 4.06% to 7.24%. A sharp increase in miners is also observed in Kazakhstan: if last September, Kazakhstan miners made up 1.42% of the bitcoin network hashrate, then by May 7 their share increased to 6.17%.
According to the chief analyst of TokenInsight Johnson Xu, the share of miners who turn off their units due to the rewards reduction among Chinese miners is much higher than the in the rest of the world. Xiu suggests that part of the miners will leave China and relocate their enterprises in other countries. This is cause by the ambiguous position of the Chinese authorities in relation to the mining industry.
IBM, Amazon, and Microsoft refuse to give U.S. law enforcement access to face recognition solutions
Large technology companies refused to sell solutions based on face recognition technology to the American police. Microsoft president Brad Smith announced that his company will not sell face recognition solutions to the U.S. police until the government enacts federal legislation regulating the use of technology. His statement followed Amazon’s announcement, which said the company will introduce a one-year moratorium on police use of Rekognition, facial recognition software.
“We advocated for governments to introduce stricter rules governing the ethical use of face recognition technology, and in recent days Congress seems ready to accept this challenge. We hope that this one-year moratorium will give Congress enough time to introduce the relevant rules, and we are ready to help if necessary, ”Amazon said.
The same statement was made by IBM, which explained that the technology has the potential for abuse or misuse.
Study: miners cut sales of mined bitcoins
Miners refuse to sell bitcoins at the current exchange rate after their Bitcoin earnings halved as a result of the network halving in May. According to the analysis firm Glassnode, the number of bitcoins originating from addresses belonging to Bitcoin miners has reached an annual minimum. The Miner Outflow Multiple (MOM) index, which is calculated based on the outflow number of Bitcoins from several mining pools and then compared to the average statistics for the last 365 days, and it fell to 0.33. The highest MOM index was recorded on March 10, two days before the collapse of Bitcoin. Then the index jumped to 1.8, which means a sharp outflow of Bitcoins from addresses associated with mining pools.
According to Tuur Demister, the founder of Adamant Capital investment company, the miners’ refusal to sell mined bitcoins suggests that cryptocurrency producers are not ready to get rid of coins at current prices and are waiting for the exchange rate to increase.
Study: network traffic is stabilizing, but remains above the pre-pandemic level
In a recent report, Nokia Deepfield states that the network traffic has begun to stabilize in many countries. Peak traffic volumes are normalized, but remain 25–30% higher compared to the level before the COVID-19 pandemic. At the end of March, on working days, the excess of the indicator by 40–50% is the pre-coronavirus level, which was observed in February 2020.
According to Nokia Deepfield experts, this is associated with prolonged use of the network during the day, both on weekdays and on weekends.
Also, the number of DDOS attacks is on the rise. Currently, the volume of DDoS traffic is 40–50% higher than the February level. In recent weeks, Nokia Deepfield experts have seen an increase in DDoS attacks on US corporate and IoT hosts acting as reflectors and amplifiers.