Top 5 crypto news of the week

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Bitcoin mining difficulty is expected to see the biggest jump since January

Bitcoin (BTC) mining problems are expected to increase this week at the highest rate since January of this year after the hash rate on the network increased over the past 11 days.

According to data from BTC.com, the estimate for the next Difficulty adjustment – which is expected on Wednesday – is +6.63%, from the current 28.35T to 30.23T. This would be the strongest single adjustment to the upside since January 21 this year, where the difficulty increased by 9.32%.

Mining difficulty is automatically adjusted approximately every two weeks to ensure that there are 10 minutes between each mined block.

The drastic adjustment comes after the hash rate on the Bitcoin network – or the amount of processing power used to secure the network – also increased significantly over the past 11 days. From a low of 198.4 ehash/s on August 8, Monday’s hash rate was 231.5 ehash/s (based on a 7-day moving average), BitInfoCharts data shows.

New call for Bitcoin ban sparks excitement

In Switzerland, the demand for a ban on Bitcoin is currently causing a stir. It comes from the former crisis manager at Swissgrid, the operator of the Swiss electricity grid. He is not only responsible for operations, but also for maintenance and expansion.

In an interview with CH Media, Paul Niggli called for a ban on Bitcoin, after all the computers require an incredible amount of power and therefore power. According to his calculations, Bitcoin uses twice as much energy as all of Switzerland. A single transaction requires as much electricity as a Swiss household does in a month and a half.

Consensus mechanism and mining takes a lot of energy

This argument is not new, after all there have been various studies for years attributing the power consumption of an entire country to Bitcoin. The so-called consensus mechanism, which ensures the security of the network, is responsible for this. Mining also requires a lot of electricity. This digging for new bitcoins is now said to account for half a percent of global electricity consumption.

If the price of Bitcoin rises again, experts also expect an increase in electricity consumption. Ultimately, this increases the attractiveness of exploration. But industry representatives find Paul Niggli’s arguments useless, because a large part of the exploration, after all, only takes place where energy prices are correspondingly low, thus making the mining business model profitable.

So you can deduct crypto losses for tax purposes

The sometimes enormous price drops have resulted in large losses for several investors. However, this only applies if you have decided to hold, otherwise the book values ​​will be reduced. But anyone who has sold their digital assets and thus realized the losses can also deduct them from their taxes in Germany. However, there are a few things to consider.

Anyone who buys cryptocurrencies now knows that they are subject to sharp price fluctuations. This volatility makes Bitcoin, XRP, Ethereum and Co. riskier assets than conventional products. If you don’t want to wait for a recovery and sell, you realize real losses. But these can reduce the tax burden.

Here the period of 1 year applies

If the period between purchase and sale is not more than one year, profit from this trade must be taxed in Germany. But the losses can also be controlled once they have been realized. So there must have been a sale or exchange to another cryptocurrency at a lower price.

If this is the case, losses can be offset against possible profits from cryptocurrency trading (if this happened within a period of one year). The losses thus reduce the tax burden on the profit. Pure exchange rate fluctuations cannot therefore be included in the tax return.

Paraguay’s president thwarts bitcoin and cryptomining legislation with ‘total veto’

Paraguayan President Mario Abdo Benítez has spectacularly overturned a promising bill that would have legalized and regulated Bitcoin (BTC) and crypto mining in the Latin American country.

As reported, the ambitious bill began as a private bill in the House of Commons and was drafted in collaboration with local miners seeking to harness excess electrical energy produced by hydroelectric plants. He was eventually taken up by the Senate, where he was represented by Senator Fernando Silva Facetti.

The Senate approved the bill, as did the House of Commons. However, it seems that the bill fell at the last hurdle, as Benítez is unhappy about how cryptomining’s power consumption could affect long-term sustainability.

According to Portalo de Bitcoin, Benítez explained that cryptomining “requires a high level of electricity consumption, which can jeopardize the development and expansion of an inclusive and sustainable national industry.” The decree, which the president says was issued on the advice of the country’s central bank, also points to the fact that mining requires “intensive use of capital and low use of labor” and “as such does not add value” to the economy it creates.

Ethereum’s Vitalik Buterin publishes a collection of his writings

Summer is drawing to a close and autumn, a boom for booksellers worldwide, is fast approaching. Ethereum (ETH) co-founder Vitalik Buterin is entering the race for this year’s best-selling crypto with the upcoming release of Proof of Stake, a collection of his writings over the past 10 years.

The title will be released on September 27 as both a physical and digital book, tweeted buterine. His entire share of the proceeds from the book will go to support open source goods through Gitcoin Grants, the author said.

Interested readers can obtain a signed digital copy of the Proof of Stake and a corresponding NFT here.

“Donate any amount of ETH to receive an NFT and a signed book from Vitalik. You will receive a non-transferable NFT and when the book is available you will have access to your signed digital copy,” it reads the website.

For pledges made on the book’s official website, 90% of the funds will go to the Gitcoin Grants Matching Pool and 10% to the title’s publisher, Seven Stories Pressto support public goods in independent publishing.

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