- Bitcoin Halving: Nigeria, Others Get Ready For Uncertain Bitcoin Future
Nigerians and other global investors in the cryptocurrency market are getting ready for Bitcoin Halving on May 12, 2020.
Cryptocurrency’s most dominant coin, Bitcoin, would experience a historical transformation from supply end for the third time this month. The process known as Bitcoin Halving would impact the number of Bitcoin supplied into the block every 10 minutes.
Bitcoin Halving is a process where the number of Bitcoin earned by miners, known as a block reward, is halved.
The process that began in 2009 started with 50 coins mined every 10 minutes. This was halved twice to current 12.5 bitcoins mined every 10 minutes. According to a document released by Satoshi Nakamoto, who may be an individual or a group that created the digital coin, the process will end with total coins of 21 million around the year 2140.
Why is Bitcoin Halving Important?
Unlike the Central Banks, Bitcoin is not manually regulated rather its algorithm has been engineered to gradually reduce the number of Bitcoins that can be created over time.
Therefore, while the supply of Bitcoin will continue to reduce, its demand will remain constant. A process that if eventually worked could see the digital currency hitting $50,000 a coin or even $1 million as more money would be chasing fewer coins.
This is different from central banks’ approach where money in circulation can be increased or reduced depending on the economic situation.
“Unlike most national currencies we’re familiar with like dollars or euros, bitcoin was designed with a fixed supply and predictable inflation schedule. There will only ever be 21 million bitcoins. This predetermined number makes them scarce, and it’s this scarcity alongside their utility that largely influences their market value,” Blockchain.com, a crypto wallet company, stated in a post.
Advantage of Bitcoin Halving
Bitcoin was trading at $2.01 a coin in 2012 before block reward was first halved to 25 Bitcoins from 50 Bitcoins, the price per coin rose to $664 a coin by 2016 due to the scarcity created by the halving as miners are the only one that can earn the coin every 10 minutes for creating additional blocks needed to strengthen the security of the blockchain.
In 2016, when the block reward was halved again to 12.5 Bitcoins, the price of the cryptocurrency rose to $20,000 in 2017 before plunging to as low as $2,800 a coin 2019 and $3,800 in early March 2020.
Therefore, some Bitcoin experts and investors are predicting that additional reduction in the supply of Bitcoin would bolster the price of the digital currency going forward while others have said the fundamentals have changed that Bitcoin Halving has been priced into the current level as the process is now pretty known by investors.
Still, at Investors King we believed a reduction in supply would positively impact the price of the dominant cryptocurrency but not immediately given the current global health crisis. Therefore, halving may benefit long-term investors more than short term traders as we doubt the market would receive enough funds in the near-term given present surge in global risk and uncertainty.
Implications of Bitcoin Halving
Halvings happened every four years or after every 210,000 blocks. These blocks helped strengthen the cryptocurrency blockchain, improve its security and bolster the confidence of investors holding the unregulated digital currency as an investment vehicle.
However, the continuous reduction in block rewards may result in fewer investments in mining given the amount involved in its set up. Also, considering the rate at which new blocks are created or expected to be created to further strengthen the Bitcoin blockchain, a decline may render it vulnerable to attacks and gradually expose the unproven or untested blockchain to hackers.
“The more computing power miners direct towards Bitcoin, the harder it is to attack because an attacker would need to have a significant portion of this processing power, known as the hashrate, to execute such an attack, stated by Coindesk.
“The more money they can earn by way of block rewards, the more mining power goes to Bitcoin, and thus the more protected the network is.”
On May 12, 2020, the global cryptocurrency investors and traders expect block reward to be halved again to 6.25 Bitcoin.
Pizza Hut Joins Burger King, Church’s Chicken to Accept Crypto Payments in Venezeuela
Pizza Hut has joined other global fast-food chains like Burger King and Church’s Chicken already accepting crypto payments in Venezuela.
This was confirmed by a crypto services firm, CryptoBuyer, on November 27 after pizza Hut stores in the South American nation partnered with Mega Soft to drive adoption in Venezuela by encouraging crypto payments in its over 20,000 shops and businesses in the country.
“Pizza Hut nowadays cannot be detached from these technological advances and all those incorporating new approaches for daily necessities,” said Richard ElKhouri, General Director for Venezuelan operations of the pizza chain, in an interview with local news outlet ElAxioma. “It is important that we accommodate young people, modern adults, and people technologically knowledgeable.”
According to Elkhouri, customers can buy pizza with Bitcoin (BTC), Litecoin (LTC), Dash (DASH), Binance Coin (BNB), Binance USD (BUSD), Ether (ETH), Tether (USDT), Dai (DAI), and its native token XPT.
This will further help deepen cryptocurrency adoption in the country and across the South American region.
Bitcoin Rebounds; Gained 7 Percent to $18,116 Per Coin Amid Renewed Demand
Bitcoin recovered most of its lost ground in the last 24 hours after dropping about $3,000 from $19,400 it exchanged a week ago to $16,800 per coin.
The world’s most dominant cryptocurrency gained 7.01 percent to close at $18,116.31 per coin on Monday morning at 8:46 am Nigerian time.
Investors jumped on the digital currency after Guggenheim Funds Trust filed an amendment with the U.S. Securities and Exchange Commission to allow its Macro Opportunities Fund to invest as much as 10 percent or $500 million of its $5 billion net asset in Bitcoin through Grayscale Bitcoin Trust (GBTC).
The news bolstered Bitcoin attractiveness as cryptocurrency investors interpreted as a new capital inflow that could aid the coin above the $20,000 per coin obstacle or resistance.
According to the amendment filed: “The Guggenheim Macro Opportunities Fund may seek investment exposure to bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust (“GBTC”), a privately offered investment vehicle that invests in bitcoin. To the extent the Fund invests in GBTC, it will do so through the Subsidiary.”
Cryptocurrency: Facebook Owned Libra to Launch Stablecoin in January 2021
Facebook Inc led Libra Association is planning to launch Libra stablecoin pegged to only the United States Dollar as early as January 2021, according to three anonymous people quoted by the Financial Times.
The stablecoin was initially proposed to be pegged to a basket of multiple currencies before the group faced several setbacks after the US parliament pressure Facebook on data breach and other issues that allegedly allowed Russia to meddle in the 2016 US presidential election.
The social media giant has now cut down on its ambition to focus on US dollar-pegged stablecoin in an effort to reduce regulatory bottleneck.
PayPal Inc., one of the first members of Libra Association that pulled out after regulators increased scrutiny on Facebook operations, has since started a cryptocurrency exchange business.
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