Cryptocurrency

Bitcoin Halving: Nigeria, Others Get Ready For Uncertain Bitcoin Future

Published

4 years ago

May 11, 2020

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.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Cryptocurrency

Binance Boss Behind Bars: CZ Sentenced to Four Months for Crypto Exchange Failures

Published

1 day ago

May 1, 2024

Samed Olukoya

Binance founder Changpeng Zhao, widely known as CZ, has been sentenced to four months in prison for his role in security failures that enabled cybercriminals and terrorist groups to exploit the Binance platform.

The verdict, delivered by US District Judge Richard Jones in Seattle, is the first time a chief executive officer of a major cryptocurrency exchange has been incarcerated for breaching banking secrecy laws.

The courtroom, packed with onlookers and CZ’s legal team, witnessed the billionaire entrepreneur, clad in a dark suit and light blue tie, receive his sentence stoically.

Despite fervent pleas from prosecutors for a three-year sentence to set a precedent in the crypto industry, Judge Jones opted for a shorter term.

In his statement, Judge Jones emphasized that no individual, regardless of wealth or status, is exempt from accountability under the law.

The case against CZ stemmed from a protracted investigation by the US Department of Justice, casting a long shadow over Binance, one of the world’s largest cryptocurrency exchanges, and its high-profile leader.

Prosecutors argued that CZ’s failure to implement adequate money laundering safeguards facilitated illicit transactions, enabling cybercriminals and even terrorist groups like Hamas to operate freely on the platform.

The sentencing also comes on the heels of similar crackdowns within the cryptocurrency space, including the recent conviction of Sam Bankman-Fried, a former crypto titan who received a 25-year prison sentence for defrauding FTX customers of billions of dollars.

CZ’s defense team, however, contended that he should be spared imprisonment due to his non-US citizenship, which they argued put him at heightened risk in a US detention facility.

Nevertheless, Judge Jones emphasized the gravity of CZ’s offenses, terming them “unprecedented” in scale and impact.

In a post-sentencing statement on social media, CZ expressed acceptance of his fate, vowing to “do his time” and focus on education and philanthropy upon his release.

Despite his impending incarceration, CZ affirmed his commitment to the cryptocurrency sector as a passive investor.

The implications of CZ’s sentencing extend beyond his personal fate, raising questions about regulatory oversight and accountability within the burgeoning crypto industry.

Federal prosecutor Kevin Mosley underscored the deliberate nature of CZ’s violations, arguing that they were not mere oversights but intentional breaches of US law.

As CZ prepares to serve his prison term at Seattle’s Federal Detention Center, SeaTac, the crypto community grapples with the repercussions of his downfall.

The episode serves as a stark reminder that, despite the decentralized ethos of cryptocurrencies, regulatory scrutiny and legal accountability remain paramount in an increasingly interconnected financial landscape.

Cryptocurrency

U.S. Prosecutors Recommend 36-Month Prison Term for Binance Founder Changpeng Zhao

Published

1 week ago

April 24, 2024

Samed Olukoya

In a significant development in the legal saga surrounding Binance, the world’s largest cryptocurrency exchange, U.S. prosecutors have recommended a 36-month prison term for its founder, Changpeng Zhao.

The recommendation follows Zhao’s guilty plea to violating laws against money laundering, a pivotal moment in the ongoing legal battle between Binance and U.S. authorities.

Zhao, commonly known as CZ, stepped down as Binance’s chief last November, simultaneously admitting to the violations alongside the exchange.

The firm agreed to a hefty penalty of $4.32 billion as part of the settlement with prosecutors.

According to court filings submitted to the U.S. district court for the western district of Washington, prosecutors argued that the magnitude of Zhao’s willful violation of U.S. law warranted an above-guidelines sentence.

While federal sentencing guidelines set a maximum term of 18 months in prison for Zhao, prosecutors emphasized the severity of the violations and their consequences in advocating for the extended sentence.

The legal scrutiny surrounding Binance stems from allegations that the exchange failed to report over 100,000 suspicious transactions involving designated terrorist groups such as Hamas, al Qaeda, and ISIS.

Furthermore, prosecutors alleged that Binance’s platform facilitated the sale of child sexual abuse materials and served as a recipient of a significant portion of ransomware proceeds.

As part of the settlement, Zhao agreed to pay a $50 million fine and disengage from any involvement with Binance, the platform he founded in 2017.

The penalties imposed on Binance included a staggering $1.81 billion criminal fine and restitution of $2.51 billion.

The recommendation for a 36-month prison term underscores the seriousness with which U.S. authorities are addressing violations within the cryptocurrency industry.

The outcome of Zhao’s sentencing, scheduled for April 30 in Seattle, will likely have far-reaching implications for both Binance and the broader cryptocurrency ecosystem.

As regulatory scrutiny intensifies, stakeholders across the industry are closely monitoring developments to gauge their impact on the future of cryptocurrency exchanges and their founders.

Cryptocurrency

SEC Philippines Urges Removal of Binance App from Google Play Store and Apple App Store

Published

1 week ago

April 23, 2024

Samed Olukoya

The Securities and Exchange Commission (SEC) of the Philippines has intensified its regulatory oversight over cryptocurrency trading platforms, particularly targeting Binance, one of the world’s largest digital asset exchanges.

In a bold move, the SEC Philippines has formally requested the removal of the Binance app from both Google Play Store and Apple App Store.

The action, disclosed through letters addressed to Google and Apple on April 19, 2024, underscores the SEC’s concerns regarding unauthorized investment solicitation activities facilitated by the Binance platform.

SEC Chairperson Emilio B. Aquino emphasized that allowing access to the Binance app and website poses a significant threat to the security of funds belonging to Filipino investors.

This move represents a significant escalation in the Philippines’ regulatory efforts to safeguard investors and maintain financial stability within the cryptocurrency market.

The SEC’s decision to target Binance reflects growing concerns globally regarding the lack of oversight and potential risks associated with digital asset trading platforms.

Binance, known for its extensive range of cryptocurrency trading services, has faced increasing scrutiny from regulators worldwide.

While the company has made efforts to comply with regulatory requirements in various jurisdictions, concerns persist regarding the adequacy of investor protection measures and compliance protocols.

The SEC Philippines’ call for the removal of the Binance app from major app stores highlights the regulator’s determination to enforce strict oversight and uphold investor confidence in the country’s financial markets.

The move is likely to have implications not only for Binance but also for other cryptocurrency exchanges operating in the Philippines and beyond.

Investors and industry stakeholders are closely monitoring developments, awaiting further updates on the SEC’s regulatory actions and their potential impact on the cryptocurrency ecosystem in the Philippines.

As regulatory scrutiny intensifies, market participants are urged to exercise caution and stay informed about evolving regulatory requirements and compliance obligations in the digital asset space.