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

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  • 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.

Bitcoin 20000Therefore, 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.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Cryptocurrency

Paxful to Build School in Nigeria Under Its 100 School Initiative to Support Emerging Markets

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Paxful, a Peer-to-Peer Bitcoin Marketplace to Commence School Construction in Nigeria

Paxful, a global peer-to-peer bitcoin marketplace, has announced that they will be building a fourth school in its Built with Bitcoin’s 100-school initiative which aims to bring quality education centers to emerging countries.

Located in Nigeria, the school will come fully equipped with a state-of-the-art solar-powered and water well system.

The new school will be built in the Ankara Nandu community of Sanga Local in Nigeria and will serve an estimated 100-120 children between the ages of three to six years old. Home to roughly 4,000 people, the city currently has only one school facility which is being used for both primary and secondary school purposes.

“We chose this particular community because of the limited resources and school infrastructure,” says Ray Youssef, CEO and co-founder of Paxful. “They are in dire need of quality learning spaces and this school is an honest representation of the impact Bitcoin can have on societies as a whole, and more specifically, how it can enhance education.”

The new school will double as an adult learning space in the evenings assisting in providing hundreds of people with a supplemental education. In response to safety requirements associated with COVID-19, The company will also provide Personal Protective Equipment for all teachers and students including face-masks and hand sanitizers.

Earlier in September, the company revealed (https://bit.ly/35Vrj88) its business expansion into Nigeria, their leading market in Africa in terms of volume and number of users. To strengthen operations and cement a physical presence in the country, Paxful appointed Nena Nwachukwu as Regional Manager for Nigeria.

Movement to empower education in Africa

Supporting over 400 students at present, Paxful’s #BuiltwithBitcoin initiative began in 2017 with partner Zam Zam Water, a humanitarian organisation devoted to eradicating poverty by providing clean, sustainable water and access to quality education to villages across the globe. The first two schools were built in Rwanda and the third school was built in Mukalala Village in Machakos County in Kenya earlier this year.

Through the 100-school plan, the company expects to bring education to nearly 15,000 young people throughout Africa while providing jobs to nearly 300 teachers. All schools, including the newest location in Nigeria, come with water filtration systems, not just to supply the locals, but also to give them an opportunity to sell the water to their local community at a very affordable price.

All the schools are also equipped with solar panels to cut spends on electricity and bypass regular electricity cuts. Paxful covers all fees associated with running a school including teacher and support staff salaries, bills for electricity and water as well as school supplies and uniforms for the students.

Supporting ongoing development and tracking success

All the completed schools under the #BuiltwithBitcoin initiative are progressing and performing very well as the company remains committed in providing the necessary tools and opportunity for the students to succeed. Continuous upgrades are made, and maintenance of the schools are monitored.

The passing rates within these schools have been higher as the confidence of the students are boosted with each child receiving their own textbooks in addition to basic school stationery supplies. Usually students share handbooks and textbooks and leave them at the school for use by other students.

As the communities always have more students than what the schools’ capacity can cater for, the initiative adopted a two-tier class approach, by having all the schools provide classes in four-hour blocks in the mornings and in the afternoons. This helps to support the highest number of students possible and not allow the quality of education to be affected. Desk space has also been limited to two to three students per bench to facilitate a healthy teaching environment.

Understanding the important role, they play in the success of the schools and learning journeys of the students, teachers and educators at these schools are also paid 15% above the national average of their salary, respective to their country.

“Each one of our schools follows the curriculum of their respective ministry of education. All textbooks, guidelines, and calendars fulfill all necessary requirements for testing and progress. Local officials have been supportive of the initiative’s efforts as we simply want the students to be able to succeed and graduate onto higher education by ensuring their educational foundation is strong and capable,” adds Youssef.

Aside from building schools, #Builtwithbitcoin has also supported a number of other philanthropic causes in various countries including Kenya and South Africa.

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SEC Insists It Has What it Takes to Regulate Crypto Space

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SEC Insists It Can Regulate Digital Assets

The Securities and Exchange Commission (SEC) once again said it has what it takes to regulate crypto assets.

The commission had announced last week that henceforth it will start regulating crypto transactions to protect investors and foster its growth across the country.

However, following the criticism that trailed the announcement, the commission has now come out to say it has the capacity and technology necessary to regulate digital space.

Commenting on the development, Mr. Emomotimi Agama, the Head, Registration, Exchanges, Market Infrastructure and Innovation, SEC, said the decision to regulate digit assets was to ensure everyone is safe and comfortable with what is going on in the investment climate.

He further explained that after the SEC launched the fintech roadmap last year, the commission went ahead to set up a blockchain virtual financial assets committee.

These committees are both market wide and principally done to engage the market, to be able to have discussions with the market and get their buy-in into what we are doing.

“What we found out today is that a lot of persons, youths are all involved in this space and it is important that even as far as that is the case, the SEC lives up to the expectations that the Nigerian public has of it which is investor protection and making sure that those people that are getting into the business, the investors are protected.

“Clearly, that is our aim and the market is part of this and indeed the feedback has been wonderful. People are happy with what we are doing, being able to provide some clarity as to where we stand in terms of digital assets regulation,” he said.

Agama added that before the commission announced the initiatives, it has conducted broad-based research.

He said, “I need to tell you that the Cambridge Centre for Alternative Finance has been partnering with the SEC and up to this point, we have been engaging with them and several of our staff members have been part of their programmes.”

“The World Bank and other institutions are also working with us on Fintech to see that the Nigerian landscape is not left barren but guided with basic principles, we will not leave any stone unturned, but ensure that everyone within the SEC that has the responsibility to guiding investors and the populace in making sure we have an investment environment that people will be proud of is provided.

“Capacity building is a continuous exercise, we will continue to upgrade ourselves, we will continue to learn because knowledge is for life,” Agama stated.

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Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue

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Bitcoin Rises to $11,050 Per Coin on Friday

Bitcoin rose above $11,000 per coin on Saturday after weeks of trading in a range, between $10,867 and $10,960 despite liquidity drying up across exchanges.

The cryptocurrency most dominant coin gained 1.67 percent to settle at $11,050 per coin as at 8.04 pm Nigerian time on Saturday.

“Markets are looking weak on drying-up liquidity on exchanges while BTC hardly managed to reach back above the $11,000 level and couldn’t sustain it,” said Jean Baptiste Pavageau, partner at trading firm ExoAlpha.

Indeed, major USD/BTC exchange volumes are looking feeble, with Friday tallying a $211 million total so far while daily averages the past month have been $364 million.

Rupert Douglas, head of institutional sales at crypto brokerage Koine, said he is concerned that stock markets are about to start correction that could potentially hurt crypto as investors look to unload risky assets.

“I think equities are headed lower and if that happens digital assets will get sucked down, too,” Douglas told CoinDesk. “The tech shares are too frothy,” he added

Another factor crypto investors are tracking: Bitcoin dominance, a measure of its market capitalization as a percentage of total cryptocurrencies. September has seen bitcoin hit 2020 dominance lows, hovering around 60% Friday.

So far, bitcoin dominance has largely been sliding downwards since the beginning of 2020,” said Andrew Tu, an executive at crypto quant trading firm Efficient Frontier. “It will be interesting to see if we see a short-term reversion of the bitcoin dominance back upwards.

Pavageau of ExoAlpha explained that Decentralized Finance (DeFi) is captivating the crypto market, and that is causing decline in bitcoin.

The market is focused on DeFi. It seems that locking value is also draining liquidity from exchanges as traders are noticing higher slippage when executing in the market,” Pavageau said. “A question to ask might be: Is the total value locked a threat to market liquidity for active traders?

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