Week 12 - 2020 News Recap
Coronavirus: How Everyone Can Help
Gregory Bowman, director at Folding@Home, stated in one of the most recent AMAs on Reddit, that there are currently over 400,000 computers contributing to the research as a part of the project. Bowman added that two weeks before the number was reached, 30,000 users were contributing to the project ahead of Coronavirus pandemics. That means that the project’s seen an increase of 1200% in the period of the last four weeks when it comes to the number of contributors. Folding@Home is a company that deals with donated computational power, directing it to scientific and medical research. The company announced on February 27th the start of a project that has the sole purpose of harnessing computational power for researching COVID-19, hopefully helping pharmaceutical research on how to battle the Coronavirus.
Aside from organizing help in the form of harnessing computational power for COVID-19 researches, Folding@Home also donates to cancer, epigenetics and Alzheimer's disease. The cryptocurrency community also responded to the action made by Folding@Home, having one of the biggest miners of Ethereum (ETH), Coreweave, directing their computational power from 6,000 different processors to help the cause and battle COVID-19. Nvidia, Tezos, and Golem also joined the project, donating computational power to Coronavirus-related research. From March 12th, Tezos already has 20 teams working on donations.
Italian Bitcoin (BTC) Fundraiser for Coronavirus Medical Equipment Reaches the Goal
Italian Red Cross organization has reached the goal of collecting funds that would serve the purpose of buying medical equipment due to the Coronavirus outbreak. This was the first initiative that included cryptocurrency-based fundraising. In only three days, the Italian Red Cross managed to reach their goal and collect enough BTC for the very much needed medical supplies. After the first initiative went well, the Italian Red Cross announced another round for the fundraiser, planning to collect more Bitcoin to battle the major outbreak of COVID-19. Within the first fundraiser, the Italian charity organization collected over 10,000$ in three days, setting the next goal to reach 20,000$ in Bitcoin donations.
Out of the newly set goal, the Red Cross already collected 75% of the set goal from only 55 donations. With the funds collected with the second Bitcoin fundraiser, the Italian Red Cross is planning to purchase equipment for emergency operations. The overall cryptocurrency community is contributing in many ways to battling the COVID-19 outbreak and helping the most affected areas. Some companies like Folding@Home are organizing donations for Coronavirus research, while Gitcoin, the ETH-based crowdfunding platform pledged the minimum amount of 50,000$ for public health initiatives.
Central Bank Digital Currency: International Monetary Fund Shared Pros and Cons
The Deputy Managing Director of the International Monetary Fund addressed the pros and cons of issuing a digital currency for central banks, in a recent speech to the London School of Economics. The Deputy Managing Director at IMF, Tao Zhang, stressed out that Central Bank digital currency (CBDC) is very well associated with increased efficiency and reduced costs. The speech reached the internet on March 19th, while Zhang spoke in London on February 28th. The IMF’s Deputy Managing Director pointed out that in some countries the costs of managing paper money on a geographical level can be very high.
Moreover, the availability of traditional banking systems for transactions is reduced in rural areas and underdeveloped countries. Other positives that were stressed out by Zhang regarding the role and the use of Central Bank digital currency are monetary stability and improved strength of monetary policy. However, Zhang didn’t miss on emphasizing the negative side of issuing CBDC – for instance, the fact that digital currency doesn’t call for a bank account, users can steer away from banks. At the same time, issuing a digital currency would represent a costly venture for the Central Bank.
Are BTC Miners Responsible for the Crash of Bitcoin Less Than Two Months Ahead of the BTC Halving?
After the major dip that Bitcoin went through on the notorious “Black Thursday” on March 12th, the top crypto is slowly taking a rise and recovering from the mentioned dip. As analysts are looking into charts to determine whether BTC is heading towards low lows or is about to rise and head for the much-needed rise, another case is taken into question – are BTC miners responsible for the 50% of the dip on March 12th, less than two months ahead of the upcoming Bitcoin halving?
CoinMetrics published a report on the Bitcoin crash, 5 days after the initial price drop of BTC, suggesting that the crash might have been the result of short-term holders selling their Bitcoin rather than confirming a scenario where new BTC holders made the crash happen by selling off. There is a great possibility that the same investors and traders that were responsible for the biggest rise in 2020 for Bitcoin, were also responsible for the greatest dip in the same year, selling off a large amount of BTC for a low price.
The suspicion of who caused the crash then falls to the miners due to interesting statistics revealing that in the period between January and the crash of BTC in March, there were 122,400 BTC mined, which is 50% of the amount sold off during and ahead of the crash. With this fact, the theory of attributing 50% of the crash to miners selling off freshly minted BTC units becomes more logical. However, there is no concrete proof that miners were 50% responsible for the “Black Thursday” crash.
Is Bitcoin the Safe Haven in Times of Crisis?
Osho Jha, a prominent investor, tech company executive and data scientist, shared his thoughts on why he considers Bitcoin to be the new haven in times of crisis and beyond. Bitcoin is already known to be a great alternative for countries affected by inflation, helping the citizens of countries like Venezuela to reduce the level of inflation at least to a certain point and slow down the process of devaluation of the national currency by exchanging fiat for BTC.
As Jha claims, Bitcoin and gold might be some of the safest options for investors as markets are getting more volatile, surprising investors and traders with dips and rises, likewise. Although Bitcoin had a major dip on March 12th, alongside a rather unprofitable week, the volatility levels of BTC condition extreme dips, but also more intense rises. Jha considers BTC to be above gold when it comes to the idea of a haven. However, he points out that having gold in a portfolio of investments has a place in financial markets that Bitcoin and digital currencies have yet to assure.