Week 20 - 2020 News Recap
Bitcoin Halving Explained: Everything You Need to Know
The latesta Bitcoin halving took place on May 11th, 2020, when the reward for Bitcoin miners has been once again halved. Bitcoin has a predetermined number for the total supply of BTC units, unlike fiat government-issued money that can be printed more and without a predetermined limit. To regulate the supply of BTC and to prevent inflation, BTC creator designed a mechanism that defines the halving of BTC as a way of regulating the total supply of Bitcoin. The network relies on miners and the mining capacity where a new block is generated approximately every ten minutes, which is the block time on the Bitcoin network. When a mathematical equation is solved, miners who had participated in the process with their computational power are rewarded in BTC. Halving cuts these rewards in half approximately every four years to regulate the supply and prevent the devaluation of BTC.
The issuance of BTC is thus controlled while Bitcoin represents a deflationary asset. That means that whenever the value of Bitcoin goes up, the value of items that could be paid of purchased with BTC goes down as the fiat value describing the price of Bitcoin stays the same for products and goods. Before the latest halving in 2020, the reward for miners working on generating new blocks and validating transactions was 12.5 BTC, while the BTC miners will now be rewarded with 6.25 BTC for each generated block. Approximately, 144 new blocks are generated every day, one block every 10 minutes. The decrease in incentives for mining BTC might affect some miners when it comes to profit, which may reduce the number of miners operating on the network as well. However, the process of halving is beneficial for the Bitcoin ecosystem and infrastructure, regulating the supply of BTC.
Reddit Preparing a Launch of Two Ethereum-based Tokens
According to The Block, Reddit is preparing the launch of two tokens that should be based on the Ethereum network. The popular online forum is already beta testing the two tokens that should serve the purpose of assets for incentivization. Reddit is compiling a new initiative called “Community Points” while the tokens will be used to reward the members of two Reddit communities. The first token is named $MOON and the second is $BRICKS – tokens will be issued to the members of two Reddit channels, r/Cryptocurrency, and r/FortniteBR. A spokesperson said on the matter of beta testing of the two Ethereum-based tokens, that Reddit is constantly testing ways to engage users and communities. Reddit will work exclusively with two communities at first to gather feedback on the token-based rewarding system.
Reddit team working on the latest token project has opened a special webpage where users from the two communities can open Vault, which is a platform for managing these two Ethereum-based tokens. Users can use Vault to monitor views for their subreddits and transform these views in points, i.e. tokens that they can later use. Since these tokens are based on the Ethereum network, users will initially have to create Ethereum wallets to be able to store their tokens.
BTC Price Model Creator PlanB Predicts Bitcoin Going Dark in Case of $288k Target
Bitcoin Stock-to-Flow creator, PlanB, warned the crypto community that in case Bitcoin would reach the predicted price of 288,000$ by 2024, the first and the top cryptocurrency would “go dark” as the governments would fight over the asset. As PlanB warned the public, there might be problems following his latest implications on the potential bull run for Bitcoin where the currency could reach its next all-time high. In case the model is successful, despite the satisfaction following the BTC/USD increasing by an order of magnitude in accordance with stock- to-flow, the scenario might go dark.
In case the model fails and breaks, PlanB said that he wouldn’t retreat, but stay present in the media and socially active for the cause of creating a new and improved model. As PlanB further says, those who have tried to discredit the model have failed in doing so and didn’t provide demonstrably accurate alternative models, predicting 288,000$ for Bitcoin.
Maker DAO Community Shifts from Single-Collateral to Multi-Collateral DAI System
The Maker DAO community officially shut down the Single-collateral DAI system (Sai), consequently shifting to Multi-collateral DAI system (MCD). The multi-collateral system was activated in November 2019 as an upgrade to the Dai protocol. While the Single-collateral system is backed by single collateral – Ethereum- based, Multi-collateral system has more than a few alternative assets backing the system. Collaterals for the MCD system currently include WBTC, ETH, USDC, and BAT. With the system being upgraded to MCD, users were introduced to more alternative assets for collaterals. Following, the community was also introduced with a new program, Dai Savings Rate where users are being rewarded with interest rates on the assets they are holding.
Interest is being paid out in Dai. The community has expected a shift from Sai to an upgraded system for some time now, but never with a sense of urgency. However, the latest market turnouts in March 2020 emphasized liquidity issues noted in the Single-collateral system. Maker Foundation created a poll on March 30th to collect votes on the definite shutdown of Sai. All Sai holders are able to exchange their Sai tokens for ETH manually through the migration portal following the shift to MCD.
More Than Half Ethereum Users More Likely to Make Small Transactions
The latest research showed that over half of all Ethereum users spend less than 20$ per single transaction, whereas 58% of all Ethereum transactions were worth less than 20%. On the other hand, 20% of all transactions made in Bitcoin are carrying over 900$. As far as stablecoins, 40% of all transactions made in stablecoins ranged from 100$ to 1000$. The data compiled by Alex Svanevik, a data scientist, also showed that 80% of transactions made by Ethereum users are worth less than 90$ per one transaction. Svanevik shared the output for Bitcoin, which showed that BTC users are more likely to spend more money and use more money in cryptocurrency of their choice – BTC – while Ethereum users are likely to make smaller transactions.
Ethereum accommodates microtransactions since the network makes a popular choice for decentralized applications. Moreover, Svanevik emphasizes that the network is also a popular choice for gambling apps, exchanges, and mining pools, which further explains microtransactions made in ETH. On the other hand, BTC makes a more popular choice for bigger transactions, while it appears that investors and crypto traders are more likely to invest in BTC than other cryptos given its hegemony in the market of digital assets when it comes to9 market cap.