DD
MM
YYYY

CATEGORIES

PAGES

DD
MM
YYYY

spot_img

CATEGORIES

PAGES

Home Blog Page 3419

Bitcoin network experiences high fees, coinciding with near completion of the minting process for Rune #1, Fehu

By
Paul Ugbede Godwin
-
0

The Bitcoin network has recently witnessed a significant surge in transaction fees, coinciding with the near completion of the minting process for Rune #1, Fehu. This phenomenon has brought about a windfall for Bitcoin miners as the fees reached record highs, a situation influenced by the debut of the Runes protocol.

The Runes protocol, introduced by Casey Rodarmor, is a new token standard on the Bitcoin blockchain that allows the creation of more efficient fungible tokens. Its launch, which occurred alongside the much-anticipated Bitcoin halving event, has led to a flurry of activity on the network. The halving, a scheduled event that reduces the reward for mining new blocks by half, was expected to decrease miners’ revenue. However, the excitement around the Runes protocol has resulted in a spike in network congestion and, consequently, transaction fees.

On April 20, 2024, the day of the halving and the Runes launch, the average transaction fee on the Bitcoin network soared to $127.97, more than seven times the average fee just a day before. This increase in fees has not only benefited miners but also raised questions about the long-term economic incentives for mining, which are crucial for the security of the blockchain network.

The Runes protocol has been compared to the Ordinals protocol, which allows data to be inscribed on the smallest units of bitcoin, known as Satoshi. While Ordinals are non-fungible, Runes are designed to function more like meme coins, which have recently gained popularity in the crypto markets. The first project to mint under the Runes protocol was Rodarmor’s own UNCOMMON•GOODS project, and since then, hundreds of Runes projects have been minted, seeking buyers and adding to the network’s fee economy.

The high fees have led to mixed reactions within the Bitcoin community. Some view the development as a positive sign for the fee economy and the miners’ revenue, while others express concerns over the accessibility and practicality of conducting transactions on the network during such congested periods[3].

For users looking to avoid high transaction fees, strategies include conducting transactions during off-peak hours, managing UTXO sets efficiently, using fee estimation tools, employing SegWit wallets, and batching transactions to reduce costs.

The situation highlights the dynamic and ever-evolving nature of the Bitcoin network and the crypto space at large. As the network continues to adapt to new protocols and standards, users and miners alike must navigate the changing landscape to optimize their strategies and maintain the network’s robustness and security. The Runes protocol’s impact on the Bitcoin network’s fee structure is a testament to the innovative spirit that drives the cryptocurrency community forward.

Resilience of Memecoins in the Cryptocurrency Industry

By
Paul Ugbede Godwin
-
0

The cryptocurrency market is known for its volatility, with prices fluctuating wildly in short periods. Despite this, certain segments of the market, such as memecoins, have shown remarkable resilience. Memecoins, which started as internet jokes and memes, have evolved into a significant part of the crypto ecosystem. They often gain popularity through social media and community support, leading to sudden surges in their market value.

Memecoins, a subset of cryptocurrencies, are often inspired by popular internet memes and do not typically have a tangible project behind them. Despite this, they have become a speculative hotspot, with some coins witnessing exponential growth in value. This phenomenon has not gone unnoticed by hedge funds, which are now exploring these digital assets as a potential source of significant profits.

Recently, the market has experienced a pullback, causing many to speculate about the future of these digital assets. However, enthusiasts like Joe believe that memecoins are not just a passing trend but a fixture in the crypto landscape. The belief is that if the total market capitalization of cryptocurrencies reaches $10 trillion, memecoins will undoubtedly be a part of that growth.

The current market cap of memecoins stands at a substantial figure, with CoinGecko listing one such coin, Memecoin (MEME), at a market cap of approximately $421 million. This is a testament to their staying power and the community’s faith in their value. Moreover, price predictions for memecoins like MEME suggest potential growth, with some forecasts indicating a rise in value over the next few years.

The allure of memecoins lies in their ability to capture the zeitgeist of the internet age. They are more than just tokens; they represent a culture and a form of expression for the digital generation. This cultural significance, combined with the speculative nature of the market, fuels their persistence. For instance, the memecoin Dogwifhat saw its value skyrocket, contributing to a hedge fund’s impressive 137% return in the first quarter, outpacing the broader crypto market’s gains.

Critics argue that memecoins lack the fundamental value and utility provided by more established cryptocurrencies. However, supporters counter that the value of memecoins comes from the community and the shared belief in the asset, much like any other currency. The market activity around memecoins, with significant trading volumes and market caps, supports the notion that they are a force to be reckoned with.

While the future of memecoins, like all cryptocurrencies, is uncertain, their impact on the market is undeniable. They have introduced a new dynamic to the world of digital assets, one that combines finance with internet culture. Whether memecoins will sustain their presence and grow along with the market to reach a $10 trillion cap remains to be seen. However, the enthusiasm surrounding them suggests that they will continue to be a fascinating part of the crypto conversation for the foreseeable future.

The rise of memecoins highlights the ever-changing nature of investment strategies and the continuous search for innovative ways to achieve growth. It serves as a reminder that in the world of finance, adaptability and an open mind can uncover unique opportunities, even among the most unconventional assets.

Zimbabwe’s ZIG Currency Faced With Low Acceptance as Credibility Doubt Lingers

By
Ojukwu Emmanuel
-
0

The newly launched Zimbabwe Gold-backed ZIG currency has been reported to be faced with low acceptance rate by Zimbabweans, as credibility doubt lingers.

The currency was introduced by the Reserve Bank of Zimbabwe in early April 2024, to replace the old note that has been battered by depreciation against major currencies, and has faced outright rejection by the people.

Since the rollout of ZIG, the currency appears to be heading down the same path of mistrust and credibility concerns as some government departments as well as businesses have refused to accept it.

Several business owners said they would rather forgo a sale than accept the ZIG, preferring the U.S. as a safer currency. This spurred the Zimbabwe government to freeze the bank accounts of several businesses, accusing them of rejecting the ZIG currency, thereby sabotaging the growth of the economy.

Meanwhile, reports reveal that the government has allowed some businesses, such as gas stations, to refuse to accept the ZiG in favor of US dollars. Some departments, like the office that issues and renews passports, accept only US dollars.

Commenting on ZIG’s mistrust among citizens, Zimbabwe’s president Emmerson Mnangagwa has urged the citizens to embrace the newly launched currency, describing it as a matter of “national identity and dignity”. He however commended Zimbabweans who have adopted and are protecting the use of the country’s currency.

As the ZiG enters circulation, its fate remains uncertain, with Zimbabweans torn between the allure of a new currency and the safety of the tried and trusted U.S. dollar. Across Zimbabwe, the US dollar is still widely used, from paying rent and school fees to buying groceries. Many take their local currency earnings to the black market to exchange for dollars.

This forced the government to take a hard-line approach to arrest several black market currency who were accused of trying to undermine the new currency. While the issue of mistrust lingers, Zimbabwe authorities say they have faith in the ZiG because it’s backed by the country’s gold reserves.

The ZiG is the sixth currency Zimbabwe has used since the 2009 collapse of the Zimbabwe dollar amid hyperinflation of 5 billion percent, one of the world’s worst currency crashes to date. The government had previously floated various ideas to replace the Zimbabwe dollar, including introducing gold coins to stem inflation and even trying out a digital currency.

The gold-backed ZIG is the southern African country’s latest attempt to halt a long-running currency crisis underlining its persistent economic troubles.

Nigerian Fintech Firms Tighten Scrutiny on Crypto Traders Following CBN Directive

By
Ojukwu Emmanuel
-
0

Nigerian fintech firms have reportedly begun to tighten scrutiny on crypto traders following a directive from the Central Bank of Nigeria (CBN).

The CBN alleged that a lot of crypto traders in the country were leveraging on several fintech platforms to disrupt the forex market.

This prompted four fintech platforms Kuda, Moniepoint, Opay, and Palmpay to temporarily halt the opening of new accounts for customers.

In line with this Moniepoint and Paga have further notified their customers that their accounts risk being blocked if they facilitate crypto transactions with it.

In the notification sent to customers on May 2, 2024, Moniepoint wrote,

“In line with CBN regulation, we will close the account of anyone engaging or other virtual assets transactions and share their details with relevant authorities.”

Also, Paga sent a similar message to their customers which reads,

“Pursuant to the CBN circular with reference FPR/DIR/GEN/CIR/06/10, we wish to remind you that dealing in or facilitating transactions in cryptocurrency and other virtual currencies is not permitted.”

One of the fintechs disclosed that the CBN’s directive is linked to the EFCC’s ongoing investigation into bank accounts involved in unauthorized FX dealings. Meanwhile, an analysis of about 1,146 accounts blocked by the EFCC revealed that only 10% are operated by fintechs, with the majority being commercial bank accounts.

The CBN directive on restriction of crypto transactions shows a reversal of the apex bank’s previous announcement to lift its crypto ban imposed in 2021.

Recall that in December 2023, the CBN rolled out a circular mandating financial institutions to open accounts, provide designated settlement accounts and settlement services, and act as channels for forex inflows and trade for firms transacting in crypto assets.

Part of the circular reads,

“However, current trends globally have shown that there is a need to regulate the activities of virtual assets service providers (VASPs) which include cryptocurrencies and crypto assets.”

The directive by the CBN aimed to establish minimum standards and requirements for establishing banking relationships and opening accounts for virtual asset service providers (VASPs) in Nigeria.

However, with the recent reversal of the ban on crypto platforms and transactions, the Nigerian government has expressed concerns about its effects on the devaluation of the Naira, amidst other challenges.

Notably, the Blockchain Industry Coordinating Committee of Nigeria (BICCON) is convening a roundtable on May 6 between the new director general of the Nigerian Securities and Exchange Commission (SEC) and local and international crypto exchanges to discuss and seek consensus on the status of crypto in the country.

The BICCON chair, Lucky Uwakwe, explained  that the meeting is open to all digital assets exchange operators, wallet providers, and other virtual asset service providers (VASPs), and relevant industry associations and bodies to address relevant issues and chart a progressive course for crypto regulations in Nigeria.

“Ndubuisi, why are you against the floating of the Naira?” – A Question

By
Ndubuisi Ekekwe
-
1

Question: “Ndubuisi, why are you against the floating of the Naira?”

My Response: Let me simply quote from my piece in June 2023 when the float was announced: “In his O’ Level textbook on economics, AO Lawal explained demand and supply and the movement of price on the demand-supply curve. If I apply what he explained in that book, floating naira with no capacity to earn USD dollars will kill Naira, because there is an asymmetric imbalance on demand and supply of USD in the Willing Buyer, Willing Seller nexus. In other words, two people may each have $100 to sell while twenty people want to buy each $100. If you do not close that number to near parity, the equilibrium point will keep shifting and I do not see how Naira will stabilize because demand outweighs supply here.”

So, you can see, it is structural, and you cannot financialize yourself out of the core tenets of the market. The “laws” of demand and supply cannot be disintermediated. So, provided Nigeria does not earn enough USD even as demand of USD stays strong, in multiples, Naira will struggle to attain a decent pricing rate equilibrium against the USD. This is foundational economics.

So, if Naira is unable to attain that equilibrium, the smart thing to do is NOT to expose the Naira to the full weight of market forces, since it cannot compete effectively. Nigeria should FLOAT companies (yes, start companies for productive things) and should change the policy of floating its currency!

What is happening here is giving someone a sword in a battle of military tanks. Yes, it is all about Demand and Supply, and how those shift pricing equilibrium. It works in Oriendu Market Ovim and certainly in CBN headquarters in Abuja.

Comment Summary via Facebook:

Your response against floating the Naira focuses on the demand-supply imbalance for USD in Nigeria. High demand for USD, driven by import dependency and other factors, contrasts with limited supply due to reliance on oil exports. This imbalance can lead to a sharp decline in the Naira’s value if floated, causing market instability and increased inflation.
Given these risks, you suggest alternatives like managed exchange rates and policies to boost USD earnings through economic diversification and foreign investment. The goal is to stabilize the currency without exposing it to the full impact of market forces. Floating the Naira without addressing these structural issues can harm the economy, so a cautious approach that focuses on underlying economic changes is preferable.
1...3,4183,4193,420...8,702Page 3,419 of 8,702

© Tekedia. All rights reserved.

Term & Privacy

© Tekedia. All rights reserved.

Term & Privacy