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The small Pacific Island nation passed the Sovereign Currency Act to create the ‘sovereign’, or SOV on Monday, following days of debate. The cryptocurrency will have equal status with the US dollar and, unlike many cryptocurrencies, users will have to reveal their identity in order to use SOV.
“This is a historic moment for our people, finally issuing and using our own currency, alongside the USD (US dollar),” President Hilda Heine said in a statement. “It is another step of manifesting our national liberty.”
The Marshall Islands uses the dollar as its currency under a Compact of Free Association. It’s an agreement under which the US gives the country about $70 million each year, and has a military base on one of the islands, Kwajalein Atoll. In 2023, US aid will fall by half to $30 million, “causing high risk for the country’s budget stability,” the Marshall Islands said.
The Pacific Island nation will issue 24 million SOVs in an Initial Currency Offer. Half will go to its government, and the other half to Israeli company Neema, which will sell some of the currency under a partnership to launch the cryptocurrency. Some lawmakers were concerned about the amount of the currency going to the company, while others argued the cash would help with the country’s urgent needs, the Star reports.
The islands will distribute 2.4 million SOVs to its 67,000 residents. Six million SOVs will be sold to international investors.
“Allocating SOV units directly to the citizens will circulate the currency and distribute wealth efficiently to our people,” Heine explained. “In addition, The RMI [Republic of the Marshall Islands] will invest the revenues to support its climate change efforts, green energy, healthcare for those still affected by the US nuclear tests, and education.”
The country’s Nuclear Legacy and Healthcare Fund helps those affected by nuclear weapons testing the US conducted on the islands between 1946 and 1958. One of those devices was 1,000 times stronger than the bomb dropped on Hiroshima, Japan at the close of the Second World War. A recent Columbia University study found radiation levels are double what is considered safe on Bikini Atoll.
“We are excited to be the world’s first nation to leapfrog into the era of digital currencies. Ten percent of our proceeds from the ICO will be directed towards a Green Climate Fund, to help us fight the effects of global warming, coming from the burn of fossil fuel by the large industrial nations, and hurting the small Island Nations the most,” Minister in Assistance to the President David Paul said.
Last month, Venezuela was the first country to launch its own cryptocurrency, the Petro. No other country has made cryptocurrency a legal tender, although a number of countries accept it as a means of payment. Israeli tax authorities recently announced that cryptocurrencies are taxable assets, and sellers will have to pay capital gains tax of 25 percent.
The number of cryptocurrencies in the world has risen above 2,000 to date, with new ones appearing almost every week. However, bitcoin is still the leader when it comes to price and popularity.
In the midst of the recent bitcoin fever, many have been tempted to take their savings from under the mattress and join the ranks of crypto-investors. Other crypto-enthusiasts have acquired the necessary equipment to start mining bitcoin from home.
The idea of just plugging your computer or a specially designed mining farm into the internet and creating money out of thin air sounds extremely attractive for many people across the world. But what expenses can arise out of mining process? How much does it cost to mine bitcoin, and where on Earth can we find the cheapest place to start mining?
Researchers from lighting and furniture firm, Elite Fixtures, have analyzed differences in the price of electricity across the world and declared Venezuela the cheapest place for mining. To create one bitcoin token, you’ll need just about $530. The figure is less than half of what you’ll have to pay in the second-cheapest country on the list, Trinidad and Tobago, where it costs $1,190. In Uzbekistan, which is in the third place, a miner will shell out a significantly higher cost of nearly $1,790 to mine a single bitcoin.
South Korea, one of the world’s biggest digital currency markets, has also been called the most expensive state for mining. It will cost you $26,170 to produce one bitcoin there, which is more than twice the present-day value of the world’s number-one digital currency.
Almost all of the top-20 states with the most expensive electricity were in Western Europe or were island nations in the Pacific. Niue, a small island nation in the South Pacific Ocean, was the second-most unprofitable country for mining, where it costs $17,566 to generate a single bitcoin. Bahrain was ranked third. In this Arabian Gulf country, a miner will shell out $16,773 to make one bitcoin.
The report analyzed prices for electricity from 115 different countries. The researchers also used data provided by three popular cryptocurrency-mining rigs, including the AntMiner S7, the AntMiner S9, and the Avalon 6.
The crypto market will continue to see an “acceleration” of growth, founder and CEO of the exchange Jesse Powell told CNBC.
“You’ve got a lot more kids graduating from crypto programs at universities now. I think we’re just going to see it continue exponentially from here,” Powell said.
Powell’s Kraken is currently ranked 8th by trading volume on cryptocurrency website CoinMarketCap, trading at around $300 million over a 24-hour period.
The market value of all the world’s virtual currencies currently stands at around $432 billion, according to CoinMarketCap. It managed to reach an all-time high of nearly $800 billion at the beginning of the year before a massive sell-off that dragged digital currencies down. Bitcoin, the world’s first cryptocurrency, lost about two-thirds of its value at the time.
According to some conventional traders, digital investing lacks intrinsic value with its current course looking like a bubble. Financial watchdogs across the globe have recently issued warnings to the public about potential risks connected to crypto trading. Moreover, regulators in India, South Korea and China have recently upped their rhetoric against digital currencies.