SBF Strikes Back | What Bitcoin Halving Holds

At his sentencing last month, Bankman-Fried said his “useful life is probably over.”

The idea is to prevent inflation of the kind that can occur when governments metaphorically print up rafts of new money, adding to the amount of currency in existence. That tends to have the effect of reducing its purchasing power by creating new supply. 

At bitcoin’s debut in 2009, miners got 50 tokens for adding a new block. Every 210,000 blocks the reward is cut in half, and it went to 25 in November 2012, 12.5 in July 2016 and 6.25 in May 2020. That brings us to the cusp of a reduction to 3.25 bitcoin, now worth about $216,450, for the next four years or so.

Some trends to watch:

Bitcoin price. The token was higher at the end of the year than it was on the eve of each of the three previous halvings, as new supply was throttled. One interesting aspect at this juncture is the appearance of exchange-traded funds that can buy actual bitcoin rather than derivatives based on it, potentially bringing in many new investors. Taken together, these elements suggest a rally, although some of the gains may already be reflected in the $66,600 price.  

Miner consolidation. The daily creation of new coins will fall to 450 from 900. Miners who can afford to might well invest in new, efficient computer hardware to win more of the diminished reward pool, driving marginal players out of the business. That runs counter to the crypto ethos of decentralization.

Government scrutiny. Fewer, bigger miners running power-hungry hardware is a likely trigger for increased interest on regulating the business.

Read more: How This Halving Will Impact Bitcoin

Forrest, chairman of Fortescue Metals and often known by the nickname Twiggy, accused the social-media giant of breaking Australia’s money laundering laws for failing to act against scam cryptocurrency ads using his name and likeness on Facebook. A spokesman for the public prosecutor’s office, which had to be involved in the case under Australian law, told Reuters there was insufficient evidence to continue the action.

In a civil action filed in the U.S. District Court for Northern California, Forrest alleges that since 2019, Meta’s automated advertising business produces the ads “using basic material supplied by criminal scammers.” The ads at issue used Forrest’s name and photo “to endorse cryptocurrency and other fraudulent investment products” on the Australian Facebook platform. His complaint adds that “despite repeated requests from Dr. Forrest, Meta will not stop producing them.” Meta seeks to have the U.S. case dismissed, citing immunity from liability for the actions of third parties under the Communications Decency Act and other considerations.