The Central Bank of Iran has reportedly banned the trading of cryptocurrencies that have been mined outside of the country.
Iran International, a prominent news outlet announced, ”The ban is an attempt thwart the capital flight happening through cryptocurrency, which is causing a depreciating effect on the national currency, the Rial.”
Iran previously banned the use of cryptocurrency as payment, while financial institutions are allowed to use crypto derived from registered miners in order to pay for imports.
About 35% of all US dollars in existence were printed in the last 10 months. Let that sink in. The U.S. and consequently the world economy is in economic crisis due to the pandemic and needs a currency replacement.
However, the replacement for the U.S. dollar as the reserve currency of the world will not be a cryptocurrency as cyberpunks are hoping. It’s something much closer to home that the government and traditional financial institutions developed for situations exactly like the one they are facing right now. It’s called SDR (Special Drawing Rights). So what is SDR?
SDR is an artificial global currency developed by the International Monetary Fund (IMF). In 1971, the IMF was concerned that the dollar would lose its position as the global reserve currency after President Nixon announced that the dollar would no longer be backed by gold. In response, the organization created the SDR as a possible successor to the dollar.
However, the dollar held its position, and the SDR never caught on. As of 2021, only $200 billion worth of SDR has been created. There have been moments when the global financial institutions have thought of bringing the SDR back. For example, in the aftermath of the 2008 recession, the United Nations and China urged the IMF to use SDR to solve the world’s financial problems. It didn’t happen. Then in 2013, the SDR was lightly used to help Greece during its debt crisis. Since then the SDR has been a sleeping giant. Until Now.
Triggered by Covid-19, governments around the globe are asking the IMF for financial aid, even though the Fund only has $1 trillion in assets in its possession. To resolve this problem, Janet Yellen, the U.S. Treasury Secretary for the Biden administration, wants to bring back SDR. In a letter to the IMF, Yellen commented that, “A new SDR allocation will boost liquidity in economically challenged countries, which have been hit hardest during this global pandemic.”
This new SDR will be a layer 2 currency, built upon a collection of 5 fiat currencies — U.S. dollars, Euros, RMB, Yen and Pounds. More SDR equals more fiat currency but in an indirect way, giving recipient institutions the leeway to print new money out of thin air. Issuing SDR will be a brilliant move for those in power, but could spell trouble for the average man, as printing, more money will devalue and debase the existing money in supply.
Dogecoin’s block rewards were previously considered a small bonus for merge mining Litecoin (LTC), but with the memecoin’s recent price rally eclipsing LTC, this state of affairs seems to be changing.
Currently, DOGE mining revenue per one gigahash (GH/s) of computing power in one day is $25, which has increased by 10,000% since April 2021, on par with the recent surge in the memecoin’s price. In the same period, the mining reward of one GH/s for LTC has only increased from $5 to nearly $8.
Both blockchains use the proof of work consensus mechanism. On 7 May, 2021 Dogecoin (DOGE) was the fourth largest cryptocurrency in the world, with a market cap of $78 billion, whereas LTC was at the 10th position with a $22 billion market capitalization.
The newly launched Chia cryptocurrency (XCH) is the first crypto that can be mined on the cloud using Amazon Web Services (AWS).
According to the Chinese AWS website, setting up a “farm” takes as little as five minutes. Chia’s whitepaper which was only published in February 2021 states, “The project’s intention is to make mining easier for individuals, allowing them to commit unused hard drive space to support the decentralized network.”
The cryptocurrency uses the novel “proof of space-time” consensus mechanism, wherein the network participants demonstrate that they have been storing data over a period of time. The project is the brainchild of BitTorrent founder Bram Cohen. The cryptocurrency was officially launched on Monday, 4 May, 2021, and reportedly caused a shortage of hard drives in China as cryptoenthusiasts rushed to mine the cryptocurrency.