This is just a quick refresh on the operations of the Bitcoin (BTC) blockchain.
BTC commenced in 2009 with an original 10,500,000 Bitcoins mined. The maximum total BTCs to be issued is 21,000,000. Miners are rewarded for each Block they successfully mine, currently they are receiving 6.25 BTC as a reward.
After every 210,000 Blocks mined the reward per block will be halved, known as the halving day. The last halving day was 11th May 2020 when the reward dropped from 12.5 BTC to 6.25 BTC. The next expected halving day will probably be in the first quarter of 2024 (below is my guess).
Currently the Miners are receiving nearly 1000 BTC per day as a reward for validating the Blocks.
With the current BTC price of USD $48,000, the miners are earning around US$48m per day.
Over the last 12 months, Miners have earned US$12.3 billion, and if maintained, it will rise to over $17 billion annualized.
BTC has processed 103 million transactions over the past 12 months. Global cards (Visa, Mastercard, Amex, Diners etc.) processed 468 billion transactions. Source: Statista.
With the annual miners’ reward of $12.3 billion, the per transaction cost is US$118.
In Australia, “to date, the Government has taken a largely non-interventionist approach to the regulation of cryptocurrency, allowing the landscape to evolve at a faster rate than its regulatory response. Australian law does not currently equate digital currency with fiat currency and does not treat cryptocurrency as “money”.
“Australia’s primary corporate, markets, consumer credit and financial services regulator, the Australian Securities and Investments Commission (ASIC), has reaffirmed the view that legislative obligations and regulatory requirements are technology-neutral and apply irrespective of the mode of technology that is being used to provide a regulated service. While there has been no legislation created to deal with cryptocurrencies as a discrete area of law, this does not hinder them from being captured within existing regimes under Australian law”. Source: Global Legal Insights: Blockchain & Cryptocurrency Regulation.
In short, Australian Regulators have not determined that Cryptocurrencies are financial products (with all the onerous compliance obligations that implies) but may be captured within existing legislation depending on how the product is created and marketed.
Michael Cornips is the Managing Director and Founder of Emerald Financial.
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