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Time Is Money

Apr 20, 2024 • 6 min read

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Middle East Activity
Bitcoin Halving

Markets:

Yesterday’s U.S. stock market:

Yesterday’s commodity market:

Yesterday’s crypto market:

Middle East Activity:

Explosions were reported in Isfahan, an Iranian city known for its military installations, including a nuclear facility and drone factory, as well as in other parts of Iran. U.S. officials attributed these explosions to an Israeli strike, while an Iranian official claimed they were the result of Iran's air defenses engaging. Similar incidents were also noted in Iraq and Syria. Amid these tensions, Iran activated its air defense systems early Friday to intercept several unidentified drones, following its warnings of a strong response to any Israeli aggression on its soil.
On April 16, from 10:50 a.m. to 11:30 a.m. (Sanaa time), U.S. Central Command (CENTCOM) forces in Yemen engaged two unmanned aerial vehicles (UAVs) controlled by Iranian-backed Houthi forces, with no reported injuries or damage. These UAVs were deemed a threat to regional navigation security, prompting action to ensure the safety of international waters. That same day, CENTCOM also delivered humanitarian aid to Northern Gaza, dropping approximately 25,300 U.S. meal equivalents to support civilians amidst ongoing conflicts.
This operation involved two C-130 U.S. Air Force aircraft and specialized U.S. Army personnel. Further humanitarian efforts continued on April 18, with CENTCOM deploying four C-130 aircraft to drop about 50,600 U.S. meal equivalents into Northern Gaza, marking a total of 946 tons of aid delivered to the region. Despite some supplies landing in the sea, the mission was part of an ongoing effort to alleviate human suffering in conflict zones, demonstrating CENTCOM's commitment to humanitarian support.

Bitcoin Halving:

Yesterday, Bitcoin reached block 840,000, marking its fourth halving event. In simple terms, the halving reduces the reward that miners receive for adding new blocks to the Bitcoin blockchain by 50%. The Bitcoin halving is a significant event in the cryptocurrency world, occurring every four years—or more precisely, every 210,000 blocks mined. Before this halving, miners were rewarded with 6.25 bitcoins per block; now, they will receive 3.125 bitcoins per block. This decrease in supply effectively makes new bitcoins harder to generate.
For miners, this event can have a mixed impact. The reduction in block rewards means their potential earnings from newly minted bitcoins are cut in half, which could hurt profitability especially if the price of Bitcoin doesn't increase to compensate. For Bitcoin users, the halving leads to a reduced rate at which new bitcoins are released into market. Overall, the halving is an essential mechanism built into Bitcoin to create scarcity and control inflation, potentially increasing its value over time as the supply of new bitcoins entering the market slows down.
Bitcoin mining involves verifying transactions and adding them to the blockchain, a public ledger. Miners gather transactions, verify their validity, and bundle them into blocks. To add a block to the blockchain, miners solve a complex mathematical puzzle, a process called proof of work, which requires significant computational effort. The first miner to solve the puzzle can add the block and receive new bitcoins as a reward. This reward halves approximately every four years in an event known as "halving," which reduces the rate at which new bitcoins are created. This process secures the network by making it computationally expensive to alter past transactions, thereby ensuring the integrity and immutability of the blockchain.
The term "expensive" in the context of altering blockchain transactions refers to the computational cost and energy required to change any information on the blockchain, not to financial cost. While it's theoretically possible to alter transactions, doing so would require re-mining all subsequent blocks because each block contains a cryptographic hash of the previous block, linking them in a chain. This means an attacker would need to control at least 51% of the network's computing power to alter any part of the blockchain, a situation known as a 51% attack. This high requirement of resources makes it impractical and extremely costly, hence providing security against fraud and tampering.

Statistic:

The total U.S. government debt stands at $34.63 trillion. Of this total, foreign entities own a portion of it, while the rest is owned by various U.S. entities including the Federal Reserve, individual American investors, financial institutions, and federal accounts such as Social Security and Medicare trust funds.
Top Foreign Owners of US National Debt:
🇯🇵 Japan: $1,153.1 trillion
🇨🇳 China: $797.7 billion
🇬🇧 United Kingdom: $753.5 billion
🇱🇺 Luxembourg: $376.5 billion
🇨🇦 Canada: $339.8 billion
Summing these amounts gives a total of about $3.42 trillion held by these five countries alone. Concept Explained: Much of the U.S. debt is indeed "owed to ourselves." This refers to the large portions of the debt held by U.S. governmental accounts and entities. When these groups purchase U.S. Treasury securities, they are effectively lending money to the federal government, which counts as part of the national debt.
This internal borrowing is significant because it represents obligations that the government has promised to pay back, primarily to American citizens in the form of future Social Security and Medicare benefits. The concept of internal debt is crucial as it highlights that not all of the national debt exposes the U.S. to external risks. Much of it represents commitments within its own economy and to its own citizens, different from the debt owned by foreign nations, which does pose potential external financial pressures.

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