Bitcoin Halving

Why in news?

• Crypto traders and Bitcoin miners are preparing for the ‘Bitcoin Halving’—predicted to happen in April.

What is Bitcoin?

• Bitcoin was introduced in 2009 by an anonymous creator known as Satoshi Nakamoto, is a decentralized, digital currency exchanged through a peer-to-peer network without centralized authorities.
• It’s the world’s first decentralized cryptocurrency, using blockchain technology to secure and verify transactions.
• The Bitcoin network is public and open-source, meaning anyone can participate.
• Bitcoin combines its network, cryptocurrency, and blockchain to record transactions transparently, prevent double spending, and ensure consensus via a process called “proof-of-work”.

What is Bitcoin Halving?

• The Bitcoin Halving refers to the 50% reduction in the reward paid to Bitcoin miners who successfully process other people’s cryptocurrency transactions so that they can be added to the public digital ledger known as the blockchain.
• To grow Bitcoin’s blockchain and keep the ecosystem running, Bitcoin miners rely on advanced computer equipment to solve a complex mathematical puzzle through a process known as ‘Proof of work.’
• This intense activity is the reason Bitcoin transactions result in huge carbon footprints and require vast amounts of electricity.
• A halving takes place after 2,10,000 blocks are mined, and has happened so far in 2012, 2016, and 2020 – every four years.
• Reward: The Bitcoin miners solve the puzzle first and claim their prize, which is currently set at 6.25 Bitcoin (BTC).
• While the reward amount is set, the true value of this prize fluctuates based on BTC prices in the market, and when the owner chooses to sell.

Impact of Bitcoin Halving:

• Increase in Price: Bitcoin mining increases the supply of BTC in circulation while the Bitcoin Halving reduces the rate at which these coins are released, making the asset more scarce.
• Scarcity is seen as pushing up prices, as is the case with gold.
• Demand for Cheap Electricity: Both corporate and independent Bitcoin miners are spread across the world, trying to leverage cheap electricity prices in countries like Kazakhstan and Iran to mine as much Bitcoin as they can.

Conclusion

Every halving in Bitcoin’s history has been different due to factors such as increasing regulation by lawmakers worldwide, more awareness about cryptocurrency investments, greater adoption of Bitcoin, and diverse geopolitical events or economic shocks.

While the next Bitcoin halving will be a fascinating episode to witness, it is best for crypto watchers to rely on their own research and decide what the halving means to them personally.

Role of Cooperatives in Farmers’ Welfare

Why in news?

• Recently, the Prime Minister of India inaugurated and laid the foundation stone of multiple key initiatives for the Cooperative Sector at Bharat Mandapam, New Delhi.

About the Cooperatives

• They play a crucial role in the agricultural sector, providing a platform for farmers to pool their resources and prevent exploitation by money lenders.
• They are business enterprises owned and controlled by the members that they serve.
• They provide a self-regulated institutional framework for the social and economic development of society.
• They have the potential to convert an ordinary system related to daily life into a huge industry system, and are a proven way of changing the face of the rural and agricultural economy.
• They are instrumental in shaping a resilient economy and propelling the development of rural areas.
• Decisions made in cooperatives are balanced by the pursuit of profit and the needs and aspirations of members and their communities. They range from those providing credit to those producing, procuring, or marketing products like fertilisers, milk, sugar, and fish.
• The Union Ministry of Cooperation was formed in 2021, its mandate was looked after by the Ministry of Agriculture before.

97th Constitutional Amendment Act 2011

• It established the right to form cooperative societies as a fundamental right (Article 19).
• It included a new Directive Principle of State Policy on the Promotion of Cooperative Societies (Article 43-B).
• It added a new Part IX-B to the Constitution titled “The Co-operative Societies” (Articles 243-ZH to 243-ZT).

Role in Farmers’ Welfare

• Cooperatives lend strength to farmers to minimise risks in agriculture and allied sectors and act as a shield against exploitation.
• They have the potential to revive agriculture and make it sustainable.
• The government has urged cooperatives to play a significant role in the implementation of initiatives taken for the welfare of the people.
• Cooperatives can play a vital role in educating farmers to reduce the cost of cultivation through balanced use of fertiliser, improve water-use efficiency, establish more warehouses to avoid distress sale of produce, link with National E-market (e-NAM), emphasise value addition and encourage farmers to take up other allied activities like poultry, beekeeping, fisheries.

Cooperatives and Government Initiatives

• Financial Support: The government is making sure that every farmer in the country receives around ₹50,000 every year in some way or the other.
• It means, under the government at the Centre, there is a guarantee that every farmer gets ₹50,000 in various forms.
• Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs): It is a Central Sector Scheme with the aim at enabling farmers to enhance their bargaining power, leverage economies of scale, reduction in cost of production and enhancing farmers’ incomes through aggregation of their agricultural produce, thus playing a major role towards sustainable incomes.
• The government has spent ₹10 lakh crore towards fertiliser subsidy in the last nine years to ensure that farmers get crop nutrients at reasonable prices despite rise in global rates.

Conclusion

Cooperatives have a significant role in the welfare of farmers. They not only provide financial support but also educate farmers about modern farming techniques, help in the marketing of produce, and assist in the procurement of necessary inputs.

By doing so, they contribute to the overall development of the agricultural sector and the welfare of farmers