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Now that Bitcoin is being halved, it’s done. What happened, and what is next?

Kyle Torpey is a Bitcoin writer who has been doing so since 2013. His work has appeared in Forbes, Fortune Magazine, Wired UK and Bitcoin Magazine. He also has more than 50,000 Twitter followers.

The fourth and most anticipated iteration in the Bitcoin halving took place a bit after 8:09 pm Eastern time on Friday. Bitcoin was flat immediately after the halving. It remained at around $63,000. After the bitcoin is halved, the rate at which new bitcoins are issued as well as the rewards given to successful bitcoin miners will be cut in half. The number of bitcoins is limited to 21 million, and the fewer tokens that enter circulation can impact the bitcoin price. The halving of bitcoin is closely watched by investors and miners.

What happened when this halving was made?

After today’s half-off, the creation rate of new Bitcoin is roughly 3.125 per 10 minutes. These halving events occur every 210,000 valid blocks or about every four to five years. This was built into the network design at its launch in January 2009.

After the halving, the block reward or subsidy associated to validating each block of transactions in the Bitcoin network has been cut in half. Block subsidy refers to newly-created Bitcoin that is added into the block in order to reward the associated miner. In effect, this means that the block subsidy to successful miners now amounts to 3.125 Bitcoin.

The miners will also receive any fees related to transactions within the block.

ViaBTC mined the halving block, which was the 840,000th on the Bitcoin network. It is also interesting to note that, according to mempool.space, the miner who was successful received a reward of a little more than 40 bitcoins, or an equivalent amount to over $2.6 million, in block subsidies and fees.

This fee is significantly higher than the fees of a little bit over 7 bitcoins (worth a little less than $450,000) that were collected for validating the blocks just before the block halving. Uncertainty surrounds the cause of this spike, but some people may have paid higher fees in order to be among the 3,050 transactions that were included in the halving blocks.

Next Steps?

In the past halvings were followed by new highs for bitcoin in the months that followed. This instance, however, has been different. The bitcoin price reached a brand new all-time during the months preceding the halving.

The spot bitcoin exchange-traded funds (ETF) were responsible for much of the recent rally. This may be an indication that the demand generated by this market has a greater influence on bitcoin prices than the halving event.

According to Thomas Perfumo who is the Head of Kraken’s Strategy Department, there’s an extra symbolism to this halving. It illustrates Bitcoin’s apolitical policy and its unwavering currency at a point when many around the globe are asking questions about the currencies they use.

Perfumo told Bloomberg that people perceive Bitcoin as an alternate form of money at a time when they are considering their traditional currencies, inflation, interest rates, and the economic climate in which they reside.

Analysts at JPMorgan and Deutsche Bank, however, said that this halving’s impact was already baked into current bitcoin prices. There is not likely to be any significant upward movement of the price following the halving.

These reports suggest that the short-term impact of the halving could be limited to the Bitcoin mining industry, where consolidation may occur due to a decline in hash rate as a result of decreased profitability.

There are indicators, however, that the miners may still be able to increase their revenue even if a price surge is not triggered by the halving. The increased revenue will come from increased fees on transactions, a result of recent developments like Ordinals or Layer-two Networks.

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