THE BITCOIN HALVING HAS TAKEN PLACE- NOW WHAT?
See a few key pointers you should be looking out for, now that the 630,000th block has been mined
Finally, the long-awaited third bitcoin halving occurred yesterday, May 11, 2020, although it had been earlier estimated to happen on May 12.
This means that the reward per block for miners has been cut in half again, this time down to 6.25 BTC. Mining rewards are cut in half every 4 years (210,000 blocks), with the previous one dropping from 50 in 2009 to 25 in 2012, 12.5 in 2016 and now 6.25. This supply slash is a mechanism meant to check inflation as supposed to what fiat currencies offer.
Now that the halving is over, a few things to keep an eye on in the coming weeks would be the BTC hash rate, the network difficulty, and of course, the price. A lot of volatility is expected at this period as whales will be swinging the price.
You’d be able to keep watch on these statistics on Coin Dance, a data and analysis web portal.
The inflation rate and issuance of bitcoin can be monitored here.
It is noteworthy that a lot of bitcoin (BTC) miners will pack up because mining will become unprofitable for them due to reduced rewards.
Alejandro De La Torre, VP at mining pool Poolin says:
We expect that the first 1008 blocks after the halving will be mined slowly as huge numbers of unprofitable miners drop off the network. We estimate around 30% of the entire Bitcoin network will be squeezed considering that the first 1008 blocks will have the pre-halving difficulty, but half the reward.
According to him, Those companies operating inefficient “old generation” mining rigs, such as Bitmain’s S9 miner, on higher electricity costs, will be most affected.
One more important thing to look out for would be transaction fees. Over the past few days before having, we’ve seen the cost per tx rise to as high as $3.19. It is speculated that a decline in revenue for miners due to reduced mining rewards might lead to higher transaction fees on the network.
The truth remains that no one is sure what would happen in the next few months. Everything you read on the media remains speculation.
Keeping an eye on the factors I hinted above would be the only clue to how the next few weeks and months turn out in bitcoin land.
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