Tag: Bitcoin halving

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Crypto Daily Topic

Bitcoin’s Third Halving: Here’s what to expect

Bitcoin’s third halving will take place today around 6.50 pm GMT. At the time of writing, Bitcoin is trading at $8783.94, with 18, 374, 362 bitcoins in circulation. The halving will take place at block height 630,000. At the time of writing, we’re at block height 629, 951. The halving will see mining block rewards reduced from the current 12.5BTC to 6.25 BTC. 

Bitcoin’s third halving will take place today around 6.50 pm GMT. At the time of writing, Bitcoin is trading at $8783.94, with 18, 374, 362 bitcoins in circulation. The halving will take place at block height 630,000. At the time of writing, we’re at block height 629, 951. The halving will see mining block rewards reduced from the current 12.5BTC to 6.25 BTC. 

Bitcoin’s third halving will take place today around 6.50 pm GMT. At the time of writing, Bitcoin is trading at $8783.94, with 18, 374, 362 bitcoins in circulation. The halving will take place at block height 630,000. At the time of writing, we’re at block height 629, 951. The halving will see mining block rewards reduced from the current 12.5BTC to 6.25 BTC. 

What is Bitcoin Mining? 

Before we look at the concept of halving and what it’s all about, we need to first understand what Bitcoin mining is, since each depends on the other. 

Bitcoin mining is the process through which people utilize their computing power to process transactions on the Bitcoin network. These people are called miners. 

Anyone can mine Bitcoin. However, the mining process requires a ton of power – thanks to the cryptographic nature of Bitcoin, which requires massive computational resources to verify and confirm transactions. It’s also the reason why Bitcoin mining requires specialized mining equipment known as application-specific integrated circuits, which require significant capital to set up. As a result, Bitcoin mining is done mostly in places with low-cost electricity, with a significant majority of miners stationed in rural China.

Proof-of-Work

Bitcoin uses a ‘proof-of-work’ protocol to verify and confirm transactions. Proof-of-work requires miners to prove they have invested effort in the processing of transactions. This effort includes the time and computational resources to perform the ‘guesswork” of a string of numbers until one finds the right combination (hash) that will unlock the next block. (A block is a file containing transactions and the metadata of those transactions.) Once a block is discovered, the transactions therein are added to the blockchain. 

Miners also protect the Bitcoin network by making it hard to attack. An attack on the network would constitute gaining control of more than 51% of the network hash power. However, the more miners on the network, the harder it is for a bad actor to gain control of the network. 

What is Bitcoin Halving? 

The Bitcoin protocol is programmed to reward miners with bitcoins for every block discovered and for securing the Bitcoin network. Miners are rewarded with bitcoins and transaction fees. 

After every 210, 000 blocks, these rewards are cut in half, which is known as halving or as Bitcoiners have christened it for effect: “halvening.” As a result, the number of the bitcoins that are released into circulation are also halved. This is Bitcoin’s creator Satoshi Nakamoto’s way of preventing inflation for Bitcoin. 

This process is set to take place until around 2140, which will mark the reaching of Bitcoin’s maximum supply. By the time we get there, mining rewards will have significantly dwindled. 

What then will keep them on? Satoshi already covered this. As mining rewards diminish, the network is programmed so that transaction fees will increase.  This will ensure that miners still have the incentive to continue running and protecting the network. 

Why is Halving Significant?

Bitcoin’s halving is significant because it keeps Bitcoin’s supply under deflationary control. This is one of the key differences between Bitcoin and traditional currencies  – which have an infinite supply and thus prone to inflation. For instance, what the US dollar was worth ten years ago is not what it’s worth now. 

There will only ever be 32 Bitcoin halvings, after which no more bitcoins will be released. This will mark the reaching of the maximum supply of Bitcoin. 

In 2009, the reward for Bitcoin mining was 50 bitcoins. After the first halving, which happened in 2012, the mining rewards fell to 25, then to 12.5 in 2016, and today, it will fall to 6.25. 

This model helps drive up demand for Bitcoin. To illustrate this, let’s imagine the amount of gold existing on earth was halved every few years. If the amount of gold was halved after every few years, then it’s conceivably certain that its demand would increase in response. 

Bitcoin’s halving is supposed to set off this chain reaction: 

Reward halving →  Circulation is halved → Supply decreases → Demand increases → Price increases → Transaction fees increases → Miner’s incentive remains, as the value of Bitcoin increases. 

Past Halving Effects on Bitcoin

Bitcoin’s past halvings were, naturally, characterized by a media buzz that increased awareness for Bitcoin. After each event, Bitcoin saw a significant increase in demand in the following year. Whether this surge was occasioned by the halving is still a point of debate. 

In the first halving, which took place in November 2012, Bitcoin was trading at $11. By the end of  2013, it was trading at nearly $1150. The second halving was in July of 2016, at which the currency traded at $650. By the end of the following year, Bitcoin’s value had skyrocketed to nearly $20,000. 

Will the third halving have any effect on Bitcoin’s price? The Bitcoin community is divided on that.

How Different is this Halving? 

Past Bitcoin halvings occurred in a relatively ‘normal’ environment. Today’s Bitcoin halving will happen in a relatively different set of circumstances.

First of all, we now have Bitcoin derivatives, such as stock options and futures. More people are now aware of the existence of cryptocurrencies. The wild spikes of 2017 lent Bitcoin so much clout that made it a household name. 

We also have another entirely unprecedented situation in the midst of the halving: the Coronavirus pandemic, which is shaking the world’s economy to its foundations and threatening a recession only rivaled by The Great Recession of 2008.

As we move forward, it remains to be seen whether the pandemic will muffle a price surge, or whether Bitcoin will defy the gloomy economic forecast. The currency has so far exhibited signs of bowing under pressure, but Bitcoin enthusiasts and investors are betting on a turnaround after the halving. 

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Crypto Daily Topic

Bitcoin Cash Successfully Undergoes its First Halving

Bitcoin Cash, one of Bitcoin’s most controversial forks and the current fourth largest cryptocurrency by market capitalization underwent its first block halving on Wednesday at 10.19 am UTC. The halving took place at the 630,000th block while the next one will take place at the 840,000th block. The halving saw the number of block rewards reduced from 12.5 BCH to 6.25 BCH. This reduces the number of mining rewards for miners. 

Bitcoin Cash, one of Bitcoin’s most controversial forks and the current fourth largest cryptocurrency by market capitalization underwent its first block halving on Wednesday at 10.19 am UTC. The halving took place at the 630,000th block while the next one will take place at the 840,000th block. The halving saw the number of block rewards reduced from 12.5 BCH to 6.25 BCH. This reduces the number of mining rewards for miners. 

Bitcoin Cash, one of Bitcoin’s most controversial forks and the current fourth largest cryptocurrency by market capitalization underwent its first block halving on Wednesday at 10.19 am UTC. The halving took place at the 630,000th block while the next one will take place at the 840,000th block. The halving saw the number of block rewards reduced from 12.5 BCH to 6.25 BCH. This reduces the number of mining rewards for miners. 

BSV and BTC to Follow

Bitcoin cash’s other fork, Bitcoin Satoshi’s Vision (BSV) underwent its halving a few days ago – at block number 628, 775. Bitcoin’s halving is expected to take place sometime in May. 

BSV forked from BCH one year later after BCH forked from BTC. The second forking was a result of a falling out between the two camps that engineered the first forking, with Roger Ver and Craig Wright (self-declared Satoshi) going separate ways. Both coins are however successful, with BSV currently ranking at 6 in market capitalization. 

BCH’s Price Surge

The halving saw the coin surge past $270, albeit briefly, and has dipped to $264.79 at the time of writing. The halving signals a limited supply going forward, thanks to a reduction in miners’ incentive. Multiple analysts had postulated a significant surge in price but the subdued uptrend is now raising questions on the effect of the halving on BCH, as well as on BTC when it undergoes it’s halving next month. 

Hashrate Drop 

It seems miners are bailing out after the halving, with 65 blocks mined since the halving and a low hash rate overall. In fact, the generation of a new block took almost two hours instead of the usual 10 minutes. Although the block generation time has sprung back to 10 minutes, the hash rate is yet to, having slashed by almost half from 4.05 to 2.24. 

Also, mining BCH at the current price and the halved rewards is anything but profitable for now. Let’s wait and see what the future stores for BCH after these developments. 

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Crypto Daily Topic

Everything You Need To Know About the Upcoming Bitcoin Halving

Bitcoin fans across the world look forward to a special event every four years. This event is the Bitcoin halving, christened ‘halvening’ by the community to give it a more apocalyptic tone. On May 12th, 2020, the cryptocurrency is set to undergo its third halving, and the community is riled up as ever in anticipation […]

Bitcoin fans across the world look forward to a special event every four years. This event is the Bitcoin halving, christened ‘halvening’ by the community to give it a more apocalyptic tone. On May 12th, 2020, the cryptocurrency is set to undergo its third halving, and the community is riled up as ever in anticipation […]

Bitcoin fans across the world look forward to a special event every four years. This event is the Bitcoin halving, christened ‘halvening’ by the community to give it a more apocalyptic tone.

On May 12th, 2020, the cryptocurrency is set to undergo its third halving, and the community is riled up as ever in anticipation of the event.

In case you’re new to the whole brouhaha or wish to get a clearer understanding of what it’s all about, read on as we break everything down.

The Upcoming Halving is Generating Interest like Never Before

Data from Google Trends shows that search for the event was at an all-time high between April 5th and the 11th, as more people Googled about “bitcoin halving” in anticipation of the event.

Google Trends ranks interest on terms on a scale of zero to 100, with 100 being the highest amount of interest an event/term can generate, based on region and period.

What is Bitcoin Halving?

Miners are network participants who validate transactions and add new blocks on the blockchain. By doing this, they make the sending of bitcoins throughout the network possible. Miners get rewarded with ‘block rewards’ – in the form of bitcoins, for doing so.

Mining is a pretty resource-intensive activity, and it’s known for consuming a lot of electricity. A lot of people describe mining as involving the solving of complex computational puzzles. A more apt description is that miners will rapidly enter a string of random numbers until they finally enter the right one – which constitutes the next block.

Mining is very crucial to Bitcoin’s security. Since every new block is linked to the previous one using cryptography, it renders it almost impossible to interfere with the blockchain and hence transactions.

The block reward, in a sense, is the driving factor behind the running of Bitcoin since it incentivizes miners to continue producing blocks and, as a result, keep the blockchain secure – and honest, and hence something that millions of users around the world can trust. If Bitcoin had a history of manipulation and tampering, it wouldn’t be the trusted blockchain and cryptocurrency it is today.

The cycle of block rewards halving is embedded into Bitcoin’s code, and it enables the deflationary supply of Bitcoin.  

What is a Block Halving Event?

Block halving is the slashing of block rewards into two. Block rewards are bitcoins that Bitcoin miners are rewarded for verifying blocks and adding new transactions on the blockchain (more on that below).

In the early days of Bitcoin, miners received 50 bitcoins for every mined block. On the 29th of November 2012, at the 210,000th block, this reward was slashed into half into 25. On July 10th of 2016 (approx. after four years), this rate was halved again into 12.5. In next month’s halving, which will take place presumably on May 12th, it will be halved into 6.25 bitcoins per block. The 2016 halving took place at block height 420, 000, and the upcoming one will take place at the height of block 630, 000.

To date, roughly 18.3 million blocks have been mined out of the 21 million that will ever exist.

Who Controls the Issuance of Bitcoin?

The short answer is, no one. Rather, Satoshi Nakamoto, Bitcoin’s creator, programmed the network itself to control how new coins are ‘minted’. In turn, new coins are issued after consensus among network participants.

The issuance of new bitcoins follows these rules:

21, 000, 000 million is the number of coins that will ever be produced

A 10-minute interval between the production of new blocks

The halving of block rewards after every 210,000 blocks

An initial bock reward of 50 bitcoins and the halving of the reward at each halving event until a zero value is reached (approx. in the year 2140).

What’s the Idea behind Halving?

Bitcoin’s supply is programmed to decrease, becoming scarcer over time. The premise is if the supply decreases, demand will increase, cushioning its users against inflation of the currency.

This is in stark contrast to the inflation-prone traditional currencies whose value decreases over time. For example, anywhere in the world right now, the purchasing value for a US dollar has decreased over time. Bitcoin is built to be the opposite of this. As its supply diminishes over time, and its demand and value increases, so do its purchasing power.

Will the Price of Bitcoin Go Up After the Halving?

The Bitcoin halving event is a huge deal: it signals a decrease in the supply of the world’s first and most successful cryptocurrency. As you would expect, it’s not one that comes and goes quietly. Naturally, the pomp and fervor that surrounds it has to influence Bitcoin’s price, right?

This is always a debate every Bitcoin halving season. Some people believe that the price will change little, if all, since the halving has already been factored in by the market. Others believe that the halving in supply should prompt an increase in the demand for Bitcoin. Either of these scenarios can play out. One, no significant change at all, or there can be a significant bump in price. What’s for certain, though, is that the event will bring with it new entrants, and the reduction in block rewards will cause an increase in demand.

Perhaps even, history will repeat itself. Bitcoin saw a major price bump a year later, both after the past two halving events. We may not see a massive rise right now, but we might see one a year from now.

Who Will Be Affected by This Event?

Of course, the halvening, uh, bringeth a few ripples that will be felt by certain players in the Bitcoin ecosystem – one way or another.

As we’ve already noted, miners will see their block rewards cut in half. For miners that are still using the older and less efficient mining models, this is not good news. Also, miners who have recently invested in mining hardware will have to wait a bit longer before they can start realizing significant ROI.

Exchanges will also be affected since they are at the center stage of any market shift. If prices take a bullish nature, they (exchanges) will be best positioned to reap from this trend.

Where Can I Witness the Halving?

You can follow the halving via a block explorer, where you can see new block updates.

In the past, Bitcoin fans across the world have held halving parties, but due to the social distancing courtesy of the Covid-19 pandemic, it looks like this time, people will follow the event from their homes. Of course, you can always join fellow Bitcoiners on Twitter, Telegram, and internet relay chats as everyone counts down to the halvening.

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Crypto Videos

The Bitcoin Halving Is Coming! Why Should You Be Buying Alts?

https://youtu.be/LUYEIl3glic

https://youtu.be/LUYEIl3glic

 

Making an insane profit from the Bitcoin Halving

Cryptocurrencies have made many people millionaires, and they will yet again. One of the biggest and fastest wealth distribution events in modern history is exactly the creation of cryptocurrencies. Events that severely impact the supply or demand of an asset are rarely known in advance, which is not the case with Bitcoin. Bitcoin’s halving event is widely known, and that makes Bitcoin extremely unique.

Bitcoin Halving

The event called the halving makes the supply of new Bitcoin coming onto the market cut in half. This is by design and happens approximately every four years. Shrinking supply, when combined with growing demand, is a proven recipe for a price increase. The halving presents an opportunity for regular people to invest a small amount of money and walk away with hundreds or thousands of dollars.

We know the Bitcoin halving will happen in May, and that the supply of Bitcoin will shrink as miners will be rewarded 50% less than up until then. Each time the halving happened, the prices soared. The first halving in 2012 brought Bitcoin’s price up 2,135%. The second halving in 2016 managed to propel Bitcoin’s price 3,122% over the next 18 months.

While most investors know about the halving, they don’t look into its track record when it comes to massive gains. On top of that, even fewer people know that altcoins might be the assets they should be looking for as the Bitcoin halving approaches. After Bitcoin’s first halving, Litecoin (which is called “Silver to Bitcoin’s Gold” soared more than 7,000%. The second Bitcoin’s halving happened, and an altcoin called verge shot up an astonishing 1,362,400%.

Conclusion

While it is true that altcoins are separate projects and that each one of them has something unique, it is undeniable that they are connected and correlated to Bitcoin. Investing in altcoins with the most promising technology might be the way to go before the halving happens.

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Crypto Daily Topic

Merged Mining and Its Potential for Mitigating Halving Effects for Bitcoin and Litecoin

Bitcoin and Litecoin are two of the most popular cryptocurrencies. Bitcoin has long maintained peak position in market capitalization, with Litecoin not far behind as the sixth-largest. Both cryptocurrencies also experience a major event every four years. This event is block rewards halving – in which miners’ rewards are slashed by half. As a result, […]

Bitcoin and Litecoin are two of the most popular cryptocurrencies. Bitcoin has long maintained peak position in market capitalization, with Litecoin not far behind as the sixth-largest. Both cryptocurrencies also experience a major event every four years. This event is block rewards halving – in which miners’ rewards are slashed by half. As a result, […]

Bitcoin and Litecoin are two of the most popular cryptocurrencies. Bitcoin has long maintained peak position in market capitalization, with Litecoin not far behind as the sixth-largest. Both cryptocurrencies also experience a major event every four years. This event is block rewards halving – in which miners’ rewards are slashed by half.

As a result, there’s a decreased incentive for miners to keep supporting and securing the blockchain networks as block rewards diminish.

Merged mining presents a potential solution to this problem. 

What is merged mining, though? What springs the idea, and how can it mitigate halving effects for Bitcoin and Litecoin? This explainer seeks to address those questions, along with a scoop of more on this merged mining phenomenon. 

Merged Mining Explained

Merged mining, a.k.a Auxiliary Proof of Work (AuxPoW) is the process of mining two or more separate cryptocurrencies at the same time. The idea is to do so in a way that does not affect the mining performance on the blockchain of either coin. The concept of merged mining is lately a hot topic in the blockchain sphere – but it’s by no means a novel concept.

Satoshi Nakamoto – the brains behind Bitcoin, had earlier on envisaged the idea of merged mining. In a 2009 post in the BitcoinTalk forum, he shared that “I think it would be possible for BitDNS to be a completely separate network and separate blockchain, yet share CPU with Bitcoin. The only overlap is to make it so miners can search for proof-of-work for both networks simultaneously.”

Merged mining is based on the premise that work on a particular blockchain can be accepted as legitimate on a different chain. Each chain trusts and accepts the other’s work in the verification of data and transactions as well as the addition of new blocks. One blockchain provides proof of work – and this is the parent chain, and the other chain leverages this work and treats it as legitimate. This chain is called the auxiliary chain.

What Does Merged Mining Entail?

To begin with, merged mining relies on the involved cryptocurrencies utilizing the same algorithm. This means, for instance, that coins that use the same algorithm as Bitcoin – the SHA-256, can be co-mined with it, provided the right technical procedures are in place. Usually, the parent blockchain doesn’t need to undergo any sort of modification. The auxiliary, or child blockchain, is the one that needs programming so the two chains can “trust” each other.

At the time of writing, only three examples of AuxPow exist. These are Bitcoin-parented Namecoin, Litecoin-parented Dogecoin, and Myriadcoin – which is parented by both Bitcoin and Litecoin.

Can Merged Mining Mitigate Halving “Shock” for Bitcoin and Litecoin?

When it comes down to it, halving means reduced rewards for crypto miners. For instance, Charlie Lee, Litecoin’s creator, reflected on this scenario in July 2019 before Litecoin’s halving the following month. Interviewing for crypto site Mickey, he acknowledged that halving is always a “shock to the system,” explaining: “When rewards get cut in half, some miners will not be profitable and they will shut off their machine…” And though Litecoin has since bounced back, it’s hard to predict the future of Litecoin in subsequent halvings.

Also, as Bitcoin’s next halving edges closer – when block rewards drop to 6.25, it is expected the event will have a ripple effect on the entire Bitcoin ecosystem. Although the market sentiment will likely be bullish, the question about future halving effects for the cryptocurrency remains open-ended.

But what if there was a solution? Could merge mining be the answer for the halving conundrum?

A study by Binance Research, the research arm of leading crypto exchange – Binance, explored the possibility of merged mining to mitigate the effects of Bitcoin and Litecoin halving.

In the July 2019 report, Binance research determined that merged mining could increase mining rewards for both cryptocurrencies in light of future halving. Per the report, smaller blockchains could also benefit from AuxPoW by gaining access to better security enabled by bigger blockchains. They can also reduce the expenses needed to run a separate mining ecosystem.

In the same report, Binance explored how Dogecoin has held its own since adopting AuxPoW – in a bid to illustrate how merge-mining can be beneficial.

Dogecoin (DOGE) and Merged Mining

Dogecoin, the meme-inspired cryptocurrency, provides us with an excellent case study of merged mining, owing to its status as the most successful coin in this category. Launched in December 2013, the crypto adopted AuxPoW in July 2014. As Litecoin miners forked over their operations to integrate DOGE, the latter’s hash rate started ballooning, reaching well over 1500% that September.

Since then, both cryptocurrencies’ hash rates have moved in close correlation – with the exceptionally high correlation coefficient of 0.95. The two cryptos have also mirrored each other pretty closely in mining difficulty, difficulty ratios, and daily transactions. Also noteworthy is the fact that after some new mining pools started mining only Litecoin in 2017, a sharp deviation between the two hash rates occurred.

Still, merged mining is nothing near a cure-all for miners, or challenges currently facing blockchain, as the research warned. Below, we’ll take a look at the good and the bad of AuxPoW in greater detail.

Merged Mining Implications

The Good

Miners have the motivation to keep mining, thanks to the ability to earn extra income without doubling up on expenses

The cryptocurrencies involved get a liquidity boost, thanks to miners clearing transactions for both blockchains at a faster rate

Auxiliary blockchains benefit from enhanced security provided by the parent chain, but still, get to keep their distinct chain

Auxiliary chains are catapulted to mainstream recognition thanks to their association with larger, more established chains

The Bad

Some miners might not warm up to the idea of supporting child chains, as this would require them to adjust a lot of their mining operations. This takes time and money.

Some miners might not perceive child chain cryptos to hold a lot of promise. For this reason, there might be little incentive to adopt and support auxiliary networks

Some miners, especially new ones, might be entirely unaware of merged mining and the potential to make more from the technology

Child chains might become overly dependent on the parent chain, hamstringing their development and adoption of scalability technologies

Merged mining opens new attack vectors on the child chain

If not enough miners from the parent chain fork over to the child chain, the merged-mining model is vulnerable to a 51% attack

Final Thoughts

Merged mining sounds like a promising proposition for blockchain. Bitcoin and Litecoin networks could utilize the technology to secure their future, while up and coming blockchain networks could hop on the train and get exposure, enhanced security, and more. Admittedly, technology has its flaws, but the promise trumps the peril.

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Blockchain and DLT

Why One Bitcoin Analyst’s Prediction Went Viral 

2020 promises to be an exciting year for the crypto community, a year when most cryptocurrencies and their backers make major moves and further their undying quest to establish dominance and woo in more users. And we aren’t just talking about Facebook’s Libra – though we expect its eventual entry into the blockchain and cryptocurrency world to rattle the markets. We are talking about the near-silent moves that the popular cryptocurrencies have been involved in and some of which will materialize early in the year.

2020 promises to be an exciting year for the crypto community, a year when most cryptocurrencies and their backers make major moves and further their undying quest to establish dominance and woo in more users. And we aren’t just talking about Facebook’s Libra – though we expect its eventual entry into the blockchain and cryptocurrency world to rattle the markets. We are talking about the near-silent moves that the popular cryptocurrencies have been involved in and some of which will materialize early in the year.

2020 promises to be an exciting year for the crypto community, a year when most cryptocurrencies and their backers make major moves and further their undying quest to establish dominance and woo in more users. And we aren’t just talking about Facebook’s Libra – though we expect its eventual entry into the blockchain and cryptocurrency world to rattle the markets. We are talking about the near-silent moves that the popular cryptocurrencies have been involved in and some of which will materialize early in the year.

From Bitcoin to Ethereum to Ripple, we expect each of these major coins to embrace significant structural or operational changes in the coming months. And in this article, we will be detailing these changes and their significance to the coin itself and the crypto community.

We start by looking at Bitcoin halving and why one man’s prediction of its price after the halving has gone viral.

Bitcoin halving

In May 2020 – that’s less than four and a half months away – Bitcoin will undergo its third halving process. This basically means that the amount of the Bitcoin cryptocurrencies being rewarded to miners for contributing to the blockchain will be slashed in half. Why is this significant, you might ask? Because it not only has a direct impact on the price of the most popular and most valuable cryptocurrency but also impacts bitcoin transaction costs. To understand the impact that this year’s halving will have on the price of the lead crypto, however, we look back at its last two halving processes.

Bitcoin halving takes place every four years, and the first took place in 2012, with the most recent coming in 2016. In its premier stage, Bitcoin miners received 50 BTC for every block contributed to the blockchain. Granted, the November 2012 halving didn’t have much impact on the price of Bitcoin that was going for $11 at the time. After the July 2016 halving, however, the coin price would sway between $580 and $700. 

Interestingly, the most significant Bitcoin price movements for the two halving stages would manifest within the 18 months following the process. After the 2012 halving, for instance, Bitcoin price rallied to hit $1100 by the end of 2013. And following the 2016 halving, the pioneer digital currency soared to its highest ever price yet of over $20,000 by Jan 2018.

In an ideal market structure, you would expect the halving to inspire significant value rise rallies that would possibly take it through to the next four years.

Nothing ideal about Bitcoin market

But there is nothing ideal about the bitcoin pricing and the larger crypto market. These markets and the digital currencies traded therein have time and again defied the conventional economy laws. And this is evidenced by their huge and persistent volatilities. These plus the relatively slow response to the halving process has become a major cause of division on different bitcoin and crypto analyst’s predictions of the coin’s price after halving. While most believe that it will ultimately go up – albeit sluggishly – a significant portion of these is adamant that the Bitcoins price increase has nothing to do with halving.

The Canfield hypothesis

Jacob Canfield is a long-time crypto analyst and his end of the year commentary about the Bitcoin’s price trajectory going into 2020 has gone viral. And with regards to the expected halving, Canfield believes that it will have significant impacts on the price of Bitcoin. But it’s his opinion on why most people don’t associate the bitcoin value rise with the halving that caught the attention of the crypto community. In a tweet sent out three days to the New Year, Jacob Canfield argued that:

“The halving is priced in so much that it’s actually not priced in and no one is buying bitcoin except the smart money who knows it’s not priced in who has convinced everyone else it is priced in so when the halving occurs and price is skyrocketing no one will be holding bitcoin.”

These sentiments – that have been regarded by some quarters as an extremely meta prediction of Bitcoin – were nonetheless echoed and interpreted by Willy Woo – an Adaptive Capital analyst. Who mentioned that:

“Translation: While the public believe in efficient market theory and that markets perfectly price in all available information. Market traders know the price chart is a war of strategy and fuckery designed to make the most money for the best players.”

Woo reckons how naive it would be for any crypto enthusiast to imagine that market prices are always a reflection of the available market data.

Any crypto analyst worth their salt will also tell you that in the periods leading to both bitcoin halving processes, the coin witnessed declining prices. Canfield was quick to observe this and put it down in a tweet expressing his confidence in Bitcoin’s price dip before the end of January. He argues that he is:

“Longing $6700-6800 in January will be a good deal. I was hoping for $5500, but not sure we get there. Not sure we see much lower for a while after that. Will revise if the context of the market changes, but that’s what I’m seeing so far.”

Ethereum and its new hard fork

On 2nd January, Ethereum completed the Muir Glacier hard fork upgrade.

What you probably do not know is that this is the second major upgrade to the blockchain in a month after a similar upgrade – the Istanbul Upgrade – in late November. The upgrade effectively holds back the kicking in of the “difficulty bomb,” also referred to as “ice age,” that will mark a transition to Ethereum 2.0. It was effected after the mining of block 9,000,000 and is expected to hold back Ethereum’s transition to a Proof-of-Stake model by about 4,000,000 blocks – or more than 600 days.

The difficulty bomb mode algorithm was embedded onto the Ethereum blockchain network in 2015 with the aim of increasing hashing difficulty and push the network towards a PoS concept. The proof of stake model adopted by Ethereum 2.0 will, however, be dissimilar to that of Bitcoin blockchain in one primary way. While bitcoin blockchain reduces the reward to miners, Ethreum’s difficulty bomb increases the time it takes to mine a block by between 10 and 20 seconds.

However, both approaches have similar side effects as they contribute to high transaction costs and demotivate miners. By delaying the difficulty bomb and the transition to the proof of stake, Ethereum will be looking for different ways of continually incentivizing their miners to ensure that they remain within the platform during and after the switch.

Ripple and XRP at the ATM

Following in the footsteps of Bitcoin and Ethereum, Ripple would also start the year with an ATM partnership that will see General Bytes dispense XRP tokens.

General Bytes is a Crypto ATM Company with a network of over 3000 machines across the United States. The XRP partnership means that virtually anyone using their machines now has the option of loading and withdrawing ripple coins from their ATMs. The company, however, mentions that this is not a default feature with their ATMs, but it is up to the ATM operator’s discretion to chose whether to enable the XRP feature or not.

While making this Ripple news public, General Bytes stated that:

“Owners can now enable XRP as it is backported to all machines sold to date. Of course, an ATM operator needs to enable it as they are the ones who own the machines, wallets, etc.”

The move confirms Ripple’s continued chase for dominance within the retail crypto space. It should particularly be noted that this isn’t the first time the blockchain developers are partnering with crypto ATM companies. In the months leading to the end of the year 2019, for instance, Xpring – Ripple’s fundraising and crypto development arm – invested over $1.5 million in CoinMe, a Seattle-based Crypto ATM company.

 

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Crypto Daily Topic

Bitcoin is the Best Asset of the Decade, According To Bank of America Merrill Lynch

Bitcoin has been ranked as the best asset of the decade. This is according to Bank of America Merrill Lynch (BAML), which has made a list of the best and worst asset classes of the last ten years.

Bitcoin has been ranked as the best asset of the decade. This is according to Bank of America Merrill Lynch (BAML), which has made a list of the best and worst asset classes of the last ten years.

Bitcoin has been ranked as the best asset of the decade. This is according to Bank of America Merrill Lynch (BAML), which has made a list of the best and worst asset classes of the last ten years.

CNBC reporter – Carl Quintanilla tweeted today that the banking giant has listed Bitcoin as the best asset class, with the worst spot going to the Myanmar Kyat. In the analysis, BAML indicates that an investor who paid $1 for a Bitcoin in 2010 would have an equivalent of $90, 026 today. This is a stark difference from an investment in U.S equities, which would have yielded $3.46 today for a $1 investment in 2010, and shows Bitcoin’s impressive performance ten years after it was launched by the anonymous individual(s) Satoshi Nakamoto.

Bitcoin’s Volatility over the Years

Bitcoin had come a long way from 2010 when it was worth $0.0025. The bitcoin community knows this because that’s the year computer programmer Laszlo Hanyecz famously bought Papa John’s pizza for 10,000 BTC on May 22, 2010. The day has become folklore, not for the transaction, but the price – Hanyecz paid for the pizza with 10,000.

Since “Bitcoin Pizza Day,” the cryptocurrency has steadily witnessed an astronomical rise in price. Nine months after the purchase, the crypto attained equal value with the US dollar, making the pizza $10,000. In 2015, the two pizzas would’ve gone for $2.4 million. As of December 13, 2019, the pizzas are worth $72.2 million.

Bitcoin’s all-time high was a staggering $20,000 in 2017, after which it started declining, experiencing an incredibly bearish market. Today, the cryptocurrency tends to stagnate between $7000 to about $7,250. Bitcoin investors are hoping for a bullish market after the crypto’s halving in May 2020.

The Crypto Decade?

Bitcoin’s strong showing comes against a backdrop of a year when cryptocurrencies, in general, outshined other major asset classes. Despite kicking off the year with a dismal run, large-cap cryptos started picking up around March, and by June, the asset class was way ahead of other assets. 

Establishing themselves as the world’s leading asset class this year, cryptocurrencies have outperformed annualized returns of US equities, bonds, and commodities such as gold and oil.

Digital Assets Data co-founder and President Ryan Alfred told Coindesk that big-name cryptocurrencies posted significantly higher returns this year when compared with traditional markets.

“Looking back at the performance of the top ten large-caps in comparison to other major asset classes, we can see their special signature,” said Alfred.

Of course, cryptocurrency’s big rally is attributable to Bitcoin, which is currently up 100% since the year kicked off.

The asset class’s success can be attributed to the very reason risk-averse investors steer clear of it: its unpredictable volatility. This volatility creates a satisfactorily liquid market – allowing traders to quickly trade between digital and fiat currencies.

Being still a burgeoning market, crypto prices are bound to jump back and forth in a frantic manner, which actually works to the assets’ advantage.

And with Bitcoin being the most popular cryptocurrency, it is no wonder it is the best asset of the decade.

Conclusion

Having marked its 10th year with a bang, what’s next for Bitcoin? As usual with cryptocurrency, it’s impossible to tell. Bitcoin devotees are hopeful the cryptocurrency will retain its lead over other asset classes. Remember that events like crypto whales – for example, investor organizations entering the market could significantly boost its price. But most observers are pegging a bullish return on the next Bitcoin halving, six months from now.

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Crypto Videos

Will The Next Bitcoin Halving Send The Price Into Space? #Moon

https://youtu.be/obpfVVZY02M
What is Bitcoin halving?
Before explaining Bitcoin halving, we need to know how Bitcoin mining works. Each time a block is verified by submitting a correct answer to

https://youtu.be/obpfVVZY02M
What is Bitcoin halving?
Before explaining Bitcoin halving, we need to know how Bitcoin mining works. Each time a block is verified by submitting a correct answer to

https://youtu.be/obpfVVZY02M

What is Bitcoin halving?

Before explaining Bitcoin halving, we need to know how Bitcoin mining works. Each time a block is verified by submitting a correct answer to the equation, new Bitcoins come as a reward. Satoshi Nakamoto set up two major rules for the proof of work protocol:

Bitcoin’s maximum supply is finite. It is limited to 21 million and cannot be changed.

The number of Bitcoins generated per block and distributed as a mining reward halves (decreases by 50%) every 210,000 blocks.


How long until Bitcoin rewards halve?

As one block is found every 10 minutes on average, 210,000 blocks would be found in approximately four years. The mining reward for solving the block puzzle will halve by 50% every four years. Bitcoin’s first mined block rewarded the miner 50 Bitcoin. Two halvings after, and we are in the present, where each block grants 12.5 Bitcoin. Next, halving will reduce that amount to 6.25 Bitcoin and so forth until there are no more Bitcoin to be mined. When there are no more Bitcoin to be mined, miners will be compensated through mining fees.

Why is halving created?

The explanation of the creation of halving events lies in the law of supply and demand. If coins are mined too fast, the supply will rise too fast, and there will be a lot more Bitcoin in circulation. This will, in turn, devalue the currency.
Vitalik Buterin, the lead developer of the Ethereum project, explained the need for halving to occur is to keep inflation under control. Additionally, he explained that “One of the major faults of traditional fiat currencies controlled by central banks is that the banks can print as much of the currency as they want, and if they print too much, the laws of supply and demand ensure that the value of the currency starts dropping quickly.”


When Will the Next Halving Occur?

As previously mentioned, each block takes 10 minutes to generate on average. Taking that into consideration, we can estimate the next block halving event to occur somewhere around June 2020. Many websites track block generation and estimate when the reward halving will happen exactly. They even have countdowns that let people know the date and time of the estimation.
One important thing to mention is that some people noticed that each block takes only 9 minutes and 20 seconds on average to generate, instead of the presumed 10.

How Will the Bitcoin Halving Affect Bitcoin’s Price?

As block halving essentially reduces the further supply of Bitcoin, many people will ask whether the price will be affected by this event. Sadly (or fortunately), no one knows. The 2016’s halving event had no major effects on the price at that time. A week after the event, Bitcoin went from $650 to $675.
However, even if there are no apparent signs of price change, economic principles of supply and demand still work. Either the price will increase after the halving, or the current price already includes the speculation of what’s about to happen.

Conclusion

Bitcoin is a scarce asset by design. The specific rules, such as a limited supply of 21 million Bitcoin as well as an inflation reduction “tool,” which is the halving event, make sure that Bitcoin becomes even more valuable over time. The Bitcoin halving event should not be considered as a date at which the price of Bitcoin skyrockets, but rather a tool which keeps inflation in check. This is one of the main attributes of Bitcoin and one that separates it from fiat currencies, which are inflationary by nature.