Bitcoin | The second ‘halving’ of the currency production merely hours away

by | Jul 8, 2016 | Bitcoin, Economy, World News | 0 comments

Bitcoin | The second 'halving' of the currency production merely hours away

By now most people have at least heard of Bitcoin, what you may not know is that from tomorrow at an estimated time of 16:30 GMT the number of bitcoins produced in each successful block is halved from 25 to 12.5. Put simply to those with little knowledge of how bitcoin works –  the cost and time used to produce 1 bitcoin will double.

Coindesk sum this all up nicely :

For close to a year, bitcoin miners and investors have been preparing for a network change nicknamed ‘the halving’. At approximately 18:00 UTC tomorrow, the subsidy the bitcoin network uses to compensate miners will drop from 25 BTC to 12.5 BTC, never to increase again.

Yet, despite its scheduled arrival, many in the industry remain unsure just how significant an impact it could have on bitcoin’s still-volatile price and the health of the distributed payment network’s transaction validators (aka miners).So 

A programmed feature in the code, the bitcoin subsidy controls the supply of new bitcoins that are released into the market with each new block. When bitcoin first launched, a miner could earn 50 BTC for sealing a block on the blockchain ledger. After 210,000 blocks, or approximately four years, however, the reward was cut in half to 25. And tomorrow, as block 420,000 is sealed, miners will be left with a reward of 12.5 bitcoin.

As currently set, only 21m BTC will ever be mined, a figure that would require the consensus of all or most bitcoin users to change.

So what does this mean for Bitcoin, what can we expect to see happen to the value of Bitcoin and how could this affect the stability of the Blockchain?

Well a decline in ‘Hashrate’ is expected as miners pullout due to their profit being effectively halved. It is more likely to be small time setups that switch off but as with the first halving process the decline in hashrate will not be huge and quickly recover to it’s original rate and beyond.

Eric Lombrozo, founder of Ciphrex and a contributor to the open-source Bitcoin Core developer tells Coindesk:

“We’ve already had a halving in the past…and we’ve also seen significant sudden drops in bitcoin price – both of these situations imply lower short-term miner revenue. In neither case did we see a significant drop in hashrate.”

As for the value of Bitcoin it is all speculation but most who work with Bitcoin agree that a possible decline is possible in the short term but the price will rise beyond it’s pre-halving level shortly after. But many suggest that much of the increase in Bitcoins value seen in recent weeks is due to the expected increase following tomorrow’s halving ; Therefore we could little change at all to the market.

Basically, no one really knows and traders of the cryptocurrency will be waiting with itchy fingers to see what happens in the coming 24 hours.

BTC Donations: 1BHJmGz7mwVUzaeYnLL5rCbwSHoLtgTa6H

Ceribalius

Ceribalius

Ceribalius is a pseudonym used by one of our writers, he/she is a digtial nomad and dedicated fighter of freedom and liberty. If there is something that needs saying which no one else is, he/she is the one to do it.
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