There has bee a reduction in the reward per block mined on the network from 12.5 BTC to 6.25 BTC. The next halving event will occur in about four years from now, in 2024.
The most anticipated 2020 date for the Bitcoin ecosystem has arrived. Block 630,000 of the Bitcoin network was mined, a milestone that confirms the activation of the third halving event. In this way, there is a reduction in the rewards that miners receive per confirmed block from 12.5 BTC to 6.25 BTC.
As scheduled, Bitcoin reached this block height in the first days of May. According to records of the blockchain, the block was mined at 3:25 on May 11th. It is the third time that the Bitcoin network has reduced its coin issuance since its launch in 2009.
The last two blocks on the Bitcoin network were rapidly mined, being processed with a difference of just a few seconds. The F2pool group mined the previous block, 629,999, while miners from Antpool processed the long-awaited block 630,000.
The F2Pool group even dared to leave a message on block 629,999, the last mined with a reward of 12.5 BTC. Recalling the first genesis block on the Bitcoin network, the miner hinted at a news story that reads: “With an injection of 2.3T, the Fed’s plan far exceeds the 2008 bailout.″
At the moment, the hash rate of the network marks about 131.05 EH/s, according to data from CoinWarz. On the other hand, the price of the cryptocurrency remains at 8517 a few minutes after the halving, according to CoinGecko figures.
More about the Halving
The Bitcoin halving is a mechanism that is responsible for reducing by half the number of coins that the network issues every 210,000 blocks. In other words, the rewards that miners receive each time they confirm a batch of transactions considerably decrease about every four years
This mechanism aims to self-regulate the Bitcoin supply, which has a limit of 21 million coins. Likewise, as the issuance of Bitcoin decreases, the asset becomes scarcer and, consequently, more valuable. Thanks to the halving, the creation of BTC will not last forever and its end is expected to occur in 2140.
The first Bitcoin halving occurred in 2012 when there was a reduction in the reward from 50 BTC to 25 BTC per block mined. Four years later, in 2016, the process left the issuance of bitcoins at just 12.5 per mined block. With this new activation in 2020, the Bitcoin community will have to wait until between March and June 2024 to witness another halving.
The Bitcoin mining industry will suffer the repercussions of the event since a reduction in the number of bitcoins per block mined directly affects miners’ profits. This could lead to the disconnection of older-generation mining equipment, which would no longer be profitable under the network’s current conditions. However, the current rise in Bitcoin’s price could help this market to reduce the effects of that hard economic hit, and could even extend the life of Bitmain’s Antminer S9.
On the other hand, the community expects the halving to have an indirect impact on Bitcoin’s price. This phenomenon seems to be already occurring, with the fluctuation between USD 8,000 and USD 10,000. Experts do not assume that the halving will fuel a bullish rally on Bitcoin, but they think that it could positively boost its value in the medium or long term.
By Alexander Salazar