Bitcoin’s Halving Brings Radical Changes To The Crypto Industry
It’s been some four years since the last and second in order Bitcoin halving, where the BTC rewarded to successful miners decreased by half from 25 to 12.5 BTC. This month, the reward split once again in order to settle with miners at a rate of 6.25 per successful mint.
Obviously, there was noise prior to the long-anticipated blockchain event, where anything between vague speculations, short-term pumps, and silent mergers and acquisitions in the DLT sphere, was surfacing in the majority of the www, and web3.
While this event might not seem like a big deal market-wise, considering if anything it caused the market to suddenly retreat with a pace of 10%/24h, it bears significance to be experienced in the form of a post-effect within the year.
Recap Of Bitcoin Halvings
According to a recent Coindesk investigation, the value of Bitcoin and most major altcoins is always shorted in the month wrapping the halving, and therefore the recent dip should come as natural to veteran traders who took this opportunity to increase their longs as a blessing.
Of course, traditional and academic investors, most of which officially handle cryptos for the first time, and only thanks to Bitcoin futures – which are way far from the real hustle – panicked when confronted a drop with a magnitude of 10%, having in mind that Bitcoin and most altcoins were bartering at a fixed +/-1% to +/-3% with occasional +/-5% during the past months. Typical noobs.
Hence, over $200mn worth of crypto was liquidated by such investing professionals who are still trying to get the ropes around the crypto market. This only backed the notes from the previous two halvings, and in addition, it even spoiled that a new wave that leads the market to new all-time highs might be just around the corner, but in any case, it won’t be during the halving.
Bitcoin Mining’s Importance In The Post-Halving Era
So, basically, whether you understand how blockchain technology works, or not, you should analogize the fact less Bitcoin will be produced and by extent introduced in the circulating economy, while the processing power required to perform the calculations underlying blockchain’s integrity will be raised.
Before the current halving, mining operations were barely making a profit to miners who had to pay around $7k to their power supplier for the sake of a whole BTC, at that time worth something around $8k per unit.
Of course, a profit of $1k for Bitcoin bulls was more than enough to keep them going, at least right until now, when miners will have to pay the same amount to their respective power supplier, yet they would be compensated with half as much BTC they were making before the halving.
In short, newly introduced Bitcoins would be twice as expensive for grab compared to the Bitcoins you bought during the last four years, and that is at least to say.
Not only miners would need to cover their fees with less BTC, but they would also engage in and spark arbitrary opportunities, eventually handled by the decentralized marketplace, which will undoubtedly lead BTC’s value to new ATHs.
Mining professionals from all over the globe agree on the fact that mining will naturally become more difficult, thus unapproachable for startups or new entries, while major mining titans would absorb the entirety of the market due to their experience, network size, and influence.
Read More: Meanwhile In Russia: How To Use A National Nuclear Weapons Development Center to Mine Bitcoin.
Should you expect an increased crypto adoption? On one hand, almost certainly, just not as soon as you read this.
On the other hand, we are at the point where we have an ATH of unique crypto wallet addresses, meaning that even if there is no crazy money going in and out every day, we got more people interested in blockchain fruits such as DeFi, dapps, and more sophisticated use-cases. If that’s not a sign of healthy adoption I am not sure what you’re waiting for.
Nevertheless, even if you’re in for the grabs, blockchain is now past parallel competition and enters the vertical growth phase, where anyone from your grocery store to your smartphone manufacturer will start to implement blockchain technology one way or another if they haven’t already.
Bitcoin it’s not a magical lottery that will make you instantly rich, but rather a train that leads to a predestined location. Stay on board enough and it will eventually reward you.
Are you afraid of Bitcoin going down, or are you confident it will eventually reach its potential? Let me know your thoughts in the comments section below, or feel free to hit me on Twitter.