The biggest Bitcoin event will approximately take place on May 11, in just a week from now. If you are not familiar with the Halving, it simply means that the block reward for Bitcoin will decrease from 12.5 coins per block to 6.25 coins per block, half. This will happen simply because it’s embedded in Bitcoin’s code. The design of Bitcoin is deflationary which means that not only the issuance of Bitcoins decreases over time, it will eventually end and no more Bitcoins will ever be created. Bitcoin Halving In Depth If you don’t even know what are, keep reading, we will explain everything in simple terms. The technology behind Bitcoin and other cryptocurrencies is called ‘Blockchain’, a chain of blocks. Transactions on the blockchain are fundamentally different from transactions in your Bank. There is no central authority that controls Bitcoin, every single participant in the Bitcoin network has a public copy of all the transactions. block rewards Some people are in charge of verifying those transactions by solving complex mathematical problems, their rewards? Bitcoin, of course. Miners are incentivized to solve those problems because of the reward in Bitcoin which was 50 Bitcoin initially. Photo by: grandstarmarket.com Of course, when Bitcoin was created, it was not worth much and it was fairly easy to mine Bitcoin alone without any kind of equipment. Now, it’s far harder because the difficulty increase over time. The difficulty self-adjusts every 2016 blocks based on the time it took to discover the previous 2016 blocks which means that if more people are mining and blocks are found faster, the next adjustment will make that harder. Mining is the essential component of Bitcoin’s blockchain and in a way, it controls Bitcoin even though the digital asset is supposed to be decentralized. What is Mining Capitulation? If you are familiar with Bitcoin and the crypto market, you have very likely heard about Miner’s capitulation. The idea behind this term comes from the inability of smaller miners to keep operating because of the price of Bitcoin. We have probably seen something similar on March 12 when the entire crypto market crashed due to the Coronavirus pandemic. Bitcoin went from $10,500 to $3,700 in less than 2 months. A lot of miners probably had to panic sell too which dumps the price even further creating a snowballing effect. Fortunately, it seems that Bitcoin has been able to recover quite well, currently trading at $7,100 and continues posting more gains. Now, although some miners have probably stopped operating, most of them are still active. The Bitcoin difficulty did drop quite significantly around March 25 after the huge crash but it’s not the first time the difficulty drops. In the long-term, it is still basically at all-time highs and it seems that Mining Capitulation was not able to end Bitcoin or even miners. Was Mining Capitulation A Lie Or Did It Not Happen Yet? Although it might seem that Mining Capitulation had to take place back in March 12, this is not likely the case. Bitcoin did plummet but the price recovered quickly. In fact, the next day, Bitcoin was already trading at $5,000 and even touched $5,955 briefly. Bitcoin miners aren’t instantly forced to and because the digital asset has managed to recover quite well, most probably haven’t sold their funds yet. sell their Bitcoin According to recent statistics, the sentiment among miners is actually positive and bullish and it’s really no surprise considering current events. Yes, Bitcoin dropped but so did the entire global market. The SP500, one of the most important indexes in the US stock market plummeted as well. had a daily crash not seen since 1978. Similarly, other indexes from other countries also plummeted. The Dow Jones Bitcoin is now the only asset to actually recover while the rest have remained in a huge downtrend. It seems that Mining Capitulation is not necessarily a lie, it just didn’t happen yet. A volatile crash will not likely force miners to sell as long as Bitcoin manages to recover within the next few days, a huge crash followed by an extended downtrend will most likely be the catalyst of Bitcoin’s Mining Capitulation.

Chain

Miners Will NOT Capitulate After Bitcoin Halving

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

What Should We Expect From The Upcoming Release of Ethereum 2.0?

06/02/2018: Biggest Stories in the Cryptosphere

06/09/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

07/02/2018: Biggest Stories in the Cryptosphere

What Should We Expect From The Upcoming Release of Ethereum 2.0?

06/02/2018: Biggest Stories in the Cryptosphere

06/09/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

07/02/2018: Biggest Stories in the Cryptosphere

Light-Mode

Classic

Newspaper

Minty

Dark-Mode

Neon Noir

Minty

HN StartUps