Countdown to Bitcoin halving, what are miners doing?

Recently, the cryptocurrency market has performed better than other traditional financial markets. As the market conditions improve, the market atmosphere has also gradually improved, which has also boosted the discussion on Bitcoin.

Bitcoin is approaching its third halving. By comparing and analyzing the two Bitcoin block reward halvings in 2012 and 2016, we can find that the market has experienced a certain degree of decline before and after the "halving". Now, the third block reward halving in Bitcoin's history is coming, and we may see a similar trend again.

CoinWorld-5 days left before Bitcoin halving, what are the miners doing?

So now many people are optimistically predicting that the price of Bitcoin will soar after the third halving. But in fact, there is not enough evidence to show that the halving of block rewards will inevitably lead to an increase in Bitcoin prices. Previous signs show that the injection of off-market funds is more likely to be an important reason for the rise in Bitcoin prices, but this may just be the industry's operators taking advantage of the halving event, which we don't know.

So whether there will really be a bull market in the next few months, only time can tell.

1

Why

One of the reasons why Bitcoin is valuable is that it has a limited supply. The total number of Bitcoins is only 21 million. This makes Bitcoin as valuable as gold. When the founder of Bitcoin created the system, he had already expected that if the number of miners increased sharply, all 21 million Bitcoins would be mined soon.

CoinWorld-5 days left before Bitcoin halving, what are the miners doing?

Therefore, in order to slow down the mining speed, Satoshi Nakamoto did two things. First, the Bitcoin code he wrote forced miners to compete with each other for block rewards. As the number of miners increases, mining computing power will become more and more difficult. As the competition for mining becomes more and more fierce, many people who started mining for fun have long disappeared, and those who remain are professionals who have mastered the computing power data of the entire network.

Second, Satoshi Nakamoto set in advance that the reward would be halved every time 210,000 blocks were mined.

2

Are miners still interested in mining after the halving?

As the block reward is halved, some small miners or players with insufficient capabilities may be forced to leave, or at least upgrade or repair their mining machines.

Because the block reward is halved, miners' profits will shrink, at least in the short term, and old versions of mining machines will no longer bring any profits to miners.

These small miners in the mining circle obviously do not have the capital to compete with large companies. Perhaps in 2020, these small miners will be eliminated by the mining circle.

CoinWorld-5 days left before Bitcoin halving, what are the miners doing?

If the price of Bitcoin rises after the halving, it will definitely be good for miners. Most market observers believe that the price of Bitcoin will rise. Bitcoin enthusiast Vinny Lingham has accurately predicted the price of Bitcoin. In an article in May this year, he said that the price of Bitcoin will rise by at least $1,000 between the halving date and the end of the year. He said that in the first few months after the halving, the price of Bitcoin may fluctuate greatly, and it is estimated that it will only reach about $700, but after that it will be unstoppable.

Buying mining machines for mining is a highly professional field with a high entry threshold. With the popularity of digital currencies and the influx of a large number of miners, more and more large-scale professional mining farms have emerged. If retail investors want to participate, it is recommended that they cooperate with professional and reliable mining farms and mining pools, so that they will have a stronger ability to resist risks.

Solemn statement: The copyright of this article belongs to the original author. The article is reproduced for the purpose of spreading more information. If the author information is marked incorrectly, please contact us as soon as possible to modify or delete it. Thank you.