- The quadrennial occurrence is widely regarded as a significant event within the cryptocurrency community.
- Several factors contribute to making this particular halving a unique event in the history of Bitcoin.
Just as soccer has the World Cup and athletics along with many other sports have the Olympics, the cryptocurrency realm has the Bitcoin halving event.
The Bitcoin (BTC) reward halving, occurring once every four years, occurred precisely at 00:09 UTC on Saturday, coinciding with the addition of the 840,000th block to the Bitcoin blockchain.
This halving event, which reduces the reward granted to bitcoin miners for adding new blocks by 50%, transpires every 210,000 blocks, following the original programming established by Satoshi Nakamoto upon the blockchain’s inception in 2009.
Marking the fourth halving event in Bitcoin’s history, the reward now stands at 3.125 BTC, with the bitcoin price hovering around $63,700 post-halving.
Explore More: Bitcoin Rally Maintains Stability at $63,700 Post 4th Block Reward Halving
Simultaneously, the Runes protocol for fungible tokens, developed by Casey Rodarmor, the mastermind behind the Ordinals platform that debuted last year to facilitate NFTs on the Bitcoin network, was also introduced at block 840,000.
A brief analysis of the mining fees paid by users to ensure their transactions are included in the block reveals a surge in competition among users to mine the new runes: a total of \(2.4 million in fees, significantly higher than the typical range of \)40,000 to \(60,000 for a standard block. Subsequent blocks also recorded fees exceeding \)1 million.
“We have not encountered a scenario like this in Bitcoin’s history,” remarked the prominent Bitcoin developer Jimmy Song during a live-streamed viewing party hosted by Tone Vays. “We are stressing the network in unprecedented ways.”
For comprehensive coverage by CoinDesk, visit our Bitcoin Halving dedicated page.
The mining reward serves as an incentive for entities contributing computing power to secure the Bitcoin network. The miner successfully adding each new block to the network claims the mining reward, a fixed amount that undergoes reduction at each halving, in accordance with the programming by Bitcoin’s enigmatic creator, Satoshi Nakamoto.
The quadrennial halving event holds immense significance in the cryptocurrency community as it embodies Bitcoin’s fundamental concept as an autonomous, decentralized financial network with a monetary policy dictated by code rather than human entities like governments or central banks.
In contrast to traditional fiat currencies susceptible to inflation and government interventions, Bitcoin is structured to be non-inflationary, with a capped total supply of 21 million BTC. Through the quadrennial halving events, the rate of new bitcoin issuance diminishes gradually until the final bitcoin is mined, projected around the year 2140.
Learn More: Decoding the Bitcoin Halving Phenomenon
Historically, halving events have been trailed by upsurges in Bitcoin’s value. The rationale behind this trend is that as the production of new BTC diminishes, the existing supply becomes more valuable. However, the outlook this time remains uncertain. While some market analysts believe that the halving’s impact is already factored into BTC’s price, suggesting subdued immediate effects, others anticipate a decline in the bitcoin price, while some foresee a potential rally.
The potential repercussions of this recent halving are challenging to forecast due to the significant shifts in the Bitcoin landscape compared to the preceding three events. Particularly, the approval of spot bitcoin exchange-traded funds (ETFs) in the U.S. earlier this year promises a surge in institutional investments in BTC on a substantial scale.
Moreover, with the introduction of the Ordinals protocol in early 2021, the Bitcoin ecosystem is witnessing heightened activity, with network enhancements and updates potentially enhancing the utility of this traditionally conservative environment.
Edited by Sheldon Reback.