With the amount of Bitcoin being paid to the computers or “miners” decreasing, this will affect Bitcoin, but how?
Housekeeping: If you don’t know what’s going on during the Bitcoin halving, my 1st post, if you do know, read on!
Background: It costs miners money to run these computers and now that the amount paid to these computers is cut in half, what does this mean for the future of Bitcoin?
I’ll break down some of the general predictions along with what happened after the previous 3 halvings.
Miners: The big miners who own thousands of computers will get bigger because the lesser bitcoin being paid could weaken the small miners. This could lead them to close up shop, merge with another company, or drastically change their operations. A good amount of this has to do with smaller companies using old computers to mine vs people who bought new, top-of-the-line computers to complete the same task.
Price: This one is difficult, to say the least. Price is dramatically up & down with Bitcoin. However, typically the price of each BTC has been higher long-term after the halving.
However, it’s important to note that this is a strange halving, as a new all-time high price of roughly $72K hit right before the expected halving, and each halving cycle hits a “low price” that’s drastically below the recently set all-time-high price.
General Online Censuses: After the halving, we can expect small miners with outdated computers to shut down, while the larger miners are likely to grow. With a decreased payment to miners, the price could rise long-term unless of any crazy market events.
https://preview.redd.it/gb8pyldjjktc1.jpg?width=1456&format=pjpg&auto=webp&s=1f007f46a9375789c5eac0ba2b65b4ec10ff83af
Source: Bloomberg, as of 12/31/23. Past performance does not guarantee future results.
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