‘Pattern’ is not exactly the favorite word of the decade, when it comes to bitcoin’s price. The currency is known for its unpredictability and volatile nature. The revolutionary technology that underpins bitcoin is undoubtedly the transforming spin of the century in the fin tech world. But the genius behind this technology, also goes by the <a href="https://www.cryptoknowmics.com/news/satoshi-nakamoto-finding-the-face-behind-the-pseudonym/" target="_blank" rel="noopener">pseudonym Satoshi Nakamoto</a>, succeeded in blocking off potential loopholes that could be manipulated and created a unique crypto ecosystem for trading and mining bitcoins safely.

One of the very few observed patterns in bitcoins market value is evident during halving. 

It's been more than 3 months since the 3rd bitcoin halving occurred this year, and quite expected the price of the currency took a sudden spike around the time of halving as it did before. The value of the coin took a spike by $3000 settling at $11,754 on August 11th, 2020 from $8,794 on the day of the halving. 

Bitcoin Halving Price impact on miners

The sudden rise in the BTC price is due to the concept behind the halving process, which reduces the BTC rewards received by miners for processing transactions by half, reducing the bitcoin halving price to 6.25 this year. This event contributes to the fear that comes with the scarcity of bitcoins while completely demolishing the source of producing new bitcoins, as all bitcoins are expected to be mined by the year 2141.

Bitcoin halving occurs when 210,000 blocks are successfully mined, which takes approximately 4 years to complete, reducing the BTC reward and the rate at which new bitcoins are created. This raises some very justified questions including what will happen when all 21 million bitcoins are mined and impact on miners as we reach towards the final halving.

It is a hard fact that the group of people who will be impacted the most with each halving will be miners, as they will be rewarded less and less with each halving. There are evident facts that contribute to the assumption that miners will be taken aback with the lack of BTC rewards with each halving especially after a difficult and costly mining process, potentially losing faith in the network itself. It is  safe to assume that they might lose interest as their mining activity will become unprofitable with the heavy cost used up in hardware systems and electricity. Some may also assume that miners will stop altogether unless the network works out a way to make it worth their while because miners aren’t just validators of transactions and producing new bitcoins but their activity directly contributes in keeping the system decentralized and away from being owned by a single authority.

It is a possibility that if miners abandon the network, it may quickly move toward centralization or even fall out.

Transaction fees contribution to the miners advantage

With every successful validation, there is a transaction fee to be given to the miners. Even with the reduced BTC reward which will only go down with each halving, the transaction fee would still be the pull towards the network.

Transaction fees surges with the hike in currency exchange in order to avoid congestion in the network. The Bitcoin halving price has proved to bring a high in the BTC’s transaction fee. On may 14th of this year, the transaction fee hit $5.16, highest in the 11 months before May, not to mention just a couple of days after the halving.

As we reach towards the mining of the final bitcoin, the possibility of any new bitcoin would be diminished which will possibly increase the value of the currency and lead to increase in currency exchange and transactions recorded in the blockchain. With the increase in the demand of prioritizing the transaction in the blockchain, the transaction fee which is valued for just hundreds of dollars today could possibly increase to thousands of dollars for every block.

Conclusion

The <a href="https://www.cryptoknowmics.com/news/polkadot-gets-integrated-with-chainlink-first-non-ethereum-blockchain-backed/" target="_blank" rel="noopener">blockchain network</a> creates an interdependence within the system directly affected by the increasing or decreasing market value of the bitcoin. As bitcoin price heightens, the trade and exchange activities will witness a surge resulting in demand of transactions validity recorded in the decentralized system, sending a price in the transaction fee for the miners.

As mentioned above, the miners come under the category of individuals that will be affected the most with <a href="https://blog.cryptoknowmics.com/what-is-bitcoin-halving-2020/" target="_blank" rel="noopener">bitcoin halving</a> price, but the scarcity of the currency that is reminded with every bitcoin halving increases its market value and the wheel spins again resulting in the increase of transaction. There are both positive and negative spins to this whole concept which can only be based on predictions and can probably change with evolution and if the number of existing bitcoins is increased by the network or if the network finds a better way of compensating miners in the future.  
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Bittersweet taste of mining with Bitcoin halving price 

Bitcoin halving directly affects miners but at the same time serves as a reminder of the scarcity of this cryptocurrency resulting in a quick price hike.

Ashna is a graduate from Amity University specializing in Journalism and Mass communications. She is currently working as a content writer for Agio support solutions Pvt. Ltd. She aims to provide quality content and strategy in the field of cryptocurrency and work with digital marketing platforms to deliver brand-specific strategies.

Bittersweet taste of mining with Bitcoin halving price

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