🚀 Bitcoin’s Fourth Halving Block Sees Additional $2.4 Million Reward Paid as Fee

🔓Uncrypto The Crypto🚀

🧱Block 840,000, the fourth-ever Bitcoin halving block, has been confirmed. This significant event in the Bitcoin network resulted in an additional $2.4 million reward paid as fees. The halving block appears to be from the crypto mining pool ViaBTC, which included a total of 3,050 transactions in the block. The reward paid as fees for these transactions amounted to 37.6256 BTC (equivalent to $2,401,399).

🔄 While this block has been confirmed, it’s essential to note that there is a possibility of changes due to something called chain reorganization. Chain reorganization occurs when two miners verify a block on the blockchain at around the same time, potentially altering the confirmed state of a block.

🚀 Bitcoin’s Halving Created the Most Valuable Blocks in History, Aside From One.

New developments in Bitcoin led to sky-high fees paid to miners during halvings. However, one famous mistake in Bitcoin’s history still holds the top slot. The halving mechanism, integrated into Bitcoin’s protocol by its pseudonymous creator, Satoshi Nakamoto, aims to control the supply of bitcoins. During a halving, the number of bitcoins entering circulation roughly every 10 minutes (known as block rewards) is reduced by half. For instance, the third halving in Bitcoin’s history occurred in May 2020, reducing the block reward from 12.5 to 6.25 BTC. The 2024 halving further decreases block rewards to 3.125 BTC.

📅 The Bitcoin halving occurs approximately every four years after every 210,000 blocks are mined. The first halving took place in November 2012, followed by subsequent halvings in July 2016 and May 2020. The fourth halving is estimated to occur at the block height of 840,000.

💥What is the significance of Bitcoin halving?

🔍 The significance of Bitcoin halving lies in its impact on the cryptocurrency’s supply, market dynamics, and long-term value. Here are the key points that highlight its importance:

✔️Controlled Supply: Bitcoin’s total supply is capped at 21 million coins. Halvings are a mechanism to ensure that the creation of new bitcoins slows down over time, which is expected to continue until around the year 2140. This controlled supply mimics the extraction of precious resources like gold, which become harder and more resource-intensive to mine over time.

✔️Inflation Rate Reduction: Each halving reduces the rate at which new bitcoins are generated, effectively halving the inflation rate of the cryptocurrency. This is significant because it contrasts with fiat currencies, where central banks can print money at will, potentially leading to inflation.

✔️Miners’ Reward Adjustment: Miners are rewarded with bitcoins for verifying transactions and adding them to the blockchain. The halving reduces the reward that miners receive, which could impact the security and processing power of the network if miners find it less profitable and decide to exit.

✔️Market Speculation: Halvings tend to attract significant attention from investors and traders. The anticipation of reduced new supply often leads to increased buying activity and speculative price increases, as seen in the months leading up to previous halvings.

✔️Long-Term Value Proposition: The halving events reinforce Bitcoin’s proposition as a store of value. The decreasing supply, coupled with increasing demand, is theorized to drive up the price over the long term, assuming demand remains strong.

💰 How does halving impact Bitcoin's price?

📉 The impact of Bitcoin halving on its price is a subject of much interest and speculation in the cryptocurrency community. Historically, halving events have been associated with an increase in Bitcoin’s price. 

Here’s how it generally impacts the price:

➡️Supply Shock: Halving reduces the rate at which new bitcoins are created, effectively halving the inflation rate of the cryptocurrency. This sudden reduction in supply, if demand remains constant or increases, can lead to a price increase.

➡️Speculative Anticipation: In the months leading up to a halving, there is often increased speculation and buying activity as traders anticipate the supply reduction’s potential impact on price.

➡️Historical Precedent: Past halvings in 2012, 2016, and 2020 have been followed by significant price increases.

➡️Long-Term Price Peaks: While immediate effects on price can vary, historical data suggests that price peaks tend to occur around 500 days after a halving event.

➡️Miner Economics: The halving can impact miners’ profitability, potentially leading to a decrease in mining activity. However, if the price increases, it can offset the reduced block reward, maintaining the incentive for miners to continue securing the network.

Alessadro Borghi

Borghi Consulting