After posting a reassuring rise that started at the beginning of last week, Bitcoin is once again in the spotlight, and this at a time when the entire crypto ecosystem is bubbling with the approach of the mergethe latest update to the Ethereum blockchain.
With a price that rose from $18,505.7 on September 7 to $22,680.1 Tuesday, September 13, the situation indeed seems positive for the first cryptocurrency in terms of market capitalization. Investors are thus preparing for a possible Bull Market and this after several months of falling market. Amidst the excitement generated by this price increase, news about the Bitcoin halving is starting to generate reactions from several analysts on Twitter.
Back to the Bitcoin halving mechanism
When Bitcoin was launched in 2009, miners received 50 bitcoins each time they managed to mine a block. This reward is systematically divided every 210,000 blocks, roughly every four years, and this automatic process is called halving. The next one was originally planned for 2024 but a combination of factors suggests that this event could take place a few months earlier.
To fully understand the halving mechanism, we must also mention the Bitcoin hashrate. The latter represents the computing power required to secure the network and make it work. Bitcoin miners compete to add new blocks every 10 minutes approximately, thus allowing transactions to take place in exchange for a reward.
As @TheTIEIO points out in a message posted on Twitter, the hashrate is historically high over the current period and its increase seems to be set for the long term. Thus, the user continues and declares:
“As the Bitcoin hashrate increases ever more significantly, there is one essential point to remember: the halving. Before this rise, it was expected for 2024 but now the scheduled date for the next Bitcoin halving has been brought forward to the fourth quarter of 2024”.
A priori, this is therefore a positive sign for the price of Bitcoin, because if we look at the data from previous halvings, we see that the movements have most often been favorable. During the previous halving which, as a reminder, took place during the year 2020, the price of BTC was around $8,500. But only a few months after the event, the value of the first cryptocurrency on the market soared to exceed the bar of 27,000 dollars.
Nevertheless, it should be noted that one of the developers who is currently working on Bitcoin has tried to temper the ardor of enthusiasts and other convinced maximalists by recalling via a slightly sarcastic Tweet that the difficulty readjustment algorithm is a detail not to be overlooked.
Changes in the hashrate are indeed counterbalanced by this algorithm which aims to protect the network from too sudden variations, and this by adjusting the difficulty of the Bitcoin mining process. To carry out its mission which consists in maintaining this duration of approximately 10 minutes for each mined block, the algorithm is able to modify the difficulty of the mining every 2016 blocksor on average every two weeks.
In practice, it is not yet possible to say with certainty whether the sole increase in the hashrate will be sufficient to bring forward the date of the halving by several months and take it from 2024 to 2023, nevertheless it is a a clear sign of the good health of the network.
However, the long term remains uncertain for Bitcoin mining due to a significant aspect, that of ecology and energy. In a recent report published last week by the White House, the energy consumption linked to Bitcoin as well as other blockchains using a system Proof of Work (French Proof of Work) is described as disastrous. This just a few days before the passage of the Ethereum blockchain, currently number 2 in the ecosystem, to a system Proof of Stake (Proof of Stake) significantly greener.