The brilliant algorithm intervened, and the supply of digital gold, bitcoin, fell by half again

Judit Rédei;

bitcoin; cryptocurrency;

2024-04-21 14:21:00

The market was not caught unexpectedly by the halving, investors speculating in virtual currency prepared in advance for the reduction in supply, but there are companies that lost 30.2 percent of their value.

The supply of digital gold, bitcoin, is halved, as the halving took place on Friday, one of the most important events in the crypto world, which has been preoccupying investors for months. After that, the success fee for miners will be 3.125 bitcoins, instead of the previous 6.25, i.e. half as many digital coins will cost following a successful transaction as before.

Although it may seem mystical to an outsider, it was not the hand of God, but the brilliantly developed algorithm of the inventor of bitcoin that moved the threads. Nakamoto Satosi, or a person hiding behind a pseudonym, long ago decided that no more than a total of 21 million virtual coins could enter the blockchain, so he built mathematical brakes into the software, which gradually cripple bitcoin mining. This will be closed for good sometime in 2040. The brake is self-propelled, at least according to our knowledge so far the original design is unhackable, so the halving occurs without human intervention, at a moment that cannot be precisely determined in advance, every 210 thousandth block inserted into the chain (a successful solution verified by the chain) acts as a starting pistol, after that the first affected the miner’s electronic wallet receives a halved reward. Anyway, on average, the stock increases by one block every ten minutes, i.e. from now on 3,125 bitcoins.

The market was not caught unexpectedly by the halving, investors speculating in the virtual currency prepared in advance for the reduction in supply. In the history of the virtual currency, Friday’s was the fourth halving, which this time caused slightly different reactions than the previous three. The reward available in 2009 was 50 bitcoins, the first halving took place in 2012, followed by 2016 and 2020 in a row. The halving was always followed by an immediate increase in the exchange rate, after the first the exchange rate increased by more than 90 times, the second by 30 times, and the 2020 by 8 times. This time, however, there was nothing to show the fear caused by the threat of a reduction in supply, the speculators had priced in the changing situation in advance, the exchange rate would not have gone away, but rather kept going down. In recent days, bitcoin has hovered around $64,000, after hitting a peak of $73,800 in mid-March. The JP. Analysts at Morgan and Deutsche Bank do not expect a major swing, they believed that many people had hedged in advance and then rushed to put their stocks on the market. The exchange rates of the larger companies listed on the stock exchange also continued to fall, but there was something to lose, after they appreciated by 300-600 percent in the past year, now, preparing for the halving, the balance sheets indicated a 30-40 percent price drop in the first quarter of the year. Thus, for example, Marathon Numerique (MARA) became more valuable by 586 percent last year, of which it has now dropped 30.2 percent.