The crypto community has been waiting for 2020 for a long time. Many analyzes made in 2018 and 2019 focused on 2020. What makes 2020 so privileged is the Bitcoin halfway, which is held approximately every 4 years.

Bitcoin Halfway

When 2020 started, investors were excited. After all, the "half-year" began. An unexpected guest appeared on the scene when everyone was discussing the possible effects of the Bitcoin halving event on the price:

Covid-19

The corona virus, which made itself felt in January and turned into a global epidemic in February, turned the global markets upside down. The crypto community was caught unprepared for this invisible monster. While the price started to rise before Bitcoin halving, investors' hope had increased. After the price rose to $ 10,500, he made some correction that the corona panic that started in the USA dropped 46% after the public address of President Trump.

Bitcoin entered the day of March 12, 2020 at $ 7900. The closing of the day was recorded as 4540 dollars. This fierce decline had a complete shock effect in the industry. Pricing due to the halving effect in May was replaced by panic sales due to the fear of the corona epidemic. The sector was once again faced with the crisis of trust.

As of today, 1 month has passed since the big crash and Bitcoin is trading at about $ 6700. Based on the bottom of 2020, that is 3620 dollars, which took place on March 13, the price has increased approximately twice.

We have stated that it has been 1 month since Bitcoin collapse. The historical Bitcoin halving has a full 1 month. Due to fluctuations in the Bitcoin difficulty level, the split is expected to happen on May 12 or 13.

What Will Bitcoin Bring to Halfway?

Bitcoin half-efficiency is the biggest weapon an asset that has the target to be a store of value. Because of this, it can provide a deflationary policy unlike the money in the market. When the Bitcoin blockchain network became operational, 50 BTC awards were distributed per block. With the halfway in 2012, this number dropped to 25 BTC. This value was reduced to 12.50 BTC with the second half event in July 2016. With the third half that will be held in May 2020, the new value will be updated as 6.25 BTC.

Halfway events have always been seen as a triggering factor for the industry. Because the amount of BTC produced per unit time will be reduced by half. This means that the sales pressure from the miners has decreased significantly.

The Bitcoin blockchain network produces blocks every 10 minutes. Considering that 12.5 BTC is produced per block, the amount of BTC excavated in 1 day: 12.5x6x24 = 1800 BTC. After the third half of May 2020, the amount of BTC to be excavated per day will decrease to 900.

When the increase rate in the demand of an asset remains the same, if the increase rate in its supply is halved, the price will naturally increase.

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Miners will be deeply affected

The only BTCs miners dig for revenue. In order to subsidize mining transactions, they have to convert the bitcoins they have dug into cash. When you enter any stock market, you encounter dozens of buyers and sellers on the board. Traders buy and sell, but miners only sell.

Perhaps the most important part of the Bitcoin ecosystem are miners. They are the ones that will be affected by the upcoming halfway activity at the first degree. Bitcoin difficulty level is increasing gradually. Increasing difficulty means that miners are now competing with more opponents. During halving, which will take place one month later, the income will be halved as if it were cut with a knife.

The huge fall supported by the corona virus panic in March displaced some stones. The Bitcoin difficulty level, which was calculated based on the total hash power, made its strongest decline after 2011. Difficulty dropped by 16%. This meant only one thing. Individual miners who could not bear the fall of BTC left the system.

Bitcoin Cash, the best-known hard fork of Bitcoin last week, was split. The hash power of the blockchain network has decreased significantly after the halved reward. Miners made the switch to Bitcoin mining that has not yet been used, using the same algorithm. This worries Bitcoin miners because of the similar turn they will encounter a month later.

Bitcoin Halfway Effect

If Bitcoin price rises in a straight linear order, there will be no problem in reducing the income from mining services. Even if the amount of BTC excavated is halved, if the unit BTCs are sold at 2 times the price, the income remains the same. However, it is seen that the expected rise did not come to a halt with one month remaining. Bitcoin is well below the $ 10,000 line, which is the psychological limit.

If the price continues to hover at these levels when the Bitcoin split is realized, the miners will be faced with a shock similar to the shock they experienced on 12 March. On that day, Bitcoin value had decreased by about half. On May 12, the amount of BTC they will win will be halved. Therefore, it can be said that weak miners will withdraw from the stage in May.

There are large mining pools that have a voice in the mining industry. These pools have lower operating costs than individual miners because their fixed costs are less. Miner's capitulation in March caused weak miners to leave the system. The same effect is expected in May. In other words, we can say that the equivalent of natural selection in the mining sector is Bitcoin half-efficiency.

Miner Natural Selection

The first factor affecting the cost of miners is the hash capacity of the device they use. If you are digging with an old-fashioned device, you will be less likely to win the BTC award in parallel with your low hash power.

The second factor is the electricity cost of the device. New miners offer higher hash power with less electricity consumption. The third factor affecting the miner's profitability is the Bitcoin price. If the BTC price is low, operations cannot be further subsidized.

According to some analysts, after Bitcoin has risen to $ 8100, it may enter a new wave of sales and be blown up to the $ 2400- $ 3400 range. In such a possibility, only the most powerful devices can survive. This will damage the high hash power, which is the most powerful weapon of the Bitcoin blockhain network.

Bitcoin continues its way

Satoshi Nakamoto was alone when he dug the first blog on January 3, 2009. Despite all the troubles experienced now, there are thousands of miners around the world. Moreover, Bitcoin's decentralized currency philosophy excited all innovators, especially cyberpunk youth. Despite the states' bans and deep depressions in the global economy, Bitcoin will continue on its way. Although motto, which was used frequently for Bitcoin for a while, makes different connotations these days, it is not possible to pass without adding; "Once the virus is infected!"