Updated April 22 below. This article was originally published on April 21.
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Bitcoin’s value has defied warnings so much that bitcoin’s halving could simply spark a “sell-off,” bouncing from less than $60,000 per bitcoin this week to around $65,000.
Today, bitcoin miners and investors are grappling with a halving of the “chaos,” which has pushed bitcoin transaction fees to “unprecedented” levels.
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“This year’s halving was highly anticipated, as is often the case, but we had a small incident that requires further explanation,” Bitcoin’s Jimmy Song and self-proclaimed “Bitcoin expert” said on X.
“The block subsidy decreased from 6. 25 bitcoins to 3,125 bitcoins in the 840,000 block as expected, but what did not plan for the payment of 37,626 bitcoins that came with it. To give some context, this is by far the highest payout rate to lock in the subsidy. . that Bitcoin has ever had. A single transaction paid around 8 Bitcoins in payments,” a staggering $520,000.
So-called Bitcoin miners secure the Bitcoin network and process transactions in exchange for newly created Bitcoins and transaction fees through rugged computers that are meant to consume as much electrical energy each year as some small countries.
Update 4/22: Bitcoin billionaire and investor Mark Cuban has warned that Bitcoin miners will be affected by the halving of Bitcoin’s supply.
The Dallas Mavericks investor and Shark Tank star told The Block that halving bitcoin will “make miners pay. “
Cuban added that Bitcoin miners could simply move into data processing and AI design practice to make up for Bitcoin’s profit shortfall. “There’s an unprecedented demand from AI for those GPUs,” Cuban said. “Will this distort the economics of mining? Not just from a load standpoint, but could it be more effective to use those GPUs to exercise [AI] styles?
Meanwhile, analysts at crypto investment firm CoinShares also predicted that Bitcoin miners could simply move into synthetic intelligence knowledge processing due to the 50% relief in profits resulting from the halving.
“This trend suggests that Bitcoin mining would possibly move to locked energy sites while AI investments would accrue in more robust locations,” the analysts led by James Butterfill wrote, noting that Bitcoin miners, adding BitDigital, Hive, and Hut 8, are already generating profits through AI. while TeraWulf and Core Scientific plan to expand into AI.
Song added that the next five blocks of mined bitcoins had “fees of 4,486, 6. 99, 16,068, 24,008 and 29,821 bitcoins respectively,” calling them fees never recorded and an “unprecedented” situation.
In addition to other people paying the most reasonable dollar for a transaction to be one of the first after halving, Bitcoin network fees have been higher thanks to runes, a new Bitcoin protocol from the developer of the arguable non-fungible tokens (NFTs) in Bitcoin ordinals. Casey Rodarmor.
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Bitcoin’s value has skyrocketed in the run-up to its halving in 2024.
The runes are designed to enable the issuance of fungible tokens, dogecoin-like memecoins, on the Bitcoin network.
The first runes were issued on the 840,000th block of Bitcoin, “leading to the chaos seen,” Song wrote.
Releasing the runes at the same time as Bitcoin’s fourth halving is “thematically cool,” Rodarmor told Coindesk ahead of Bitcoin’s halving.
“We already see blocks where the payment is higher than the block subsidy, and this will become less and less unusual over time, and each will be halved. “
Runes is the popular BRC-20 token that brought fungible tokens to the Bitcoin network. However, the protocol claims to be a more effective implementation of token issuance.