BSV Halving: Will The Transaction Fees Pay-Off?
Bitcoin SV sent shock-waves across the crypto sphere with a striking price spike in early January. With an unceasing buzz in the community, the team is gearing up for major upgrades to the network in the upcoming weeks. Halving event is going to be a crucial upgrade as it is going to be the first for BSV and may have an impact on the whole network.
In this short post, ChangeHero will give you a brief outlook of everything you need to know about BSV Halving.
A Maiden
A quick background story on Halving for the starters — In return for confirming the transactions miners are given a block reward, freshly mined cryptocurrency in this case. This ensures that miners are incentivized for contributing to the network. Unlike the dollar bills, cryptocurrencies are deflationary in nature and the supply is limited, talking only the decentralized ones.😉 To avoid the improper distribution of the coins, Satoshi Nakamoto has introduced a unique phenomenon called Halving. It reduces the block reward for every 210,000 blocks and ensures an even distribution of the coins to maintain the value of the cryptocurrency. Looking for more info on Halving? Quickly go through this article.
Back to the topic, BSV is about to undergo it’s first halving event the coming months and the news flew under the radar due to the Genesis upgrade. Though we do not have a precise date yet, the halving will take place at the block #630,000 and is expected to happen in April. The current block reward of 12.5 BSV will be reduced to 6.25 BSV after the maiden halving event.
Everything Around The Miners
2020 will get into the history books of the crypto as three Bitcoin-based chains will be going through halving within three months. Though the dates may vary a bit, it is expected that BSV and BCH halving will take place before BTC. On a different note, miners invest a lot to gain access to computing power and finding the block. With the block reward decreasing, miners would initially look for alternatives to be profitable. As all the three chains run on the SHA-256 hashing algorithm, there is a considerable chance that miners could shift to the BTC chain right after the BSV halving to cash in the extra rewards for a short period. Either way, it is too early to predict and it would be good to wait for the things to unfold.
Additionally, there is some criticism about miners contributing to BSV mining and not being able to make ends meet. Adding fuel to this, the initial impression of halving does look unfavourable to the miners as the reward will be slashed in half. There are only two ways that one might find mining to be profitable — one being an increase in the value of the crypto and the other is the transaction fees from the block. Betting on the future price of the coin might not be the optimal choice as there will be a plethora of factors affecting the price of BSV. BSV team aims to counter this by compensating the miners with transaction fees to transform mining into a profitable activity. This will be made possible by increasing the block size and lifting off the limits completely as a part of the Genesis Hard Fork in early February. Quick reminder: Go through this article quickly to learn more about the BSV Genesis Hard Fork.
The team is playing around with this feature on the STN and reported some impressive figures recently. On January 25, Block #14893 was mined at over 1GB and consisted of a whopping 5,449,866 transactions. As a cherry on the top, the block has generated 10.73654716 in BSV as fees accounting to around $3000. This would definitely draw the attention of the miners and make them stay on board.
As of writing, BSV is being traded at a price of $301.46 and a circulating supply of 18,222,577 BSV with block count #619591. As it is the first-ever halving event for the chain and there is no historical data to draw patterns from, it is near to impossible to forecast the price of BSV after the halving premier.
Flying under the radar
Though there isn’t much of a chatter on BSV halving, the event does appear to instigate major changes in the network. In the short-run, we could witness miners who look for profits migrating to other chains. Conversely, in the long-run, approaching the halving by compensating with more transactions in a block has all the possibilities of turning out to be a success.
In a nutshell, outcomes of the halving are very much interconnected with the Genesis upgrade which lifts the block size limits allowing more transactions per block. This would, in turn, result in more fees to the miners despite the low network fee per transaction, ultimately a win for both the users and miners. It is evident that BSV team has chosen a sensible way to combat the rewards reduction with the vision of a scalable chain to build a better world for both people and businesses.
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