The third halving of Bitcoin: the reward of miners has halved to 6.25 BTC

Halving of bitcoin in 2020 took place. A few minutes ago, a block with the number 630000 was extracted, in which the pool received only 6.25 BTC.

The first block with a reduced reward appeared at 22: 25 on may 11, Moscow time, it was extracted by Antpool. The reward in a coinbase transaction was 6.25 BTC, and the amount of commissions that also went to the pool was just under 0.91 BTC.

Halving the reward of miners has two main consequences. First, of course, a decrease in the supply of BTC on the market will lead to an increase in the rate in the future. But this will not have an instant effect. This, obviously, was used by the “whales”, who in the last three days sold the bitcoin exchange rate from the pierced may 7-8 bar by $10,000 to $8,400 today. Growth expectations have already been set in recent months. In itself, the halving has not added anything new, but a small speculative bubble is quickly blown away.

The second consequence of halving is more negative. Reducing the reward will make a significant share of ASIC miners of previous generations unprofitable, and their owners will be forced to turn off unprofitable equipment or transfer it to other blockchains. This will lead to a sharp drop in hashrate and a temporary decrease in network security. But there will also be a more direct effect that will affect everyone. A drop in hashing power will result in slower block creation until the next complexity recalculation. This means that transactions will take longer, and their fees will increase several times.

It is the topic of transaction fees that now comes to the fore. The coming months will show whether miners should expect that someday transaction fees will exceed the block reward and provide them with work for an unlimited time. Last week, the average bitcoin transaction fee reached its highest level in the past ten months at $3.19. But this is more likely a consequence of market volatility and increased user activity.

According to information
Bitinfocharts, on may 8, the average bitcoin transaction fee was $3.19, which was the highest since July 2019. The previous increase in the size of commissions was recorded on April 30 – then the fee for a bitcoin transaction was $2.94.

In may, the average Commission rate briefly dropped to $1.8 last week, and then gradually reached a new high of $3.19. however, over the past weekend, commissions fell again, and on may 10, the average transaction fee was $2.7. When the price of BTC reached an all-time high in December 2017, the average transaction cost reached $55. For the processing of some transactions with low Commission required several days.

There is an assumption that miners will encourage higher commissions after halving. Since miners have to work the same way for half the money, they can only start processing transactions with high fees in order to continue making profits. But if user activity decreases, then the miners will be forced to include any existing transactions in the blocks, and the commissions will go down again.