The Bitcoin Halving Approaches: Miners BitFury and BTCC Not Concerned

The second-ever Bitcoin block reward halving is estimated to take place in a little under two weeks, and the overall effects of this event are still somewhat of an unknown. There has been a runup in the Bitcoin price over the past month, and many claim this is due to the upcoming halving, where the number of new bitcoins created roughly every 10 minutes is cut in half (from 25 to 12.5).

To get some informed opinions about what could happen next, Bitcoin Magazine reached out to BitFury CEO Valery Vavilov and BTCC COO Samson Mow. BitFury manufactures ASIC Bitcoin mining chips (and mines with them), and BTCC controls one of the largest Bitcoin mining pools (in addition to other Bitcoin-related services).

A Slight Drop in the Network Hashrate

Although Vavilov and Mow were contacted separately, they had similar views on the upcoming Bitcoin halving. One of the most common, possibly-negative effects of the halving discussed in the past has been the idea that the network hashrate will decline as a result of the lower number of bitcoins released to miners on a regular schedule.

In terms of this possible issue, Vavilov stated:

“Some decline in the Bitcoin network hashrate is expected, and we believe it will be insignificant. The most important thing is that even if the hashrate declines, it will not compromise the security of the Bitcoin network. As to the Bitcoin price, it surged close to 20 percent over the weekend spanning June 11th and June 12th, and it is a very robust appreciation. This is an indication that the halving event is regarded as a good thing for the Bitcoin industry and it is positively impacting the market even before it takes place.”

Mow shared similar comments:

“It's likely we'll see the overall network hashrate drop slightly after the halving as some smaller miners find it less profitable to continue mining. However the longer-term effects will probably be negligible. Many smaller miners outside of China are mining on the PPLNS model so they are really mining on luck and are not as price sensitive. Within China, nearly all miners are on the PPS model, so their costs and revenues are very stable and predictable. That allows miners in China to optimize their operations for the halving and reduce any potential risk.”

Mow also agreed that the halving could continue to have a positive impact on the Bitcoin price. He noted, “The halving will work to drive up the price, and I believe the upward price movements we've seen lately are the first wave of the upcoming halving-related price increase. Post-halving, we'll see the upward trend continue as fewer coins are being supplied to the market and the halving risk is shown to be a non-issue.”

Although Vavilov and Mow acknowledge the network hashrate may decline slightly, they do not think it will have an overly negative impact on the network.

The Halving Spurs Innovation


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