Sat Jul 09 2016
Lucy Harlow (3651 articles)

Bitcoin Price Drops 5% Amid ‘Halving’

Bitcoin, the digital money, has just undergone its second-ever “halving” event.

Hard-coded into cryptocurrency’s rulebook is a law that cuts in half the value of the digital payout that so-called miners receive for supporting the network with their computing power. The event happens about every four years. (More specifically, after every 210,000 blocks of transactions are processed.)

As Balaji Srinivasan, CEO of the Andreessen Horowitz-backed Bitcoin company 21, described it, the occasion is a sort of New Year’s Eve for financial futurists.

The halving event has proven—and will continue to prove—consequential for the mining set. The Bitcoin backers who supply the CPU time and electricity that fuel the Bitcoin network do so to recoup a reward. Although the markets have been pricing in the impact of the long-awaited trim over the past few weeks, some miners face an uncertain fate: their prize just dropped to 12.5 Bitcoins per processed block, down from 25. With less potential revenue on the table, fewer miners may survive. Already, KnCMiner, a Swedish Bitcoin mining startup, filed for bankruptcy in May.

As the halving got underway, Bitcoin’s price fell 5% to near $ 627 per Bitcoin from about $ 660, according to CoinDesk data. At press time, the value of the cryptocurrency appeared to be recovering from the initial drop; its price hovered at just under $ 640, about a 4% drop for the day. Expect more volatility as the markets adjust.

Now days use and acceptance of bitcoin is gathering pace in fast manner. Bitcoins are being used from Starbucks to Online Gambling sites like BitcoinCasino.Best This show how fast people are embracing the block chain technology. Since the beginning of the year, Bitcoin’s value has risen almost 50%—a couple hundred-dollar increase, likely in anticipation of the impending scarcity.


Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe