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Brave New Coin Weekly Bitcoin halving countdown update: 25th March

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What is the Halving?

Bitcoin is a decentralized digital currency that enables instant payments to anyone, with no central authority. The Bitcoin network is secured by miners which are specialized computers that use a consensus mechanism called “proof of work” to verify each block of bitcoin transactions.

The miner that verifies each block is rewarded for their work with newly-created bitcoins. This ‘block reward’ is how new bitcoins are released into the system. A new block of transactions is added to the Bitcoin blockchain approximately every 10 minutes. The current reward is 12.5 bitcoins per block.

An average of 144 blocks are mined every day which means approximately 1,800 new bitcoins are generated every 24 hours.

The number of new bitcoins that are created via the block reward is reduced by half every four years. This is known as the Bitcoin Halving. The next halving will be the third halving, and the current block reward of 12.5 bitcoins will reduce to 6.25 bitcoins.

This week in the halving countdown

The Bitcoin network’s hashrate trended downwards again last week, pushing the halving prediction dates out to the second half of May.

This week’s consolidated (across all Brave New Coin prediction models) Bitcoin block reward having prediction date is _16/05/2020 2:04.

The consolidated prediction date from a week earlier was 14/05/2020 14:09 This week’s predicted date is 48 hours and 23 minutes later than last week. Each model is recalculated every day. The consolidated block halving prediction date has been pushed back quite significantly.

The Bitcoin network’s hashrate capitulated last week, dropping by over X% between the 16th and 17th of March, losing over 20 quintillion hashes per second in one day. The Bitcoin network’s hashrate now sits near the November 2019 level, and it appears that the long term positive trend that this fundamental metric was on will be temporarily broken.

The hashrate directly affects average daily block times, the key indicator used to predict the halving date. With demand to mine on the Bitcoin network dropping, it’s taking longer for miners to find a new block. This forces halving block, block #630,00. The Bitcoin network’s hashrate has been extremely volatile over the last month, having been on a steady uptrend for much of 2019. This has made predicting the block halving more difficult and may affect how effectively stakeholders can allocate capital in anticipation of the halving.

Bitcoin analyst Rekt Capital points out that many miners capitulated/or ended mining operations last week, despite it coinciding with a strong rise in the price of the asset. Normally BTC’s price and hashrate are strongly positively correlated, however, this tends to change in the immediate months before a halving as miners switch off machines in preparation for a sharp drop in mining profitability once block rewards are slashed post halving. This time around though, with factors like the sharp price drop of BTC in the last month, and far reaching economic chaos caused by the COVID-19 crisis, many miners appear to have capitulated.

Hashrate bounced back in the last few days, finally catching up with BTC price gains. These gains, however, were much smaller than the loss in hashrate output over the course of the week. Many miners may have temporarily switched off machines as the price of BTC dropped below US$5,000, but have since switched machines back on as the price of BTC surges past the US$6,500 price level.

https://bravenewcoin.com/data-and-charts/bitcoin-halving

Halving prediction dates

Current-halving-prediction-model-dates (4)

Average predicted block halving date 22/03/2020 across the 8 different models= 16/05/2020 02:04

Average predicted block halving date the week before across the 8 different models= 14/05/2020 01:41

Difference= 48 hours & 23 minutes later

Date Convergence charts

Scenario 1: Average Daily Block Time

This is the average execution time of all Bitcoin blocks mined the day before. This model estimates the number of days left until the next halving, by multiplying the average daily block time by the number of blocks left to be mined before the next halving. Using this measure we calculate the timestamp for next halving.

Average-daily-block-time (4)

Average predicted halving date (first observation 01/01/2019)= 12/05/2020 20:59 Predicted halving date on 08/03/2020= 20/05/2020 09:14

__Scenario 2: Cumulative Average Block Time __

This is the cumulative numerical average of execution time of all Bitcoin blocks mined till the present day. In order to remove the long gap between the initial block execution, the average block time between those blocks is taken as 600 seconds. We estimate the number of days left until the next halving, by multiplying the cumulative average block time with the number of blocks left to be mined before the next halving. By using this measure we calculate the timestamp for next halving.

Cumulative-average-block-time (4)

Average predicted halving date (first observation 01/01/2019)= 08/05/2020 08:35 Predicted halving date on 22/03/2020= 11/05/2020 13:59

Scenario 3: Simple Moving Average Block Time 50 day

This is an arithmetic moving average of all block times calculated by adding the average block time of blocks executed each day for the last 50 days of the period. This is a lagging technical indicator which applies an equal weight to all observations over the period for determining if the block time will continue to have the same trend or reverse it. If the simple moving average points up, this will explain the increase in the number of blocks execution which means the halving date will arrive faster than expected. If it is pointing down it means that the blocks executed will decrease on a daily basis and the halving date can move further away.

Simple-average-block-time-over-50-days (4)

Average predicted halving date (first observation 01/01/2019)= 13/05/2020 18:14

Predicted halving date on 01/03/2020= 14/05/2020 01:18

Scenario 4: Exponential Moving Average block time 200 day

This is a type of moving average where a greater!significance is given to the most recent average block times. This provides good signals on crossovers and divergences from the historical average block time. This is a lagging technical indicator. When the average block time crosses the moving average block time, the large changes are expected in the average block time, where the trend changes direction. As EMA provides higher weight to the recent daily average block time than on older data, it is more reactive to the latest block time changes.

exponential-moving-rate (4)">exponential-moving-rate (4)

Average predicted halving date (first observation 01/01/2019)= 15/05/2020 08:56

Predicted halving date on 01/03/2020= 13/05/2020 17:01

[https://bravenewcoin.com/data-and-charts/bitcoin-halving]

Network fundamentals

Bitcoin-Hashrate (4)

Average Daily Hashrate 15/03/2020- 22/03/2020= 95,340,488,026 Th/s

Average Daily Hashrate the week before= 109,801,817,357 Th/s

Percentage change= -13.17%

Bitcoin left to be mined before the halving as of 23/03/2020= 92575 btc



OhNoCrypto

via https://www.ohnocrypto.com

Aditya Das, Khareem Sudlow