Bitcoin halving may arrive sooner than expected

Rising Bitcoin hashrate: Right before Bitcoin's much-anticipated halving event, expected to take place in the coming month, the Bitcoin blockchain is witnessing a strong surge in its hashrate that may lead the Bitcoin halving to occur sooner than market expectations. 

Mining companies are capitalising on the bullish trends in the market by bringing new, more powerful rigs online and reactivating older machines, thereby driving up the network's hashrate, according to reports from CoinDesk.  

But what does Bitcoin halving mean? And why is the Bitcoin hashrate rising? In this report, we will dive deeper to explain the phenomenon and the reasons behind the halving rush. 

Bitcoin halving explained

Bitcoin halving is an event programmed into the Bitcoin protocol that occurs approximately every four years, or after every 210,000 blocks mined. During this event, the reward given to Bitcoin miners for validating transactions on the network is halved. 

This means that the rate at which new Bitcoin is created decreases by half, reducing the overall supply of Bitcoin entering circulation. The purpose of the halving is to control inflation and ensure the scarcity of Bitcoin over time, similar to how precious metals like gold are mined at a decreasing rate. Looking forward to 2024, the new halving set to reduce the mining reward from 6.25 BTC to 3.125 BTC per block.

As a result, Bitcoin’s halving is often anticipated by investors and traders, as it historically has led to an increase in the value of Bitcoin due to its reduced supply and increasing demand. 

What is Bitcoin hashrate and how is it calculated? 

Bitcoin hashrate refers to the computational power expended by miners to secure and validate transactions on the Bitcoin network. It represents the speed at which miners collectively solve complex mathematical puzzles to add new blocks to the blockchain. 

Hashrate is measured in hashes per second (H/s), or more commonly in exahashes per second (EH/s) for Bitcoin, indicating billions of hashes per second.

Bitcoin hashrate chart (1-year) | Image credit: CoinWarz

The calculation of Bitcoin hashrate involves estimating the total computational power of the network by analysing the number of hashes performed per second by all miners. This calculation typically relies on data from mining pools and specialised hardware, such as ASICs (Application-Specific Integrated Circuits), which are optimised for Bitcoin mining. 

Bitcoin hashrate unites | Image credit: CoinWarz

As more miners join the network or upgrade their equipment, the hashrate increases, enhancing network security and efficiency. Conversely, fluctuations in hashrate can impact transaction processing times and the overall stability of the Bitcoin network.

Can Bitcoin halving occur earlier than expected? 

Yes. The Bitcoin’s block reward halving will happen whenever the 8,40,000th block is added to the blockchain and it has nothing to do with any specific date. 

Image credit: Nicehash’s Countdown

The Bitcoin blockchain still needs to add 4,391 blocks to the blockchain to reach the halving mark and if the hashrate continues to increase in the coming days, the mark will be reached sooner. 

Mining companies are investing in newer, more powerful equipment, such as the latest Antminer S21s, which nearly double the hash rate per slot compared to previous models like the S19 series.

Initially, the halving was scheduled for April 28 and as per the current hashrate, it is expected to take place around April 15, according to Nicehash's countdown and it may vary depending upon the blockchain hashrate at the particular time. 

Halvings occur every 210,000 blocks, approximately once every four years, though occasional difficulty adjustments are made to maintain consistency. However, during bullish periods, the blockchain's pace can accelerate. As the cryptocurrency's price rises, mining rewards become more lucrative, incentivising more operators to increase their computational power.