The mining reward for Bitcoin just got reduced by 50% early today, a mechanism established by the digital currency’s creator in an effort to control supply and maintain stable inflation. The move will slash profits in half for miners from now on and it’s likely that it will result in a lot of miners abandoning their efforts as profits will come under question.
Minning which is a process to maintain greater security and stability of the whole bitcoin system, where miners are required to solve computer generated puzzles for which they are rewarded bitcoins. The reward for one block mined is now $8000, and up until yesterday, it was double the amount or $16000.
The price of Bitcoin fell below $630 from a high of $660 today, but experts assure us it won’t last. In fact, they say that the halving of the reward could result in higher prices for the cryptocurrency. This was the case last time when the halving in 2012 occurred, the price of Bitcoin skyrocketed to all-time highs.
Some companies have already declared bankruptcy in the months leading up to this halving, however, analysts say that for the companies that will remain in business the rise in the price of Bitcoin would likely compensate for the reward slash.