The fourth Bitcoin halving has taken place

The Bitcoin network completed its fourth halving after block number 840,000 was mined, halving the miner reward from 6.25 to 3,125 Bitcoins.

On the morning of April 20, Hanoi time, the 840,000th block on the Bitcoin blockchain network was successfully mined by miners, marking the completion of the fourth "halving" event.

Bitcoin halving is pre-programmed into the Bitcoin network to limit inflation. Nakamoto Satoshi, the father of Bitcoin (BTC), added a piece of code so that after every 210,000 mining blocks, the reward for miners will be halved. This algorithm is called Bitcoin halving, which occurs every four years. The rewards are less, while mining Bitcoin is increasingly difficult, thereby creating scarcity and eliminating ineffective miners from the network.

Illustration of Bitcoin halving. Photo: Cointelegraph

One week before the fourth halving, Bitcoin price fluctuated sharply, falling from 70,000 to 67,000 USD. On April 19, the price even fell straight to the $60,000 area before rising to $63,000 this morning. Data from CoinMarketCap shows that over the past 24 hours, Bitcoin price increased by 1.16%.

According to Ms. Lynn Hoang, Binance representative in Vietnam, data from the three previous halvings showed that BTC prices always decreased before the event and peaked about a year later. However, the market is currently witnessing many unusual fluctuations , the world's largest cryptocurrency has even peaked before the halving.

"It is very difficult to predict the next price of Bitcoin because the current context has many impacts. Conflicts, inflation can all affect the market," Ms. Lynn said.

Meanwhile, M2 CEO Stefan Kimmel told Cointelegraph : "Bitcoin halving is an important event signaling major changes in the market. Digital currency prices tend to increase in the following months. With the fourth halving period , the upward trajectory may continue but will be lighter than before."

Bitcoin price movements a week before the "halving" event. Source: CoinMarketCap

Despite recent market changes, the cryptocurrency community remains optimistic about the impact of Bitcoin halving. Investor and billionaire Tim Draper believes that the event will push Bitcoin price up to $250,000. He has continuously reiterated this prediction since 2022. "The simple reason why Bitcoin increased after halving is that supply decreased, while market demand continued to expand, leading to a completely natural increase in price," he said.

According to Ms. Lynn Hoang, when it comes to halving, many people focus on price fluctuations. But taken as a whole, the event could also have a dangerous impact on Bitcoin, including the problem of mining across the network. Miners now receive 3,125 instead of 6.25 Bitcoins as before. If miners find that they are no longer profitable and stop mining, transactions on the Bitcoin network can become clogged, and thieves can dominate network operations.

Smaller block rewards and greater competition drive out small miners, leaving most of the computing power in the hands of large-scale mining factories. According to BTC.com data from 2016 to 2021, 30-40% of the hash rate across the network is regularly controlled by the two largest mining pools, Foundry USA and AntPoo. On February 28, these two groups controlled nearly 50% of the Bitcoin network's hashing power, according to CoinDance . Hash rate represents the computing power for Bitcoin mining.

When mining is no longer decentralized but in the hands of several parties, they can retain the power to moderate transactions by choosing not to confirm them. This goes against Satoshi's original ideals of Bitcoin's decentralization and anti-censorship characteristics. However, in reality, there has never been a time when miners simultaneously left the network after the halving.