We have reached the conclusion of the halving, the fourth in the history of the largest and most important cryptocurrency in the world. As I write these words, we are only 20 blocks away from the event. As a miner and industry observer, I would like to share some reflections on the moment.
During this fourth epoch (as the period between halvings is called), in which the mining reward dropped from 6.25 to the next 3.12 BTC, we witnessed the maturation of the industry, such as the adoption of BTC by banks and nations.
We witnessed the entry of players institutions, the change in user profile and the increase in the general acceptance of cryptocurrencies. In other words, we have seen a series of significant developments, from the launch of the first bond issued in Bitcoin by a country to nations publicly admitting mining activities, as is the case with El Salvador and the Kingdom of Bhutan, respectively. To mention specific points, I list some highlights:
- China bans mining (for real);
- First mining machine with 100TH (already almost obsolete);
- Miners being listed on the stock exchange;
- Energy companies embracing mining, some even becoming miners and abandoning the old core business;
- Mining going from a “problem” to a solution, especially on the issue of ventilated methane;
- Mining being used as an emergency load on electrical grids.
Now, in the final moments of this period, we see even the largest financial asset manager in the world, BlackRock (NYSE:), launch a Bitcoin ETF. Naturally, it is not alone and 14 other spot Bitcoin ETFs have been listed on the US market.
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As a reflection of this movement, we now have BTC spot ETFs being listed around the world, including in Hong Kong and Taiwan, bringing the Chinese market closer to the largest cryptocurrency in the world. Furthermore, we have seen notable advances, such as the integration of Bitcoin mining into energy infrastructure, as is occurring in the USA, in states such as Texas, an issue that deserves greater attention from energy system regulatory bodies in other parts of the planet.
Beyond price discussions, and whether or not BTC will reach $100,000, $200,000 or $1 million, we can expect more important developments, such as greater understanding as a financial asset similar to gold and other assets considered as “flight to safety”, by financial institutions and market actors.
The possibility of it being adopted as backing, as predicted by prominent figures in the early days of cryptocurrency, is also a point of attention. The increase in the use of small Bitcoin units known as satoshis in daily transactions is another aspect that could become popular, driven by technologies such as the Lightning Network and other layer 2 solutions (secondary protocols on top of the blockchain of Bitcoin). The use of satoshis is already commonplace for digital nomads and people who live across different borders.
Ease of use as a means of payment follows adoption and popularization, with banks favoring conversion between fiat currency and Bitcoin. The initial obstacle of difficult access due to the technicality with which the BTC subject was handled is being put aside. After all, bitcoin wallets are increasingly integrated with ubiquitous banking apps and debit and credit cards via NFC.
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The critical assessment by governments regarding the acceptance or prohibition of Bitcoin, as well as allegations of it being a means of money laundering and financing illicit activities, are also losing strength and giving way to more positive views, expanding recognition of the cryptocurrency as a viable and positive financial asset for the population.
Progress in mining regulation and its integration into electrical energy systems are perhaps the most interesting points to observe. The example of Texas should serve as an inspiration for other electrical grids that seek robustness and redundancy without breaking public coffers, amidst energy storage projects that are extremely expensive and unfeasible in most countries. An important point will be the new breath of vitality and financial viability that mining can bring to renewable energy initiatives, enabling actions that would previously have been impractical.
Much more important and fundamental than the price, this new period marks an exciting phase for Bitcoin, in which maturation and widespread adoption are in the spotlight. As we prepare for the halving, it is clear that we are facing the transition to adulthood, including all the challenges and opportunities facing transformation. Bitcoin is not only an investment, but also a tool to protect the sweat equity of the majority against inflation and volatile economic policies.
We should therefore observe an even greater recognition of BTC for its qualities, its values and, consequently, its price. On the cusp of this new era, it is possible to glimpse a new era.
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