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Brave New Coin Weekly Bitcoin halving countdown update: 6th May

Brave New Coin has launched a countdown to predict the date and timing of the Bitcoin Halving. This weekly report summarizes the data provided by BNC's halving prediction models and analyzes the macro factors influencing the halving countdown.

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 hashrate rose last week, resuming a medium-term positive trend. Hashrate is up 46% from this time a month ago.

This week’s Bitcoin (BTC) block reward halving predicted date, averaged across the 8 models, is 12/05/2020 9:26.

Block halving prediction times are based on average daily block times. As hash rate increases more blocks are produced each day. The increase in the rate of block production means miners are likely to arrive at the halving block sooner. Each of the Brave New Coin models is recalculated every day.

The consolidated prediction date from a week earlier was 12/05/2020 6:52. This predicted date is 2 hours and 44 minutes later than last week.

The hashrate has risen by ~3% this week, touching a new all-time high on Tuesday. The Bitcoin hash rate spiked to 267 Billion Gigahashes per second,or 267 Million Terahashes per seconds, on 3rd May 2020, at 11 am UTC. Brave New Coin analyst, Sumathi Pandi, suggests that this spike is the result of “significant network growth approaching the next Bitcoin block reward halving in approximately 8 days.”

It has been reported that ~23% of Bitcoin network hashrate is produced by Bitmain Antminer S9 machines. The Antminer S9 is a legacy mining machine first released in 2016 by Beijing-based Bitmain. It quickly became the most popular ASIC miner on the market and at one point it produced 78% of network hashrate.

The S9 has maintained popularity, despite a range of new miners having been launched since its release. This includes newer versions of the Antminer series and products made by competitors like MicroBT. Bitmain’s newest updated miner, the S19 Pro ASIC, began selling in May 2020.

The first batches of the S19 have already sold out. The miner solves Bitcoin hashing problems at 110Th/s, while the S9 solves them at 14Th/s. Bitmain’s older machine, while being much slower, uses far less power than the updated model.

Bitmain’s Mainland China sales manager, Kun Yu, expressed his view that miners already using the S9 should stick to them. He explains that with the rainy season soon to begin in the Southwest regions country, miners will soon have access to cheap electricity. Bitcoin nonce distributions, however, suggest the Antminer S9 and S7 may leave out specific patterns when sampling.

As part of the Bitcoin block reward halving that occurs every 4 years, BTC earnt per block reward will drop from 12.5btc to 6.25btc. This will lead to a huge short term drop in mining profitability, unless the hash rate also drops to a similar degree.

Halving prediction dates (average across the week)

Current-halving-prediction-model-dates (10)

Average predicted block halving date 03/05/2020 across the 8 different models= 12/05/2020 0:08

Average predicted block halving date the week before across the 8 different models= 12/05/2020 10:23

Difference= 10 hours and 14 minutes earlier

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 (10)

Halving prediction date on 03/05/2020= 11/05/2020 03:02

Average predicted halving date (first observation 01/01/2019)= 12/05/2020 21:17

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 (10)

Halving prediction date on 03/05/2020= 11/05/2020 23:42

Average predicted halving date (first observation 01/01/2019)= 08/05/2020 16:03

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 executed 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 (11)

Halving prediction date on 03/05/2020= 12/05/2020 06:01

Average predicted halving date (first observation 01/01/2019)= 13/05/2020 17:02

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 (10)

Halving prediction date on 03/05/2020= 12/05/2020 06:36

Average predicted halving date (first observation 01/01/2019)= 15/05/2020 3:40

Network fundamentals

Bitcoin-Hashrate (10)

Average Daily Hashrate 27/04/2020- 03/05/2020= 116,863,653,804 Th/s

Average Daily Hashrate the week before= 111,639,975,700 Th/s

Percentage change= 4.68%

Total-Bitcoin-left-to-be-mined-before-halving (10)


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