It feels like we only hear about Bitcoin when the price is either tanking or skyrocketing. And, since it’s currently skyrocketing, let’s talk about Bitcoin! As of writing, Bitcoin is hovering around $745 per coin . It has only been worth this much twice before – once on the way up to the height of the Christmas 2013 bubble, and once on the way down. But since trading at lows of around $230 one year ago, the price has been slowly increasing until a few weeks ago, when it started going crazy. So of course everyone wants to know why. But like any public market, there really is no way to possibly know what is actually driving the price up. But we can guess, so here are a few things that could be behind this price spike.
The Halving
Ever heard of the halving? Well if you follow Bitcoin and haven’t, get ready for it to soon dominate the cryptocurrency news cycle. Let me explain. Bitcoin was designed as deflationary currency – there will ever only be 21 million coins in existence, and less and less will be mined as time goes on.
This is because Bitcoin’s core code dictates that every 210,000 blocks mined, the mining reward is halved. So it started at 50 BTC per block, in late 2012 fell to 25 BTC per block, and is expected to half again to 12.5 BTC per block in about three weeks .
Since miners will soon essentially see their profits cut in half, this price increase could just be the Bitcoin economy’s natural (and designed) reaction to compensating for that.
Bitcoin Core Updates
Bitcoin Core is the code that powers bitcoin. It is maintained by a trusted team of Bitcoin Core developers who are responsible for the direction of […]
