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2020 is an important year of production reduction in the history of digital token development, and many mainstream tokens represented by BTC will usher in a production reduction.
Summary
Summary
Topic: Production cuts are coming, opportunity or challenge? In 2020, the seven mainstream tokens of ETC, BCH, BSV, BTC, DASH, XZC, and ZEC will face production reductions in turn. At present, ETC, BCH, and BSV have completed production reductions successively. Since BTC has experienced a magnificent bull market after previous halvings, the market has strong bullish expectations for the production reduction of mainstream tokens. The market may usher in a bull market again with this round of production reduction, which will bring huge profits to miners. At the same time, because With the uncertainty of BTC price rise, miners also face huge risks. After BCH and BSV halved the block rewards, there was a loss of computing power.
Market: With the advent of production cuts, the market continues to fluctuate upwards. The total market value of digital tokens this week was US$200.28 billion, an increase of US$6.82 billion or about 3.5% compared to last week; the average daily turnover rate was 64.7%, an increase of 0.5% from last week. The current price of BTC is 6865.49 US dollars, with a weekly increase of 2.0%, and the average daily trading volume is 38.5 billion US dollars. The current price of ETH is 158.41 US dollars, with a weekly increase of 11.5%, and the average daily trading volume is 16.6 billion US dollars. This week, the BTC balance on the exchange was 683,000, an increase of 4,895 from last week. The balance of ETH on the exchange was 14.978 million, an increase of 118,000 from last week. Among the BICS secondary industries, the proportion of the project service industry has increased significantly.
Industry: Industry standardization is inevitable. "Bitcoin Evolution" is using members of the British royal family to commit fraud; Kraken Business Development Director: After halving, the BTC network security model may need to be adjusted; British companies paid nearly $2.3 million in BTC to hackers after a blackmail attack.
Risk warning: regulatory policy risk, market trend risk
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1 Production reduction is coming, opportunity or challenge?
2020 is an important year of production reduction in the history of digital token development, and many mainstream tokens represented by BTC will usher in a production reduction.
Production reduction, that is, block reward halving, is a measure taken by Satoshi Nakamoto to halve the number of block reward BTC every 210,000 blocks in order to control the total circulation when designing the BTC economic model. This mechanism is not only inherited by BTC’s forked tokens BCH, BSV, etc., but also imitated by many PoW consensus tokens.
1.1 Production reduction = increase?
In 2020, the seven mainstream tokens of ETC, BCH, BSV, BTC, DASH, XZC, and ZEC will see production cuts in turn.
On March 17th, ETC took the lead in reducing production, and the block reward after the reduction was reduced from 4 ETC to 3.2 ETC; on April 8, BCH ushered in a production reduction, and the block reward was reduced from 12.5 BCH to 6.25 BCH; on April 10, BSV has completed the production reduction, and the block reward has been reduced from 12.5 BSV to 6.25 BSV.
The market has strong bullish expectations for the production reduction of mainstream tokens, which is due to the magnificent bull market after the previous halving of BTC. Taking BTC's production reduction cycle of about four years as a cycle, the BTC market can be divided into four stages: overheating period, recession period, recovery period, and expansion period.
As shown in the picture above, blue, brown, pink and green represent four different stages. BTC prices tend to rise rapidly after halving and enter an overheating period. BTC rose 92.19 times within 368 days after the first cut, and 29.39 times within 525 days after the second cut. Before the production cut, it was a period of recovery and expansion. The market came out of the shadow of the bear market and rebuilt confidence.
At present, ETC, BCH and BSV have completed their production cuts one after another, and there is still about a month before the BTC production cut. Previously, due to reasons such as the new crown epidemic, the market has experienced a downward adjustment and bottomed out, and the market may usher in a bull market again with this round of production cuts.
1.2 Loss of computing power caused by production reduction
The reduction of block rewards means that when the price and cost of the token remain unchanged, the income of the miners will decrease, so the miners will also adjust the distribution of computing power according to the market conditions.
After the block rewards of BCH and BSV were halved for the first time in history, the block rewards were reduced from 12.5 to 6.25. The situation of computing power loss.
The day after the BCH production reduction, the computing power dropped from 3.51 EH/S to 2.97 EH/S, and the lowest once dropped to 0.96 EH/S. /S dropped to 0.85 EH/S, while the computing power of the entire BTC network continued to increase.
However, affected by the market's perception that halving is good, the price of BCH rose by nearly 20% and the price of BSV rose by more than 30% in the week before the production cut. The short-term rise in the price of tokens has reduced the losses of miners to a certain extent. Before BTC was halved, some flexible miners chose to switch their computing power to BTC, taking advantage of the time difference of nearly a month before BTC halved, to obtain more block rewards.
1.3 Opportunities and challenges faced by miners
After the previous halving of BTC, there has been a magnificent bull market. In 2020, the encrypted asset market will usher in a reduction in the production of many tokens, which may push the market to usher in a long-lost bull market again, thereby bringing huge profits to miners.
The mining industry is a capital-intensive industry with high fixed costs and large operating leverage. When the block reward is halved, the mining income of mining machines will decrease. When the daily mining income of the mining machine is less than the variable cost (electricity + operating expenses), the mining machine will shut down. The profit of mining machines has been severely squeezed, which directly leads to a significant increase in the price of mining machines, and at the same time will prolong the payback cycle of mining machines. Some mining machines will not even be able to pay back, and miners will face huge losses.
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2 Market: The market continues to fluctuate and rise as production cuts come
2.1 The overall market: With the advent of production cuts, the market continues to fluctuate upwards
This week, the ChaiNext Digital Asset 100 Index closed at 627.07 points, up 3.4%. The ChaiNext Digital Asset 100X Index closed at 1677.29 points, up 6.9%.
The total market value of digital tokens this week was US$200.28 billion, an increase of US$6.82 billion or about 3.5% compared to last week.
This week, the BTC balance on the exchange was 683,000, an increase of 4,895 from last week. The balance of ETH on the exchange was 14.978 million, an increase of 118,000 from last week.
The market value of USDT is 6.37 billion US dollars, an increase of 189 million US dollars from last week, and the premium rate of USDT relative to the US dollar has increased.
The market value of USDT is 6.37 billion US dollars, an increase of 189 million US dollars from last week, and the premium rate of USDT relative to the US dollar has increased.
2.2 Core Tokens: Mainstream Tokens Continue to Call Back
The current price of BTC is $6865.49, with a weekly increase of 2.0% and a monthly decrease of 13.2%. The average daily turnover is 38.5 billion US dollars, and the average daily turnover rate is 29.7%.
The current price of ETH is $158.41, with a weekly increase of 11.5% and a monthly decrease of 18.7%. The average daily turnover is US$16.6 billion, and the average daily turnover rate is 93.1%.
The current price of EOS is $2.5, with a weekly increase of 6.8% and a monthly decrease of 18.3%. The average daily turnover is 3.36 billion US dollars, and the average daily turnover rate is 140.6%.
This week, the monthly volatility of major tokens was basically flat, and the price fluctuations were still relatively large.
2.3 BICS industry: the proportion of project service industry has increased significantly
2.3 BICS industry: the proportion of project service industry has increased significantly
Among the top five BICS (Blockchain Industry Classification Standard, Blockchain Industry Classification Standard) secondary industries, the market value of the project service industry has increased significantly; the market value of the healthcare industry has decreased significantly.
The secondary industries of BICS that saw a significant increase in the number of tokens this week were payment and settlement, leisure and entertainment, while information technology and healthcare saw a significant decline.
2.4 Market view: After the production cut, the market went down and the rebound ended
The short-term may have bottomed out, but the market is volatile, so we still need to pay attention to controlling positions. The BTC halving market is approaching, and the recent volatile market has provided investors with a more suitable price. It is still a good time to invest in digital assets such as BTC. Long-term currency holders may consider regular investment or bargain hunting.
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This week, according to Google Trends, the search popularity of the term Bitcoin is 13, and that of Ethereum is 11.
This week, according to Google Trends, the search popularity of the term Bitcoin is 13, and that of Ethereum is 11.
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4 Industry news: industry standardization is inevitable
4.1 "Bitcoin Evolution" is using members of the British royal family to commit fraud
According to Cryptoglobe, a new BTC scam has emerged, using a fake BBC report featuring Prince Harry and Meghan Markle to carry out its encryption token scam scheme. The ad claimed the royal couple were on the TV show discussing a "wealth loophole" that could "turn anyone into a millionaire in three to four months". They are using crypto tokens to achieve "financial independence" and step back from royal duties. The ad lured users into a crypto trading program called "Bitcoin Evolution," and told investors they could "become the next millionaire."
4.2 Kraken Business Development Director: After the halving, the BTC network security model may need to be adjusted.
According to AMBCrypto, Dan Held, Director of Business Development at Kraken Encrypted Token Exchange, said that in the next 30 days, BTC will experience the third block reward halving, which may have an impact on security. He pointed out: "In the long run, BTC's security is the most important, whether its security model can withstand attacks. A core part of it is to focus on block rewards, which consist of block subsidies and transaction fees. We should Examine whether transaction fees will replace the block subsidy in a meaningful way, and whether it will be sufficient to ensure the security of the network.” Held emphasized that when it comes to BTC and crypto tokens, users will always turn to more secure blockchains.
Note:
Note:
Due to some reasons, some nouns in this article are not very accurate, mainly such as: general certificate, digital certificate, digital currency, currency, token, crowdsale, etc. If readers have any questions, they can call or write to discuss together.
Due to some reasons, some nouns in this article are not very accurate, mainly such as: general certificate, digital certificate, digital currency, currency, token, crowdsale, etc. If readers have any questions, they can call or write to discuss together.
