Considering that Bitcoin is still going strong in 2020, its mining community has 18 million blocks to go before exhausting the cryptocurrency in its entirety. Rest assured that the day when all of Bitcoin enters circulation is far away (2140 is not quite here yet), and there are still plenty of exciting moments left for miners. This year promises an interesting turn of events for the mining world.
There are plenty of factors, some more intangible than others, that influence such changes. For example, some may point to Bitcoin’s increased use around the world. Around 120 companies accept it as a method of payment, as SpendMeNot’s research reveals, and that demand affects its mining operations.
So what can we expect from the Bitcoin mining community in 2020? All things considered, we are looking at the probable surge in hash rates.
What Pushes Hash Rates
One looming event promises to make quite an impact on Bitcoin’s mining efforts—the block halving scheduled to take place on May 20 of this year. This halving will decrease the coin reward for successfully mining a block from 12.5 BTC to 6.25 BTC.
The effects of this decrease cannot be precisely predicted, but we can make some pretty accurate guesses based on the last halving. Based on what we saw in 2016 when block rewards dropped to 12.5 BTC, the crypto’s hash rate increased quite a bit. This was, in fact, the time of Bitcoin’s greatest bull run ever.
Due to the possible rise in Bitcoin’s value, many speculators make very optimistic predictions, and some maintain that it will increase to $100,000. Such positive takes will almost certainly lead to a significant rise in hash rates. They have already gone up a great deal, jumping from 93 exahashes a second to 106 from December to January.
This upward trend has much to do with miners anticipating an increase in demand and the value of Bitcoin following the halving, but that is not the only apparent factor. A notable increase in Chinese mining pool activity is also accountable for the change.
Speaking of which, the dominion of China as the central mining country will most likely stay unchallenged in 2020. That has raised some concerns about monopolization, and the fact that China will only further solidify this status in the near future does not alleviate the distress.
The events taking place outside the crypto community should also be taken into account. A fine example is related to the recent tensions between the US and Iran, which seem to have pushed Bitcoin’s value through its recent slump, increasing it to $8,500. What might happen in the future is beyond our ability to predict accurately.
All in all, the looming reward cut coming this year is the primary force behind the increase in hash rates. That should lead to a notable rise in Bitcoin’s value, considering that it is a deflationary currency, and its suppliers cannot be increased beyond the designated amount. With mining going strong, and current events pointing to further demand, the business should be operating full steam ahead for the foreseeable future.