May 22, 2024

Brighton Journal

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Bitcoin Halving Sends Cryptocurrency Miners Racing to Get 'Epic Sat' That Could Be Worth Millions

Bitcoin Halving Sends Cryptocurrency Miners Racing to Get 'Epic Sat' That Could Be Worth Millions
  • These are the first Bitcoin rewards to be halved as the value can be allocated to individual sats, which can now be traded like NFTs following the launch of the Ordinals protocol last year.

  • The first to be mined after the halving this month could theoretically be worth $1 million or more in digital collectibles markets.

  • “It's kind of a lottery ticket,” said an executive at cryptocurrency mining company Marathon Digital.

With Bitcoin's fourth quadrennial “halt” less than a week away, cryptocurrency mining companies are vying to seize what could be the most valuable data block ever, potentially worth millions of dollars.

The reason for creating the system was that after the launch of Ordinals in early 2023, it became possible to number these satoshis and trade them as if they were unique tokens. But each of them can also be considered collectibles, or non-fungible tokens (NFT). As any collector knows, the price of their item is often linked to its rarity.

Rodarmor's scale went from “uncommon”, which is the first session of each block, all the way to “legendary”, which is the first session of the first ever block on Bitcoin – which was supposedly safely placed in the possession of Bitcoin creator Satoshi Nakamoto. So don't even think about getting that.

Somewhere in between, but at the higher end of the scale, it ranks first after the halving of Bitcoin rewards – the beginning of a new “era” in blockchain parlance. It is classified as “epic”. Tristan, founder of Ordiscan, believes this seat could be just that “Conservatively” $50 million By would-be ordinal enthusiasts.

So what's happening now is the first ever run for Odyssey since the introduction of Ordinals, and the previous Bitcoin halvings were even more hoarse, because there was little more than bragging rights at stake for cryptocurrency miners. And bets are on that this first-ever epic could be very highly regarded in the Ordinals markets.

The race sat on the “epic”.

Mining companies making a concerted effort to win this race could ramp up their operations to ensure they account for a high percentage of the global hashrate — the total computing power that works to confirm Bitcoin transactions — once it becomes clear that the halving is imminent.

This may include bringing new, more powerful equipment online and even reinstalling an old and soon-to-be outdated toolkit.

The halving, the fourth in Bitcoin's 15-year history, is scheduled to occur when the network reaches block height 840,000, sometime next week; Looks like April 19th or 20th.

The miner who adds this block to the blockchain is rewarded with 3,125 BTC, which is about $219,000. It's not a small change, but it is a gradual change down from 6.25 BTC, or $440,000 before the halving.

But such calculations also show what's at stake if a single satoshi, a hundred-millionth of 1 bitcoin, could be worth more than $1 million.

The miner will then need to send 546 satoshis – the minimum amount that can be sent across the blockchain in a transaction, also known as the “dust limit” – to the cold storage wallet. The first thing that was mentioned in this session Unspent transaction output (UXTO) will be retroactively classified as the first sat after the halving, since the Ordinals protocol identifies satellites on a first-in, first-out basis.

What is the value of the first sitting after half?

Tristan, founder of project tracking company Ordinals Ordiscan.com, he wrote in a blog post That under the “Rodarmor Rarity” system, the first person sitting in the building alone could be worth at least a million dollars.

Miners now have nearly a year of experience, since the launch of Ordinals, to unlock the full value of their Bitcoin rewards, including any particularly valuable rewards buried within them.

“We have thousands of these uncommon satellites — the first Satoshi of each block, for example — and we often looked at the market to see if we should sell them or keep them,” Marathon Digital's Swick said.

Marathon also mined the first session after Adaptation Difficulty, which at one point was “worth hundreds of thousands of dollars,” according to Swick.

Another publicly listed mining company, Hut 8 (HUT), is scanning its balance sheet for rare satellites it may already own and monitoring how much interest there might be in the market, its CEO told CoinDesk.

Asher Genoot compares this concept to the demand for “virgin” Bitcoin – BTC that has never been transacted.

“When we first started mining, people were saying they would pay a premium for raw bitcoin, but it's not a very liquid market, so there's not a very clear price,” he said.

How much effort do miners put into mining rare earth for the first time after the halving?

Major miners, those who control a relatively large percentage of the global hash rate, may feel they have the resources to chase that first epic to be mined in the Ordinals era.

Marathon, for example, has about a 5% stake, and therefore arguably has a 5% win stake in it.

“We realize it's kind of a lottery ticket,” Swick said. “But we take care to make sure all our devices are connected to the Internet, which is our goal anyway. But we are very aware of the importance of reaching halving.”

Thomas Chibas, CEO of Argo Blockchain (ARGO), believes miners can only realistically pursue it if they are in a marathon situation. Chibas explained in an interview with CoinDesk that most miners are members of a pool, and some pools will often drop the top two or three blocks and the bottom two or three blocks over a period of time when they start calculating payouts to miners.

“They do this as a way to avoid positive and negative outliers,” Chibas said. “So in a pool like this, if there's a crazy block because someone paid for a particular session, you might not benefit from it because that pool might drop that block.”

“So, we're interested in that revenue that a rare seat could generate, but we're also very practical,” he said.

What is the interest outside mining companies?

Swick imagined a use case for a futures market to develop around rare and epic satellite mining, where miners with a large share of the hash rate are paid up front for the rare satellites they can theoretically obtain.

For example, a global hashrate for Marathon of 5% could result in the Ordinals trader paying the company 5% of what they think the Epic session will be worth. So, if the first session after the halving can bring $100 million, the trader pays Marathon $5 million with the promise that the company will deliver the saga if its group wins it.

“It could be very interesting if someone went to all the publicly listed mining companies that pre-paid them for the saga, and then they had a 40% chance of winning it,” Swick said.

“This has never happened before and I'm frankly surprised that a futures market like this hasn't emerged yet,” he added.