The upcoming halving could trigger processes that will destroy decentralization in the Bitcoin network. The entire cryptocurrency market is growing following the industry leader – Bitcoin. The rapid growth of BTC is largely due to the launch of exchange-traded funds and the April halving. However, the latter is fraught with a hidden threat, which Gryphon Digital Mining CEO Rob Chang spoke about to reporters about.
Bitcoin’s 2024 Halving and Decentralization Concerns
According to Rob Chang, the fourth decline in mining speed threatens the decentralized structure of Bitcoin. The loss of this characteristic, in turn, exposes the blockchain of the first cryptocurrency to security risks.
Size doesn’t help a #Bitcoin miner survive the halving. That is a narrative pushed by those trying to get investors focused on size. Being LOW COST is what is key in surviving the halving. Size helps by spreading fixed costs but not blowing money on G&A, bad debt deals, poor… pic.twitter.com/zuljeeRPEC
— Rob Chang (@omnipotent32) March 4, 2024
Many analysts are of the opinion that not all mining companies will remain profitable after the halving. Many participants are already talking about consolidation in the industry.
According to Chang, the fourth halving could be the impetus that will trigger the “domino effect” and lead to a scenario in which BTC will be completely controlled by several or even one cryptocurrency mining firm.
BTC Centralization Consequences
The consequences of Bitcoin centralization will be catastrophic. If the network falls under the control of one organization, it will lose protection against a 51% attack. However, Chang explains that this is a worst-case scenario and is unlikely to happen at this stage.
It will take a long time to establish a monopoly on the blockchain of the first cryptocurrency. This is due to the fact that no mining company has such powerful equipment that would allow them to take control of the entire BTC network.
“Marathon is the largest public miner today, but even so, its share of the global hashrate is only 5%,” said Marathon Chief Development Officer Adam Swick.
Rob Chang agrees with this position. He emphasized that the hashrate of all public mining companies combined will amount to only 20% of the blockchain. Such a low percentage is explained by the fact that a huge number of so-called microminers are dispersed around the world. They use from one to 100 computing power and no one knows about their existence. This was the case, for example, with farms in Bhutan.
Bitcoin Spot ETFs & Halvings
Previously, Grayscale analysts said that the 2024 halving will be significantly different from all previous ones. It will be greatly affected by high activity on the BTC network, as well as spot Bitcoin ETFs. The history of observations shows that halvings create a shortage of bitcoins in the market, which pushes the coin rate to update its absolute maximum value. If investor interest in Bitcoin ETFs remains at the same level, purchases of cryptocurrency against the instrument by issuers could also support the growth of BTC.
Many sellers took advantage of Bitcoin’s growth to new local highs, under whose pressure the cryptocurrency corrected.
Popular crypto blogger MartyParty, in turn, noted that the volume of bitcoins available on exchanges has already dropped to the lows of 2015. Participants in the crypto community suggested that the continuation of the trend will force issuers of crypto funds to look for investors willing to sell them cryptocurrency.
