Summary
TLDR: The upcoming Bitcoin halving at block 840,000 will reduce the block reward from 6.25 BTC to 3.125 BTC, impacting supply and demand dynamics. Ordinals, which track individual satoshis, have created a new market and could potentially lead to a blockchain reorg. Mining pools are exploring sifting for sats, with some pools having a higher probability of pulling off a reorg. The Bitcoin whitepaper outlines the security of mining using the Poisson distribution. The value of the first block of the halving, including an “epic sat,” may incentivize miners to attempt a reorg. Mining pools’ decisions will be crucial in determining the outcome.
Key Points
1. Block 840,000 triggers the Bitcoin halving, reducing the block reward from 6.25 BTC to 3.125 BTC, cutting the amount of BTC mined each day in half, impacting the supply and demand dynamics for bitcoin significantly.
2. The emergence of Ordinals in the first block of the halving has created a new market, with various rarity levels such as common, uncommon, rare, epic, legendary, and mythic, leading to a growing demand for these individual sats within the Bitcoin network.
3. The probability of a blockchain reorg to win the first block of the halving, particularly for the epic sat, is influenced by the Poisson distribution model for mining security, incentivizing certain mining pools to consider the tradeoffs and potential value in attempting a reorg.