Bitcoin Halving Has Crypto Miners Racing for ‘Epic Sat’ Potentially Worth Millions

  • This is the first Bitcoin halving reward in which value can be assigned to individual sats, which can now be traded as NFTs following last year’s launch of the Ordinals protocol.

  • The first sat mined after this month’s halving could theoretically fetch a value of $1 million or more on digital collectibles markets.

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

As Bitcoin’s fourth quadrennial is ‘halved’ in just a week, cryptocurrency mining companies are racing to capture what could be the most valuable block of data ever, potentially worth millions of dollars. dollars.

The reason for this system was that, following the launch of Ordinals in early 2023, these satoshis could be numbered and traded as if they were unique tokens. But each could also be considered a collectible or non-fungible token (NFT). And as any collector knows, the price of a collector’s item is often linked to its rarity.

Rodarmor’s scale went from “rare”, the first sat of each block, to “mythical”, which is the first sat of the very first block on Bitcoin – presumably safely hosted in the possession of Bitcoin’s creator, Satoshi Nakamoto. So don’t even think about getting it.

Somewhere in between, but at the upper end of the scale, ranks first sat after Bitcoin rewards halving – the start of a new “epoch,” in blockchain lingo. It is classified as “epic”. Tristan, the founder of Ordiscan, believes this sat could be “conservatively” valued at $50 million by future Ordinals enthusiasts.

So what’s happening now is the first ever run for an epic sat since the Ordinals were introduced, previous Bitcoin halvings were much more ho-hum, as there was little more than the right to boast in-game for crypto miners. And it’s a safe bet that this very first epic sat could be very popular on the Ordinals markets.

“So if we take that satoshi produced in an event that happens every two weeks, to a satoshi produced only once every four years, I don’t know what that’s going to be worth, but it could be millions ” Adam said. Swick, chief growth officer of mining company Marathon Digital Holdings (MARA), said in an interview.

The race for 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 working to confirm Bitcoin transactions – just as it becomes clear that the halving is imminent. .

This could involve bringing new, more powerful equipment online and even reinstalling older and soon-to-be obsolete kit.

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

The miner who adds this block to the blockchain is rewarded with 3,125 BTC, or approximately $219,000. This is not a simple currency, but it is an incremental change from 6.25 BTC, or $440,000 before the halving.

But such calculations also show what is at stake if a single satoshi, which represents one hundred millionth of 1 BTC, can be worth more than a million dollars.

This miner would then have to send 546 satoshis – the minimum amount that can be sent via the blockchain in a transaction, also known as the “dust limit” – to a cold storage wallet. The first of the sats contained in this unspent transaction output (UXTO) would be retroactively labeled as the first sat after the halving, since the Ordinals protocol defines sats on a first-in, first-out basis.

“They would basically split the 3,125 BTC in two: one of them is incredibly small and contains the first one, the rest is just Bitcoin and nothing special,” Tyler Whittle of the Ordinals Taproot Wizards project . , said in an interview.

What would the first sat be worth after the halving?

Tristan, founder of the Ordinals project tracker, wrote in a blog post that under the “Rodarmor Rarity” system, the first seat on the block alone could be worth at least $1 million.

Miners now have about a year of experience, since the launch of Ordinals, to take advantage of the full value of their Bitcoin rewards, including the particularly valuable sats buried within them.

“We have thousands of these rare satoshis – the first satoshi of each block for example – and we’ve often looked at the market to see if we should sell or hold them,” said Marathon Digital’s Swick.

Marathon also pulled the first sat after a difficulty adjustment, which at one point was “worth hundreds of thousands of dollars,” according to Swick.

Another publicly traded mining company, Hut 8 (HUT), has been scouring its balance sheet for rare sats it might already own and is monitoring what interest there might be in the market, its CEO told CoinDesk.

Asher Genoot likens the concept to the demand for “virgin” Bitcoin – BTC that has never been traded.

“When we first started mining, people said they would pay a premium for virgin bitcoin, but it’s not a very liquid market, so there’s not a very clear price,” did he declare.

How much effort do miners put into mining the first rare sat after the halving?

Major miners, those who control a relatively large percentage of the global hashrate, may believe they have the resources to actively pursue this first mining epic in the Ordinal era.

Marathon, for example, has about a 5% share, so you could say it has a 5% chance of winning.

“We recognize that it’s kind of a lottery ticket,” Swick said. “But we’re making sure all our machines are online, which is our goal anyway. But it’s something we’re very aware of before the halving.”

Some relatively small businesses might recognize that the structure of their operations makes the trophy far too unrealistic. Marathon, for example, operates its own mining pool, but many other companies do not.

Thomas Chippas, CEO of Argo Blockchain (ARGO), believes that miners can only realistically pursue it if they are in Marathon’s shoes. Most miners are members of a pool and some pools often drop the top two or three blocks and the bottom two or three blocks over a period of time when they begin their calculation of payment to miners, Chippas explained in an interview with CoinDesk.

“They do this to avoid positive and negative outliers,” Chippas said. “So in a pool like that, if there’s a crazy block because someone paid for a particular sat, you might not benefit from that because that pool might remove that block.”

“So we are interested in the revenue that a rare satellite could bring in, but we are also very practical,” he said.

What interest is there outside of mining companies?

Swick envisioned a use case for a futures market to develop around the mining of rare and epic sats, in which miners with a substantial hashrate share are paid upfront for the rare sats that they they could theoretically get.

Marathon’s 5% global hashrate, for example, could cause an Ordinals trader to pay the company 5% of what they think the epic sat will be worth. So if the first sat after the halving could bring in $100 million, the trader would pay Marathon $5 million with the promise that the company would hand over the epic sat if their pool won it.

“It could be very interesting if someone went to all the publicly traded mining companies and paid them up front for the epic sat, and then they would have a 40% chance of winning it,” Swick said.

“This has never been done before and I am frankly fascinated that a futures market like this has not yet emerged,” he added.

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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe.Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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