What is half life?

Consideration from cases such as BTC and LTC

Now, in the topic of cryptocurrencies, you often hear the term half-life with BTC and LTC etc!

Half-life means that the mining fee paid to minors is halved every time a minor generates a block, in order to maintain the mechanism of virtual currency mining.

Bitcoin was paid about 50 BTC in 2009, with this event occurring about once every four years.

Currently, 12.5 BTC is paid.

On the comparison chart, there is a big difference in the fluctuation rate, with Light Coins at 328% at the beginning of the year, and Eisarium, which is also the main alto coin, at 92% and XRP at 18.12%.

Although there are multiple reasons, the influence of the oversized material “half-life”, which attracts attention from past reproducibility, on the market price is large.

The purpose of this half-life is twofold.

1. To increase the rarity of the currency by curbing the increase in the amount of circulation of the currency

2. Tighten the amount of money issued to curb inflation and stabilize prices

The first point greatly affects the short-term market price.

For example, taking Bitcoin as an example, about 12.5 BTC bitcoins are produced in the world every 10 minutes.

However, when the amount is halved, the amount of newly generated bitcoins naturally decreases.

In theory, it would be difficult to obtain the same amount of bitcoins compared to when they were acquiring bitcoins at 12.5 BTC.

This is equivalent to an increase in the value of bitcoins, assuming that the increase in the demand curve is constant.

Simply reducing the amount of supply makes it more difficult to obtain the supply, and it is not unimaginable to influence price increases.

In addition, by defining the standard of issue volume (fluctuation after half life) and the maximum issue volume in its issuance algorithm, unexpected inflation that may occur in legal currency can be suppressed, stability of value, and including investors Create a situation where it is easy for users to judge their value.

So, what kind of price fluctuation is seen specifically when it reaches half life?

Bitcoin prices have started to rise about a month and a half ago, and have fallen after reaching a peak three weeks ago.

In the case of Light Coin in 2015, the price of LTC rose from about two and a half months ago, and dropped after reaching a peak at one and a half months ago.

Also, looking at the behavior of price changes of BTC and LTC at the time of price increase, it seems that both seem to follow a similar trajectory.

However, especially at the peak just before the half life, the price increase of LTC is about one day earlier.

That is, rather than the price of BTC being affected, the price of LTC is more likely to have affected the price of BTC.

Similar to Lightcoin, Monacoin, which attracts attention in the field of payment use, has started raising prices about two and a half months ago, and has fallen since two weeks ago.

Looking at the price changes in BTC in the second chart, like Lightcoin, the price of Monacoin follows the rise and fall after deducting the price change of BTC. Recognize.

There are more than 2000 virtual currencies listed on CoinMarketCap alone, but many do not have half-lives.

The main reason for the lack of half-life is that the maximum issue volume has not been determined.

In addition, it is possible that this example is an arbitrary conclusion that brought out only a specific example.

The following are coins that have major half-lives expected in the coming years.

・ LTC (light coin) August 2019

・ LSK (risk) October 2019

・ BCH (bit coin cash) April 2020

・ BTC (bitcoin) May 2020

・ MONA (Monacoin) August 2020

・ ZEC (Gee cash) October 2020

While the half-life event has the positive side of affecting prices, it is important to consider what kind of trajectory the currency will follow after you finish it in terms of the long-term individual currency It will be.

Aside from the fact that there is still little data, it can be said that the half-life (or forging) and the market are relevant!

Generally, prices rise three months before half-life and peak and fall several weeks ago.

This flow is seen in addition to bitcoin!

There is still little data, but because of this correlation, the event of “half-life” is drawing attention around the world!

It is good to pay attention to the light coin and the risk that will occur soon!

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