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This is the first Bitcoin reward halving that allows individual Sats to be assigned value and traded like NFTs, following the launch of the Ordinals protocol last year.
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The first SATs to be mined after this month's halving could theoretically reach a value of more than $1 million on digital collectibles marketplaces.
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“This is a kind of lottery,” said an executive at crypto mining company Marathon Digital.
With Bitcoin's once-every-four-year “halving'' just a week away, crypto mining companies are scrambling to acquire the most valuable block of data in history, potentially worth millions of dollars. .
The reason for this system is that after the launch of Ordinals in early 2023, these Satoshis were numbered and could be traded as if they were unique tokens. But each can also be considered a collectible, or a non-fungible token (NFT). And, as any collector knows, the price of a collector item is often tied to its rarity.
The scale of Rodalmor ranges from “Uncommon”, the first sat of each block, to “Myth”, the first sat of the first block in Bitcoin history, likely owned by Bitcoin founder Satoshi Nakamoto. It was stored safely. So don't even think about getting it.
In between, but at the top of the scale, ranks the first sat after Bitcoin rewards are halved, or the beginning of a new “epoch” in blockchain jargon. It is classified as an “epic”. Ordiscan founder Tristan believes the sat could be “conservatively” valued at $50 million by his future Ordinals enthusiasts.
So what's happening now is the first epic race for satellites since Ordinals was introduced. Previous Bitcoin halvings were more sketchy, as crypto miners had little more than bragging rights. And we're betting that this first-ever epic of his SATs could rank very highly on the Ordinals marketplace.
“So if you took Satoshi, which is produced in an event once every two weeks, to Satoshi, which is produced only once every four years, I don't know how much it would be worth, but it would be worth millions. It could be dollars,” Adam said. Swick, chief growth officer of mining company Marathon Digital Holdings (MARA), said in an interview.
Competition for “grand” satellites
Mining companies, making a concerted effort to win this race, will have to wait until it becomes clear that the halving is just around the corner. There is a possibility of strengthening the business to ensure a high proportion of .
This may include bringing new, more powerful equipment online or reinstalling older and soon-to-be obsolete kit.
The halving, the fourth in Bitcoin's 15-year history, is programmed to occur sometime next week when the network's block height reaches 840,000. Looks like April 19th or 20th.
The miner who added that block to the blockchain received a reward of 3.125 BTC (approximately $219,000). This is not a huge change, but it is a gradual decrease from 6.25 BTC, or $440,000 before the halving.
But such calculations also show what is at stake when one Satoshi, equal to 1/100 millionth of 1 BTC, is worth more than $1 million.
This miner must send 546 SATOSHI (the minimum amount that can be sent over the blockchain in a transaction, also known as the “dust limit”) to a cold storage wallet. Because the Ordinals protocol defines SAT on a first-in, first-out basis, the first SAT included in this unused transaction output (UXTO) is retroactively labeled as the first SAT after the halving.
“They're basically going to split the 3.125 BTC in two, one of which is incredibly small and has the initial Bitcoin stored in it, and the rest is just Bitcoin, Nothing special,” said Tyler Whittle of Ordinals Project Taproot Wizards. said in an interview.
What will be the first sat after the halving?
Tristan, founder of Ordinals project tracker Ordiscan.com, wrote in a blog post that under the “Rodarmor rarity” system, the first sheet in a block alone could be worth at least $1 million. I am.
Since Ordinals was launched, miners have gained about a year of experience and have cashed in all of their Bitcoin rewards. This includes his particularly valuable SAT, which is buried inside Bitcoin.
“We have thousands of these rare satoshis, like the first satoshi of each block, and we've been looking at the market a lot to see if we should sell them or hold them,” Marathon Digital's Swick said. Told.
Marathon also mined the first difficulty-adjusted SAT, which at one point was “worth hundreds of thousands of dollars,” according to Swick.
Another listed mining company, Hut8 (HUT), is scouring its balance sheet for rare satellites it may already own and monitoring what interest there is in the market. The company's CEO told CoinDesk.
Asher Genuto likens this concept to the demand for “virgin” Bitcoin (BTC that has never been traded before).
“When we first started mining, people said they would pay a premium for virgin Bitcoin, but there is no clear price because the market is not very liquid,” he said. I did.
How much effort are miners putting into mining the rare first sat after the halving?
Major miners, which account for a relatively large proportion of the world's hashrate, may feel they have the resources to aggressively pursue the first Epic Sats to be mined during the Ordinals era.
For example, the marathon share is about 5%, so we can say that winning the marathon is 5%.
“We recognize it's like a lottery ticket,” Swick said. “But we're careful to make sure all machines are online. That's our goal anyway. But it's something we're keenly aware of heading into the halving. It’s about being there.”
Some smaller companies may find trophies too unrealistic due to their business structure. For example, Marathon operates its own mining pool, which many other companies do not.
Thomas Chippas, CEO of Argo Blockchain (ARGO), believes miners can only realistically track it if they are in a marathon position. Most miners are members of pools, and some pools allow the top two or his three blocks and the bottom two or his three blocks over a period of time to start calculating payments to the miner. Tsipas explained in his interview with CoinDesk.
“They do it as a way to avoid both positive and negative outliers,” Tsippas said. “In a pool like that, if you had a crazy block because someone paid for a certain seat, you might not get the benefit of that because the pool could drop that block. .”
“So we're interested in the revenue that rare satellites can bring, but we're also very practical,” he said.
What interests do you have outside of mining companies?
Swick envisioned a futures market use case that would evolve around mining rare and spectacular SATs. This allows a miner with a significant hashrate share to be paid upfront for the rare his SAT that he could theoretically obtain.
For example, Marathon's 5% global hashrate could result in Ordinals traders paying the company 5% of what they think the epic SAT is worth. So if the first sat after the halving could be sold for his $100 million, the trader would pay Marathon his $5 million and hand over that grand sat if the pool wins. I make this promise.
“If someone could run around all the publicly traded mining companies and pay up front for a grand SAT and have a 40% chance of winning it, that could be very interesting,” Swick said.
“This has never been done before, and I'm frankly intrigued that a futures market like this hasn't emerged yet,” he added.
