Happy 11th birthday, Bitcoin!
It was on an auspicious Halloween day that many years ago that the anonymous Satoshi released the white paper around the Bitcoin cryptocurrency that has so thoroughly changed the way we view finance around the world.
Looking at the state of Bitcoin as it rounds this calendar landmark, we see somewhat of a settling of price at around $9300 after the coin spiked from $7500 to over $10,000 during the last week.
There’s kind of a neat equilibrium to Bitcoin settling in the middle range on its birthday, and there are also some interesting metrics being released today about something called the Bitcoin ‘thermocap.’
Hold on – just what on earth is a thermocap, anyway?
If you feel like you’re behind the times for not recognizing this lingo, don’t feel bad. It’s one of those crypto terms that is so obscure it hasn’t really even received full treatment on the Internet.
In a nutshell, the thermocap represents the combination of all mining rewards with all transaction fees.
“The ‘thermocap’ includes block rewards — new bitcoins paid to miners for validating a block of transactions — and transaction fees,” writes someone with the handle Crypto2Cash at Medium. “Transaction fees broke the $1 billion mark this week.”
Elsewhere, Coinmetrics characterizes thermocap as the “net fiat inflow into the (cryptocurrency) asset,” which shows you why many people would think the thermocap is important in analysis.
As a metric, it lends itself to some thorough analysis of how cryptocurrencies work.
A Cointelegraph piece today looks at how both the rewards and the fees are moving in today’s market.
“Both Bitcoin fees and the block reward are decreasing over time,” writes William Suberg. “While the block reward decreases at set intervals, fees are a free market, with fluctuations a common occurrence.”
Assessing block reward, Suberg writes: “The vast majority of the thermocap consists of the block reward.”
A block reward halving set for May 2020 may have some amount of impact on BTC.
This past May, Moe Adham of the Forbes Council predicted the upcoming halving as creating a “volatility event.”
“The block reward halving tends to have long-term positive effects on the price of bitcoin. Why does this happen?,” Adham wrote. “There are a lot of theories, but one common one comes down to simple supply and demand: If fewer bitcoins are being generated, the newly increased scarcity automatically makes them more valuable. But this doesn’t happen right away.”
Keep an eye on both short-term and long-term BTC values in light of this information.
