The fact that Bitcoin is undervalued is probably not news to many people involved in the cryptocurrency ecosystem. Bitcoin’s recent price increase, through the $500 resistance point, rallied over the weekend and is now crossing $700 (£493, €621).
The most immediate price driver is the halving of the number of Bitcoins being mined. Currently some 3,600 coins are mined every day, which will drop to 1,800 in July. This change is integral to the design of Bitcoin and its limited supply.
This also means that the miners that verify blocks of transactions will see their fees drop from 25 Bitcoin per block to 12.5 per block. Bitcoin has been stable for some time and the halving of supply therefore entails an increase in demand hence the price pop. Importantly, this preserves economic viability for the mining community, although there have been some casualties.
During a recent chat at Consensus 2016, Samson Mow, chief technical officer of Chinese Bitcoin mining giant BTCC, spoke about the state of