Key Takeaways:
The most pivotal moment in Bitcoin’s history, known as ‘The Halving’, is merely a week away and miners are in fierce competition with each other to obtain what could be the most valuable and rare fragment of a Bitcoin (BTC), known as the ‘Epic Sat’. This denomination of BTC worth millions could be found in the first block to be mined after the reward-halving process.
Bitcoin Miners are Racing to Get Their Hands on the $50 Million Worth of Satoshis
Two years ago, Casey Rodarmor, creator of the Ordinals protocol atop the Bitcoin network, developed a system for categorizing the rarity of individual Satoshis, or SATS – the smallest denomination of BTC comparable to cents on the dollar.
After the launch of Ordinals, it became possible to identify, number, and also trade these denominations as if they were unique tokens. They were also thought of as digital collectibles or non-fungible tokens (NFTs). The value of the SATS was linked to its rarity.
The Rodarmor scale goes from “Uncommon”, referring to the first SAT of each block on the Bitcoin network, all the way up to “Mythic”, which is the first SAT of the first-ever block to be mined. The Mythic Sat is presumably safe in possession of the apex cryptocurrency’s creator Satoshi Nakamoto.
However, miners are now in the race to obtain another high-ranking satoshi that would be the first one on the first Bitcoin block to be mined after the rewards halving process is complete. Known as the “Epic”, this SAT is being valued by Ordinals enthusiasts at $50 million.
In an interview with CoinDesk, Adam Swick, the chief growth officer at mining firm Marathon Digital, said that if we were to compare a satoshi that is produced in an event that happens every two weeks to one that’s produced just once every four years, it could be worth millions of dollars.
Mining Firms Amping Operations to Maximize Their Chances of Winning the First Block Post-Halving
Mining companies are now making a concentrated effort to win the race to mine the Epic Sat by ramping up their operations to ensure that they account for a high percentage of the global Bitcoin hashrate right till the point the halving becomes imminent. Just as the miners responded to Bitcoin’s rally to new all-time highs last month, they could be going all-in to maximize their chances of winning the first block after halving.
This involves setting up new and powerful mining rigs or even bringing online older and soon-to-be-obsolete machines.
The upcoming block reward halving process, the fourth of its kind in Bitcoin’s 15-year-old history, is programmed to occur when the blockchain reaches a block height of 840,000. This is expected to happen sometime between April 19 and 20.
The miner who will be adding that block to the Bitcoin network will be rewarded with 3.125 BTC, worth around $219,000 at current prices. This will be a step down from the block reward of 6.25 BTC, or $440,000, that exists at the time of writing.
However, these calculations show what is at stake when a single Satoshi, which is one-hundred-millionth of 1 BTC, might be worth more than a million dollars.
The miner in question will need to transfer 546 SATS – the minimum amount that is sent over the Bitcoin network in a single transaction – to a cold wallet. The first SATS contained in this unspent transaction output (UTXO) would be retroactively labeled as the first satoshi post-halving. This is because the Ordinal protocol defines SATS on a first-in-first-out basis.
Tyler Whittle, a member of the Ordinals-based project Taproot Wizards, told CoinDesk that the reward of 3.125 BTC would essentially be broken into two parts: one which is extremely small and will contain the first SAT, the second which is just BTC as usual.
The founder of Ordinals project tracker Ordiscan.com wrote in a blog post that under the Rodarmor Rarirty system, the first sat in the first block to be mined after halving could be worth at least $1 million.
Miners are Carving a Niche Market for Bitcoin SATS
Marathon’s Swick said the company has mined thousands of ‘Uncommon’ SATS and often looked at whether to sell or hold these tokens. The world’s largest mining firm by hashrate also mined the first SATS after a difficulty adjustment on the Bitcoin network that at one point was worth “hundreds of thousands of dollars”, according to Swick.
The CEO of Hut 8 said the publicly traded mining firm is already looking at its balance sheet for rare satoshis that it may already own and is currently monitoring what interest there may be in the market for them.
There is growing interest among miners to create a future market for the rare and valuable denominations of Bitcoin. This could entail prepaying mining firms for the anticipated value of an Epic SAT, thereby opening up a new avenue for cryptocurrency investments.
At the time of writing, Bitcoin (BTC) is trading at $64,206 – up 2.4% in the last 24 hours. Ordinals (SATS) is currently worth $0.00000002696 – down 1.2%.
More News: Will Bitcoin Regain $70K Before Halving?
