Friends of the note circle must know the upcoming events in the second half of this year. It is estimated that in August this year, Wright will have its second reduction.
Many investors will also cut the production into their own investment plans, want to advance layout, and even think that the reduction of the Wright currency may open the bull market.
Now let’s look at what the meaning of lett’s currency reduction is and what the real impact it will bring.
What does it mean to reduce the yield of Wright currency?
Friends who know the Wright coins should know that Wright coins draw on the idea of bitcoin, similar to bitcoin in operation and follow the rule of halving every four years.
The total volume of the Wright coin is 84 million, and every 2.5 minutes a block is generated. The block reward is 50 at the beginning, and 840 thousand pieces of Wright coins are generated each time. The reward of the block is reduced to half until the output reaches 84 million set.
Up to now, the half price of the Wright coin has been halved. In August 26, 2015, the award of the block was halved from 50 to 25. What will happen next August is the second halving of the Wright coins, and the block rewards will be changed from the current 25 to 12.5.
So what does it mean to reduce the yield of the Wright currency? In fact, the system was designed at the very beginning and everything was running according to the design at the beginning.
Then why design half the rules? In order to control inflation. Imagine that if the Wright currency can be dug out indefinitely, then as the number of Wright coins increases and the volume of circulation increases, it will become cheaper and cheaper according to the supply and demand relationship.
This principle is also referred to as gold, the total amount of gold on the earth is constant, and the exploitation of gold requires a lot of manpower and material resources, production is difficult and rare in quantity, so gold is very conservative.
What will be the impact of the reduction?
Next is the question we are most concerned about. Will the price of production cut up?
First of all, forecasting prices is a very unreliable thing. But we can make more reasonable predictions based on economic principles and historical data.
First of all, in theory, the reduction of production means a drop in supply in the next period of time. According to the relationship between supply and demand, when the demand growth rate is constant, the growth rate of supply will decrease and the price will rise.
Then we’ll look at the trend of bitcoin that has gone through 2 halves.
The first half reduction in bitcoin took place in November 28, 2012.
After half the price, the price of bitcoin increased by more than 80% in one year.
The second half reduction in bitcoin took place in July 9, 2016.
In the first 1 months of the rise, bitcoin showed a slight increase. During the year after half a reduction, bitcoin increased from $651 to $more than 2500, 3 times.
Finally, let’s take a look at the first half price change of Wright coins.
The last half of the Wright currency was August 26, 2015. In the first 3 months of the reduction, the price of the Wright coins rose sharply, and the unit price rose from $1.3 to the highest of $8.96, nearly 7 times.
Therefore, we have reason to predict that after the second reduction of Wright’s currency, the market will probably rise due to rising expectations, and the price will rise steadily as a result of changes in supply and demand.