This event will reduce the reward for mining a block from 25 bitcoins to 12.5 bitcoins. As they scramble to cut costs, miners are playing a high-stakes game of chicken. In spring 2024, the halving, a mechanism baked into the bitcoin system that periodically cuts the number of coins awarded in half, will slash mining profits. The underlying Bitcoin’s blockchain software dictates the rate of Bitcoin creation. This software compels computers in its network to compete in verifying transactions via a mining process. The system rewards miners with a specific number of new coins for valid transactions.
At the https://www.tokenexus.com/, BTC was worth $647, and by the end of the following year, it had attained an impressive height of $19,800. (Dec. 17, 2017, up about 3,000% in value.) After hitting this height, the price of BTC dipped to about $3,276 on Dec. 17, 2018. Bitcoin halving takes place once 210,000 blocks have been added . For example, 6.25 BTC is worth over $340,000 when Bitcoin is trading around the $55,000 level. So we can confidently conclude that mining is much more lucrative and rewarding now than it ever was. The miner gets rewarded with freshly minted Bitcoins as compensation for their effort used in validating a transaction.
When is the bitcoin halving and what will happen?
This becomes even more significant as a What is Bitcoin Halving halving event draws close, as the price of BTC will likely surge due to supply crunch. Every bitcoin halving reduces the digital currency’s inflation rate. This ensures that, with under 2,000,000 BTC yet to be mined, Bitcoin will not reach its cap until around 2140. Halving refers to the number of coins that miners receive for adding new transactions to the blockchain being cut in half.
Some analysts claim that bitcoin is becoming a safe-haven asset similar to gold, and early evidence suggests that investors may already be looking towards it as an alternative store-of-value. 2020 has been an historic year for financial markets with every asset class experiencing huge market volatility and price swings. However, it is May 2020 that is set to shake up the cryptocurrency market. Dubbed the ‘bitcoin halving’, the production of the digital coin is set to drop by 50%. The event is written in the rules of bitcoin’s underlying code with no one in control of the process, creating unique trading opportunities for those in the know. Read on to learn more and find out what these opportunities could be.
Bitcoin Halving and Its Impact on the Economy
Many analysts suggest the halvening is likely to take place between May but this could vary either side. The halving will see miner’s rewards decline from 12.5 bitcoins per block to 6.25 bitcoins. When bitcoin was first released the mining reward was 50 bitcoins. On 28 November 2012, the amount dropped to 25 bitcoins and on 9 July 2016, it dropped again to 12.5 bitcoins. Bitcoin’s unique digital design means that every four years a seismic shift in the digital currency happens. For the third time in its 11-year history, it will undergo another major change in May 2020.