Bitcoin Halving- Reason, Effects, Future Events

If you have experience in the Crypto world. Then you already aware of the Bitcoin Halving. And the functioning of the bitcoin halving. But for the new user who is not aware of the Bitcoin Halving and its importance to the currency.

In the article below you would know about the Bitcoin, its meaning, effect, and the future events with the Bitcoin Halving.

bitcoin halving

Bitcoin Whitepaper

What is Bitcoin Whitepaper?

Pseudonym Satoshi Nakamoto is the creator of the Bitcoins. It was established on the 31st of October 2008. It is a type of paper on his or her creation. The article is on Bitcoin which means a peer-to-peer electronic cash system. It was published before the Bitcoin mined and posed using the cryptography mailing site. So it is known as Bitcoin whitepaper.

The Bitcoin Whitepaper contains all the information regarding the Bitcoin and the working procedure. It also contains data about the cryptography and the decentralized currencies. The use of the Bitcoin is part of it. The paper is a type of codec which is used for the Bitcoin function.

Bitcoin Halving

bitcoin halving

What is Bitcoin Halving?

The word Halving means Half. Bitcoin is a system in which the number of coins mined gets decrease by half after the transaction in specific numbers.

In simple words, it is rewarding that the miner will get for a block. It decreases by half after the particular number of blocks founded in the blockchain. It is known as Halving event.

Halving Event

When does this ‘halving event’ occur?

Halving happens when the  2,10,000 block is founded.  It is the feature of the Bitcoin which has its own specific code. It happens after 4 years when estimate roughly.

Earlier it took place in the year 2012. And the rewards of the mining reduces bitcoins from 50 to 25 per proof of work. Then it has taken place in the year 2016. The reward of mining again fell from 25 to 12.5 per block.

Now it is regarded that it would happen in the year 2020. And it is estimated to be reduced to 6.25.

You can get the information regarding the halving event on the site.

Click here

The interested can visit the site to get the information. As the live event will be made available at the site.

Reason for BTC Halving

Why does BTC Halving happen?

Bitcoins as earlier mined by  Satoshi Nakamoto. Leading to the establishment of the Genesis Block.  Satoshi is not happy with the banking system and its immense monetary control. One of such is print money as much as bank need.

The excess in the production of money will lead to inflation. As per the data, the hyperinflation in many countries is the result. It would lead to the prices of the commodities reaches hike. Changing every hour.

As per the economic theories, it is assured that no long term implication will take place with the excess in the supply of money. People feel that the complete power is in the hand of a single institution. In case if it fails the complete system of economy will suffer.

Satoshi a clever person. That he, she, they made Bitcoin has to first decentralize it to” peer to peer” currency.  Saying that the only limited number of bitcoins can produce. He, she, they can get it by a halving system.

As above in the article. With the halving of the bitcoin,s it leads to the add certain number of blocks to the blockchain. So a time will come when no bitcoins will yield by mining. Leading to the bitcoins that can be minded becomes finite.

As per the study, the halving code has a clause when the process of yielding bitcoins mining will stop if the halving event completes 64 times.

So mathematical if calculated there can be a  maximum of 21 million Bitcoins in circulation. No bitcoin will be produced after that.

Effect of Bitcoin Halving

What are the Effects of Bitcoin Halving?

Shortage of Supply

Halving and the limited number of coins leads to the shortage in the supply. In the case of high demands, the supply shortage leads to an increase in the price.

bitcoin supply rate

Possible Increase in Value

Shortage in the coins often leads to an increase in the market. For instance, as time passes the price of the gold increases causing the coin to hold greater. There is a rarity that the increment of the coin’s value will take place many folds.

Harder to Mine

BTC Halving also leads difficult to mine as with the passage of time. It would lead to stopping mining as the profitability miners will get after the halving events. It would not match to the one that they were receiving.

With the reduction in the Bitcoins numbers. The revenue earned will also reduce 50% after every halving event. This conditions will lead to the earn only thin profit and only too the marginal miners. It will be no longer useful as the amount is less with the new revenue rate.

Miners May Continue Mining 

Miners will continue mining as per some people. In case if the rewards earn would be half of what they earlier. It would lead to becoming the currency more valuable.

It means the value of the rewards if reduce or remain the same or increase. It would lead to getting the larger reward before the Bitcoin halving event. Leading to increase the value of the bitcoin before the shortage of the supply.

The above assumption can also be true. But in recent years, the hashing power leads to falling.

The bubble might Burst

There is also a condition when the Bitcoin widespread speculations. As it spread worldwide. A type of long term investment, bitcoin inflated can burst to leave the investor empty-handed.

Future of Halving Events

To know the future of the Bitcoin Halving. It depends on o the following factors:

Time:  It depends on Time. In the year 2020, it estimates to happen. But no specific time set for it.

Quantity: The number of coins reduces to half. As per earlier it reduced from 12.5 to 6.25. It means the miners will get the earning of 6.25 bitcoins for every complete block.

Value:  If the demand increase the prices increase many folds. It should not be a sudden change before or after the Bitcoin halving.

Volatility:  Bitcoin is very volatile. The price keeps on fluctuating. Leading to the highs and lows. It can be true for next halving.

As earlier mentioned the prices may also not rise as much with a suddenness as expected before the event. Then it would lead to the hash rate. So the with the old system and marginal profits have to shut down operations before the event.

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