Bitcoin halving is a process embedded in the Bitcoin protocol that occurs approximately every four years, halving the rate at which more bitcoins are added to circulation, or mined. Yes, you read that right; bitcoins can and are being mined.
The Bitcoin blockchain employs a mechanism known as "proof-of-work" to validate transactions in a block before appending them to the blockchain.
In few words, proof-of-work is a mining process involving programmers (miners) solving a mathematical problem to obtain a random number, known as "nonce," through a trial-and-error method, serving as the solution to the problem.
Solving this problem validates transactions in a block, and the block is added to the blockchain, rewarding the miner with a given amount of bitcoins.
Solving these mathematical problems requires computers with massive computing power, taking approximately 10 minutes to solve before adding the block to the chain (blockchain đ).
So, where does the halving come into play? Before 2012, each time a miner successfully solves a mathematical problem, he or she is rewarded 50 bitcoins, adding 50 bitcoins to the circulating amount.
In 2012, the first halving occurred, reducing rewards to 25 bitcoins, then to 12.5 bitcoins in 2016, and finally to 6.25 bitcoins in 2020. The next halving is in 2024, happening after 21,000 blocks have been added to the blockchain or approximately every 4 years.
On X, formerly known as Twitter, an account named "Bitcoin Halving Timer" displays the number of blocks and days left before the next halving, though inactive since 2022.
Addressing the question of Bitcoin's max supply, it's coded at 21 million, but not all are in circulation. By around 2140, all 21 million bitcoins will be in circulation, and miners will be rewarded through transaction fees, as there will be no more bitcoin left to mine.
The halving regulates the rate at which more bitcoins are added, creating a sense of scarcity and preventing issues like inflation.
How does Bitcoin Halving affect price dynamics? Historically, during halving events, the price of bitcoin has shown significant increases. When the supply is reduced and demand remains constant or increases, the value or price of bitcoin rises.
Additionally, due to market psychology, traders aware of bitcoin's historical price increments during halving events often take long positions, contributing to price increases.
THE HALVING IS COMING!
THE HALVING IS COMING!!
IT IS COMING!!!
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