Halving is a quadrennial event in the crypto space that reduces the supply of new coins into circulation by half. Thus, reducing block rewards for miners by half. Bitcoin Halving generally helps manage the supply and demand of a bitcoin to increase its value through scarcity.
Only the best cryptocurrencies such as Bitcoin, Litecoin, Bitcoin Cash, Zcash, Bitcoin SV, etc. have the âhalvingâ mechanism.
What Is Bitcoin Halvingâ
This event occurs after every 210,000 blocks are mined, generally every four years. It reduces the block rewards given to miners for processing transactions on the Bitcoin blockchain by half to maintain its value through scarcity. The process was added to the Bitcoin code by its pseudonymous inventor, Satoshi Nakamoto.
The BTC halving process will continue until the mining of all 21 million BTCs. It is likely to be completed by 2140. Until now, BTC has undergone three halving events i.e., in 2012, 2016, and 2020.
Initially, in 2009, the reward for mining a BTC block was 50 BTC. Subsequently, after each Bitcoin halving event, the block rewards halved to 25 BTC in 2012, 12.5 BTC in 2016, and 6.25 BTC in 2020. In 2024, the bitcoin block rewards will reduce to 3.125 BTC.
How Bitcoin Halving Affects BTC Priceâ
Historically, all three BTC halving events have led to an increase in the bitcoin price. Also, people believe halving events is one of the best indicators of BTC price movement. Hence, investors consider investing in BTC near halving events can give better returns. However, the price movement can happen anytime, and timing the market is always a bad idea.
How Does Bitcoin Halving Workâ
The event focuses on miners who donate their processing power to keep the Bitcoin network safe and secure. Miners are the heart and soul of the Bitcoin ecosystem. They contribute to the safety and functionality of the ecosystem by validating Bitcoin transactions and adding new blocks to the blockchain. They receive rewards in the form of freshly created Bitcoin in exchange.
Thereâs a catch, though. This award is halved every four years, as the name suggests. Itâs similar to a scheduled, predictable wage decrease for these miners. Also, halvingâs modify the payouts for miners as well as slow down the production of new coins, which lowers the supply and affects their market value.
When Did the Last Bitcoin Halvings Happenâ
To date, there have been only three Bitcoin halvings, with the next one in the fray. Hereâs the history of Bitcoin halving events:
Upcoming Bitcoin Halvings Dates
Since the upcoming Bitcoin halving dates rely on block height, it is not possible to anticipate when they will occur. However, as we are aware that the event occurs every 210,000 blocks, block 840,000 in 2024 is predicted to be the date of the next Bitcoin halves.
Time Left For Next Bitcoin Halving
The next Bitcoin halving date, which is scheduled for block 840,000, is predicted to occur in 143 days, i.e., April 19, 2024 (tentative), according to the countdown.
Conclusion
The term âBitcoin halvingâ describes a regular occurrence in which the quantity of rewards, which are in the form of new BTCs created through cryptocurrency mining, is cut in half. The first halving was done in 2012. Three halvings have occurred since then. The next one is anticipated to take place in 2024. It is anticipated that the rewards programme will run until 2140, when the 21 million bitcoin total supply limit will be reached. In order to maintain Bitcoinâs deflationary principles and ensure that the total supply never exceeds 21 million, these halvings are important for inflation control.
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