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Countdown to Bitcoin Halving Begins, Get Ready for Crypto Milestone
Bitcoin is one of the most popular cryptocurrencies. It was first launched in January 2009 by a computer programmer or group of programmers under the pseudonym Satoshi Nakamoto, whose true identity has never been verified. Although Bitcoin is a digital currency, it cannot be created infinitely.
So, at the core of the Bitcoin protocol, there are two fundamental concepts related to scarcity. First, the total number of Bitcoins will never exceed 21 million, and by the end of 2020, fewer than 2.5 million Bitcoins will actually be “mined.” Second, every four years, the rate at which new Bitcoins are added to the network is cut in half, and this is where the Bitcoin halving event plays an important role.
How do mining farms mine Bitcoin?
A "block" is a file that holds Bitcoin transactions, kind of like keeping track of who's sending money to whom. Miners are like competitors who want to add the next block to this list. They do this by solving tricky math problems with special computers. When they solve the problem, they produce a random 64-character output called a "hash," and lock the block so that no one can change it. In return for doing this job, miners get some Bitcoins as a reward.
Bitcoin halving countdown
Before getting into the excitement and buzz surrounding the full Bitcoin event, let’s first understand what it actually is? Bitcoin halving basically refers to the halving of the reward for mining new blocks, meaning that miners receive 50% fewer Bitcoins for validating transactions. In 2020, 12.5 new Bitcoins were introduced through virtual mining in a block time of about 10 minutes. Subsequently, in May, this number was reduced to 6.25. By 2024, this number will drop to around 3.125, and this will continue until all 21 million coins are mined, which is expected to happen around 2140.
Why does the Bitcoin halving matter?
As a result of the Bitcoin halving, the price of Bitcoin will most likely increase in the future. This is the exact opposite of fiat currencies, which typically lose value over time due to inflation. As part of the Bitcoin protocol, the halving maintains scarcity, and scarcity is one of the reasons millions of people seek Bitcoin. In short, fewer Bitcoins available means that the remaining Bitcoins become more valuable, thus attracting more investors.
So let’s dig in and make clear the importance of Bitcoin halving:-
1. Scarcity: Bitcoin halving primarily reduces the rate at which new coins are created, making them more scarce. This scarcity stimulates demand, making Bitcoin more valuable. 2. 3. Inflation Control: This also helps control inflation by slowing down the rate at which new Bitcoins are available. By reducing the block reward, it limits the number of new Bitcoins entering the market. This controlled approach is designed to maintain Bitcoin’s stability and long-term value. 4. 5. Economic Impact: Due to the halving, miners have to change the way they work because they receive less rewards, which makes competition more intense and less efficient miners may exit. 6. 7. Price: When the supply of Bitcoin decreases and the demand for it rises, the price of Bitcoin rises before the halving event. But it is important to remember that what happened before may not happen again because the Bitcoin price is not only affected by the halving event. 8. 9. 10.
2. Inflation Control: This also helps control inflation by slowing down the rate at which new Bitcoins are available. By reducing the block reward, it limits the amount of new Bitcoins entering the market. This controlled approach is designed to maintain the stability and long-term value of Bitcoin.
3. Economic impact: Due to halving, miners have to change the way they work because they receive less rewards, which makes the competition more intense and less efficient miners may withdraw.
4. Price: When the supply of Bitcoin decreases and the demand for it increases, the price of Bitcoin has risen before the halving event. But it is important to remember that what happened before may not happen again, because the price of Bitcoin is not only affected by the halving event.
A Guide to the Bitcoin Halving Journey
2009: Bitcoin mining begins, with rewards set at 50 BTC per block.
2012: The first Bitcoin halving event cuts the mining reward in half to 25 BTC.
2016: The second halving further reduces mining rewards to 12.5 BTC.
2020: After this, the third halving will see the mining reward drop to 6.25 BTC.
2024: The fourth halving is about to occur, and the mining reward will be reduced to 3.125 BTC.
2140: Finally, the 64th halving will occur and no new Bitcoins will be created.
So far, there have been three Bitcoin halving events. The first halving took place on November 28, 2012. During the first halving event, the price of Bitcoin was $12.31. During the second halving event, which took place on July 9, 2016, its price was $650.63. The third event took place on May 11, 2020, and the price reached $8,590.
However, it should not be misunderstood that the price increase is only due to the halving event, as there are several other factors that influence the price.
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